China Eastern Airlines Corporation Limited | ||||
(Registrant)
|
||||
|
|
|
||
Date |
April
14,
2008
|
By |
/s/
Li
Fenghua
|
|
Name: Li Fenghua | ||||
Title: Chairman of the Board of Directors |
A.
|
PREPARED
IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
(“IFRS”)
|
2007
|
2006
|
|||||||||
|
Note
|
RMB’000
|
RMB’000
|
|||||||
Revenues
|
3
|
42,521,226
|
37,634,132
|
|||||||
Other
operating income, net
|
5
|
604,713
|
424,265
|
|||||||
Operating
expenses
|
||||||||||
Aircraft
fuel
|
(15,117,147
|
)
|
(13,608,793
|
)
|
||||||
Take-off
and landing charges
|
(5,174,183
|
)
|
(4,989,382
|
)
|
||||||
Depreciation
and amortization
|
(4,811,916
|
)
|
(4,597,178
|
)
|
||||||
Wages,
salaries and benefits
|
(4,327,397
|
)
|
(3,538,082
|
)
|
||||||
Aircraft
maintenance
|
(2,392,039
|
)
|
(2,647,340
|
)
|
||||||
Food
and beverages
|
(1,235,578
|
)
|
(1,188,016
|
)
|
||||||
Aircraft
operating lease rentals
|
(2,850,873
|
)
|
(2,954,751
|
)
|
||||||
Other
operating lease rentals
|
(292,844
|
)
|
(276,715
|
)
|
||||||
Selling
and marketing expenses
|
(1,805,342
|
)
|
(1,734,987
|
)
|
||||||
Civil
aviation infrastructure levies
|
(781,613
|
)
|
(696,428
|
)
|
||||||
Ground
services and other charges
|
(224,466
|
)
|
(162,104
|
)
|
||||||
Office,
administrative and other expenses
|
(3,943,083
|
)
|
(3,620,718
|
)
|
||||||
Deficits
on revaluation/impairment loss
|
(130,921
|
)
|
(1,035,343
|
)
|
||||||
Total
operating expenses
|
(43,087,402
|
)
|
(41,049,837
|
)
|
2007
|
2006
|
|||||||||
|
Note
|
RMB’000
|
RMB’000
|
|||||||
Operating
profit/(loss)
|
38,537
|
(2,991,440
|
)
|
|||||||
Finance
income
|
6
|
2,119,881
|
1,008,563
|
|||||||
Finance
costs
|
7
|
(1,978,550
|
)
|
(1,765,981
|
)
|
|||||
Share
of results of associates
|
58,312
|
103,566
|
||||||||
Share
of results of jointly controlled entities
|
30,086
|
29,595
|
||||||||
Profit/(loss)
before income tax
|
268,266
|
(3,615,697
|
)
|
|||||||
Income
tax
|
8
|
(23,763
|
)
|
162,932
|
||||||
Profit/(loss)
for the year
|
244,503
|
(3,452,765
|
)
|
|||||||
Attributable
to:
|
||||||||||
Equity
holders of the Company
|
268,896
|
(3,313,425
|
)
|
|||||||
Minority
interests
|
(24,393
|
)
|
(139,340
|
)
|
||||||
244,503
|
(3,452,765
|
)
|
||||||||
Profit/(loss)
per share for profit/(loss)
attributable
to the equity holders of
the
Company during the year
|
||||||||||
-
basic and diluted
|
10
|
RMB0.06
|
RMB(0.68
|
)
|
2007
|
2006
|
|||||||||
Note
|
RMB’000
|
RMB’000
|
||||||||
Non-current
assets
|
||||||||||
Intangible
assets
|
1,244,706
|
1,337,554
|
||||||||
Property,
plant and equipment
|
47,548,204
|
40,050,466
|
||||||||
Lease
prepayments
|
967,497
|
1,054,362
|
||||||||
Advanced
payments on acquisition of aircraft
|
6,695,573
|
7,668,708
|
||||||||
Investments
in associates
|
601,119
|
623,390
|
||||||||
Investments
in jointly controlled entities
|
336,966
|
115,540
|
||||||||
Available-for-sale
financial assets
|
53,236
|
47,554
|
||||||||
Other
long-term assets
|
660,751
|
1,099,265
|
||||||||
Deferred
tax assets
|
113,211
|
82,146
|
||||||||
Derivative
assets
|
6,077
|
73,269
|
||||||||
58,227,340
|
52,152,254
|
|||||||||
Current
assets
|
||||||||||
Flight
equipment spare parts
|
1,124,936
|
1,198,642
|
||||||||
Trade
receivables and notes receivable
|
11
|
2,096,007
|
1,719,782
|
|||||||
Amounts
due from related companies
|
65,455
|
352,719
|
||||||||
Prepayments,
deposits and other receivables
|
2,555,649
|
2,759,065
|
||||||||
Cash
and cash equivalents
