Hutchison Telecommunications
(Australia) Limited
ABN 15 003 677 227
Level 1, 177 Pacific Highway
North Sydney, NSW 2060
(02) 9015 5088
Tel:
Fax:
(02) 9015 5034
www.hutchison.com.au
ASX Market Announcements
Australian Securities Exchange
Date: 28 March 2022
Subject: 2021 Annual Report
The 2021 Annual Report for Hutchison Telecommunications (Australia) Limited
incorporating the full year financial statements for the year ended 31 December 2021,
is attached.
Yours faithfully
Swapna Keskar
Joint Company Secretary
AUTHORISED FOR RELEASE: By order of the Board
For further information, please contact the Company Secretary by email at htalinvestors@companymatters.com.au
by telephone on (02) 9015 5088.
ANNUAL REPORT
2021
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CONTENTS
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
Hutchison Telecommunications (Australia) Limited
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AGM Details
The Annual General Meeting
of HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Wednesday 4 May 2022 at 10.00 am Sydney time
ABN 15 003 677 227
Hutchison Telecommunications (Australia) Limited (ASX: HTA)
(HTAL)
WHO WE ARE
1
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% interest directly held by
Hutchison 3G Australia Holdings Pty Limited (“H3GAH”, a wholly owned subsidiary of HTAL) and
an attributed 13.91% interest 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. VHAH has a direct 27.82% interest in TPG.
TPG operates a number of leading mobile and internet brands including Vodafone, TPG, iiNet,
Internode, Lebara, AAPT and felix, providing consumers with a comprehensive portfolio of fixed
and mobile products in the Australian telecommunications market.
2020
VHA merged with
TPG Telecom
Limited creating
the present TPG.
2009
HTAL’s operations
were merged with
Vodafone Australia
to form VHA.
2003
HTAL launched
Australia’s first
3G service under
the 3 brand.
1999
HTAL was listed
on the ASX.
Annual Report 2021 2
OWNERSHIP STRUCTURE
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%
HUTCHISON
TELECOMMUNICATIONS
(AUSTRALIA) LIMITED
(ASX: HTA)
100%
HUTCHISON 3G AUSTRALIA
HOLDINGS PTY LIMITED
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
3
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
2021
($’000)
121
2020
($’000)
1,272
Movement
($’000)
(1,151)
Movement
(%)
(90%)
(21,677)
825,441
(847,118)
(103%)
(21,677)
825,441
(847,118)
(103%)
TPG – Financial Metrics
The items below represent the share of TPG attributable to HTAL1:
Total revenue ($m)
EBITDA ($m)4
Share of net (loss)/profit
of TPG before equity accounted
adjustments ($m)
Share of net (loss)/profit
of TPG after equity accounted
adjustments ($m)
2021
20202
Pre-merger Post-merger3
1,325.9
433.6
742.5
256.4
717.7
220.0
YoY change
(%)
(9.2%)
(9.0%)
Total
1,460.2
476.4
27.6
(52.5)
219.8
167.3
83.5%
1.8
(358.6)
191.2
(167.4)
101.1%
HTAL uses the equity method of accounting to account for its interests in TPG. The amount of HTAL’s 25.05%
share of TPG net profit/(loss) for the year ended 31 December 2021 is a profit of $1.8 million and is after an equity
accounting adjustment for depreciation in TPG network assets. This amount is different from HTAL’s share of
net profit/(loss) of equity accounted investments for the year ended 31 December 2021 of a loss of $19.9 million
reported on the consolidated statement of profit or loss and other comprehensive income as 13.91% of HTAL’s
interests in TPG is indirectly held through a joint venture company, VHAH, for which there are financing costs
which flow through into the equity accounted results. Further details are included in Notes 1 and 6 of the financial
statements for the year ended 31 December 2021.
1 Effective from 27 June 2020, HTAL’s 25.05% interest in TPG comprises 11.14% interest directly held by H3GAH, a wholly owned subsidiary of HTAL,
and an attributed 13.91% interest indirectly held by H3GAH through VHAH, a company domiciled in the United Kingdom in which H3GAH has a 50%
shareholding. VHAH has a direct 27.82% interest in TPG. Refer to Note 6 for further information.
2 HTAL had a share of 50% in VHA results up until 26 June 2020, when the merger between VHA and TPG Corporation Limited (formerly named TPG
Telecom Limited (“TPM”)) became effective for accounting purposes. On the same date, HTAL’s ownership interest percentage in VHA diluted from
50% to 25.05%. Refer to Note 6 for further information.
3 Adjustments have been made to certain prior period comparatives to enhance comparability.
4 EBITDA is defined as earnings before net finance costs, tax and depreciation and amortisation.
Annual Report 2021 4
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 2021 Financial Results
Post merger considerations
HTAL’s revenue from ordinary activities represents interest
income. HTAL’s revenue from ordinary activities for the
year ended 31 December 2021 decreased from $1.3 million
in the corresponding period in 2020 to $0.1 million,
due to the lower interest income for the year ended
31 December 2021 as the working capital facility previously
provided to Vodafone Hutchison Australia Limited (“VHA”)1
was terminated prior to the merger (between VHA and
TPG Corporation Limited, formerly named TPG Telecom
Limited, following which the merged entity renamed to
TPG and listed on the Australian Securities Exchange
(“ASX”)) completed in 2020.
Dividends of $32.1 million were received from TPG by
HTAL’s wholly owned subsidiary Hutchison 3G Australia
Holdings Pty Limited (“H3GAH”) during the year. Dividend
income received from equity accounted investment in
TPG is recognised as a reduction in the carrying amount
of the investment in the Group’s consolidated financial
statements. Additionally, $80.2 million of dividend income
from TPG was received and retained by joint venture
VHAH of which HTAL has a 50% interest, during the year.
HTAL’s other operating expenses for the year ended
31 December 2021 had increased from $1.4 million in
the comparative period to $1.9 million.
Dividends received by H3GAH of $32.1 million was
advanced to HTAL by way of an interest free loan.
The proceeds of $32.1 million along with the cash on
hand was then used to fund a $49.7 million partial
repayment of a related party borrowing facility.
Upon completion of the merger referenced to above, HTAL
now holds 25.05% ownership interest of TPG. This 25.05%
ownership interest comprises of 11.14% interest directly
held by H3GAH, and an attributed 13.91% interest indirectly
held by H3GAH through 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. VHAH has a direct 27.82% interest in TPG.
Under the TPG Scheme Implementation Deed, HTAL and
its wholly-owned subsidiary, H3GAH and Vodafone Group
Plc (“VGP”) and its relevant subsidiaries entered into an
escrow deed under which, subject to certain exceptions,
they must not dispose of, directly or indirectly, any of their
TPG shares for a period of 24 months following merger
implementation. Furthermore, the VHAH shareholders’
agreement entered into between HTAL, VGP, VHAH and
others dated 24 June 2020: (i) places restrictions on direct
and indirect transfers of shares in VHAH for a period
of two years from the merger implementation, and (ii)
places restrictions on VHAH from selling its shares in TPG
for a period of two years from merger implementation
and also provides that, on expiry of three 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 nine-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.
1 Vodafone Hutchison Australia Pty Limited (“VHA”) was converted to a public company on 19 June 2020 and changed its name to Vodafone Hutchison
Australia Limited. On 29 June 2020, VHA changed its name from Vodafone Hutchison Australia Limited to TPG Telecom Limited, (the company that
previously bore that name having changed its name to TPG Corporation Limited) and was listed on the ASX on 30 June 2020.
Hutchison Telecommunications (Australia) Limited 5
Key 2021 achievements and highlights of TPG
TPG 2021 financial results
– EBITDA of $1,731.0 million, resilient amid COVID-19
and industry headwinds
– Strong cash flow result reflecting merger benefits
and disciplined financial management
– Final dividend of 8.5 cents per share, fully franked,
up 13% on the final dividend in the financial year 2020
TPG announced a total revenue of $5,293.0 million,
EBITDA of $1,731.0 million, and a net profit attributable
to shareholders of $110.0 million for the year ended
31 December 2021. For further details and an explanation
of TPG’s results for the year ended 31 December 2021,
you may refer to TPG’s 2021 annual report which was
lodged with the ASX on 24 February 2022.
– Returning momentum in mobile subscriber numbers,
up 33,000 since November 2021
Outlook – COVID-19 Pandemic
– Strong fixed wireless growth: 80,000 subscribers in
December 2021; to double in 2022
– Continued metro 5G upgrades with a further
1,000-plus sites to be delivered in 2022
– Strategic review of passive towers and rooftops
infrastructure nearing completion
– On track to deliver $125.0–$150.0 million merger
synergy target in 2022, a year ahead of schedule
On 21 February 2022 TPG announced a regional
Multi-Operator Core Network (“MOCN”) agreement with
Telstra Corporation Limited (ASX: TLS) which will enable
TPG to provide its subscribers with 4G and 5G coverage
for data, calls and messaging from over 3,700 Telstra sites
in regional and rural Australia. The MOCN Agreement,
which is subject to regulatory and other approvals as
may be required, will significantly expand TPG’s mobile
network footprint through an increase in regional sites.
