Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Shandong Airlines Co., Ltd.
Summary of Annual Report 2010
§1. Important Notice
1.1 Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Shandong Airlines Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are
no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of
the whole contents.
The summary of Annual Report 2010 is abstracted from the Annual Report; and full text of the
Annual Report is published on Internet website http://www.cninfo.com.cn in the mean time. The
investors are suggested to read the full text of annual report to get more details.
1.2 Other directors all attend the meeting except the followed list:
Name of absent Entrusted
Position of absentee Reasons for absent
director person
Ma Chonxian Deputy Chairman Business Zhang Xingfu
Wang Mingyuan Director Business Xu Guojian
1.3 Reanda Certified Public Accountants has audited the Annual Financial Report and issued
standard unqualified Auditors’ Report for the Company.
1.4 Zhang Xingfu, Principal of the Company; Xu Guojian, Person in Charge of Accounting Works;
Wang Wuping, Person in Charge of Accounting Organ(Accounting Supervisor) hereby confirm that
the Financial Report of the Annual Report is true and complete.
§2. Company Profile
2.1 Basic information
Short form of the stock Shanhang B
Stock code 200152
Listed stock exchange Shenzhen Stock Exchange
Registered address Yaoqiang International Airport, Jinan, Shandong
Post code of registered
250107
address
Office address SDA Building, No. 5746, Er Huan East Road, Jinan, Shandong
Post code of office address 250014
Internet web site of the
http://www.shandongair.com.cn
Company
E-mail zqb@shandongair.com.cn
2.2 Contact person and method
Authorized Representative in
Secretary of the Board of Directors
Charge of Securities Affairs
Name Dong Qiantang Fan Peng
19/F, SDA Building, No. 5746, Er 19/F, SDA Building, No. 5746, Er
Contact address
Huan East Road, Jinan, Shandong Huan East Road, Jinan, Shandong
Telephone 0531－85698229 0531－85698678
Fax 0531－85698679 0531－85698679
E-mail dongqt@shandongair.com.cn fanp@shandongair.com.cn
§3. Summary of Accounting Data and Financial Indexes
3.1 Major accounting data
1
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Unit: RMB
Increase/decrease in this
2010 2009 year compared with that 2008
of last year (%)
Operating income (RMB) 7,292,615,957.10 5,366,113,363.68 35.90% 5,049,391,116.47
Total profit (RMB) 844,544,446.68 403,361,305.82 109.38% 108,260,827.56
Net profit attributable to
shareholders of the listed 634,364,547.92 302,282,325.68 109.86% 80,981,442.68
company (RMB)
Net profit attributable to
shareholders of the listed
company after deducting 625,449,962.16 203,597,306.19 207.20% 92,440,296.87
non-recurring gains and
losses (RMB)
Net cash flow arising from
1,675,078,629.81 1,317,347,150.42 27.16% 1,059,833,106.56
operating activities (RMB)
Increase/decrease at the
At the end of end of this year compared
At the end of 2009 At the end of 2008
2010 with that at the end of last
year (%)
Total assets (RMB) 8,923,799,368.85 8,096,403,730.75 10.22% 7,844,104,901.47
Owners’ equity
attributable to
1,406,659,169.90 852,294,621.98 65.04% 550,012,296.30
shareholders of the listed
company (RMB)
Share capital (RMB) 400,000,000.00 400,000,000.00 0.00% 400,000,000.00
3.2 Major financial indexes
Unit: RMB
Increase/decrease this
2010 2009 year compared with 2008
that last year (%)
Basic earnings per share
(RMB/Share) 1.59 0.76 109.86% 0.20
Diluted earnings per share
(RMB/Share) 1.59 0.76 109.86% 0.20
Basic earnings per share
after deducting
non-recurring gains and 1.56 0.51 207.20% 0.23
losses (RMB/Share)
Weighted average return Up13.73 percentage
on equity (%) 56.84% 43.11% 15.89%
points
Weighted average return
29.04% Up27.00percentage
on equity after deducting
non-recurring gains and 56.04% 18.14%
points
losses (%)
Net cash flow arising
from operating activities 4.19 3.29 27.16% 2.65
per share (RMB/Share)
Increase/decrease at
the end of this year
At the end of 2010 At the end of 2009 compared with that at At the end of 2008
the end of last year
(%)
Net asset per share
attributable to shareholders of 3.52 2.13 65.04% 1.38
2
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
listed company
(RMB/Share)
Items of non-recurring gains and losses
√Applicable □Inapplicable
Unit: RMB
Notes
Items of non-recurring gains and losses Amount
(If applicable)
Gains and losses from the disposal of non-current asset -7,700,920.17
Governmental subsidy calculated into current gains and
losses, while closely related with the business of the Governmental
Company, excluding the fixed-amount or fixed-proportion 16,013,518.70 subsidies for airlines,
governmental subsidy according to the unified national etc
standard
Losses/gains from changes of fair values occurred in holding
transaction financial assets and transaction financial
liabilities, and investment income obtaining from the
disposal of transaction financial assets and transaction -8,872,312.71
financial liabilities and financial assets available for sales,
excluded effective hedging business relevant with normal
operations of the Company
Governmental
subsidies for airlines
12,545,837.53 and other non
Other non-operating income and expenditure except for the operating revenue and
aforementioned items expenditure
Effect of income tax -3,071,587.08
Effect of equity of minority shareholders 49.49
Total 8,914,585.76 -
3.3 Differences between CAS and IAS
□Applicable √Inapplicable
§4. Changes in Share Capital and Particulars about Shareholders
4.1 Statement of change in share capital
Unit: Share
Before the change Increase/Decrease of this time (+, -) After the change
Capitaliza
New
Proportio Bonus tion of Proportio
Amount shares Others Subtotal Amount
n shares public n
issued
reserve
260,000,0 260,000,0
I. Unlisted shares 65.00% 65.00%
00 00
1. Sponsor’s 168,601,0 168,601,0
42.15% 42.15%
shares 00 00
Including:
168,402,0 168,402,0
State-owned 42.10% 42.10%
00 00
shares
Domestic legal
199,000 0.05% 199,000 0.05%
person’s shares
Foreign legal
person’s shares
Others
2. Raised legal
person’s shares
3. Inner
3
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
employees’ shares
4. Preference 91,399,00 91,399,00
22.85% 22.85%
shares or other 0 0
140,000,0 140,000,0
II. Listed shares 35.00% 35.00%
00 00
1. RMB ordinary
shares
2. Domestically
140,000,0 140,000,0
listed foreign 35.00% 35.00%
00 00
shares
3. Overseas listed
foreign shares
4. Other
400,000,0 400,000,0
III. Total shares 100.00% 100.00%
00 00
4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of
circulation share
Unit: Share
Total shareholders at the
17,748
end of report
Particulars about shares held by the top ten shareholders
Number of share
Nature of Non-circulating
Full name of Shareholders Proportion Shares held pledged/
shareholders shares
frozen
SHANDONG AVIATION State-owned
42.00% 168,004,000 168,004,000 0
GROUP legal person
State-owned
AIR CHINA LIMITED 22.80% 91,200,000 91,200,000 0
legal person
Foreign
CHEN TIAN MING 0.49% 1,976,072 0 0
natural person
Foreign
CHEN JING JIAN 0.34% 1,352,200 0 0
natural person
Foreign
ZENG YU HUI 0.28% 1,110,330 0 0
natural person
GUOTAI JUNAN
Foreign legal
SECURITIES(HONGKO 0.24% 952,000 0 0
person
NG) LIMITED
Foreign
LIU LI YA 0.23% 918,917 0 0
natural person
Domestic
BAO XIU ZHEN 0.22% 879,950 0 0
natural person
Domestic
OU YAN PING 0.21% 834,210 0 0
natural person
Domestic
YAO MING 0.21% 824,000 0 0
natural person
Particulars about shares held by the top ten shareholders of circulation share
Full name of the shareholders Circulating shares held Type of shares
CHEN TIAN MING 1,976,072 Domestically listed foreign share
CHEN JING JIAN 1,352,200 Domestically listed foreign share
ZENG YU HUI 1,110,330 Domestically listed foreign share
GUOTAI JUNAN
952,000 Domestically listed foreign share
SECURITIES(HONGKONG) LIMITED
LIU LI YA 918,917 Domestically listed foreign share
BAO XIU ZHEN 879,950 Domestically listed foreign share
OU YAN PING 834,210 Domestically listed foreign share
YAO MING 824,000 Domestically listed foreign share
4
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
YE QU FA 809,600 Domestically listed foreign share
WU CHI LI 750,000 Domestically listed foreign share
1. Shandong Aviation Group is the first largest shareholder of the Company, who holds
the shares of the Company on behalf of the State with unlisted shares.
