Notes to the Financial Statements (Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)
11 STAFF COSTS 2008 RMB million 2007 RMB million
Salaries, wages and welfare 5,591 5,130
Retirement scheme contributions 686 614
Early retirement benefits (Note 41) 10 12
6,287 5,756
Staff costs relating to flight operations, maintenance, aircraft and traffic servicing, promotion and sales and general and administrative expenses are also included in the respective total amounts disclosed separately in Notes 5 to 9 above.
12 INTEREST EXPENSE
2008 2007 RMB million RMB million
Interest on bank and other loans wholly repayable within five years 1,934 1,986
Interest on other loans 30 105
Finance charges on obligations under finance leases 678 743
Other interest expense (Note 41) 19 15
Less: borrowing costs capitalised (674) (558)
1,987 2,291
The borrowing costs have been capitalised at rates ranging from 5.17% to 5.28% per annum in 2008 (2007: 5.30% to 5.84% per annum).
13 OTHER (LOSS)/INCOME, NET
2008 2007
RMB million RMB million
(Loss)/gain on sale of property, plant and equipment, net
(20)
–
Aircraft and spare engines 106
(39)
–
Other property, plant and equipment 24
(59) 130
In 2008, the loss on sale of property, plant and equipment mainly included a loss of RMB20 million on the sale of one Boeing 757-200 aircraft, to an independent third party, being the excess of the carrying amount of the asset and related disposal costs over the sale proceeds.
76 ANNUAL REPORT 2008
Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)
ANNUAL REPORT 2008
78 ANNUAL REPORT 2008
Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)
14 EMOLUMENTS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT (cont’d)
(b) Individuals with highest emoluments
In 2008, two of the five individuals (2007: one) with the highest emoluments are directors. The aggregate emoluments in respect of the three (2007: four) individuals during the year are as follows:
2008 2007 RMB’000 RMB’000
Salaries, allowances and benefits in kind 2,829 3,162
Retirement scheme contributions 162 50
2,991 3,212
The emoluments of the three (2007: four) individuals with the highest emoluments are within the following band:
2008 2007 Number Number of individuals of individuals
1 4 2
Nil to HK$1,000,000 (RMB882,000 equivalent)
HK$1,000,000 to HK$1,500,000 (RMB1,335,000 equivalent)
ANNUAL REPORT 2008
Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)
15 INCOME TAX EXPENSE
(a) Income tax expense in the consolidated income statement 2008 RMB million 2007 RMB million (restated, note 3)
PRC income tax Provision for the year Over-provision in prior year 25 (6) 408 (58)
19 350
Deferred tax Origination and reversal of temporary differences 232 301 Effect on deferred tax balances resulting from a change in tax rate (189) 196
43 497
Income tax expense 62 847
In respect of the Group’s overseas airline activities, the Group has either obtained exemptions from overseas taxation pursuant to the bilateral aviation agreements between the overseas governments and the PRC government, or has sustained tax losses in these overseas jurisdictions. Accordingly, no provision for overseas tax has been made for both the current and prior years.
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