The COVID-19 pandemic continues to persist and
containment policies by the Australian Government and
governments around the world remain in force to prevent
the spread of COVID-19. The level of restrictions and
measures to limit movement into and out of Australia,
and also domestically, is ongoing, and continues to
impact inbound related connections, visitor revenue
and international roaming revenues of TPG. While there
is prevailing uncertainty of the extent and duration of
the COVID-19 pandemic, it is reasonably likely that the
pandemic will continue to have an impact on the Group’s
results in future periods.
HTAL remains committed to its investment in TPG and will
continue to support TPG in the future.
Fok Kin Ning, Canning
Chairman
Annual Report 2021 6
BOARD OF DIRECTORS
1
2
3
4
1. Fok Kin Ning, Canning
(Chairman) BA, DFM, FCA (ANZ)
3. Melissa Anastasiou
(Director)
Fok Kin Ning, Canning, aged 70, has been a Director since
February 1999. Mr Fok has been an executive director and
group co-managing director of CK Hutchison Holdings
Limited (“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 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 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 and chairman
of TPG Telecom Limited (“TPG”) (formerly Vodafone
Hutchison Australia Limited (“VHA”))1 since 2001 and
March 2021 respectively, a director of Cenovus Energy
Inc. (“Cenovus Energy”) since January 2021 and deputy
president of the board of commissioners of PT Indosat
Tbk (“PTI”) since January 2022. The aforementioned
companies are either the ultimate holding company of
HTAL, or subsidiaries or associated companies of CKHH of
which Mr Fok has oversight as director of CKHH. He was
a co-chairman from 2000 to 2020 and was a director
from 2000 to March 2021 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 72, 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.
Melissa Anastasiou, aged 50, 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 68, 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 and
HKEIL since 2014. She is an independent non-executive
director of Hong Kong Exchanges and Clearing Limited
since 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.
1 Vodafone Hutchison Australia Pty Limited (“VHA”) was converted to a public company on 19 June 2020 and changed its name to Vodafone Hutchison
Australia Limited. On 29 June 2020, VHA changed its name from Vodafone Hutchison Australia Limited to TPG Telecom Limited, (the company that
previously bore that name having changed its name to TPG Corporation Limited) and was listed on the ASX on 30 June 2020.
Hutchison Telecommunications (Australia) Limited 7
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6
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8
9
5. Justin Herbert Gardener
(Director) BEc, FCA, AGIA
8. Frank John Sixt
(Director) MA, LLL
Justin Herbert Gardener, aged 85, 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 68, 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 as director of CKHH. He was a director of
TPG from 2016 to 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 80, has been a Director
since July 2005. Mr Scanlon is a special venture partner
to Clarity Partners LLP, a private equity firm. From 1965
through to 1988, his career was with AT&T, primarily Bell
Labs, rising to group vice president of AT&T. Mr Scanlon
then went on to become president and general manager of
Motorola’s Cellular Networks and Space Sector, founding
chief executive officer of Asia Global Crossing, chief
executive officer of Global Crossing and chairman and
chief executive officer of PrimeCo Cellular.
Frank John Sixt, aged 70, 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 HKEIL since 2015,
a director of TPG since 2001 and a director of Cenovus
Energy since January 2021. He has also been a member
of the board of commissioners of PTI since January 2022.
The aforementioned companies are either the ultimate
holding company of HTAL, or subsidiaries or associated
companies of CKHH of which Mr Sixt has oversight as
director of CKHH. He has almost four decades of legal,
global finance and risk management experience, and
possesses deep expertise in overseeing financial reporting
system, risk management and internal control systems as
well as sustainability issues and related risks. Mr Sixt was
a director of Husky Energy (delisted on 5 January 2021
upon its combination with Cenovus Energy) from 2000 to
March 2021. 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 68, 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 has also been a member
of the board of commissioners of PTI since January 2022.
He held various senior technology management positions
in the telecommunications industry before joining the
group of HWL in 1998. 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 Vodafone Hutchison
Australia Pty Limited (now known as 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 2016 to 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.
Annual Report 2021 8
This Corporate Governance Statement is dated
23 February 2022 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 2021 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.
– monitoring the performance of management against
these goals and objectives and initiating corrective
action when required;
– ensuring that there are adequate internal controls
and ethical standards of behaviour adopted and met
within the Group;
– reviewing and approving annual financial plans and
monitoring corporate performance against both
short-term and long-term financial plans;
– appointing the chief executive 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.
The Board Charter is available on the Company’s website.
Composition of the Board
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;
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.
CORPORATE GOVERNANCEHutchison Telecommunications (Australia) Limited 9
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 in which the Group conducts its
business and to refresh their knowledge and skills on the
roles, functions and duties of a listed company director.
There were no new board appointments during the
2021 financial year.
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 2020
was undertaken at the beginning of 2021 and that for the
financial year ended 31 December 2021 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 2022, 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.
Annual Report 2021 10
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;
– 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 half year results for the
period ended 30 June 2021 as well as the full year results
for the year ended 31 December 2021, received a signed
declaration provided in accordance with section 295A of
the Corporations Act 2001 (Cth) by Mr Frank Sixt.
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 2021, as any matters
that arose for possible consideration by this Committee
were dealt with by the full Board.
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited 11
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 two
employees 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%) (2020: 78% male, 22% female). The
Company has only two (male) employees who are not
considered to be a senior executives (2020: 100% male).
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.
Annual Report 2021 12
Company secretaries
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.
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.
Risk management
The Board acknowledges its responsibility for risk
oversight and ensuring that significant business risks
are appropriately managed, whilst acknowledging
that such risks may not be wholly eliminated. Details
of the Company’s risk management policy and internal
compliance and control system are available on the
Company’s website.
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 served as
an observer until August 2021 and was appointed as a
member in September 2021 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. Further,
in February 2022, the HTAL Board approved a risk appetite
statement for HTAL and HTAL’s Audit & Risk Committee
oversees that the operations of HTAL are within the
scope of its risk appetite statement.
Material business/operational 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.
The Company has not identified any material exposures to
environmental and social risks.
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.
Our values and expected behaviour
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.
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited 13
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.
Dealing in shares
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
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 through the use of one or more
technologies 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
2021 AGM were conducted by a poll with the results of
the meeting announced to the ASX.
Annual Report 2021 14
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.
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.
CORPORATE GOVERNANCE CONTINUEDHutchison Telecommunications (Australia) Limited DIRECTORS’ REPORT
15
The Directors present their report of Hutchison
Telecommunications (Australia) Limited (“HTAL” or the
“Company”) and the entity it controlled (the “Group”) at
the end of, or during, the year ended 31 December 2021.
No other matter or circumstance has arisen since
31 December 2021 that has significantly affected, or may
significantly affect:
– the Group’s operations in future financial years;
Principal activities
The Group’s principal activity is the ownership of a
combined 25.05% equity interest in TPG Telecom Limited
(“TPG”) (formerly Vodafone Hutchison Australia Limited
(“VHA”))1. TPG operates a number of leading mobile and
internet brands including Vodafone, TPG, iiNet, AAPT,
Internode, Lebara and felix, providing consumers with a
comprehensive portfolio of fixed and mobile products in
the Australian telecommunications market. From 1 January
until 26 June 2020 when the merger between VHA and
TPG Corporation Limited (formerly named TPG Telecom
Limited) (“TPM”) occurred, the Group’s principal activity
was the ownership of a 50% equity interest in VHA.
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
There were no significant changes in the state of affairs
of the Group during the financial year.
On 21 February 2022 TPG announced a regional
Multi-Operator Core Network (“MOCN”) agreement with
Telstra Corporation Limited (ASX: TLS) which will enable
TPG to provide its subscribers with 4G and 5G coverage
for data, calls and messaging from over 3,700 Telstra sites
in regional and rural Australia. The MOCN Agreement,
which is subject to regulatory and other approvals as may
be required, will significantly expand TPG’s mobile network
footprint through an increase in regional sites.
Subject to finalisation of the regulatory and other
approvals, TPG will recognise one-off, non-cash accounting
impacts in its financial results for the year ending
31 December 2022 arising from the decommissioning of
sites as follows: the recognition of onerous lease related
charges of up to $150 million and a write-down to the
value of network infrastructure assets of up to $75 million.
