Hutchison Telecommunications
(Australia) Limited
ABN 15 003 677 227
Level 1, 177 Pacific Highway
North Sydney, NSW 2060
(02) 9015 5088
Tel:
Fax:
(02) 9015 5034
www.hutchison.com.au
ASX Market Announcements
Australian Securities Exchange
Date: 23 March 2017
Subject: Annual Report 2016
The Company’s 2016 Annual Report incorporating the full year accounts for the period
ended 31 December 2016 is attached.
Yours faithfully
Louise Sexton
Company Secretary
2016
Annual
Report
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Contents
Ownership Structure
VHA Key Operational Highlights in 2016
Financial Summary
Chairman’s Message
Board of Directors
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Financial Report
Shareholder Information
Corporate Directory
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AGM Details
The Annual General Meeting of
HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Friday 28 April 2017 at 10.00 am
ABN 15 003 677 227
Hutchison Telecommunications (Australia)
Limited (“HTAL”) (ASX: HTA) has a 50% interest
in Vodafone Hutchison Australia Pty Limited
(“VHA”). HTAL was listed on the ASX in
1999 and in 2003 launched Australia’s first
3G service under the 3 brand.
In 2009, HTAL’s operations were merged
with Vodafone Australia to form VHA.
VHA offers mobile telecommunications
under the Vodafone brand in Australia.
HTAL owns 50% of VHA.
Vodafone Group Plc owns the
remaining 50%. CK Hutchison
Holdings Limited is the majority
shareholder of HTAL, with
an 87.87% stake#.
Ownership Structure
CK HUTCHISON
HOLDINGS LIMITED
87.87%#
SPARK NEW ZEALAND
TRADING LIMITED
10%#
2.13%
PUBLIC SHAREHOLDERS
HUTCHISON TELECOMMUNICATIONS
(AUSTRALIA) LIMITED
VODAFONE GROUP PLC
50%#
50%#
#
Indirect ownership.
1
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 VHA Key
Operational Highlights
in 2016
Continued growth in customer numbers, EBITDA and underlying
revenue.
Improved company Net Promoter Score.
Top-performing network in Australia’s major cities for aggregate
voice and data in the CommsDay P3 network benchmark tests.
Expansion of international roaming products, 40% increase in
roaming revenue.
Growth in the Enterprise segment.
Welcomed Universal Service Obligation and domestic roaming
inquiries.
Opening of VHA’s new national headquarters, “Vodafone Central”.
2
Financial Summary
VHA Financial and
Operating Metrics
The items below represent the 50% share of VHA attributable to HTAL
Total revenue ($m)
Gross service revenue1 ($m)
Net service revenue2 ($m)
EBITDA ($m)
Share of net loss of VHA3 ($m)
The items below represent totals for VHA
– Postpaid customers (‘000)
– Prepaid customers (‘000)
VHA customers subtotal (‘000)
– Mobile Virtual Network Operator (“MVNO”) customers (‘000)
Total network customers (‘000)
Gross ARPU4 ($)
Net ARPU5 ($)
Notes:
2016
2015
YoY change
1,672.6
1,417.9
1,181.3
456.1
(68.0)
3,354
1,652
5,006
556
5,562
45.87
37.97
1,825.8
1,571.4
1,375.2
406.4
(187.5)
3,249
1,730
4,979
458
5,437
52.38
45.68
(8.4%)
(9.8%)
(14.1%)
12.2%
63.7%
3.2%
(4.5%)
0.5%
21.4%
2.3%
(12.4%)
(16.9%)
1
2
Gross service revenue represents total monthly amount billed to the customer excluding any handset/device charges, plus incoming mobile
termination revenue.
Net service revenue represents gross service revenue excluding amounts attributable to a handset/device in postpaid contract bundled plans.
The amount attributable to a handset/device is based on the price differential between a contract bundled plan and a comparable SIM-only plan
at the time of acquisition or re-sign.
3 Reconciliation for the Share of net loss of VHA is set out on page 35.
4
Gross ARPU represents a rolling 12 month average gross service revenue per user per month at the end of the period excluding MVNOs.
5 Net ARPU represents a rolling 12 month average net service revenue per user per month at the end of the period excluding MVNOs.
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
3
Chairman’s Message
Hutchison Telecommunications (Australia)
Limited (“HTAL”) reports a $63.5 million loss for
the year ended 31 December 2016, compared
with a loss of $182.9 million in the prior year.
HTAL’s share of Vodafone Hutchison Australia
Pty Limited’s (“VHA”) net loss included in
HTAL’s results for the year was $68.0 million for
the year ended 31 December 2016 compared
with a net loss of $187.5 million in 2015.
HTAL’s revenue from ordinary activities
represents interest income received
on loans to VHA. HTAL’s revenue from
ordinary activities for the year ended
31 December 2016 decreased from
$6.0 million in 2015 to $5.8 million.
No dividend was declared or paid by HTAL
during the year.
VHA highlights
During 2016, VHA achieved continuity of
growth, despite competition for mobile
customers intensifying in the Australian
telecommunications sector both in the
products on offer and on the public policy
and regulatory front.
With strong support from HTAL and its joint
shareholder Vodafone Group Plc, VHA has
continued to achieve solid growth through its
strategic focus on a strong network, “worry-free”
products and excellence in customer service.
Key achievements and highlights:
• Continued growth in customer numbers,
EBITDA and underlying revenue;
•
Improved company Net Promoter Score;
• Top-performing network in Australia’s major
cities for aggregate voice and data in the
CommsDay P3 network benchmark tests;
• Expansion of international roaming
products, 40% increase in roaming revenue;
• Growth in the Enterprise segment;
• Opening of VHA’s new national
headquarters, “Vodafone Central”;
• Cash flow positive; and
•
Improved loss position.
VHA 2016 financial results
References to VHA’s financial results reflect
the 50% share of VHA attributable to HTAL.
References to customer metrics reflect the total
customer base of VHA.
VHA achieved another solid financial
performance in 2016, recording further
growth in customer base and EBITDA, and
decrease in net loss.
HTAL’s share of VHA’s EBITDA increased
12.2% to $456.1 million for the full year
from $406.4 million in 2015, driven by
growth in customer base and ARPU, and
commercial optimisation.
In a year on year comparison, HTAL’s share of
VHA’s total revenue increased 5.7% and gross
ARPU increased 3.6% if incoming revenue
impacted by the Australian Competition and
Consumer Commission’s reduction of industry
mobile termination rates (“MTR”) is excluded.
Driven entirely by the changes in MTR,
which were effective 1 January 2016, HTAL’s
share of VHA’s revenue declined 8.4% to
$1,672.6 million and gross ARPU decreased
12.4% to $45.87.
VHA turned free cash flow positive for the
first time since 2010. Operating free cash flow
also increased.
HTAL’s share of VHA’s net loss declined 63.7% to
$68.0 million driven by the increase in EBITDA,
and reduction in depreciation and interest.
Growing the VHA business
VHA’s customer base continued to grow
with VHA adding 125,000 customers during
2016. Total network customers are up 2.3%
to 5.56 million on the back of a 3.2% lift in
postpaid customers and 21.4% growth in
Mobile Virtual Network Operator customers.
In an increasingly competitive market, VHA
prepaid handset ARPU and revenue grew year
on year, despite a slight decline in prepaid
customer base. VHA has also expanded its
operations with the purchase of Lebara’s
Fok Kin Ning, Canning
Chairman
I am pleased to
provide you with
the summary of
our performance
in 2016, based
on the continued
improvement
in Vodafone
Hutchison
Australia’s
business.
4
VHA was ranked as the network with the best
combined voice and data performance in major cities
with a population over 100,000 in the independent
CommsDay P3 network benchmark tests.
Delivering a worry-free mobile
experience
VHA has continued to drive connections,
customer retention and revenue through
its “worry-free” product platform. VHA
expanded its popular $5 Roaming product,
allowing customers to use their plan
inclusions in almost 60 countries for an extra
$5 per day. It also extended its $0 Roaming
to New Zealand trial and launched pre-paid
international roaming add-ons. VHA’s roaming
propositions delivered an increase in roaming
revenue and Net Promoter Score (“NPS”)
among roamers.
There has been a strong response to VHA’s
MyMix product which allows prepaid
customers to select a level of data and call
inclusions, and a recharge period of their
choice. VHA’s product offering is underpinned
by Australia’s only money-back Network
Satisfaction Guarantee, which reinforces
VHA’s confidence in its network.
Increasing customer sentiment and
reducing complaints
VHA customers’ willingness to recommend
VHA products and services to others has
reached its highest levels in more than six
years. In one of the biggest indicators of
the significant shift in customer sentiment,
VHA’s brand NPS rose 13 points from January
to December 2016. VHA also continues its
focus on reducing customer complaints
to the Telecommunications Industry
Ombudsman, recording a complaints ratio
22% lower than the industry average in the
December quarter.
Australian mobile business assets. With this
acquisition, VHA took over Lebara’s mobile
customer base and procured the right to
use the Lebara brand in Australia. Lebara
Mobile has a strong brand presence and
loyal customer base, particularly in migrant
communities, and VHA sees opportunities to
grow this business further.
VHA also increased its retail presence with the
opening of 18 new stores around the country.
Building a network for the future
Following VHA’s multi-billion investment in its
network over recent years, VHA continues to
be recognised for its network performance.
VHA was ranked as the network with the best
combined voice and data performance in
major cities with a population over 100,000
in the independent CommsDay P3 network
benchmark tests released in December 2016.
Of the three Australian mobile networks,
VHA also achieved the biggest improvement
from 2015.
During 2016, VHA continued to expand and
upgrade its network, adding 111 new sites
and performing over 2,200 upgrades across
the country. VHA’s 4G services now reach
more than 22 million Australians. Its network
expansion program includes more than
100 new sites to be built in regional areas by
the end of 2017 through VHA investment and
the Australian Government’s Mobile Black
Spot Program.
The rollout of VHA’s fibre transmission
network is progressing well, with
500 sites now connected. VHA also
continues preparations for the future
launch of 5G, the next generation mobile
network. VHA conducted two successful
5G demonstrations, including Australia’s first
live public trial, in collaboration with two
of its technology partners.
Driving competition in Enterprise
VHA’s Enterprise strategy, which focusses
on small to medium businesses, is working
well with the unit achieving growth in
business connections and revenue in 2016. By
delivering personalised value and leveraging
its global strengths, the unit is building a loyal
customer base with a very high willingness
of business customers to recommend VHA
products and services to others.
Leading the charge for a fairer telco
playing field
VHA’s public policy agenda is a key
component of VHA’s strategy and business
purpose. The Australian mobile market is
unique internationally, and is characterised
by an extreme geography and a strong
incumbent which has benefited significantly
from a legacy fixed network and significant
ongoing government and industry funding
and subsidies. This has led to an extensive
mobile competition divide between
metropolitan and regional areas, and a
monopoly in 60% of the mobile coverage
area in Australia. In 2016, VHA accelerated its
campaign to bring increased competition
to regional and rural areas through
telecommunications policy and regulatory
reform, and welcomed several significant
developments in the second half of the year.
The Australian Competition and Consumer
Commission (“ACCC”) commenced an
inquiry into whether a domestic roaming
declaration would be in the long term
interest of Australian mobile users. Domestic
roaming is an infrastructure sharing solution
which allows mobile customers to use the
network of another operator when outside
their network provider’s footprint. It is used
extensively overseas and has been regulated
in most western economies with a large land
area and low population density. VHA lodged
a comprehensive submission to the ACCC
5
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Chairman’s Message Continued
VHA argues domestic roaming is
Australia’s greatest opportunity to
deliver choice of provider to Australians
in regional, rural and remote areas.
arguing that domestic roaming is Australia’s
greatest opportunity to deliver choice of
provider to Australians in regional, rural
and remote areas. VHA’s submission, which
is supported by extensive international
experience and expert economic opinion,
argues the incumbent’s 1.4 million square
kilometre monopoly has been created by a
natural monopoly and substantial direct and
indirect government subsidies. In light of the
experience in international markets including
the USA, Canada and France, VHA argues
regulated domestic roaming would also drive
investment in new regional infrastructure.
The ACCC is also undertaking a market
study into the state of competition within
the Australian telecommunications market,
and VHA is participating in this process.
The Australian Government has tasked the
Productivity Commission with a review of the
Universal Service Obligation (“USO”), which
currently sees around $300 million per year
in industry and public funding provided
to the incumbent for its copper network
and payphones. This follows calls for reform
from VHA and other bodies and regional
parties, including the Australian Regional
Telecommunications Review Committee and
Infrastructure Australia. In December 2016,
the Productivity Commission released its
draft report which stated the USO is ‘past its
use-by date’, and highlighted concerns about
the lack of accountability and transparency
required of the funding recipient.
Employees key to VHA success
To drive increased employee collaboration
and engagement, VHA has relocated
its Sydney-based corporate offices in
November 2016 to purpose-built headquarters
at 177 Pacific Highway, North Sydney. As
the anchor tenant with signage rights,
the move has seen the Vodafone brand
return to the Sydney skyline. With a focus
on technology-enabled flexible working,
“Vodafone Central” features a variety of
working spaces and cutting-edge technology
in all rooms allowing employees inside
and out of the building to be ‘in the room’.
These facilities empower employees to
work the way in which they can produce
the best outcomes for VHA customers
and the business. The new headquarters
brought together VHA’s approximately 1,000
Sydney-based corporate staff from its former
North Sydney and Chatswood offices.