2. Air China Limited is the second largest shareholder of the Company, who holds the
shares of the Company on behalf of the State with unlisted shares; Air China is the first
largest shareholder of SDA and the actual controller of the Company.
Explanation on associated 3. Among the above the top ten shareholders, Air China, shareholders of state-owned
relationship or accordant legal person’s share, is the first largest shareholder of the SDA, and there exists no
action among the aforesaid associated relationship between SDA and Air China and the other shareholders, and
shareholders they don’t belong to the consistent actionist regulated by the Management Regulation of
Information Disclosure on Change of Shareholding for Listed Companies with the other
shareholders. The Company is not aware of their associated relationship among the
other shareholders of circulation share, whether belongs to the consistent actionist
regulated by the Management Regulation of Information Disclosure on Change of
Shareholding for Listed Companies.
4.3 Particulars about controlling shareholders and actual controller of the Company
4.3.1 Particulars about change in controlling shareholders and actual controller of the
Company
□Applicable √Inapplicable
4.3.2 Introduction of especial situation for controlling shareholder and actual controller
Actual controller of the Company: Air China Limited.
Place: 9F/Sky Mansion, No.28 Building Tianzhu Road, Block A of Tianzhu Airport Industrial Zone, Shunyi
District, Beijing.
Legal Representative: Kong Dong
Registered capital: RMB 12.892 billion
Business scope: It was engaged in the domestic and overseas transportation business such as periodic and
un-periodic aviation passenger, cargo, letter and baggage; domestic and overseas official flight business; airplane
management business; repairing of aerostat; business agent among air companies; ground service and air courier
services related with the main operations (excluding letter and articles with the nature of letters); tax-free
commodities in airplane.
Main shareholders: China National Aviation Group Co., Ltd., which accounted for 39.88% in total shares;
Cathay Pacific Airways Ltd., which accounted for 18.54% in total shares.
4. 3. 3 Property right and controlling relationships between the actual controller of the
Company and the Company is as follows:
State-owned Assets Supervision & Administration Commission of State Council
会
100%
China National Aviation Holding Company
39.88%
Air China Limited
49.406%
Shandong Aviation Group 22.8%
42%
Shandong Airlines Co., Ltd.
5
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
§5. Particulars about Directors, Supervisors, Senior Executives
5.1 Particulars about changes in shares held by directors, supervisors and senior executives
and their remunerations
Total
Drawing
remunera
remuner
tion
ation
Share drawn
from
s Shares Reaso from the
sharehol
Begin date of End date of office held held at n for Company
Name Title Sex Age ders’
office term term at year chang in the
units or
year- -end e report
other
begin period
related
(RMB’00
units or
00)(befor
not
e tax)
ZHAN
G Chairma
Male 1955-4 2009-06-26 2012-06-25 0 0 0.00 Yes
XING n
FU
MA
Vice
CHON
Chairma Male 1965-6 2010-04-22 2012-06-25 0 0 0.00 Yes
G
n
XIAN
ZENG Director,
GUO General Male 1953-10 2009-06-26 2012-06-25 0 0 99.69 No
QIANG Manager
Director,
SU Standing
JIAN Deputy Male 1954-3 2009-06-26 2012-06-25 0 0 81.19 No
MIN General
Manager
Director,
Vice
XU General
GUO Manager Male 1964-11 2010-01-29 2012-06-25 0 0 50.88 No
JIAN , chief
accounta
nt
WANG
MING Director Male 1965-9 2009-06-26 2012-06-25 0 0 0.00 Yes
YUAN
KOU
ZUN Director Male 1955-8 2009-06-26 2012-06-25 0 0 0.00 Yes
XIAN
WANG
JIE Director Female 1958-6 2009-06-26 2012-06-25 0 0 0.00 Yes
MING
Independ
WEI
ent Male 1950-2 2009-06-26 2012-06-25 0 0 5.90 No
JIN CAI
Director
Independ
LI
ent Male 1957-3 2009-06-26 2012-06-25 0 0 5.90 No
CHUN
Director
QU Independ
Male 1972-6 2009-06-26 2012-06-25 0 0 5.90 No
WEN ent
6
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
ZHOU Director
Chairma
WANG n of
FU board of Male 1953-6 2009-06-26 2012-06-25 0 0 0.00 Yes
ZHU supervis
ors
XUE
Supervis
RUI Male 1961-3 2009-06-26 2012-06-25 0 0 0.00 Yes
or
TAO
ZHAN Supervis
Male 1965-5 2009-06-26 2012-06-25 0 0 0.00 Yes
G KAI or
Employe
e
supervis
MIAO or,
LIU general Male 1971-2 2009-06-26 2012-06-25 0 0 46.73 No
BIN manager
of flight
departme
nt
Employe
e
supervis
ZHOU or, vice
QIAO general Female 1975-1 2009-06-26 2012-06-25 0 0 28.15 No
YAN manager
of cabin
departme
nt
YU vice
HAI general Male 1969-9 2009-06-26 2012-06-25 0 0 78.29 No
TIAN manager
SONG vice
YU general Female 1956-1 2009-06-26 2012-06-25 0 0 81.08 No
XIA manager
LI vice
QING general Male 1955-8 2009-06-26 2012-06-25 0 0 74.19 No
EN manager
vice
QIU
general Male 1967-1 2009-06-26 2012-06-25 0 0 63.20 No
FENG
manager
ZHAN
Chief
G
flight Male 1958-10 2009-06-26 2012-06-25 0 0 88.39 No
QING
trainer
SHE
XIONG
Chief
JIAN Male 1965-1 2009-12-01 2012-06-25 0 0 60.30 No
engineer
BO
DONG Secretar
QIAN y of the Male 1962-1 2009-06-26 2012-06-25 0 0 37.86 No
TANG Board
Total - - - - - 0 0 - 807.65 -
Stocks option of the directors, supervisors and senior executives bestowed in the report period
□Applicable √Inapplicable
5.2 Presences at the meetings of the Board by the directors
7
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Whether
Attending
attending the
the meeting
Due Presence in meeting in
Name of the in way of Entrusted Absence
Positions Presence person person in
directors communicat presence (times)
(times) (times) successive
ion
two times or
(times)
not
Zhang Xingfu Chairman 9 3 6 0 0 No
Feng Gang Vice Chairman 6 2 4 0 0 No
Director, General
Zeng Guoqiang 9 3 6 0 0 No
Manger
Director,
Su Zhongmin Standing Deputy 9 3 6 0 0 No
General Manager
Director, Deputy
General
Xu Guojian 6 2 4 0 0 No
Manager, Chief
Accountant
Wang Mingyuan Director 9 2 6 1 0 No
Kou Zunxian Director 9 3 6 0 0 No
Wang Jieming Director 9 3 5 1 0 No
Independent
Wei Jincai 9 3 6 0 0 No
director
Independent
Li Chun 9 3 6 0 0 No
director
Independent
Qu Wenzhou 9 3 6 0 0 No
director
Explanations on not attending the meeting of the Board in person in successive two times
Naught
Meetings of the Board held
9
during the year (times)
Of which: site meetings
3
(times)
Meetings held in way of
6
communication (times)
Meetings held in way of both
site and communication 0
(times)
§6. Report of the Board of Directors
6.1 Discussion and analysis by the management team
