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2020
Annual Report
Contents
Ownership structure
Financial Summary
Chairman’s Message
Board of Directors
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Financial Report
Independent Auditor’s Report
Shareholder Information
Corporate Directory
2
3
4
6
8
15
23
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56
62
64
AGM Details
The Annual General Meeting
of HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Friday 7 May 2021 at 10.00 am Sydney time
D
ABN 15 003 677 227
HUTCHISON TELECOMMUNICATIONS (AUSTRALIA) LIMITED
(ASX: HTA) (HTAL)
WHO WE ARE
Hutchison Telecommunications (Australia) Limited (HTAL or the Company) (ASX:HTA) has a 25.05%
equity interest in TPG Telecom Limited (ASX: TPG) (TPG) (formerly named Vodafone Hutchison
Australia Limited (VHA)). This comprises 11.14% directly held by Hutchison 3G Australia Holdings
Pty Limited (“H3GAH”, a wholly owned subsidiary of HTAL) and an attributed 13.91% indirectly held
by H3GAH through Vodafone Hutchison (Australia) Holdings Limited, a company domiciled in the
United Kingdom in which H3GAH has a 50% shareholding.
TPG operates a number of leading mobile and internet brands including Vodafone, TPG, iiNet,
Internode, Lebara and AAPT, providing consumers with a comprehensive portfolio of fixed and
mobile products in the Australian telecommunications market.
1999
2003
2009
2020
HTAL was listed on the ASX.
HTAL launched Australia’s first 3G service
under the 3 brand.
HTAL’s operations were merged with
Vodafone Australia to form VHA.
VHA merged with TPG Telecom Limited
creating the present TPG.
Annual Report 2020
1
1
OWNERSHIP STRUCTURE
Hutchison Telecommunications (Australia) Limited (HTAL)
listed on the Australian Securities Exchange in August 1999.
CK HUTCHISON
HOLDINGS LIMITED
87.87%*
SPARK
NEW ZEALAND
TRADING LIMITED
10%
PUBLIC
SHAREHOLDERS
2.13%
2
HUTCHISON
TELECOMMUNICATIONS
(AUSTRALIA)
LIMITED
(ASX:HTA)
VODAFONE
GROUP
PLC
50%*
50%*
VODAFONE
HUTCHISON
(AUSTRALIA)
HOLDINGS
LIMITED
11.14%*
27.82%
11.14%*
TPG TELECOM
LIMITED
(ASX:TPG)
%* INDIRECT OWNERSHIP
Hutchison Telecommunications (Australia) Limited
FINANCIAL SUMMARY
HTAL – Financial Summary
Revenue from ordinary activities
Profit/(loss) from ordinary activities
after tax attributable to members
Net profit/(loss) for the year
attributable to members
Dec 20
($’000)
1,272
Dec 19
($’000)
5,697
Movement
($’000)
(4,425)
Movement
(%)
(78%)
825,441
(154,870)
980,311
825,441
(154,870)
980,311
633%
633%
TPG – Financial Metrics
The items below represent the share of TPG attributable to HTAL.
Total revenue ($m)
EBITDA ($m)3
Share of net (loss)/profit
of TPG ($m)4
2020
Pre-merger1
Post-merger2
742.5
256.4
717.7
220.0
Total
1,460.2
476.4
2019
1,761.7
589.4
YoY change
(%)
(17.1%)
(19.2%)
(358.6)
148.3
(210.3)
(159.1)
32.2%
Notes:
1
Pre-merger results represent the period between 1 January 2020 and 26 June 2020.
2 Post-merger results represent the period between 27 June 2020 and 31 December 2020.
3 EBITDA is defined as earnings before net finance costs, tax and depreciation and amortisation.
4 Reconciliation for the share of net loss of TPG is set out on page 40.
33
Annual Report 2020 CHAIRMAN’S MESSAGE
Hutchison Telecommunications (Australia) Limited
(“HTAL” or the “Company”) (ASX: HTA) accounts for
its investments in TPG Telecom Limited (“TPG”) and
Vodafone Hutchison (Australia) Holdings Limited
(“VHAH”) using the equity method of accounting.
Under this method, revenue from TPG’s and VHAH’s
ordinary activities are not included in HTAL’s
consolidated revenues from ordinary activities.
HTAL 2020 Financial Results
HTAL’s revenue from ordinary activities represents interest
income received on loans made to TPG. HTAL’s revenue from
ordinary activities for the year ended 31 December 2020
decreased from $5.7 million in the corresponding period
last year to $1.3 million, due to the decrease in shareholder
loan balances provided to TPG. The shareholder loan was
repaid post 30 June 2020, on 3 July 2020.
No dividend income was received from TPG during the
period. HTAL’s other operating expenses for the year ended
31 December 2020 remained at the similar level of the
corresponding period at $1.4 million. Loss for year ended
31 December 2020 before the share of results of equity
accounted investments and one off dilution gain of interest
in joint venture amounted to $0.2 million. This is compared
with a profit in the corresponding period last year of
$4.3 million reflecting a lower interest income for the period
as mentioned above.
Completion of Merger
On 26 June 2020, the merger between Vodafone Hutchison
Australia Limited (“VHA”) and TPG Corporation Limited
(formerly named TPG Telecom Limited) (“TPM”) was
sanctioned by the Supreme Court of New South Wales and
became effective under Australian Accounting Standards.
On 29 June 2020, VHA renamed to TPG and listed on the
Australian Securities Exchange (“ASX”) on 30 June 2020.
On 26 June 2020, HTAL’s ownership interest percentage
effectively changed from 50% to 25.05%, giving rise to a
gross dilution gain of $1,036 million. This required HTAL
to recognise previously unrecognised share of losses in
VHA of $358.6 million during the period.
As part of its merger implementation activities, VHA, HTAL
and Vodafone Group Plc (“Vodafone Group”) were required
to restructure the existing VHA debt, which involved the
transfer of Vodafone Hutchison Finance Pty Limited (“VHF”)
which held external debt of $4,475 million in return for
VHA shares (of which Hutchison 3G Australia Holdings
Pty Limited (“H3GAH”) (HTAL’s wholly owned subsidiary),
through its 50% ownership of VHAH effectively owned
shares valued at $2,237 million).
4
Hutchison Telecommunications (Australia) Limited VHAH, is 50% owned by H3GAH and which H3GAH jointly
controls with Vodafone Europe B.V. (“VEBV”). HTAL’s
50% investment in VHAH has been accounted for in the
consolidated financial reports using the equity method.
On 9 July 2020, VHF became a wholly owned subsidiary
of VHAH. Refer to Note 1 (t) (iii) Dilution Accounting, under
Critical accounting estimates and judgements, for further
understanding of the debt restructure.
On 14 July 2020, upon completion of all merger
implementation and debt restructuring activities, HTAL’s
25.05% ownership comprises of 11.14% directly held
by H3GAH, and an attributed 13.91% indirectly held by
H3GAH through VHAH.
Under the TPG Scheme Implementation Deed, HTAL and
its wholly-owned subsidiary, H3GAH and Vodafone Group
Plc and its relevant subsidiaries entered into an escrow deed
under which, subject to certain exceptions, they must not
dispose, directly or indirectly, of any of their TPG shares for
a period of 24 months following merger implementation.
Furthermore, the VHAH shareholders’ agreement entered into
between HTAL, Vodafone Group Plc, VHAH and others dated
24 June 2020: (i) places restrictions on direct and indirect
transfers of shares in VHAH for a period of 2 years from the
merger implementation, and (ii) places restrictions on VHAH
from selling its shares in TPG for a period of 2 years from
merger implementation and also provides that, at on expiry
of 3 years from the merger implementation, either VHAH
shareholder group may require VHAH to sell no more than
10% of VHAH’s TPG shares in any 9-month period subject
to the other shareholder group having a right of first offer to
purchase the shares prior to them being sold to a third party.
Following the merger between VHA and TPM, TPG
generated $342 million of net cash flow in first six months
with continued support from CK Hutchison Holdings Limited
(“CKHH”) and its other shareholders.
Key 2020 achievements and highlights of TPG
In 2020, TPG:
– implemented the merger between VHA and TPM,
delivering increased competition, innovation and
enhanced network services under a unified and
experienced senior management team;
– carefully navigated COVID-19 and regulatory
challenges to its operations;
– introduced 5G technology into its network;
– continued to provide great value and service to
its customers;
– made good progress on its merger integration plans; and
– delivered a maiden dividend of 7.5 cents per share to
its shareholders.
TPG is fast-tracking its 5G mobile rollout, with 5G services
now available in more than 350 suburbs in Sydney,
Melbourne, Brisbane, Perth, Adelaide, Canberra, the Gold
Coast and Newcastle and around 1,600 sites in the planning
and design phase.
During 2020, TPG achieved net growth of 415,000 National
Broadband Network (“NBN”) subscribers, introduced highly
competitive mobile and fixed products and offers and
launched infinite data mobile plans with higher speed tiers
and felix, TPG’s carbon neutral, 100% powered by renewable
electricity digital-native brand, bringing innovation and more
value to its customers.
On the technology side, more than 1.8 million Australians
are benefiting from enhanced mobile performance after
TPG deployed 1800 MHz spectrum to around 320 sites
around Australia.
TPG is nearing completion of a program to integrate
around 400 small cells into the mobile network in Sydney,
Melbourne, Brisbane and Adelaide.
TPG’s program to connect an additional 700 mobile
sites to dark fibre is ahead of schedule and around 60%
of iiNet mobile customers have so far migrated to TPG’s
mobile network.
During 2020, total data traffic on TPG’s mobile network
grew 12% to 611 million Gigabytes from 545 million Gigabytes
in 2019 as customers continued to stream, browse and share
more on their smartphones, mobile devices and tablets.
TPG 2020 financial results
As the merger between VHA and TPM was effective for
accounting purposes on 26 June 2020, TPG’s reported
results for 2020 include a full 12 months of VHA and
a contribution of 6 months and 4 days from TPM.
TPG’s reported revenue for the year ended 31 December 2020
increased 24% from 2019 to $4.35 billion and reported
EBITDA increased by 18% to $1.39 billion.
TPG’s NPAT of $734 million includes a one-off, non-cash
credit to income tax expense of $820 million.
In the first six months’ post-merger, the TPG group
has generated $342 million of net cash flow.
TPG’s results demonstrate that despite the impact
of COVID-19, especially global travel restrictions, continued
NBN headwinds, on-going mobile competition and
regulatory challenges, TPG has delivered for its customers
and shareholders.
Outlook
Reduced roaming revenue and the absence of international
visitors (attributable to global travel restrictions) will
continue to impact TPG’s business, as will the on-going
NBN headwinds and the introduction of the Regional
Broadband Scheme Levy.
However, TPG is confident that its growth strategies and
synergy program will help to offset these and as a merged
entity, TPG is in a stronger position to respond to the
ongoing COVID-19 challenges and aggressive competition
in the mobile market.
TPG’s plans and targets for 2021 are ambitious and on
track. These include a target to achieve 85% 5G population
coverage in the top six cities by the end of 2021 using TPG’s
3.6 GHz spectrum and 700 MHz spectrum, together with
a new standalone core. In addition, TPG plans to achieve
more than $70 million in merger synergies.
HTAL remains committed to its investment in TPG and
will continue to support TPG in the future.
Fok Kin Ning, Canning
Chairman
55
Annual Report 2020 BOARD OF DIRECTORS
1.
2.
3.
4.
5.
6.
7.
8.
9.
6
1. FOK KIN NING, CANNING
(Chairman) BA, DFM, FCA (ANZ)
Fok Kin Ning, Canning, aged 69, has
been a Director since February 1999.
Mr Fok has been an executive director
and group co-managing director
of CKHH since 2015. He has been a
director of Cheung Kong (Holdings)
Limited and Hutchison Whampoa
Limited (“HWL”) since 1985 and 1984
respectively, both of which became
wholly owned subsidiaries of CKHH
in 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. He has also been
an executive director and deputy
chairman of CK Infrastructure Holdings
Limited (“CKI”) since 1997. Mr Fok has
also been a director of TPG (listed on
the Australian Securities Exchange on
30 June 2020, previously known as
Vodafone Hutchison Australia Limited)
(ASX: TPG) since 2001 and a director
of Cenovus Energy Inc. (“Cenovus
Energy”) since January 2021. The
aforementioned companies are either
the ultimate holding company of
HTAL, or subsidiaries or associated
companies of CKHH of which Mr Fok
has oversight. He was a co-chairman
from 2000 to December 2020 and has
been a director since 2000 of Husky
Energy Inc. (delisted on 5 January 2021
following its combination with Cenovus
Energy). He holds a Bachelor of Arts
degree and a Diploma in Financial
Management and is a Fellow of
Chartered Accountants Australia
and New Zealand.
2. BARRY ROBERTS-THOMSON
(Deputy Chairman)
Barry Roberts-Thomson, aged 71,
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.
Mr Roberts-Thomson has also served
as a director of TPG from 2001 until
his resignation in July 2020 and he
also serves as a director on HTAL’s
subsidiary, Hutchison 3G Australia
Holdings Pty Limited.
3. MELISSA ANASTASIOU
(Director)
Melissa Anastasiou, aged 49, has
been a Director since March 2020.