Building on its suite of policies and initiatives
to support employees, which includes
an industry-leading paid parental leave
scheme and ten days’ of annual domestic
violence leave, VHA has introduced a Super
Bump. To help address the superannuation
inequality between women and men, all
female employees with a minimum of
twelve months’ continuous service will
receive an additional super contribution
of $500 per annum.
Making a difference through mobile
In November 2016, the Vodafone Foundation
marked the first anniversary of its DreamLab
app which uses the processing power of idle
smartphones to help the Garvan Institute of
Medical Research with vital cancer research.
Since launch, the app has been downloaded
more than 75,000 times and has processed
almost 50% of a research project to help
identify personalised and more effective
treatments for cancer patients. In addition
to breast, ovarian, pancreatic and prostate
cancer research, DreamLab is now supporting
lung cancer, brain cancer, melanoma and
sarcoma projects.
The Vodafone Foundation is also a proud
supporter of Hello Sunday Morning (“HSM”),
a non-profit organisation which encourages
Australians to think about their relationship
with alcohol. HSM’s Daybreak smartphone
app has been shown to reduce harmful levels
of drinking by 50% amongst users. Over the
past three years, the number of Australians
using HSM has increased 360% to over
120,000, and HSM’s national brand awareness
has increased 142%.
6
The strength of the VHA business
is based on its network, customer
propositions and customer
service delivery, and it will continue
to build on the momentum in these
areas of recent years.
VHA will also continue its focus on delivering
products tailored to customer needs, and a
seamless, simple customer experience. VHA
will also continue its policy and regulatory
agenda to bring increased competition and
choice to regional Australian customers.
HTAL remains committed to its investment
in VHA, and will continue to support VHA’s
growth in the future.
Fok Kin Ning, Canning
Chairman
Outlook
VHA is well-positioned to continue its growth
in 2017. The strength of the VHA business is
based on its network, customer propositions
and customer service delivery, and it will
continue to build on the momentum in
these areas of recent years. VHA’s strategy is
underpinned by its company purpose – to
give customers the freedom and choice to
connect the way they want.
During 2017, VHA will launch fixed broadband
services via the National Broadband Network
to complement its mobile network. The
move is in response to strong demand from
customers seeking a bundled mobile and
fixed broadband solution from VHA. VHA’s
entrance into the fixed broadband market
will mirror its approach to mobile, which
has seen it achieve consistent, steady and
sustainable growth.
Enterprise will continue to be a key focus for
VHA as it looks to grow its customer base,
market share and revenue in this segment
through its mobile strategy and the launch
of fixed broadband services. VHA will take a
strategic approach to network expansion and
enhancement, retail expansion and marketing
activities by leveraging new opportunities to
reach existing and potential new customers.
To build capability and flexibility in its
network, VHA has launched a major five-year
program to virtualise its core and IP networks.
It will also deliver a Voice Over WiFi product
which will allow mobile customers to make
and receive voice calls and SMS/MMS over a
fixed internet service.
7
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Board of Directors
Fok Kin Ning, Canning (Chairman) BA, DFM, FCA (ANZ)
Fok Kin Ning, Canning, aged 65, has been a Director since February 1999. Mr Fok has been a non-executive
director of CK Hutchison Holdings Limited (“CKHH”) since January 2015 and was re-designated as an executive
director and group co-managing director of CKHH in June 2015. He has been a director of Cheung Kong
(Holdings) Limited since 1985, became a non-executive director in 1993 and was re-designated as a director in
June 2015. Mr Fok has been an executive director of Hutchison Whampoa Limited (“HWL”) since 1984, group
managing director since 1993 and was re-designated as a director in June 2015. He has been chairman and a
non-executive director of Hutchison Telecommunications Hong Kong Holdings Limited (“HTHKH”) since 2009
and of Hutchison Port Holdings Management Pte. Limited (“HPHM”) as the trustee-manager of Hutchison Port
Holdings Trust (“HPH Trust”) since 2011, an executive director since 1985 and chairman since 2005 of Power Assets
Holdings Limited (“Power Assets”), chairman and an executive director of HK Electric Investments Manager Limited
(“HKEIML”) as the trustee-manager of HK Electric Investments (“HKEI”) and of HK Electric Investments Limited
(“HKEIL”) since 2013, co-chairman of Husky Energy Inc. (“Husky Energy”) since 2000, and an executive director
and deputy chairman of Cheung Kong Infrastructure Holdings Limited (“CKI”) since 1997. The aforementioned
companies are either the ultimate holding company of HTAL, or subsidiaries or associated companies of CKHH
in which Mr Fok acts as chairman, co-chairman, deputy chairman or director for the purpose of overseeing the
management of such businesses. Mr Fok was previously a director from 1992 to 2014 and chairman from 2002
to 2014 of Hutchison Harbour Ring Limited (“HHR”, now known as China Oceanwide Holdings Limited). He was
previously alternate director to a director of HTHKH from 2010 to July 2016. Mr Fok has also been a director of
Vodafone Hutchison Australia Pty Limited (“VHA”) since 2001. He holds a Bachelor of Arts degree and a Diploma in
Financial Management, and is a Fellow of Chartered Accountants Australia and New Zealand.
Barry Roberts-Thomson (Deputy Chairman)
Barry Roberts-Thomson, aged 67, has been a Director since February 1989 and was Managing Director of HTAL
from its inception in 1989 until September 2001. In his capacity as Deputy Chairman, Mr Roberts-Thomson
represents HTAL in government relations and strategic projects and has served as a director of VHA since 2001.
Justin Herbert Gardener (Director) BEc, FCA, AGIA
Justin Herbert Gardener, aged 80, has been a Director since July 1999. Mr Gardener has been a director
of a number of private and publicly listed companies including Austar United Communications Limited
(appointed 1999 and retired 2008). From 1961, and until his retirement in 1998, Mr Gardener held a variety
of positions with Arthur Andersen, becoming a partner in 1972 and for the last ten years in a management
and supervisory role for Asia Pacific. Mr Gardener is a Fellow of the Institute of Chartered Accountants and
an Associate of the Governance Institute.
Lai Kai Ming, Dominic (Director) BSc, MBA
Lai Kai Ming, Dominic, aged 63, has been a Director since May 2004 and Alternate Director to Mr Sixt since
May 2006 and to Mr Fok since 5 December 2016. Mr Lai has been an executive director and deputy managing
director of CKHH since June 2015. He has been an executive director of HWL since 2000 and was re-designated
as a director in June 2015. Mr Lai has been a non-executive director of HTHKH since 2009 and alternate director
to directors of HTHKH since 2010. He has been alternate director to a director of TOM Group Limited (“TOM”)
since August 2016. The aforementioned companies are either the ultimate holding company of HTAL, or
subsidiaries or associated companies of CKHH in which Mr Lai acts as director for the purpose of overseeing
the management of such businesses. He was previously a director from 1994 to 2014 and deputy chairman
from 2001 to 2014 of HHR, and alternate director to a director of HHR from 2007 to 2014. He has also been a
director of VHA since October 2016. He was previously Alternate Director to Mrs Chow Woo Mo Fong, Susan, a
then Director of HTAL from 2006 to July 2016. Mr Lai has over 30 years of management experience in different
industries. He holds a Bachelor of Science (Hons) degree and a Master’s degree in Business Administration.
8
John Michael Scanlon (Director)
John Michael Scanlon, aged 75, has been a Director since July 2005. Mr Scanlon is a special venture
partner to Clarity Partners LLP, a private equity firm. From 1965 through to 1988, his career was with AT&T,
primarily Bell Labs, rising to group vice president of AT&T. Mr Scanlon then went on to become president
and general manager of Motorola’s Cellular Networks and Space Sector, founding chief executive officer
of Asia Global Crossing, chief executive officer of Global Crossing and chairman and chief executive officer
of PrimeCo Cellular.
Frank John Sixt (Director) MA, LLL
Frank John Sixt, aged 65, has been a Director since January 1998 and Alternate Director to Mr Lai since February
2008. Mr Sixt has been a non-executive director of CKHH since January 2015 and was re-designated as an
executive director, group finance director and deputy managing director of CKHH in June 2015. He has been
an executive director of Cheung Kong (Holdings) Limited since 1991, became a non-executive director in 1998
and was re-designated as a director in June 2015. Mr Sixt has been an executive director of HWL since 1991,
group finance director since 1998 and was re-designated as a director in June 2015. He has been chairman
and a non-executive director of TOM since 1999 and an executive director of CKI since 1996. Mr Sixt has also
been a director of Husky Energy since 2000. He has been alternate director to a director of HKEIML as the
trustee-manager of HKEI and of HKEIL since 2015. The aforementioned companies are either the ultimate
holding company of HTAL, or subsidiaries or associated companies of CKHH in which Mr Sixt acts as chairman
or director for the purpose of overseeing the management of such businesses. Mr Sixt was previously a non-
executive director of HTHKH from 2009 to December 2016 and of HPHM as the trustee-manager of HPH Trust
from 2011 to December 2016. He was previously a non-executive director (re-designated from an executive
director to a non-executive director in January 2014) of Power Assets from 1998 to December 2016. He has also
been a director of VHA since 2001. He was previously Alternate Director to Mrs Chow Woo Mo Fong, Susan, a
then Director of HTAL from 2008 to July 2016. Mr Sixt holds a Master’s degree in Arts and a Bachelor’s degree in
Civil Law, and is a member of the Bar and of the Law Society of the Provinces of Québec and Ontario, Canada.
Ronald Joseph Spithill OAM (Director) BScTech
Ronald Joseph Spithill, aged 75, has been a Director since November 2010. Mr Spithill was a director of
Telecom Corporation of New Zealand Limited from 2006 until 2011 and serves on a number of NGO Boards.
Mr Spithill has also been a director of VHA since 2010. He was previously President of Alcatel Asia Pacific
responsible for operations in 16 countries, Executive Vice President and Chief Marketing Officer of the
Paris-based Alcatel group and Vice-Chairman of Alcatel Shanghai Bell. He has been CEO and Chairman of
Alcatel Australia. He is a past President of the Telecommunications Industry Association of Australia and
served with the AEEMA Board, the Australian Business Council, the Malaysian Government Industry Advisory
Panel, the New Zealand Independent Industry Oversight Group, the NSW Government IT Advisory Board
and the Australian Government “Goldsworthy” Committee. Mr Spithill is a Fellow of the Australian Academy
of Technological Sciences and Engineering and a Distinguished Fellow of the Telecommunications Society
of Australia.
Woo Chiu Man, Cliff (Director) BSc
Woo Chiu Man, Cliff, aged 63, has been a Director since 1 August 2016. Mr Woo has been an executive director
and chief executive officer of HTHKH since January 2017. The aforementioned companies are either subsidiaries
or associated companies of the ultimate holding company of HTAL in which Mr Woo acts as director or senior
executive for the purpose of overseeing the management of such businesses. He has been alternate director
to a director of VHA since October 2016. He held various senior technology management positions in the
telecommunications industry before joining in 1998 the group of HWL, a wholly owned subsidiary of CKHH. He
was deputy managing director of Hutchison Telecommunications (Hong Kong) Limited from 2000 to 2004. He
was also executive director from March 2005 to December 2005 and alternate director to a director from 2005
to 2010 of Hutchison Telecommunications International Limited. He was seconded to VHA as chief technology
officer from 2012 to 2013 and was part of the core management team. He possesses extensive operations
experience in the telecommunications industry and has been involved in cellular technology for over 30 years.
Mr Woo holds a Bachelor’s degree in Electronics and a Diploma in Management for Executive Development. He
is a Chartered Engineer and also a Member of The Institution of Engineering and Technology (UK) and the Hong
Kong Institution of Engineers.
9
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Corporate Governance
This Corporate Governance Statement is dated 23 February 2017 and
approved by the Board of Hutchison Telecommunications (Australia)
Limited (“HTAL” or the “Company”). Information about the Company
and its corporate governance is available on the Company’s website at
www.hutchison.com.au.
The Company and its Directors are committed to high standards of
corporate governance. Set out below is a description of the main
corporate governance practices of the Company and its subsidiaries
(collectively, the “Group”). These practices were reviewed and
updated in 2014 in response to the release of the 3rd edition of
the ASX Corporate Governance Principles and Recommendations
(the “ASX Principles”). This report reflects the Company’s corporate
governance practices in place from 1 January 2016, and where the
Company does not comply with the ASX Principles.
The Board
Role of the Board
The Board has responsibility for approving strategy, monitoring the
implementation of the strategy and the performance of the Group,
protecting the rights and interests of shareholders and overseeing the
overall corporate governance within the Group.
The Board Charter is available on the Company’s website.
The Board’s responsibilities include:
•
reviewing and approving the strategic direction of the Group and
establishing goals, both short-term and long-term, to ensure these
strategic objectives are met and ensuring appropriate resources are
available to meet these objectives;
• overseeing the Group, including its control and accountability
systems;
• ensuring the business risks facing the Group are identified and
reviewing, ratifying and monitoring systems of risk management
and internal compliance and control, codes of conduct and legal
compliance;
• monitoring the performance of management against these goals
and objectives and initiating corrective action when required;
• ensuring that there are adequate internal controls and ethical
standards of behaviour adopted and met within the Group;
•
reviewing and approving annual financial plans and monitoring
corporate performance against both short-term and long-term
financial plans;
• appointing the chief executive, evaluating performance and
determining the remuneration of senior executives and ensuring
that appropriate policies and procedures are in place for
recruitment, training, remuneration and succession planning; and
• delegating to the chief executive the authority to manage and
supervise the business of the Group with senior managers and other
management, including the making of all decisions regarding the
Group’s operations that are not specifically reserved to the Board.
