INTERIM RESULTS/PROPOSED APPOINTMENT/OTHER

RNS Number : 6062M

Air China Ld

28 August 2013

 



Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

 AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

(I) INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

(II) PROPOSED APPOINTMENT OF DIRECTORS

(III) PROPOSED APPOINTMENT OF SUPERVISORS

The board of directors (the "Board") of Air China Limited (the "Company") hereby announces that the Board has passed, among others, the following resolutions at a meeting of the Board held on 27 August 2013: (I)      interim results for the six months ended 30 June 2013; and (II)     proposed appointment of directors of the fourth session of the Board. At a meeting of the supervisory committee of the Company (the "Supervisory Committee") held on 26 August 2013, it was resolved, among others, to propose the appointment of supervisors of the fourth session of the Supervisory Committee.

(I)      INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

The Board of the Company announced the unaudited interim results of the Company and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2013, with comparative figures for the corresponding period of last year, as follows:

Consolidated Income Statement

For the six months ended 30 June 2013 - unaudited

(Prepared under International Financial Reporting Standards)

		For the six months ended
		30 June 2013	30 June 2012
		RMB'000	RMB'000
	Notes		(Restated)
Turnover
Air traffic revenue	3	44,465,024	45,273,640
Other operating revenue	4	1,554,011	1,702,186
		46,019,035	46,975,826
Operating expenses
Jet fuel costs		(16,372,097)	(17,812,407)
Take-off, landing and depot charges		(4,452,818)	(4,327,889)
Depreciation		(5,262,453)	(4,988,824)
Aircraft maintenance, repair and overhaul costs		(1,519,473)	(1,412,341)
Employee compensation costs		(6,198,255)	(5,966,843)
Air catering charges		(1,157,761)	(1,368,840)
Aircraft and engine operating lease expenses		(1,949,509)	(1,708,032)
Other operating lease expenses		(403,824)	(358,941)
Other flight operation expenses		(3,960,842)	(3,160,848)
Selling and marketing expenses		(2,754,840)	(2,686,687)
General and administrative expenses		(560,548)	(388,495)
		(44,592,420)	(44,180,147)
Profit from operations	5	1,426,615	2,795,679
Finance revenue	6	1,245,233	141,297
Finance costs	6	(1,293,834)	(1,282,124)
Share of profits less losses of associates		100,660	(94,715)
Share of profits less losses of joint ventures		67,951	(72,705)
Profit before tax		1,546,625	1,487,432
Taxation	7	(395,219)	(308,665)
Profit for the period		1,151,406	1,178,767
Attributable to:
Equity shareholders of the Company		1,144,799	1,042,127
Non-controlling interests		6,607	136,640
		1,151,406	1,178,767
Earnings per share	9
Basic and diluted (RMB)		9.31 cents	8.59 cents

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2013 - unaudited

(Prepared under International Financial Reporting Standards)

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
		(Restated)
Profit for the period	1,151,406	1,178,767
Other comprehensive income/(losses) for the period  (after tax and reclassification adjustments)
Item that may be reclassified subsequently to profit or loss:
Share of other comprehensive income/(losses)   of associates and joint ventures	490,957	(49,951)
Exchange realignment	(350,754)	105,707
Other comprehensive income for the period	140,203	55,756
Total comprehensive income for the period	1,291,609	1,234,523
Attributable to:
Equity shareholders of the Company	1,292,389	1,095,268
Non-controlling interests	(780)	139,255
Total comprehensive income for the period	1,291,609	1,234,523

Consolidated Statement of Financial Position

At 30 June 2013 - unaudited

(Prepared under International Financial Reporting Standards)

	30 June 2013	31 December 2012	1 January 2012
	RMB'000	RMB'000	RMB'000
		(Restated)	(Restated)
NON-CURRENT ASSETS
Property, plant and equipment	126,060,145	123,479,738	110,315,265
Lease prepayments	2,095,031	2,120,495	2,140,366
Investment properties	224,296	229,824	240,879
Intangible assets	59,234	59,216	37,221
Goodwill	1,099,975	1,099,975	1,099,975
Interests in associates	13,703,171	13,676,018	13,227,747
Interests in joint ventures	1,176,876	1,142,319	1,178,541
Advance payments for aircraft and  flight equipment	23,562,067	18,696,984	19,443,291
Deposits for aircraft under operating leases	421,723	443,539	420,854
Available-for-sale investments	46,925	45,925	27,182
Deferred tax assets	2,878,544	2,849,703	3,071,522
	171,327,987	163,843,736	151,202,843
CURRENT ASSETS
Aircraft and flight equipment held for sale	658,384	592,697	92,487
Inventories	1,132,481	1,105,048	1,128,164
Accounts receivable	3,621,643	2,744,103	2,060,852
Bills receivable	191	1,253	1,601
Prepayments, deposits and other receivables	4,667,960	4,025,493	2,661,025
Financial assets	11,701	12,671	12,144
Due from the ultimate holding company	191,357	223,047	218,940
Pledged deposits	779,097	802,941	113,833
Cash and cash equivalents	13,903,245	11,787,943	15,306,409
Other current assets	469,144	144,552	-
	25,435,203	21,439,748	21,595,455
TOTAL ASSETS	196,763,190	185,283,484	172,798,298

Consolidated Statement of Financial Position

At 30 June 2013 - unaudited

(Prepared under International Financial Reporting Standards)

	30 June 2013	31 December 2012	1 January 2012
	RMB'000	RMB'000	RMB'000
		(Restated)	(Restated)
CURRENT LIABILITIES
Air traffic liabilities	(4,363,341)	(3,876,787)	(4,562,773)
Accounts payable	(9,798,517)	(9,849,718)	(10,639,811)
Bills payable	(89,188)	(1,503)	-
Other payables and accruals	(9,970,666)	(9,936,750)	(11,781,242)
Financial liabilities	(68,869)	(120,413)	(223,137)
Dividends payable	(776,580)	-	-
Due to the ultimate holding company	(37,732)	(28,970)	(12,957)
Due to the immediate holding company	-	-	(565)
Tax payable	(41,975)	(57,364)	(1,695,566)
Obligations under finance leases	(3,534,569)	(3,476,572)	(2,687,925)
Interest-bearing bank loans and other borrowings	(44,367,728)	(28,211,613)	(25,701,186)
Provision for major overhauls	(772,739)	(699,849)	(589,123)
	(73,821,904)	(56,259,539)	(57,894,285)
NET CURRENT LIABILITIES	(48,386,701)	(34,819,791)	(36,298,830)
TOTAL ASSETS LESS
CURRENT LIABILITIES	122,941,286	129,023,945	114,904,013
NON-CURRENT LIABILITIES
Obligations under finance leases	(23,877,832)	(25,476,607)	(19,191,860)
Interest-bearing bank loans and other borrowings	(35,342,459)	(42,254,161)	(39,398,481)
Provision for major overhauls	(3,046,335)	(2,745,327)	(2,496,294)
Provision for early retirement benefit obligations	(39,070)	(46,970)	(56,820)
Long-term payables	(203,000)	(147,268)	(147,177)
Deferred income	(3,782,674)	(3,479,947)	(3,452,491)
Deferred tax liabilities	(1,832,943)	(1,561,424)	(1,194,293)
	(68,124,313)	(75,711,704)	(65,937,416)
NET ASSETS	54,816,973	53,312,241	48,966,597
CAPITAL AND RESERVES
Issued capital	13,084,751	12,891,955	12,891,955
Treasury shares	(3,026,250)	(2,896,092)	(2,889,399)
Reserves	41,306,259	39,948,387	36,200,538
Total equity attributable to equity shareholders  of the Company	51,364,760	49,944,250	46,203,094
Non-controlling interests	3,452,213	3,367,991	2,763,503
TOTAL EQUITY	54,816,973	53,312,241	48,966,597

NOTES:

1.         BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of preparation

The interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard 34 ("IAS 34") "Interim Financial Reporting", issued by the International Accounting Standards Board ("IASB"). The interim financial reports are unaudited but have been reviewed by the Group's external auditor and it was authorised for issue by the Board on 27 August 2013.

As at 30 June 2013, the Group's current liabilities exceeded its current assets by approximately RMB48.39 billion. The liquidity of the Group is primarily dependent on its ability to maintain adequate cash inflows from operations and sufficient financing to meet its financial obligations as and when they fall due. Considering the Group's sources of liquidity and the unutilised bank facilities of RMB98.6 billion as at 30 June 2013, the Directors of the Company believe that adequate funding is available to fulfil the Group's debt obligations and capital expenditure requirements when preparing the interim financial report for the six months ended 30 June 2013. Accordingly, the interim financial report has been prepared on a basis that the Group will be able to continue as a going concern.

The interim condensed consolidated financial statements do not include all the information and disclosures required in annual financial statements, and therefore should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2012.