|
1,655,244
|
1,987,486
|
||||||||
Derivative
assets
|
89,470
|
113,532
|
||||||||
Non-current
assets held for sale
|
2,262,058
|
882,426
|
||||||||
9,848,819
|
9,013,652
|
|||||||||
Current
liabilities
|
||||||||||
Sales
in advance of carriage
|
1,211,209
|
891,659
|
||||||||
Trade
payables and notes payable
|
12
|
3,137,880
|
5,026,764
|
|||||||
Amounts
due to related companies
|
671,593
|
348,477
|
||||||||
Other
payables and accrued expenses
|
9,624,491
|
7,873,603
|
||||||||
Current
portion of obligations under
|
||||||||||
finance
leases
|
2,545,223
|
2,803,956
|
||||||||
Current
portion of borrowings
|
18,494,521
|
16,016,327
|
||||||||
Income
tax payable
|
90,867
|
80,483
|
||||||||
Current
portion of provision for
|
||||||||||
aircraft
overhaul expenses
|
-
|
20,900
|
||||||||
Derivative
liabilities
|
20,238
|
124,722
|
||||||||
Liabilities
directly associated with
|
||||||||||
non-current
assets held for sale
|
127,239
|
442,935
|
||||||||
35,923,261
|
33,629,826
|
|||||||||
Net
current liabilities
|
(26,074,442
|
)
|
(24,616,174
|
)
|
||||||
Total
assets less current liabilities
|
32,152,898
|
27,536,080
|
2007
|
2006
|
||||||
Note
|
RMB’000
|
RMB’000
|
|||||
Non-current
liabilities
|
|||||||
Obligations
under finance leases
|
13,906,987
|
9,048,642
|
|||||
Borrowings
|
11,369,307
|
12,091,413
|
|||||
Provision
for aircraft overhaul expenses
|
956,910
|
489,721
|
|||||
Other
long-term liabilities
|
864,336
|
614,655
|
|||||
Deferred
tax liabilities
|
50,369
|
68,459
|
|||||
Post-retirement
benefit obligations
|
1,370,702
|
1,292,960
|
|||||
Long
term portion of staff housing allowance
|
-
|
439,491
|
|||||
Derivative
liabilities
|
21,558
|
14,096
|
|||||
28,540,169
|
24,059,437
|
||||||
Net
assets
|
3,612,729
|
3,476,643
|
|||||
Equity
|
|||||||
Capital
and reserves attributable to
|
|||||||
the
equity holders of the Company
|
|||||||
Share
capital
|
4,866,950
|
4,866,950
|
|||||
Reserves
|
(1,839,187
|
)
|
(2,052,053
|
)
|
|||
3,027,763
|
2,814,897
|
||||||
Minority
interests
|
584,966
|
661,746
|
|||||
Total
equity
|
3,612,729
|
3,476,643
|
1.
|
Basis
of preparation
|
The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the disclosure requirements of the Hong Kong Companies Ordinance. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of property, plant and equipment, available-for-sale financial assets, financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. |
The Group’s accumulated losses were approximately RMB2,820 million as at 31 December 2007 and its current liabilities exceeded its current assets by approximately RMB26,074 million. Based on the Group’s history of obtaining finance, its relationships with its bankers, banking facilities available and net operating cash inflow, the Board considers that the Group will be able to obtain sufficient financing to enable it to operate and meet its liabilities as and when they fall due. Accordingly, it is appropriate that these consolidated financial statements should be prepared on a going concern basis and they do not include any adjustments that would be required should the Company and the Group fail to continue as a going concern. |
In 2007, the Group adopted IFRS 7, ‘Financial Instruments: Disclosures’ and the complementary amendment to IAS 1, ‘Presentation of financial statements - Capital disclosures’. These amendments and interpretations did not result in any significant changes to the Group’s accounting policies. |
2.