2010 was the key transition period breaking new ground for the future. Under support and leadership
of various shareholder units, the Company deeply conducted scientific thought of development,
overarched guideline to entire work, enhanced leading of strategy, seized management one hand and
development another hand, made overall arrangements and gave top priority to what is the most
important, scientifically and carefully decided, strongly promoted the arrange of fixed work,
successfully realized fabulous operation and management performance which ensured 16 years of
safe flight, made historic breakthrough in safe operation, comprehensive interest and innovated
development etc.
1. Situation of safe production kept stable, safe management improved in stability
In 2010, the Company ensured safe flight 172,000 hours plus 94,700 flights, respectively up 14.2%
8
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
and 8.9% over the same period of last year, no insecurity events beyond transport accidents symptom
arising from the Company; smoothly passed the SMS supplementary appraisal of civil aviation
administration, and became the first series of airline companies which got SMS operating standards;
for the second time awarded with the Top Reliability Award for Mission CRJ-200 Fleet in
Bombardier Asian Area, and put an end to parking in air of engine for 9 years; realized safe flight for
16 years and got the One Star of Safe Flight of national civil aviation.
2. Scientifically organized production, and the interest level climbed on a historic height
In 2010, the Company completed total traffic mileage 1.178 billion kilometers, passengers transport
volume 9.346 million persons, goods and mail transport volume 99,800 tons, respectively up 21.4%,
19.6% and 22.7% over the same period of last year; realized operating income of RMB 7.293 billion,
up 35.90% over the same period of last year; total profit amount of RMB 0.845 billion, up 109.38%
over the same period of last year
3. Started construction of service system of entire procedure, and the service quality was constantly
improved
On-schedule rate of flights in 2010 was 79.02%, ranking the 3rd position of the entire civil aviation;
degree of satisfaction of passengers was 89.78%, upper than average level of the industry; complaint
rate of passengers was 0.021 time per 10,000 persons, down 0.003 time over the same period of last
year; luggage error rate was 0.362 time per 1,000 pieces, down 0.07 time over the same period of last
year; successfully accomplished service guarantee tasks of World Expo, Asian Games and Asian
Games for Disabled; ranked the 150th in evaluation of the 500 Most Valuable Brands in China, up 10
positions comparing with last year.
4. Completed main projects of organization transformation, internal control and management was
preliminarily built
Comprehensively completed installation of personnel and posts as well as payment reform, set up
and completed order installation of posts, realized multiple channels development of staffs. On basis
of increment reform, regulated optimization of remuneration structure, gave prominence to value of
posts, enhanced remuneration motivation effect. Conducted and organized innovated looking back
activities, further divided and defined responsibility of function department.
6.2 Statement of main operations classified according to industries or products
Unit: RMB’0000
Main operations classified according to industries
Increase/decre
Increase/decre Increase/decrea
ase in income
ase in cost of se in gross
Classified according Gross profit from
Income from Cost of operations profit ratio
to industries or ratio operations
operations operations over the last over the last
products (%) over the last
year year
year
(%) (%)
(%)
Aviation
transportation 717,330.54 545,972.00 23.89% 36.00% 33.62% Up 1.36
percentage point
services
Logistics
transportation 1,337.88 246.53 81.57% 90.71% 29.05% Up 8.8
percentage point
services
Hotel and food
2,541.41 2,081.58 18.09% 10.57% 8.53% Up 1.54
services percentage point
Main operations classified according to products
Aviation
transportation 717,330.54 545,972.00 23.89% 36.00% 33.62% Up 1.36
percentage point
services
Logistics
transportation
1,337.88 246.53 81.57% 90.71% 29.05% Up 8.8
9
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
services percentage point
Hotel and food
2,541.41 2,081.58 18.09% 10.57% 8.53% Up 1.54
services percentage point
6.3 Particulars about main operations classified according to areas
Unit: RMB’0000
Increase/decrease in income
Areas Income from operations from operations over last
year (%)
Domestic 694,311.49 34.56%
Overseas 12,942.22 45.66%
Area 13,956.12 150.98%
6.4 Items measured by adopting fair value
√Applicable □Inapplicable
Unit: RMB
Change of
Gains and loss accumulated Provision for
Amount of Amount of
Items form change fair value impairment of
period-begin period-end
of fair value calculated in this period
equity
Financial assets:
1. financial assets
calculated with fair
value and whose 11,341,846.48 -2,050,999.86 0.00 0.00 9,290,846.62
change was calculated
in current gains and
loss
Including: derivative 11,341,846.48 -2,050,999.86 0.00 0.00 9,290,846.62
financial assets
2. Financial assets
available for sale
Subtotal of financial 11,341,846.48 -2,050,999.86 0.00 0.00 9,290,846.62
assets
Financial liability 0.00 -3,865,809.52 0.00 0.00 3,865,809.52
Investment real estate
Productive biological
assets
Other
Total 11,341,846.48 13,156,656.14
6.5 Application of the raised proceeds
□Applicable √Inapplicable
Particulars about the changed projects with funds raised
□Applicable √Inapplicable
6.6 Application of the proceeds not raised through shares offering
□Applicable √Inapplicable
10
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
6.7 Explanation of the Board of Directors on changes to the accounting policy and accounting
estimates, or reasons of modification of material accounting errors and the influences
□Applicable √Inapplicable
6.8 Explanation of the Board of Directors on the “Qualified Opinion” made by the CPAs
□Applicable √Inapplicable
6.9 The preplan of the profit distribution and capitalization of capital public reserve of the
Board of Directors
Audited by Reanda Certified Public Accountants accordance with Accounting Standards for
Business Enterprise, the Company realized net profit of RMB 633.69 million in 2010.Till end of
the December 31, 2010, profit of RMB 858.42 million was available for distribution for parent
company.