Impact of new and revised IFRSs

The IASB has issued a number of new IFRSs and amendments to IFRSs that are first effective for the current accounting period of the Group and the Company. Of these, the following developments are relevant to the Group's financial statements:

Amendments to IAS 1, Presentation of financial statements - presentation of items of other comprehensive income

IFRS 10, Consolidated financial statements

IFRS 11, Joint arrangements

IFRS 12, Disclosure of interests in other entities

IFRS 13, Fair value measurement

Revised IAS 19, Employee benefits

Annual Improvements to IFRSs 2009-2011 Cycle

Amendments to IFRS 7 - Disclosures - Offsetting financial assets and financial liabilities

The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

Amendments to IAS 1, Presentation of financial statements - presentation of items of other comprehensive income

The amendments to IFRS 1 require entities to present the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met separately from those that would never be reclassified to profit or loss. The Group's presentation of other comprehensive income in these financial statements has been modified accordingly.

IFRS 10, Consolidated financial statements

IFRS 10 replaces the requirements in IAS 27, Consolidated and separate financial statements, relating to the preparation of consolidated financial statements and SIC 12 Consolidation - Special purpose entities. It introduces a single control model to determine whether an investee should be consolidated, by focusing on whether the entity has power over the investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect the amount of those returns.

As a result of the adoption of IFRS 10, the Group has changed its accounting policy with respect to determining whether it has control over an investee. The adoption does not change any of the control conclusions reached by the Group in respect of its involvement with other entities as at 1 January 2013.

IFRS 11, Joint arrangements

IFRS 11, which replaces IAS 31, Interests in joint ventures, divides joint arrangements into joint operations and joint ventures. Entities are required to determine the type of an arrangement by considering the structure, legal form, contractual terms and other facts and circumstances relevant to their rights and obligations under the arrangement. Joint arrangements which are classified as joint operations under IFRS 11 are recognised on a line-by-line basis to the extent of the joint operator's interest in the joint operation. All other joint arrangements are classified as joint ventures under IFRS 11 and are required to be accounted for using the equity method in the Group's consolidated financial statements. Proportionate consolidation is no longer allowed as an accounting policy choice.

As a result of the adoption of IFRS 11, the Group has changed its accounting policy with respect to its interests in joint arrangements and re-evaluated its involvement in its joint arrangements. The Group has reclassified the investments from jointly controlled entities to joint ventures. The Group has changed its accounting policy with respect to account its joint ventures, for which the proportionate consolidation method was previously applied. This change in accounting policy has been applied retrospectively by restating the balances at 31 December 2012 and the result for the six months ended 30 June 2012. The impact of the changes in accounting policies are summarised below.

IFRS 12, Disclosure of interests in other entities

IFRS 12 brings together into a single standard all the disclosure requirements relevant to an entity's interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The disclosures required by IFRS 12 are generally more extensive than those previously required by the respective standards. Since those disclosure requirements only apply to a full set of financial statements, the Group has not made additional disclosures in this interim financial report as a result of adopting IFRS 12.

IFRS 13, Fair value measurement

IFRS 13 replaces existing guidance in individual IFRSs with a single source of fair value measurement guidance. IFRS 13 also contains extensive disclosure requirements about fair value measurements for both financial instruments and non-financial instruments. Some of the disclosures are specifically required for financial instruments in the interim financial reports. The Group has provided those disclosures. The adoption of IFRS 13 does not have any material impact on the fair value measurements of the Group's assets and liabilities.

Revised IAS 19, Employee benefits

Revised IAS 19 introduces a number of amendments to the accounting for defined benefit plans. Among them, revised IAS 19 eliminates the "corridor method" under which the recognition of actuarial gains and losses relating to defined benefit schemes could be deferred and recognised in profit or loss over the expected average remaining service lives of employees. Under the revised standard, all actuarial gains and losses are required to be recognised immediately in other comprehensive income. Revised IAS 19 also changed the basis for determining income from plan assets from expected return to interest income calculated at the liability discount rate, and requires immediate recognition of past service cost, whether vested or not.

As a result of the adoption of revised IAS 19, an associate of the Company has changed its accounting policy with respect to defined benefit plans, for which the corridor method was previously applied. This change in accounting policy has been applied retrospectively by restating the balances at 31 December 2012 and the result for the six months ended 30 June 2012 of the associate's financial statements and has significantly affected the Group's share of profits of associates and other comprehensive income. Accordingly, the Group has also applied retrospectively to restate the balances at 31 December 2012 and the result for the six months ended 30 June 2012. The impact of the changes in accounting policies are summarised below.

Annual Improvements to IFRSs 2009-2011 Cycle

This cycle of annual improvements contains amendments to five standards with consequential amendments to other standards and interpretations. Among them, IAS 34 has been amended to clarify that total assets for a particular reportable segment are required to be disclosed only if the amounts are regularly provided to the chief operating decision maker ("CODM") and only if there has been a material change in the total assets for that segment from the amount disclosed in the last annual financial statements. The amendment also requires the disclosure of segment liabilities if the amounts are regularly provided to the CODM and there has been a material change in the amounts compared with the last annual financial statements. In respect of this amendment, the Group has continued to disclose segment assets.

Amendments to IFRS 7 - Disclosures - Offsetting financial assets and financial liabilities

The amendments introduce new disclosures in respect of offsetting financial assets and financial liabilities. Those new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32, Financial instruments: Presentation, and those that are subject to an enforceable master netting arrangement or similar agreement that covers similar financial instruments and transactions, irrespective of whether the financial instruments are set off in accordance with IAS 32.

The adoption of the amendments does not have an impact on the Group's interim financial report because the Group has not offset financial instruments, nor has it entered into master netting arrangement or similar agreement which is subject to the disclosures of IFRS 7.

Summaries of retrospective impact with respect to changes in accounting policies

The retrospective impact of the adoption of IFRS 11 and revised IAS 19, by restating the balances at 31 December 2012 and the result for the six months ended 30 June 2012, are summarised as follows:

		Effect of	Effect of
	As previously	adopting of	adopting of
	reported	IFRS 11	revised IAS 19	As restated
	RMB'000	RMB'000	RMB'000	RMB'000
Consolidated income statement for the  six months ended 30 June 2012:
Share of profits less losses of associates	75,488	-	19,227	94,715
Share of profits less losses of joint ventures	-	72,705	-	72,705
Profit attributable to equity shareholders  of the Company	(944,515)	(116,839)	19,227	(1,042,127)
Basic and diluted earnings per share	7.79 cents			8.59 cents
Consolidated statement of comprehensive  income for the six months ended 30 June 2012:
Total comprehensive income attributable to  equity shareholders of the Company	(997,304)	(118,529)	20,565	(1,095,268)
Consolidated statement of financial  position as at 31 December 2012:
Net assets/Total equity attributable to  equity shareholders of the Company	(49,658,503)	(578,201)	292,454	(49,944,250)
Retained earnings attributable to  equity shareholders of the Company	(18,296,742)	(655,751)	85,176	(18,867,317)

The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

2.         SEGMENT INFORMATION

The Group's operating businesses are structured and managed separately, according to the nature of their operations and the services they provide. The Group has the following reportable operating segments:

(a)        the "airline operations" segment which comprises the provision of air passenger and air cargo services; and

(b)        the "other operations" segment which comprises the provision of aircraft engineering, ground services and other airline-related services.

In determining the Group's geographical information, revenue is attributed to the segments based on the origin and destination of each flight. Assets, which consist principally of aircraft and ground equipment supporting the Group's worldwide transportation network, are mainly located in Mainland China. An analysis of assets of the Group by geographical distribution has therefore not been included in the interim condensed consolidated financial statements.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Operating segments

The following tables present the Group's consolidated revenue and profit before tax regarding the Group's operating segments in accordance with the Accounting Standards for Business Enterprises of the PRC ("CASs") for the six months ended 30 June 2013 and 2012 and the reconciliations of reportable segment revenue and profit before tax to the Group's consolidated amounts under IFRSs:

For the six months ended 30 June 2013 (Unaudited)

	Airline	Other
	operations	operations	Eliminations	Total
	RMB'000	RMB'000	RMB'000	RMB'000
REVENUE
Sales to external customers	45,752,024	106,289	-	45,858,313
Intersegment sales	-	865,930	(865,930)	-
Total revenue for reportable segments  under CASs	45,752,024	972,219	(865,930)	45,858,313
Business tax set off against segment revenue				(176,571)
Other income not included in segment revenue				378,670
Effects of differences between IFRSs and CASs				(41,377)
Revenue for the period under IFRSs				46,019,035
SEGMENT PROFIT BEFORE TAX
Profit before tax for reportable segments  under CASs	1,329,426	182,656	-	1,512,082
Effects of differences between IFRSs and CASs				34,543
Profit before tax for the period under IFRSs				1,546,625

For the six months ended 30 June 2012 (Unaudited/Restated)

	Airline	Other
	operations	operations	Eliminations	Total
	RMB'000	RMB'000	RMB'000	RMB'000
REVENUE
Sales to external customers	47,519,450	40,903	-	47,560,353
Intersegment sales	-	969,187	(969,187)	-
Total revenue for reportable segments  under CASs	47,519,450	1,010,090	(969,187)	47,560,353
Business tax set off against segment revenue				(1,092,045)
Other income not included in segment revenue				612,655
Effects of differences between IFRSs and CASs				(105,137)
Revenue for the period under IFRSs				46,975,826
SEGMENT PROFIT BEFORE TAX
Profit before tax for reportable segments  under CASs	1,496,265	(12,207)	-	1,484,058
Effects of differences between IFRSs and CASs				3,374
Profit before tax for the period under IFRSs				1,487,432