10
Composition of the Board
The Board comprises eight Directors whose appointment reflects
the shareholding of the Company and the need to ensure that the
Company is run in the best interest of all shareholders. All the Directors,
including the Chairman, Mr Fok, are non-executives. The Board has
considered the factors relevant to assessing the independence of
a Director contained in the ASX Principles, and in light of this, the
Board determined that the independent Directors are not substantial
shareholders or officers of substantial shareholders, have not been
employed as an executive of the Group or its majority shareholder,
nor are they associated with any significant supplier, customer or
professional adviser of the Group. Further, an independent Director does
not have any significant contractual relationship with the Group nor is
there any business relationship which could materially interfere with a
Director’s ability to act in the best interest of the Company.
Mr Gardener and Mr Scanlon, being the only Directors who are not,
or have not been, officers of a significant shareholder or have not
been employed as an executive of the Group, are considered by the
Board to be independent Directors. The Board does not consider
that the length of tenure of either Mr Gardener or Mr Scanlon has
compromised their independence. In light of the majority ownership
by CK Hutchison Holdings Limited (“CKHH”), the Board has resolved
that, at this stage, it is not in the best interests of the Company that
a majority of Directors or the Chairman be independent.
The Board has considered the skills that are appropriate for the Board
as a whole and these include experience in:
• general business management, strategy and entrepreneurship;
•
information and technology particularly in telecommunications or
multimedia;
• marketing, sales and distribution in highly competitive markets;
• Government relations and policy;
•
legal, governance and compliance risk management;
• human resources and remuneration;
• accounting, finance and audit; and
• banking, treasury and capital markets.
Details of the Directors’ skills, experience and date of appointment
are set out on pages 8 and 9. Details of the non-executive Director
remuneration are set out in the Remuneration Report which forms
part of the Directors’ Report on pages 17 to 19.
Subject to the Corporations Act 2001 requirements in relation to the
retirement of Directors, the current Directors have not been appointed
for a specified term. An election of Directors is held at the Annual
General Meeting (“AGM”) each year, and information on the Directors
standing for re-election is provided to shareholders in the Notice of
Meeting for the AGM. Any Director who has been appointed during
the year must stand for election at the next AGM. Each Director must
retire every three years, and if eligible, may stand for re-election.
Retiring Directors are not automatically reappointed.
Prior to the appointment of a new Director, appropriate checks
will be undertaken in areas such as education, employment and
character references, and the balance of skills and experience
collectively on the Board will be taken into consideration. Each new
Director receives a letter of appointment detailing the Company’s
expectations having regard to his familiarity with the Company and
its investment in Vodafone Hutchison Australia Pty Limited (“VHA”).
Upon appointment to the Board, a new Director receives an induction
process arranged by the Company Secretary which includes a package
of orientation materials on the Company. Thereafter, the Company
provides professional development materials to Directors and enables
them to attend appropriate external seminars and information sessions
to help ensure that they are apprised of the latest changes in the
commercial, legal and regulatory environment and to refresh their
knowledge and skills on the roles, functions and duties of a listed
company director.
The Company evaluates the performance of the Board as a whole,
the Board Committees and the Directors by questionnaire at the
beginning of each year. The evaluation for the financial year ended
31 December 2015 was undertaken at the beginning of 2016 and that
for the financial year ended 31 December 2016 has commenced. The
objective of such evaluation is to ensure that the Board, its Committees
and the Directors continued to act effectively in fulfilling the duties and
responsibilities expected of them.
In connection with their duties and responsibilities, Directors and
Board Committees have the right to seek independent professional
advice at the Company’s expense. Prior written notification to the
Chairman is required.
Board Committees
The Board has two Committees to assist in the implementation of
its corporate governance practices, fiduciary and financial reporting
and audit responsibilities. These are an Audit & Risk Committee and a
Governance, Nomination & Compensation Committee.
Each of these Committees has its own charter setting out its role and
responsibilities, composition, structure, membership requirements
and the manner in which the Committee is to operate. Details of these
charters are available on the Company’s website.
Audit & Risk Committee
The responsibility of the Audit & Risk Committee is to assist the
Board in fulfilling its duties through review and supervision of the
Group’s financial reporting process and the Group’s system of risk
management, internal control and legal compliance.
This Committee comprises non-executive Directors, a majority of
whom are independent Director and is chaired by an independent
Director who is not the Chairman of the Board. The composition
of the Committee meets the requirements of the ASX Listing
Rules. It has appropriate financial expertise and knowledge of the
telecommunications industry. Details of the Committee members,
and their qualifications, expertise, experience and attendance at
Committee meetings are set out on pages 8, 9, 15 and 16.
This Committee considers the annual and interim financial
statements of the Company and its subsidiaries and any other
major financial statements prior to approval by the Board, and
reviews standards of internal control and financial reporting within the
Group. It is also responsible for overview of the relationship between
the Group and its external auditor, including periodic review of
the performance and the terms of appointment of the auditor.
Furthermore, it considers any matters relating to the financial affairs
of the Group and any other matter referred to it by the Board.
The main responsibilities delegated to this Committee are:
•
•
•
•
•
•
to consider and recommend to the Board the appointment and
remuneration of the Company’s external auditor and to determine
with the external auditor the nature and scope of the audit or
review and approve audit or review plans;
to assess the performance and independence of the external
auditor, taking into account factors which may impair the auditor’s
judgement in audit matters related to the Company;
to review the interim and annual financial statements of the
Company before their submission to the Board;
to ensure the Group’s practices and procedures with respect to
related party transactions are appropriate for compliance with the
relevant legal and securities exchange requirements;
to review the risk management practices and oversee the
implementation and effectiveness of the risk management
system including overseeing appropriate governance standards
for tax management and the effectiveness of the tax control
and governance framework including the monitoring of tax risk
management strategies;
to review with management and the external auditor the
presentation and impact of significant risks and uncertainties
associated with the business of the Group and their effects on
the financial statements of the Group; and
•
to ensure corporate compliance with applicable legislation.
Governance, Nomination & Compensation
Committee
This Committee comprises non-executive Directors and is chaired
by the Chairman of the Board. In light of the majority ownership by
CKHH and that the Company does not currently have any executives,
the Board has resolved that, at this stage, it is not in the best interests
of the Company that a majority of members of this Committee be
independent or that the Chair of this Committee be independent.
Details of the Committee members, and their qualifications,
expertise and experience are set out on pages 8, 9, 15 and 16. No
meetings of this Committee were required during the year ended
31 December 2016.
Compensation responsibilities
This Committee is responsible for the review of remuneration and
other benefits, and the Group’s policies in relation to recruitment and
retention of staff. It will, where relevant, obtain independent advice
from external consultants on the appropriateness of the remuneration
policies of the Group.
Details of the compensation philosophy and practices of the Company,
including equity based remuneration schemes, are set out in the
Remuneration Report. As the Company does not currently have any
executives, no process is in place for the evaluation of the performance
of executives, although formal performance evaluation has been a part
of the Company’s practices in the past.
11
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Corporate Governance continued
Governance and nomination responsibilities
The governance and nomination responsibilities related to Board
performance and evaluation are:
to periodically assess and provide recommendations to the
Chairman of the Board on the effectiveness of the Board as a whole,
the Board Committees, the contribution of individual Directors, and
assessment of Directors;
to periodically review the Company’s investor relations and public
relations activities to ensure that procedures are in place for the
effective monitoring of the shareholder base, receipt of shareholder
feedback and response to shareholder concerns;
to oversee the maintenance of an induction and education
programme for new Directors, and continuing professional
development programs for Directors;
to ensure appropriate structures and procedures are in place so that
the Board can function independently of management;
External Auditors
The performance of the external auditor is reviewed annually and
applications for the tender of external audit services will be requested
as deemed appropriate. PricewaterhouseCoopers was appointed as
the external auditor in June 2014.
An analysis of fees paid to the external auditor, including a break-down
of fees for non-audit services, is provided in note 14 to the financial
statements. The Company’s policy in relation to awarding non-audit
work to the external auditor requires that all proposed non-audit
service assignments in excess of $100,000 will be approved by the
Audit & Risk Committee and will only be awarded to the external
auditor after completion of a competitive tendering process which
demonstrates that the external auditor is the preferred service provider
on the basis of an objective assessment of price, capabilities and
commitment. It is the policy of the external auditor to provide an annual
declaration of their independence to the Audit & Risk Committee.
to receive and consider any concerns of individual Directors relating
to governance matters; and
The external auditor attends and is available for questioning at the
AGM by shareholders in relation to the conduct of the audit.
•
•
•
•
•
•
to review all related party transactions to ensure they reflect market
practice and are in the best interests of the Group.
The governance and nomination responsibilities related to the
Directors are:
•
•
to recommend to the Board criteria regarding personal qualifications
for Board membership such as background, experience, technical
skills, affiliations and personal characteristics; and
to consider and recommend to the Board the skills matrix required
for the board generally.
The governance and nomination responsibilities related to Board
Committees are:
•
•
to review from time to time and recommend to the Board the
types, terms of reference and composition of Board Committees,
and the nominees as chair of the Board Committees; and
to review from time to time and make recommendations to the
Board the length of service of members on Board Committees,
meeting procedures, quorum and notice requirements, records
and minutes, resignations and vacancies on Board Committees.
Company Secretary
The Company has two company secretaries, Ms Edith Shih and
Ms Louise Sexton, who are responsible to the Board for ensuring that
Board processes are followed and board activities are efficiently and
effectively conducted.
12
Diversity
The Company recognises the corporate benefit of diversity as that term
is defined in the ASX best practice recommendations and its Diversity
Policy is available on the Company’s website.
The Company recognises the benefits of a Board that possesses a
balance of skills, experience, expertise and diversity of perspectives
appropriate to the requirements of the businesses of the Company.
The Company supports diversity, with Directors from various
parts of the world with experience of different cultures and
possessing varied expertise, in finance and accounting, sales and
marketing, operations, and technology relevant to operating a
telecommunications company.
In assessing candidates for appointment to the Board, the Governance,
Nomination & Compensation Committee will have regard to the
diversity balance on the Board and the skills and experience of each
candidate. The Board will give due consideration to ensuring that the
diversity of the Board increases.
No objectives have been set for achieving gender diversity among
employees as currently the Company has only one employee.
Risk Management
The Board acknowledges its responsibility for risk oversight and
ensuring that significant business risks are appropriately managed,
whilst acknowledging that such risks may not be wholly eliminated.
Details of the Company’s risk management policy and internal
compliance and control system are available on the Company’s
website. Material business risks faced by the Company are those
associated with the Company’s investment in VHA.
The Audit & Risk Committee has been delegated responsibility as the
primary body for risk oversight and for ensuring that appropriate risk
management policies, systems and resources are in place.
As all former operational activities of the Company are now
undertaken in VHA, the associated risks are now in that entity.
The Company no longer has an internal audit function, but the
Audit & Risk Committee receives and considers all VHA internal audit
reports prepared by the risk management function of VHA for the VHA
Audit and Risk Committee, including an annual review of the VHA risk
management framework. One of the members of the Group’s Audit &
Risk Committee is a member of the VHA Audit and Risk Committee.
The VHA risk management framework ensures that adequate
mechanisms are in place to identify, assess and manage strategic,
financial, operational and regulatory risks and that VHA corporate
performance is reviewed across a broad range of issues. In addition to
oversight of VHA’s risk management, other key aspects of the Group’s
risk management framework are regular reports from external auditors
and detailed financial reporting reviews with its major shareholder’s
finance team.
As the Company no longer has executives performing the function
of chief executive officer or chief financial officer, the Board has not
received a declaration provided in accordance with section 295A of
the Corporations Act 2001. However, the VHA Board has received such
a declaration in respect of the VHA financial statements.
Code of Conduct
The need to ensure that a strong ethical culture within the Group
has led to greater emphasis on the development of a strong culture
designed to ensure that all Directors, managers and employees act
with the utmost integrity and objectivity in their dealings with all
people that they come in contact with during their working life with
the Group. The Corporate Code of Conduct applies to all Directors
and employees and compliance with the values underlying the
Company’s culture forming part of the performance appraisal of senior
employees and sales managers. Details of this Code are available on
the Company’s website.
Dealing in Shares
The Company has the following policy regarding dealing in its shares
(which currently only applies to Directors and Company Secretaries as
the Company does not employ any senior executives):
•
the Chairman discusses any proposed dealing in HTAL shares with
an independent Director prior to any dealing;
• Directors discuss any proposed dealing in HTAL shares with the
Chairman prior to any dealing; and
• Senior executives discuss any proposed dealing in HTAL shares with
the Company Secretary or the chief executive officer prior to any
dealing. Unless there are unusual circumstances, dealings in HTAL
shares by Directors and senior executives are limited to the period of
one month after the release of the Company’s half year and annual
results to the ASX and from the lodgment of the Company’s annual
report with the ASX up to one month after the AGM of HTAL.
