Third Quarterly Report & Shareholder' Return Plan

RNS Number : 9240P

Air China Ld

31 October 2012

 



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)

(1) THIRD QUARTERLY REPORT 2012

(2) SHAREHOLDERS' RETURN PLAN FOR THE NEXT THREE YEARS FROM 2012 TO 2014

(1)    THIRD QUARTERLY REPORT 2012

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

The board of directors (the "Board") of Air China Limited (the "Company") hereby announces that a meeting of the Board was held on 30 October 2012 and the Board, among others, passed the resolution approving the quarterly report for the third quarter of 2012 prepared in accordance with the PRC Accounting Standards.

1        IMPORTANT NOTICE

1.1     The Board, the supervisory committee, as well as the directors, supervisors and senior management of the Company hereby warrant that there are no false representations, misleading statements or material omissions in this report, and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this quarterly report.

1.2     Directors absent from the board meeting are required to be disclosed separately.

Name of absent directors	Position of absent directors	Reason(s) for absence	Name of proxy
Cao Jianxiong	Director	business engagement	Wang Yinxiang
Christopher Dale Pratt	Director	business engagement	Ian Sai Cheung Shiu

1.3     This third quarterly financial report of the Company is unaudited.

1.4	The legal representative of the Company	Wang Changshun
	Person in charge of accounting function	Fan Cheng
	Person in charge of accounting department  (accounting superintendent)	Xiao Feng

Wang Changshun (legal representative of the Company), Fan Cheng (person in charge of accounting function), and Xiao Feng (person in charge of accounting department (accounting superintendent)) hereby jointly declare that the financial statements set out in this quarterly report is true and complete.

2        BASIC INFORMATION OF THE COMPANY

2.1     Major accounting data and financial ratios

currency: RMB

	At the end of  the reporting period	At the end of  the previous year	Increase/ decrease at  the end of the reporting  period as  compared to the end of the  previous year
			(%)
Total assets (RMB'000)	184,587,046	173,323,568	6.5
Owner's equity (or shareholders'  equity) (RMB'000)	49,566,991	46,738,018	6.05
Net asset per share attributable to  shareholders of the listed  company (RMB)	4.08	3.84	6.25

	For the period from the beginning of the year to the end of the reporting period (January to September)	Increase/ decrease as compared to the corresponding period of the previous year
		(%)
Net cash flows from  operating activities (RMB'000)	11,606,622	-37.90
Net cash flows per share from  operating activities (RMB)	0.96	-37.66

	Reporting  period (July to  September)	From the  beginning of  the year to  the end of  the reporting  period  (January to  September	Increase/ decrease of this reporting period as compared to the corresponding period of the previous year
			(%)
Net profit attributable to  shareholders of the  listed company (RMB'000)	3,174,118	4,236,003	-16.46
Basic earnings per share (RMB)	0.26	0.35	-16.13
Basic earnings per share after  deducting non-recurring  profits and losses (RMB)	0.25	0.3	-16.67
Diluted earnings per share (RMB)	N/A	N/A	N/A
Weighted average return  on net assets (%)	6.53	8.79	decreased by 2ppt
Weighted average return  on net assets after deducting  non-recurring profits  and losses (%)	6.22	7.57	decreased by 1.87ppt

After deducting non-recurring profits and losses:

(RMB'000)

Items	From the  beginning of  the year to the end of the reporting  period  (January to  September)
Gains/(losses) from disposal of non-current assets	52,260
Government grants included in the profits and losses for the current  period (except for those that are closely related to the Company's  normal operating business and qualified under national policy to  receive certain standard amount and quantities)	570,706
Gain/(loss) from changes in fair value of financial assets/liabilities  held for trading and investment gains from disposal of financial  assets/liabilities held for trading and available-for-sale financial  assets (except for hedging activities related to the Company's  normal operating business)	5,953
Reversal of provision for impairment of receivables which  are individually tested for impairment	315,783
Other non-operating income and expenses not covered above	-25,090
Effect of income tax	-140,808
Effect on minority interest (after tax)	-193,152
Total	585,652

2.2     Total number of shareholders and the top 10 shareholders not subject to selling restrictions as at the end of the reporting period