Ms Anastasiou is currently General
Counsel for Spark New Zealand
Limited (“Spark”) where she is
responsible for oversight of the legal
and compliance functions, providing
Spark with strategic legal and
commercial guidance, ensuring the
business acts lawfully and with the
utmost integrity. Ms Anastasiou joined
Spark in 2009 and undertook a range
of legal roles across the organisation
before being appointed as Group
General Counsel in 2012 and to the
Spark Leadership Squad on 1 July 2018.
Ms Anastasiou is the Executive
Sponsor for Spark’s Wholesale
business, a director on a number
of Spark subsidiary boards (including
Spark New Zealand Trading Limited
and Spark Finance Limited (NZX Listed
Issuer)) and has also played a pivotal
role in leading Spark’s diversity and
inclusion programme. Prior to joining
Spark, Ms Anastasiou spent a number
of years as a Senior Legal Counsel for
UK mobile provider Telefonica O2. She
also has extensive experience working
for leading corporate law firms in
Auckland and the UK. Ms Anastasiou
has a Bachelor of Laws from
Victoria University of Wellington.
4. SUSAN MO FONG CHOW, ALSO KNOWN
AS WOO MO FONG, SUSAN (ALIAS
CHOW WOO MO FONG, SUSAN)
(Director) BSc
Susan Mo Fong Chow, aged 67, has
been a Director since December 2019.
Mrs Chow has been a non-executive
director of CKHH since 2017. She
was an executive director and group
deputy managing director from June
2015 to July 2016 and senior advisor
from August 2016 to December 2016
of CKHH. From 1993 to 2016, she was
a director of HWL which became a
wholly owned subsidiary of CKHH in
2015. Prior to joining HWL, Mrs Chow
was a partner of Woo Kwan Lee
& Lo, a major law firm in Hong Kong.
Mrs Chow is an alternate director to
a director of CKI since 2006, HKEIML
as the trustee-manager of HKEI
Hutchison Telecommunications (Australia) Limited and HKEIL since 2014. She is an
independent non-executive director
of Hong Kong Exchanges and Clearing
Limited since May 2020. She previously
served as a member of the Listing
Committee of The Stock Exchange of
Hong Kong Limited, the Joint Liaison
Committee on Taxation of the Law
Society of Hong Kong, the Committee
on Real Estate Investment Trusts of
the Securities and Futures Commission,
the Trade and Industry Advisory Board,
the Court of the Hong Kong University
of Science and Technology and the
Appeal Boards Panel (Education).
Mrs Chow is a qualified solicitor
and holds a Bachelor’s degree in
Business Administration.
5. JUSTIN HERBERT GARDENER
(Director) BEc, FCA, AGIA
Justin Herbert Gardener, aged 84,
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 and holds a Bachelor
of Economics Degree.
6. LAI KAI MING, DOMINIC
(Director) BSc, MBA
Lai Kai Ming, Dominic, aged 67, has
been a Director since May 2004
and Alternate Director to Mr Sixt
since May 2006 and to Mr Fok since
December 2016. Mr Lai has been
an executive director and deputy
managing director of CKHH since
2015. He was finance director and chief
operating officer of the A.S. Watson
Group, the retail arm of CKHH, from
1994 to 1997 and group managing
director of the Harbour Plaza Hotel
Management Group, the former hotel
business of HWL, from 1998 to 2000.
Since 2000, he has been a director
of HWL which became a wholly owned
subsidiary of CKHH in 2015. Mr Lai has
been a non-executive director since
2009 and an alternate director to
directors since 2017 of HTHKH. He has
been an alternate director to a director
of TOM Group Limited (“TOM”) since
2016. He has been a member of the
board of commissioners of PT Duta
Intidaya Tbk (“PTDI”) since 2018.
The aforementioned companies are
either the ultimate holding company
of HTAL, or subsidiaries or associated
companies of CKHH of which Mr Lai
has oversight. He was a director
of TPG from October 2016 to
June 2020. Mr Lai has over 35 years
of management experience in different
industries. He holds a Bachelor of
Science (Hons) degree and a Master’s
degree in Business Administration.
7. JOHN MICHAEL SCANLON
(Director)
John Michael Scanlon, aged 79,
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.
8. FRANK JOHN SIXT
(Director) MA, LLL
Frank John Sixt, aged 69, has been
a Director since January 1998 and
Alternate Director to Mr Lai since
February 2008. Mr Sixt has been an
executive director, group finance
director and deputy managing director
of CKHH since 2015. Since 1991, he
has been a director of Cheung Kong
(Holdings) Limited and HWL, both
of which became wholly owned
subsidiaries of CKHH in 2015. He has
been chairman and a non-executive
director of TOM since 1999 and an
executive director of CKI since 1996.
He has been an alternate director
to a director of HKEIML as the
trustee-manager of HKEI and of HKEIL
since 2015. He has also been a director
of TPG since 2001 and a director of
Cenovus Energy since January 2021.
The aforementioned companies are
either the ultimate holding company
of HTAL, or subsidiaries or associated
companies of CKHH of which Mr Sixt
has oversight. He has almost four
decades of legal, global finance
and risk management experience,
and possesses deep expertise in
overseeing financial reporting systems,
risk management and internal control
systems as well as sustainability
issues and related risks. Mr Sixt has
also been a director of Husky Energy
(delisted on 5 January 2021 following
its combination with Cenovus Energy)
since 2000. 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.
9. WOO CHIU MAN, CLIFF
(Director) BSc
Woo Chiu Man, Cliff, aged 67, has
been a Director since August 2016.
Mr Woo has been an executive
director and chief executive officer
of HTHKH since 2017 and was
re-designated as co-deputy chairman
and a non-executive director of
HTHKH in 2018. He held various
senior technology management
positions in the telecommunications
industry before joining in 1998 the
group of HWL. He was deputy
managing director of Hutchison
Telecommunications (Hong Kong)
Limited from 2000 to 2004. He was
also an executive director of Hutchison
Telecommunications International
Limited in 2005. He was seconded
to TPG as chief technology officer
from 2012 to 2013 and was part of
the core management team. He was
an alternate director to a director of
TPG from October 2016 to June 2020.
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.
77
Annual Report 2020 CORPORATE GOVERNANCE
This Corporate Governance Statement is dated
25 February 2021 and has been approved by the Board
of the Company. Information about the Company and
its corporate governance including current policies and
charters are available on the Company’s website at
www.hutchison.com.au. The Company and its Directors are
committed to high standards of corporate governance. This
report reflects the main corporate governance practices
adopted by the Company and its subsidiaries (collectively,
the “Group”) during the 2020 financial year (“Reporting
Period”), noting where the Company does not comply with
the ASX Corporate Governance Council’s Principles and
Recommendations (4th edition) (“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 statement of values,
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 management in its implementation of the
Group’s strategic objectives, instilling of the Group’s
values and performance generally;
• overseeing the integrity of the Group’s accounting and
corporate reporting systems, including the external
audit, control and accountability systems;
• satisfying itself that the Group has in place an
appropriate risk management framework (for both
financial and non-financial risks) and setting the risk
appetite within which the Board expects management
to operate;
• satisfying itself that the Group’s remuneration policies
are aligned with its purpose, values, strategic objectives
and risk appetite;
• ensuring the business risks facing the Group are
identified and reviewing, ratifying and monitoring sound
systems of risk management and internal compliance
and control, codes of conduct and legal compliance;
• satisfying itself of the effectiveness of the governance
processes in place and that an appropriate framework
exists for relevant information to be reported by
management to the Board and whenever required,
challenging management and holding it to account;
• 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;
8
•
reviewing and approving annual financial plans and
monitoring corporate performance against both
short-term and long-term financial plans;
• appointing the chief executive officer, evaluating
performance and determining the remuneration of
senior executives and ensuring that appropriate policies
and procedures are in place for recruitment, training,
occupational health & safety, environmental issue
remuneration and succession planning; and
• delegating to the chief executive officer the authority to
manage and supervise the business of the Group with
senior executives and other management, including the
making of all decisions regarding the Group’s operations
that are not specifically reserved to the Board.
COMPOSITION OF THE BOARD
The Board comprises nine 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. Eight of the Directors, including the Chairman,
Mr Fok Kin Ning, Canning, are non-executives. One Director,
Mr Frank Sixt is considered to be an executive Director as
he is the person directly responsible to the Board in respect
of carrying out the Chief Executive Officer function and
Chief Financial Officer function pursuant to section 295A
of the Corporations Act 2001 (Cth). Mr Sixt is not formally
appointed to either role and accordingly, the Company does
not have “senior 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 Justin Herbert Gardener and Mr John Michael 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 service 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.
Hutchison Telecommunications (Australia) Limited 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 facilitates their
attendance at appropriate external seminars and information
sessions to help them to keep abreast of current trends
and issues facing the Group, including the latest changes in
the commercial (including industry-specific and innovative
changes), 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 2019
was undertaken at the beginning of 2020 and that for the
financial year ended 31 December 2020 has commenced.
The objective of such evaluation is to ensure that the Board,
its Committees and the Directors continue to act effectively
in fulfilling the duties and responsibilities expected of
them. It also includes an evaluation of whether there is
a need for existing Directors to undertake professional
development to maintain the skills and knowledge needed
to adequately perform their roles as Directors. The Company
does not employ any senior executives and accordingly,
no performance evaluation was conducted in respect of
senior executives.
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 SKILLS MATRIX
The Board has considered the mix of skills which are
appropriate for the Board as a whole, that is currently
required and that the Board would seek to maintain in its
membership. 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 individual Directors’ skills set, experience and
date of appointment are set out on pages 6 and 7 of the
Annual Report. Details of the executive and non-executive
Director remuneration are set out in the Remuneration
Report which forms part of the Directors’ Report on
pages 18 to 21.
Subject to the Company’s Constitution requirements in
relation to the retirement of Directors, the appointment of
all the current Directors will continue until the next Annual
General Meeting (“AGM”) in 2021, and will be automatically
renewed for successive 12-month periods unless otherwise
terminated. An election of Directors is held at the 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 are undertaken in areas such as education,
employment and character references, and the balance
of skills set 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 their familiarity with the Company, and its
core activities being its investment in TPG Telecom Limited
(“TPG”). Written agreements are in place with each of the
Directors setting out their terms of appointment.
In March 2020, Ms Melissa Anastasiou was appointed as
a non-executive Director following Mr Ronald Spithill’s
resignation. Prior to her appointment, the Company
undertook appropriate background checks. The Company
provided shareholders with all the relevant information in
its possession necessary for shareholders to consider voting
on Ms Anastasiou’s election at its 2020 AGM.
9
Annual Report 2020 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 three non-executive Directors,
a majority of whom are independent Directors 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 Principles. 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 6, 7 and 17 of the Annual Report.
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;
•
•
•
•
10
•
•
•
•
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 and make recommendations to the Board
regarding the adequacy of the Group’s processes for
managing risk and any changes that should be made
to the Group’s risk management framework or to the
risk appetite set by the Board;
to consider new and emerging sources of risk and the
risk controls and mitigation measures that management
has put in place to deal with those risks;
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.
The Board, prior to approving the full year results for
the year ended 31 December 2020, received a signed
declaration provided in accordance with section 295A of the
Corporations Act 2001 (Cth) by Mr Frank Sixt. The Company
did not receive a signed declaration in respect of the
half year results for the period ended 30 June 2020, but
anticipates to do so for future reporting periods.
In reviewing and approving periodic corporate reports for
the Company, the Audit & Risk Committee and Board relies
on a signed statement by persons responsible for preparing
and verifying information contained in such reports.
The appropriate persons are required to confirm that the
information contained in such corporate reports have been
validated with supporting documents including but not
limited to confirmation of balances with financial institutions,
contracts with business partners, and/or other source
documents maintained by the Company. The Company has
received signed verification statements for the Directors’
Report and operating review in respect of the half year and
annual reports during the Reporting Period.
GOVERNANCE, NOMINATION & COMPENSATION COMMITTEE
This Committee comprises three 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 senior 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 6, 7 and 17 of the Annual Report. No meetings
of this Committee were required during the year ended
31 December 2020, as any matters that arose for possible
consideration by this Committee were dealt with by the
full Board.
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited 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 senior executives, no process
is in place for the evaluation of the performance of senior
executives, although formal performance evaluation has
been a part of the Company’s practices in the past.
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 in respect of Board
nomination and remuneration matters;
to oversee and periodically review the induction and
education, and continuing professional development
programs for Directors including whether there is a
need for existing directors to undertake professional
development;
to ensure appropriate structures and procedures are
in place so that the Board can function independently
of management;
to receive and consider any concerns of individual
Directors relating to governance matters; and
to review all related party transactions to ensure they
reflect market practice and are in the best interests of
the Group and consider any disclosure requirements.
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 including
Director independence.
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.
DIVERSITY
The Company recognises the corporate benefit of diversity
as that term is defined in the ASX Corporate Governance
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 set, experience, expertise and
diversity of perspectives appropriate for the strategies
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, legal and technology relevant to operating
a telecommunications company.
In assessing candidates for appointment to the Board,
the Board or 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 measurable gender diversity objectives have been set
having regard to the Company’s current structure, size
and type of operations. The Company currently only has
one employee and no senior executives. Notwithstanding,
the Company will continue to consider and make future
appointments to its Board, senior executives (if required)
and workforce generally based on merit, skill and
experience necessary.
The Board currently comprises seven males (78%) and
two females (22%) (2019: 89% male, 2018: 100% male).
