(xi)  
On 14 August 2007, the Company signed an agreement to acquire (1) the entire equity interest in Air Catering;

(2)
certain assets of Guangzhou Bi Hua Yuan Training Centre including certain properties and office facilities; and (3) certain assets of Nan Lung Travel & Express (Hong Kong) Limited, including certain properties and office facilities and the 51% equity interest in Nan Lung International Freight Limited (“Nan Lung Freight”), from CSAHC for a total consideration of RMB270 million (Note 47(b)).

120 ANNUAL REPORT 2008

ANNUAL REPORT 2008
119

Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)

ANNUAL REPORT 2008
122 ANNUAL REPORT 2008

Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)
44 MATERIAL RELATED PARTY TRANSACTIONS (cont’d)
(f) (ii)  Transactions with other state-controlled entities (cont’d) The Group’s balances with other state-controlled entities, including state -controlled banks in the  PRC 
2008 RMB million  2007 RMB million 

3,354
Cash and deposits at bank  2,624
18,675
Short-term bank loans and current portion of long-term bank loans  23,004
14,773
Long-term bank loans, less current portion  6,772
(iv)  Guarantees from other state-controlled entities, including state-controlled banks in the PRC
2008 2007 RMB million RMB million
Guarantees on certain bank loans of the Group  1,082 703
(vi)  During the year, the issuance of the short-term financing bills of RMB2,000 million was underwritten by certain state-controlled banks in the PRC.

45 RETIREMENT AND HOUSING BENEFITS
(a)  Retirement benefits
Employees of the Group participate in several defined contribution retirement schemes organised separately by the PRC municipal governments in regions where the major operations of the Group are located. The Group is required to contribute to these schemes at the rates ranging from 9% to 24% (2007: 9% to 24%) of salary costs including certain allowances. A member of the retirement schemes is entitled to pension benefits from the Local Labour and Social Security Bureau upon his/her retirement. The retirement benefit obligations of all retired staff of the Group are assumed by these schemes.
In addition, the Group has established a supplementary defined contribution retirement scheme for the benefit of employees in accordance with relevant regulations in the PRC. In this connection, employees of the Group participate in a supplementary defined contribution retirement scheme whereby the Group is required to make contributions not exceeding one-twelfth of the prior year’s total salaries.
122 ANNUAL REPORT 2008

Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)

(b)  Housing benefits
The Group contributes on a monthly basis to housing funds organised by municipal and provincial governments based on certain percentages of the salaries of employees. The Group’s liability in respect of these funds is limited to the contributions payable in each year.
In addition to the housing funds, certain employees of the Group are eligible to one of the following housing benefit schemes:
(i)  
Pursuant to the comprehensive services agreement (the “Service Agreement”) dated 22 May 1997 between the Company and CSAHC, CSAHC provided quarters to eligible employees of the Group. In return, the Group paid a fixed annual fee of RMB85 million to CSAHC for a ten-year period from 1995 to 2004. The agreement expired by 31 December 2004.
　
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