Directors and senior executives are prohibited from dealing in HTAL
shares if the Director or senior executive is in possession of price sensitive
information or would be dealing for a short-term gain. All Directors
and senior executives within the Group have been advised of their
obligations in regard to price sensitive information. Directors and senior
executives are also aware of their obligations not to communicate price
sensitive information to any other person who might deal in HTAL shares
or communicate that information to another party.
The Company’s practices are documented in a policy, details of which
are available on the Company’s website.
Continuous Disclosure and Shareholder
Communication
The Board strongly believes that the Company’s shareholders should
be fully informed of all material matters that affect the Group in
accordance with its continuous disclosure obligations. Financial reports
and other significant information are available on the Company’s
website for access by its shareholders and the broader community.
Procedures are in place to review whether any price sensitive
information has been inadvertently disclosed in any forum, and if so,
this information is immediately released to the market. The Company
Secretary resident in Australia has been appointed as the person
responsible for communications with the ASX.
The Company seeks to enhance its communication with shareholders
through the introduction of new types of communication through cost
effective electronic means and the provision of information in addition
to the reports required by legislation. Shareholders have the option to
receive communications from the Company and to communicate with
the Company and the Share Registry electronically.
Shareholders are encouraged to participate in general meetings
physically or to appoint proxies to attend and vote at such meetings
for and on their behalf if they are unable to attend. Notices of general
meetings and the accompanying papers are provided within the
prescribed time prior to the meetings on the Company’s website and
the ASX website (www.asx.com.au), by email to shareholders or by post
to those shareholders who have elected to receive a hard copy version
of such communication.
The Company’s investor relations program is based upon responding
to requests from shareholders and analysts for information to
enable them to gain an understanding of the Company’s business,
governance, financial performance and prospects.
The Company’s existing practices on information disclosure and
shareholder communications are documented in Continuous
Disclosure Policy and Shareholder Communications Policy, details
of which are available on the Company’s website.
Related Party Transactions
The Group draws great strength from its relationship with CKHH
and other companies in the CKHH Group in relation to its financial
support and management expertise. The Board is aware of the need
to represent all shareholders and to avoid conflicts of interest. Where
there is a conflict of interest or the potential appearance of a conflict,
affected Directors do not participate in the decision making process or
vote on such matters. All commercial agreements with related parties
are negotiated on arms’ length terms. Further information about
the Company’s related party transactions is set out in note 17 to the
financial statements.
13
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Directors’ Report
The Directors are pleased to present their report on the consolidated entity (the “Group”) consisting of Hutchison Telecommunications (Australia)
Limited (“HTAL” or the “Company”) and the entities it controlled at the end of or during the year ended 31 December 2016.
Principal activities
During the year, the Group’s principal activity was the ownership of a 50% interest in Vodafone Hutchison Australia Pty Limited (“VHA”) which
provides telecommunications services in Australia.
Dividends
No dividend was declared or paid during the year.
Review of operations
Comments on the operations of the Group, results of those operations, the Company’s business strategies and its prospects for future years are set
out on pages 2 to 7. Details of the financial position of the Company are contained in page 24 of this report.
Significant changes in the state of affairs and matters subsequent to the end of the
financial year
There was no significant change in the state of affairs of the Group during the financial year. No other matter or circumstance has arisen since
31 December 2016 that has significantly affected, or may significantly affect:
•
•
•
the Group’s operations in future financial years;
the results of those operations in future financial years; or
the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
Other than as set out in the Review of operations above, further information on business strategies and the future prospects of the Company
has not been included in this report because the Directors believe that it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
The Group’s operations and business activities, through its investment in VHA, are subject to environmental regulations under both
Commonwealth and State legislation and the requirements of the Telecommunications Act 1997. The Group’s risk review and audit program
is designed to ensure that the Group meets its obligations under current legislation.
VHA’s operations and business activities are subject to environmental regulations under both Commonwealth and State legislation and the
requirements of the Telecommunications Act 1997, particularly with regard to:
•
•
•
the impact of the construction, maintenance and operation of transmission facilities;
reporting on carbon emissions from operations;
site contamination; and
• waste management.
Management systems are in place in VHA to clearly define accountability and responsibility for compliance with legislation and for achieving
specific environmental management objectives.
The Directors are not aware of any material breaches of environmental regulations by the Group or by VHA.
14
Directors
The following persons were Directors of HTAL during the whole of the year ended 31 December 2016 and up to the date of this report:
FOK Kin Ning, Canning
Barry ROBERTS-THOMSON
Justin Herbert GARDENER
LAI Kai Ming, Dominic
John Michael SCANLON
Frank John SIXT
Ronald Joseph SPITHILL
WOO Chiu Man, Cliff
Mrs Chow Woo Mo Fong, Susan retired as Director with effect from 1 August 2016.
Mr Woo Chiu Man, Cliff was appointed as Director with effect from 1 August 2016 and continues in office at the date of this report.
Ms Tang Wing Yee, Angeline was appointed as Alternate Director to Mrs Chow Woo Mo Fong, Susan with effect from 29 April 2016 until the
retirement of Mrs Chow Woo Mo Fong, Susan on 1 August 2016.
Further information on the Directors is set out on pages 8 and 9.
Director
Fok Kin Ning, Canning
Barry Roberts-Thomson
Chow Woo Mo Fong, Susan^
Justin Herbert Gardener
Lai Kai Ming, Dominic ^^
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Woo Chiu Man, Cliff ^^^
Other Responsibilities
Non-executive Chairman,
Chairman of Governance, Nomination
& Compensation Committee
Deputy Chairman
Member of Governance, Nomination
& Compensation Committee
Chairman of Audit & Risk Committee,
Member of Governance, Nomination
& Compensation Committee
Member of Governance, Nomination
& Compensation Committee
Member of Audit & Risk Committee
Member of Audit & Risk Committee
–
–
Particulars of Directors’ Interests in
ordinary shares of HTAL
5,100,000*
83,918,337**
N/A
1,957,358
–
–
1,000,000
–
–
Direct holding of 4,540 shares
Direct holding of 100,000 shares
*
**
^
^^
^^^ Appointed as Director with effect from 1 August 2016
Retired as Director and ceased to be member of the Governance, Nomination & Compensation Committee with effect from 1 August 2016
Appointed as member of the Governance, Nomination & Compensation Committee with effect from 1 August 2016
Notes:
Fok Kin Ning, Canning, holds a relevant interest in (i) 5,111,438 ordinary shares of CK Hutchison Holdings Limited (“CKHH”), a related body corporate of HTAL;
and (ii) 1,202,380 ordinary shares of Hutchison Telecommunications Hong Kong Holdings Limited (“HTHKH”), a related body corporate of HTAL.
Lai Kai Ming, Dominic holds a relevant interest in 34,200 ordinary shares of CKHH.
Frank John Sixt holds a relevant interest in (i) 136,800 ordinary shares of CKHH; and (ii) 17,000 American Depositary Shares (each representing 15 ordinary
shares) of HTHKH.
Woo Chiu Man, Cliff holds a relevant interest in (i) 3,420 ordinary shares of CKHH; and (ii) 2,001,333 ordinary shares of HTHKH.
15
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Directors’ Report continued
Meetings of Directors
The number of meetings of HTAL’s Board of Directors and each of the Board committees held during the year ended 31 December 2016 and the
number of meetings attended by each Director were:
Board Meetings
held during the
period as
Director
Board Meetings
attended as
Director
Audit & Risk
Committee
Meetings held
during the year
Governance,
Nomination &
Compensation
Committee
Meetings held
during the period
as Member of
the Committee
Governance,
Nomination &
Compensation
Committee
Meetings
attended as
Member of the
Committee
Audit & Risk
Committee
Meetings
attended as
Member of the
Committee
8
8
4
8
8
8
8
8
4
6
8
4
8
8
8
8
7
4
N/A
N/A
N/A
3
N/A
3
3
N/A
N/A
N/A
N/A
N/A
3
N/A
3
3
N/A
N/A
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
N/A
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
N/A
Director
Fok Kin Ning, Canning
Barry Roberts-Thomson
Chow Woo Mo Fong, Susan^
Justin Herbert Gardener
Lai Kai Ming, Dominic^^
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Woo Chiu Man, Cliff^^^
^
Retired as Director and ceased to be member of the Governance, Nomination & Compensation Committee with effect from 1 August 2016
^^
Appointed as member of the Governance, Nomination & Compensation Committee with effect from 1 August 2016
^^^ Appointed as Director with effect from 1 August 2016
No meeting of the Governance, Nomination & Compensation Committee was held during the year as any matters that arose for possible
consideration by the Committee that were dealt with by the full Board.
Retirement, election and continuation in office of Directors
Mr Barry Roberts-Thomson is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers himself for re-election.
Mr Lai Kai Ming, Dominic is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers himself for re-election.
Mr Ronald Joseph Spithill is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers himself for re-election.
Mr Woo Chiu Man, Cliff, having been appointed since the last annual general meeting, in accordance with the Constitution, retires as a Director
at the annual general meeting and, being eligible, offers himself for re-election.
Company secretaries
Edith Shih
BSE, MA, MA, EdM, Solicitor, FCIS, FCS(PE)
Ms Shih has over 19 years of experience as a company secretary in listed companies and has been a Company Secretary of the Company
since 1999. Since January 2017, she has been an executive director and since June 2015, she has been the head group general counsel
and company secretary of CKHH. She has also been the head group general counsel since 1993 and company secretary since 1997 of
Hutchison Whampoa Limited which is a wholly owned subsidiary of CKHH. She has been with the CKHH group since 1989, overseeing legal,
corporate finance, regulatory, compliance and corporate governance affairs of the CKHH group, with in-depth knowledge of the business
operations of the CKHH group. She is a solicitor qualified in England and Wales, Hong Kong and Victoria, Australia and a Fellow of both the
Institute of Chartered Secretaries and Administrators in the United Kingdom and The Hong Kong Institute of Chartered Secretaries.
Louise Sexton
BA, LLM, MBA (Exec), GAICD
Ms Sexton has over 23 years of experience as a company secretary in listed companies and has been a Company Secretary of the Company
since 1999. Ms Sexton has practised as a solicitor since 1983 with experience in government, private practice and in-house corporate practice.
16
Remuneration Report
Following the merger of Hutchison 3G Australia Pty Limited and Vodafone Australia Limited in June 2009, the Company’s employees, including
all executives, working in the VHA business ceased to be employees of the Company and became employees of VHA during 2009. VHA is not
a subsidiary of the Company and accordingly this report does not include any information relating to the employees or employment practices
of VHA. As at 31 December 2016, the Company had one employee who is not ‘key management personnel’. The Company does not have any
employees who are ‘key management personnel’.
The compensation philosophy and policies referred to remain in place notwithstanding their currently limited application.
Compensation philosophy and practice
The Governance, Nomination & Compensation Committee is responsible for making recommendations to the Board on compensation policies
and packages for all staff, including Board members. The Company’s compensation policy is designed to ensure that remuneration strategies are
competitive, innovative, support the business objectives and reflect company performance. The Company’s performance is measured according
to the achievement of key financial and non-financial measures as approved by the Board, and key management personnel’s remuneration
packages (other than Directors) would be directly linked to these measures. The Group has been committed to ensuring it has compensation
arrangements which would reflect individual performance, overall contribution to the Company’s performance and developments in the external
market. Written service agreements setting out remuneration and other terms of employment would be required for key management personnel.
Principles used to determine the nature and amount of remuneration
The Company’s compensation policy is designed to ensure that remuneration strategies are competitive, innovative and support the business
objectives while reflecting individual performance, overall contribution to the business and developments in the external market. Remuneration
packages would generally involve a balance between fixed and performance based components, the latter being assessed against objectives
which include both company and job specific financial and non-financial measures. These measures at the financial level directly relate to the key
management’s contribution to meeting or exceeding the Company’s statement of comprehensive income and statement of financial position
targets. At the non-financial level the measures would reflect the contribution to achieving a range of key performance indicators as well as
building a high performance company culture. The performance conditions are chosen to reflect an appropriate balance between achieving
financial targets and building a business and organisation to be sustainable for the long term.
Directors’ fees
The remuneration of the non-executive and independent Directors, Mr Gardener and Mr Scanlon, comprised a fixed amount only and was not
performance based. The non-executive and non-independent Directors, Mr Fok, Mrs Chow, Mr Lai, Mr Roberts-Thomson, Mr Sixt, Mr Spithill and
Mr Woo, did not receive any remuneration for their services as Directors.
Retirement allowances for Directors
No retirement allowances are payable to non-executive Directors.
Key management personnel
There were no key management personnel having authority and responsibility for planning, directing and controlling the activities of the
Company for the period from 1 January 2016 to 31 December 2016.
17
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Directors’ Report continued
Details of remuneration
Details of the remuneration of each Director of HTAL including their personally-related entities, are set out in the following tables.
Directors of HTAL
2016
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Chow Woo Mo Fong, Susan^
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Woo Chiu Man, Cliff^^
Total
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Superannuation
$
Options
$
–
–
–
50,000
–
50,000
–
–
–
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,750
–
4,750
–
–
–
9,500
–
–
–
–
–
–
–
–
–
–
^
Retired as Director with effect from 1 August 2016
^^
Appointed as Director with effect from 1 August 2016
2015
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Chow Woo Mo Fong, Susan
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Total
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Cash bonus
$
Non-monetary
benefits
$
Superannuation
$
Options
$
–
–
–
50,000
–
50,000
–
–
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,750
–
4,750
–
–
9,500
–
–
–
–
–
–
–
–
–
Total
$
–
–
–
54,750
–
54,750
–
–
–
109,500
Total
$
–
–
–
54,750
–
54,750
–
–
109,500
Mr Fok, Mrs Chow, Mr Lai, Mr Sixt and Mr Woo, as officers of CKHH group, are remunerated for their duties within the CKHH Group which include
their directorships of HTAL.