The Company has only one (male) employee who is not
considered to be a senior executive (2019: 100% male, 2018:
100% male).
11
Annual Report 2020 Company secretaries
Risk management
The Company has two company secretaries, Ms Edith Shih
and Ms Swapna Keskar, who are responsible to the Board
for ensuring that Board processes are followed and board
activities are efficiently and effectively conducted.
In December 2020, Ms Naomi Dolmatoff resigned as
a company secretary and Ms Keskar was appointed.
Biographies of the company secretaries are included in the
Directors’ Report.
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 13 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 (where appropriate) 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.
The external auditor attends and is available for questioning
at the AGM by shareholders in relation to the conduct of
the audit.
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.
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.
Following the TPG merger completed in July 2020, the
Company undertook a review of its corporate governance
practices and reporting processes. Changes were
implemented, reflective of the Company’s holding in
TPG reducing from a 50% to 25.05% interest. HTAL’s sole
activity is its investment in TPG. The operational activities
of TPG are undertaken entirely by TPG and the associated
operational risks are in that entity. Two of HTAL’s Directors,
Mr Canning Fok and Mr Frank Sixt are nominated to the
TPG board and additionally, Mr Frank Sixt also serves as an
observer of the TPG board’s audit & risk committee.
TPG has its own policies and risk management framework
and is required to report to ASX and its investors in its own
capacity as an ASX-listed entity. These may be accessed on
the ASX announcements platform under ASX ticker code
“TPG”, and on its website at www.tpgtelecom.com.au.
HTAL’s Audit & Risk Committee has undertaken a review of
its risk management framework in respect of the Reporting
Period and considers it to be sound and operating with
due regard to the risk appetite as set by CKHH, being the
Company’s ultimate parent company and holder of 87.87%
of the issued capital in the Company.
The Company has not identified any material exposures to
environmental and social risks. Material business risks faced
by the Company are those associated with the Company’s
investment in TPG. As set out earlier, information in respect
of TPG may be accessed via TPG’s separate disclosures
available on the ASX announcements platform and on the
TPG website.
Due to the size and structure of the Company, an internal
audit function has not been established. The Audit &
Risk Committee is the responsible body for receiving
risk reporting, reviewing the Company’s risk register
and framework and considering the effectiveness of the
Company’s governance, risk management and internal
control processes, in accordance with its charter.
12
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited Our values and expected behaviour
Dealing in shares
The need to ensure that a strong ethical culture within the
Group has led to greater emphasis on the development
of a strong culture with values 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 Code of Conduct applies to all Directors,
officers, employees, consultants, contractors, agents
and other representatives engaged by the Company and
compliance with the values underlying the Company’s
culture forming part of the performance appraisal of senior
executives and managers.
The Code of Conduct also sets out the Company’s
zero-tolerance approach to bribery and corruption.
HTAL aspires to operate openly, fairly, lawfully, ethically and
responsibly with honesty and integrity. The Company’s Code
of Conduct sets out HTAL’s values in which we strive to:
• make everything we do simple and relevant;
• always look for ways to make our way of doing
business better;
• be courageous and bold in our thinking;
•
think of others in everything we do;
• deliver on our promises;
•
listen, understand and treat others as an individual;
• be honest and open, have real conversations;
• make conscious commitments – keep your word;
• celebrate success; and
•
listen to and learn from each other.
Whistleblower policy
The Company encourages a culture of reporting actual
or suspected conduct which is illegal, unacceptable or
undesirable and any person who reports conduct as a
whistleblower who is acting honestly, reasonably and with
a genuine belief about the conduct will be supported and
protected. The Company has adopted a Whistleblower
Policy that outlines the protected disclosure can be
reported, how the Company will investigate and deal with
improper conduct, and how persons making a disclosure
will be supported and protected throughout this process.
Copies of the Company’s Code of Conduct and
Whistleblower Policy are available on the Company’s
website. The Board or the Audit & Risk Committee will
be informed of any material breaches or any material
incidents reported under the Code of Conduct and
Whistleblower Policy.
The Company has the following policy regarding dealing in
its shares:
•
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
• any other designated officer (being any person engaged
in the management of the Company, whether as an
employee or consultant) 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 designated officers 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 lodgement of the
Company’s annual report with the ASX up to one month
after the AGM of HTAL.
Directors, officers and employees must not engage in insider
dealing in breach of the Corporations Act 2001 (Cth) and
are prohibited from dealing in HTAL shares if in possession
of price sensitive information. Directors and senior
executives are also prohibited from engaging in short term
speculative dealing. All Directors, officers and employees
within the Group have been advised of their obligations
in regard to price sensitive information. Directors, officers
and employees 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 does not have an equity-based remuneration
scheme in place.
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. All Directors receive a copy
of all material ASX announcements promptly after they have
been made.
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
13
Annual Report 2020 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 16 to the
financial statements.
electronically. The Company does not currently prepare
investor or analyst presentations, but if it were to do so, and
contain new and substantive information, a copy of such
presentation will be released to the ASX and also made
available on the Company’s website.
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 in person. 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. All substantive resolutions put to
shareholders in general meeting are decided on a poll, rather
than a show of hands. All resolutions put to the 2020 AGM
were conducted by a poll with the results of the meeting
announced to the ASX.
The Company’s investor relations program is based upon
appropriately 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
the Continuous Disclosure Policy and the Shareholder
Communications Policy, details of which are available on the
Company’s website.
14
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited DIRECTORS’ REPORT
The Directors are pleased to present their report on the
consolidated entity (the “Group”) consisting of HTAL and
the entities it controlled at the end of or during the year
ended 31 December 2020.
There were no other significant changes in the state of
affairs of the Group during the financial year. No other
matter or circumstance has arisen since 31 December 2020
that has significantly affected, or may significantly affect:
Principal activities
From 1 January until 26 June 2020 when the merger
between VHA and TPM occurred, the Group’s principal
activity was the ownership of a 50% equity interest in VHA.
From 26 June 2020 onwards, the Group’s principal activity
was the ownership of a combined 25.05% equity interest in
TPG. TPG operates a number of leading mobile and internet
brands including Vodafone, TPG, iiNet, Internode, Lebara
and AAPT, providing consumers with a comprehensive
portfolio of fixed and mobile products in the Australian
telecommunications market.
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 4
to 5. Details of the financial position of the Company are
contained in page 27 of this report.
Significant changes in the state of
affairs and matters subsequent to the
end of the financial year
On 26 June 2020, the merger between VHA and TPM
was sanctioned by the Court and became effective under
Australian Accounting Standards. On 29 June 2020,
VHA was renamed to TPG and listed on the ASX on
30 June 2020. On 26 June 2020, HTAL’s ownership interest
percentage effectively changed from 50% to 25.05%, giving
rise to a gross dilution gain of $1,036 million. This required
HTAL to recognise previously unrecognised share of losses
in VHA of $358.6 million during the period. As part of its
merger implementation activities, VHA, HTAL and Vodafone
Group were required to restructure the existing VHA debt,
which involved the transfer of VHF which held external
debt of $4,475 million in return for VHA shares (of which
H3GAH, through its 50% ownership of VHAH effectively
owned shares valued at $2,237 million). Following the debt
restructure, VHF became a 100% owned subsidiary of VHAH,
a company domiciled in the United Kingdom in which
H3GAH has a 50% shareholding, together with VEBV who
owns the other 50% shareholding.
On 30 November 2020, the outstanding US$3.5 billion
Syndicated Banking Facility held by VHF matured and
VHF repaid in full the outstanding balance and accrued
interest using funds received from VHAH as a result of
VHAH entering into a new US$3.5 billion Syndicated
Banking Facility (“New SFA”). The related cross currency
swap contracts and guarantee fee arrangement with VHF’s
ultimate shareholders were also terminated as part of the
transaction. The New SFA is guaranteed by the VHAH’s
ultimate parent entities, CKHH and Vodafone Group. CKHH
and Vodafone Group have also entered into a Counter
Indemnity Agreement with VHAH but no guarantee fee is
charged to VHAH.
•
•
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 Group 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 TPG, 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.
TPG is subject to the National Greenhouse and
Environmental Reporting Act 2007 (“NGER”) and is required
to report information about greenhouse gas emissions,
energy production, energy consumption and other
information specified by the NGER. TPG has fulfilled its
reporting requirements for its operations annually since
2010 under the NGER.
Dividends
No dividend was declared or paid during the year.
Directors
The following persons were Directors of HTAL during the
whole of the year ended 31 December 2020 and up to the
date of this report, unless otherwise stated:
FOK Kin Ning, Canning
Barry ROBERTS-THOMSON
Melissa ANASTASIOU (appointed on 20 March 2020)
Susan Mo Fong CHOW, also known as WOO Mo Fong, Susan
(alias CHOW WOO Mo Fong, Susan)
Justin Herbert GARDENER
LAI Kai Ming, Dominic
John Michael SCANLON
Frank John SIXT
WOO Chiu Man, Cliff
Ronald Joseph SPITHILL (resigned on 20 March 2020)
Further information on the Directors is set out on
pages 6 and 7.
15
Annual Report 2020 DIRECTORS’ REPORT CONTINUED
Director
Other Responsibilities
Fok Kin Ning, Canning
Non-executive Chairman,
Chairman of Governance, Nomination & Compensation Committee
Barry Roberts-Thomson
Deputy Chairman
Melissa Anastasiou^
Susan Mo Fong Chow
Justin Herbert Gardener
Lai Kai Ming, Dominic^^
–
–
Chairman of Audit & Risk Committee,
Member of Governance, Nomination & Compensation Committee
Member of Governance, Nomination & Compensation Committee,
Member of Audit & Risk Committee
John Michael Scanlon
Member of Audit & Risk Committee
Frank John Sixt^^^
Executive Director
Woo Chiu Man, Cliff
Ronald Joseph Spithill^^^^
–
–
*
**
^
Direct holding of 100,000 shares
Direct holding of 4,540 shares
Appointed as Director with effect from 20 March 2020
Particulars of
Directors’ Interests
in ordinary
shares of HTAL
5,100,000*
83,918,337**
–
–
1,957,358
–
–
1,000,000
–
–
^^ Appointed as member of the Audit & Risk Committee in place of Mr Frank Sixt with effect from 2 December 2020
^^^ Ceased to be member of the Audit & Risk Committee with effect from 2 December 2020
^^^^ Resigned as Director with effect from 20 March 2020. Shares held are known as at 20 March 2020
Notes:
Fok Kin Ning, Canning, holds a relevant interest in (i) 6,011,438 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.
Susan Mo Fong Chow holds a relevant interest in (i) 129,960 ordinary shares of CKHH; and (ii) 250,000 ordinary shares of HTHKH.
Lai Kai Ming, Dominic holds a relevant interest in 34,200 ordinary shares of CKHH.
Frank John Sixt holds a relevant interest in (i) 166,800 ordinary shares of CKHH; and (ii) 255,000 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.
16
Hutchison Telecommunications (Australia) Limited 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 2020 and the number of meetings attended by each Director were:
Board Meetings
held during
the year
Board Meetings
attended as
Director
Audit & Risk
Committee
Meetings held
during the year
Audit & Risk
Committee
Meetings
attended as
Member of the
Committee
Governance,
Nomination &
Compensation
Committee
Meetings held
during the year
Governance,
Nomination &
Compensation
Committee
Meetings
attended as
Member of the
Committee
4
4
4
4
4
4
4
4
4
4
4
3
3
4
4
4
4
4
4
1
N/A
N/A
N/A
N/A
4
4
4
4
N/A
N/A
N/A
N/A
N/A
N/A
4
N/A
3
4
N/A
N/A
Nil
N/A
N/A
N/A
Nil
Nil
N/A
N/A
N/A
N/A
Nil
N/A
N/A
N/A
Nil
Nil
N/A
N/A
N/A
N/A
Director
Fok Kin Ning, Canning*
Barry Roberts-Thomson
Melissa Anastasiou^
Susan Mo Fong Chow
Justin Herbert Gardener
Lai Kai Ming, Dominic^^
John Michael Scanlon
Frank John Sixt^^^
Woo Chiu Man, Cliff
Ronald Joseph Spithill^^^^
* Mr Lai attended two Board meetings as Alternate Director for Mr Fok
^ Appointed as Director with effect from 20 March 2020
^^ Appointed as member of the Audit & Risk Committee in place of Mr Frank Sixt with effect from 2 December 2020
^^^ Ceased to be member of the Audit & Risk Committee with effect from 2 December 2020
^^^^ Resigned as Director with effect from 20 March 2020
No meeting of the Governance, Nomination & Compensation Committee was held during the year as any matters that arose
for possible consideration by the Committee were dealt with by the full Board.
Retirement, election and continuation in office of Directors
Mr Fok Kin Ning, Canning is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers
himself for re-election.
Mr Justin Herbert Gardener is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers
himself for re-election.
Mr John Michael Scanlon is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers
himself for re-election.
17
Annual Report 2020 Company secretaries
Remuneration Report
EDITH SHIH
BSE, MA, MA, EdM, Solicitor, FCG (CS, CGP),
FCS (CS, CGP) (PE)
Edith Shih has been a Company Secretary of the Company
since 1999. Ms Shih is an executive director and company
secretary of CKHH. She has been with the Cheung Kong
(Holdings) Limited group since 1989 and was with HWL
from 1991 to 2015. Both Cheung Kong (Holdings) Limited
and HWL became wholly owned subsidiaries of CKHH in
2015. She has acted in various capacities within the HWL
Group, including head group general counsel and company
secretary of HWL and director and company secretary
of HWL subsidiaries and associated companies. Ms Shih
is a non-executive director of Hutchison China MediTech
Limited and HPHM as the trustee-manager of HPH Trust;
and a member of the board of commissioners of PTDI.