In order to return the shareholder’s supports for many years, and meanwhile, consider the
long-term development of the Company, the Board plans to submit the 2010 profit distribution
plan to the shareholders’ general meeting, as follows:
1. Withdrawal of current statutory surplus reserve amounts to RMB 63.37 million.
2. Plans to distribute cash bonus amounting to RMB 120.00 million , taking the total shares
400,000,000 of the Company ended as Dec. 31, 2010 as the base, the cash bonus for each 10
share is RMB 3.00(Tax included).
The profit distribution preplan would be handed into the 2010 Shareholders’ General Meeting of the
Company for examination and discussion.
Particulars about the cash bonus of the Company in previous three years
Unit: RMB
Net profit attributable Ratio of net profit
to shareholders of attributable to
Year for bonus Amount of cash bonus Distributable profit
listed company in shareholders of listed
distribution (tax included) during the year
consolidated statement company in
of bonus year consolidated statement
2009 80,000,000.00 302,282,325.68 26.47% 308,668,390.11
2008 0.00 80,981,442.68 0.00% 36,471,405.69
2007 0.00 68,171,958.24 0.00% -39,938,895.93
The proportion of accumulative cash bonus during recent three
53.16%
years in latest annual average net profit (%)
The Company didn’t put forward cash profit distribution preplan though the Company achieved the
profit in the report period
□Applicable √Inapplicable
§7. Significant Events
7.1 Purchase of assets
√Applicable □Inapplicable
Unit: RMB’0000
Net profit Net profit Assets
Credit The
contributed contributed rights
and related
to the to the concer
The other liabilit relation
Company Company Related Princip ned
party of y ship(ap
Assets Purchase Purchase from the from the transact le of transfe
transactio concer plicabl
purchased date price purchase year-begin to ion or price rred
n or final ned e for
date to the the not setting owner
controller shifted related
year-end(app year-end(app ship
fully transact
licable for licable for fully
or not ion)
enterprise enterprise or not
11
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
merger under merger under
the the common
uncommon control)
control)
100%
Whethe
equity of
r the
Qingdao
related
Feisheng
party
Shangdon Internatio
was the
g Airline nal Airline Auctio
2010-11-29 5,074.01 -45.49 Yes Yes Yes biggest
Group Technolog n
shareho
Co., Ltd y
lder of
Developm
the
ent
Compa
Training
ny
Co., Ltd
7.2 Sales of assets
□Applicable √Inapplicable
Influences on the business continuity and stability of management of the Company by the matters
7.1 and 7.2 concerned
Naught
7.3 Significant guarantees
□Applicable √Inapplicable
7.4 Significant related transaction
7.4.1 Related transaction connected to routine operations
√Applicable □Inapplicable
Unit: RMB’0000
Sell products and supply labor force to Purchase products and accept labor
the related parties force from related parties
Related parties Proportion in the Proportion in the
Transaction amount amount of the same Transaction amount amount of the same
transaction transaction
Taikoo (Shandong) Aircraft
0.00 0.00% 7,833.80 16.75%
Engineering Co., Ltd
Shandong Aviation Group 0.00 0.00% 1,180.41 28.98%
Air China Limited 1,300.00 76.70% 1,411.84 2.14%
Shandong Xiangyu Aero
0.00 0.00% 2,994.29 6.40%
Technical Services Co., Ltd.
Total 1,300.00 76.70% 13,420.34 54.27%
Of which: In the report period, the related transaction amount the listed companies sold products or
supplied labor forced for the controlling shareholders and its subsidiaries was RMB 00.00.
The above mentioned related transaction exceed the
predicted amount mainly due to that with recover and
constantly increased demands of civil aviation the
actual flight time of airplanes of the Company rented
Explanation on difference from predicted temporary by China Airline and ground service provided
disclosure of year-begin exceeded the prediction, however, the transaction
price was in a fair value way and do no harm to the
adverse effects of the operational structure and
harmless to the interest of shareholders of the
Company.
7.4.2 Related current credits and liabilities
12
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
□Applicable √Inapplicable
7.4.3 Occupation and its progress of paying off on non-operational funds by largest
shareholder and its affiliated enterprises
□Applicable √Inapplicable
7.5 Entrusted assets management
□Applicable √Inapplicable
7.6 Implementation of commitments
Commitments made by the listed company and its directors, supervisors, senior executives, the
shareholders with holding above 5% shares and its actual controller in the report period or lasting
until the report period.
√Applicable □Inapplicable
Commitment event Promisee Content of commitment Fulfillment
Share reform commitment
Commitments made in purchase
report and equity change report
Commitments made when assets
reorganization
Commitments made when issuing
When the Company competed to purchase
100% equity of Qingdao Feisheng, the
biggest shareholder of Shangdong Airlines
After appraisal,
Group made compensation committee for
the profit of the
profit prediction in accordance with the
first year of
Appraisal Report: the net profit of Qingdao
Qingdao
Feisheng in future 3 years were respectively
Shangdong Feisheng reached
Other commitment (appended 4804900yuan, 5361400 yuan and 5778400
Airlines Group the committed
commitments included) yuan with calculation method of equity. If
Co., Ltd target, thus
the future operation performance of
Shangdong
Qingdao Feisheng doesn’t reach the
Airlines needn’t
predicted profit under the insisting of base
cash
of estimation, and the difference does harm
compensation.
to the interests of the Company, Shangdong
Airlines made committee to make cash
compensation for the difference.