Unit: share

Total number of shareholders as at the end of the reporting period		303,652 (including 4,655 registered H Share shareholders)
Particulars of the top 10 shareholders not subject to selling restrictions
Name of shareholder (full name)	Number of listed shares not subject to selling restrictions held as at the end of the reporting period	Class of Shares
China National Aviation Holding Company  ("CNAHC")	5,072,981,631	RMB ordinary shares 5,072,981,631
Cathay Pacific Airways Limited	2,517,385,455	Overseas listed foreign shares 2,517,385,455
HKSCC NOMINEES LIMITED	1,793,212,434	Overseas listed foreign shares 1,793,212,434
China National Aviation Corporation  (Group) Limited ("CNACG")	1,556,334,920	RMB ordinary shares 1,332,482,920O verseas listed foreign shares 223,852,000
China National Aviation Fuel Group Corporation	86,300,000	RMB ordinary shares 86,300,000
New China Life Insurance Company Ltd. - Bonus  - Personal Bonus - 018L - FH002 Shanghai	76,595,770	RMB ordinary shares 76,595,770
Sinotrans Air Transportation Development  Co., Ltd.	75,800,000	RMB ordinary shares 75,800,000
China Life Insurance Company Limited - Bonus  - Personal Bonus - 005L - FH002 Shanghai	58,684,367	RMB ordinary shares 58,684,367
Guo Hua Life Insurance Co., Ltd  Self-owned Funds	48,000,000	RMB ordinary shares 48,000,000
PICC Property and Casualty Company Limited  - traditional - ordinary insurance products  - 008C - CT001Shanghai	40,842,706	RMB ordinary shares 40,842,706

Note:             HKSCC Nominees Limited is a subsidiary of The Stock Exchange of Hong Kong Limited and its main business is acting as nominee for other corporate shareholders or individual shareholders. The 1,793,212,434 H Shares it held in the Company did not include the 166,852,000 Shares held as nominee for CNACG.

3        SIGNIFICANT EVENTS

3.1     Particulars of, and reasons for, significant changes in major items in the accounting statements and key financial indicators of the Company

RApplicable                          □ Not applicable

Unit: RMB'000

Items in consolidated balance sheet	As of 30 September 2012	As of 31 December 2011	Amount of Change	Percentage	Reasons for Change
Other receivables	2,889,410	1,662,087	1,227,323	73.84%	This was mainly attributable to the increase in rebate due from aircraft manufacturers caused by the receipt of aircrafts and the partial reversal of the provision for bad debts of subsidiaries in this reporting period.
Short-term  borrowings	15,776,170	11,507,317	4,268,853	37.10%	This was mainly attributable to the increase of current borrowings.
Taxes payable	1,505,092	2,756,215	-1,251,123	-45.39%	This was mainly attributable to the payment of enterprise income taxes of the previous year in this reporting period, thereby reducing the balance as at the beginning of the period, and the decrease in earnings in this reporting period, resulting in the decrease in enterprise income taxes payable.
Obligations under  finance leases	25,142,773	19,191,860	5,950,913	31.01%	This was mainly attributable to the receipt of aircrafts under finance leases in this reporting period.

Items in Consolidated income statement	For the period from the beginning of the year to the end of the reporting period (January to September)	For the Corresponding period of the previous year (January to September)	Amount of Change	Percentage	Reasons for Change
Finance costs	2,076,851	-1,390,784	3,467,635	-249.33%	This was mainly attributable to the depreciation of RMB against US dollars and the increase in borrowings in this reporting period.
Impairment losses  in assets	-230,408	515,362	-745,770	-144.71%	The losses in the corresponding period of the previous year was mainly attributable to the provision for impairment of fixed assets and the gains in this reporting period was mainly attributable to the partial reversal of the provision for bad debts of receivables of a subsidiary.
Gains/(losses) from  movements in  fair value	5,953	77,208	-71,255	-92.29%	The gains in the corresponding period of the previous year was mainly attributable to the recovery of fair value of the debt of fuel derivative contracts and all fuel derivative contracts held by the Company expired at the end of the previous year.
Investment income	192,028	1,224,028	-1,032,000	-84.31%	This was mainly attributable to the decrease in gains or losses on investment by certain associates recognized under the equity method in this reporting period.
Tax	1,493,675	2,672,207	-1,178,532	-44.10%	This was mainly attributable to the decrease in earnings in this reporting period, resulting in the decrease in enterprise income taxes payable.