In addition, the costs of site decommissioning (which is
expected to take two years to complete) to be incurred
by TPG are expected to be up to $50 million. HTAL will
equity account (see note 1(u)(iii)) for the accounting
impacts in its financial results for the year ending
31 December 2022 accordingly.
– 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. TPG’s compliance
framework is designed to ensure TPG meets its obligations
under current legislation.
TPG is subject to the National Greenhouse and
Environmental Reporting Act 2007 (“NGER Act”) and
is required to report information about greenhouse gas
emissions, energy production, energy consumption and
other information specified by the NGER Act. TPG has
fulfilled its reporting requirements for its operations
annually since 2010 under the NGER Act.
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 2021 and up to
the date of this report, unless otherwise stated:
FOK Kin Ning, Canning
Barry ROBERTS-THOMSON
Melissa ANASTASIOU
Susan Mo Fong CHOW, also known as WOO Mo Fong,
Susan (alias CHOW WOO Mo Fong, Susan)
Justin Herbert GARDENER
LAI Kai Ming, Dominic, also alternate to FOK Kin Ning,
Canning and Frank John SIXT
John Michael SCANLON
Frank John SIXT, also alternate to LAI Kai Ming, Dominic
WOO Chiu Man, Cliff
Further information on the Directors is set out
on pages 6 and 7.
1 Vodafone Hutchison Australia Pty Limited (“VHA”) was converted to a public company on 19 June 2020 and changed its name to Vodafone Hutchison
Australia Limited. On 29 June 2020, VHA changed its name from Vodafone Hutchison Australia Limited to TPG Telecom Limited, (the company that
previously bore that name having changed its name to TPG Corporation Limited) and was listed on the ASX on 30 June 2020.
Annual Report 2021 16
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
Chairman of Audit & Risk Committee,
Member of Governance, Nomination & Compensation Committee
Lai Kai Ming, Dominic
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
–
* Direct holding of 100,000 shares
** Direct holding of 4,540 shares
Notes:
Particulars of
Directors’ Interests
in ordinary shares
of HTAL
5,100,000*
83,918,337**
–
–
1,957,358
–
–
1,000,000
–
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.
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited 17
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 2021 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
4
4
4
4
4
4
4
N/A
N/A
N/A
N/A
4
4
4
N/A
N/A
N/A
N/A
N/A
N/A
4
4
4
N/A
N/A
Nil
N/A
N/A
N/A
Nil
Nil
N/A
N/A
N/A
Nil
N/A
N/A
N/A
Nil
Nil
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
* Mr Lai attended three Board meetings as Alternate Director for Mr Fok
** Mr Lai attended two Board meetings as Alternate Director for Mr Sixt
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 Frank John Sixt, is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers himself
for re-election.
Ms Melissa Anastasiou, is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers
herself for re-election.
Mr Woo Chiu Man, Cliff, is a Director retiring by rotation in accordance with the Constitution who, being eligible, offers
himself for re-election.
Annual Report 2021 18
Company secretaries
Edith Shih
BSE, MA, MA, EdM, Solicitor, FCG(CS, CGP),
HKFCG(CS, CGP)(PE)
Edith Shih has been a Company Secretary of the Company
since 1999. She has over 35 years of experience in the
legal, regulatory, corporate finance, compliance and
corporate governance fields. Ms Shih is an executive
director and company secretary of CKHH. She has been
with the Cheung Kong (Holdings) Limited group since
1989 and 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 HTHKH, HUTCHMED (China) Limited (formally
known as 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 as director of CKHH.
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 of The Hong Kong Chartered Governance
Institute (“HKCGI”, formerly known as The Hong Kong
Institute of Chartered Secretaries) and current chairperson
of its Nomination Committee. She is also a member
of the Hong Kong-Europe Business Council. She is a
solicitor qualified in England and Wales, Hong Kong and
Victoria, Australia and a Fellow of both CGI and HKCGI,
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
MCom., LLB, FGIA, FCIS, FCS, GAICD
Swapna Keskar has been a Company Secretary of the
Company since 3 December 2020. She 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.
Remuneration Report
As at 31 December 2021, the Company had two employees
who are 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 John 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.
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited 19
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 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 of the Company.
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 (“KMP”) of HTAL having the authority and responsibility for
planning, directing and managing activities for the period 1 January 2021 to 31 December 2021.
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
2021
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
Total
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
BENEFITS
SHARE-BASED
PAYMENTS
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
$
Total
$
–
–
–
–
50,000
–
50,000
–
–
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,875
–
4,875
–
–
9,750
–
–
–
–
–
–
–
–
–
–
–
–
–
–
54,875
–
54,875
–
–
109,750
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.
Annual Report 2021 20
2020
Name
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
BENEFITS
SHARE-BASED
PAYMENTS
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
$
Total
$
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^^
–
–
–
–
50,000
–
50,000
–
–
–
Total
100,000
^ Appointed as Director with effect from 20 March 2020
^^ Resigned as Director with effect from 20 March 2020
Statutory performance indicators
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,750
–
4,750
–
–
–
9,500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
54,750
–
54,750
–
–
–
109,500
The below table shows measures of the Company’s financial performance over the last five years as required by the
Corporations Act 2001 (Cth).
2021
2020
2019
2018
2017
Profit/(loss) for the year attributable to owners
of HTAL ($’000)
(21,677)
825,441
(154,870)
4,475
(37,557)
Basic earnings/(loss) per share (cents)
(0.16)
6.08
(1.14)
(0.03)
(0.28)
Dividend payments ($’000)
Dividend payout ratio (%)
Increase/(decrease) in share price (%)
Total KMP incentives as percentage of
profit/(loss) for the year (%)
–
n/a
(17)
–
n/a
21
–
n/a
9
(0.51)
0.01
(0.1)
–
n/a
69
2.3
–
n/a
(14)
(0.3)
The dividend payout ratio is calculated based on dividends paid and profit/(loss) 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 exercisable at the end of the year.
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited 21
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
* Direct holding of 100,000 shares
** Direct holding of 4,540 shares
Shares under option
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
–
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 2021 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 2021 and 31 December 2020.
Other transactions with Directors and key management personnel
There were no other transactions with Directors for the years ended 31 December 2021 or 31 December 2020.
The above Remuneration Report has been audited by PricewaterhouseCoopers.
Annual Report 2021 22
Non-audit services
Indemnity of auditors
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 44 of
the financial report.
Auditor’s independence declaration
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.
Corporate Governance
HTAL is committed to conduct the business with the
highest standards of business ethics and adhering to the
legal and regulatory obligations. HTAL’s Board of Directors
has put in place formal guidelines representing the Board’s
policy on best practice corporate governance. These
guidelines outline the composition and responsibilities
of the Board and Board committees, and the Company’s
policies relating to, inter alia, continuous disclosure,
shareholder communications, share dealing policy and
corporate code of conduct. Refer to http://www.hutchison.
com.au/about-hutchison/corporate-governance/ for
further details.
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.
HTAL has agreed to reimburse their auditors,
PricewaterhouseCoopers, for any liability
(including reasonable legal costs) incurred by
PricewaterhouseCoopers in connection with any claim by a
third party arising from the Company’s breach of the audit
agreement between HTAL and PricewaterhouseCoopers.
The reimbursement obligation is subject to restrictions
contained in the Corporations Act 2001 (Cth). No payment
has been made to indemnify the auditors during or since
the end of the financial year.
Proceedings on behalf of HTAL
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
The Group is of a kind referred to in Corporations
(Rounding in Financial/Directors’ Reports) Legislative
Instrument 2016/191 issued by the Australian Securities
and Investments Commission relating to the ‘rounding
off’ of amounts in the financial statements. Amounts in
the financial statements and Directors’ report have been
rounded off in accordance with the 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.
Signature
Director
24 February 2022
Signature
Director
24 February 2022
DIRECTORS’ REPORT CONTINUEDHutchison Telecommunications (Australia) Limited
AUDITOR’S INDEPENDENCE DECLARATION
23
Auditor’s Independence Declaration
As lead auditor for the audit of Hutchison Telecommunications (Australia) Limited for the year ended
31 December 2021, I declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Hutchison Telecommunications (Australia) Limited and the entities it
controlled during the period.
Rosalie Wilkie
Partner
PricewaterhouseCoopers
Sydney
24 February 2022
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Annual Report 2021
24
FINANCIAL REPORT
For the year ended 31 December 2021
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 24 February 2022. The Company
has the power to amend and reissue
the financial statements.