The following tables present the segment assets of the Group's operating segments under CASs as at 30 June 2013 and 31 December 2012 and the reconciliations of reportable segment assets to the Group's consolidated amounts under IFRSs:

	Airline	Other
	operations	operations	Eliminations	Total
	RMB'000	RMB'000	RMB'000	RMB'000
SEGMENT ASSETS
As at 30 June 2013 under CASs (Unaudited)	195,484,456	3,804,683	(2,372,559)	196,916,580
Effects of differences between IFRSs and CASs				(153,390)
As at 30 June 2013 under IFRSs (Unaudited)				196,763,190
As at 31 December 2012 under CASs  (Restated)	184,487,735	3,950,738	(3,020,021)	185,418,452
Effects of differences between IFRSs and CASs  (Restated)				(134,968)
As at 31 December 2012 under IFRSs (Restated)				185,283,484

Geographical information

The following tables present the geographical information of the Group's consolidated revenue under IFRSs for the six months ended 30 June 2013 and 2012:

For the six months ended 30 June 2013 (Unaudited)

		Hong Kong,			Japan
	Mainland	Macau and		North	and	Asia Pacific
	China	Taiwan	Europe	America	Korea	and others	Total
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Sales to external  customers and  total revenue	30,409,332	2,503,168	4,555,937	3,617,152	2,429,830	2,503,616	46,019,035

For the six months ended 30 June 2012 (Unaudited/Restated)

		Hong Kong,			Japan
	Mainland	Macau and		North	and	Asia Pacific
	China	Taiwan	Europe	America	Korea	and others	Total
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Sales to external  customers and  total revenue	31,674,268	2,543,839	4,246,128	3,347,430	3,063,115	2,101,046	46,975,826

3.         AIR TRAFFIC REVENUE

Air traffic revenue represents revenue from the Group's airline operation business. An analysis of the Group's air traffic revenue during the period is as follows:

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Passenger	40,735,592	41,431,591
Cargo and mail	3,729,432	3,842,049
	44,465,024	45,273,640

4.         OTHER OPERATING REVENUE

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Aircraft engineering income	80,598	23,192
Ground service income	310,106	351,582
Government grants and subsidies:
- Recognition of deferred income	44,328	112,816
- Others	235,620	354,966
Service charges on return of unused flight tickets	351,216	299,363
Training service income	24,855	20,843
Sale of materials	6,193	5,166
Import and export service income	15,435	15,495
Others	485,660	518,763
	1,554,011	1,702,186

5.         PROFIT FROM OPERATIONS

The Group's profit from operations is arrived at after charging/(crediting):

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Gain on disposal of property, plant and equipment, net	(38,368)	(76,977)
Minimum lease payments under operating leases:
- Aircraft and related equipment	1,949,509	1,708,032
- Land and buildings	363,657	315,001
Amortisation of lease prepayments	24,985	25,322
Depreciation	5,262,453	4,988,824
Accrual/(reversal) of bad debt provision, net	18,144	(230,368)

6.         FINANCE REVENUE AND FINANCE COSTS

An analysis of the Group's finance revenue and finance costs during the period is as follows:

Finance revenue

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Exchange gains, net	1,119,362	-
Gain on interest rate derivative contracts	-	2,025
Interest income	123,981	139,272
Others	1,890	-
	1,245,233	141,297

Finance costs

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Interest on interest-bearing bank loans and other borrowings	1,362,434	1,157,558
Interest on finance leases	188,674	135,118
Loss on interest rate derivative contracts	1,876	-
Exchange loss, net	-	340,691
	1,552,984	1,633,367
Less: Interest capitalised	(259,150)	(351,243)
	1,293,834	1,282,124

The interest capitalisation rates during the period ranges from 1.21% to 7.86% (six months ended 30 June 2012: 1.19% to 7.92%) per annum relating to the costs of related borrowings during the period.

7.         TAXATION

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Current taxation:
- Mainland China	141,168	239,966
- Hong Kong and Macau	11,373	378
Deferred taxation	242,678	68,321
	395,219	308,665

Under the relevant Corporate Income Tax Law and regulations in the PRC, except for two branches which are taxed at a preferential rate of 15% (six months ended 30 June 2012: 15%), all group companies located in Mainland China are subject to a corporate income tax rate of 25% (six months ended 30 June 2012: 25%) during the period. Subsidiaries in Hong Kong and Macau are taxed at corporate income tax rates of 16.5% and 12% (six months ended 30 June 2012: 16.5% and 12%), respectively.

In respect of majority 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 governments, or has sustained tax losses in these overseas jurisdictions. Accordingly, no provision for overseas tax has been made for overseas airlines activities in the current and prior periods.

8.         DIVIDEND

In accordance with the Company's articles of association, the profit after tax of the Company for the purpose of dividend distribution is based on the lesser of (i) the profit determined in accordance with CASs; and (ii) the profit determined in accordance with IFRSs.

The Board of Directors decided not to declare an interim dividend for the six months ended 30 June 2013 (six months ended 30 June 2012: Nil).

9.         EARNINGS PER SHARE

The calculation of basic earnings per share for the six months ended 30 June 2013 was based on the profit attributable to ordinary equity shareholders of the Company of RMB1.14 billion (six months ended 30 June 2012: RMB1.04 billion (Restated)) and the weighted average of 12,293,118,783 ordinary shares (six months ended 30 June 2012: 12,136,990,775 shares) in issue during the period, as adjusted to reflect the weighted average number of treasury shares held by Cathay Pacific Airways Limited ("Cathay Pacific") through reciprocal shareholding.

The Group had no potentially dilutive ordinary shares in issue during both periods.

Unaudited Interim Consolidated Income Statement

For the six months ended 30 June 2013

(Prepared under the Accounting Standards for Business Enterprises of the PRC)

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
		(Restated)
Revenue from operations	45,858,313	47,560,353
Less: Cost of operations	39,530,704	39,385,193
Business taxes and surcharges	176,571	1,092,045
Selling expenses	3,397,742	3,280,207
General and administrative expenses	1,450,566	1,414,931
Finance cost	218,321	1,307,906
Impairment losses/(reversals) in assets	18,144	(230,199)
Add: (Losses)/gains from movements in fair value	(954)	3,544
Investment income/(loss)	170,501	(211,404)
Including: Share of profits less losses of associates       and joint ventures	168,611	(167,420)
Profit from operations	1,235,812	1,102,410
Add: Non-operating income	316,943	471,123
Less: Non-operating expenses	40,673	89,475
Including: Loss on disposal of non-current assets	21,027	11,382
Profit before tax	1,512,082	1,484,058
Less: Taxation	386,583	304,760
Profit for the period	1,125,499	1,179,298
Net profit attributable to equity shareholders  of the Company	1,118,892	1,042,658
Non-controlling interests	6,607	136,640
Earnings per share (RMB)
Basic and diluted	0.09	0.09
Other comprehensive income	140,203	55,756
Total comprehensive income	1,265,702	1,235,054
Attributable to:
Equity shareholders of the Company	1,266,482	1,095,799
Non-controlling interests	(780)	139,255

Unaudited Interim Consolidated Balance Sheet

At 30 June 2013

(Prepared under the Accounting Standards for Business Enterprises of the PRC)

	30 June 2013	31 December 2012
	RMB'000	RMB'000
		(Restated)
ASSETS
Current assets
Cash and bank balances	14,682,342	12,590,884
Financial assets held for trading	11,701	12,671
Bills receivable	191	1,253
Accounts receivable	3,813,000	2,967,150
Other receivables	3,577,917	3,103,008
Prepayments	776,971	623,754
Inventories	1,132,481	1,105,048
Other current assets	469,144	144,552
Total current assets	24,463,747	20,548,320
Non-current assets
Long-term receivables	423,803	445,657
Long-term equity investments	15,010,433	14,947,723
Investment properties	224,296	229,824
Fixed assets	118,034,484	116,303,025
Construction in progress	31,769,569	25,977,975
Intangible assets	2,783,278	2,810,814
Goodwill	1,102,185	1,102,185
Long-term deferred expenses	310,992	296,613
Deferred tax assets	2,793,793	2,756,316
Total non-current assets	172,452,833	164,870,132
Total assets	196,916,580	185,418,452

Unaudited Interim Consolidated Balance Sheet

At 30 June 2013

(Prepared under the Accounting Standards for Business Enterprises of the PRC)