Items in consolidated statement of cash flows	For the period from the beginning of the year to the end of the reporting period (January to September)	For the corresponding period of the previous year (January to September)	Amount of Change	Percentage	Reasons for Change
Cash paid to or on behalf of employees	9,646,963	7,200,571	2,446,392	33.97%	This was mainly attributable to the payment of corporate annuity from December 2011 by the Group and the increase in the number of staff headcounts in the reporting period. In addition, benchmark salaries were raised from the second half of 2011 and started to be paid from January 2012, resulting in the increase of cash expenses for the reporting period.
Cash from investment income	445,391	852,727	-407,336	-47.77%	This was mainly attributable to the decrease in bonus from associated companies in this reporting period
Net cash proceeds from disposal of subsidiaries and other business units	0	1,669,177	-1,669,177	-100%	Cash inflow from capital contribution for restructuring Air China Cargo in the previous year
Cash received relating to other investment activities	300,773	1,439,248	-1,138,475	-79.10%	This was mainly attributable to cash inflow from the recovery of secured deposits and establishment of Beijing Airlines to receive the investments made by minority interests in the corresponding period of the previous year
Cash paid for purchase of fixed assets and other long-term assets	10,322,533	16,712,276	-6,389,743	-38.23%	This was mainly attributable to introduction of more aircrafts under finance leases in this reporting period and the decrease in cash paid for purchase of assets as compared to the corresponding period in the previous year.
Cash paid relating to other financing activities	2,604,436	1,823,936	780,500	42.79%	This was mainly attributable to the increase in finance leases paid in this reporting period as compared to the corresponding period in the previous year.

3.2     Analysis and explanation on the progress of significant events and their impact and resolutions

□ Applicable                         RNot applicable

3.3     Performance of undertakings given by the Company, the shareholders and de facto controller

RApplicable                           □ Not applicable

The Company entered into a reorganization agreement dated 20 November 2004 with CNAHC and CNACG, pursuant to which, CNAHC undertook to the Company that within a period of six months or one year from the date of establishment of the Company, it would assist in transferring to the Company the land use rights, the land use right certificates and the property ownership certificates of the properties as its investment in the Company.

As of 30 September 2012, regarding the land use rights invested by CNAHC in the Company, the Company has received the land use right certificates with the Company as their designated title owners. Except for the 14 properties under our Zhejiang branch, all the properties invested by CNAHC have been registered under the name of the Company. We have finished all necessary procedures for the title transfer of the 13 properties under our Zhejiang branch, and are waiting for the issuance of property ownership certificates by the local property management authorities. As the relevant local administrative authorities have promulgated new regulations after the establishment of the Company, the transfer procedures of the property ownership certificate for the remaining one property (with floor area of approximately 598.99 sq.m.) have not been completed. Accordingly, CNAHC has further undertook to assist the Company in completing the title transfer procedures of such remaining property in the next 3 years from July 2010. At present, the relevant local administrative authorities have accepted the application for transfer of such property. The Company will carry out the relevant procedures for the transfer of the property ownership certificate promptly. This undertaking is in the process of being implemented.

On 12 August 2010, CNAHC issued a letter of undertaking in respect of the deposit and loan services between the Company and China National Aviation Finance Co., Ltd ("CNAF"). For details of the undertaking, please refer to the announcement of the Company published on 13 August 2010 on the website of the Shanghai Stock Exchange (www.sse.com.cn), China Securities Journal, Shanghai Securities Journal and Securities Daily. This undertaking is in the process of being implemented.

In light of the financial service agreement (the "Financial Service Agreement") dated 27 October 2009 between the Company and CNAF, the Company, taking into consideration its actual business needs, undertook on 12 August 2010 that, within the framework of the Financial Service Agreement, the daily balance of deposits placed by the Company and its subsidiaries with CNAF shall not exceed RMB4 billion. This undertaking is in the process of being implemented.