7.7 Significant lawsuit and arbitrations
□ Applicable √Inapplicable
7.8 Other significant events and analysis on their influences and solutions
7.8.1 Particulars about securities investment
□Applicable √Inapplicable
7.8.2 Equity of other listed companies held
□Applicable √Inapplicable
7.8.3 Equities of companies to be listed and unlisted financial enterprises held
□Applicable √Inapplicable
7.8.4 Particulars about the purchases and sales on equities of other listed company
□Applicable √Inapplicable
7.8.5 Other consolidated incomes
Unit: RMB
Amount occurred in the Amount occurred in last
Items
report period report period
1. Gains/losses from financial assets
available for sales
13
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Less: Income tax influences from financial
assets available for sales
Net amount reckoned into other
consolidated income in previous period but
transferred into gains/losses in current
period
Subtotal
2. Shares in the other consolidated income
of the investee calculated based on equity
method
Less: Income tax influences of shares in the
other consolidated income of the investee
calculated based on equity method
Net amount reckoned into other
consolidated income in previous period but
transferred into gains/losses in current
period
Subtotal
3. Gains/losses from cash flow hedge
instrument
Less: Income tax influences from cash flow
hedge
Net amount reckoned into other
consolidated income in previous period but
transferred into gains/losses in current
period
Adjusted amount transferred to initial
confirmed amount of the arbitraged items
Subtotal
4. Differences from translating foreign
currency financial statements
Less: Net amount of disposing overseas
business transferred to current gains/losses
Subtotal
5. Others
Less: Income tax influences by others
reckoned into other consolidated income
Net amount reckoned into other
consolidated income in previous period but
transferred into gains/losses in current
period
Subtotal 0.00 0.00
Total 0.00 0.00
§8. Report of the Supervisory Committee
√Applicable □Inapplicable
(I) Particulars about the work of Supervisory Committee
In 2010, the Supervisory Committee exerted the duties authorized by Company Law of the P.R.C.
and the Articles of Association of the Company according to laws with assiduity and responsibility,
actively implemented supervision functions on the Company’s operating decision-making, financial
14
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
status, the responsibility and behaviors of directors and senior managers in the period and tried to
safeguard the rights and interests of the shareholders.
The Supervisory Committee had hold five meetings of the Supervisory Committee and attended all
Shareholders’ General Meetings and meetings of the Board in 2010.
In the report period, particular about the Meetings of Supervisory Committee and comments:
1. On January 8, 2010, the Supervisory Committee held a meeting to comment on the Proposal of
Accounting Estimation Alteration of Shandong Airlines Co., Ltd., which was proposed by the 1 st
Extraordinary Shareholders’ General Meeting 2010 of the 4th session of the Board.
2. The 2nd meeting of the 4th session of Supervisory Committee was held by the Company on March
24, 2010. The meeting examined and approved the following proposals:
(1) The 2009 Working Report of Supervisory Committee of Shandong Airlines Co., Ltd.;
(2) The 2009 Annual Report and Summary of Shandong Airlines Co., Ltd;
(3) Self-Evaluation Report on Internal Control of the Company (2009)
Announcement resolutions of the meeting were published at China Securities Journal, Securities
Times and Hong Kong Commercial Daily dated March 26, 2010.
3. The meeting of Supervisory Committee was held by the Company on April 22, 2010, and
approved the 1st Quarterly Report 2010 of Shandong Airlines Co., Ltd.
4. The meeting of Supervisory Committee was held by the Company on August 28, 2010, and
approved the Semi-Annual Report 2010 of Shandong Airlines Co., Ltd and its Summary.
5. The meeting of Supervisory Committee was held by the Company on October 25, 2010, and
approved the 3rd Quarterly Report 2010 of Shandong Airlines Co., Ltd.
(II) Independent Opinions of the Supervisory Committee on relevant events in 2010
1. Operation according to laws
In 2010 the Company operated according to relevant national laws and rules, provision of Company
Charter as well as decision and authorization of Shareholders’ General Meeting and the Board of
Directors; major decision was scientific and reasonable, deciding process was lawful; directors and
senior executives were diligent and responsible when performing their duties, and no behaviors
against law, rules as well as company charter or doing harm to interest of the Company and
shareholders were found; operators of the Company carefully performed various decisions of the
Board of Directors, tightly seized opportunity, got over various difficulties, exceedingly completed
production and operation plan made at year-begin and profiting goals, and no behaviors against rules
was found in operation.
2. Finance management of the Company
In 2010, the board of supervisors carefully investigated finance system, internal control system and
financial condition of the Company, and audited accounting statement and financial information of
the Company, believed: compiling of the financial statement conformed to relevant rules of the
Corporate Accounting System and the Corporate Accounting Rules, the internal control system of
financial accounting was complete, no major information was left out and no false information was
recorded. The financial condition and operating performance as well as cash flow were in a better
situation, the 2010 annual report could truthfully reflect financial condition and operation
performance of the Company.
3. Particular about external guarantee and fund occupation
In 2010, the Company no external guarantee occurred, and no fund occupation on non-operating
capitals by largest shareholders and no other violation of shareholders’ interest occurred either.
4. Opinions on self-evaluation on internal control of the Company from Supervisory Committee
The Supervisory Committee believes that: a perfection internal control system was established by
the Company with an effective-ness execution. The self-evaluation report on the internal control of
the Company shows a true and objective situation on the establishment and execution of the internal
control system of the Company.
15
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
§9. Financial Report
9.1 Auditor’s opinions
Audited or not Yes
Auditor’s opinions Standard unqualified auditor’s opinions
Ref. No. of auditor’s
Reanda SZi No.[2011]1193
report
Title of auditor’s report Auditor’s Report
Receiver of auditor’s
Shareholders of Shanhang Airlines Co., Ltd.
report
We have audited the accompanying financial statements of Shandong Airlines Co., Ltd.
(“the Company”), including balance sheet and consolidated balance sheet of 31 December
2010, and profit statement and consolidated profit statement, and cash flow statement and
Introduction paragraph
consolidated cash flow statement, and statement on changes of owners’ equity and
consolidated statement on changes of owners’ equity for the year ended, and notes to the
financial statements for the year ended.
The Company's management is responsible for the preparation and fair presentation of the
financial statements in accordance with the Enterprises Accounting Standards and
Responsibilities
Enterprises Accounting System. The responsibility includes: (1) designing, performing
paragraph of the
and maintaining internal control related to the preparation and fair presentation of the
management on the
financial statements, which are free from material misstatements whether due to frauds or
financial statements
errors; (2) choosing and applying right accounting policies; (3) making reasonable
accounting estimates.
Our responsibility is to express an audit opinion on these financial statements based on
our audit. We performed our audit in accordance with Chinese Certified Public
Accountants Auditing Standards. Those standards require us to comply with professional
ethics, and to plan and perform our audit so as to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures of the financial statements. The selective audit procedures depend on auditor’s
Responsibilities judgment, including the evaluation of the risk of material misstatement of the
paragraph of the CPA consolidated financial statements due to frauds or errors. When evaluating risk, we
consider internal control related to financial statements, in order to design auditing
procedures, but not for the purpose of expressing an opinion on the internal control’s
effectiveness. An audit also includes assessing the appropriateness of the accounting
policies adopted and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that we have obtained sufficient and appropriate audit evidences to provide a
basis for our audit opinion.