	30 June 2013	31 December 2012
	RMB'000	RMB'000
		(Restated)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short term loans	26,625,868	16,787,697
Short-term bonds payable	2,200,000	1,500,000
Financial liabilities held for trading	68,869	120,413
Bills payable	89,188	1,503
Accounts payable	11,414,519	11,246,311
Domestic air traffic liabilities	1,449,751	1,566,686
International air traffic liabilities	2,913,590	2,310,101
Receipts in advance	127,204	162,884
Employee compensations payable	2,058,993	2,192,434
Taxes payable	441,305	444,972
Interest payable	681,184	352,515
Dividend payable	776,580	-
Other payables	5,173,844	5,322,884
Non-current liabilities repayable within one year	19,352,853	13,802,983
Total current liabilities	73,373,748	55,811,383
Non-current liabilities
Long-term loans	21,342,459	30,254,161
Corporate bonds	14,000,000	12,000,000
Long-term payables	3,249,335	2,892,595
Obligations under finance leases	23,877,832	25,476,607
Accrued liabilities	398,570	406,470
Deferred income	3,708,793	3,361,737
Deferred tax liabilities	1,832,943	1,561,424
Total non-current liabilities	68,409,932	75,952,994
Total liabilities	141,783,680	131,764,377
Shareholders' equity
Issued capital	13,084,751	12,891,955
Capital reserve	17,704,764	16,492,312
Reserve funds	4,985,234	4,572,881
Retained earnings	19,294,744	19,374,375
Foreign exchange translation reserve	(3,388,806)	(3,045,439)
Equity attributable to shareholders of the Company	51,680,687	50,286,084
Non-controlling interests	3,452,213	3,367,991
Total shareholders' equity	55,132,900	53,654,075
Total liabilities and shareholders' equity	196,916,580	185,418,452

Effects of Significant Differences Between IFRSs and CASs

The effects of the significant differences between the consolidated financial statements of the Group prepared under CASs and IFRSs are as follows:

	For the six months ended
	30 June 2013	30 June 2012
	RMB'000	RMB'000
	(Unaudited)	(Unaudited/ restated)
Net profit attributable to shareholders of the
Company under CASs	1,118,892	1,042,658
Deferred taxation	(8,636)	(3,905)
Differences in value of fixed assets and  other non-current assets	(9,786)	(66,848)
Government grants	44,329	79,895
Others	-	(9,673)
Net profit attributable to shareholders of the  Company under IFRSs	1,144,799	1,042,127

	30 June 2013	31 December 2012
	RMB'000	RMB'000
	(Unaudited)	(Restated)
Equity attributable to shareholders of the  Company under CASs	51,680,687	50,286,084
Deferred taxation	84,751	93,387
Differences in value of fixed assets and  other non-current assets	(378,060)	(368,274)
Government grants	(162,537)	(206,866)
Unrecognition profit of the disposal of  Hong Kong Dragon Airlines	139,919	139,919
Equity attributable to shareholders of the  Company under IFRSs	51,364,760	49,944,250

CHAIRMAN'S STATEMENT

The first half of 2013 witnessed a complex and volatile operating environment both internationally and domestically. The global economy continued its sluggish recovery whilst China's economic growth slowed, facing the pressure from the economic restructuring and transition upgrade. Despite the steady growth in the air passenger market, market competition intensified and profit margin declined accordingly. The air cargo market remained weak, resulting in a relatively challenging operating environment. The Group has taken a series of proactive measures, including optimising its operating structure and strengthening its marketing, product innovation and service management, which effectively improved our operational efficiency, consolidated our competitive edge in core markets, and maintained an industry-leading performance in business operations. During the reporting period, the Group recorded a profit attributable to shareholders of RMB1,145 million, representing an increase of 9.85% from the corresponding period last year.

In the first half of 2013, our capacity measured in available seat kilometer reached 83,719 million and our revenue passenger kilometer reached 67,905 million, representing an increase of 7.49% and 8.93% over the same period of the last year, respectively. We carried a total of 37,450,200 passengers with a passenger load factor of 81.11%, representing an increase of 7.78% and 1.07 percentage points over the same period of the previous year, respectively. The operating cost per available seat kilometer decreased by 7.02% to RMB0.53 compared with the same period of last year while our passenger yield decreased by 9.09% to RMB0.60 due to the intensifying market competition.

In the first half of 2013, with the delivery of 20 new aircraft, the Group promptly adapted to the changes in the market environment by further strengthening the alignment between capacity allocation and market demand. For our domestic operations, we have primarily increased the deployment of narrow-body aircraft in second and third tier cities as well as central and western regions, and rationalised the deployment of wide-body aircraft in major first tier cities. For our international operations, we, in seizing the market trend in a timely manner, have increased our capacity deployment of Boeing 777-300 aircraft in place of Boeing 747 on our North American routes, replaced Airbus 340 aircraft with more advantageous Airbus 330 aircraft on our European routes and appropriately reduced our capacity on our Japanese routes and re-deployed such capacity to other markets with a higher demand. With these efforts, we achieved a better alignment between the capacity allocation and market demand, a steady increase in the operational efficiency of air passenger business as well as an effective decrease in our unit operating cost.

In the first half of 2013, the Group continued to strengthen its operating advantages in terms of its network, transfer flights and alliance partners and increase the value of its aviation hubs. Flight connections at the Beijing hub have been effectively optimised and the introduction of a 72-hour visa-free transit policy have resulted in a notable increase in the transfer revenue, particularly from international flights. New routes including Jiuzhaigou-Guangzhou and Chengdu-Frankfurt were launched at the Chengdu regional hub, resulting in the number of cities served by the Chengdu regional hub reaching 64. The profitability of air routes at the Shanghai gateway was further improved with Airbus 340 aircraft gradually being replaced by Airbus 330 aircraft for long-haul international routes. In the first half of 2013, the Company successfully became a member of the strategic group of the core executive committee of Star Alliance and strengthened the cooperation with other Star Alliance members. With the Star Alliance platform, our competitive advantage of the hub network was further consolidated.

In the first half of 2013, the Group continued to improve its core competitiveness in service by committing to its passenger demand oriented services, providing full-featured integrated services and improving the passenger experience. We introduced innovative service products and conducted a successful trial flight with on-board satellite internet technology. We also enhanced operation at zone D of Terminal 3 of the Beijing Capital International Airport and improved both bridge docking rate and on time performance rate. Efforts have also been made to optimise the through check-in and through baggage for transfer flights on European and American routes to facilitate passengers transfer in the Beijing hub. In response to the declining on time performance rate, we formulated a series of measures such as optimising our flight schedules, enhancing flight monitoring and increasing resource availability. At the same time, we developed specific measures to deal with flight delays in terms of information release, decision-making mechanism and passenger care.

In order to improve its operational efficiency, the Group continued to strengthen the strategic collaboration with its member airlines. We furthered our comprehensive cooperation with Cathay Pacific Airways Limited in cargo business, ground handling at the Shanghai International Airport and code-sharing flights. We also continued to deepen our comprehensive cooperation with Shenzhen Airlines Company Limited in various business aspects, among which the joint procurement of 100 Airbus aircraft saved our procurement costs. With the official launch of Air China Inner Mongolia limited, we have strengthened our influence in the regional market.

The weak performance of the air cargo market that started in 2012 continued in the first half of the year. In response to the challenging operating environment, Air China Cargo Co., Ltd. strived to strengthen its marketing and deepen the synergy of passenger and cargo operation. Air China Cargo Co., Ltd. also placed greater emphasis on optimising the capacity deployment in alignment with the market demand as well as aviation routes with the launch of two new cargo routes (i.e., Shanghai Pudong-Chongqing-Frankfurt and Shanghai Pudong-Zhengzhou-Amsterdam routes) to boost its competitiveness in the western China market. Air China Cargo Co., Ltd. entered into an agreement in respect of the purchase of eight Boeing 777-F aircraft and the sale of seven 747-400BCF aircraft, with the sale of one aircraft already completed, which has resulted in a decrease in fixed costs in the reporting period and will also significantly improve the efficiency of its fleet in the future. In the first half of 2013, Air China Cargo Co., Ltd. recorded an increase of 3.96% and 4.6% in available freight tonne kilometers and revenue freight tonne kilometers, respectively, and the cargo and mail load factor also increased by 0.34 percentage points compared with the same period of the last year, resulting in an effective reduction in operating losses.

In the second half of 2013, faced with the intense market competition, the Group will continue to implement measures to maintain its steady business growth and revenue and further stimulate management potential and innovation vitality by accelerating structural adjustment, boosting operational efficiency, enhancing marketing capability and improving services in a bid to seize opportunities in the peak season, achieve a better performance and maintain its strategic leading advantage.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following discussion and analysis are based on the Group's interim condensed consolidated financial statements and its notes prepared in accordance with IFRSs and are designed to assist the readers in understanding the information provided in this announcement further so as to better understand the financial conditions and results of operations of the Group as a whole.

Profit analysis

For the six months ended 30 June 2013, the Group proactively responded to market changes by adopting various measures such as optimising operational arrangement, strengthening dynamic adjustment of flights allocation and refining cost control. Notwithstanding weak market demand and intensified competition, we recorded profit before tax of RMB1,547 million, profit attributable to shareholders of the Company of RMB1,145 million and an earnings per share of RMB0.0931, representing an increase of 3.98%, 9.85% and 8.38%, respectively, over the same period of 2012.