|
Revised
accounting estimates and change of accounting
policy
|
(a) | Treatments on aircraft and engine overhaul costs | ||
During the year ended 31 December 2007, the Group reviewed the way it accounts for certain aircraft maintenance activities and decided to change its accounting policy with respect to the cost of major overhauls of airframes and engines held under operating leases. The review of the Group’s accounting policy was, in part, initiated in response to recent changes in generally accepted accounting practice in the United States which have eliminated the use of the accrual method for overhauls. | |||
Previously, the Group accrued for the cost of periodic major overhauls of airframes over the period between overhauls based on flying hours but only accrued for certain return condition checks for engines based on the specific terms of operating lease agreements. The Group has now adopted a new policy under which the periodic cost of major overhauls of both airframes and engines is expensed as incurred and accrual is made for the estimated cost of return condition checks (for both airframes and engines) on a straight line basis over the term of the relevant lease. The Group determined that its new policy for accounting of overhauls for aircraft under operating leases is more relevant and appropriate in the context of the significant growth in the size of the Group’s fleet. The new policy is consistent with similar policies adopted by many other large international airlines with mature fleets. The impact of the change in accounting policy for airframes is immaterial to the amounts reported in prior years. If the adjustments had been applied retrospectively, the impact would have been to decrease aircraft maintenance expense and loss for the year ended 31 December 2006 by RMB78 million (2005: increase aircraft maintenance expense and loss for the year by RMB26 million). |
As part of the Group’s review of its accounting for overhaul costs, inconsistencies were identified in (1) the way that the Group’s previous policies had been applied to certain individual engines based on interpretation of their lease contracts; and (2) the accounting for maintenance costs under certain “Power by hour” contracts where maintenance contractors receive agreed payments based on the number of operating hours for the engine. The net effect of the necessary adjustments, if they had been applied retrospectively, would have been to increase aircraft maintenance expense and loss for the year ended 31 December 2006 by RMB33 million (2005: decrease aircraft maintenance expense and loss for the year by RMB35 million). The impact of these corrections is immaterial to the amounts reported in prior years. | |||
The aggregate impact of the application of the change in accounting policy and the correction of the inconsistencies referred to above is immaterial to both the 2007 and prior year financial statements and all changes have been recognised in the current year. The cumulative impact of the new policy and the corrections was an increase of RMB31 million in net assets and profit as of and for the year ended 31 December 2007. | |||
(b) | Change in useful life of flight equipment | ||
The Group has changed the estimated useful life of flight equipment in 2007. Previously, flight equipment was depreciated over 20 years plus an annual provision of 7% for scrapped items. The economic useful life of flight equipment has been reviewed and is now depreciated over 10 years with no annual provision for scrapped items with effect from 1 January 2007. Management considers the new policy more accurately reflects past experience and is consistent with industry practice. The change in estimate has resulted in a decreased depreciation charge of RMB44 million for the year ended 31 December 2007. |
(c) | Change in the depreciation method for components related to engine overhaul | ||
The Group has changed the depreciation method applied to components related to engine overhaul costs. Previously, components related to engine overhaul costs were depreciated on a straight-line basis over 2 to 8 years. The economic useful life of components related to engine overhaul costs has been reviewed and is now depreciated between each overhaul period using the ratio of actual flying hours and estimated flying hours between overhauls. Management considers the new treatment better reflects the pattern in which the component’s future economic benefits are expected to be consumed by the entity. The change in estimate has resulted in a decreased depreciation charge of RMB109 million for the year ended 31 December 2007. |
3.
|
Revenues
|
The Group is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services. |
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Revenues
|
|||||||
Traffic
revenues
|
|||||||
-
Passenger
|
36,064,642
|
31,121,718
|
|||||
-
Cargo and mail
|
5,633,117
|
5,776,671
|
|||||
Ground
service income
|
1,001,809
|
893,960
|
|||||
Cargo
handling income
|
364,638
|
289,530
|
|||||
Commission
income
|
156,713
|
125,576
|
|||||
Others
|
393,166
|
403,469
|
|||||
43,614,085
|
38,610,924
|
||||||
Less:
Business tax (Note)
