Key Questions for China Eastern Annual Reports

Question One

In the “Consolidated Statement of Comprehensive Income” There is a sub-heading under “Operating Expenses” that is termed “Impairment reversals/(charges).” What does this mean?

Question Two

In the “Condensed Consolidated Balance Sheet” they list “Goodwill” as an asset. I am familiar with the concept of good will but am not sure as to how a monetary figure can be determined for such an abstract concept. Does anyone know?

Question Three

The terms “Derivative assets” and “Derivative liabilities” are used in the financial statements. Not sure what is meant by these terms. Does anyone know?

Question Four

In the Chairman’s Report it is mentioned that China Eastern is reducing its flight capacity to Japan due to the changing nature of the relationship between the two countries. Does anyone know why the relationship between the two countries is changing? I assume the relationship is being negatively affected if they are limiting their flights to Japan.

Question Five

“As at 31 December 2012, the total number of registered Shareholders was 250,268, of which 249,578 are holders of A shares and 690 are holders of H shares.” Does anyone know the difference between these two shares?

Question Six

What does the term “Gain on fair value movements of derivatives financial instruments” mean?

Question Seven

It seems that some of the directors, and chairman did not receive a salary or wage from China Eastern Airlines but were paid by CEA holdings (a major shareholder and a company that has been referred to as the parent company). Is this a common occurrence? 

Click Image to Open 2012 Annual Report