18
Share-based compensation
The HTAL Employee Option Plan, which was approved by the Board on 4 June 2007, provides for the issue of options to executives and employees.
No options were granted under the plan in 2016, and no options remained outstanding.
No ordinary shares were issued on the exercise of options during the year to any of the Directors or former key management personnel.
No Directors were issued options during the year or hold options over the ordinary shares of the Company. No options were vested and
unexercisable at the end of the year.
Share holdings
The number of shares in the Company held during the financial year by each Director, including their personally-related entities, are set out below.
Directors of HTAL
Ordinary shares
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Chow Woo Mo Fong, Susan^
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Woo Chiu Man, Cliff^^
Tang Wing Yee, Angeline^^^
Balance at the start of
the year (or at the
appointment date)
Received during the
year on the exercise
of options
Changes during
the year
Balance at the
end of the year
5,100,000*
83,918,337**
–
1,957,358
–
–
1,000,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,100,000*
83,918,337**
N/A
1,957,358
–
–
1,000,000
–
–
N/A
Direct holding of 4,540 shares
Direct holding of 100,000 shares
*
**
^
^^
^^^ Appointed as Alternate Director to Mrs Chow Woo Mo Fong, Susan with effect from 29 April 2016 until the retirement of Mrs Chow Woo Mo Fong, Susan
Appointed as Director with effect from 1 August 2016
Retired as Director with effect from 1 August 2016
on 1 August 2016
Shares under option
As at the date of this report there were no unissued ordinary shares of HTAL under option issued pursuant to the HTAL Employee Option Plan.
Shares issued on the exercise of options
No ordinary shares of HTAL were issued during the year ended 31 December 2016 or up to the date of this report on the exercise of options
granted under the HTAL Employee Option Plan.
Loans to Directors and key management personnel
There were no loans made to the Directors of the Company, including their personally-related entities, during the years ended 31 December 2016
and 31 December 2015.
Other transactions with Directors and key management personnel
There were no other transactions with Directors for the years ended 31 December 2016 and 31 December 2015.
19
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Directors’ Report continued
Non-audit services
HTAL may decide to employ the auditor, PricewaterhouseCoopers, on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company are important.
The Board of Directors, in accordance with the advice received from the Audit & Risk Committee, is satisfied that the provision of the non-audit
services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied
that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001
for the following reasons:
• all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the integrity and objectivity of the
auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risk and rewards.
Details of the amounts paid to PricewaterhouseCoopers for audit and non-audit services provided during the year are set out in note 14,
Remuneration of auditors, on page 39 of the financial report.
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21.
Directors’ and officers’ liability insurance
During the financial year, CKHH paid a premium to insure the Directors and officers of the Group against loss or liability arising out of a claim for a
wrongful act, including any costs, charges and expenses that may be incurred in defending any actions, suits, proceedings or claims. This does not
include such liabilities that arise from conduct involving a wilful breach of duty by the officer or the improper use by the officers of their position
to gain advantage for themselves or someone else or to cause detriment to the Company.
Proceedings on behalf of HTAL
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of HTAL, or to intervene
in any proceedings to which HTAL is a party, for the purpose of taking responsibility on behalf of HTAL for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of HTAL with leave of the Court under section 237 of the Corporations Act 2001.
Rounding of amounts to nearest thousand dollars
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian
Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ report and financial statements. Amounts in the
Directors’ report and financial report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases
to the nearest dollar or cent.
Auditor
PricewaterhouseCoopers continues in office in accordance with section 327B of the Corporations Act 2001.
This report is made in accordance with a resolution of the Directors.
Director
23 February 2017
Director
23 February 2017
20
Auditor’s Independence Declaration
21
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Financial Report
For the year ended 31 December 2016
Contents
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Note 1
Summary of significant accounting policies
Note 2
Revenue
Note 3
Expenses
Note 4
Income tax
Note 5
Current assets – Cash and cash equivalents
Note 6 Other financial assets
Note 7 Non-current assets – Investment accounted for using the equity method
Note 8
Controlled entities
Note 9
Current liabilities – Payables
Note 10 Current liabilities – Other financial liabilities
Note 11 Contributed equity
Note 12 Reserves and accumulated losses
Note 13 Director and key management personnel compensation
Note 14 Remuneration of auditors
Note 15 Contingencies
Note 16 Commitments
Note 17 Related party transactions
Note 18 Deed of cross guarantee
Note 19 Segment reporting
Note 20 Reconciliation of loss after income tax to net cash inflows from operating activities
Note 21 Earnings per share
Note 22 Financial risk management
Note 23 Events occurring after the reporting date
Note 24 Parent entity disclosures
Directors’ Declaration
Independent Auditor’s Report
23
24
25
26
27
27
32
32
33
33
33
34
36
36
36
37
38
39
39
39
39
39
41
43
43
44
45
46
47
48
49
These financial statements cover the consolidated financial statements for the group consisting of Hutchison Telecommunications (Australia)
Limited and its controlled entities. The financial statements are presented in Australian dollars.
Hutchison Telecommunications (Australia) Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Level 1, 177 Pacific Highway,
North Sydney NSW 2060
The financial statements were authorised for issue by the Directors on 23 February 2017. The Company has the power to amend and reissue the
financial statements.
22
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 31 December 2016
Revenue
Other operating items
Finance costs
Share of net losses of a joint venture accounted for using the equity method
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss:
Changes in the fair value of cash flow hedges (share of joint venture)
Other comprehensive income (loss) for the year, net of tax
Total comprehensive loss for the year attributable to members of
Hutchison Telecommunications (Australia) Limited
Earnings per share for loss from continuing operations attributable
to the ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
Notes
2
3
7
4
12
12
2016
$’000
5,807
(1,246)
–
(68,014)
(63,453)
–
2015
$’000
6,028
(1,299)
(4)
(187,523)
(182,798)
(70)
(63,453)
(182,868)
413
413
(825)
(825)
(63,040)
(183,693)
Notes
Cents
Cents
21
21
(0.47)
(0.47)
(1.35)
(1.35)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
23
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Consolidated Statement of Financial Position
As at 31 December 2016
ASSETS
Current Assets
Cash and cash equivalents
Other financial assets
Trade receivables
Total Current Assets
Non-current Assets
Other financial assets
Investment accounted for using the equity method
Total Non-current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Other financial liabilities
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
Notes
2016
$’000
2015
$’000
5
6
6
7
9
10
11
12
12
4,469
48,906
6
5,318
136,676
5
53,381
141,999
–
209,714
209,714
263,095
277
136,862
137,139
137,139
125,956
11,801
277,315
289,116
431,115
257
241,862
242,119
242,119
188,996
4,204,488
4,204,488
70,857
70,444
(4,149,389)
(4,085,936)
125,956
188,996
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
24
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Attributable to members of Hutchison Telecommunications (Australia) Limited
Reserves
Contributed
equity
$’000
Capital
redemption
$’000
Cash flow
hedging
$’000
Share-based
payments
$’000
Accumulated
losses
$’000
Notes
Total equity
$’000
Balance at 1 January 2015
4,204,488
54,887
Loss for the year
Share of joint venture’s
changes in the fair value of
cash flow hedges
Total comprehensive loss
for the year
Balance at 31 December 2015
Balance at 1 January 2016
Loss for the year
Share of joint venture’s
changes in the fair value of
cash flow hedges
Total comprehensive income
(loss) for the year
–
–
–
–
–
–
4,204,488
4,204,488
54,887
54,887
–
–
–
–
–
–
12
12
Balance at 31 December 2016
4,204,488
54,887
502
–
(825)
(825)
(323)
(323)
–
413
413
90
15,880
(3,903,068)
372,689
–
–
–
(182,868)
(182,868)
–
(825)
(182,868)
(183,693)
15,880
15,880
(4,085,936)
(4,085,936)
188,996
188,996
(63,453)
(63,453)
–
413
–
–
–
(63,453)
15,880
(4,149,389)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
(63,040)
125,956
25
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Consolidated Statement of Cash Flows
For the year ended 31 December 2016
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Finance costs paid
Net cash inflows from operating activities
Cash Flows from Investing Activities
Loans to joint venture
Repayment of loans from joint venture
Net cash inflows (outflows) from investing activities
Cash Flows from Financing Activities
Proceeds from borrowings – entity within the CKHH Group
Repayment of borrowings – entity within the CKHH Group
Net cash (outflows) inflows from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes
20
5
2016
$’000
(1,226)
5,377
–
4,151
2015
$’000
(1,120)
4,627
(4)
3,503
–
(100,000)
100,000
100,000
–
(100,000)
–
100,000
(105,000)
(105,000)
(849)
5,318
4,469
–
100,000
3,503
1,815
5,318
26
Notes to the Financial Statements
Note 1 Summary of significant accounting policies
Hutchison Telecommunications (Australia) Limited (the “Company” or “Parent Entity”) is a company limited by shares incorporated in Australia
whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Company and
its subsidiaries (the “Group” or “Consolidated Entity” or “HTAL”) are described in the Directors’ Report.
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board, and comply with other requirements of the law. The accounting policies
adopted are consistent with those of the previous financial year.
For financial reporting purposes the Company is considered a “for-profit” entity.
(i) Statement of compliance
Accounting Standards include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that
the financial statements and notes of the Consolidated Entity comply with International Financial Reporting Standards (“IFRS”).
As a consequence of the financial reporting relief provided by ASIC Class Orders 10/654 and 10/655, the consolidated financial statements are
presented without the parent entity financial statements. Disclosures in relation to the parent entity required under paragraph 295(3)(a) of the
Corporations Act 2001 have been included in note 24.
(ii) Going concern disclosures
As at 31 December 2016, the Consolidated Entity has a deficiency of net current assets of $84 million (2015: net current assets deficiency of
$100 million). Included in the Consolidated Entity’s current liabilities is an amount of $137 million (2015: $242 million) which relates to an interest
free financing facility provided from a subsidiary of the ultimate parent entity, CK Hutchison Holdings Limited (“CKHH”), which is repayable on
demand. The Consolidated Entity has unused financing facilities of $1,463 million at 31 December 2016. CKHH has confirmed its current intention
is to provide sufficient financial support to enable the Consolidated Entity to meet its financial obligations as and when they fall due for a
minimum period of twelve months from the date of signing these financial statements. Consequently, the Directors have prepared the financial
statements on a going concern basis.
(iii) Historical cost convention
These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and
liabilities (including derivative instruments) which are stated at fair value, as explained in the significant accounting policies set out below.
(b) Principles of consolidation
(i) Subsidiaries
A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
(ii) Joint arrangements
A joint arrangement is an arrangement of which two or more parties have joint control and over which none of the participating parties has
unilateral control.
Investments in joint arrangements are classified either as joint operations or joint ventures, depending on the contractual rights and obligations
each investor has under the relevant contract. Joint operations arise where the investors have rights to the assets and obligations for the liabilities
of an arrangement. A joint operator accounts for its share of the assets, liabilities, revenue and expenses. Joint ventures arise where the investors
have rights to the net assets of the arrangement. Joint ventures are accounted for under the equity method.
The results and net assets of joint ventures are incorporated in these accounts using the equity method of accounting, except when the investment is
classified as held for sale, in which case it is accounted for under AASB 5, Non-current assets held for sale and discontinued operations. The total carrying
amount of such investments is reduced to recognise any identified impairment loss in the value of individual investments.
As at 31 December 2016, HTAL has only one joint venture.
(iii) Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share
of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of
the investee in other comprehensive income. Dividends received or receivable from joint ventures are recognised as a reduction in the carrying
amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-
term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these
entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies
and estimates of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
27
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 1 Summary of significant accounting policies continued
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Consolidated Entity’s subsidiaries are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian
dollars, which is Hutchison Telecommunications (Australia) Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit or loss and other comprehensive
income, except when deferred in equity as qualifying cash flow hedges set out in note 1(i)(ii).
(d) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade
allowances and duties and taxes paid. Revenue is recognised as described below:
Interest income
Interest income is recognised using the effective interest method.
(e) Income tax
The current tax payable or recoverable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit
or loss and other comprehensive income because some items of income or expense are taxable or deductible in different years or may never be
taxable or deductible. The Consolidated Entity’s liability for current tax is calculated using Australian tax rates (and laws) that have been enacted or
substantively enacted by the statement of financial position date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax assets are recognised for deductible temporary difference and unused tax losses only if it is probable that future taxable amounts will
be available to utilise those temporary differences and losses.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in
joint ventures, except where the associated entity is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised, based on tax
rates (and laws) that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Tax is charged or credited to the statement of profit or loss and other comprehensive income, except when it relates to items charged or credited
directly to equity, in which case the tax is also recognised directly in equity.
Hutchison Telecommunications (Australia) Limited and its wholly owned Australian subsidiaries have not implemented the tax consolidation legislation.