|
(1,092,859
|
)
|
(976,792
|
)
|
|||
42,521,226
|
37,634,132
|
4.
|
Segment
information
|
(a)
|
Primary
reporting format by business segment
|
Segment information is presented in respect of the Group’s business and geographical segments. Business segment information is chosen as the primary report format. |
(1)
|
Passenger
business segment includes cargo carried by passenger
flights.
|
(2)
|
Inter-segment
transfers or transactions are entered into under normal commercial
terms
and conditions that would also be available to unrelated third
parties.
|
|
Cargo
and
|
||||||||||||
|
Passenger
|
logistics
|
Unallocated
|
Total
|
|||||||||
|
RMB’000
|
RMB’000
|
RMB’000
|
RMB’000
|
|||||||||
Traffic
revenues
|
37,537,460
|
3,113,488
|
-
|
40,650,948
|
|||||||||
Other
revenues
|
1,208,760
|
900,529
|
208,456
|
2,317,745
|
|||||||||
Total
segment revenue
|
38,746,220
|
4,014,017
|
208,456
|
42,968,693
|
|||||||||
Inter-segment
revenue
|
(348,643
|
)
|
-
|
(98,824
|
)
|
(447,467
|
)
|
||||||
Revenues
|
38,397,577
|
4,014,017
|
109,632
|
42,521,226
|
|||||||||
Operating
(loss)/profit
|
|||||||||||||
-
segment results
|
(182,147
|
)
|
181,823
|
38,861
|
38,537
|
||||||||
Finance
income
|
2,034,611
|
84,481
|
789
|
2,119,881
|
|||||||||
Finance
costs
|
(1,799,454
|
)
|
(164,685
|
)
|
(14,411
|
)
|
(1,978,550
|
)
|
|||||
Share
of results of associates
|
-
|
-
|
58,312
|
58,312
|
|||||||||
Share
of results of
|
|||||||||||||
jointly
controlled entities
|
-
|
-
|
30,086
|
30,086
|
|||||||||
Profit
before income tax
|
53,010
|
101,619
|
113,637
|
268,266
|
|||||||||
Income
tax
|
38,835
|
(58,123
|
)
|
(4,475
|
)
|
(23,763
|
)
|
||||||
Profit
for the year
|
91,845
|
43,496
|
109,162
|
244,503
|
|
Cargo
and
|
||||||||||||
|
Passenger
|
logistics
|
Unallocated
|
Total
|
|||||||||
|
RMB’000
|
RMB’000
|
RMB’000
|
RMB’000
|
|||||||||
Traffic
revenues
|
33,489,978
|
2,842,836
|
-
|
36,332,814
|
|||||||||
Other
revenues
|
1,211,553
|
709,069
|
140,525
|
2,061,147
|
|||||||||
Total
segment revenue
|
34,701,531
|
3,551,905
|
140,525
|
38,393,961
|
|||||||||
Inter-segment
revenue
|
(689,331
|
)
|
-
|
(70,498
|
)
|
(759,829
|
)
|
||||||
Revenues
|
34,012,200
|
3,551,905
|
70,027
|
37,634,132
|
|||||||||
Operating
(loss)/profit
|
|||||||||||||
-
segment results
|
(2,770,861
|
)
|
(242,526
|
)
|
21,947
|
(2,991,440
|
)
|
||||||
Finance
income
|
989,473
|
17,639
|
1,451
|
1,008,563
|
|||||||||
Finance
costs
|
(1,653,939
|
)
|
(104,418
|
)
|
(7,624
|
)
|
(1,765,981
|
)
|
|||||
Share
of results of associates
|
-
|
-
|
103,566
|
103,566
|
|||||||||
Share
of results of
|
|||||||||||||
jointly
controlled entities
|
-
|
-
|
29,595
|
29,595
|
|||||||||
(Loss)/profit
before income tax
|
(3,435,327
|
)
|
(329,305
|
)
|
148,935
|
(3,615,697
|
)
|
||||||
Income
tax
|
198,088
|
(30,262
|
)
|
(4,894
|
)
|
162,932
|
|||||||
(Loss)/profit
for the year
|
(3,237,239
|
)
|
(359,567
|
)
|
144,041
|
(3,452,765
|
)
|
(b)
|
Secondary
reporting format by geographical
segment
|
The Group’s two business segments operate in four main geographical areas, even though they are managed on a worldwide basis. |
The Group’s revenues (net of business tax) by geographical segment are analyzed as follows: |
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Domestic
(the PRC, excluding Hong Kong)
|
24,125,288
|
20,948,698
|
|||||
Hong
Kong
|
2,694,857
|
3,244,846
|
|||||
Japan
|
3,642,220
|
3,582,962
|
|||||
Other
countries
|
12,058,861
|
9,857,626
|
|||||
Total
|
42,521,226
|
37,634,132
|
5.
|
Other
operating income, net
|
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Government
subsidies (Note)
|
487,561
|
462,370
|
|||||
Net
fair value (losses)/gains on financial instruments
|
|||||||
-
forward foreign exchange contracts
|
20,577
|
26,744
|
|||||
-
fuel hedging income/(losses)
|
96,575
|
(64,849
|
)
|
||||
604,713
|
424,265
|
6.
|
Finance
income
|
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Exchange
gains, net (Note)
|
2,023,032
|
888,402
|
|||||
Interest
income
|
96,849
|
120,161
|
|||||
Finance
income
|
2,119,881
|
1,008,563
|
7.
|
Finance costs |
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Interest
relating to obligations under finance leases
|
(731,885
|
)
|
(543,953
|
)
|
|||
Interest
on loans from banks and financial institutions
|
(1,629,090
|
)
|
(1,580,536
|
)
|
|||
Interest
relating to notes payable
|
(72,779
|
)
|
(91,280
|
)
|
|||
Amortisation
of the discount on zero coupon debentures
|
-
|
(25,456
|
)
|
||||
Interest
relating to long-term payables
|
(3,406
|
)
|
(4,961
|
)
|
|||
Fair
value gains on financial instruments
|
|||||||
-
transfer from equity in respect of interest rate swaps
|
|||||||
qualified
as cash flow hedges
|
59,111
|
55,889
|
|||||
(2,378,049
|
)
|
(2,190,297
|
)
|
||||
Less:
Amounts capitalised into advanced payments
|
|||||||
on
acquisition of aircraft
|
399,499
|
424,316
|
|||||
(1,978,550
|
)
|
(1,765,981
|
)
|
8.
|
Income
tax
|
|
Group
|
||||||
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Provision
for PRC income tax
|
72,918
|
48,072
|
|||||
Deferred
taxation
|
(49,155
|
)
|
(211,004
|
)
|
|||
23,763
|
(162,932
|
)
|
9.
|
Dividends
|
10.
|
Profit/loss
per share
|
11.