Hutchison Telecommunications (Australia) Limited
FINANCIAL REPORT
For the year ended 31 December 2021
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/(loss) 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
25
26
27
28
29
30
30
36
36
37
37
37
41
41
41
42
43
44
44
44
45
45
46
48
48
49
50
53
53
55
56
62
64
Annual Report 2021
26
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2021
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
Items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Recycling of hedging reserve
Net gain on cash flow hedges taken to equity (share of equity
accounted investments)
Tax relating to items that may be reclassified to profit or loss
Other comprehensive income for the year, net of tax
Total comprehensive income/(loss) for the year
attributable to members of the Company
Earnings/(loss) per share for profit/(loss) attributable
to members of the Company
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Notes
2
6
3
11
11
2021
$’000
121
2020
$’000
1,272
(1,901)
(1,457)
–
(19,897)
677,315
148,311
(21,677)
825,441
–
–
(21,677)
825,441
–
–
150
–
150
–
2
64
–
66
(21,527)
825,507
Cents
Cents
20
20
(0.16)
(0.16)
6.08
6.08
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
Hutchison Telecommunications (Australia) Limited CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
27
ASSETS
Current Assets
Cash and cash equivalents
Loans and receivables
Prepayments
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
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
Notes
2021
$’000
2020
$’000
4
5
3,737
23,657
–
52
–
7
–
20
3,789
23,684
6
774,578
774,578
825,742
825,742
778,367
849,426
8
9
10
11
11
474
38,316
38,790
38,790
991
88,013
89,004
89,004
739,577
760,422
4,204,488
4,204,488
71,266
70,434
(3,536,177)
(3,514,500)
739,577
760,422
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Annual Report 2021 28
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
ATTRIBUTABLE TO MEMBERS OF THE COMPANY
RESERVES
Contributed
equity
$’000
Capital
redemption
reserve1
$’000
Cash flow
hedging
reserve1
$’000
Share-based
payments
reserve1
$’000
Accumulated
losses2
$’000
Total equity
$’000
Balance at 1 January 2020
4,204,488
54,887
(399)
15,880
(4,339,941)
(65,085)
Profit for the year
Other comprehensive income:
Recycling of hedging reserve
Net gain on cash flow hedges
(share of equity accounted
investments)
Tax relating to components of
other comprehensive income
Total comprehensive
income for the year
–
–
–
–
–
–
–
–
–
–
Balance at 31 December 2020
Balance at 1 January 2021
4,204,488
4,204,488
54,887
54,887
Loss for the year
Other comprehensive income:
Net gain on cashflow hedges
(share of equity accounted
investments)
Tax relating to components of
other comprehensive income
Total comprehensive
income for the year
Equity-settled share-based
payments (share of equity
accounted investments),
net of tax
–
–
–
–
–
–
–
–
–
–
–
2
64
–
66
(333)
(333)
–
150
–
150
–
–
–
–
–
825,441
825,441
–
–
–
2
64
–
825,441
825,507
15,880
(3,514,500)
760,422
15,880
(3,514,500)
760,422
–
–
–
–
(21,677)
(21,677)
–
–
150
–
(21,677)
(21,527)
–
682
–
682
Balance at 31 December 2021
4,204,488
54,887
(183)
16,562
(3,536,177)
739,577
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
1 See note 11 (a) and (c).
2 See note 11 (b).
Hutchison Telecommunications (Australia) Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
29
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of GST)
(2,443)
(1,088)
Notes
2021
$’000
2020
$’000
Interest received
Dividends from associate
Net cash inflows from operating activities
Cash Flows from Investing Activities
Repayment of loans from associate
Net cash inflows from investing activities
Cash Flows from Financing Activities
121
32,099
29,777
–
–
19
16
1,272
–
184
76,193
76,193
Repayment of borrowings – entity within the CKHH Group
16
(49,697)
(160,777)
Net cash outflows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
(49,697)
(160,777)
(19,920)
(84,400)
23,657
3,737
108,057
23,657
4
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Annual Report 2021 30
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2021
Note 1
Summary of significant
accounting policies
(d) Principles of consolidation
(i) Subsidiaries
(a) Reporting entity
Hutchison Telecommunications (Australia) Limited
(“HTAL” or the “Company”) 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 (together the “Group”)
is included in the Directors’ report on pages 15 to 22. The
financial report was authorised for issue by the Board on
the 24 February 2022. The Company has the power to
amend and reissue the financial report.
The principal accounting policies adopted in the
preparation of the financial statements are set out below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
(b) 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 23.
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.
(c) Net current asset deficiency
As at 31 December 2021, the Group has a deficiency of
net current assets of $35.0 million (2020: a deficiency of
$65.3 million). Included in the Group’s current liabilities
is an amount of $38.3 million (2020: $88.0 million) which
relates to an interest free financing facility provided from
a subsidiary of the ultimate parent entity, CK Hutchison
Holdings Limited (“CKHH”), which is repayable on demand.
The Group has unused financing facilities of $1,561.7 million
at 31 December 2021 (2020: $1,512.0 million). 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.
A subsidiary is an entity over which the Group has control.
The Group controls an entity when the Group is exposed,
or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns
through its power over the entity.
(ii) Joint arrangements
A joint arrangement is an arrangement of which two or
more parties have joint control and over which none of the
participating parties has unilateral control.
Investments in joint arrangements are classified either
as joint operations or joint ventures, depending on the
contractual rights and obligations each investor has under
the relevant contract. Joint operations arise where the
investors have rights to the assets and obligations for the
liabilities of an arrangement. A joint operator accounts for
its share of the assets, liabilities, revenue and expenses.
Joint ventures arise where the investors have rights to
the net assets of the arrangement. Joint ventures are
accounted for under the equity method, after initially
being recognised at cost in the consolidated balance sheet.
(Refer to Note 6 for further details).
(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
after initially being recognised at cost in the consolidated
statement of financial position. (Refer to Note 6 for
further details).
(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.
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.
Hutchison Telecommunications (Australia) Limited On acquisition of the equity accounted investment, any
excess of the cost of the investment over the Group’s
share of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill, which
is included within the carrying amount of the investment.
Any excess of the Group’s share of the net fair value of
the identifiable assets and liabilities over the cost of the
investment, after reassessment, is recognised immediately
in the consolidated statement of profit or loss and
other comprehensive income in the period in which the
investment is acquired.
If an investment in an associate becomes an investment in
a joint venture or an investment in a joint venture becomes
an investment in an associate, the Group continues to
apply the equity method of accounting and does not
remeasure the retained interest.
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 adjusted where necessary to ensure
consistency with the policies adopted by the Group.
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 the interest deemed to be received, plus
amounts reclassified from other comprehensive income.
(e) 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.
(f) 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.
31
(g) 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 differences 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 subsidiary have not
implemented the tax consolidation legislation.
Annual Report 2021 32
Note 1
Summary of significant
accounting policies continued
(h) Impairment of assets
Equity accounted investments are tested for impairment
annually or when there is an indication that it may be
impaired. The requirements to test for impairment are
applied to the net investment in the equity accounted
investee. Fair value adjustments and goodwill recognised
on acquisitions of equity-accounted investees are
not recognised separately. The guidance in AASB 128
Investments in Associates and Joint Ventures is used
to determine whether it is necessary to perform an
impairment test for investments in equity-accounted
investees. If there is an indication of impairment, then the
impairment test applied follows the principles in AASB 136
Impairment of Assets.
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.
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 have
suffered an impairment are reviewed for possible reversal
of 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.
(i) 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 cash and are
subject to an insignificant risk of changes in value.
(j) Other receivables
Other receivables are initially recognised at fair value
and subsequently at amortised cost, collectability is then
reviewed on an ongoing basis.
(k) 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.
(l) 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 2021, 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
Telecom Limited (“TPG”) equity accounted investment.
(m) 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 acquiree’s identifiable
net assets exceeds the sum of the consideration
transferred, the amount of any non-controlling interests
in the acquiree’s 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 associates/joint ventures
is not recognised separately and is included in the net
investments in the equity accounted investee which
is tested for impairment annually or when there is an
indication that it may be impaired.
(n) 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.
(o) Borrowings
Borrowings are initially recognised at fair value.
Borrowings are subsequently measured at amortised cost.
Transaction costs associated with the borrowings 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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 33
(p) Contributed equity
(t) 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.
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.
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.
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.
(q) Earnings/(loss) per share
(i) Basic earnings/(loss) per share
Basic earnings/(loss) 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/(loss) per share
Diluted earnings/(loss) per share adjusts the figures
used in the determination of basic earnings/(loss) 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.
(r) 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.
(s) 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.
Annual Report 2021 34
Note 1
Summary of significant
accounting policies continued
(t) Leases continued
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(h)).
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.