28
Note 1 Summary of significant accounting policies continued
(f) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are tested for impairment annually and when there is an indication that they
may be impaired. Other assets are tested for impairment whenever there is any indication that the carrying value of these assets may not be
recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss,
if any. The recoverable amount is the higher of an asset’s fair value less costs to dispose and value in use. Such impairment loss is recognised in the
statement of profit or loss and other comprehensive income.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
(h) Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less
provision for impairment. Appropriate allowance for estimated irrecoverable amounts are recognised in the statement of profit or loss and other
comprehensive income when there is objective evidence that the assets is impaired.
(i) Derivative financial instruments and hedging activities
Derivative financial instruments are utilised by the Group in the management of its foreign currency and interest rate exposures. The Group’s policy
is not to utilise derivative financial instruments for trading or speculative purposes.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to fair value
at each reporting date. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Consolidated Entity designates certain derivatives as; (1) hedges of the fair value of
recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).
The Consolidated Entity documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items,
as well as its risk management objective and strategy for undertaking various hedge transactions. The Consolidated Entity also documents its
assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and
will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the statement of profit or loss and other
comprehensive income, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in
the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the statement of profit or loss and other
comprehensive income within other income or other expenses.
Amounts accumulated in equity are recycled in the statement of profit or loss and other comprehensive income in the periods when the hedged
item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged
results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from
equity and included in the measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the
statement of profit or loss and other comprehensive income. When a forecast transaction is no longer expected to occur, the cumulative gain or
loss that was reported in equity is immediately transferred to the statement of profit or loss and other comprehensive income.
(j) Fair value estimation
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market
at the measurement date under current market conditions. Fair value is an exit price regardless of whether that price is directly observable in active
markets or estimated using another valuation technique.
The fair value of forward exchange contracts is determined using forward exchange market rates at the statement of financial position date.
(k) Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease
income from operating leases is recognised in income on a straight-line basis over the lease term.
29
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 1 Summary of significant accounting policies continued
(l) Goodwill
Goodwill is initially measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the fair value of the net identifiable assets
acquired and the liabilities assumed. If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the
sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously
held equity interest in the acquiree (if any), the excess is recognised immediately in the statement of profit or loss and other comprehensive
income as a bargain purchase gain.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates/joint ventures is included in
investments in associates. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if, events or changes
in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing.
(m) Payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial period and which
are unpaid. The amounts are unsecured and are usually paid or payable within 30 days of recognition.
(n) Employee benefits
(i) Wages and salaries, and leave provisions
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave when
it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to
apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be
made by the Group in respect of services provided by employees up to the reporting date.
(ii) Retirement benefits
Retirement benefits are delivered under the Retail Employees Superannuation Trust, although employees have an option to choose other funds.
This fund is a defined contribution fund and is based on employer and employee contributions made to the fund.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them
to the contributions.
(o) Contributed equity
Ordinary shares are classified as equity. Refer to note 11 for further information.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(p) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to ordinary equity holders of the Consolidated Entity; and
• by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
30
Note 1 Summary of significant accounting policies continued
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation
authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to,
the taxation authority is included within other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash flows.
(r) Segments reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose
operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the
segment and assess its performance and for which discrete financial information is available.
Operating segments have been identified based on the information provided to the chief operating decision maker. Operating segments that
meet the quantitative criteria as prescribed by AASB 8 Operating Segments are reported separately. Refer to note 19 for details of the Consolidated
Entity’s operating segment, being investment in telecommunications services.
(s) Critical accounting estimates and assumptions
The preparation of financial statements often requires the use of judgements to select specific accounting methods and policies from several
acceptable alternatives. Furthermore, significant estimates and assumptions concerning the future may be required in selecting and applying
those methods and policies in the accounts. The Group bases its estimates and judgements on historical experience and various other
assumptions that it believes are reasonable under the circumstances. Actual results may differ from these estimates and judgements under
different assumptions or conditions.
(i) Impairment of investments in controlled entities and joint venture
In accordance with the Consolidated Entity’s accounting policy, the investments in controlled entities and the joint venture are periodically tested
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount
of the Company’s investment in controlled entities, and the recoverable amount of the Consolidated Entity’s investment in its joint venture are
determined as the higher of the fair value less cost of disposal or value in use methodology. The underlying calculation is based on the approved
business plan for Vodafone Hutchison Australia Pty Limited (“VHA”). These calculations require the use of estimates and assumptions.
A discounted cash flow calculation is undertaken on the approved business plan. A terminal value is calculated on the cash flows. The cash flows
are then discounted using a suitable discount rate consistent with recent internal assessments of the Consolidated Entity’s weighted average
cost of capital. The resulting net present value is compared to the balance of the Consolidated Entity’s equity accounted for investment in a
joint venture.
The Directors believe that the carrying values of the Consolidated Entity’s investment in joint venture as at 31 December 2016 is appropriate
and are not aware of any events or changes since the year end which may potentially impair the carrying values of the Consolidated Entity’s
investment in joint venture as at the statement of financial position date.
(ii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that future taxable profits
will be available to utilise those temporary differences. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and level of taxable profits generated in the foreseeable future together with future
tax planning strategies.
(iii) Joint venture accounting adjustments
Depreciation of operating assets constitutes a substantial operating cost for the joint venture. The cost of fixed assets is charged as a depreciation
expense over the estimated useful lives of the respective assets using the straight-line method and this is reflected in the “share of net losses of
a joint venture accounted for using the equity method” in HTAL’s consolidated statement of profit or loss and other comprehensive income. The
Directors are of the view that the estimated useful lives of network assets within the joint venture should be extended to reflect the experience
of the group. Accordingly, adjustments to the useful lives of assets have been made when the Group’s 50% interest in joint venture VHA is
incorporated into the Group’s consolidated financial statements. This is to reflect the use of the Group’s fixed assets useful lives.
(t) Rounding of amounts to nearest thousand dollars
The Consolidated Entity is of a kind referred to Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian
Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ report and financial statements. Amounts in the
financial statements have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the nearest
dollar or cent.
31
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 1 Summary of significant accounting policies continued
(u) Parent entity financial information
The financial information for the parent entity disclosed in note 24 has been prepared on the same basis as the consolidated financial statements,
except investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of HTAL.
(v) New accounting standards and interpretations
The Consolidated Entity has adopted all of the new and revised effective / applicable standards, amendments and interpretations issued by
the Australian Accounting Standards Board (“AASB”) that are relevant to the Consolidated Entity’s operations and mandatory for annual periods
beginning on or after 1 January 2016.
The Consolidated Entity has applied the following standards and amendments for first time in their annual reporting period commencing
1 January 2016:
Reference
Standard(s)
AASB 2014–4
Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation
[AASB 116 & AASB 138]
AASB 2014–9
Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements [AASB 1, 127 & 128]
AASB 2014–10
Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an investor and its Associate or
Joint Venture [AASB 10 & AASB 128]
AASB 2015–1
Amendments to Australian Accounting Standards – Annual improvement to Australian Accounting Standards 2012–2014 Cycle
AASB 2015–2
Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
AASB 2015–4
Amendments to Australian Accounting Standards – Financial Reporting Requirements for Australian Groups with a
Foreign Parent
The adoption of these accounting standards and interpretations did not have any significant impact on the financial performance or position of
the Consolidated Entity.
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2016 reporting periods and
have not been early adopted by the Group. The Group is still assessing the impact of the new standards and interpretations set out below on the
financial statements.
Reference
Nature of change
AASB 9
AASB 15
AASB 16
AASB 9 addresses the classification, measurement and derecognition of financial assets and financial
liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets.
The new standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer. The standard permits either a full retrospective or a modified retrospective
approach for the adoption.
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the
balance sheet, as the distinction between operating and finance leases is removed.
Application date
1 January 2018
1 January 2018
1 January 2019
Note 2 Revenue
Other revenue
Interest
Note 3 Expenses
Loss before income tax includes the following specific expenses:
Finance costs
Interest and finance charges
32
2016
$’000
2015
$’000
5,807
6,028
2016
$’000
2015
$’000
–
4
Note 4
Income tax
(a) Income tax expense
Deferred tax
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from operations before income tax expense
Tax at the Australian tax rate of 30% (2015: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Share of losses of a joint venture
Deferred tax on temporary difference not recognised
Previously unrecognised tax losses now recouped to reduce current tax expense
Income tax expense
(c) Unrecognised tax losses
Opening balance
Tax losses utilised during completion of income tax return
Tax losses recouped to reduce current tax expense
Unused tax losses for which no deferred tax assets have been recognised
Potential tax benefit @ 30%
All unused tax losses were incurred by Australian entities.
2016
$’000
2015
$’000
–
70
(63,453)
(19,036)
(182,798)
(54,839)
20,404
1,368
2
(1,370)
–
56,256
1,417
63
(1,410)
70
183,797
188,565
–
(4,568)
179,229
53,769
(67)
(4,701)
183,797
55,139
This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses derives future assessable income of a nature
and of an amount sufficient to enable the benefit from the deductions for the losses to be realised, and the company complies with the conditions
for deductibility imposed by tax legislation.
(d) Recognised deferred tax assets
There are no recognised deferred tax assets at 31 December 2016 and 31 December 2015.
Note 5 Current assets – Cash and cash equivalents
Cash at bank and in hand
Note 6 Other financial assets
Receivable from a joint venture (note 17)
Total current
Total non-current
2016
$’000
4,469
2016
$’000
48,906
48,906
–
2015
$’000
5,318
2015
$’000
148,477
136,676
11,801
Receivable from a joint venture
Weighted average interest on the current receivable from a joint venture of $36.1 million (2015: $136.7 million) is charged at a rate of 4.44% p.a.
(2015: 4.58% p.a.) during the year. The interest on the remaining receivable from a joint venture of $12.8 million (2015: $11.8 million) is charged at a
fixed rate of 8% p.a. (2015: 8% p.a.).
Further information relating to receivable from a joint venture is set out in note 17.
33
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Notes to the Financial Statements continued
Note 6 Other financial assets continued
(a) Fair value
The carrying values of the current and non-current receivables are at cost and approximate to their fair value.
(b) Foreign currency and interest rate risk
The carrying amounts of the Consolidated Entity’s current and non-current receivables and financial assets are denominated in the following
currencies:
Australian dollars
2016
$’000
48,906
48,906
2015
$’000
148,477
148,477
For an analysis of the sensitivity of other financial assets to foreign exchange and interest rate risk refer to note 22.
(c) Credit risk
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The Consolidated
Entity does not hold any collateral as security. Refer to note 22 for more information on the risk management policy of the Consolidated Entity.
Note 7 Non-current assets – Investment accounted for using the equity method
Interest in a joint venture
2016
$’000
2015
$’000
209,714
277,315
The Consolidated Entity has a 50% interest in VHA, which is resident in Australia and the principal activity of which is providing mobile
telecommunications services.
The Consolidated Entity’s interest in VHA is accounted for using the equity method in the consolidated financial statements. Summarised financial
information of the joint venture, based on its Australian Accounting Standards financial statements and a reconciliation to the carrying amount of
the investment in the consolidated financial statements are set out below:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net Assets
Proportion of the Consolidated Entity’s ownership
Share of the joint venture’s net assets
Goodwill
Joint venture accounting adjustments
Carrying amount of the investment
2016
$’000
2,129,475
5,883,456
2015
$’000
1,071,542
7,112,468
(6,460,885)
(3,302,339)
(2,166,636)
(5,255,325)
(614,590)
(373,654)
50%
50%
(307,295)
(186,827)
165,321
351,688
209,714
165,321
298,821
277,315
The carrying value of HTAL’s investment in VHA is predicated on the ongoing financial support from both of VHA’s shareholders. At 31 December 2016,
HTAL’s share of VHA’s net current assets deficiency is $2,165.7 million (2015: net current assets deficiency of $1,115.4 million). The increase is mainly
driven by reclassification of VHA’s Syndicated Bifurcated Facility from non-current liabilities to current liabilities as the facility is due to expire within
the 2017 financial year. Both of VHA’s ultimate shareholders, CKHH and Vodafone Group Plc have confirmed their current intention to jointly
provide financial support to enable VHA to meet its financial obligations as and when they fall due for a minimum period of twelve months from
the date of signing the VHA financial statements.
34
Note 7 Non-current assets – Investment accounted for using the equity method continued
Summarised statement of profit or loss and other comprehensive income of VHA
Revenues
Expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive loss
Changes in the fair value of cash flow hedges, net of tax
Total comprehensive loss
50% share of VHA’s loss for the year
Joint venture accounting adjustments
Share of joint venture’s loss
VHA’s financial statements include the following specific items:
Cash and cash equivalents
Current financial liabilities
Non-current financial liabilities
Depreciation and amortisation^
Interest income
Finance costs
Reconciliation of interest in a joint venture
Investment brought forward
Loss for the year
Share of change in fair value of cash flow hedges, net of tax
Interest in a joint venture at 31 December
VHA’s commitments
Operating leases
Other commitments
Capital commitments
VHA’s contingent liabilities
2016
$’000
2015
$’000
3,345,174
3,651,553
(3,586,936)
(4,081,721)
(241,762)
(430,168)
–
–
(241,762)
(430,168)
826
(240,936)
(120,881)
52,867
(68,014)
271,129
5,385,142
2,050,058
793,464
4,435
364,846
277,315
(68,014)
413
(1,650)
(431,818)
(215,084)
27,561
(187,523)
291,608
2,194,060
5,137,296
827,880
3,120
418,243
465,663
(187,523)
(825)
209,714
277,315
1,260,650
1,053,111
352,759
326,532
60,887
476,257
271,802
67,265
^
Depreciation and amortisation under HTAL accounting policies are $687.7 million for year ended 31 December 2016 (2015: $772.8 million). The differences
are primarily related to differences in the estimated economic useful lives of property, plant and equipment.