The aforementioned companies are either the ultimate
holding company of HTAL, or subsidiaries or associated
companies of CKHH of which Ms Shih has oversight. She
has over 35 years of experience in the legal, regulatory,
corporate finance, compliance and corporate governance
fields. Ms Shih is the immediate past International President
and current member of the Executive Committee of The
Chartered Governance Institute (“CGI”) as well as a past
President and current chairperson of various committees
and panels of The Hong Kong Institute of Chartered
Secretaries (“HKICS”). She is a solicitor qualified in England
and Wales, Hong Kong and Victoria, Australia and a Fellow
of both CGI and HKICS, holding Chartered Secretary and
Chartered Governance Professional dual designations. She
holds a Bachelor of Science degree in Education, Master of
Arts degrees and a Master of Education degree.
SWAPNA KESKAR (APPOINTED ON 3 DECEMBER 2020)
MCom., LLB, FGIA, FCIS, FCS, GAICD
Swapna Keskar has extensive experience in providing
company secretarial, governance consulting and corporate
administration services to clients, including a large number
of ASX companies, across a range of different industries,
including financial services, retail, resources and energy.
Ms Keskar is a Graduate of the Australian Institute of
Company Directors and a Fellow member of the Governance
Institute of Australia, The Chartered Governance Institute
and the Institute of Company Secretaries of India.
NAOMI DOLMATOFF (RESIGNED ON 3 DECEMBER 2020)
BCom., AGIA, ACIS
Naomi Dolmatoff is an experienced Company Secretary
and has worked with ASX listed entities in financial services,
technology, government bodies and mining and resources
industries. Ms Dolmatoff holds a Bachelor of Commerce
(Finance) and a Graduate Diploma in Applied Corporate
Governance. Ms Dolmatoff is also an Associate of both
The Governance Institute of Australia and The Chartered
Governance Institute.
As at 31 December 2020, the Company had one employee
who is not ‘key management personnel’. As at the date of
this report, the Company does not have any employees
who are ‘key management personnel’. This report does
not include any information relating to the employees
or employment practices of TPG as it is not a subsidiary
of the Company.
Mr Frank Sixt is the person directly responsible to the
Board in respect of carrying out the Chief Executive Officer
function and Chief Financial Officer function pursuant to
section 295A of the Corporations Act 2001 (Cth), however
Mr Sixt is not formally appointed to either role. He was not
remunerated in the current year for this responsibility.
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.
18
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited DIRECTORS’ FEES
The remuneration of the non-executive and independent Directors, Mr Justin Herbert Gardener and Mr John Michael
Scanlon, comprised a fixed amount only and was not performance based. The non-executive and non-independent Directors,
Mr Fok Kin Ning, Canning, Mr Barry Roberts-Thomson, Ms Melissa Anastasiou, Mrs Susan Mo Fong Chow, Mr Lai Kai Ming,
Dominic, Mr Ronald Joseph Spithill and Mr Woo Chiu Man, Cliff did not receive any remuneration for their services as
Directors. Mr Frank John Sixt also did not receive any remuneration for his service as an executive Director.
RETIREMENT ALLOWANCES FOR DIRECTORS
No retirement allowances are payable to non-executive and executive Directors.
KEY MANAGEMENT PERSONNEL
The Directors of HTAL are the key management personnel of HTAL having the authority and responsibility for planning,
directing and managing activities for the period 1 January 2020 to 31 December 2020.
The appointment of Mr Fok Kin Ning, Canning, Mr Lai Kai Ming, Dominic, Mr Frank John Sixt, and Mr Woo Chiu Man, Cliff is
part of and in conjunction with their executive duties within the CKHH group. Mrs Susan Mo Fong Chow’s appointment is
also in conjunction with her directorship within the CKHH Group. They are not separately remunerated by the Company for
their services. The remuneration details of these directors are available from the disclosure in their respective CKHH group
annual reports.
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
2020
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Melissa Anastasiou^
Susan Mo Fong Chow
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Woo Chiu Man, Cliff
Ronald Joseph Spithill^^
Total
SHORT-TERM BENEFITS
Cash salary
and fees
$
Cash bonus
$
Non-
monetary
benefits
$
POST-
EMPLOYMENT
BENEFITS
SHARE-
BASED
PAYMENTS
Superannuation
$
Options
$
Total
$
–
–
–
–
50,000
–
50,000
–
–
–
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,750
–
4,750
–
–
–
9,500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
54,750
–
54,750
–
–
–
109,500
Mr Fok Kin Ning, Canning, Mrs Susan Mo Fong Chow, Mr Lai Kai Ming, Dominic, Mr Frank John Sixt and Mr Woo Chiu Man,
Cliff, as officers of CKHH group, are remunerated for their duties within the CKHH Group which include their directorships
of HTAL.
^ Appointed as Director with effect from 20 March 2020
^^ Resigned as Director with effect from 20 March 2020
19
Annual Report 2020 2019
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Susan Mo Fong Chow#
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
$
Total
$
–
–
–
50,000
–
50,000
–
–
–
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,750
–
4,750
–
–
–
9,500
–
–
–
–
–
–
–
–
–
–
–
–
–
54,750
–
54,750
–
–
–
109,500
# Appointed as Director with effect from 9 December 2019
STATUTORY PERFORMANCE INDICATORS
The below table shows measures of the Company’s financial performance over the last five years as required by the
Corporations Act 2001.
2020
2019
2018
2017
2016
Profit/(loss) for the year attributable to owners
of HTAL ($’000)
825,441
(154,870)
Basic earnings per share (cents)
Dividend payments ($’000)
Dividend payout ratio (%)
Increase/(decrease) in share price (%)
Total KMP incentives as percentage of profit/(loss)
for the year (%)
6.08
–
n/a
21
0.01
(1.14)
–
n/a
9
(0.1)
4,475
(0.03)
(37,557)
(63,453)
(0.28)
(0.47)
–
n/a
69
2.3
–
n/a
(14)
–
n/a
(6)
(0.3)
(0.2)
The dividend payout ratio is calculated based on dividends paid and profit for the year.
SHARE-BASED COMPENSATION
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.
20
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited SHAREHOLDINGS
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
Name
Fok Kin Ning, Canning
Barry Roberts-Thomson
Melissa Anastasiou^
Susan Mo Fong Chow
Justin Herbert Gardener
Lai Kai Ming, Dominic
John Michael Scanlon
Frank John Sixt
Woo Chiu Man, Cliff
Ronald Joseph Spithill^^
ORDINARY SHARES
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
–
–
Balance
at the start
of the year
5,100,000*
83,918,337**
–
–
1,957,358
–
–
1,000,000
–
–
* Direct holding of 100,000 shares
** Direct holding of 4,540 shares
^ Appointed as Director with effect from 20 March 2020
^^ Resigned as Director with effect from 20 March 2020
Shares under option
As at the date of this report there were no unissued ordinary shares of HTAL under option.
Shares issued on the exercise of options
No ordinary shares of HTAL were issued during the year ended 31 December 2020 or up to the date of this report on the
exercise of options.
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 2020 and 31 December 2019.
Other transactions with Directors and key management personnel
There were no other transactions with Directors for the years ended 31 December 2020 or ended 31 December 2019.
The above Remuneration Report has been audited by PricewaterhouseCoopers.
21
Annual Report 2020 Non-audit services
Proceedings on behalf of HTAL
HTAL may engage 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 (Cth). 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 (Cth) 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 13, Remuneration of auditors, on page 45 of
the financial report.
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act 2001
(Cth) is set out on page 23.
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.
No person has applied to the Court under section 237
of the Corporations Act 2001 (Cth) 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 (Cth).
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 (Cth).
This report is made in accordance with a resolution
of the Directors.
Director
25 February 2021
Director
25 February 2021
22
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited AUDITOR’S INDEPENDENCE DECLARATION
23
Annual Report 2020 FINANCIAL REPORT
For the year ended 31 December 2020
These financial statements
cover the consolidated financial
statements for the group consisting
of Hutchison Telecommunications
(Australia) Limited (“HTAL”) and
its controlled entities. The financial
statements are presented in
Australian dollars.
HTAL 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 25 February 2021. The Company
has the power to amend and reissue
the financial statements.
24
Hutchison Telecommunications (Australia) Limited FINANCIAL REPORT
For the year ended 31 December 2020
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
Income tax
Note 4
Current assets – Cash and cash equivalents
Note 5
Current assets – Loans and receivables
Note 6
Non-current assets – Investment accounted for using the equity method
Note 7
Controlled entities
Note 8
Current liabilities – Payables
Note 9
Current liabilities – Other financial liabilities
Note 10
Contributed equity
Note 11
Reserves and accumulated losses
Note 12
Director and key management personnel compensation
Note 13
Remuneration of auditors
Note 14
Contingencies
Note 15
Commitments
Note 16
Related party transactions
Note 17
Deed of cross guarantee
Note 18
Segment reporting
Note 19
Reconciliation of profit/(loss) after income tax to net cash inflows from operating activities
Note 20 Earnings per share
Note 21
Financial risk management
Note 22
Events occurring after the reporting date
Note 23
Parent entity disclosures
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
26
27
28
29
30
30
37
37
38
38
38
42
42
42
43
44
45
45
45
46
46
48
49
50
50
51
53
54
55
56
62
64
Annual Report 2020
25
Annual Report 2020 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 31 December 2020
Revenue
Operating expenses
Net gain on dilution of interest in joint venture
Share of net profit/(loss) of equity accounted investments, net of tax
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Recycling of hedging reserve
Changes in the fair value of cash flow hedges (share of equity
accounted investments), net of tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income/(loss) for the year attributable to members of
Hutchison Telecommunications (Australia) Limited
Earnings per share for profit/(loss) attributable to members of the Company
Basic earnings per share
Diluted earnings per share
Notes
2
6
3
11
11
20
20
2020
$’000
1,272
2019
$’000
5,697
(1,457)
(1,423)
677,315
–
148,311
(159,144)
825,441
(154,870)
–
–
825,441
(154,870)
2
64
66
–
(494)
(494)
825,507
(155,364)
Cents
Cents
6.08
6.08
(1.14)
(1.14)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
26
Hutchison Telecommunications (Australia) Limited CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
ASSETS
Current Assets
Cash and cash equivalents
Loans and receivables
Other receivables
Total Current Assets
Non-current 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/(Liabilities)
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
Notes
2020
$’000
2019
$’000
4
5
6
8
9
23,657
108,057
7
20
76,193
13
23,684
184,263
825,742
825,742
849,426
–
–
184,263
991
88,013
89,004
89,004
558
248,790
249,348
249,348
760,422
(65,085)
10
11
11
4,204,488
4,204,488
70,434
70,368
(3,514,500)
(4,339,941)
760,422
(65,085)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
27
Annual Report 2020 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
ATTRIBUTABLE TO MEMBERS OF THE COMPANY
RESERVES
Contributed
equity (i)
$’000
Capital
redemption
reserve (ii)
$’000
Cash flow
hedging
reserve (ii)
$’000
Share-based
payments
reserve (ii)
$’000
Accumulated
losses (iii)
$’000
Total equity
$’000
Balance at 1 January 2019
4,204,488
54,887
Loss for the year
Share of equity accounted
investments’ changes in the fair value
of cash flow hedges, net of tax
Total comprehensive loss for the year,
net of tax
Balance at 31 December 2019
Balance at 1 January 2020
Profit for the year
Recycling of hedging reserve
Share of equity accounted
investments’ changes in the fair value
of cash flow hedges, net of tax
Total comprehensive income for the
year, net of tax
–
–
–
–
–
–
4,204,488
4,204,488
54,887
54,887
–
–
–
–
–
–
–
–
95
–
(494)
(494)
(399)
(399)
–
2
64
66
15,880
(4,185,071)
90,279
–
–
–
(154,870)
(154,870)
–
(494)
(154,870)
(155,364)
15,880
(4,339,941)
(65,085)
15,880
(4,339,941)
(65,085)
–
–
–
–
825,441
825,441
–
–
2
64
825,441
825,507
Balance at 31 December 2020
4,204,488
54,887
(333)
15,880
(3,514,500)
760,422
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
(i) See note 10
(ii) See note 11 (a)
(iii) See note 11 (b)
28
Hutchison Telecommunications (Australia) Limited 5,931
4,695
84,764
84,764
–
–
89,459
18,598
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of GST)
(1,088)
(1,236)
Notes
2020
$’000
2019
$’000
Interest received
Net cash inflows from operating activities
Cash Flows from Investing Activities
Repayment of loans from equity accounted investment
Net cash inflows from investing activities
Cash Flows from Financing Activities
19
16
1,272
184
76,193
76,193
Repayment of borrowings – entity within the CKHH Group
16
(160,777)
Net cash outflows 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
(160,777)
(84,400)
108,057
4
23,657
108,057
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
29
Annual Report 2020 NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
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. A description
of the nature of the operations and principal activities of the
Company and its controlled entities (the “Group” or “HTAL”)
is included in the Directors’ report on pages 15 to 22.