In our opinion, the Company’s financial statements have been prepared in accordance
Paragraph of auditor’s with the Enterprises Accounting Standards and Enterprises Accounting System, and they
opinions fairly present, in all material respects, the financial position of the Company as of
December 31, 2010, and its operation results and cash flows for the year ended.
Non-standard opinions
Name of audit institution Reanda Certified Public Accountants
Address of audit Room 2008 on 20/F, East District of No.1 Building, No.100, Xili Street, Balizhuang,
institution Chaoyang District, Beijing
Date of auditor’s report 2011-03-25
Name of the Certified Accountants
Sun Yibin/ Yang Yunhui
9.2 Financial statement
9.2.1 Balance Sheet
Prepared by Shandong Airlines Co., Ltd. December 31, 2010 Unit: RMB
Balance at period-end Balance at year-begin
Items
Consolidation Parent Company Consolidation Parent Company
16
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Current assets:
Monetary funds 333,572,647.76 328,897,146.25 194,065,742.69 179,813,989.83
Settlement provisions
Capital lent
Transaction finance asset 9,290,846.62 9,290,846.62 11,341,846.48 11,341,846.48
Notes receivable
Accounts receivable 192,444,914.49 185,873,337.88 142,545,895.96 140,731,572.47
Accounts paid in advance 28,353,455.80 28,201,391.84 22,504,262.48 22,370,882.70
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable 1,409,528.13 1,409,528.13
Dividend receivable 1,617,642.00 1,617,642.00
Other receivables 224,905,440.68 225,345,428.46 160,552,013.99 160,483,475.47
Purchase restituted finance
asset
Inventories 77,787,249.46 77,787,249.46 65,267,781.10 65,267,781.10
Non-current asset due within
one year
Other current assets
Total current assets 867,764,082.94 856,804,928.64 597,895,184.70 581,627,190.05
Non-current assets:
Granted loans and advances
Finance asset available for
sales
Held-to-maturity securities
Long-term account
receivable
Long-term equity investment 88,352,100.00 169,842,785.43 88,352,100.00 112,165,305.97
Investment property
Fixed assets 6,616,497,360.85 6,551,672,655.53 6,631,600,764.96 6,619,089,545.44
Construction in progress 937,253,250.34 925,773,327.54 422,277,445.58 422,277,445.58
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 47,146,366.53 32,299,511.53 47,895,073.21 33,013,562.26
Expense on Research and
Development
Goodwill 10,220,816.22
Long-term expenses to be
229,830,196.19 229,493,082.25 216,546,250.96 216,370,254.46
apportioned
Deferred income tax asset 126,735,195.78 126,425,389.96 91,836,911.34 91,812,136.84
Other non-current asset
Total non-current asset 8,056,035,285.91 8,035,506,752.24 7,498,508,546.05 7,494,728,250.55
Total assets 8,923,799,368.85 8,892,311,680.88 8,096,403,730.75 8,076,355,440.60
Current liabilities:
Short-term loans 1,001,269,036.73 1,001,269,036.73 739,819,020.88 739,819,020.88
17
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
3,865,809.52 3,865,809.52
liabilities
Notes payable 135,042,835.33 135,042,835.33 182,124,331.32 182,124,331.32
Accounts payable 1,008,600,051.49 1,009,216,769.85 812,032,950.07 810,639,584.15
Accounts received in
202,453,668.78 200,972,965.98 117,956,240.43 117,467,352.04
advance
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 236,150,660.44 236,130,188.66 135,033,537.40 135,018,545.42
Taxes payable 170,115,170.97 169,899,177.32 177,564,425.49 177,319,512.46
Interest payable 9,656,528.23 9,569,756.23 4,001,134.66 4,001,134.66
Dividend payable 11,940.00 11,940.00 11,940.00 11,940.00
Other accounts payable 140,733,981.14 141,469,803.57 124,930,463.59 124,872,192.44
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due
476,767,879.05 464,467,879.05 535,108,457.71 535,108,457.71
within 1 year
Other current liabilities
Total current liabilities 3,384,667,561.68 3,371,916,162.24 2,828,582,501.55 2,826,382,071.08
Non-current liabilities:
Long-term loans 3,180,283,177.55 3,180,283,177.55 3,402,752,588.39 3,402,752,588.39
Bonds payable
Long-term account payable 863,013,847.54 863,013,847.54 968,968,451.94 968,968,451.94
Special accounts payable
Projected liabilities
Deferred income tax
2,322,711.66 2,322,711.66 2,835,461.62 2,835,461.62
liabilities
Other non-current liabilities 73,390,628.74 73,390,628.74 27,718,573.00 27,718,573.00
Total non-current liabilities 4,119,010,365.49 4,119,010,365.49 4,402,275,074.95 4,402,275,074.95
Total liabilities 7,503,677,927.17 7,490,926,527.73 7,230,857,576.50 7,228,657,146.03
Owner’s equity (or
shareholders’ equity):
Paid-in capital (or share
400,000,000.00 400,000,000.00 400,000,000.00 400,000,000.00
capital)
Capital public reserve 84,050,162.84 84,050,162.84 84,050,162.84 84,050,162.84
Less: Inventory shares
Reasonable reserve
Surplus public reserve 122,944,754.89 122,284,050.36 59,576,069.03 58,915,364.50
Provision of general risk
Retained profit 799,664,252.17 795,050,939.95 308,668,390.11 304,732,767.23
Balance difference of foreign
currency translation
18
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Total owner’s equity
attributable to parent 1,406,659,169.90 1,401,385,153.15 852,294,621.98 847,698,294.57
company
Minority interests 13,462,271.78 13,251,532.27
Total owner’s equity 1,420,121,441.68 1,401,385,153.15 865,546,154.25 847,698,294.57
Total liabilities and owner’s
8,923,799,368.85 8,892,311,680.88 8,096,403,730.75 8,076,355,440.60
equity
9.2.2 Profit Statement
Prepared by Shandong Airlines Co., Ltd. January-December, 2010 Unit: RMB
Amount in this period Amount in last period
Items
Consolidation Parent Company Consolidation Parent Company
I. Total operating income 7,292,615,957.10 7,284,474,069.23 5,366,113,363.68 5,362,673,481.18
Including: Operating income 7,292,615,957.10 7,284,474,069.23 5,366,113,363.68 5,362,673,481.18
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 6,461,293,024.92 6,454,275,861.75 5,095,949,275.87 5,094,605,991.37
Including: Operating cost 5,487,590,890.83 5,484,462,677.17 4,110,033,275.19 4,111,698,242.88
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
Reinsurance expense
Operating tax and extras 205,209,128.98 204,810,196.58 158,797,763.77 158,446,999.40
Sales expenses 480,347,949.12 480,347,949.12 346,387,720.51 346,387,720.51
Administration expenses 136,465,813.62 133,056,074.42 228,619,847.42 225,696,583.77
Financial expenses 150,515,922.36 150,659,261.66 251,871,219.83 252,180,082.66