On 21 December 2011, CNAHC increased its shareholdings in the Company by 13,823,559 A shares via the trading system of the Shanghai Stock Exchange, representing 0.11% of the total share capital of the Company (the "First Share Acquisition"). CNAHC intends to continue to increase its shareholdings in the Company, either in its own name or through parties acting in concert with it, via the secondary market within 12 months from 21 December 2011 in an aggregated amount not exceeding 2% of the total share capital of the Company (including the shares in the First Share Acquisition). CNAHC undertook that it would not sell any shares it held in the Company during the period of the implementation of the further acquisition plan and within the statutory period. This undertaking is in the process of being implemented.

3.4     Warning in respect of forecast of possible net loss from the beginning of the year to the end of the next reporting period or warning in respect of any significant changes in net profit as compared with that of the corresponding period of previous year and the underlying reasons

□ Applicable                         RNot applicable

3.5     Distribution of cash dividends during the reporting period

Pursuant to the "Decisions on Revising Certain Regulations on Cash Dividends Distribution by Listed Companies" issued by the China Securities Regulatory Commission (the "CSRC") (CSRC (2008) No.57) and the articles of association of the Company (the "Articles of Association"), the Company implements a proactive profit distribution plan, focuses on creating reasonable investment returns for its investors, maintains a consistent and stable profit distribution policy and considers cash dividend as a preferred profit distribution.

The Company's profit distribution plan for 2011 was a cash dividend of RMB0.118 per share (including applicable taxes) distributed to the shareholders of the Company ("Shareholders") based on a total of 12,891,954,673 shares. The dividends distribution has completed on 23 July 2012.

Pursuant to the "Notice on Further Implementation of Cash Dividends Distribution by Listed Companies" (Zheng Jian Fa (2012) No. 37) issued by the CSRC and the "Notice on Further Completing the Policy of Cash Dividends Distribution by Listed Companies" (Jing Zheng Gong Si Fa (2012) No.101) issued by the Beijing Securities Regulatory Administration, the Company has revised and refined the provisions on cash dividends distribution under its existing Articles of Association by clearly setting out the basis of calculation, proportion, relevant decision-making procedures of the Company which require obtaining the independent directors' opinions on the profit distribution plan of the Company, communication and exchange opinions with its Shareholders, particularly the minority and non-substantial shareholders, through a number of channels (e.g. online voting and inviting the minority and non-substantial shareholders to the general meeting), listening to their opinions and requests and responding to their concerns. The relevant amendments have been considered and approved at the 27th meeting of the third session of the Board held on 28 August 2012, and will be submitted for Shareholders' approval at the general meeting of the Company.

Air China Limited

Legal representative: Wang Changshun

30 October 2012

4        APPENDIX

4.1     Consolidated Balance Sheet

30 September 2012

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT ASSETS:
Cash and bank balances	13,618,987	15,420,242
Provisions on payables
Contributions made
Financial assets held for trading	13,735	12,144
Bills receivable	418	1,601
Accounts receivable	3,437,092	2,652,439
Prepayments	700,405	584,983
Premium receivable
Receivables on reinsurance
Provisions for reinsurance contracts
Interest receivable
Dividend receivable
Other receivables	2,889,410	1,662,087
Purchase of financial assets resold
Inventories	1,130,715	1,128,164
Non-current assets due within a year
Other current assets	8,000
Total current assets	21,798,762	21,461,660
NON-CURRENT ASSETS:
Loans and advances
Available-for-sale financial assets
Held-to-maturity investments
Long term receivables	441,857	424,618
Long term equity investments	14,683,948	14,804,420
Investment property	232,588	240,879
Fixed assets	112,853,455	101,737,456
Construction in progress	27,346,925	27,566,439
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	2,775,423	2,805,249
Development expenses
Goodwill	1,102,185	1,102,185
Long term deferred expenses	237,391	187,893
Deferred tax assets	3,114,512	2,992,769
Other non-current assets
Total non-current assets	162,788,284	151,861,908
Total assets	184,587,046	173,323,568