The consolidated financial statements incorporates the assets, liabilities and results of the following joint venture in accordance with the
accounting policy described in note 1(b):
Name of entity
Vodafone Hutchison Australia Pty Limited **
(formerly Hutchison 3G Australia Pty Limited)
Country of
Incorporation
Class of
Shares
Australia
Ordinary
Equity Holding*
2016
%
50
2015
%
50
*
**
The proportion of ownership interest is equal to the proportion of voting power held.
The ownership of this joint venture is through Hutchison 3G Australia Holdings Pty Limited.
35
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Notes to the Financial Statements continued
Note 8 Controlled entities
The consolidated financial statements incorporates the assets, liabilities and results of the following controlled entities and joint venture in
accordance with the accounting policy described in note 1(b):
Name of Controlled Entity
Lindian Pty Limited
Hutchison 3G Australia Holdings Pty Limited**
*Equity Holding*
Country of
Incorporation
Australia
Australia
Class of
Shares
Ordinary
Ordinary
2016
%
100
100
* The proportion of ownership interest is equal to the proportion of voting power held.
**
This entity has been granted relief from the necessity to prepare financial reports in accordance with Class Order (98/1418) issued by the Australian
Securities and Investments Commission.
Note 9 Current liabilities – Payables
Other creditors
Payables to joint venture (note 17)
2016
$’000
215
62
277
Payables to a joint venture
Further information relating to payables to a joint venture is set out in note 17.
Foreign currency and interest rate risk
The carrying amounts of the Consolidated Entity’s trade and other payables are predominantly denominated in Australian Dollars:
Australian Dollars
2016
$’000
277
277
2015
%
100
100
2015
$’000
208
49
257
2015
$’000
257
257
Refer to note 22 for an analysis of the Consolidated Entity’s exposure to foreign currency risk in relation to trade and other payables. A summarised
analysis of the sensitivity of trade payables to foreign exchange and interest rate risk can be found in note 22.
Note 10 Current liabilities – Other financial liabilities
Loan from an entity within the CKHH Group (note 17)
2016
$’000
2015
$’000
136,862
241,862
Loan from an entity within the CKHH Group
Further information relating to the loan from an entity within the CKHH Group is set out in note 17. The loan from an entity within the CKHH Group
is an interest free financing facility and is repayable on demand.
Financing arrangements
Unrestricted access was available at the statement of financial position date to the following lines of credit:
Other financial liabilities
Total facilities from an entity within the CKHH Group
Used at the statement of financial position date
Unused at the statement of financial position date
36
2016
$’000
2015
$’000
1,600,000
(136,862)
1,463,138
1,600,000
(241,862)
1,358,138
Note 11 Contributed equity
Share capital
Ordinary shares (fully paid)
2016
Shares
2015
Shares
2016
$’000
2015
$’000
13,572,508,577
13,572,508,577
4,204,488
4,204,488
(a) Share capital
Ordinary shares entitle the holder to participate in dividends and proceeds on winding up of the company in proportion to the number of and
amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote.
(b) Movement in ordinary shares
There has been no movement in the number of shares issued during the years ended 31 December 2016 and 31 December 2015.
(c) Options
There are no options outstanding as at the statement of financial position date.
(d) Capital risk management
The Consolidated Entity’s objectives when managing capital is to safeguard its ability to continue as a going concern as discussed in note 1(a).
Management also maintain an optimal capital structure to reduce the cost of capital.
The Consolidated Entity monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt
is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘Total equity’ as shown in the statement of financial
position plus net debt.
The gearing ratios at 31 December 2016 and 31 December 2015 were as follows:
Total payables, borrowings and other financial liabilities
Less: cash and cash equivalents (note 5)
Net debt
Total equity
Total capital
Gearing ratio
2016
$’000
137,139
(4,469)
132,670
125,956
258,626
51%
2015
$’000
242,119
(5,318)
236,801
188,996
425,797
56%
37
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 12 Reserves and accumulated losses
(a) Reserves
Capital reserve
Share of hedging reserve – cash flow hedges
Share-based payments reserve
Movements:
Capital reserve
There has been no movement in the capital reserve during the year.
Share of hedging reserve – cash flow hedges
Balance at 1 January
Hedging movement, net of tax
Balance at 31 December
Share-based payments reserve
There has been no movement in the share-based payments reserve during the year.
(b) Accumulated losses
Accumulated losses at 1 January
Loss attributable to the members of Hutchison Telecommunications (Australia) Limited
Accumulated losses at 31 December
2016
$’000
54,887
90
15,880
70,857
2015
$’000
54,887
(323)
15,880
70,444
(323)
413
90
502
(825)
(323)
(4,085,936)
(3,903,068)
(63,453)
(182,868)
(4,149,389)
(4,085,936)
(c) Nature and purpose of reserves
Capital reserve
The capital reserve relates to the surplus arising on initial consolidation of a 19.9% stake in Hutchison 3G Australia Holdings Pty Limited.
Hedging reserve – cash flow hedges
The hedging reserve is used to record gains and losses on a hedging instrument in a joint venture cash flow hedge that are recognised directly
in equity, as described in note 1(i)(ii).
Amounts are recognised in the statement of profit or loss and other comprehensive income when the associated hedged transaction affects
profit or loss.
Share-based payments reserve
The share-based payments reserve is used to:
(i) recognise the grant date fair value of options issued to employees but not exercised; and
(ii) recognise the fair value of the 850 MHz spectrum licence assigned from Telecom New Zealand (“TCNZ”). The fair value was determined by
reference to the fair value of the option granted to TCNZ in exchange for the spectrum licence.
38
Note 13 Director and key management personnel compensation
(a) Director and key management personnel compensation
Short term employee benefits
Other key management personnel (excluding Directors) were transferred to VHA on merger.
2016
$
2015
$
109,500
109,500
(b) Loans to key management personnel
There were no loans made to Directors of the Company, including their personally-related entities, during the years ended 31 December 2016 and
31 December 2015.
(c) Other transactions with key management personnel
There were no other transactions with the Directors of the Company for the years ended 31 December 2016 and 31 December 2015.
Note 14 Remuneration of auditors
PricewaterhouseCoopers Australia
Assurance services
Audit services
Audit and review of financial reports and other audit work under the Corporations Act 2001
Total remuneration for assurance services
Total auditors remuneration
2016
$
2015
$
107,000
107,000
107,000
95,665
95,665
95,665
It is the Consolidated Entity’s policy to employ the auditors on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Consolidated Entity are important. These assignments are principally tax, compliance and advice. It is the
Consolidated Entity’s policy to seek competitive tenders for all major consulting projects.
Note 15 Contingencies
Details and estimates of maximum amounts of contingent liabilities as at 31 December 2016 are as follows:
2016
$’000
2015
$’000
Guarantees
Unsecured guarantees in respect of leases held by a joint venture
–
28
No material losses are anticipated in respect of any of the above contingent liabilities.
The Directors are not aware of any other material contingent liabilities existing at the reporting date.
Note 16 Commitments
There were no commitments contracted for but not recognised as liabilities, payable at 31 December 2016 and 31 December 2015, except for as
disclosed in note 7.
Note 17 Related party transactions
(a) Parent entities
The holding company and parent entity is Hutchison Telecommunications (Amsterdam) B.V. which, at 31 December 2016, owns approximately
88% of the issued ordinary shares of Hutchison Telecommunications (Australia) Limited. The ultimate parent entity is CK Hutchison Holdings
Limited (incorporated in Cayman Islands).
39
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Notes to the Financial Statements continued
Note 17 Related party transactions continued
(b) Directors
The names of persons who were Directors of the Company at any time during the financial year are as follows: FOK Kin Ning, Canning;
Barry ROBERTS-THOMSON; Justin Herbert GARDENER; LAI Kai Ming, Dominic; John Michael SCANLON; Frank John SIXT, Ronald Joseph SPITHILL and
WOO Chiu Man, Cliff.
Mrs Chow Woo Mo Fong, Susan retired as director with effect from 1 August 2016.
Mr Woo Chiu Man, Cliff was appointed as director with effect from 1 August 2016 and continues in office at the date of this report.
Ms Tang Wing Yee, Angeline was appointed as Alternate Director to Mrs Chow Woo Mo Fong, Susan with effect from 29 April 2016 until the
retirement of Mrs Chow Woo Mo Fong, Susan on 1 August 2016.
(c) Key management personnel compensation
Disclosures relating to key management personnel compensation are set out in note 13.
(d) Transactions with related parties
During the year, the following transactions occurred with related parties:
Loans to related parties
Advanced to joint venture
Repayments from joint venture
Loans from related parties
Advanced from an entity within the CKHH Group
Repayments to an entity within the CKHH Group
Interest revenue
Joint venture
Operating expenses
Joint venture
2016
$’000
2015
$’000
–
100,000
100,000
–
–
100,000
105,000
–
5,701
5,948
485
578
Advances to the joint venture represent funds advanced under the terms of an agreement with the joint venture. The funds advanced from an
entity within the CKHH Group are on an interest free basis under the agreement.
(e) Outstanding balances
The following balances are outstanding at the statement of financial position date in relation to transactions with related parties:
Current financial assets
Joint venture (note 6)
Non-current financial assets
Joint venture (note 6)
Payables
Joint venture (note 9)
Current liabilities – Other financial liabilities
Entity within the CKHH Group (note 10)
2016
$’000
2015
$’000
48,906
136,676
–
62
11,801
49
136,862
241,862
No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad
or doubtful debts due from related parties.
(f) Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates, except interest on some loans between the parties
that are interest free.
40
Note 18 Deed of cross guarantee
During the year ended 31 December 2007, the Company, Hutchison 3G Australia Holdings Pty Limited (“H3GAH”) and Hutchison 3G Australia Pty
Limited (“H3GA”) entered into a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed
of cross guarantee, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’ report under
Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.
On 10 June 2009, the Company announced that the merger of its subsidiary H3GA with Vodafone Australia Limited had completed. H3GA has
been renamed VHA. As a result the parties to the deed of cross guarantee are now the Company and H3GAH.
(a) Closed Group consolidated statement of profit or loss and other comprehensive income and a summary
of movements in the Closed Group consolidated retained earnings
HTAL and H3GAH represented a ‘Closed Group’ for the purposes of the Class Order. As there are no other parties to the deed of cross guarantee
that are controlled by HTAL, H3GAH also represents the ‘Extended Closed Group’.
Set out below is the Closed Group consolidated statement of profit or loss and other comprehensive income and a summary of movements in the
Closed Group consolidated accumulated losses for the years ended 31 December 2016 and 31 December 2015.
Statement of profit or loss and other comprehensive income
Revenue
Other operating expenses
Impairment loss in investment held within the Closed Group
Finance costs
Income (loss) before income tax
Income tax expense
Income (loss) for the year
Share of movements in consolidated accumulated losses
Accumulated losses at the beginning of the financial year
Income (loss) for the year
Accumulated losses at the end of the financial year
2016
$’000
5,807
(1,246)
–
–
4,561
–
4,561
2015
$’000
6,028
(1,299)
(188,348)
(4)
(183,623)
(70)
(183,693)
(4,086,259)
(3,902,566)
4,561
(183,693)
(4,081,698)
(4,086,259)
41
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 18 Deed of cross guarantee continued
(b) Statement of financial position
Set out below is a statement of financial position as at 31 December 2016 of the Closed Group consisting of H3GAH and HTAL.
2016
$’000
2015
$’000
4,469
48,906
6
53,381
277,315
277,315
330,696
277
136,862
137,139
137,139
193,557
5,318
136,676
5
141,999
289,116
289,116
431,115
257
241,862
242,119
242,119
188,996
4,204,488
4,204,488
70,767
70,767
(4,081,698)
(4,086,259)
193,557
188,996
ASSETS
Current Assets
Cash and cash equivalents
Other financial assets
Trade receivables
Total Current Assets
Non-current Assets
Other financial assets
Total Non-current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Other financial liabilities
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
42
Note 19 Segment reporting
The Consolidated Entity has identified its operating segment based on the internal reports that are reviewed and used by the executive
management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
In 2016, the Consolidated Entity continued to invest in an operator within the telecommunications industry.
The chief operating decision maker of the Consolidated Entity receives information to manage its operations and investment based on one
operating segment, an investor in an operator of telecommunications services. As such, the Consolidated Entity believes it is appropriate that
there is one operating segment, investment in telecommunications services.
Key financial information used by the chief operating decision maker of the Consolidated Entity when evaluating the investment in
telecommunications services operating segment includes:
HTAL’s share of the following items of VHA*
Total Revenue
Net Losses
2016
$m
1,673
68
2015
$m
1,826
188
Further information reviewed by the chief operating decision maker with regards to the performance of the Consolidated Entity’s investment in
VHA is disclosed in note 7.
