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Consolidated CommunicationsHutchison Telecommunications
(Australia) Limited
ABN 15 003 677 227
Level 1, 177 Pacific Highway
North Sydney, NSW 2060
Tel:
(02) 9015 5088
Fax:
(02) 9015 5034
www.hutchison.com.au
ASX Market Announcements
Australian Securities Exchange
Date: 29 March 2023
Subject: 2022 Annual Report
The 2022 Annual Report for Hutchison Telecommunications (Australia) Limited incorporating
the full year financial statements for the year ended 31 December 2022 is attached.
Yours sincerely,
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
or by telephone on (02) 9015 5088.
Annual Report
2022
Hutchison Telecommunications (Australia) Limited
Contents
Who we are
Ownership structure
Financial Summary
Chairman’s Message
Board of Directors
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
Financial Report
Independent Auditor’s Report
Shareholder Information
Corporate Directory
i
ii
1
2
4
6
12
20
21
52
58
60
AGM Details
The Annual General Meeting
of HTAL will be held at:
177 Pacific Highway
North Sydney NSW 2060
Friday 5 May 2023 at 10.00 am Sydney time
ABN 15 003 677 227
Hutchison Telecommunications (Australia) Limited (ASX: HTA)
(HTAL)
WHO WE ARE
i
Hutchison Telecommunications (Australia) Limited (“HTAL” or
the “Company”) (ASX: HTA) has a 25.05% equity interest in
TPG Telecom Limited (ASX: TPG) (“TPG”) (formerly 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, AAPT, Internode,
Lebara and felix, providing consumers with a comprehensive
portfolio of fixed and mobile products in the Australian
telecommunications market.
2020
VHA merged with TPG
Corporation Limited
(formerly 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 2022 ii
OWNERSHIP STRUCTURE
CK HUTCHISON
HOLDINGS LIMITED
87.87%*
SPARK NEW ZEALAND
TRADING LIMITED
HUTCHISON
TELECOMMUNICATIONS
(AUSTRALIA) LIMITED
10%
(ASX: HTA)
VODAFONE GROUP PLC
PUBLIC
SHAREHOLDERS
2.13%
100%
HUTCHISON 3G AUSTRALIA
HOLDINGS PTY LIMITED
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
Revenue
Operating expenses
1
2021
$’000
Movement
$’000
Movement
%
2022
$’000
194
(1,676)
(1,901)
121
73
225
60%
12%
N/A
Impairment loss on equity accounted investment
(444,617)
–
(444,617)
Share of net profit/(loss) of equity accounted investments,
net of tax
47,721
(19,897)
67,618
340%
Loss from ordinary activities after tax attributable to members
(398,378)
(21,677)
(376,701)
Net loss for the year attributable to members
(398,378)
(21,677)
(376,701)
1,738%
1,738%
Hutchison Telecommunications (Australia) Limited (“HTAL” or the “Company”) (ASX: HTA) accounts for its interests in
TPG Telecom Limited (“TPG”)1 and Vodafone Hutchison (Australia) Holdings Limited (“VHAH”)2 using the equity method
of accounting. Under this method, HTAL’s share of net profit/(loss) of these equity accounted investments is reported in
HTAL’s consolidated statement of profit or loss and other comprehensive income. For the year ended 31 December 2022,
share of net profit/(loss) of these equity accounted investments, after consolidation adjustments, increased to a profit of
$47.7 million from a loss of $19.9 million for the comparative year ended 31 December 2021. This represented an increase
of $67.6 million, primarily driven by an increase in TPG’s net profit resulting from one-off gain arising from the sale of its
passive tower and rooftop assets. The net profit was partially offset by the higher net finance costs of VHAH. Further
details are included in Note 10 to the financial statements for the year ended 31 December 2022.
HTAL’s basic earnings/(loss) per share is $(2.94) for the year ended 31 December 2022 (2021: $(0.16)).
1 HTAL’s 25.05% ownership interest in TPG 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 VHAH, a company domiciled in the United Kingdom in which
H3GAH has a 50% shareholding. VHAH has a direct 27.82% interest in TPG.