Turnover

For the six months ended 30 June 2013, the Group's total turnover was RMB46,019 million, representing a decrease of RMB957 million or 2.04% as compared with that of the same period of the previous year. Revenue from our air traffic operations contributed RMB44,465 million to the total turnover, representing a decrease of RMB809 million or 1.79% over the corresponding period of last year. Our other operating revenue was RMB1,554 million, representing a decrease of RMB148 million or 8.70% as compared with that of the same period of the previous year. The decrease in revenue is mainly due to the implementation of the policy to substitute value-added tax for business tax since September 2012. Had such tax policy substitution not taken place, the Group's turnover would actually grow by 2.50%.

Revenue contribution by geographical segments

	For the six months ended 30 June
	2013		2012 (restated)		Change
(in RMB'000)	Amount	Percentage	Amount	Percentage	(%)
International	13,106,535	28.48%	12,757,719	27.16%	2.73
Domestic	30,409,332	66.08%	31,674,268	67.42%	-3.99
Hong Kong, Macau and Taiwan	2,503,168	5.44%	2,543,839	5.42%	-1.60
Total	46,019,035	100.00%	46,975,826	100.00%	-2.04

Air passenger revenue

For the six months ended 30 June 2013, the Group recorded an air passenger revenue of RMB40,736 million, representing a decrease of RMB696 million or 1.68% over the same period of 2012. Among the Group's air passenger revenue, the increase in capacity and passenger load factor contributed to an increase of RMB3,105 million and RMB597 million in revenue, respectively, while the decrease in passenger yield caused a RMB4,398 million decrease in revenue. The Group's capacity, passenger load factor and passenger yield of our passenger operations for the six months ended 30 June 2013 are as follows:

	For the six months ended 30 June		Change
	2013	2012	%
Available seat kilometres (million)	83,718.58	77,881.59	7.49
Passenger load factor (%)	81.11	80.04	1.07 ppts
Yield per RPK (RMB)	0.60	0.66	-9.09

Air passenger revenue contributed by geographical segment

	For the six months ended 30 June
	2013		2012		Change (%)
(in RMB'000)	Amount	Percentage	Amount	Percentage
International	10,327,724	25.35%	9,943,992	24.00%	3.86
Domestic	28,058,635	68.88%	29,161,090	70.38%	-3.78
Hong Kong, Macau and Taiwan	2,349,233	5.77%	2,326,509	5.62%	0.98
Total	40,735,592	100.00%	41,431,591	100.00%	-1.68

Air cargo revenue

For the six months ended 30 June 2013, the Group's air cargo and mail revenue was RMB3,729 million, representing a decrease of RMB113 million or 2.93% from the same period in 2012. Among the Group's air cargo and mail revenue, increase in capacity and cargo and mail load factor contributed to an increase in revenue of RMB152 million and RMB27 million, respectively, while the decrease in cargo yield resulted in a decrease in revenue of RMB292 million. The capacity, cargo and mail load factor and yield of our cargo and mail operations for the six months ended 30 June 2013 are as follows:

	For the six months ended 30 June		Change
	2013	2012	%
Available freight tonne kilometres (million)	4,132.68	3,974.99	3.97
Cargo and mail load factor (%)	57.26	56.88	0.38 ppts
Yield per RFTK (RMB)	1.58	1.70	-7.06

Air cargo revenue contributed by geographical segment

	For the six months ended 30 June
	2013		2012		Change (%)
(in RMB'000)	Amount	Percentage	Amount	Percentage
International	2,705,276	72.54%	2,761,698	71.88%	-2.04
Domestic	870,221	23.33%	887,211	23.09%	-1.91
Hong Kong, Macau and Taiwan	153,935	4.13%	193,140	5.03%	-20.30
Total	3,729,432	100.00%	3,842,049	100.00%	-2.93

Operating expenses

For the six months ended 30 June 2013, the Group's operating expenses were RMB44,592 million, representing an increase of 0.93% as compared with RMB44,180 million recorded in the same period of 2012. The breakdown of the operating expenses is set out below:

	For the six months ended 30 June
	2013		2012 (restated)		Change (%)
(in RMB'000)	Amount	Percentage	Amount	Percentage
Jet fuel costs	16,372,097	36.71%	17,812,407	40.32%	-8.09
Take-off, landing and  depot charges	4,452,818	9.99%	4,327,889	9.80%	2.89
Depreciation	5,262,453	11.80%	4,988,824	11.29%	5.48
Aircraft maintenance,  repair and overhaul costs	1,519,473	3.41%	1,412,341	3.20%	7.59
Employee compensation costs	6,198,255	13.90%	5,966,843	13.51%	3.88
Air catering charges	1,157,761	2.60%	1,368,840	3.10%	-15.42
Selling and marketing expenses	2,754,840	6.18%	2,686,687	6.08%	2.54
General and administrative  expenses	560,548	1.26%	388,495	0.88%	44.29
Others	6,314,175	14.15%	5,227,821	11.82%	20.78
Total	44,592,420	100.00%	44,180,147	100.00%	0.93

In particular:

•        Jet fuel costs decreased by RMB1,440 million or 8.09% from the corresponding period in the previous year, mainly due to the change of policy on levying value-added tax in lieu of business tax. Without taking into account such policy change, jet fuel costs would actually record a slight increase.

•        Take-off, landing and depot charges increased by RMB125 million over the same period of 2012 primarily due to an increase in the number of take-offs and landings.

•        Depreciation expenses increased due to an increase in the number of self-owned and finance leased aircraft during the reporting period.

•        Aircraft maintenance, repair and overhaul costs recorded an increase of RMB107 million or 7.59% over the same period of last year due to the expansion of fleet size.

•        Employee compensation costs increased by RMB231 million, mainly due to an increase in number of employees and an increase in the hourly rate of pilots.

•        Air catering charges decreased by RMB211 million, mainly due to the levy of value-added tax in lieu of business tax. Air catering charges would be substantially the same as that of the same period of last year without taking into account such policy change.

•        Sales and marketing expenses increased by RMB68 million as compared to the same period in the previous year due to an increase in agency handling fees from the corresponding period of last year.

•        General and administrative expenses increased by RMB172 million as compared to the same period of the previous year mainly due to the bad debt provision on receivables of RMB18 million for the reporting period, as opposed to the reversal of bad debt provision on receivables of RMB230 million in the corresponding period of last year. Setting aside the effect of bad debt provision, general and administrative expenses decreased by 12.35% over that of the same period of last year.

•        Other operating expenses mainly included aircraft and engines operating lease expenses, contributions to the civil aviation infrastructure construction fund and ordinary expenses arising from our core air traffic business not included in the aforesaid items. Other operating expenses increased by 20.78% from the corresponding period of last year, mainly due to the increase in the operating lease expenses of aircraft engines and buildings and contributions to the civil aviation infrastructure construction fund for the reporting period from the corresponding period of last year.

Financial revenue and financial costs

For the six months ended 30 June 2013, the Group recorded a net exchange gain of RMB1,119 million as compared to a net exchange loss of RMB341 million for the same period of 2012, which was mainly due to the appreciation of RMB against U.S. dollars for the reporting period. For the current reporting period, the Group recorded interest expenses (including capitalized interest) of RMB1,551 million, representing an increase of RMB258 million from the same period of 2012, which was mainly due to the growth in interest-bearing liabilities and finance costs of the Group.

Share of profits less losses of associates and joint ventures

For the six months ended 30 June 2013, the Group's share in the profits of its associates was RMB101 million, as compared with a share in the losses of associates of RMB95 million for the same period of 2012, mainly due to the recognition of gains on investment in Cathay Pacific Airways Limited ("Cathay Pacific") of RMB44 million under the equity method in the current reporting period, as compared with the recognition of losses on investment in Cathay Pacific of RMB197 million (restated) under the equity method for the same period in 2012.

For the six months ended 30 June 2013, the Group's share in the profits of its joint ventures was RMB68 million, as compared with a share in the losses of joint ventures of RMB73 million for the same period of 2012.

Analysis of assets structure

As at 30 June 2013, the total assets of the Group amounted to RMB196,763 million, representing an increase of 6.20% as compared with 31 December 2012, among which current assets accounted for RMB25,435 million or 12.93% of the total assets, while non-current assets accounted for RMB171,328 million or 87.07% of the total assets.

Among the current assets, cash and cash equivalents were RMB13,903 million, representing an increase of 17.94% from 31 December 2012. Accounts receivable amounted to RMB3,622 million, representing an increase of 31.98% as compared with 31 December 2012. Among the non-current assets, the net book value of property, plant and equipment as at 30 June 2013 was RMB126,060 million, representing an increase of 2.09% from 31 December 2012.