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT LIABILITIES:
Short term loans	15,776,170	11,507,317
Borrowings from central bank
Deposits from clients and placements   from other banks
Contributions received
Financial liabilities held for trading	156,357	223,137
Bills payable	330,544
Accounts payable	11,527,199	12,081,912
Domestic air traffic liabilities	1,849,946	2,052,297
International air traffic liabilities	2,783,198	2,510,478
Receipts in advance	107,411	121,503
Sale of financial assets repurchased
Fees and commissions payable
Salaries and wages payable	1,929,895	2,703,428
Taxes payable	1,505,092	2,756,215
Interests payable	364,026	360,578
Dividend payable
Other payables	6,411,902	6,309,825
Amounts payable on reinsurance
Reserves on insurance contracts
Brokerage payable
Underwriting fees payable
Non-current liabilities due within a year	18,245,772	17,240,694
Other current liabilities
Total current liabilities	60,987,512	57,867,384
NON-CURRENT LIABILITIES:
Long-term borrowings	30,996,551	33,398,481
Debentures payable	6,000,000	6,000,000
Long-term payables	2,864,763	2,643,472
Obligations under finance leases payable	25,142,773	19,191,860
Specific payables
Estimated liabilities	411,833	346,284
Deferred income tax liabilities	1,476,220	1,213,030
Deferred income	3,780,073	3,161,536
Other non-current liabilities
Total non-current liabilities	70,672,213	65,954,663
Total liabilities	131,659,725	123,822,047

Items	Balance at the end of the period	Balance at the beginning of the year
OWNER'S EQUITY (OR SHAREHOLDERS'  EQUITY):
Issued capital	12,891,955	12,891,955
Capital reserve	16,239,910	16,288,523
Less: Treasury shares
Specific reserves
Surplus reserves	4,150,938	3,471,812
General risk provisions
Profit available for appropriation	19,170,608	17,134,982
Foreign exchange translation reserve	-2,886,420	-3,049,254
Total owner's equity attributable to   shareholders of the Company	49,566,991	46,738,018
Minority interests	3,360,330	2,763,503
Total owner's equity	52,927,321	49,501,521
Total liabilities and owner's equity	184,587,046	173,323,568

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

Balance Sheet of the Parent Company

30 September 2012

Prepared by: Air China Limited

Unit: RMB'000 (Unaudited)

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT ASSETS:
Cash and bank balances	5,363,423	7,797,123
Held-for-trading financial assets
Bills receivable
Accounts receivable	3,554,315	2,267,190
Prepayments	389,134	333,595
Interests receivable
Dividend receivable
Other receivables	2,722,043	1,827,398
Inventories	722,018	762,546
Non-current assets due within a year		2,200,000
Other current assets
Total current assets	12,750,933	15,187,852
NON-CURRENT ASSETS:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables	263,174	251,729
Long-term equity investments	22,192,136	21,549,749
Investment properties
Fixed assets	82,974,187	75,452,377
Construction in progress	20,353,845	20,539,767
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	2,149,817	2,222,451
Development expenses
Goodwill
Long-term deferred expenses	102,279	117,328
Deferred income tax assets	2,204,504	2,170,000
Other non-current assets
Total non-current assets	130,239,942	122,303,401
Total assets	142,990,875	137,491,253

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT LIABILITIES:
Short-term borrowings	9,555,249	9,309,099
Held-for-trading financial liabilities	104,898	176,167
Bills payable
Accounts payable	7,510,038	8,003,628
Domestic air traffic liabilities	1,417,603	1,411,187
International air traffic liabilities	2,483,874	2,297,526
Receipts in advance	55,630	60,116
Salaries and wages payable	1,028,100	1,737,612
Taxes payable	1,083,340	1,975,889
Interests payable	321,708	336,128
Dividend payable
Other payables	1,848,672	1,907,700
Non-current liabilities due within a year	15,926,118	14,795,817
Other current liabilities
Total current liabilities	41,335,230	42,010,869
NON-CURRENT LIABILITIES:
Long-term borrowings	18,991,347	21,170,298
Debentures payable	6,000,000	6,000,000
Long-term payables	1,579,901	1,380,986
Obligations under finance leases payable	23,938,445	18,428,125
Specific payables
Estimated liabilities	47,291	55,608
Deferred income tax liabilities	175,000	136,000
Deferred income	2,759,103	2,340,113
Other non-current liabilities
Total non-current liabilities	53,491,087	49,511,130
Total liabilities	94,826,317	91,521,999
OWNER'S EQUITY (OR SHAREHOLDER'S  EQUITY):
Issued capital	12,891,955	12,891,955
Capital reserve	20,111,977	20,111,677
Less: Treasury shares
Specific reserves
Surplus reserves	4,141,348	3,462,222
General risk provisions
Profit available for appropriation	11,019,278	9,503,400
Total owner's equity (or shareholders' equity)	48,164,558	45,969,254
Total liabilities and owner's equity   (or shareholders' equity)	142,990,875	137,491,253