The financial report was authorised for issue by the Board
on the 25th February 2021. The Company has the power
to amend and reissue the financial report.
TPG is an equity accounted investment in which HTAL has
an effective 25.05% shareholding.
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 Australian Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board (“AASB”) and the Corporations
Act 2001. For the purposes of preparing the financial
statements, the Company is a for-profit entity.
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.
These financial statements have been prepared under the
historical cost convention. Unless otherwise stated, the
accounting policies adopted are consistent with those of
the previous year. Comparative figures have been adjusted
to conform to the presentation of the financial statements
and notes for the current financial year, where required, to
enhance comparability.
(b) Net current asset deficiency
As at 31 December 2020, the Group has a deficiency of net
current assets of $65.3 million (2019: net current assets
deficiency of $65.1 million). Included in the Group’s current
liabilities is an amount of $88.0 million (2019: $248.8 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 Group has unused financing
facilities of $1,512.0 million at 31 December 2020. CKHH
has confirmed its current intention is to provide sufficient
financial support to enable the Group 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.
(c) 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 2 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, after initially being recognised at
cost in the consolidated balance sheet.
The results and net assets of joint arrangements 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.
(iii) Associates
Associates are all entities over which the Group has
significant influence but not control or joint control. This
is generally the case where the Group holds between
20% and 50% of the voting rights directly or indirectly.
Where the Group holds less than 20% of the voting
rights of an investee, representation on the board of
directors or equivalent governing body of the investee and
participation in the investee’s policy making processes,
including participation in decisions about dividends or
other distributions, are also considered when determining
whether the Group has significant influence. Investments in
associates are accounted for under the equity method.
(iv) 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 and associates are recognised
as a reduction in the carrying amount of the investment.
30
Hutchison Telecommunications (Australia) Limited 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.
The carrying amount of equity accounted investment is
tested for impairment in accordance with Note 1(g).
(v) Gain/loss on dilution of interests in equity
accounted investments
When there is a decrease in the ownership percentage of an
investment, this will give rise to a deemed disposal of the
investment. A gain or loss on the deemed disposal should be
recognised in profit or loss upon completion of the dilution/
deemed disposal.
The dilution gain or loss is calculated by comparing the
difference between the carrying amount of interest deemed
to be disposed (i.e. change in ownership %) to the fair value
of interest deemed to be disposed.
Where an investment in a joint venture becomes an
investment in an associate the Group continues to
apply the equity method and does not remeasure the
retained interest.
(d) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the
Group’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
HTAL’s functional and presentation currency.
(e) 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.
(f) 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 Group’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.
HTAL and its wholly owned Australian subsidiaries have not
implemented the tax consolidation legislation.
31
Annual Report 2020 Note 1 Summary of significant
accounting policies continued
(g) Impairment of assets
Equity accounted investments are tested for impairment
annually and when there is an indication that it 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
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.
For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets
(cash-generating units). An impairment loss is recognised
for the amount by which the asset’s carrying amount
exceeds its recoverable amount. Impairment losses are
recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income unless an asset has
previously been revalued, in which case the impairment loss
is recognised as a reversal to the extent of that previous
revaluation with any excess recognised through profit or
loss. Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period or when
there is an indication that the impairment loss may no
longer exist. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had
been recognised.
(h) 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.
(i) Other receivables
Other receivables are initially recognised at fair value
and subsequently at amortised cost, collectability is then
reviewed on an ongoing basis.
(j) Loan receivables at amortised cost
Loan receivables are initially recognised at fair value
and subsequently amortised cost, collectability is then
reviewed on an ongoing basis. Contractual cash flows
are solely principal and interest and the objective of
the Group’s business model is achieved by collecting
contractual cash flows.
(k) 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 and are subsequently
remeasured to fair value at each reporting date. The
accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument.
The full fair value of a hedging derivative is classified as a
non-current asset or liability when the remaining maturity of
the hedged items is more than 12 months; it is classified as a
current asset or liability when the remaining maturity of the
hedged item is less than 12 months.
As at 31 December 2020, the Group has not engaged in any
hedging activities and only equity accounts for the share of
the fair value changes of the cash flow hedge from the TPG
equity accounted investment.
(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.
(l) Goodwill
Goodwill as part of equity accounted investments 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 acquirer’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 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 impairment testing.
32
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited Goodwill on acquisitions of associates/joint ventures is
included in investments accounted for using the equity
method and is tested whenever an event or periodically
tested for impairment whenever events or changes in
circumstances indicated that the carrying value may not
be recoverable.
(m) Payables
These amounts represent liabilities for goods and services
provided to the Group 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) Borrowings
Borrowings are initially recognised at fair value. Borrowings
are subsequently measured at amortised cost. Transaction
costs associated are capitalised and amortised over the term
of the debt.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
(o) Contributed equity
Ordinary shares are classified as equity. Refer to Note 10
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 or loss attributable to members of the
Company; 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 consider:
•
•
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.
(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) Segment 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 18 for details of
the Group’s operating segment, being investment in
telecommunication services.
(s) Leases
The Group does not have any outstanding leases as at
the balance date. The TPG equity accounted investment
leases various network sites, offices, retail stores and data
centres. Contracts may contain both lease and non-lease
components. The Group allocates the consideration in the
contract to the lease and non-lease components based on
their relative stand-alone prices.
Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions. The
lease agreements do not impose any covenants other than
the security interests in the leased assets that are held by
the lessor. Leased assets may not be used as security for
borrowing purposes.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments),
less any lease incentives receivable;
• variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable by the Group under
residual value guarantees;
•
the exercise price of a purchase option if the Group is
reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the
lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain
extension options are also included in the measurement of
the liability.
33
Annual Report 2020 (t) Critical accounting estimates and judgements
The preparation of financial statements often requires
the exercise of judgements to select specific accounting
methods and policies from several acceptable alternatives.
Furthermore, significant estimates and judgements
concerning the future may be required in applying those
methods and policies in the accounts. In preparing the
annual financial report, the Group has made accounting
related estimates based on assumptions about current and,
for some estimates, future economic and market conditions
and in particular has assumed that the current market
conditions as a result of the Coronavirus Disease 2019
(“COVID-19”) pandemic is not a long-term norm. Although
our estimates and assumptions contemplate current and,
as applicable, expected future conditions that the Group
considers are relevant and reasonable, including but not
limited to the potential impacts to our operations arising
from the COVID-19 pandemic and different monetary, fiscal
and government policy responses aimed at reviving the
economy, it is reasonably possible that actual conditions
could differ from our expectations.
In particular, a number of estimates in relation to impairment
of investments in controlled entities and equity accounted
investments have been and will continue to be affected by
the ongoing COVID-19 outbreak. The severity, magnitude
and duration, as well as the economic consequences of
the COVID-19 pandemic, are uncertain, rapidly changing
and it is currently impossible to predict. As a result, our
accounting estimates and assumptions may change over
time in response to how market conditions develop.
In addition, actual results could differ significantly from
those estimates and assumptions. Uncertainty about these
judgements, assumptions and estimates could result in
outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected and the amount and
timing of results of operations, cash flows and disclosures
in future periods.
(i) Impairment of investments in controlled entities and
equity accounted investments
In accordance with the Group’s accounting policy, the
investments in controlled entities and equity accounted
investments are tested for impairment annually and
whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable.
In assessing whether there is any indication of potential
impairment as at 31 December 2020, the Group has
reviewed internal and external criteria. The ongoing
COVID-19 pandemic has been deemed to be an impairment
trigger which is expected to have had an adverse effect on
the performance of the investment in TPG during the year
ended 31 December 2020, however based on an impairment
analysis, there has been no impairment deemed necessary
for the year.
Note 1 Summary of significant
accounting policies continued
(s) Leases continued
The lease payments are discounted using the interest
rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the
Group, the lessee’s incremental borrowing rate is used,
being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group
where possible, uses recent third-party financing received
by the individual lessee as a starting point, adjusted to
reflect changes in financing conditions since third party
financing was received and makes adjustments specific to
the lease, e.g. term of lease.
The Group is exposed to potential future increases in
variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect.
When adjustments to lease payments based on an index or
rate take effect, the lease liability is reassessed and adjusted
against the right-of-use asset.
Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising
the following:
•
the amount of the initial measurement of lease liability
• any lease payments made at or before the
commencement date less any lease incentives received
• any initial direct costs, and
•
restoration costs.
Right-of-use assets are generally depreciated over the
shorter of the asset’s useful life and the lease term on
a straight-line basis. If the Group is reasonably certain
to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life. While
the Group revalues its land and buildings that are presented
within property, plant and equipment, it has chosen not to
do so for the right-of-use buildings held by the Group.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (Note 1(g)).
The recoverable amount is the higher of an asset’s fair value
less cost of disposal and value in use.
Payments associated with short-term leases of equipment
and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit
or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment
and typically have an underlying value of less than $10,000.
34
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited Furthermore, the recoverable amount of the Company’s
investment in controlled entities, and the recoverable amount
of the Group’s equity accounted investments are determined
as the higher of the fair value less cost of disposal or value
in use methodology. Fair value is derived, when available
and appropriate, from quoted share price of the business or
comparable businesses, historically completed transactions
of comparable businesses or metrics of publicly traded
companies or market observable pricing multiples of similar
businesses, and possible control premiums. The value in
use calculation is based on a discounted cash flow (“DCF”)
model which is sensitive to the discount rate used for the
DCF model as well as the expected future cash-inflows and
the growth rate used for extrapolation purposes. As TPG is
listed on the ASX, TPG’s share price at 31 December 2020
provides a basis for estimating the fair value less cost
of disposal. This approach has been used to assess the
recoverable amount of the investment in TPG in the current
year impairment assessment. These calculations require the
use of estimates and assumptions in terms of the share-price
used as part of the determination of the fair value less cost
of disposal, and as the resulting recoverable amount is in
excess of the carrying amount, no impairment has been
deemed necessary for the year.
(ii) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary
differences if management considers that it is probable that
sufficient 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 profit.
Deferred tax assets have not been recognised as there is no
convincing evidence that sufficient future taxable profits will
be available against which unused tax losses or unused tax
credits can be utilised.
(iii) Dilution accounting
On 26 June 2020, the merger between VHA and TPM
was sanctioned by the Supreme Court of New South
Wales (the “Court”). This date has been deemed to be the
acquisition date to account for the underlying business
combination. On the same date, HTAL’s ownership interest
in VHA effectively diluted from 50% to 25.05%. HTAL has
recognised a gain on dilution of its interest in the VHA joint
venture by comparing the acquisition date fair value of
TPM’s equity interest to HTAL’s carrying value investment
for the 24.95% relating to its ownership reduction.
The fair value of TPM has been determined by the
acquisition date fair value of TPG’s consideration, which is
one TPG share for one TPM share. Under AASB 13 Fair Value
Measurement, HTAL management has used the quoted price
of TPG shares when it first traded on 30 June 2020 to proxy
the fair value of the dilution gain consideration at the date
of acquisition.
Under AASB 3 Business Combinations, the TPG merger
is considered effective on the Second Court date
(i.e. 26 June 2020), as TPM shareholders had approved the
Scheme and was subsequently sanctioned by the Court on
that date. Merger implementation activities after this date
and prior to the implementation date of 13 July 2020 are
deemed to be administrative in nature and are viewed to
have occurred on the merge effective date of 26 June 2020
for accounting purposes. The recognition timing of HTAL’s
dilution gain/loss aligns with the TPG merger effective date
of 26 June 2020, with the relevant implementation activities
deemed to have occurred on this date.
(iv) TPG equity accounting
When assessing whether HTAL has significant influence over
TPG, management has considered HTAL’s combined 25.05%
interest in TPG.
Depreciation of operating assets constitutes a substantial
operating cost for TPG. 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 profit/(loss) of equity
accounted investments, net of tax” in HTAL’s consolidated
statement of profit or loss and other comprehensive income.
In 2019, the Group decided to revise the useful life of
some of TPG’s existing network assets from up to 20 years
to between 3 and 18 years, which is consistent with the
estimates adopted by TPG. Along with the assessment of
operating leases for AASB 16 resulting in the recognition
of “right of use” assets, this change was made having
considered developments in the environment, as a result of
the Government issued security guidance advising network
operators that the use of 5G equipment supplied by banned
vendors from certain countries would not be permitted due
to national security concerns; and the announced proposed
merger between VHA and TPM to become a full-service
telecommunications company in Australia.
In implementing the revised useful lives, management
applied the change in the depreciation of the TPG existing
network assets based on an assessment of individual asset
lives prospectively from 1 January 2019 as required under
Australian Accounting Standards. This resulted in a decrease
in the share of equity accounted investment’s current year
profit by $83.1 million (2019: $252.5 million). The change has
been included in the summarised financial information of
TPG as disclosed in Note 6.
35
Annual Report 2020 Note 1 Summary of significant
accounting policies continued
(u) Rounding of amounts to nearest thousand dollars
The Group is of a kind referred in 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.
(v) Parent entity financial information
The financial information for the parent entity disclosed
in Note 23 has been prepared on the same basis as the
consolidated financial statements, except investments
in subsidiaries and investments in associates, which are
accounted for at cost in the financial statements of HTAL.
