Audited Financial Statement 2000

Audited Financial Statement for the Year of 2000

Balance sheet at 31 December 2000
(in Patacas)

			2000		1999			2000	1999
Account Codes		Cost	Accumulated depreciation and provisions	Net book value		Account Codes
	Assets						Shareholders’ equity

	Fixed assets					51	Capital	400,000,000	400,000,000
41	Investment	1,500,000	-	1,500,000	1,500,000
							Reserves and retained earnings
42	Tangible assets	676,239,598	180,381,684	495,857,914	529,738,157	56	Legal reserve	13,075,548	3,951,796
43	Intangible assets	32,927,227	32,761,696	165,531	10,212,357	59	Accumulated losses	(27,457,720)	(79,015,600)
		709,166,825	213,143,380	496,023,445	539,950,514	839	Prior year adjustment	13,095,617	-
						88	Profit for the year	105,599,622	51,557,880
						89	Transfer to legal reserve	(9,123,752)	-
	Current assets						Total shareholders’ equity	*495,189,315*	*376,494,076*

32	Stock	50,413,856	-	50,413,856	42,938,463

	Accounts receivable – non-current

26	Deposits	61,546,006	-	61,546,006	61,468,814		Liabilities
27	Deferred expenditure	961,753	-	961,753	1,363,907
		62,507,759	-	62,507,759	62,832,721		Provision for risks and charges
						29	Provision for taxation	3,189,556	772,046
	Accounts receivable – current
21	Trade receivables	123,466,421	6,942,711	116,523,710	70,294,115		Long term liabilities
22	Advances to suppliers	11,292,841	-	11,292,841	8,053,134	23	Bank loans	262,077,411	287,548,737
23	Loans and advances to staff	161,291	-	161,291	190,781	27	Accrued expenses	54,774,683	85,977,323
25	Amount due from related	175,881	-	175,881	81,789			316,852,094	373,526,060
	companies
26	Other receivables	4,411,599	-	4,411,599	2,957,848		Current liabilities
27	Prepaid expenses	24,660,364	-	24,660,364	26,068,996	21	Receipts in advance	121,152,379	96,055,153
		164,168,397	6,942,711	157,225,686	107,646,663	22	Trade payable	105,697,531	69,323,503
						23	Bank loans	25,467,015	23,538,325
	Cash at bank and in hand					24	State public sector	3,885,362	3,817,087
13	Term deposits	383,536,231	-	383,536,231	195,356,752	25	Amount due to related companies	18,993,369	21,288,217
12	Demand deposits	49,245,526	-	49,245,526	90,350,557	26	Other creditors	72,328,481	33,544,896
11	Cash in hand	699,039	-	699,039	750,981	27	Accrued expenses	38,396,440	42,967,288
		433,480,796	-	433,480,796	286,458,290			385,920,577	290,534,469

							Total liabilities	*705,962,227*	*664,832,575*
	Total depreciation		213,143,380
	Total provisions		6,942,711
	Total assets	1,421,237,633	220,086,091	1,201,151,542	1,041,326,651		Total equity and liabilities	1,201,151,542	1,041,326,651

Profit and loss account for the year ended 31 December 2000
(in Patacas)

Account Codes				Account Codes
		2000	1999			2000	1999
	Expenses				Income
63	Third party supplies and services	1,127,632,876	988,720,035	72	Services rendered	1,437,885,166	1,146,293,990
64	Taxes	5,882	15,390	75	Supplementary receipts	53,055,343	109,634,862
65	Personnel expenses			77	Financial income	40,953,603	27,968,803
	- Remuneration	155,199,406	141,079,843			1,531,894,112	1,283,897,655
	- Other personnel expenses	44,563,867	26,530,186
66	Financial expenses
	- Interest	22,296,001	21,481,243
	- Other financial expenses	841,252	887,580
67	Other expenses and charges	7,272,416	7,070,636
68	Depreciation and amortisation	65,576,241	57,647,836
69	Provisions	3,844,001	760,158
		1,427,231,942	1,244,192,907

82	Extraordinary expenses	958,482	9,265,379	82	Extraordinary income	5,098,590	4,730,015
83	Profit tax	3,202,656	-	83	Profit tax	-	16,388,496
		1,431,393,080	1,253,458,286

	Profir for the year	105,599,622	51,557,880


		*1,536,992,702*	*1,305,016,166*			*1,536,992,702*	*1,305,016,166*

CORPORATE DATA

Board of Directors

Chairman	Gu Tiefei
Vice Chairman	Jose Queiroz
Vice Chairman	Sun Bo
Director	Deng Jun
Director	Liu Suning
Director	Zhang Huilan
Director	Alvaro Brasao Antunes
Director	Pansy Ho
Director	Ng Fok
Director	Zhang Hongying
Director	Henry Leung Y. H.