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

4.2     Consolidated Income Statement

Prepared by: Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period (July to September)	Amounts for the corresponding period of the previous year (July to September)	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
I.        Revenue from operations	28,749,484	28,144,172	76,309,837	73,274,530
Including: Operating income	28,749,484	28,144,172	76,309,837	73,274,530
Interest income
Premium earned
Fees and commission                        income
II.       Total operating costs	24,651,424	23,359,768	70,901,507	63,848,184
Including: Operating costs	20,777,552	20,308,920	60,162,745	56,112,880
Interest expenses
Fees and commission                        expenses
Returned premium
Net reimbursement                        paid
Net amounts of                        provisions on                         insurance contracts                            drawn
Bonus paid on                             insurance policy
Reinsurance premium
Business taxes and                          other levies	554,517	654,223	1,646,562	1,682,321
Selling expenses	1,790,599	1,807,184	5,070,806	4,887,771
Administrative                         expenses	760,020	754,412	2,174,951	2,040,634
Finance expenses	768,945	-660,290	2,076,851	-1,390,784
Impairment loss of                        assets	-209	495,319	-230,408	515,362
Add: Gains from changes                          in fair value                          (loss is represented                       by "-" sign)	2,409	37,882	5,953	77,208
Investment income (loss is                  represented by "-" sign)	384,205	583,927	192,028	1,224,028
Including: Gains arising                         from investments  in                      associated companies                      and joint ventures	337,726	583,929	189,533	1,222,528
Exchange gains (loss is                  represented by "-" sign)

Items	Amounts for the period (July to September)	Amounts for the corresponding period of the previous year (July to September)	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
III.      Profit from operations (loss is represented by "-" sign)	4,484,674	5,406,213	5,606,311	10,727,582
Add: Non-operating income	230,344	281,074	701,467	536,629
Less: Non-operating expenses	14,116	10,603	103,591	60,645
Including: Loss arising                        from disposal of                        non-current assets	2,610		13,992	4,955
IV.      Total profit (total loss is represented            by "-" sign)	4,700,902	5,676,684	6,204,187	11,203,566
Less: Income tax expenses	1,188,915	1,497,438	1,493,675	2,672,207
V.       Net profit (net loss is represented            by "-" sign)	3,511,987	4,179,246	4,710,512	8,531,359
Net profits attributable to shareholders            of the Company	3,174,118	3,799,624	4,236,003	7,862,838
Gains or losses attributable to            minority interests	337,869	379,622	474,509	668,521
VI.      Earnings per share:
(I)    Basic	0.26	0.31	0.35	0.65
(II)    Diluted	N/A	N/A	N/A	N/A
VII.     Other consolidated gains	59,445	-345,022	116,539	-564,830
VIII.    Total consolidated gains	3,571,432	3,834,224	4,827,051	7,966,529
Total consolidated gains attributable to            shareholders of the Company	3,233,860	3,455,872	4,350,224	7,300,418
Total consolidated gains attributable to            minority interests	337,572	378,352	476,827	666,111