(u) 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. 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 Coronavirus Disease
2019 (“COVID-19”) the 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 assessment on investments in equity
accounted investments
In accordance with the Group’s accounting policy, the
investments in equity accounted investments are tested
for impairment annually or whenever events or changes in
circumstances indicate that the carrying amount may not
be recoverable. The impairment test for the Group’s equity
accounted investments in TPG Telecom Limited (“TPG”)
is carried out at 31 December 2021. Carrying value of the
investment is compared with its recoverable amount for
the impairment testing. The recoverable amount of the
investment is determined based on its fair value less cost
of disposal. Fair value is derived using the volume weighted
average price of TPG shares where share prices might be
driven by incidents or market sentiment which a company
cannot control. A block premium on the basis of HTAL’s
significant influence on TPG was considered. The result of
the impairment testing undertaken on 31 December 2021
indicated that the recoverable amount is in excess of the
carrying amount, as a result no impairment is deemed
necessary for the year.
(ii) Recovery of deferred tax assets
Deferred tax assets are recognised for unused tax losses
and deductible temporary differences if management
considers that it is probable that sufficient future taxable
profits will be available to utilise those temporary
differences. 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. The Group
has carried forward tax losses for unused deferred tax
assets that have not been recognised. (Refer to Note 3 for
further details).
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 35
(iii) 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” 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.
AASB 16: COVID-19–Related Rent Concessions beyond
30 June 2021
The Group has early adopted AASB 16: COVID-19-Related
Rent Concessions beyond 30 June 2021 ahead of
its effective date of 1 April 2021. The amendment
extends, by one year, the original amendment issued
by Australian Accounting Standards Board in June
2020. It 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 amount
recognised in profit or loss for the reporting period arising
from application of the practical expedient is insignificant
to the results for the period.
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 an increase in the share of net loss of
equity accounted investment of $25.8 million (2020: a
decrease in the share of net profit of equity accounted
investments of $83.1 million). The change has been
included in the summarised financial information of TPG
as disclosed in Note 6.
(v) Rounding of amounts
The Group is of a kind referred to in Corporations
(Rounding in Financial/Directors’ Reports) Legislative
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 ASIC Instrument
to the nearest thousand dollars, or in certain cases unless
otherwise indicated, the nearest dollar or cent.
(w) 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.
(x) 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 2021. In addition, the Group has early
adopted Amendment to AASB 16: COVID-19-Related Rent
Concessions beyond 30 June 2021 ahead of its effective
date. Adoption of this amendment has not had a material
impact in the current year.
AASB 2020-8 Amendments to Australian–Interest Rate
Benchmark Reform–Phase 2
The Australian Accounting Standards Board published
Interest Rate Benchmark Reform Amendments to AASB
9 Financial Instruments, AASB 139 Financial Instruments:
Recognition and Measurement and AASB 7 Financial
Instruments: Disclosures representing the finalisation of
Phase II of the project on 27 August 2020 to address issues
that might affect financial reporting when an existing
interest rate benchmark is replaced with an alternative
benchmark interest rate, i.e., replacement issues.
The Phase II amendments do not supersede the Phase
I amendments. The Phase II amendments apply to all
entities and are not optional and effective for annual
periods beginning on or after 1 January 2021 with early
application permitted. The amendments are applied
retrospectively and include the potential reinstatement of
hedge relationships that were discontinued solely due to
changes directly required by the reform. The adoption of
these amendments has not had a material impact to the
Group’s financial statements as the Libor rate applicable
to the Group will only discontinue after 30 June 2023.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations
have been published that are not mandatory for
31 December 2021 reporting periods. With the exception
of Amendment to AASB 16: COVID-19-Related Rent
Concessions beyond 30 June 2021, these new accounting
standards and interpretations have not been early adopted
by the Group. The adoption of these standards in future
period is not expected to have a material impact on the
Group’s financial statements.
Annual Report 2021 36
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% (2020: 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% (2020: 30%)
All unused tax losses were incurred by Australian entities.
2021
$’000
2020
$’000
121
1,272
2021
$’000
2020
$’000
–
–
(21,677)
825,441
(6,503)
247,632
–
(203,195)
5,969
(44,493)
(534)
46
–
488
–
(56)
(41)
–
97
–
160,811
160,512
–
–
1,626
162,437
48,731
(24)
–
323
160,811
48,243
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 2021 and 31 December 2020.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 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
(a) Fair value
37
2021
$’000
3,737
2021
$’000
–
2020
$’000
23,657
2020
$’000
7
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
2021
$’000
–
2020
$’000
7
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
2021
$’000
2020
$’000
774,578
825,742
Pre-merger 2020, HTAL and Vodafone Group Plc (“VGP”) each owned a 50% interest in a joint venture named Vodafone
Hutchison Australia Limited (“VHA”), which provided telecommunications 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. Also at that time, Vodafone Hutchison Finance Pty Limited
(“VHF”) was a wholly owned subsidiary of VHA.
On 26 June 2020, the merger between VHA and TPG Corporation Limited (formerly named TPG Telecom Limited)
(“TPM”) was sanctioned by the Court and became effective for accounting purposes. 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 Vodafone Hutchison (Australia) Holdings
Limited (“VHAH”), in which HTAL has a 50% ownership interest.
As part of its merger implementation activities, VHA, HTAL and VGP were required to restructure the existing VHA debt,
which involved the transfer of VHF which held external debt of $4,475 million (AUD equivalent) 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 in the annual report for the year
ended 31 December 2020 for further background.
Annual Report 2021 38
Note 6 Non-current assets – Investment accounted for using the equity method continued
Under the TPG Scheme Implementation Deed, HTAL and its wholly-owned subsidiary, H3GAH and VGP and its relevant
subsidiaries entered into an escrow deed under which, subject to certain exceptions, they must not dispose of, directly or
indirectly, any of their TPG shares for a period of 24 months following merger implementation. Furthermore, the VHAH
shareholders’ agreement entered into between HTAL, VGP, 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, 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% interest directly held by H3GAH, and an attributed 13.91% interest indirectly
held by H3GAH through 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, including its 50% share of VHAH’s
bank debt, has been accounted for in the consolidated financial reports using the equity method. VHF was placed in
member’s voluntary liquidation on 30 March 2021 and formally deregistered on 12 December 2021.
The market value of the above listed investments based on the quoted market price at 31 December 2021 was
$2,743.4 million (2020: $3,362.8 million). This amount is before the Group’s 50% share of VHAH’s net debt of
$4,524.0 million (2020: $4,554.7 million).
As at 31 December 2021, the Group held interests in the following associate and joint venture:
Name of entities
Associate:
Principal activity
Country of operation
TPG Telecom Limited (formerly
Vodafone Hutchison Australia Limited)
Telecommunications
Services
Australia
Joint venture:
OWNERSHIP INTEREST
2021
%
2020
%
11.14%3
11.14%3
Vodafone Hutchison (Australia)
Holdings Limited
Financing and
investing activities
United Kingdom
50.00%
50.00%
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 profit/(loss) of equity accounted investments, net of tax
Recycling of hedging reserve
Net gain on cash flow hedges taken to equity (share of equity accounted Investments),
net of tax
Share-based payment reserve (share of equity accounted Investments), net of tax
Share of dividend received from equity accounted investment4
2021
$’000
825,742
–
–
(19,897)
–
150
682
(32,099)
2020
$’000
–
50
677,315
148,311
2
64
–
–
Closing Balance
774,578
825,742
3 HTAL’s 25.05% ownership interest in TPG comprises 11.14% interest directly held by H3GAH, a wholly owned subsidiary of HTAL, and an attributed 13.91% interest
indirectly held by H3GAH through VHAH, a company domiciled in the United Kingdom in which H3GAH has a 50% shareholding. VHAH has a direct 27.82%
interest in TPG.
4 HTAL’s dividend income received from TPG for the 11.14% interest directly held by H3GAH is recognised as a reduction in the carrying amount of
the investment.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 39
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 of accounting. 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(u)(iii) Critical accounting estimates and judgements for further background.