(w) New accounting standards and Interpretations
Accounting standards issued and mandatorily effective
in the current year
The Group has adopted all of the new and revised effective/
applicable standards, amendments and interpretations
issued by the Australian Accounting Standards Board that
are relevant to the Group’s operations and mandatory
for annual periods beginning on or after 1 January 2020.
In addition, the Group has early adopted Amendment to
AASB 16: COVID‑19‑Related Rent Concessions ahead of its
effective date. Adoption of these have not had a material
impact in the current year.
AASB 16: COVID-19–Related Rent Concessions
The amendment permits lessees, as a practical expedient,
not to assess whether particular rent concessions occurring
as a direct consequence of the COVID-19 pandemic are
lease modifications and instead to account for those rent
concessions as if they are not lease modifications. The
amendment does not affect lessors. The Group has applied
the practical expedient to all its COVID-19-related rent
concessions from 1 January 2020. The amount recognised
in profit or loss for the reporting period arising from
application of the practical expedient is insignificant to the
results for the year.
AASB 7, AASB 9 and AASB 139: Interest Rate
Benchmark Reform
Amendments have been made to AASB 7 Financial
Instruments: Disclosures, AASB 9 Financial Instruments
and AASB 139 Financial Instruments: Recognition and
Measurement, with an effective date of 1 January 2020.
The amendments provide certain reliefs in relation to
interest rate benchmark reforms. The amendments did not
have an impact on the amounts recognised in prior periods
and are not expected to significantly affect the current or
future periods.
AASB 3: Definition of a Business
Amendments have been made to AASB 3 Business
Combinations to clarify the definition of a business, assisting
entities to determine whether a transaction should be
accounted for as a business combination or as an asset
acquisition. As a business combination was carried out
within the Group during the current year, the adoption
of the definition of a business was relevant to the Group.
The Group also applied the following amendments for the
first time for their annual reporting period commencing
1 January 2020:
• AASB 2018‑7 Amendments to Australian Accounting
Standards – Definition of Material [AASB 101 and
AASB 108].
• Conceptual Framework for Financial Reporting and
AASB 2019‑1 Amendments to Australian Accounting
Standards – References to the Conceptual Framework.
These amendments did not have any impact on the amounts
recognised in prior periods and are not expected to
significantly affect the current or future periods.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations
have been published that are not mandatory for
31 December 2020 reporting periods. With the exception
of Amendment to AASB 16: COVID‑19‑Related Rent
Concessions, these new accounting standards and
interpretations have not been early adopted by the Group.
These standards are not expected to have a material impact
on the entity in the current or future reporting periods and
on foreseeable future transactions.
36
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited Note 2 Revenue
Other revenue
Interest
Note 3 Income tax
(a) Income tax expense
Deferred tax
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from operations before income tax expense
Tax at the Australian tax rate of 30% (2019: 30%)
Tax effect of amounts which are not deductible or taxable/(non-assessable or deductible)
in calculating taxable income:
Non-assessable dilution gain on dilution of interest in associate
Share of (profits)/losses of equity accounted investments
Deferred tax on temporary difference not recognised
Previously unrecognised tax losses now recouped to reduce current tax expense
Additional tax losses not recognised in the current period
Income tax expense
(c) Unrecognised tax losses
Opening balance
Tax profits identified during completion of income tax return
Tax losses recouped to reduce current tax expense
Additional tax losses generated
Unused tax losses for which no deferred tax assets have been recognised
Potential tax benefit @ 30% (2019: 30%)
All unused tax losses were incurred by Australian entities.
2020
$’000
2019
$’000
1,272
5,697
2020
$’000
2019
$’000
–
–
825,441
(154,870)
247,632
(46,461)
(203,195)
(44,493)
(56)
(41)
–
97
–
–
47,743
1,282
12
(1,294)
–
–
160,512
164,826
(24)
–
323
–
(4,314)
–
160,811
160,512
48,243
48,154
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 or liabilities at 31 December 2020 and 31 December 2019.
37
Annual Report 2020 Note 4 Current assets – Cash and cash equivalents
Cash at bank
Note 5 Current assets – Loans and receivables
Receivable from related party (Note 16)
Receivable from TPG equity accounted investment
2020
$’000
2019
$’000
23,657
108,057
2020
$’000
2019
$’000
7
76,193
On 3 July 2020, TPG fully repaid the outstanding working capital facility balance of $76 million to HTAL, including
accompanying interest payments.
Further information relating to receivables from related parties is set out in Note 16.
(a) Fair value
The carrying values of the current receivables are at cost and approximate to their fair value.
(b) Foreign currency and interest rate risk
The carrying amounts of the Group’s current receivables and financial assets are denominated in the following currencies:
Australian dollars
2020
$’000
2019
$’000
7
76,193
For an analysis of the sensitivity of other financial assets to interest rate risk refer to Note 21.
(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 receivable is current with no indication of impairment. The Group does not hold any collateral as security. Refer
to Note 21 for more information on the risk management policy of the Group.
Note 6 Non-current assets – Investment accounted for using the equity method
Equity accounted investments
2020
$’000
825,742
2019
$’000
–
At 31 December 2019, HTAL and Vodafone Group Plc each owned a 50% interest in a joint venture named Vodafone
Hutchison Australia Limited (“VHA”), which provided telecommunication services in Australia. HTAL’s interest in VHA
was held by a controlled entity, Hutchison 3G Australia Holdings Pty Limited (“H3GAH”), and was accounted for in the
consolidated financial reports using the equity method. At 31 December 2019, VHF was a wholly owned subsidiary of VHA.
On 26 June 2020, the merger between VHA and TPM was sanctioned by the Court and became effective under Australian
Accounting Standards. This date has been deemed to be the acquisition date to account for the underlying business
combination. On the same date, HTAL’s ownership interest percentage in VHA effectively diluted from 50% to 25.05%, giving
rise to a gross dilution gain of $1,036 million. From 26 June 2020, HTAL no longer had joint control in the investment, and
has attained the ability to exercise significant influence over the new merged company. As such, HTAL’s 25.05% investment
in VHA has been accounted for in the consolidated financial reports using the equity method. VHA was renamed to TPG on
29 June 2020 and listed on the ASX on 30 June 2020. On 9 July 2020, VHF became a wholly owned subsidiary of VHAH, in
which HTAL has a 50% ownership interest.
38
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited As part of its merger implementation activities, VHA, HTAL and Vodafone Group Plc were required to restructure the
existing VHA debt, which involved the transfer of VHF which held external debt of $4,475 million in return for VHA shares
(of which H3GAH was issued shares valued at $2,237 million). This required HTAL to recognise previously unrecognised
share of losses in VHA up until 26 June 2020 of $359 million during the year. The net gain on dilution of interest in
VHA shown in the table below is reported after charging the pre-merger unrecognised losses of $359 million. Refer to
(iii) Dilution Accounting, under Note 1(t) Critical accounting estimates and assumptions for further background.
Under the TPG Scheme Implementation Deed, HTAL and its wholly-owned subsidiary, H3GAH and Vodafone Group Plc and
its relevant subsidiaries entered into an escrow deed under which, subject to certain exceptions, they must not dispose,
directly or indirectly, of any of their TPG shares for a period of 24 months following merger implementation. Furthermore,
the VHAH shareholders’ agreement entered into between HTAL, Vodafone Group Plc, VHAH and others (the “VHAH
Shareholders Agreement”) dated 24 June 2020: (i) places restrictions on direct and indirect transfers of shares in VHAH
for a period of 2 years from the merger implementation, and (ii) places restrictions on VHAH from selling its shares in
TPG for a period of 2 years from merger implementation and also provides that, at on expiry of 3 years from the merger
implementation, either VHAH shareholder group may require VHAH to sell no more than 10% of VHAH’s TPG shares in any
9-month period subject to the other shareholder group having a right of first offer to purchase the shares prior to them
being sold to a third party.
On 14 July 2020, upon completion of all merger implementation and debt restructuring activities, HTAL’s 25.05% ownership
interests in TPG comprises 11.14% interests directly held by H3GAH, and an attributed 13.91% interests indirectly held by
H3GAH through Vodafone Hutchison (Australia) Holdings Limited (“VHAH”), a company domiciled in the United Kingdom
in which H3GAH has a 50% shareholding and which H3GAH jointly controls with Vodafone Europe B.V. HTAL’s 50% interests
in VHAH has been accounted for in the consolidated financial reports using the equity method.
As at 31 December 2020, the Group held interests in the following associate and joint venture:
Name of associate/joint venture
Principal activity
Country of operation
OWNERSHIP INTEREST
2020
%
2019
%
TPG Telecom Limited (formerly Vodafone
Hutchison Australia Limited)
Telecommunications
Services
Vodafone Hutchison (Australia)
Holdings Limited
Financing and investing
activities
Australia
11.14%*
50.00%
United Kingdom
50.00%
0.00%
*
HTAL’s 25.05% interest in TPG comprises 11.14% directly held by H3GAH and an attributed 13.91% indirectly held by H3GAH through VHAH, a company
domiciled in the United Kingdom in which H3GAH has a 50% shareholding.
Movement in equity accounted investments carrying values
Opening balance
New investments during the year
Net gain on dilution of interest in joint venture
Share of net profit/(loss) of equity accounted investments, net of tax**
Recycling of hedging reserve
Share of change in fair value of cash flow hedges, net of tax
Closing balance
2020
$’000
–
50
677,315
148,311
2
64
825,742
2019
$’000
159,638
–
–
(159,144)
–
(494)
–
**
2020 balance represents HTAL’s share of post-merger profit and 2019 balance represents HTAL’s share of pre-merger loss from equity accounted
investment, net of tax.
39
Annual Report 2020 Note 6 Non-current assets – Investment accounted for using the equity method
continued
Summarised Financial Information
Summarised Statement of Profit or Loss and Other Comprehensive Income
Summarised financial information with respect to the profit or loss and other comprehensive income of the Group’s equity
accounted investments, based on their respective Australian Accounting Standards financial statements, and reconciliation
of the summarised financial information to the Group’s share of profit/(loss) of equity accounted investments, net of tax,
are set out below. The amounts included in the summarised financial information have been adjusted to reflect adjustments
made by HTAL in applying the equity method. The adjustments principally relate to a fixed asset depreciation overlay carried
out in 2019 to align the Group’s useful life of some of TPG’s existing network assets from up to 20 years to between 3 and
18 years, to be consistent with the estimates adopted by TPG. Please refer to Note 1(t) Critical accounting estimates and
assumptions for further background.
Gross amount of the following items of the
equity accounted investments:
Revenue
Interest income
Expenses
VHAH
$’000
2020
TPG
$’000
Pre-merger 2
$’000
Post-merger 3
$’000
Total pre and
post-merger
2019 1
TPG
$’000
–
1,484,937
2,865,261
4,350,198
3,513,000
116
1,928
9,150
11,078
10,000
(3,505)
(974,090)
(1,996,129)
(2,970,219)
(2,345,000)
Share of profits from investment in TPG,
net of tax
212,391
–
–
–
–
Depreciation and amortisation
–
(572,447)
(836,786)
(1,409,233)
(1,525,000)
Net finance costs
(82,476)
(191,645)
(97,666)
(289,311)
(437,000)
Profit/(loss) before income tax
126,526
(251,317)
(56,170)
(307,487)
(784,000)
Income tax expense
Profit/(loss) for the year
–
–
819,616
819,616
–
126,526
(251,317)
763,446
512,129
(784,000)
Other comprehensive income/(loss)
–
92
2,155
2,247
(1,000)
Total comprehensive profit/(loss)
126,526
(251,225)
765,601
514,376
(785,000)
Reconciliation to the Group’s share of profit/(loss)
of the equity accounted investments:
Group interest:
50%
50%
11.14% 4
Sub Total
50%
Group’s share of the following items:
Profit/(loss) for the year
63,263
(125,659)
85,048
(40,611)
(392,106)
Unrecognised share of joint venture loss
Recognise previously unrecognised share
of joint venture loss(i)
Group’s share of profit/(loss) of equity
accounted investments
–
–
125,659
(358,620)
–
–
125,659
232,962
(358,620)
–
63,263
(358,620)
85,048
(273,572)
(159,144)
(i) On 26 June 2020, due to the debt restructuring as required under the Scheme Implementation Deed, HTAL’s investment
in VHA became positive, which allowed HTAL to recognise previously unrecognised share of losses in the dilution gain
during the period.
1. The comparatives are derived from the comparatives in the TPG 31 December 2020 financial report.
2. Pre-merger results represent the period between 1 January 2020 and 26 June 2020.
3. Post-merger results represent the period between 27 June 2020 and 31 December 2020.
4. HTAL’s 25.05% interest in TPG comprises 11.14% directly held by H3GAH and an attributed 13.91% indirectly held by H3GAH through VHAH, a company
domiciled in the United Kingdom in which H3GAH has a 50% shareholding.
40
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited
Summarised Statement of Financial Position
Summarised financial information with respect to the statement of financial position of the Group’s equity accounted
investments, based on its Australian Accounting Standards financial statements, and reconciliation of the summarised
financial information to the Group’s carrying amount of these investments, are set out below. The amounts included in the
summarised financial information have been adjusted to reflect adjustments made by HTAL in applying the equity method.
