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REPORT
OF THE SUPERVISORY COMMITTEE OF AIR MACAU This report is based on the 2001 Annual Report and Financial Statements, presented by the Board of Director 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 year 2001 was in fact, full of challenges for most of the international carriers. Due to the global economic downturn, in addition to the September 11 terrorist attack, passenger demand fell dramatically and insurance premium became more expensive. Furthermore, being encountered with harsh competition, many airlines reported operational deficit and even layoffs of employees. Hence the Supervisory Committee is happy with the outstanding financial results of the company. Nevertheless, the Supervisory Committee recommends that sales and marketing management strategy should be enhanced in regards to the company's operational activities, so as to maintain and improve Air Macau's chances of sustained success in the future. The Supervisory Committee based on the document received, express 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, 28th March, 2002
Zhang Xianlin Chairman
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