2021
2020
TPG
VHAH
$’000
TPG
$’000
VHAH
$’000
$’000
$’000
$’000
Pre-merger5
Post-merger6
Total pre
and post-
merger
–
–
5,293,000
45,000
–
116
1,484,937
2,865,261
4,350,198
1,928
9,150
11,078
(719) (3,607,000)
(3,505)
(974,090)
(1,996,129)
(2,970,219)
2,023
–
212,391
–
–
–
Gross amount of the following
items of the equity accounted
investments:
Revenues
Other income
Expenses
Share of profits from investment
in TPG, net of tax
Depreciation and amortisation
–
(1,525,725)
–
(572,447)
(836,786)
(1,409,233)
Net finance costs
(42,718)
(149,000)
(82,476)
(191,645)
(97,666)
(289,311)
Profit/(loss) before income tax
(41,414)
56,275
126,526
(251,317)
(56,170)
(307,487)
Income tax expense
Profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive profit/(loss)
Reconciliation to the Group’s
share of profit/(loss) of the equity
accounted investments:
–
(49,000)
–
–
819,616
(41,414)
166
(41,248)
7,275
597
7,872
126,526
(251,317)
763,446
–
92
2,155
126,526
(251,225)
765,601
514,376
819,616
512,129
2,247
Group interest:
50%
11.14%7
50%
50%
11.14%7
Sub Total
Group’s share of the following items:
Profit/(loss) for the year
(20,707)
810
63,263
(125,659)
85,048
(40,611)
Unrecognised share of joint
venture loss
Recognise previously
unrecognised share of joint
venture loss
Group’s share of profit/(loss) of
equity accounted investments
–
–
–
–
–
–
125,659
(358,620)
–
–
125,659
(358,620)
(20,707)
810
63,263
(358,620)
85,048
(273,572)
HTAL’s share of profit/loss of equity accounted investments of $19.9 million loss for the year ended 31 December 2021
(2020: $148.3 million profit) represents (i) the combined total of the Group’s 50% share of net loss of VHAH of
$20.7 million (2020: $63.3 million net profit) (which includes the Group’s 50% share of VHAH’s financing costs and
others of $21.7 million (2020: $42.9 million) and the Group’s 13.91% indirect share of net profit of TPG of $1.0 million
(2020: $106.2 million) after considering equity accounted adjustments), and (ii) the Group’s 11.14% direct share of net
profit of TPG of $0.8 million (2020: $85.0 million) after considering equity accounted adjustments as presented in
the table above.
5 Pre-merger results represent the period between 1 January 2020 and 26 June 2020.
6 Post-merger results represent the period between 27 June 2020 and 31 December 2020.
7 HTAL’s 25.05% ownership interest in TPG comprises 11.14% interest directly held by H3GAH, a wholly owned subsidiary of HTAL, and an attributed 13.91%
interest indirectly held by H3GAH through VHAH, a company domiciled in the United Kingdom in which H3GAH has a 50% shareholding. VHAH has a direct
27.82% interest in TPG.
Annual Report 2021 40
Note 6 Non-current assets – Investment accounted for using the equity method continued
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 their respective 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 of accounting.
Gross amount of the following items of the equity accounted
investments:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net (Liabilities)/Assets
2021
2020
VHAH
$’000
TPG
$’000
VHAH8
$’000
TPG
$’000
361,456
833,000
342,189
683,000
3,372,270
18,757,684
3,449,507
18,654,000
(7,331)
(1,667,000)
(11,223)
(1,456,000)
(4,878,173)
(5,801,000)
(4,891,761)
(5,476,000)
(1,151,778)
12,122,684
(1,111,288)
12,405,000
Reconciliation to the carrying amount of the Group’s investment
accounted for using the equity method
Group Interest
50%
11.14%9
50%
11.14%9
Group’s share of net (liabilities)/assets
(575,889)
1,350,467
(555,644)
1,381,386
HTAL’s investments accounted for using the equity method of accounting of $774.6 million at 31 December 2021
(31 December 2020: $825.7 million) represents (i) the combined total of the Group’s 50% share of net liabilities of
VHAH of $575.9 million (31 December 2020: $555.6 million) which includes the Group’s 50% share of VHAH’s bank
debt of US$3.5 billion (31 December 2020:US$3.5 billion), and the Group’s 13.91% indirect share of net assets of TPG
of $1,686.3 million (31 December 2020:$1,725.5 million), and (ii) the Group’s 11.14% direct share of net assets of TPG of
$1,350.5 million (31 December 2020: $1,381.4 million) presented in the table above.
The summarised statement of financial position includes the following items:
Cash and cash equivalents
Current financial liabilities
Non-current financial liabilities
2021
2020
VHAH
$’000
TPG
$’000
VHAH8
$’000
TPG
$’000
361,456
202,000
342,085
120,000
(7,331)
(61,000)
(11,223)
(93,000)
(4,878,173) (5,649,000)
(4,891,961)
(5,381,000)
(i) On 20 November 2020, VHAH entered into a US$3.5 billion Syndicated Facility Agreement (“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 SFA is guaranteed by the VHAH ultimate parent entities,
CKHH and VGP. CKHH and VGP 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. VHAH’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 the interest
payment is made to the facility agent. VHAH utilised the funds from the 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
20 November 2020.
(ii) HTAL’s investment in VHAH is predicated on the ongoing financial support from both of VHAH’s ultimate shareholders.
The SFA is fully guaranteed by VHAH’s ultimate parent entities.
8 Adjustments have been made to certain prior period comparatives to enhance comparability.
9 HTAL’s 25.05% ownership interest in TPG comprises 11.14% interest directly held by H3GAH, a wholly owned subsidiary of HTAL, and an attributed 13.91%
interest indirectly held by H3GAH through VHAH, a company domiciled in the United Kingdom in which H3GAH has a 50% shareholding. VHAH has a direct
27.82% interest in TPG.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 41
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(d) and Note 23(c):
Name of controlled entity
Country of
Incorporation
Class
of Shares
Hutchison 3G Australia Holdings Pty Limited11
Australia
Ordinary
Note 8 Current liabilities – Payables
Trade creditors
Payables to related parties (Note 16)
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 risk is set out 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
EQUITY HOLDING10
2021
%
100
2021
$’000
355
119
474
2020
%
100
2020
$’000
120
871
991
2021
$’000
38,316
2020
$’000
88,013
Further information relating to the loan from an entity within the CKHH Group is set out in Note 16. The $1.6 billion
facilities from an entity within the CKHH Group is an interest free financing facility and is repayable on demand. Total
unused financing facilities at 31 December 2021 is $1,561.7 million (31 December 2020: $1,512.0 million).
(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
2021
$’000
2020
$’000
1,600,000
1,600,000
(38,316)
(88,013)
1,561,684
1,511,987
10 The proportion of ownership interest is equal to the proportion of voting power held.
11 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.
Annual Report 2021 42
Note 10 Contributed equity
Share capital
2021
Shares
2020
Shares
2021
$’000
2020
$’000
Ordinary shares (fully paid)
13,572,508,577 13,572,508,577
4,204,488
4,204,488
(a) Share capital
Ordinary shares entitle the holder to participate in dividends and proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
(b) Movement in ordinary shares
There has been no movement in the number of shares issued during the years ended 31 December 2021 and
31 December 2020.
(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.
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 2021 and 31 December 2020 were as follows:
Gearing ratio
2021
%
5
2020
%
9
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited Note 11 Reserves and accumulated losses
(a) Reserves
Capital redemption reserve
Cash flow hedging reserve
Share-based payments reserve
Movements:
Capital redemption reserve
There has been no movement in the capital redemption reserve during the year (2020: nil).
Cash flow hedging reserve
Balance at 1 January
Hedging movement
Balance at 31 December
Share-based payments reserve
Balance at 1 January
Share-based payments
Balance at 31 December
(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
Capital redemption reserve
43
2021
$’000
2020
$’000
54,887
54,887
(183)
(333)
16,562
71,266
15,880
70,434
(333)
150
(183)
(399)
66
(333)
15,880
15,880
682
–
16,562
15,880
2021
$’000
2020
$’000
(3,514,500)
(4,339,941)
(21,677)
825,441
(3,536,177)
(3,514,500)
The capital redemption reserve relates to the surplus arising on initial consolidation of a 19.9% stake in H3GAH.
Cash flow hedging reserve
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(l).
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;
(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; and
(iii) recognise HTAL’s share of TPG equity accounted investment’s the grant date fair value of options issued to its
employees but not exercised.
Annual Report 2021 44
Note 12 Director and key management personnel compensation
(a) Director and key management personnel compensation
Short term employee benefits
2021
$
2020
$
109,750
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 2021 and 31 December 2020. There were no transactions with the Directors of the Company for the years
ended 31 December 2021 and 31 December 2020.
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
2021
$
2020
$
228,000
228,000
355,292
355,292
12,000
12,000
240,000
367,292
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 2021 and 31 December 2020. 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
2021
$’000
2020
$’000
–
–
–
–
–
–
2021
$’000
–
18,000
18,000
2020
$’000
–
13,138
13,138
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 45
Note 15 Commitments
There were no commitments contracted by HTAL or its controlled entities not recognised as liabilities or payables at
31 December 2021 and 31 December 2020.
At 31 December 2021 and 31 December 2020, 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
2021
$’000
2020
$’000
2021
$’000
2020
$’000
–
–
–
–
–
–
323,000
366,340
218,000
276,280
541,000
642,620
(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 2021,
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; Melissa ANASTASIOU; Susan Mo Fong CHOW; Justin Herbert
GARDENER; LAI Kai Ming, Dominic; John Michael SCANLON; Frank John SIXT 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:
Loans to related parties
Repayments from TPG equity accounted investment
Loans from related parties
2021
$
2020
$
–
76,193,205
Repayments to an entity within the CKHH Group
(49,696,962) 160,776,989
Interest revenue
Received from TPG equity accounted investment
–
954,555
Operating expenses
Paid to TPG equity accounted investment
(478,509)
(626,529)
Annual Report 2021 46
Note 16 Related party transactions continued
(e) Outstanding balances
The following balances are outstanding at 31 December 2021 and 31 December 2020 in relation to transactions with
related parties:
Current loans and other receivables
VHAH equity accounted investment (Note 5)
Payables
TPG equity accounted investment (Note 8)
Current liabilities – Other financial liabilities
Entity within the CKHH Group (Note 9)
2021
$
2020
$
–
6,828
(119,627)
(870,750)
(38,315,620) (88,012,582)
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 SFA with a syndicate of lenders. The SFA is guaranteed by VHAH’s
ultimate parent entities, CKHH and VGP. CKHH and VGP 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.