Assets mortgage

As at 30 June 2013, the Group, pursuant to certain bank loans and finance leasing agreements, mortgaged certain aircraft and premises with an aggregate net book value of approximately RMB79,944 million (approximately RMB80,227 million as at 31 December 2012), a number of shares in its associates with a market value of approximately RMB4,312 million (approximately RMB4,604 million as at 31 December 2012) and land use rights with a net book value of approximately RMB38 million (approximately RMB39 million as at 31 December 2012). At the same time, the Group had approximately RMB779 million (approximately RMB803 million as at 31 December 2012) in bank deposits pledged as security for certain bank loans and security deposit for aircrafts under operating lease and the provision for overhauls of aircraft engines under operating lease of the Group.

Capital expenditure

For the six months ended 30 June 2013, the Company's capital expenditure amounted to RMB9,411 million, of which the total investment in aircraft and engine was RMB8,692 million.

Other capital expenditure amounted to RMB719 million, which was mainly spent on rotables, aircraft additions and modifications, flight simulators, infrastructure construction, information system building, equipment purchase and cash component of long-term investments.

Equity investment

As at 30 June 2013, the Group's equity investment in its associates was RMB13,703 million, representing an increase of 0.20% as compared with 31 December 2012, of which the equity investment in Cathay Pacific, Shandong Aviation Group Co., Ltd. ("Shandong Aviation Group") and Shandong Airlines Co., Ltd. ("Shandong Airlines") was approximately RMB11,896 million, RMB874 million and RMB529 million, respectively. Cathay Pacific, Shandong Aviation Group and Shandong Airlines recorded a profit of RMB19 million, RMB148 million and RMB82 million, respectively, for the six months ended 30 June 2013.

As at 30 June 2013, the Group's equity investment in its joint ventures was RMB1,177 million, representing an increase of 3.03% from 31 December 2012.

Debt structure analysis

As at 30 June 2013, the total liabilities of the Group amounted to RMB141,946 million, representing an increase of 7.56% from 31 December 2012, among which current liabilities accounted for RMB73,822 million and non-current liabilities accounted for RMB68,124 million, representing 52.01% and 47.99% of the total liabilities, respectively.

Among the current liabilities, interest-bearing debts (including bank and other loans, obligations under finance leases and bills payable) amounted to RMB47,991 million, representing an increase of 51.44% from 31 December 2012. Accounts payable amounted to RMB9,799 million, representing a decrease of 0.52% from 31 December 2012. Other payables and accruals amounted to RMB9,971 million, representing an increase of 0.34% from 31 December 2012.

Among the non-current liabilities, interest-bearing debts (including bank and other loans, corporate bonds and obligations under finance leases) amounted to RMB59,220 million, representing a decrease of 12.57% from 31 December 2012.

Commitments and contingent liabilities

As at 30 June 2013, capital commitments of the Group amounted to RMB120,171 million, representing an increase of 62.20% from RMB74,088 million as at 31 December 2012, which was primarily used in purchasing certain aircraft and related equipment to be delivered in the coming years and constructing certain properties. The Group had operating lease commitments of RMB21,594 million, representing an increase of 11.07% as compared with RMB19,443 million (restated) as at 31 December 2012, which was primarily used in leasing aircraft, office premises and related equipment. Investment commitments of the Group was RMB57 million, representing a decrease of RMB96 million from RMB153 million as at 31 December 2012, which was primarily used in respect of pre-existing joint venture agreements.

Gearing ratio

As at 30 June 2013, the Group's gearing ratio (total liabilities divided by total assets) was 72.14%, representing an increase of 0.91 percentage point from 71.23% as at 31 December 2012, which was mainly attributable to the increase in liabilities as a result of aircraft and assets purchase by way of debt financing. Given that high gearing ratios are common among aviation enterprises and considering the profitability of the Group and the future prospects of the industry, the long-term insolvency risks of the Group are within control.

Working capital and its sources

As at 30 June 2013, net current liabilities of the Group (current liabilities minus current assets) amounted to RMB48,387 million, representing an increase of RMB13,567 million from 31 December 2012. The Group's current ratio (current assets divided by current liabilities) was 0.34, representing a decrease of 0.04 percentage point from 0.38 as at 31 December 2012. The increase in net current liabilities was primarily due to the significant increase in the Group's interest-bearing current liabilities.

The Group meets its working capital needs mainly through proceeds from its operating activities and external financing activities. During the first half of 2013, the Group's net cash inflow from operating activities was RMB5,399 million, representing an increase of 38.04% from RMB3,911 million for the same period of 2012, primarily due to the decrease in tax expenses payment due to the change of levying value-added tax in lieu of business tax and the decrease in enterprise income tax payment for the period as compared with that in the corresponding period of last year. Net cash outflow from investment activities was RMB12,217 million, representing an increase of 78.16% from RMB6,857 million for the same period of 2012, primarily due to an increase in the payment of balance of aircraft purchase consideration and prepayment for aircraft acquisition during the reporting period as compared to the same period last year. The Group recorded a net cash inflow from financing activities of RMB9,054 million, representing an increase of RMB9,951 million from a cash outflow of RMB897 million during the same period of 2012, primarily due to the issuance of the first batch of corporate bonds for 2012 and the issuance of new A shares during the period.

The Group's cash and cash equivalent increased by RMB2,236 million in the first half of 2013 (as opposed to a decrease of RMB3,844 million in the same period of 2012). The Company obtained bank facilities with an aggregate maximum amount of RMB142,700 million from a number of banks in the PRC, of which approximately RMB44,100 million has been utilised, sufficient to meet our working capital demand and future capital commitments.

Financial risk management objectives and policies

The Group is exposed to fluctuations in jet fuel prices in our daily operation. International jet fuel prices are subject to market volatility and fluctuation in supply and demand. The Group's strategy in managing jet fuel price risk aims at controlling the risk arising from the rise in fuel price. The Group has engaged in fuel hedging transactions since March 2001. The hedging instruments used were mainly derivatives of Singapore kerosene together with Brent crude oil and New York crude oil, which are closely linked to the price of jet fuel. As at 30 November 2011, the fuel derivative contracts of the Company all expired, and no new position has been established so far. Considering the volatility of international prices and cost sensitivity, the Company will continue to develop its fuel hedging business in compliance with the regulatory requirements so as to cope with changes in the jet fuel market.

As at 30 June 2013, the interest-bearing debts of the Group totalled RMB107,212 million, accounting for 75.53% of the Group's total liabilities, most of which were foreign debts and mainly denominated in U.S. dollars, Hong Kong dollars and Euros. In addition, the Group also had sales revenues and expenses denominated in foreign currencies. The Group endeavoured to minimize any risks relating to the fluctuations in foreign exchange rates and interest rates by adjusting the structure of the interest rates and currency denomination of its debts and by making use of the financial derivatives.

REPURCHASE, SALE OR REDEMPTION OF SECURITIES

During the first half of 2013, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any listed securities of the Company (the term "securities" has the meaning ascribed to it under paragraph 1 of Appendix 16 to The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")).

INTERIM DIVIDEND

No interim dividend will be paid for the six months ended 30 June 2013.

CORPORATE GOVERNANCE

1.       Compliance with the Code Provisions of the Corporate Governance Code

For the six months ended 30 June 2013, the Company complied with all the code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules.

2.       Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code")

The Company has adopted and formulated a code of conduct on terms no less exacting than the required standards of the Model Code as set out in Appendix 10 to the Listing Rules. After making specific enquiries, the Company confirmed that each director and each supervisor of the Company have complied with the required standards of the Model Code and the Company's code of conduct throughout the six months ended 30 June 2013.

DISCLOSURE REQUIRED BY THE LISTING RULES

In compliance with paragraph 46 of Appendix 16 to the Listing Rules, the Company confirms that in relation to those matters set out in paragraph 46(3) of Appendix 16 to the Listing Rules, save as disclosed herein, there has been no material change in the Company's existing information from the relevant disclosure in the 2012 Annual Report of the Company.

REVIEW BY THE AUDIT AND RISK CONTROL COMMITTEE

The audit and risk control committee of the Company has reviewed the Company's interim report for the six months ended 30 June 2013, the Company's unaudited interim condensed consolidated financial statements and the accounting policies and practices adopted by the Group.

(II)    PROPOSED APPOINTMENT OF DIRECTORS

Pursuant to the articles of association of the Company (the "Articles of Association"), the term of the third session of the Board is three years and will expire when the fourth session of the Board is elected.

At the Board meeting held on 27 August 2013, the Board resolved to propose that Mr. Wang Changshun, Ms. Wang Yinxiang, Mr. Cao Jianxiong, Mr. Sun Yude, Mr. Christopher Dale Pratt, Mr. Ian Sai Cheung Shiu, Mr. Cai Jianjiang, Mr. Fan Cheng, Mr. Fu Yang, Mr. Yang Yuzhong, Mr. Pan Xiaojiang and Mr. To Chi Keung be elected as directors of the fourth session of the Board. Among the directors, Mr. Wang Changshun, Ms. Wang Yinxiang, Mr. Cao Jianxiong, Mr. Sun Yude, Mr. Christopher Dale Pratt and Mr. Ian Sai Cheung Shiu will be appointed as non-executive directors; Mr. Cai Jianjiang and Mr. Fan Cheng will be appointed as executive directors; and Mr. Fu Yang, Mr. Yang Yuzhong, Mr. Pan Xiaojiang and Mr. Simon To Chi Keung will be appointed as independent non-executive directors. The proposed independent non-executive directors have confirmed that they have fulfilled the independent factors as stipulated in Rule 3.13 of the Listing Rules. The Company considered that they are independent pursuant to the guidelines on independence under the Listing Rules.