*
after joint venture accounting adjustments
Note 20 Reconciliation of loss after income tax to net cash inflows from operating
activities
Loss after income tax
Share of losses of joint venture partnership accounted for using equity method
Change in operating assets and liabilities
Increase in other financial assets
Decrease in deferred tax assets
Increase in payables
Net cash inflows from operating activities
Notes
7
4
2016
$’000
(63,453)
68,014
(430)
–
20
4,151
2015
$’000
(182,868)
187,523
(1,233)
70
11
3,503
43
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016
Notes to the Financial Statements continued
Note 21 Earnings per share
(a) Basic earnings per share
2016
Cents
2015
Cents
Loss attributable to the ordinary equity holders of the Consolidated Entity
(0.47)
(1.35)
(b) Diluted earnings per share
Loss attributable to the ordinary equity holders of the Consolidated Entity
(0.47)
(1.35)
Consolidated
2016
$’000
2015
$’000
(c) Earnings used in calculating earnings per share
Basic earnings per share
Loss attributable to the ordinary equity holders of the Consolidated Entity used in calculating
basic earnings per share
(63,453)
(182,868)
Diluted earnings per share
Loss attributable to the ordinary equity holders of the Consolidated Entity used in calculating
diluted earnings per share
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share
(63,453)
(182,868)
Consolidated
2016
Number
2015
Number
13,572,508,577
13,572,508,577
13,572,508,577
13,572,508,577
There were no (2015: nil) options outstanding at 31 December 2016 that are anti-dilutive and accordingly there was no impact on the earnings per
share calculation for the year ended 31 December 2016.
44
Note 22 Financial risk management
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk
and liquidity risk. The Consolidated Entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity. It is the Consolidated Entity’s policy not to enter into
derivative transactions for speculative purposes. It is also the Group’s policy not to invest liquidity in financial products, including hedge funds or
similar vehicles, with significant underlying leverage or derivative exposure.
Risk management is carried out by a central treasury department within CKHH on behalf of HTAL under policies approved by the Board of
Directors. Treasury operates as a centralised service for managing financial risks, including interest rate and foreign exchange risks. Treasury
identifies, evaluates and hedges financial risks in close co-operation with the Consolidated Entity’s operating units. The Board provides written
principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use
of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(a) Market risk
For the presentation of market risks (including interest rate risk, exchange rate risk and market price risk), AASB 7 “Financial instruments: disclosures”
requires disclosure of a sensitivity analysis for each type of market risk that show the effects of a hypothetical change in the relevant market risk
variable to which the Group is exposed at the reporting date on profit or loss and total equity.
The effect that is disclosed in the following sections assumes that (a) a hypothetical change of the relevant risk variable had occurred at the
reporting date and had been applied to the relevant risk variable in existence on that date; and (b) the sensitivity analysis for each type of market
risk does not reflect inter-dependencies between risk variables, e.g. the interest rate sensitivity analysis does not take into account of the impact
of changes in interest rates would have on the relative strengthening and weakening of the currency with other currencies.
The preparation and presentation of the sensitivity analysis on market risk is solely for compliance with AASB 7 disclosure requirements in
respect of financial instruments. The sensitivity analysis measures changes in the fair value and/or cash flows of the Group’s financial instruments
from hypothetical instantaneous changes in one risk variable (e.g. functional currency rate or interest rate), the amount so generated from the
sensitivity analysis are what-if forward-looking estimates. The sensitivity analyses are for illustration purposes only and it should be noted
that in practice market rates rarely change in isolation. Actual results in the future may differ materially from the sensitivity analyses due to
developments in the global markets which may cause fluctuations in market rates (e.g. exchange or interest rate) to vary and therefore it is
important to note that the hypothetical amounts so generated do not represent a projection of likely future events and profits or losses.
(i) Interest risk
The Consolidated Entity’s main interest rate risk arises from cash balances and other financial assets.
(ii) Summarised sensitivity analysis
The following table summarises the sensitivity of the Consolidated Entity’s financial assets and financial liabilities to interest rate risk, foreign
exchange risk and other price risk.
Interest rate risk
Foreign exchange risk
-1%
+1%
-10%
+10%
Carrying
amount
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
31/12/2016
Financial assets
Cash and cash equivalents
Other financial assets
Total increase (decrease)
4,469
48,906
53,375
(45)
(361)
(406)
–
–
–
45
361
406
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Interest rate risk
Foreign exchange risk
-1%
+1%
-10%
+10%
Carrying
amount
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
31/12/2015
Financial assets
Cash and cash equivalents
Other financial assets
Total increase (decrease)
5,318
148,477
153,795
(53)
(1,367)
(1,420)
–
–
–
53
1,367
1,420
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
45
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements continued
Note 22 Financial risk management continued
(b) Credit risk
Credit risk is managed on an entity basis. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as
credit exposures to related parties. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.
Credit risk further arises in relation to financial guarantees given to certain parties (see note 15 for details). Such guarantees are only provided in
exceptional circumstances and are subject to board approval.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate
amount of committed credit facilities and the support from related parties.
The Consolidated Entity manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles
of financial assets and liabilities. Treasury aims at maintaining flexibility in funding by keeping committed credit lines available with a variety of
counterparties. Surplus funds are generally only invested in instruments that are tradeable in highly liquid markets.
The table below analyses the Consolidated Entity’s financial assets and liabilities relevant maturity groupings based on the remaining period at
the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due
within 12 months equal their carrying balances, as the impact of discounting is not significant.
31/12/2016
Cash and cash equivalents
Other financial assets
Payables
Other financial liabilities
Total
31/12/2015
Cash and cash equivalents
Other financial assets
Payables
Other financial liabilities
Total
Weighted
average
interest rate
2.1%
4.8%
–
–
Weighted
average
interest rate
2.3%
4.8%
–
–
Less than
1 year
$’000
4,469
48,906
(277)
(136,862)
(83,764)
Less than
1 year
$’000
5,318
136,676
(257)
(241,862)
(100,125)
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Over
5 years
$’000
–
–
–
–
–
–
–
–
–
–
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Over
5 years
$’000
–
11,801
–
–
11,801
Total
$’000
4,469
48,906
(277)
(136,862)
(83,764)
Total
$’000
5,318
148,477
(257)
(241,862)
(88,324)
Note 23 Events occurring after the reporting date
There has been no other matter or circumstance that has arisen subsequent to the reporting date that has significantly affected, or may
significantly affect:
(i) the operations of the Company in future financial years, or
(ii) the results of those operations in future financial years, or
(iii) the state of affairs of the Company in future financial years.
46
Note 24 Parent entity disclosures
(a) Summary financial information
Financial position
ASSETS
Current Assets
Non-current Assets
Total Assets
LIABILITIES
Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
Financial performance
Loss for the year
Total comprehensive loss for the year
(b) Guarantees entered into by the parent entity
2016
$’000
2015
$’000
53,381
277,315
330,696
137,139
137,139
193,557
141,999
289,116
431,115
242,119
242,119
188,996
4,204,488
4,204,488
15,880
15,880
(4,026,811)
(4,031,372)
193,557
188,996
4,561
4,561
2016
$’000
(183,693)
(183,693)
2015
$’000
Guarantees
Unsecured guarantees in respect of leases held by the joint venture
–
28
(c) Commitments
Operating leases
There were no commitments contracted for but not recognised as liabilities, payable at 31 December 2016 and 31 December 2015.
The Directors of the parent entity are not aware of any other material contingent liabilities existing at the reporting date.
As at 31 December 2016, the Parent Entity has a deficiency of net current assets of $84 million (2015: deficiency of net current assets of $100 million).
Included in the Parent Entity’s current liabilities is an amount of $137 million (2015: $242 million) which relates to an interest free financing facility
provided from a subsidiary of the ultimate parent entity, CKHH, which is repayable on demand. The Parent Entity has unused financing facilities of
$1,463 million at 31 December 2016. CKHH has confirmed its current intention to provide sufficient financial support to enable the Parent Entity to
meet its financial obligations as and when they fall due. This undertaking is provided for a minimum period of twelve months from the date of signing
these financial statements. Consequently, the Directors have prepared the financial statements on a going concern basis.
(d) Impairment in HTAL’s investment in H3GAH
Impairment loss
Investment in H3GAH
2016
$’000
2015
$’000
–
188,348
As a result of solid growth in HTAL’s investment in H3GAH, its recoverable amount is greater than its book value in the parent entity. In 2016, $nil
(2015: $188 million) impairment loss in HTAL’s investment in H3GAH has been written down in its separate parent entity financial statements.
47
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Directors’ Declaration
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 23 to 47 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2016 and of its performance for the financial
year ended on that date; and
(b) there are reasonable grounds to believe that Hutchison Telecommunications (Australia) Limited will be able to pay its debts as and when they
become due and payable; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group identified in note 18
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described
in note 18.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by International
Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer of Vodafone Hutchison Australia Pty
Limited required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Director
23 February 2017
Director
23 February 2017
48
Independent Auditor’s Report
49
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Independent Auditor’s Report continued
50
51
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Independent Auditor’s Report continued
52
53
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Shareholder Information
The shareholder information set out below was applicable as at 23 February 2017.
Substantial shareholders
Substantial shareholders in the Company are:
Shareholder
CK Hutchison Holdings Limited and its subsidiaries#
Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust##
Vodafone Group Plc and subsidiaries*
Spark New Zealand Trading Limited** and Telecom Corporation of New Zealand Limited
Shareholding
12,009,393,175
12,009,393,175
12,009,393,175
1,357,250,858
%
Issued Capital
88.48
88.48
88.48
10.00
Notes:
#
##
*
Substantial shareholding includes relevant interest arising from an equitable mortgage of shares from Leanrose Pty Limited.
Substantial shareholding arises solely because Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust is the registered
holder of 25.97% of the shares in CK Hutchison Holdings Limited and therefore has a relevant interest in the same shares in the Company in which CK
Hutchison Holdings Limited has a relevant interest. Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust or otherwise
does not hold any shares in the Company.
Substantial shareholding arises solely as a result of the relevant interests which Vodafone Group Plc and its subsidiaries have in shares in the Company
in which CK Hutchison Holdings Limited and its subsidiaries have a relevant interest. Vodafone Group Plc’s relevant interests arise under a Shareholders
Agreement between Vodafone Group Plc, Hutchison Whampa Limited (currently a subsidiary of CK Hutchison Holdings Limited) and other parties in
relation to Vodafone Hutchison Australia Pty Limited. The acquisitions of such relevant interests were approved by shareholders on 2 April 2009. None of
Vodafone Group Plc or any of its subsidiaries holds any shares in the Company.
**
Spark New Zealand Trading Limited is the entity resulting from the amalgamation of Telecom 3G (Australia) Limited, Telecom New Zealand International
Limited and Spark New Zealand Trading Limited that occurred on 29 July 2016.
Distribution of equity securities
Range
1–1000
1,001–5,000
5,001–10,000
10,001–100,000
100,001–OVER
Total
There were 4,070 holders of less than a marketable parcel of ordinary shares.
Number of Shareholders
1,402
2,379
859
1,139
262
6,041
54
Twenty largest shareholders
The names of the 20 largest holders of quoted ordinary shares as at 23 February 2017 are as follows:
Shareholder
Hutchison Telecommunications (Amsterdam) B.V.
Spark New Zealand Trading Limited
Leanrose Pty Limited
JP Morgan Nominees Australia
HSBC Custody Nominees (Australia) Limited
Dimitrios Piliouras & Konstantina Piliouras
George Thomson
Kenneth Kin Kau Heung & Rene Conrad Heung
Citicorp Nominees Pty Limited
Arjee Pty Ltd
Yet Kwong Chiang & Ho Yuk Lin Chiang
George Thomson (Thomson Superfund A/C)
William Charles Wheelahan
Yim Fong Leung
Justin Herbert Gardener & Anne Louise Gardener
Yi Wei Sun
Bin Lui
Ping Ping Lu
Kurt Ruegg & Ursula Ruegg
Rene H Investments Pty Limited
Shareholding
11,925,479,378
1,357,250,858
83,913,797
10,163,199
8,941,016
8,500,000
7,032,251
4,830,000
4,052,766
4,033,575
2,700,138
2,494,146
2,438,049
2,255,000
1,957,358
1,900,000
1,880,000
1,620,000
1,500,000
1,470,000
% Issued
Capital
87.87
10.00
0.62
0.07
0.07
0.06
0.05
0.04
0.03
0.03
0.02
0.02
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.01
Voting rights
The voting rights attaching to each class of equity securities are:
Ordinary shares
On a show of hands, every member present, in person or by proxy, attorney or representative, has one vote.
On a poll every member has one vote for each share.
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
55
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 Corporate Directory
Directors
Fok Kin Ning, Canning
Barry Roberts-Thomson
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Ronald Joseph Spithill
Woo Chiu Man, Cliff
Company Secretaries
Edith Shih
Louise Sexton
Investor Relations
Tel: 133 121
Email: investors@hutchison.com.au
www.hutchison.com.au
Registered Office
Level 1, 177 Pacific Highway
North Sydney NSW 2060
Tel: 133 121
www.hutchison.com.au
Share Registry
Link Market Services
Level 12, 680 George Street
Sydney NSW 2000
Tel: (02) 8280 7111
www.linkmarketservices.com.au
Auditor
PricewaterhouseCoopers
Darling Park Tower 2
201 Sussex Street
GPO Box 2650
Sydney NSW 1171
Securities Exchange Listing
HTAL shares are listed on the Australian Securities Exchange (ASX)
ASX Code: HTA
Notice of Annual General Meeting
The Annual General Meeting of HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Date: 28 April 2017
Time: 10.00 am
56
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED ANNUAL REPORT 2016 H
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