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 2021 in comparison to
31 December 2020.
(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 2021 and
31 December 2020.
Statement of profit or loss and other comprehensive income
Revenue
(Impairment)/reversal of impairment of TPG investment held within Closed Group(i)
Other operating expenses
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Movements in consolidated accumulated losses
Accumulated losses at 1 January
Profit/(loss) for the year
Accumulated losses at 31 December
2021
$’000
2020
$’000
32,220
1,272
(187,868)
1,217,185
(1,901)
(1,457)
(157,549)
1,217,000
–
–
(157,549)
1,217,000
(2,846,025)
(4,063,025)
(157,549)
1,217,000
(3,003,574)
(2,846,025)
(i) During the financial year, the Closed Group recognised an impairment of $187.9 million (2020: reversal of prior period
impairment of $1,217 million) on H3GAH’s investment in TPG (formerly VHA) as a result of a decrease in its recoverable
value due to decrease in TPG share price. The recoverable value has been determined as the investment’s fair value
less costs to sell.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 47
(b) Statement of financial position
Set out below is a statement of financial position as at 31 December 2021 and 31 December 2020 of the Closed Group
consisting of H3GAH and HTAL.
ASSETS
Current Assets
Cash and cash equivalents
Loans and receivable
Prepayments
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
2021
$’000
2020
$’000
3,737
23,657
–
52
–
7
–
20
3,789
23,684
1,306,682
1,494,550
1,306,682
1,494,550
1,310,471
1,518,234
474
38,316
38,790
38,790
996
88,013
89,009
89,009
1,271,681
1,429,225
4,204,488
4,204,488
70,767
70,762
(3,003,574)
(2,846,025)
1,271,681
1,429,225
Annual Report 2021
48
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 2021, 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)*
2021
$’000
2020
$’000
1,325,897
1,460,214
(19,897)
148,311
Further information reviewed by the chief operating decision maker with regards to the performance of the Group’s
equity accounted investments is disclosed in Note 6.
* after equity accounted investment accounting adjustments.
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)
Dividends from associate
Change in operating assets and liabilities
(Decrease)/Increase in other financial assets
Increase in other assets
(Decrease)/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 2021
Cash flows
Net debt as at 31 December 2021
2021
$’000
2020
$’000
(21,677)
825,441
–
(677,315)
19,897
32,099
(148,311)
–
–
(25)
(517)
29,777
(66)
–
435
184
3,737
23,657
(38,316)
(88,013)
(34,579)
(64,356)
Borrowings
due within
1 year
$’000
Cash
$’000
Total
$’000
23,657
(88,013)
(64,356)
(19,920)
49,697
29,777
3,737
(38,316)
(34,579)
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited Note 20 Earnings/(loss) per share
(a) Basic earnings/(loss) per share
Profit/(loss) attributable to members of the Company
(b) Diluted earnings/(loss) per share
Profit/(loss) attributable to members of the Company
49
CONSOLIDATED
2021
Cents
2020
Cents
(0.16)
6.08
(0.16)
6.08
$’000
$’000
(c) Earnings used in calculating earnings/(loss) per share
Basic earnings/(loss) per share
Profit/(loss) attributable to members of the Company used in calculating basic
earnings/(loss) per share
(21,677)
825,441
Diluted earnings/(loss) per share
Profit/(loss) attributable to members of the Company used in calculating diluted
earnings/(loss) per share
(21,677)
825,441
CONSOLIDATED
2021
Number
2020
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/(loss) 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/(loss) per share
13,572,508,577
13,572,508,577
There were no (2020: nil) options and no other potential ordinary shares outstanding at 31 December 2021 and
accordingly there was no impact on the earnings/(loss) per share calculation for the years ended 31 December 2021 and
31 December 2020.
Annual Report 2021 50
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 overseas the overall risk management including 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 2021, 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 2021 balances (2020: immaterial change).
(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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 51
(iii) Summarised sensitivity analysis
The following table summarises the sensitivity of the Group’s financial assets to interest rate risk.
31/12/2021
Financial assets
Cash and cash equivalents
Total increase/(decrease)
31/12/2020
Financial assets
Cash and cash equivalents
Loans and receivable
Total increase/(decrease)
(b) Credit risk
INTEREST RATE RISK
-1%
+1%
Carrying
amount
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
3,737
3,737
(37)
(37)
–
–
37
37
–
–
INTEREST RATE RISK
-1%
+1%
Carrying
amount
$’000
Post-tax
loss
$’000
Other
equity
$’000
Post-tax
loss
$’000
Other
equity
$’000
23,657
7
23,664
(237)
–
(237)
–
–
–
237
–
237
–
–
–
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.
At 31 December 2020, 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 VGP.
(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.
Annual Report 2021 52
Note 21 Financial risk management continued
(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 $38.3 million (2020: $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.
31/12/2021
Cash and cash equivalents
Payables
Other financial liabilities
Total
31/12/2020
Weighted
average
interest rate
0.03%
–
–
Less than
1 year
$’000
3,737
(474)
(38,316)
(35,053)
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
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
–
–
–
7
(991)
(88,013)
(65,340)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
3,737
(474)
(38,316)
(35,053)
Total
$’000
23,657
7
(991)
(88,013)
(65,340)
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited 53
Note 22 Events occurring after the reporting date
On 21 February 2022 TPG announced a regional Multi-Operator Core Network (“MOCN”) agreement with Telstra
Corporation Limited (ASX: TLS) which will enable TPG to provide its subscribers with 4G and 5G coverage for data, calls
and messaging from over 3,700 Telstra sites in regional and rural Australia. The MOCN Agreement, which is subject to
regulatory and other approvals as may be required, will significantly expand TPG’s mobile network footprint through an
increase in regional sites.
Subject to finalisation of the regulatory and other approvals, TPG will recognise one-off, non-cash accounting impacts
in its financial results for the year ending 31 December 2022 arising from the decommissioning of sites as follows: the
recognition of onerous lease related charges of up to $150 million and a write-down to the value of network infrastructure
assets of up to $75 million. In addition, the costs of site decommissioning (which is expected to take two years to
complete) to be incurred by TPG are expected to be up to $50 million. HTAL will equity account (see note 1(u)(iii)) for the
accounting impacts in its financial results for the year ending 31 December 2022 accordingly.
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.
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/(loss) for the year(i)
Total comprehensive profit/(loss) for the year
2021
$’000
2020
$’000
3,789
23,684
1,080,200
1,080,200
1,083,989
1,103,884
70,888
70,888
89,004
89,004
1,013,101
1,014,880
4,204,488
4,204,488
15,880
15,880
(3,207,267)
(3,205,488)
1,013,101
1,014,880
(1,779)
(1,779)
802,651
802,651
(i) No impairment was deemed necessary to be recorded in current year (December 2020: $802.9 million gain on
reversal of prior period impairment) of HTAL’s investment in H3GAH.
Annual Report 2021 54
Note 23 Parent entity disclosures continued
(b) Commitments and Contingencies
There were no commitments contracted for by HTAL but not recognised as liabilities or payable at 31 December 2021 and
31 December 2020.
The Directors of the Parent Entity are not aware of any other material contingent liabilities existing at the reporting date.
As at 31 December 2021, the Parent Entity has a deficiency of net current assets of $67.1 million (2020: deficiency
of net current assets of $65.3 million). Included in the Parent Entity’s current liabilities is an amount of $38.3 million
(2020: $88.0 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 $1,561.7 million at
31 December 2021 (2020: $1,512.0 million). 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
2021
$’000
2020
$’000
3,664,655
3,664,655
(2,584,455)
(2,584,455)
1,080,200
1,080,200
NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFor the year ended 31 December 2021Hutchison Telecommunications (Australia) Limited DIRECTORS’ DECLARATION
55
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 2021 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 the 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.