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

Income Statement of the Parent Company

Prepared by: Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period (July to September)	Amounts for the corresponding period of the previous year (July to September)	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
I.        Revenue from operations	20,292,634	20,165,821	54,040,244	52,639,379
Less: Operating cost	14,537,505	14,301,961	42,600,103	39,931,956
Business taxes and other                  levies	321,032	437,261	1,033,049	1,132,709
Selling expenses	1,310,269	1,324,071	3,703,270	3,591,194
Administrative expenses	407,361	421,248	1,189,871	1,120,662
Finance expenses	507,122	-674,941	1,383,418	-1,417,251
Impairment loss of assets	0	550,000	15,526	550,000
Add: Gains from changes                      in fair value (loss is                   represented by "-"sign)	-4,539	-16,800	-8,031	26,119
Investment income (loss is                   represented by "-" sign)	252,764	216,083	267,816	1,083,101
Including: Gains arising                      from investments in                   associated companies                   and joint ventures	252,764	216,084	267,816	408,118
II.       Profit from operations (loss is represented by "-" sign)	3,457,570	4,005,504	4,374,792	8,839,329
Add: Non-operating income	164,411	187,575	471,736	342,446
Less: Non-operating expenses	8,812	10,758	29,217	23,299
Including: Loss arising                        from disposal of                        non-current assets	2,422	1,144	11,972	3,516
III.      Total profit (total loss is            represented by "-" sign)	3,613,169	4,182,321	4,817,311	9,158,476
Less: Income tax expenses	933,574	1,210,536	1,101,056	2,226,948
IV.      Net profit (net loss is represented            by "-" sign)	2,679,595	2,971,785	3,716,255	6,931,528
V.       Earnings per share:
(I)    Basic
(II)    Diluted

Items	Amounts for the period (July to September)	Amounts for the corresponding period of the previous year (July to September)	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
VI.      Other consolidated gains		-147	300	-1,067
VII.     Total consolidated gains	2,679,595	2,971,638	3,716,555	6,930,461

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

4.3     Consolidated Cash Flow Statement

January to September 2012

Prepared by: Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
I.       Cash flows from operating activities:
Cash received from sales of goods and provision of            services	75,138,050	73,226,146
Net increase in deposits from clients and            placements from other banks
Net increase in borrowings from central bank
Net increase in contributions made to other             financial institutions
Cash received from premiums of original            insurance contracts
Net cash receipt from reinsurance operations
Net increase in reserve of the insured and            investment
Net increase in disposal of held-for-trading             financial assets
Cash received from interests, fees and commission
Net increase in contributions received
Net increase in cash from repurchase operations
Refund of tax and levy	149,108
Other cash received relating to operating activities	1,913,079	2,168,068
Subtotal of cash inflows of operating activities	77,200,237	75,394,214
Cash paid for goods purchased and services received	44,395,196	38,934,790
Net increase in loans and advances to clients
Net increase in deposits in central bank and            to other banks
Cash paid in respect of claims under original            insurance contracts
Cash paid for interests, fees and commission
Cash paid for bonus paid on insurance policy
Cash paid to or on behalf of employees	9,646,963	7,200,571
Tax and levies paid	5,785,336	5,266,213
Other cash paid relating to operating activities	5,766,120	5,302,004
Subtotal of cash outflows from operating activities	65,593,615	56,703,578
Net cash flows from operating activities	11,606,622	18,690,636

Items	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
II.      Cash flows from investment activities:
Cash received from sales and redemption of            investments
Cash received from investment income	445,391	852,727
Net cash proceeds from disposal of fixed assets,            intangible assets and other long-term assets	227,562	494,152
Net cash proceeds from disposal of subsidiaries            and other business units		1,669,177
Other cash received relating to investment activities	300,773	1,439,248
Subtotal of cash inflows from investment activities	973,726	4,455,304
Cash paid for purchase of fixed assets,            intangible assets and other long-term assets	10,322,533	16,712,276
Cash paid for investments
Net increase in secured loans	674,283
Net cash payments for acquisition of subsidiaries             and other business units
Other cash paid relating to investment activities	62,418	130,643
Subtotal of cash outflows from investment activities	11,059,234	16,842,919
Net cash flows from investment activities	-10,085,508	-12,387,615
III.     Cash flows from financing activities:
Cash received from capital injection
Including: Cash received from capital injection of                            minority shareholders in subsidiaries
Cash received from borrowings	21,868,527	22,901,906
Cash received from issue of debentures
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	21,868,527	22,901,906
Cash paid for repayment of borrowings	19,650,465	21,606,315
Cash paid for distribution of dividends,            profits or payment of interest expenses	3,552,167	3,384,556
Including: Dividends and profit paid to minority                            shareholders by subsidiaries
Other cash paid relating to financing activities	2,604,436	1,823,936
Subtotal of cash outflows from financing activities	25,807,068	26,814,807
Net cash flows from financing activities	-3,938,541	-3,912,901