In addition, the Board has also resolved to propose that the shareholders of the Company (the "Shareholders") approve that the emolument of the proposed independent non-executive directors be RMB100,000 per person per year and the other proposed directors of the Company will not receive any compensation for serving as a director. Each proposed director shall enter into a service contract on this basis. The term of office of each proposed director is three years, which shall commence upon the Shareholders' approval of the appointment and shall end upon the fifth session of the Board being elected in three years.

An ordinary resolution to consider and approve the appointment of the above proposed directors and the proposal on their emolument will be proposed at the forthcoming extraordinary general meeting of the Company (the "EGM").

The biographical details of the proposed directors are as follows:

Mr. Wang Changshun, aged 56, graduated from the University of Science and Technology of China with a Ph.D. degree in management science and engineering. Mr. Wang was previously the Secretary of Communist Party Committee and Deputy Director of Xinjiang Regional Administration and had served as Deputy General Manager, a Member of the Standing Committee to the Communist Party Committee and Secretary of Communist Party Committee of Xinjiang Airlines. From October 2000 to September 2002, Mr. Wang worked as General Manager, Deputy Chairman of the Board and Deputy Secretary of Communist Party Committee of China Southern Airlines Company Limited. Mr. Wang served as Deputy General Manager and a Member of Communist Party Committee of China Southern Air Holding Company and General Manager, Deputy Chairman of the Board and Deputy Secretary of Communist Party Committee of China Southern Airlines Company Limited from September 2002 to August 2004. Mr. Wang became Deputy Director and a Member of Communist Party Committee of General Administration of Civil Aviation of China from August 2004 to March 2008. Mr. Wang served as a Member of Communist Party Committee and Deputy Director of Civil Aviation Administration of China ("CAAC") and Secretary of Communist Party Committee of the department directly administered by CAAC and Chairman of National Labour Union of Civil Aviation from March 2008 to October 2011. Mr. Wang has served as General Manager and Deputy Secretary of Communist Party Committee of China National Aviation Holding Company ("CNAHC") since October 2011. Mr. Wang has been serving as the Chairman of the Company since January 2012, and has been concurrently serving as a non-executive director of Cathay Pacific since March 2012.

Ms. Wang Yinxiang, aged 58, graduated from the Party School of the Central Committee of the Communist Party of China majoring in economics and management. Ms. Wang is a senior engineer of political work and a senior flight attendant. Ms. Wang served several positions at Air China International Corporation, including Vice Captain of the in-flight service team of the Chief Flight Team, Deputy Manager of the in-flight service division, Deputy Manager of the passenger cabin service division and Deputy Secretary of the Communist Party Committee. In October 2002, Ms. Wang served several positions in CNAHC, including Deputy General Manager, Head of the Disciplinary and Supervisory Committee of the Communist Party Group and Secretary of the Communist Party Committee of CNAHC. Since March 2008, Ms. Wang has been serving as Secretary of the Communist Party Group, Deputy General Manager and Secretary of the Communist Party Committee of CNAHC, and was appointed as President of the Labour Union of CNAHC from July 2003 to July 2009. Ms. Wang has been serving as the Vice Chairman of the Company since October 2008.

Mr. Cao Jianxiong, aged 54, holds a master degree in economics from the Eastern China Normal University and is a senior economist. He was appointed as the Deputy General Manager and Chief Financial Officer of China Eastern Airlines Corporation Limited in December 1996. In September 1999, he was appointed as the Vice President of China Eastern Airlines Group Corporation. Commencing from September 2002 till December 2008, he served as Vice President and a member of Communist Party Group of China Eastern Airlines Group Corporation and was also Secretary of the Communist Party Committee of China Eastern Airlines Northwest Company from December 2002 to September 2004. From October 2006 to December 2008, he served as the President and the Deputy Party Secretary of the Communist Party Committee of China Eastern Airlines Corporation Limited. Since December 2008, Mr. Cao has been serving as the Deputy General Manager and a member of Communist Party Group of CNAHC. Mr. Cao has been serving as a non-executive director of the Company since June 2009.

Mr. Sun Yude, aged 59, graduated from China Civil Aviation Institute majoring in economic management. He started his career in China's civil aviation industry in 1972 and served various positions such as Deputy Head of CAAC Taiyuan Terminal and Head of its Ningbo Terminal, as well as General Manager of CNAC Zhejiang Airlines. In October 2002, Mr. Sun was appointed Vice President of Air China International Corporation, and concurrently took up the position of General Manager of its Zhejiang branch, and was appointed as Vice President of the Company in September 2004. Mr. Sun was appointed as Chairman in November 2004, and President and Deputy Secretary of the Communist Party Committee in December 2005, of Shandong Aviation Group, and has also served as Director and President of China National Aviation Corporation (Group) Limited ("CNACG") from March 2007 to September 2011. Mr. Sun served as Secretary of the Communist Party Committee of CNACG from April 2007 to December 2009. Since May 2009, he has been serving as Deputy General Manager and a member of the Communist Party Group of CNAHC. Mr. Sun has been serving as a non-executive director of the Company since October 2010.

Mr. Christopher Dale Pratt, aged 57, holds an honours degree in modern history from the University of Oxford. He joined John Swire & Sons Limited in 1978 and has worked with the Swire Group in its offices in Hong Kong, Australia and Papua New Guinea. He is also the Chairman of John Swire & Sons (H.K.) Limited, Swire Pacific Limited, Cathay Pacific, Hong Kong Aircraft Engineering Company Limited and Swire Properties Limited, and a Director of The Hongkong and Shanghai Banking Corporation Limited. Mr. Pratt has been serving as a non-executive director of the Company since June 2006.

Mr. lan Sai Cheung Shiu, aged 59, holds a bachelor's degree in business administration from University of Hawaii and an MBA degree from the University of Western Ontario. Mr. Shiu worked at offices of Cathay Pacific in Hong Kong, the Netherlands, Singapore and the United Kingdom. He has been a director of Cathay Pacific and Hong Kong Dragon Airlines Limited since October 2008. He has also been a director of John Swire & Sons (H.K.) Limited since July 2010. He has been serving as a director of Swire Pacific Limited since August 2010. Mr. Shiu has been serving as a non-executive director of the Company since October 2010.

Mr. Cai Jianjiang, aged 50, graduated from China Civil Aviation Institute majoring in aviation control and English. Mr. Cai was appointed as General Manager of Shenzhen Airlines in 1999. He joined Air China International Corporation in 2001 as Manager of its Shanghai Branch, and subsequently as Assistant to the President and Manager of the marketing department. In October 2002, he was appointed as Vice President of Air China International Corporation, and subsequently was appointed as Secretary of the Communist Party Committee and Vice President of the Company in September 2004. He has been serving as President and Deputy Secretary of the Communist Party Committee of the Company and a member of the Communist Party Group of CNAHC since February 2007. Since May 2010, he has been serving as the Chairman of Shenzhen Airlines. Mr. Cai has been serving as an executive director of the Company since October 2004, and has been concurrently serving as a non-executive director of Cathay Pacific since November 2009.

Mr. Fan Cheng, aged 58, graduated from Nanjing Institute of Chemistry and Chemical Engineering with a major in organic fertilizer and has an MBA degree from Guanghua School of Management, Peking University. Mr. Fan is a senior accountant, senior engineer and Certified Public Accountant. Mr. Fan was appointed as Deputy General Manager of China New Technology Venture Capital Company in 1996. He started his career in China's civil aviation industry in 2001, and served as General Manager of the corporate management department and capital management department of CNAHC in October 2002 and Chief Financial Officer of the Company in September 2004. Since October 2006, he has been serving as Vice President and Chief Financial Officer of the Company. From December 2009 to May 2010, he served as Secretary of the Communist Party Committee of Shenzhen Airlines. From March 2010 to April 2010, he served as President of Shenzhen Airlines and from March 2010 to May 2010, he served as the Chairman of Shenzhen Airlines. Since January 2011, he has been serving as Director and Chairman of Beijing Airlines Company Limited. Since February 2011, he has been serving as Secretary of the Communist Party Committee of the Company. Since April 2011, he has been serving as Chairman of Air China Cargo Co., Ltd. Mr. Fan has been serving as an executive director of the Company since October 2004, and concurrently serving as a non-executive director of Cathay Pacific since November 2009.

Mr. Fu Yang, aged 64, previously served as Deputy Director of the Economic Law Office of the National People's Congress Law Committee, Vice President of the third, fourth and fifth sessions of the All China Lawyers Association, a specially appointed professor at the Law Schools of China University of Political Science and Law and Nankai University. He is a partner and the director of Kang Da Law Firm in Beijing. He is also an arbitrator of China International Economic and Trade Arbitration Commission and a visiting professor of Center for Environment Law at the Law School of Renmin University of China. Mr. Fu has been serving as an independent non-executive director of the Company since June 2009.