|
Trade
receivables
|
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Within
90 days
|
1,761,799
|
1,506,219
|
|||||
91
to 180 days
|
104,991
|
118,323
|
|||||
181
to 365 days
|
187,355
|
88,342
|
|||||
Over
365 days
|
101,769
|
97,303
|
|||||
2,155,914
|
1,810,187
|
||||||
Less:
provision for impairment of receivables
|
(59,907
|
)
|
(90,405
|
)
|
|||
Trade
receivables
|
2,096,007
|
1,719,782
|
12.
|
Trade
payables and notes payable
|
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Within
90 days
|
1,465,079
|
2,707,474
|
|||||
91
to 180 days
|
1,126,091
|
2,030,629
|
|||||
181
to 365 days
|
449,391
|
243,296
|
|||||
Over
365 days
|
97,319
|
45,365
|
|||||
3,137,880
|
5,026,764
|
13.
|
Post
balance sheet event
|
14.
|
Comparative
figures
|
2007
|
2006
|
||||||||||
|
RMB’000
|
RMB’000
|
|||||||||
Revenue |
43,528,561
|
38,210,193
|
|||||||||
Less: |
Cost
of operation
|
(37,654,536
|
)
|
(35,115,042
|
)
|
||||||
Taxes
and levies
|
(1,092,859
|
)
|
(932,748
|
)
|
|||||||
Selling
and distribution expenses
|
(2,766,379
|
)
|
(2,554,296
|
)
|
|||||||
General
and administrative expenses
|
(2,075,732
|
)
|
(1,942,193
|
)
|
|||||||
Finance
income/(expenses), net
|
106,125
|
(761,678
|
)
|
||||||||
Impairment
loss
|
(224,714
|
)
|
(834,194
|
)
|
|||||||
Add:
|
Fair
value gain/(loss)
|
|
|
83,965
|
(42,344
|
)
|
|||||
Investment
income
|
155,180
|
67,911
|
|||||||||
Operating profit/(loss) |
59,611
|
(3,904,391
|
)
|
||||||||
Add:
|
Non-operating
income
|
|
676,610
|
719,191
|
|||||||
Less:
|
Non-operating
expenses
|
|
(28,878
|
)
|
(76,941
|
)
|
|||||
Total profit/(loss) |
707,343
|
(3,262,141
|
)
|
||||||||
Less:
|
income
tax
|
|
(96,512
|
)
|
140,208
|
||||||
Net profit/(loss) |
610,831
|
(3,121,933
|
)
|
||||||||
Attributable to: | |||||||||||
-
Equity holders of the Company
|
586,464
|
(2,991,571
|
)
|
||||||||
-
Minority interests
|
24,367
|
(130,362
|
)
|
||||||||
610,831
|
(3,121,933
|
)
|
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Assets
|
|||||||
Total
current assets
|
7,565,738
|
8,552,782
|
|||||
Long-term
investment
|
990,758
|
779,929
|
|||||
Fixed
assets and construction in progress
|
55,212,262
|
47,306,359
|
|||||
Intangible
assets & other non-current assets
|
2,632,261
|
2,868,267
|
|||||
Deferred
tax assets
|
740,695
|
382,523
|
|||||
Total
assets
|
67,141,714
|
59,889,860
|
|||||
Liabilities
& shareholder’s equity
|
|||||||
Current
liabilities
|
35,876,458
|
33,908,135
|
|||||
Non-current
liabilities
|
27,008,295
|
22,601,066
|
|||||
Deferred
tax liabilities
|
688,954
|
307,188
|
|||||
Total
liabilities
|
63,573,707
|
56,816,389
|
|||||
Minority
interests
|
705,142
|
741,040
|
|||||
Equity
attributable to equity holders
|
2,862,865
|
2,332,431
|
|||||
Total
liabilities & shareholder’s equity
|
67,141,714
|
59,889,860
|
C.