Items	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
IV.     Effect of exchange rate changes on cash and            cash equivalents	-58,111	-126,754
V.      Net increase in cash and cash equivalents	-2,475,538	2,263,366
Add: Balance of cash and cash equivalents                    as at the beginning of the period	15,306,409	14,204,591
VI.     Balance of cash and cash equivalents as at the end of the period	12,830,871	16,467,957

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

Cash Flow Statement of the Parent Company

January to September 2012

Prepared by: Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
I.       Cash flows from operating activities:
Cash received from sales of goods and provision of            services	52,876,501	52,714,914
Refund of tax and levy	7,985
Other cash received relating to operating activities	1,235,272	972,843
Subtotal of cash inflows from operating activities	54,119,758	53,687,757
Cash paid for goods purchased and services received	31,826,473	28,701,031
Cash paid to and on behalf of employees	6,060,737	4,427,420
Taxes and levies paid	3,971,238	4,192,114
Other cash paid relating to operating activities	4,118,384	3,811,472
Subtotal of cash outflows from operating activities	45,976,832	41,132,037
Net cash flows from operating activities	8,142,926	12,555,720
II.      Cash flows from investment activities:
Cash received from sales and redemption of            investments	2,200,000
Cash received from investment income	107,129	87,246
Net cash proceeds from disposal of fixed assets,            intangible assets and other long-term assets	192,855	152,870
Net cash proceeds from disposal of subsidiaries            and other business units
Other cash received relating to investment activities	158,704	126,913
Subtotal of cash inflows from investment activities	2,658,688	367,029
Cash paid for purchase of fixed assets,            intangible assets and other long-term assets	6,366,526	11,428,133
Cash paid for investments		1,000,000
Net cash payments for acquisition of subsidiaries             and other business units	480,000	670,000
Other cash paid relating to investment activities	742,617	98,140
Subtotal of cash outflows from investment activities	7,589,143	13,196,273
Net cash flows from investment activities	-4,930,455	-12,829,244

Items	Amounts for the period from the beginning of the year to the end of the reporting period (January to September)	Amounts for the period from the beginning of the previous year to the end of the previous reporting period (January to September)
III.     Cash flows from financing activities:
Cash received from capital injection
Cash received from borrowings	14,347,805	19,058,514
Cash received from issue of debentures
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	14,347,805	19,058,514
Cash paid for repayment of borrowings	15,704,780	15,960,240
Cash paid for distribution of dividends,            profits or payment of interest expenses	2,837,887	2,807,771
Other cash paid relating to financing activities	2,065,255	1,573,774
Subtotal of cash outflows from financing activities	20,607,922	20,341,785
Net cash flows from financing activities	-6,260,117	-1,283,271
IV.     Effect of exchange rate changes on cash and            cash equivalents	-49,373	-74,278
V.      Net increase in cash and cash equivalents	-3,097,019	-1,631,073
Add: Balance of cash and cash equivalents                    as at the beginning of the period	7,797,123	11,501,617
VI.     Balance of cash and cash equivalents as at the end of the period	4,700,104	9,870,544

Legal representative of the Company: Wang Changshun

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Xiao Feng

(2)     SHAREHOLDERS' RETURN PLAN FOR THE NEXT THREE YEARS FROM 2012 TO 2014 (THE "Shareholders' Return Plan")

In light of the proposed amendments to the Articles of Association in relation to dividends distribution of the Company, the details of which were set out in the announcement of the Company dated 28 August 2012, the Company proposes to adopt the Shareholders' Return Plan. The proposed adoption of the Shareholders' Return Plan will be subject to approval by the Shareholders at an extraordinary general meeting of the Company.

A circular setting out details of the Shareholders' Return Plan will be provided to the Shareholders in due course.

By order of the Board

Air China Limited

Rao Xinyu  Tam Shuit Mui

Joint Company Secretaries

Beijing, the PRC, 30 October 2012

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

 

 

QRTUASURUSARORA