Current assets
Non-current assets(ii)
Current liabilities
Non-current liabilities
Net (Liabilities)/Assets(iii)
Reconciliation to the carrying amount of the Group’s investment
accounted for using the equity method
Group interest
Group’s share of net (liabilities)/assets
The summarised statement of financial position includes the following items
Cash and cash equivalents
Current financial liabilities
Non-current financial liabilities
2020
VHAH
$’000
TPG
$’000
2019
TPG 5
$’000
352,390
683,000
1,422,000
3,449,507
18,654,000
8,060,000
(11,223)
(1,456,000)
(6,629,000)
(4,901,962)
(5,476,000)
(3,321,000)
(1,111,288)
12,405,000
(468,000)
50%
11.14%6
(555,644)
1,381,386
2020
VHAH
$’000
TPG
$’000
50%
–
2019
Total
$’000
342,085
120,000
734,000
(11,062)
(93,000)
(5,341,000)
(4,901,962)
(5,381,000)
(3,287,000)
(i) On 20 November 2020, VHAH entered into a US$3.5 billion Syndicated Facility Agreement (“New SFA”) with a
syndicate of lenders. The facility bears interest at 3 month US Libor + 1.00% and it will mature in 2023. An upfront fee
of US$10.5 million was charged by the syndicate of lenders. The New SFA is guaranteed by the VHAH ultimate parent
entities, CKHH and Vodafone Group Plc. CKHH and Vodafone Group Plc have also entered into a Counter Indemnity
Agreement with VHAH but no guarantee fee is charged to VHAH.
In order to protect against exchange rate movements, VHAH entered into cross currency interest rate swaps to
coincide with the maturity of the loan. The swaps in place cover 100% of the outstanding loan balance and have a
fixed exchange rate and effectively swap US dollar debt for Australian dollar debt. The swaps were entered into with
related parties associated with the VHAH joint venture partners. The company’s effective rate of interest is based on
the Australian 3 month BBR plus a margin. The cross currency swaps are settled in full on the same date as interest
payment is made to the facility agent. VHAH utilised the funds from the New SFA to repay the outstanding principal of
the existing US$3.5 billion Syndicated Facility Agreement owed by VHF, its 100% owned subsidiary, which matured on
the 20 November 2020.
(ii) Under the TPG Scheme Implementation Deed, HTAL and its wholly-owned subsidiary, H3GAH and Vodafone Group
Plc and its relevant subsidiaries entered into an escrow deed under which, subject to certain exceptions, they must not
dispose, directly or indirectly, of any of their TPG shares for a period of 24 months following merger implementation.
Furthermore, the VHAH shareholders’ agreement entered into between HTAL, Vodafone Group Plc, VHAH and others
dated 24 June 2020: (i) places restrictions on direct and indirect transfers of shares in VHAH for a period of 2 years from
the merger implementation, and (ii) places restrictions on VHAH from selling its shares in TPG for a period of 2 years
from merger implementation and also provides that, at on expiry of 3 years from the merger implementation, either
VHAH shareholder group may require VHAH to sell no more than 10% of VHAH’s TPG shares in any 9-month period
subject to the other shareholder group having a right of first offer to purchase the shares prior to them being sold to
a third party.
(iii) HTAL’s investment in VHAH is predicated on the ongoing financial support from both of VHAH’s ultimate shareholders.
The New SFA is fully guaranteed by VHAH’s ultimate parent entities.
5. The comparatives are derived from the comparatives in the TPG 31 December 2020 financial report. HTAL had discontinued the recognition of its share
of losses exceeding its interest in TPG (formerly VHA) in accordance with Australian Accounting Standards.
6. HTAL’s 25.05% ownership interest in TPG comprises 11.14% directly held by H3GAH and an attributed 13.91% indirectly held by H3GAH through VHAH,
a company domiciled in the United Kingdom in which H3GAH has a 50% shareholding.
41
Annual Report 2020
Note 7 Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in
accordance with the accounting policy described in Note 1(c):
Name of controlled entity
Country of
Incorporation
Class of Shares
Hutchison 3G Australia Holdings Pty Limited **
Australia
Ordinary
EQUITY HOLDING*
2020
%
100
2019
%
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 instrument 2016/785 issued by the Australian
Securities and Investments Commission.
Note 8 Current liabilities – Payables
Trade creditors
Payables to related parties (Note 16)
2020
$’000
120
871
991
2019
$’000
258
300
558
Further information relating to payables to related parties is set out in Note 16.
Liquidity risk
A summarised analysis of the Group’s sensitivity of payables to liquidity rate risk can be found in Note 21.
Note 9 Current liabilities – Other financial liabilities
Loan from an entity within the CKHH Group (Note 16)
(a) Loan from an entity within the CKHH Group
2020
$’000
2019
$’000
88,013
248,790
Further information relating to the loan from an entity within the CKHH Group is set out in Note 16. The loan from an entity
within the CKHH Group is an interest free financing facility and is repayable on demand.
(b) Financing arrangements
Unrestricted access was available at the statement of financial position date to the following lines of credit.
(c) 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
2020
$’000
2019
$’000
1,600,000
1,600,000
(88,013)
(248,790)
1,511,987
1,351,210
42
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited Note 10 Contributed equity
Share capital
Ordinary shares (fully paid)
(a) Share capital
2020
Shares
2019
Shares
2020
$’000
2019
$’000
13,572,508,577
13,572,508,577
4,204,488
4,204,488
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 2020 and 31 December 2019.
(c) Options
There are no options outstanding as at the statement of financial position date.
(d) Capital risk management
The Group’s primary objectives when managing capital are to safeguard its ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders, by pricing loans receivables commensurately with the
level of risk.
The Group defines capital as total equity attributable to shareholders of the Group, comprising issued share capital and
reserves, as shown in the consolidated statement of financial position. The Group actively and regularly reviews and manages
its capital structure to ensure capital and shareholder returns, taking into consideration the future capital requirements of the
Group and capital efficiency, projected operating cash flows and projected capital expenditures.
The Group 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 2020 and 31 December 2019 were as follows:
Gearing ratio
2020
9%
2019
186%
43
Annual Report 2020 Note 11 Reserves and accumulated losses
(a) Reserves
Capital redemption reserve
Share of hedging reserve – cash flow hedges
Share-based payments reserve
Movements:
Capital redemption reserve
There has been no movement in the capital redemption reserve during the year.
Share of hedging reserve – cash flow hedges
Balance at 1 January
Hedging movement
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
Profit/(loss) attributable to members of the Company
Accumulated losses at 31 December
(c) Nature and purpose of reserves
2020
$’000
2019
$’000
54,887
54,887
(333)
15,880
70,434
(399)
15,880
70,368
(399)
66
(333)
95
(494)
(399)
2020
$’000
2019
$’000
(4,339,941)
(4,185,071)
825,441
(154,870)
(3,514,500)
(4,339,941)
Capital redemption reserve
The capital redemption 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 TPG equity accounted investment cash
flow hedge that are recognised directly in equity, as described in Note 1(k)(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.
44
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited Note 12 Director and key management personnel compensation
(a) Director and key management personnel compensation
Short term employee benefits
2020
$
2019
$
109,500
109,500
(b) Loans to key management personnel and other transactions with key management personnel
There were no loans made to Directors of the Company, including their personally-related entities, during the years ended
31 December 2020 and 31 December 2019. There were no other transactions with the Directors of the Company for the years
ended 31 December 2020 and 31 December 2019.
Note 13 Remuneration of auditors
PricewaterhouseCoopers Australia
Assurance services
Audit services
Audit and review of financial reports and other audit work under the
Corporations Act 2001 (Cth)
Total remuneration for assurance services
Non‑Assurance services
Tax services
Total auditors’ remuneration
2020
$
2019
$
355,292
355,292
161,670
161,670
12,000
12,000
367,292
173,670
It is the Group’s policy to employ the auditors on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Group are important. These assignments are principally tax compliance and advice. It is
the Group’s policy to seek competitive tenders for all major consulting projects.
Note 14 Contingencies
There were no contingencies for HTAL or its controlled entities at 31 December 2020 and 31 December 2019. The Directors
are not aware of any other material contingent liabilities existing at the reporting date.
At balance date, guarantees existing in respect of interests in equity accounted investments are as follows:
Guarantees
Secured guarantees
Unsecured guarantees
Total guarantees
VHAH
TPG
2020
$’000
2019
$’000
2020
$’000
2019
$’000
–
–
–
–
–
–
–
13,138
13,138
37,197
14,648
51,845
45
Annual Report 2020
Note 15 Commitments
There were no commitments contracted by HTAL or its controlled entities not recognised as liabilities or payables at
31 December 2020 and 31 December 2019.
At balance date, capital commitments existing in respect of interests in equity accounted investments contracted but not
provided for in the financial statements are as follows:
Capital commitments (i)
Other commitments (ii)
Total commitments
VHAH
TPG
2020
$’000
2019
$’000
–
–
–
–
–
–
2020
$’000
366,340
276,280
642,620
2019
$’000
378,426
180,248
558,674
(i) TPG’s capital commitments pertain to the acquisition of plant and equipment contracted for at the reporting date but not recognised as liabilities
or payables.
(ii) TPG’s other commitments generally pertain to payment of information technology, network support services and sponsorships under contracts in
existence at the reporting date but not recognised as liabilities.
Note 16 Related party transactions
(a) Parent entities
The holding company and parent entity is Hutchison Telecommunications (Amsterdam) B.V. which, at 31 December 2020,
owns approximately 88% of the issued ordinary shares of the Company. The ultimate parent entity is CK Hutchison Holdings
Limited (incorporated in Cayman Islands).
(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; Susan Mo Fong CHOW; Justin Herbert GARDENER; LAI Kai Ming,
Dominic; John Michael SCANLON; Frank John SIXT; Melissa ANASTASIOU (appointed as Director with effect from
20 March 2020); Ronald Joseph SPITHILL (resigned as Director with effect from 20 March 2020) and WOO Chiu Man, Cliff.
(c) Key management personnel compensation
Disclosures relating to key management personnel compensation are set out in Note 12.
(d) Transactions with related parties
During the year, the following transactions occurred with related parties:
2020
$
2019
$
Loans to related parties
Repayments from equity accounted investments
76,193,205
84,764,621
Loans from related parties
Repayments to an entity within the CKHH Group
160,776,989
–
Interest revenue
Received from TPG equity accounted investment
954,555
5,399,924
Operating expenses
Paid to TPG equity accounted investment
(626,529)
(485,000)
46
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited (e) Outstanding balances
The following balances are outstanding at the statement of financial position date in relation to transactions with related
parties:
Current loans and other receivables
VHAH equity accounted investment (Note 5)
TPG equity accounted investment (Note 5)
Payables
TPG equity accounted investment (Note 8)
Current liabilities – Other financial liabilities
Entity within the CKHH Group (Note 9)
2020
$
2019
$
6,828
–
–
76,193,205
(870,750)
(299,635)
(88,012,582) (248,789,571)
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.
On 20 November 2020, VHAH entered into the New SFA with a syndicate of lenders. The New SFA is guaranteed by the
VHAH ultimate parent entities, CKHH and Vodafone Group Plc. CKHH and Vodafone Group Plc have also entered into a
Counter Indemnity Agreement with VHAH but no guarantee fee is charged to VHAH.
(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. All these loans have been disclosed. From 20 November 2020, no guarantee fee
is charged to VHAH under the Counter Indemnity Agreement entered into with CKHH and Vodafone Group Plc.
47
Annual Report 2020 Note 17 Deed of cross guarantee
The Company and H3GAH are parties to a deed of cross guarantee, under which each company guarantees the debt
of the others. There have been no changes to the deed of cross guarantee as at 31 December 2020 in comparison to
31 December 2019.
(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’. H3GAH is a
holding company with no material operations and owns 25.05% of TPG (11.14% directly and 13.91% indirectly through its 50%
investment in the VHAH joint venture).
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 2020
and 31 December 2019.
Statement of profit or loss and other comprehensive income
Revenue
Reversal of prior period impairment of TPG investment held within Closed Group(i)
Other operating expenses
Income before income tax
Income tax expense
Income for the year
Share of movements in consolidated accumulated losses
Accumulated losses at the beginning of the financial year
Income for the year
Accumulated losses at the end of the financial year
2020
$’000
2019
$’000
1,272
1,217,185
(1,457)
1,217,000
–
1,217,000
5,697
–
(1,423)
4,274
–
4,274
(4,063,025)
(4,067,299)
1,217,000
4,274
(2,846,025)
(4,063,025)
(i) During the financial year, the Closed Group recognised a reversal of prior period impairment of $1,217 million (2019: $nil)
on H3GAH’s investment in TPG (formerly VHA) as a result of an increase in its recoverable value arising from the merger
between VHA and TPM. The merger had the effect of improving the investment’s performance and it also provided an
observable market price for H3GAH’s underlying investment in TPG following its listing on the ASX. The recoverable value
has been determined as the investment’s fair value less costs to sell.
48
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited (b) Statement of financial position
Set out below is a statement of financial position as at 31 December 2020 and 31 December 2019 of the Closed Group
consisting of H3GAH and HTAL.
ASSETS
Current Assets
Cash and cash equivalents
Loans and receivable
Other 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
2020
$’000
2019
$’000
23,657
108,057
7
20
76,193
13
23,684
184,263
1,494,550
1,494,550
1,518,234
277,315
277,315
461,578
996
88,013
89,009
89,009
1,429,225
558
248,790
249,348
249,348
212,230
4,204,488
4,204,488
70,762
70,767
(2,846,025)
(4,063,025)
1,429,225
212,230
Note 18 Segment reporting
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Group in
assessing performance and in determining the allocation of resources.