|
SIGNIFICANT
DIFFERENCES BETWEEN INTERNATIONAL FINANCIAL REPORTING STANDARDS
AND PRC
ACCOUNTING REGULATIONS
(UNAUDITED)
|
2007
|
2006
|
||||||
|
RMB’000
|
RMB’000
|
|||||
Consolidated
profit/(loss) attributable to
|
|||||||
equity
holders of the Company
|
|||||||
As
stated in accordance with
|
|||||||
PRC
Accounting Regulations
|
586,464
|
(2,991,571
|
)
|
||||
Impact
of IFRS:
|
|||||||
Difference
in depreciation charges for
|
|||||||
flight
equipment due to different depreciation
|
|||||||
lives
used previously
|
(170,082
|
)
|
239,466
|
||||
Difference
in depreciation charges for
|
|||||||
aircraft
due to different depreciation lives
|
|||||||
and
revaluation
|
(167,151
|
)
|
(524,118
|
)
|
|||
Provision
for post-retirement benefits
|
(81,445
|
)
|
(84,982
|
)
|
|||
Reversal
of revaluation surplus relating to land use right
|
12,426
|
16,740
|
|||||
Others
|
(32,825
|
)
|
(662
|
)
|
|||
Deferred
tax adjustments
|
72,749
|
22,722
|
|||||
Minority
interests
|
48,760
|
8,980
|
|||||
As
stated in accordance with IFRS
|
268,896
|
(3,313,425
|
)
|
||||
Consolidated
net assets
|
|||||||
As
stated in accordance with
|
|||||||
PRC
Accounting Regulations
|
2,862,865
|
2,332,431
|
|||||
Impact
of IFRS:
|
|||||||
Difference
in depreciation charges for flight equipment
|
|||||||
due
to different depreciation lives used previously
|
263,764
|
433,846
|
|||||
Difference
in depreciation charges for aircraft due to
|
|||||||
different
depreciation lives and revaluation
|
810,347
|
977,498
|
|||||
Provision
for post-retirement benefits
|
(1,405,127
|
)
|
(1,323,682
|
)
|
|||
Goodwill
and negative goodwill
|
688,311
|
688,311
|
|||||
Reversal
of revaluation surplus relating to land use right
|
(309,212
|
)
|
(321,638
|
)
|
|||
Others
|
(14,462
|
)
|
18,363
|
||||
Deferred
tax adjustments
|
11,101
|
(61,648
|
)
|
||||
Minority
interests
|
120,176
|
71,416
|
|||||
As
stated in accordance with IFRS
|
3,027,763
|
2,814,897
|
|
For
the
|
For
the
|
||||||||
|
year
ended
|
year
ended
|
||||||||
|
31
December
|
31
December
|
||||||||
2007
|
2006
|
Change
|
||||||||
Capacity
|
||||||||||
ATK
(available tonne-kilometres) (millions)
|
12,085.88
|
11,065.57
|
9.22
|
%
|
||||||
-
Domestic routes
|
5,383.41
|
4,901.45
|
9.83
|
%
|
||||||
-
International routes
|
5,971.74
|
5,313.14
|
12.40
|
%
|
||||||
-
Hong Kong routes
|
730.73
|
850.98
|
-14.13
|
%
|
||||||
ASK
(available seat-kilometres) (millions)
|
77,717.23
|
70,468.28
|
10.29
|
%
|
||||||
-
Domestic routes
|
46,166.30
|
42,687.36
|
8.15
|
%
|
||||||
-
International routes
|
26,476.13
|
22,226.69
|
19.12
|
%
|
||||||
-
Hong Kong routes
|
5,074.80
|
5,554.22
|
-8.63
|
%
|
||||||
AFTK
(available freight tonne-kilometres) (millions)
|
5,091.33
|
4,723.43
|
7.79
|
%
|
||||||
-
Domestic routes
|
1,228.42
|
1,059.58
|
15.93
|
%
|
||||||
-
International routes
|
3,588.91
|
3,312.74
|
8.34
|
%
|
||||||
-
Hong Kong routes
|
274.00
|
351.10
|
-21.96
|
%
|
||||||
Hours
flown (thousands)
|
756.00
|
678.28
|
11.46
|
%
|
||||||
Traffic
|
||||||||||
RTK
(revenue tonne-kilometres) (millions)
|
7,713.92
|
6,930.97
|
11.30
|
%
|
||||||
-
Domestic routes
|
3,777.51
|
3,369.67
|
12.10
|
%
|
||||||
-
International routes
|
3,524.95
|
3,106.23
|
13.48
|
%
|
||||||
-
Hong Kong routes
|
411.46
|
455.07
|
-9.58
|
%
|
||||||
RPK
(revenue passenger-kilometres) (millions)
|
57,182.56
|
50,271.88
|
13.75
|
%
|
||||||
-
Domestic routes
|
35,491.96
|
31,272.41
|
13.49
|
%
|
||||||
-
International routes
|
18,385.95
|
15,478.45
|
18.78
|
%
|
||||||
-
Hong Kong routes
|
3,304.65
|
3,521.02
|
-6.15
|
%
|
||||||
RFTK
(revenue freight tonne-kilometres) (millions)
|
2,614.07
|
2,444.01
|
6.96
|
%
|
||||||
-
Domestic routes
|
608.66
|
574.70
|
5.91
|
%
|
||||||
-
International routes
|
1,887.85
|
1,728.01
|
9.25
|
%
|
||||||
-
Hong Kong routes
|
117.56
|
141.30
|
-16.80
|
%
|
||||||
Number
of passengers carried (thousands)
|
39,161.36
|
35,039.74
|
11.76
|
%
|
||||||
-
Domestic routes
|
31,158.09
|
27,744.49
|
12.30
|
%
|
||||||
-
International routes
|
5,671.61
|
4,807.75
|
17.97
|
%
|
||||||
-
Hong Kong routes
|
2,331.66
|
2,487.51
|
-6.27
|
%
|
||||||
Weight
of freight carried (kg) (millions)
|
940.12
|
893.22
|
5.25
|
%
|
||||||
-
Domestic routes
|
464.42
|
438.55
|
5.90
|
%
|
||||||
-
International routes