Signature
Director
24 February 2022
Signature
Director
24 February 2022
Annual Report 2021
56
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To the members of Hutchison Telecommunications (Australia) Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Hutchison Telecommunications (Australia) Limited (the
Company) and its controlled entities (together the Group) is in accordance with the Corporations
Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2021
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year
then ended
the notes to the consolidated financial statements, which include significant accounting
policies and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the
financial report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Hutchison Telecommunications (Australia) Limited
57
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free
from material misstatement. Misstatements may arise due to fraud or error. They are considered
material if individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
•
For the purpose of our audit we used overall
Group materiality of $7.5 million, which
represents approximately 1% of the Group's
total assets.
• We applied this threshold, together with
qualitative considerations, to determine the
scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate
the effect of misstatements on the financial
report as a whole.
•
•
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions
and inherently uncertain future events.
The Group audit team conducted an audit of the
financial information contained within the
consolidated financial statements and the
component auditors of TPG performed
procedures for the equity accounted
investment.
• We chose an asset base benchmark because, in
our view, the primary function of the Group is
to hold the investment in TPG Telecom Limited
(TPG). We performed further audit procedures
over the consolidation of the Group, including
adjustments for equity accounting of TPG.
• We utilised a 1% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
• We, as the Group engagement team,
determined and undertook an appropriate level
of involvement in the work performed by the
component audit team, in order for us to be
satisfied that sufficient audit evidence had been
obtained to support our opinion on the Group
financial report as a whole. This included
written instructions to the component auditors.
Annual Report 2021
58
INDEPENDENT AUDITOR’S REPORT CONTINUED
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report for the current period. The key audit matters were addressed in
the context of our audit of the financial report as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. Further, any commentary on the outcomes
of a particular audit procedure is made in that context. We communicated the key audit matters to
the Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Equity accounting for Hutchison
Telecommunication Australia Limited
(HTAL) ’s investment in TPG Telecom
Limited (TPG) (refer to note 6)
HTAL applies equity accounting for its
combined 25.05% ownership
investment in TPG. These investments
are held by HTAL via a:
•
•
13.91% indirect interest
through Vodafone Hutchison
Australia Holdings Limited
(VHAH), which HTAL jointly
controls through a wholly
owned subsidiary, and
11.14% direct interest in TPG
via a wholly owned subsidiary.
As at 31 December 2021, HTAL’s equity
accounted investment is carried at
$774 million.
Accounting for TPG was a key audit
matter because of the magnitude of the
investment.
To assess the equity accounting for the Group’s
investment in TPG, we performed the following
procedures amongst others:
•
Considered the appropriateness of the equity
accounting method.
• Reconciled the opening equity accounted
investment balance to the final position
reflected in the financial report. This
included:
o
o
recalculating the share of net
profit/(loss) and changes in reserves
of TPG by examining the schedule
prepared by the Group and
recalculating HTAL’s 25.05% share;
and
compared dividends received from
TPG to the supporting
documentation and bank
statements.
•
•
•
Agreed the financial statements of TPG as at
31 December 2021 to the equity accounting
schedule.
For borrowings and derivatives held by
VHAH:
o
o
tested the fair value of the
derivatives associated with the
borrowings with the assistance of
valuation experts, and
obtained third party confirmation of
borrowings.
Tested equity accounting adjustments in
HTAL to historical records and supporting
schedules for accuracy.
We also evaluated the adequacy of disclosures made
by the Group in the financial report in view of the
requirements of Australian Accounting Standards.
Hutchison Telecommunications (Australia) Limited
59
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of HTAL’s
equity accounted investment in TPG
(refer to note 6)
HTAL’s equity accounted investment in
TPG is the most significant asset of the
Group and is subject to an impairment
assessment, which involves application
of judgement in determining the
recoverable amount.
As part of their impairment
assessment, the Group has applied
assumptions to determine an expected
fair value less costs to sell.
The determination of fair value
involves significant judgment about a
market based price for the investment
in TPG.
As set out in note 1, estimates
considered by the Group in
determining fair value include the
application of a premium given the
significant influence held in TPG, as
well as the use of a volume weighted
average price (VWAP).
We performed the following procedures amongst
others:
• Developed an understanding of the process
•
•
by which the Group conducted the
impairment assessment.
Evaluated the Group’s methodologies and
their documented basis for key assumptions
utilised in the determination of fair value less
costs to sell. This included fair value being
estimated for the overall 25.05%
shareholding which is held both directly and
indirectly by the Group, along with
consideration of the proportionate net debt
held within VHAH.
Considered the share price of TPG
throughout the year and at year end, and
selected factors which could impact the
valuation.
• With the assistance of our valuation expert,
we assessed the inclusion and magnitude of
applying a premium for significant influence
in TPG.
Assessed management’s key assumptions
surrounding share price fluctuations and the
resultant VWAP applied.
•
• Obtained an understanding of the nature of
the net debt held within VHAH, and
recalculated the Group’s proportionate
share.
Considered other potential methods of
determining fair value.
•
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2021, but does not
include the financial report and our auditor’s report thereon. Prior to the date of this auditor's
report, the other information we obtained included the Review of operations, Board of Directors,
Directors' Report and Corporate Directory. We expect the remaining other information to be made
available to us after the date of this auditor's report.
Annual Report 2021
60
INDEPENDENT AUDITOR’S REPORT CONTINUED
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the
date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part
of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 18 to 21 of the directors’ report for the
year ended 31 December 2021.
In our opinion, the remuneration report of Hutchison Telecommunications (Australia) Limited for
the year ended 31 December 2021 complies with section 300A of the Corporations Act 2001.
Hutchison Telecommunications (Australia) Limited
61
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the remuneration report, based on our audit conducted in
accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Rosalie Wilkie
Partner
Sydney
24 February 2022
Annual Report 2021
62
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 24 February 2022.
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 26.16% 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
Ordinary Shares
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
1,346
2,208
771
901
219
0.01
0.04
0.04
0.21
99.70
5,445
100.00
There were 3,313 holders of less than a marketable parcel of ordinary shares at a share price of $0.10 on
24 February 2022.
Hutchison Telecommunications (Australia) Limited 63
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Twenty largest shareholders
The names of the 20 largest holders of quoted ordinary shares as at 24 February 2022 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 Dimitrios Piliouras
Boscaini Investments Pty Ltd
Mr Kenneth Kin Kau Heung & Mr Rene Conrad Heung
Citicorp Nominees Pty Limited
Mr Ting Hua Kho
Arjee Pty Ltd
J P Morgan Nominees Australia Pty Limited
Mr Hung Fong Chong
Mr Khalil Shahin & Mrs Kholoud Shahin
Mrs Yu Jie Zhi
Mrs Yim Fong Leung
Mr Ian Keith Flint
Leith Investments No 1 Pty Ltd
Mr Arthur Katropoulos & Mrs Despina Katropoulos
Shareholding
11,925,479,378
1,357,250,858
83,913,797
19,500,000
12,263,282
5,191,645
5,000,000
4,830,000
4,684,733
4,600,000
4,033,575
4,000,000
2,816,000
2,800,000
2,300,000
2,255,000
2,200,000
2,000,000
2,000,000
Mr Justin Herbert Gardener & Mrs Anne Louise Gardener
1,957,358
% Issued
Capital
87.86
10.00
0.62
0.14
0.09
0.04
0.04
0.04
0.03
0.03
0.03
0.03
0.02
0.02
0.02
0.02
0.02
0.01
0.01
0.01
Voting rights
The voting rights attaching to each class of equity securities are:
Ordinary shares
On a show of hands, every member present, in person or by proxy, attorney or representative, has one vote.
On a poll every member has one vote for each share.
13,449,075,626
99.08
On-market buy-back
There is currently no on-market buy-back.
Annual Report 2021 64
CORPORATE DIRECTORY
Directors
FOK Kin Ning, Canning
Barry ROBERTS-THOMSON
Melissa ANASTASIOU
Share Registry
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Tel: 1800 629 116 or +61 1800 629 116 (International)
Susan Mo Fong CHOW, also known as WOO Mo Fong,
Susan (alias CHOW WOO Mo Fong, Susan)
www.linkmarketservices.com.au
Justin Herbert GARDENER
Auditor
LAI Kai Ming, Dominic (also alternate to FOK Kin Ning,
Canning and Frank John SIXT)
John Michael SCANLON
PricewaterhouseCoopers
One International Towers Sydney, Watermans Quay
Barangaroo NSW 2000
Frank John SIXT (also alternate to LAI Kai Ming, Dominic)
Securities Exchange Listing
WOO Chiu Man, Cliff
HTAL shares are listed on the Australian
Securities Exchange (ASX)
Company Secretaries
ASX Code: HTA
Edith SHIH
Swapna KESKAR
Investor Relations
Tel: +61 2 9015 5088
Email: htalinvestors@companymatters.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
Notice of Annual General Meeting
The Annual General Meeting of HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Date: 4 May 2022
Time: 10.00 am Sydney time
Hutchison Telecommunications (Australia) Limited H
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