Executive Committee

President	Sun Bo
Executive Director	Deng Jun
Executive Director	Alvaro Brasao Antunes
Executive Director	Pansy Ho
Executive Director	Zhang Hongying
Executive Director	Henry Leung Y. H.

Supervisory Committee

Chairman	Zhang Xianlin
Member	Herculano Jorge Sousa
Member	Jacryn M. S. Ho

REPORT BY THE BOARD OF DIRECTORS YEAR OF 2000

1. INTRODUCTION

In accordance with the provisions of the law and the ordinance of the company, we hereby submit to your debate and vote the Annual Report and Accounts concerning the Year of 2000, ranging from 1 January to 31 December, during which the activities were conducted throughout the organization of the Company and on the definition of the internal performance rules.

The directors have pleasure in presenting their Annual Report together with the Supervisory Council and audited accounts of the Company for the year ended 31 December 2000.

2. PRINCIPAL ACTIVITIES

The company was incorporated on 13^th September 1994 in the form of a private limited liability company and its principal activity is to operate as Macau's international airline, under the concession agreement signed on 8^th March 1995 with the Macau's Territory. The company commenced operations on 9^th November 1995.

3. ACCOUNTS

In the opinion of the Directors, the results of the operations of the Company during the financial year have not been affected by any item, transaction or event of material and unusual nature.

- NET PROFIT

Total profit of MOP105,599,622.86 was made for the financial year of 2000.

For a complete explanation of the account, attached hereto please find the Analysis Balance Sheet and the Net Profit breakdown.

- PROPOSAL FOR NET PROFIT APPLICATION

Out of a MOP105,599,622.86 Net Profit, the Board of Directors, in accordance with Article Twenty eight of the Articles of Association, submits for discussion and approval by the General Meeting the following proposal for application:

Legal Reserve Fund

10% (of Accumulated Profit) in the terms of

Article 432 of Commercial Code ……………………... MOP $9,123,751.93

Net Profit

To carry forward to 2001 …………………………….. MOP $96,475,870.93

- FINAL NOTE

We would like to thank staff of Air Macau for their dedication and professional sense of duty.

To the Shareholders, Supervisory Committee and Government Representative, the Board of Directors would like to underline their appreciation for the cooperation and trust bestowed upon them.

Macau on the 29 of March, 2001

Gu Tiefei

Chairman of Board

REPORT OF THE SUPERVISORY COMMITTEE OF AIR MACAU

ON THE 2000 ANNUAL REPORT AND

FINANCIAL STATEMENTS PRESENTED BY THE BOARD OF DIRECTORS

This report is based on the 2000 Annual Report and Financial Statements, presented by the Board of Directors of Air Macau. In preparing this report the Supervisory Committee also takes into consideration the information received during the year from the Company independent auditors as well as their final comments on the aforementioned documents.

During the course of the year the Supervisory Committee held its regular meetings, as foreseen under Air Macau's Articles of Association, and kept adequate contact with the Company's directors and officials as deemed necessary, whose co-operation with this Committee we wish to acknowledge.

During the year under study, the performance of the Supervisory Committee was supported by the help of the external auditors. Under the terms of the existing arrangements, quarterly reports were prepared and submitted to this Committee. A number of accounting, control and procedural issues were identified and duly brought to the attention of Air Macau's management. The Supervisory Committee hence would like to acknowledge the important efforts contributed by the Company's management to introduce financing and control procedures in order to correct, in part, deficiencies found. While some outstanding issues awaiting to be resolved, we believe they do not materially affect the financial position of the Company as mentioned in the Financial Statements prepared by the Board of Directors. In fact it was enhancing notably. However, the Supervisory Committee emphasized that the improvement efforts of the Company needs to be persisted on so as to achieve professional and qualified standard in the areas of accounting and internal audit control.

The Supervisory Committee is happy with the financial results reached by the Company, undergoing the great competition amongst the other airlines. Nevertheless, the Supervisory Committee recommends that a very conservative and prudent attitude to be maintained, namely with regards to the management of the Company's financial resources, so as to preserve them and to improve Air Macau's chances of sustained success in the future.

The Supervisory Committee based on the document received, expresses the opinion that the Annual Report, the Balance Sheet and the Profit and Loss Account fairly reflect the financial status of the Company, and hence, recommends their approval by the Shareholders.

Finally, the Supervisory Committee wishes to express its appreciation for the co-operation and prompt assistance provided by the Executive Committee Directors and other Company officials.

Macau, 29^th March, 2001

Zhang Xianlin

Chairman

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