|
395.89
|
358.98
|
10.28
|
%
|
||||||
-
Hong Kong routes
|
79.82
|
95.70
|
-16.59
|
%
|
|
For the |
For
the
|
||||||||
|
year ended |
year
ended
|
||||||||
|
31
December
|
31
December
|
||||||||
2007
|
2006
|
Change
|
||||||||
Load
factors
|
||||||||||
Overall
load factor (%)
|
63.83
|
62.64
|
1.19
|
|||||||
-
Domestic routes
|
70.17
|
68.75
|
1.42
|
|||||||
-
International routes
|
59.03
|
58.46
|
0.57
|
|||||||
-
Hong Kong routes
|
56.31
|
53.48
|
2.83
|
|||||||
Passenger
load factor (%)
|
73.58
|
71.34
|
2.24
|
|||||||
-
Domestic routes
|
76.88
|
73.26
|
3.62
|
|||||||
-
International routes
|
69.44
|
69.64
|
-0.20
|
|||||||
-
Hong Kong routes
|
65.12
|
63.39
|
1.73
|
|||||||
Freight
load factor (%)
|
51.34
|
51.74
|
-0.4
|
|||||||
-
Domestic routes
|
49.55
|
54.24
|
-4.69
|
|||||||
-
International routes
|
52.60
|
52.16
|
0.44
|
|||||||
-
Hong Kong routes
|
42.91
|
40.24
|
2.67
|
|||||||
Break-even
load factor (%)
|
67.74
|
71.15
|
-3.41
|
|||||||
Yields
and costs
|
||||||||||
Revenue
tonne-kilometers yield (RMB)
|
5.27
|
4.87
|
8.21
|
%
|
||||||
-
Domestic routes
|
5.91
|
5.77
|
2.43
|
%
|
||||||
-
International routes
|
4.44
|
3.16
|
40.51
|
%
|
||||||
-
Hong Kong routes
|
6.49
|
9.95
|
-34.77
|
%
|
||||||
Passenger-kilometers
yield (RMB)
|
0.61
|
0.61
|
-
|
|||||||
-
Domestic routes
|
0.61
|
0.61
|
-
|
|||||||
-
International routes
|
0.61
|
0.58
|
5.17
|
%
|
||||||
-
Hong Kong routes
|
0.65
|
0.68
|
-4.41
|
%
|
||||||
Freight
tonne-kilometers yield (RMB)
|
2.10
|
2.30
|
-8.70
|
%
|
||||||
-
Domestic routes
|
0.98
|
0.88
|
11.36
|
%
|
||||||
-
International routes
|
2.31
|
2.54
|
-9.06
|
%
|
||||||
-
Hong Kong routes
|
4.49
|
5.12
|
-12.30
|
%
|
||||||
Available
tonne-kilometers unit cost (RMB)
|
3.57
|
3.70
|
-3.51
|
%
|
1. | The Group will strengthen safety supervision and build up a system of safety management, so as to ensure safety production to progress in a steady and orderly way. |
2. | The Group will innovate servicing ideas, improve the service-providing system, extend “Experience the Air Culture of China Eastern Airlines” and enhance the brand image of the Company. The Group will continue to keep its flights on-time. While striving for a higher on-time rate, the Group will also strengthen and improve irregular flight service genuinely. The Group will enhance the standard of its service in upper class cabins and focus on providing personalized services. The Group will do its utmost to guarantee transportation for the Beijing Olympic Games. |
3. | In terms of marketing, the Group will develop long-term plan for its route network, further optimize the structure of the route network, and arrange flights in a scientific and reasonable way, put more effort into developing the transit business, coordinate with the construction of the Shanghai aviation hub, increase the earnings level through the network and improve the operating conditions of international flights, accelerate electronic business to extend the function of selling electronic tickets on the website and promote self-service check-in on the internet. The Company will actively promote the “95808” customer service hotline in serving destinations and further improve its sale and service function, deepen the operation of one-stop freight transport, comprehensively promote the system of freight information, strengthen its combined transport and trans-shipment to increase revenues. |
4. | The Group will continue to strictly manage the overall budget, strengthen cost control, increase cash flow efficiency, actively extend financing channels, strengthen corporate risk management, control financial risks and reduce operation risks. |
5. | The Group will implement standardized management, develop scientifically, inject more capital into training, accelerate the cultivation of talent, continue to promote IT development and promote energy-saving and emission-reducing strategies. |
|
Approximate
|
|||||||||
Total
number
|
percentage
in
|
|||||||||
|
of
Shares
|
shareholding
|
||||||||
|
(%)
|
|||||||||
1.
A
shares
|
|
|||||||||
(a) Listed
shares with trading moratorium
|
2,904,000,000
|
59.67
|
||||||||
(b) Listed
shares without trading moratorium
|
396,000,000
|
8.13
|
||||||||
2.
H
shares
|
|
1,566,950,000
|
32.20
|
|||||||
3.