Mr. Yang Yuzhong, aged 69, graduated from Beijing Aeronautical Institute majoring in aircraft design and manufacturing. From July 1999 to July 2006, Mr. Yang served as the Deputy General Manager of China Aviation Industry Corporation I, during which period he was also the head of Chinese Aeronautical Establishment and the chairman of AVIC1 Commercial Aircraft Co., Ltd. Mr. Yang has been a consultant of Aviation Industry Corporation of China since August 2006. He served as an independent non-executive director of China National Materials Company Limited from June 2007 to December 2009. Mr. Yang has been an independent non-executive director of China South Locomotive & Rolling Stock Corporation Limited since December 2007 and an external director of China National Materials Group Corporation Ltd. since December 2009. Mr. Yang has been serving as an independent non-executive director of the Company since May 2011.

Mr. Pan Xiaojiang, aged 61, holds a Ph.D. degree in Management from Tsinghua University and is a senior economist and China Certified Public Accountant. He served as Deputy Director of the Accounting Management Department of the Ministry of Finance ("MOF"); Deputy Director of Chinese Institute of Certified Public Accountants; Deputy Director, Director and Deputy Director-general of the World Bank Department of the MOF; and Deputy Director-general of the International Department of the MOF. Mr. Pan was appointed as full-time supervisor and deputy office director of the board of supervisors of Bank of China Limited in July 2000; full-time supervisor and office director of the board of supervisors of Bank of China Limited in November 2001; full-time supervisor and office director of the board of supervisors of Agricultural Bank of China Limited in July 2003; supervisor representing shareholders and office director of the board of supervisors of Agricultural Bank of China Limited from January 2009 to January 2012; leader of the fifth patrol team of the Communist Party Committee of Agricultural Bank of China Limited from March 2012 to January 2013. Since May 2013, Mr. Pan has been serving as an independent director of Tsinghua Tongfang Limited.

Mr. Simon To Chi Keung, aged 61, holds a First Class Bachelor's Honours Degree in Mechanical Engineering from the Imperial College of Science and Technology (London University) and a Master's degree in Business Administration from Stanford University's Graduate School of Business. He joined Hutchison Whampoa (China) Limited in 1980 as the divisional manager of the Industrial Project Division and was appointed managing director in 1981. From 1999 to 2005, he served as an independent non-executive director of China Southern Airlines Company Limited. From 2000 to 2011, he served as a non-executive director of Shenzhen International Holdings Limited. He is currently the managing director of Hutchison Whampoa (China) Limited and chairman of Hutchison China MediTech Limited. He is concurrently the vice chairman of Guangzhou Aircraft Maintenance & Engineering Co. Ltd, director of China Aircraft Services Limited, chairman of Beijing Greatwall Hotel, chairman of Hutchison Whampoa (China) Commerce Limited, chairman of Guangzhou Hutchison Logistics Services Company Limited, chairman of Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited, vice chairman of Shanghai Hutchison Pharmaceuticals Limited, chairman of Hutchison Optel Telecom Technology Co., Ltd. and chairman of Shanghai Hutchison Whitecat Co., Ltd.

Mr. Christopher Dale Pratt is a non-executive director of the Company and is concurrently the chairman and an executive director of Cathay Pacific. Mr. Ian Sai Cheung Shiu is a non-executive director of the Company and is concurrently a non-executive director of Cathay Pacific. Mr. Wang Changshun, who is the chairman and a non-executive director of the Company and Mr. Cai Jianjiang and Mr. Fan Cheng, who are both executive directors of the Company, are concurrently non-executive directors of Cathay Pacific. Cathay Pacific is a substantial shareholder of the Company.

Save as disclosed above, none of the proposed directors (i) has held any directorship in any other listed companies in the past three years, (ii) has any relationship with any other director, senior management, substantial shareholder or controlling shareholder of the Company; and (iii) has any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the "SFO").

Save as disclosed above, there is no other information required to be disclosed pursuant to items (h) to (v) of Rule 13.51(2) of the Listing Rules, and there are no other matters in respect of the proposed appointment of the above directors that need to be brought to the attention of the Shareholders.

(III)   PROPOSED APPOINTMENT OF SUPERVISORS

Pursuant to the Articles of Association, the term of the third session of the Supervisory Committee is three years and will expire when the fourth session of the Supervisory Committee is elected.

At a meeting of the Supervisory Committee held on 26 August 2013, it was resolved to propose that Mr. Li Qinglin, Mr. He Chaofan and Mr. Zhou Feng be appointed as supervisors representing the Shareholders on the fourth session of the Supervisory Committee. Another two supervisors representing the employees of the Company will be elected in accordance with the Articles of Association.

In addition, the Supervisory Committee has also resolved to propose that the Shareholders approve that the proposed supervisors of the Company will not receive any compensation for serving as a supervisor. Each proposed supervisor shall enter into a service contract on this basis. The term of office of each proposed supervisor is three years, which shall commence upon the Shareholders' approval of the appointment and shall end upon the fifth session of the Supervisory Committee being elected in three years.

An ordinary resolution to consider and approve the appointment of the above proposed supervisors and the proposal on their emolument will be proposed at the EGM.

The biographical details of the proposed supervisors are as follows:

Mr. Li Qinglin, aged 59, graduated from Beijing Television University majoring in Chinese and Zhongnanhai Spare Time University majoring in administrative management, and is a senior engineer of political work. Mr. Li served various positions, including a section chief, deputy director, director, vice director-general and director-general, as well as the chairman of the Labour Union, of the Government Office Administration of the State Council. From 1998 to 2000, he served as a deputy director of the Hebei Leading Group Office of Poverty Alleviation and Development. Since 2000, he has served different positions, including a deputy director of the Work Department under the Supervisory Committee of Central Enterprises Working Commission, deputy director of the Office of Central Enterprises Working Commission, deputy director and inspector of the General Office of the State-owned Assets Supervision and Administration Committee of the State Council and director of the Office of the Stability Preservation Leading Team of the State-owned Assets Supervision and Administration Committee. In September 2008, he was appointed as the head of the Disciplinary and Supervisory Committee and a member of the Communist Party Group of CNAHC. Mr. Li has been serving as the chairman of the Supervisory Committee of the Company since October 2010.

Mr. He Chaofan, aged 51, graduated from Civil Aviation University of China majoring in operation management. Mr. He started his career with CAAC in 1983. He served as an accountant at the Finance Department of Beijing Administrative Bureau of CAAC, and served various positions in Air China International Corporation, including the section chief, deputy head and head of the finance department and general manager of the revenue accounting center of Air China International Corporation. From March 2003 to October 2008, he served as the General Manager of China National Aviation Finance Co., Ltd. He served as the General Manager of the finance department of CNAHC and a supervisor of the Company concurrently from October 2008 to April 2011. He was appointed as a director and vice president of CNACG in May 2011, and has been concurrently served as the general manager of Zhongyi Aviation Investment Co., Ltd. since July 2013.

Mr. Zhou Feng, aged 52, obtained a master's degree in Economics from Shanghai University of Finance and Economics. He held various positions, including the accountant, the deputy division head, the division head of the finance division and the director of the finance and audit department of the CAAC Zhejiang Bureau; the director, the chief accountant of finance department of CNAC Zhejiang Airlines; the assistant general manager of China National Aviation Corporation (Macau) Company Limited; the deputy general manager, the chief accountant and a member of the party committee of China National Aviation Finance Co., Ltd.; the director, the executive vice president of Samsung Air China Life Insurance Co., Ltd. Mr. Zhou has been the secretary of the Communist Party Committee and the deputy general manager of China National Aviation Finance Co., Ltd. since August 2010. He has been the general manager of the finance department of CNAHC since April 2011. Mr. Zhou has been serving as a supervisor of the Company since November 2011.

As at the date of this announcement, Mr. Zhou Feng holds 10,000 A shares of the Company.

Save as disclosed above, none of the proposed supervisors (i) has held any directorship in any other listed companies in the past three years; (ii) has any relationship with any other director, senior management, substantial shareholder or controlling shareholder of the Company; and (iii) has any interest in shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, there is no other information required to be disclosed pursuant to items (h) to (v) of Rule 13.51(2) of the Listing Rules, and there are no other matters in respect of the proposed appointment of the above supervisors that need to be brought to the attention of the Shareholders.

By Order of the Board

Air China Limited

Rao Xinyu  Tam Shuit Mui

Joint Company Secretaries

Beijing, the PRC, 27 August 2013

As at the date of this announcement, the directors of the Company are Mr. Wang Changshun, Ms. Wang Yinxiang, Mr. Cao Jianxiong, Mr. Sun Yude, Mr. Christopher Dale Pratt, Mr. Ian Sai Cheung Shiu, Mr. Cai Jianjiang, Mr. Fan Cheng, Mr. Fu Yang*, Mr. Li Shuang*, Mr. Han Fangming* and
Mr. Yang Yuzhong*.

* Independent non-executive Director of the Company

 

END

 

 

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