Losses of devaluation of
1,163,320.01 939,702.80 239,449.15 196,362.15
asset
Add: Changing income of
fair value(Loss is listed with -5,916,809.38 -5,916,809.38 -12,118,965.63 -12,118,965.63
“-”)
Investment income (Loss is
-1,720,112.18 -1,720,112.18 3,715,867.94 3,715,867.94
listed with “-”)
Including: Investment
income on affiliated
company and joint venture
Exchange income (Loss is
listed with “-”)
III. Operating profit (Loss
823,686,010.62 822,561,285.92 261,760,990.12 259,664,392.12
is listed with “-”)
Add: Non-operating income 29,012,243.89 29,012,243.84 155,122,260.87 155,122,260.87
Less: Non-operating expense 8,153,807.83 8,068,071.01 13,521,945.17 13,520,445.27
Including: Disposal loss of
7,708,562.86 7,622,991.01 13,495,868.42 13,494,368.52
non-current asset
19
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
IV. Total Profit (Loss is
844,544,446.68 843,505,458.75 403,361,305.82 401,266,207.72
listed with “-”)
Less: Income tax 209,969,159.25 209,818,600.17 100,618,103.42 100,412,795.16
V. Net profit (Net loss is
634,575,287.43 633,686,858.58 302,743,202.40 300,853,412.56
listed with “-”)
Net profit attributable to
owner’s equity of parent 634,364,547.92 633,686,858.58 302,282,325.68 300,853,412.56
company
Minority shareholders’ gains
210,739.51 0.00 460,876.72 0.00
and losses
VI. Earnings per share
i. Basic earnings per share 1.59 0.76
ii. Diluted earnings per share 1.59 0.76
VII. Other consolidated
income
VIII. Total consolidated
634,575,287.43 633,686,858.58 302,743,202.40 300,853,412.56
income
Total consolidated income
attributable to owners of 634,364,547.92 633,686,858.58 302,282,325.68 300,853,412.56
parent company
Total consolidated income
attributable to minority 210,739.51 0.00 460,876.72 0.00
shareholders
As for combination of enterprise under the same control in this period, the combined party realized
net profit before consolidation: RMB 0.00.
9.2.3 Cash Flow Statement
Prepared by Shandong Airlines Co., Ltd. January-December, 2010 Unit: RMB
Amount in this period Amount in last period
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from
7,352,842,476.95 7,338,125,353.04 5,372,538,176.19 5,371,074,050.51
operating activities:
Cash received from selling
commodities and providing
labor services
Net increase of
customer deposit and
interbank deposit
Net increase of loan
from central bank
Net increase of capital
borrowed from other
financial institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Insured savings and net
increase of investment
Net increase of disposal
of transaction financial asset
Cash received from interest,
commission charge and
commission
Net increase of capital
borrowed
20
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Net increase of returned
business capital
Write-back of tax received 97,024,882.28 100,423,221.27 144,094,051.53 143,549,876.83
Other cash received
concerning operating 7,449,867,359.23 7,438,548,574.31 5,516,632,227.72 5,514,623,927.34
activities
Subtotal of cash inflow
arising from operating 4,295,519,127.79 4,291,454,969.98 3,288,589,954.21 3,290,761,891.91
activities
Cash paid for purchasing
commodities and receiving
labor service
Net increase of customer
loans and advances
Net increase of deposits
in central bank and interbank
Cash paid for original
insurance contract
compensation
Cash paid for interest,
commission charge and
commission
Cash paid for bonus of
827,331,854.08 824,315,034.77 614,147,622.35 612,051,079.62
guarantee slip
Cash paid to/for staff and
497,696,065.27 496,457,992.65 199,428,230.46 198,501,653.16
workers
Taxes paid 154,241,682.28 154,456,869.48 97,119,270.28 96,311,963.23
Other cash paid concerning
5,774,788,729.42 5,766,684,866.88 4,199,285,077.30 4,197,626,587.92
operating activities
Subtotal of cash outflow
arising from operating 1,675,078,629.81 1,671,863,707.43 1,317,347,150.42 1,316,997,339.42
activities
Net cash flows arising from
operating activities
II. Cash flows arising from
investing activities:
Cash received from
2,853,033.15 2,853,033.15 2,098,225.94 2,098,225.94
recovering investment
Cash received from
26,880.00 26,880.00 327,572,914.09 327,572,914.09
investment income
Net cash received from
disposal of fixed, intangible
and other long-term assets
Net cash received from
disposal of subsidiaries and
other units
Other cash received
concerning investing 2,879,913.15 2,879,913.15 329,671,140.03 329,671,140.03
activities
Subtotal of cash inflow from
1,085,247,694.21 1,073,446,055.08 1,002,204,067.04 1,001,881,192.04
investing activities
Cash paid for purchasing
fixed, intangible and other
long-term assets
Cash paid for investment
21
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
Net increase of
43,095,223.17 50,740,053.00
mortgaged loans
Net cash received from
15,902,881.83 15,902,881.83
subsidiaries and other units
Other cash paid concerning
1,144,245,799.21 1,140,088,989.91 1,002,204,067.04 1,001,881,192.04
investing activities
Subtotal of cash outflow
-1,141,365,886.06 -1,137,209,076.76 -672,532,927.01 -672,210,052.01
from investing activities
Net cash flows arising from
investing activities
III. Cash flows arising from
financing activities
Cash received from
absorbing investment
Including: Cash
received from absorbing
1,619,256,428.26 1,619,256,428.26 2,228,373,619.53 2,228,373,619.53
minority shareholders’
investment by subsidiaries
Cash received from loans
Cash received from
11,459,417.00 11,459,417.00
issuing bonds
Other cash received
concerning financing 1,630,715,845.26 1,630,715,845.26 2,228,373,619.53 2,228,373,619.53
activities
Subtotal of cash inflow from
1,543,956,930.32 1,535,656,930.32 2,345,081,757.10 2,345,081,757.10
financing activities
Cash paid for settling debts 228,396,529.91 228,062,165.48 195,890,585.87 195,890,585.87
Cash paid for dividend and
profit distributing or interest
paying
Including: Dividend and
profit of minority
292,679,544.51 292,679,544.51 327,783,543.29 327,783,543.29
shareholder paid by
subsidiaries
Other cash paid concerning
2,065,033,004.74 2,056,398,640.31 2,868,755,886.26 2,868,755,886.26
financing activities
Subtotal of cash outflow
-434,317,159.48 -425,682,795.05 -640,382,266.73 -640,382,266.73
from financing activities
Net cash flows arising from
-122,729.57 -122,729.57 -35,585.75 -35,585.75
financing activities