Total
number of shares
|
4,866,950,000
|
100.00
|
|
Approximate
|
|||||||||
Total
number
|
percentage
in
|
|||||||||
Name
|
of
Shares
|
shareholding
|
||||||||
|
(%)
|
|||||||||
China
Eastern Air Holding Company
|
2,904,000,000
|
59.67
|
||||||||
HKSCC
Nominees Limited
|
1,544,484,799
|
31.73
|
(a) | At the 2006 annual general meeting held on 29 June 2007, the shareholders of the Company approved the termination of office as a whole for the fourth session of the Board, and approved the appointment of Mr. Li Fenghua, Mr. Li Jun, Mr. Luo Chaogeng, Mr. Cao Jianxiong, Mr. Luo Zhuping, Mr. Hu Honggao, Mr. Peter Lok, Mr. Wu Baiwang, Mr. Zhou Ruijin and Mr. Xie Rong as directors to the fifth session of the Board. |
(b) | At the 2006 annual general meeting held on 29 June 2007, the shareholders of the Company approved the termination of office as a whole for the fourth session of the supervisory committee, and approved the appointment of Mr. Liu Jiashun, Ms. Liu Jiangbo and Mr. Xu Zhao as supervisors nominated by shareholders to the fifth session of the supervisory committee. Pursuant to an employees’ representatives meeting of the Company, Ms. Wang Taoying and Ms. Yang Jie were nominated as supervisors by the employees of the Company with effect from 29 June 2007. | |
(c) | On 29 June 2007, the fifth session of the Board held the first meeting for 2007 and elected Mr. Li Fenghua as the Chairman of the Board and Mr. Li Jun as the Vice Chairman of the Board, and that Mr. Xie Rong, Mr. Hu Honggao and Mr. Zhou Ruijin were appointed as the members of the Audit Committee and Mr. Xie Rong as the Chairman of the Audit Committee, and that Mr. Wu Baiwang, Mr. Luo Chaogeng and Mr. Luo Zhuping were appointed as the members of the planning and development committee of the Company (the “Planning and Development Committee”) and Mr. Wu Baiwang as the Chairman of the Planning and Development Committee, and that Mr. Zhou Ruijin, Mr. Luo Chaogeng and Mr. Wu Baiwang were appointed as the remuneration and assessment committee of the Company (the “Remuneration and Assessment Committee”), and Mr. Zhou Ruijin as the Chairman of the Remuneration and Assessment Committee, and that based on the nomination by the Chairman of the Board, Mr. Cao Jianxiong was appointed as the President of the Company, and that based on the nomination by the President of the Company, Mr. Zhang Jianzhong, Mr. Li Yangmin and Mr. Fan Ru were appointed as the Vice Presidents of the Company and Mr. Luo Weide as the Chief Financial Officer of the Company, and that based on the nomination by the Chairman of the Board, Mr. Luo Zhuping was appointed as the secretary to the Board. | |
(d) | On 29 June 2007, the fifth session of the supervisory committee of the Company held the first meeting for 2007 and elected Ms. Liu Jiangbo as the Chairman of the supervisory committee of the Company. |
(a) | On the 2006 annual general meeting held on 29 June 2007, the shareholders of the Company approved amendments to the articles of association of the Company by adding the following new paragraph after the first paragraph of Article 21: | |
“On 18th December, 2006, the share reform plan of the Company was approved in the relevant shareholders’ meeting of A share market. Upon the implementation of the share reform, the total share capital of the Company remained unchanged and still comprised 4,866,950,000 shares, of which 2,904,000,000 A shares, representing 59.67% of the total share capital of the Company, were held by China Eastern Air Holding Company. The 1,566,950,000 shares, representing 32.20% of the total share capital of the Company, were overseas listed H shares, and the 396,000,000 shares, representing 8.13% of the total share capital of the Company, were domestic listed A shares.” | ||
(b) | On 9 November 2007, Singapore Airlines Limited and Lentor Investments Ptd. Ltd (an indirectly wholly-owned subsidiary of Temasek Holdings (Private) Limited) entered into an investor subscription agreement with the Company, to subscribe for new H shares to be issued by the Company. Simultaneously with the entering into of the investor subscription agreement, China Eastern Air Holding Company (“CEA Holding”) entered into a CEA Holding subscription agreement with the Company to subscribe for new H shares to be issued by the Company. For information about this project, please refer to the announcements dated 2 September 2007, 9 November 2007, 8 January 2008, 21 January 2008 and 26 February 2008 and published by the Company in Hong Kong. |
Li Fenghua | (Chairman, Non-executive Director) |
Li Jun | (Vice Chairman, Non-executive Director) |
Cao Jianxiong | (President, Executive Director) |
Luo Chaogeng | (Non-executive Director) |
Luo Zhuping | (Executive Director) |
Hu Honggao | (Independent Non-executive Director) |
Peter Lok | (Independent Non-executive Director) |
Wu Baiwang | (Independent Non-executive Director) |
Zhou Ruijin | (Independent Non-executive Director) |
Xie
Rong
|
(Independent Non-executive
Director)
|