In 2020, the Group continued to invest in an operator within the telecommunications industry.
The chief operating decision maker of the Group continues to receive information to manage its operations and investment
based on one operating segment, an investor in an operator of telecommunication services. As such, the Group believes it is
appropriate that there is one operating segment.
Key financial information used by the chief operating decision maker of the Group when evaluating the investment in
telecommunication services operating segment includes:
HTAL’s share of the following items of the equity accounted investments*
Total Revenue
Net Profit/(Loss)*
2020
$’000
2019
$’000
1,460,214
1,761,707
148,311
(159,144)
Further information reviewed by the chief operating decision maker with regards to the performance of the Group’s
investment in TPG is disclosed in Note 6.
*
after equity accounted investment accounting adjustments.
49
Annual Report 2020 Note 19 Reconciliation of profit/(loss) after income tax to net cash inflows from
operating activities
Profit/(loss) after income tax
Net gain on dilution of interest in joint venture
Share of (profit)/loss of equity accounted investments (see Note 6)
Change in operating assets and liabilities
(Decrease)/Increase in other financial assets
Increase in payables
Net cash inflows from operating activities
Net debt reconciliation
Cash and cash equivalents
Borrowings
Net debt
Net debt as at 1 January 2020
Cash flows
Net debt as at 31 December 2020
Note 20 Earnings per share
2020
$’000
2019
$’000
825,441
(154,870)
(677,315)
–
(148,311)
159,144
(66)
435
184
234
187
4,695
23,657
108,057
(88,013)
(248,790)
(64,356)
(140,733)
Borrowings
due within
1 year
$’000
Cash
$’000
Total
$’000
108,057
(248,790)
(140,733)
(84,400)
160,777
76,377
23,657
(88,013)
(64,356)
CONSOLIDATED
2020
Cents
2019
Cents
(a) Basic earnings per share
Profit/(loss) attributable to members of the Company
6.08
(1.14)
(b) Diluted earnings per share
Profit/(loss) attributable to members of the Company
(c) Earnings used in calculating earnings per share
Basic earnings per share
Profit/(loss) attributable to members of the Company used in calculating
basic earnings per share
Diluted earnings per share
Profit/(loss) attributable to members of the Company used in calculating
diluted earnings per share
6.08
(1.14)
$’000
$’000
825,441
(154,870)
825,441
(154,870)
50
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited
CONSOLIDATED
2020
Number
2019
Number
(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
13,572,508,577 13,572,508,577
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
13,572,508,577 13,572,508,577
There were no (2019: nil) options outstanding at 31 December 2020 that are anti-dilutive and accordingly there was no
impact on the earnings per share calculation for the year ended 31 December 2020.
Note 21 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk.
The Group’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 Group. It is the Group’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 exposures.
Risk management is carried out by the management of HTAL under policies approved by the Board of Directors. Management
identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides
written principles for overall risk management, as well as policies covering specific areas, such as 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.
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. 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. 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 rate risk
The Group’s main interest rate risk arises from cash balances and other financial assets. At 31 December 2020, there are
no material loans receivable from equity accounted investments and entities within the CKHH Group. As such, a 1% change
on the Australian market rate on the loans and receivables will result in an immaterial change in interest revenue based on
31 December 2020 balances.
(ii) Foreign currency exchange risk
Management has assessed there is minimal foreign currency exchange risk as the Group does not carry any material
balances in foreign currency.
51
Annual Report 2020 Note 21 Financial risk management continued
(a) Market risk continued
(iii) Summarised sensitivity analysis
The following table summarises the sensitivity of the Group’s financial assets to interest rate risk.
31/12/2020
Financial assets
Cash and cash equivalents
Loans and receivable
Total increase/(decrease)
31/12/2019
Financial assets
Cash and cash equivalents
Loans and receivable
Total increase/(decrease)
(b) Credit risk
INTEREST RATE RISK
-1%
+1%
Post-tax loss
$’000
Other equity
$’000
Post-tax loss
$’000
Other equity
$’000
(237)
–
(237)
–
–
–
237
–
237
–
–
–
INTEREST RATE RISK
-1%
+1%
Post-tax loss
$’000
Other equity
$’000
Post-tax loss
$’000
Other equity
$’000
Carrying
amount
$’000
23,657
7
23,664
Carrying
amount
$’000
108,057
(1,081)
76,193
(762)
184,250
(1,843)
–
–
–
1,081
762
1,843
–
–
–
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 from loans and receivables from equity accounted investments. The recoverability of the loan and
receivable is supported by a letter of support from CKHH and Vodafone Group Plc.
(i) Impairment of financial assets
All of the entity’s debt investment is measured at amortised cost and is considered to have low credit risk, and the loss
allowance recognised during the period was therefore limited to 12 months’ expected losses. Debt investment is considered
to be low credit risk as the debt investment is held solely by TPG (formerly VHA) which has never defaulted on any
payments of principal and/or interest.
52
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited (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 Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group maintains 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 Group’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. Other financial liabilities include an amount of $88.0 million relating to an interest free loan from a subsidiary in
the CKHH group. CKHH has confirmed its current intention to provide sufficient financial support to enable the Parent entity
to meet is financial obligations as and when they fall due. This undertaking is provided for a minimum of 12 months from
signing these financial statements.
31/12/2020
Weighted
average
interest rate
Less than
1 year
$’000
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
Cash and cash equivalents
0.05%
23,657
Loans and receivables
Payables
Other financial liabilities
Total ($’000)
31/12/2019
Cash and cash equivalents
Loans and receivables
Payables
Other financial liabilities
Total ($’000)
–
–
–
–
Weighted
average
interest rate
1.1%
3.4%
–
–
–
7
(991)
(88,013)
(65,340)
Less than
1 year
$’000
108,057
76,193
(558)
(248,790)
(65,098)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
23,657
7
(991)
(88,013)
(65,340)
Total
$’000
108,057
76,193
(558)
(248,790)
(65,098)
Note 22 Events occurring after the reporting date
There has been no other matter or circumstance that has arisen after the reporting date that has significantly affected or
may significantly affect:
(i) the operations of the Group in future financial years, or
(ii) the results of those operations in future financial years, or
(iii) the state of affairs of the Group in future financial years.
53
Annual Report 2020 Note 23 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
Profit for the year(i)
Total comprehensive profit for the year
2020
$’000
2019
$’000
23,684
1,080,200
1,103,884
89,004
89,004
1,014,880
184,263
277,315
461,578
249,348
249,348
212,230
4,204,488
4,204,488
15,880
15,880
(3,205,488)
(4,008,138)
1,014,880
212,230
802,651
802,651
4,274
4,274
(i) Profit for the year includes a $802.9 million gain on reversal of prior period impairment of HTAL’s investment in H3GAH.
(b) Commitments and contingencies
There were no commitments contracted for by HTAL but not recognised as liabilities or payable at 31 December 2020 and
31 December 2019.
The Directors of the Parent Entity are not aware of any other material contingent liabilities existing at the reporting date.
As at 31 December 2020, the Parent Entity has a deficiency of net current assets of $65.3 million (2019: deficiency of
net current assets of $65.1 million). Included in the Parent Entity’s current liabilities is an amount of $88.0 million (2019:
$248.8 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 $1,512 million at 31 December 2020.
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.
(c) HTAL’s investment in H3GAH
Investment in H3GAH
Investment at cost
Prior year Impairment recognised to date
Value of investment
54
2020
$’000
2019
$’000
3,664,655
3,664,655
(2,584,455)
(3,387,340)
1,080,200
277,315
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2020Hutchison Telecommunications (Australia) Limited DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 24 to 54 are in accordance with the Corporations Act 2001 (Cth),
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 2020 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 17 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 17.
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 Mr Frank John Sixt, being person responsible to the Board for performing
the Chief Executive Officer function and Chief Financial Officer function of Hutchison Telecommunications (Australia)
Limited required by section 295A of the Corporations Act 2001 (Cth).
This declaration is made in accordance with a resolution of the Directors.
Director
25 February 2021
Director
25 February 2021
55
Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
56
Hutchison Telecommunications (Australia) Limited 57
Annual Report 2020 INDEPENDENT AUDITOR’S REPORT CONTINUED
58
Hutchison Telecommunications (Australia) Limited 59
Annual Report 2020 INDEPENDENT AUDITOR’S REPORT CONTINUED
60
Hutchison Telecommunications (Australia) Limited 61
Annual Report 2020 SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 25 February 2021.
Substantial shareholders
Substantial shareholders in the Company (as disclosed to the ASX) are:
Shareholder
CK Hutchison Holdings Limited and its subsidiaries#
Shareholding
12,009,393,175
Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust##
12,009,393,175
Vodafone Group Plc and subsidiaries*
Spark New Zealand Trading Limited and Spark New Zealand Limited
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 of approximately 0.62%
of the issued capital of the Company.
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 26.02% 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. None of Vodafone Group Plc or any of its subsidiaries holds any
shares in the Company. Previously, Vodafone Group Plc’s relevant interests arose under a Shareholders Agreement between Vodafone Group Plc,
Hutchison Whampoa Limited (currently a subsidiary of CK Hutchison Holdings Limited) and other parties in relation to Vodafone Hutchison Australia
Pty Limited (name changed to Vodafone Hutchison Australia Limited and then to TPG Telecom Limited) (the “VHA Shareholders Agreement”). The
acquisition of the relevant interests was approved by shareholders in April 2009. The VHA Shareholders Agreement was terminated in June 2020. At
or about the time of termination of the VHA Shareholders Agreement, Vodafone Group Plc, CK Hutchison Holdings Limited, the Company and other
parties entered into a Shareholders Agreement in relation to Vodafone Hutchison (Australia) Holdings Limited (the “New Shareholders Agreement”).
As a result of certain provisions in the New Shareholders Agreement, Vodafone Group Plc and its subsidiaries have a relevant interest in shares in the
Company in which CK Hutchison Holdings Limited and its subsidiaries have a relevant interest.
Distribution of equity securities
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
Number of
Shareholders
% Issued
Capital
1,361
2,282
803
955
230
0.01
0.05
0.04
0.22
99.68
5,631
100.00
There were 3,158 holders of less than a marketable parcel of ordinary shares at a share price of $0.13 on 25 February 2021.
62
Hutchison Telecommunications (Australia) Limited Twenty largest shareholders
The names of the 20 largest holders of quoted ordinary shares as at 25 February 2021 are as follows:
Shareholder
Hutchison Telecommunications (Amsterdam) B.V.
Spark New Zealand Trading Limited
Leanrose Pty Ltd
Mr Dimitrios Piliouras & Mrs Konstantina Piliouras
HSBC Custody Nominees (Australia) Limited
Mr Kenneth Kin Kau Heung & Mr Rene Conrad Heung
Citicorp Nominees Pty Limited
Mr Dimitrios Piliouras
Mr Ting Hua Kho
J P Morgan Nominees Australia Pty Limited
Arjee Pty Ltd
Boscaini Investments Pty Ltd
Mr Hung Fong Chong
Mrs Yim Fong Leung
Mr George Thomson
Mr Ian Keith Flint
Mr Arthus Katropoulos & Mrs Despina Katropoulos
Mrs Yu Jie Zhi
Shareholding
11,925,479,378
1,357,250,858
83,913,797
16,700,000
12,213,282
4,830,000
4,537,063
4,500,000
4,200,000
4,181,983
4,033,575
3,000,000
2,816,000
2,255,000
2,001,300
2,000,000
2,000,000
2,000,000
Mr Justin Herbert Gardener & Mrs Anne Louise Gardener
1,957,358
Mr Yet Kwong Chiang & Mrs Ho Yuk Lin Chiang
1,870,965
% Issued
Capital
87.86
10.00
0.62
0.12
0.09
0.04
0.03
0.03
0.03
0.03
0.03
0.02
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.01
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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.
13,441,740,559
99.04
On a poll every member has one vote for each share.
On-market buy-back
There is currently no on-market buy-back.
63
Annual Report 2020 CORPORATE DIRECTORY
Directors
Fok Kin Ning, Canning
Barry Roberts-Thomson
Melissa Anastasiou
Share Registry
Link Market Services
Level 12, 680 George Street
Sydney NSW 2000
Susan Mo Fong Chow, also known as Woo Mo Fong, Susan
(alias Chow Woo Mo Fong, Susan)
Tel: 1800 629 116 or +61 1800 629 116 (International)
www.linkmarketservices.com.au
Justin Herbert Gardener
Lai Kai Ming, Dominic (also alternate to Fok Kin Ning,
Canning and Frank John Sixt)
John Michael Scanlon
Auditor
PricewaterhouseCoopers
One International Towers Sydney
Frank John Sixt (also alternate to Lai Kai Ming, Dominic)
Watermans Quay
Woo Chiu Man, Cliff
Company Secretaries
Edith Shih
Swapna Keskar
Investor Relations
Tel: +61 2 9015 5088
Email: investors@hutchison.com.au
www.hutchison.com.au
Registered Office
Level 1, 177 Pacific Highway
North Sydney NSW 2060
Tel: +61 2 9015 5088
www.hutchison.com.au
Barangaroo NSW 2000
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: 7 May 2021
Time: 10.00 am Sydney time
64
Hutchison Telecommunications (Australia) Limited www.hutchison.com.au
www.hutchison.com.au
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