IV. Influence on cash due to
99,272,854.70 108,849,106.05 4,396,370.93 4,369,434.93
fluctuation in exchange rate
V. Net increase of cash and
49,333,429.81 35,081,676.95 44,937,058.88 30,712,242.02
cash equivalents
Add: Balance of cash and
cash equivalents at the period 148,606,284.51 143,930,783.00 49,333,429.81 35,081,676.95
-begin
VI. Balance of cash and cash
7,352,842,476.95 7,338,125,353.04 5,372,538,176.19 5,371,074,050.51
equivalents at the period -end
22
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
9.2.4 Consolidated Statement on Changes of Owners’ Equity
Prepared by Shandong Airlines Co., Ltd. 2010 Unit: RMB
Amount in this report period Amount in last year
Owners’ equity attributable to the parent company Owners’ equity attributable to the parent company
Genera Minorit Total Paid-up Genera Minorit Total
Items Paid-up
Capital Less: Reason Surplus l risk Retaine y’s owners’ capital
Capital Less: Reason Surplus
l risk Retaine y’s owners’
capital
reserve Treasur able reserve Others reserve Treasur able reserve Others
(Share provisi d profit equity equity (Share provisi d profit equity equity
s y Stock
capital) reserve s s y Stock reserve s
on capital) on
400,00 308,66 865,54 400,00 562,80
I. Balance at the end of the 84,050, 59,576, 13,251, 84,050, 29,490, 36,471, 12,790,
0,000.0 8,390.1 6,154.2 0,000.0 2,951.8
last year 162.84 069.03 532.27 162.84 727.77 405.69 655.55
0 1 5 0 5
Add: Changes of accounting
policy
Error correction of the last
period
Others
400,00 308,66 865,54 400,00 562,80
II. Balance at the beginning 84,050, 59,576, 13,251, 84,050, 29,490, 36,471, 12,790,
0,000.0 8,390.1 6,154.2 0,000.0 2,951.8
of this year 162.84 069.03 532.27 162.84 727.77 405.69 655.55
0 1 5 0 5
III. Increase/ Decrease in this 490,99 554,57 272,19 302,74
63,368, 210,73 30,085, 460,87
year (Decrease is listed with 5,862.0 5,287.4 6,984.4 3,202.4
685.86 9.51 341.26 6.72
“-”) 6 3 2 0
634,36 634,57 302,28 302,74
210,73 460,87
(I) Net profit 4,547.9 5,287.4 2,325.6 3,202.4
9.51 6.72
2 3 8 0
(II) Other consolidated
23
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
income
634,36 634,57 302,28 302,74
210,73 460,87
Subtotal of (I) and (II) 4,547.9 5,287.4 2,325.6 3,202.4
9.51 6.72
2 3 8 0
(III) Owners’ devoted and
decreased capital
1. Owners’ devoted capital
2. Amount calculated into
owners’ equity paid in shares
3. Others
-143,36
63,368, -80,000 30,085, -30,085
(IV) Profit distribution 8,685.8
685.86 ,000.00 341.26 ,341.26
6
1. Withdrawal of surplus 63,368, -63,368 30,085, -30,085
reserves 685.86 ,685.86 341.26 ,341.26
2. Withdrawal of general risk
provisions
3. Distribution for owners -80,000 -80,000
(shareholders) ,000.00 ,000.00
4. Others
(V) Carrying forward internal
owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
24
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
3. Remedying loss with
surplus reserve
4. Others
(VI) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VII) Other
400,00 122,94 799,66 1,420,1 400,00 308,66 865,54
IV. Balance at the end of the 84,050, 13,462, 84,050, 59,576, 13,251,
0,000.0 4,754.8 4,252.1 21,441. 0,000.0 8,390.1 6,154.2
report period 162.84 271.78 162.84 069.03 532.27
0 9 7 68 0 1 5
9.2.5 Statement on Changes of Owners’ Equity of Parent Company
Prepared by Shandong Airlines Co., Ltd. 2010 Unit: RMB
Amount in this report period Amount in last year
Paid-up Paid-up
Less: General Total Less: General Total
Items capital Capital Reasonab Surplus Retained capital Capital Reasonab Surplus Retained
Treasury risk owners’ Treasury risk owners’
(Share reserves le reserve reserves profit (Share reserves le reserve reserves profit
Stock provision equity Stock provision equity
capital) capital)
I. Balance at the end of the 400,000,0 84,050,16 58,915,36 304,732,7 847,698,2 400,000,0 84,050,16 28,830,02 33,964,69 546,844,8
last year 00.00 2.84 4.50 67.23 94.57 00.00 2.84 3.24 5.93 82.01
Add: Changes of accounting
policy
Error correction of the last
period
Others
25
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
II. Balance at the beginning 400,000,0 84,050,16 58,915,36 304,732,7 847,698,2 400,000,0 84,050,16 28,830,02 33,964,69 546,844,8
of this year 00.00 2.84 4.50 67.23 94.57 00.00 2.84 3.24 5.93 82.01
III. Increase/ Decrease in this
63,368,68 490,318,1 553,686,8 30,085,34 270,768,0 300,853,4
year (Decrease is listed with
5.86 72.72 58.58 1.26 71.30 12.56
“-”)
633,686,8 633,686,8 300,853,4 300,853,4
(I) Net profit
58.58 58.58 12.56 12.56
(II) Other consolidated
income
633,686,8 633,686,8 300,853,4 300,853,4
Subtotal of (I) and (II)
58.58 58.58 12.56 12.56
(III) Owners’ devoted and
decreased capital
1. Owners’ devoted capital
2. Amount calculated into
owners’ equity paid in shares
3. Others
63,368,68 -143,368, -80,000,0 30,085,34 -30,085,3
(IV) Profit distribution
5.86 685.86 00.00 1.26 41.26
1. Withdrawal of surplus 63,368,68 -63,368,6 30,085,34 -30,085,3
reserves 5.86 85.86 1.26 41.26
2. Withdrawal of general risk
provisions
3. Distribution for owners -80,000,0 -80,000,0
(shareholders) 00.00 00.00
4. Others
26
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
(V) Carrying forward internal
owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
3. Remedying loss with profit
surplus
4. Others
(VI) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VII) Other
IV. Balance at the end of the 400,000,0 84,050,16 122,284,0 795,050,9 1,401,385 400,000,0 84,050,16 58,915,36 304,732,7 847,698,2
report period 00.00 2.84 50.36 39.95 ,153.15 00.00 2.84 4.50 67.23 94.57
27
Shandong Airlines Co., Ltd. Summary of Annual Report 2010
9.3 Explanation on changes of accounting policy, accounting estimation and settlement
method compared with the latest annual report
□Applicable √Inapplicable
9.4 Contents, correction amount, reason and its influence of significant accounting errors
□Applicable √Inapplicable
9.5 Explanation on change of consolidated scope compared with the latest annual report
√Applicable □Inapplicable
On November 29, 2010, the Company purchased equity of Qingdao Feisheng held by Shangdong
Airlines, thus Qingdao Feisheng became the wholly-owned subsidiary of the Company. Besides for
the change, the consolidated financial statement in reporting period was the same with that of last
year.
Board of Directors of
Shandong Airlines Co., Ltd.
March 25, 2011
28