2 A company domiciled in the United Kingdom in which HTAL through H3GAH has a 50% shareholding and which H3GAH jointly controls with a subsidiary of
Vodafone Group Plc. VHAH holds a direct 27.82% interest in TPG.
Annual Report 2022 2
CHAIRMAN’S MESSAGE
HTAL Operations and 2022 Financial Results
Hutchison Telecommunications (Australia) Limited (“HTAL”
or the “Company” (ASX: HTA), and together with its
controlled entity, the “Group”) reports a statutory net
loss of $398.4 million for the year ended 31 December
2022, compared with a net loss of $21.7 million for
the comparative year ended 31 December 2021. The
increase in net loss for the year 2022 is attributable to
a $444.6 million non-cash impairment loss recognised
to reduce the carrying amount of the Group’s 25.05%1
interests in TPG Telecom Limited (“TPG”) to its estimated
recoverable amount.
HTAL’s revenue represents interest income. For the
year ended 31 December 2022, interest income
increased to $0.2 million from $0.1 million for the
comparative year ended 31 December 2021, driven
by the increase in interest rates during the second
half of 2022. HTAL’s other operating expenses for
the year ended 31 December 2022 decreased to
$1.7 million from $1.9 million for the comparative year
ended 31 December 2021. This is due to decease in
general expenses.
The Group has determined the recoverable amount of its
investments in TPG at 31 December 2022 by reference to
an indicative share price, including a significant influence
premium given the parcel of shareholding and significant
influence held by HTAL. As a result, the Group has
recognised a non-cash impairment loss of $444.6 million
for the year 2022 for the amount by which the carrying
amount exceeds the recoverable amount.
The Group’s share of net profit/(loss) of the equity
accounted investments, after consolidation adjustments,
increased to a profit of $47.7 million for the year 2022,
from a loss of $19.9 million for the comparative year 2021.
This represented an increase of $67.6 million, primarily
driven by an increase in TPG’s net profit resulting from
one-off gain arising from the sale of its passive tower and
rooftop assets. The net profit was partially offset by the
higher net finance costs of Vodafone Hutchison (Australia)
Holdings Limited (“VHAH”)2.
Hutchison Telecommunications (Australia) Limited 3
HTAL’s wholly owned subsidiary Hutchison 3G Australia
Holdings Pty Limited (“H3GAH”), which holds the
Group’s 11.14% direct interest in TPG, received dividends
of $36.2 million from TPG during the year 2022. These
dividends were used to fund a $33.0 million partial
repayment of a borrowing facility granted by a subsidiary
of the ultimate parent entity, CK Hutchison Holdings
Limited. Additionally, VHAH received and retained
dividends of $90.5 million from TPG during the year 2022.
TPG 2022 financial results
TPG announced a total revenue of $5,415 million,
EBITDA of $2,135 million, and a net profit attributable
to shareholders of $513 million for the year ended
31 December 2022, compared to $5,292 million,
$1,727 million and a profit of $113 million respectively
for the year ended 31 December 2021.
For further details and an explanation of TPG’s results
for the year ended 31 December 2022, you may refer to
TPG’s 2022 annual report which was lodged with the
ASX on 27 February 2023.
HTAL remains committed to its investment in TPG and
will continue to support TPG in the future.
Fok Kin Ning, Canning
Chairman
1
HTAL’s 25.05% ownership interest in TPG Telecom Limited (“TPG”) comprises 11.14% interest directly held by HTAL’s wholly owned subsidiary Hutchison
3G Australia Holdings Pty Limited (“H3GAH”) 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.
2 A company domiciled in the United Kingdom in which HTAL through H3GAH has a 50% shareholding and which H3GAH jointly controls with a subsidiary of
Vodafone Group Plc. VHAH holds a direct 27.82% interest in TPG.
Annual Report 2022 4
BOARD OF DIRECTORS
1
2
3
4
1. FOK Kin Ning, Canning BA, DFM, FCA (ANZ)
3. Melissa ANASTASIOU
Chairman
Director
Fok Kin Ning, Canning, aged 71, 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 (“Cheung Kong
(Holdings)”) and Hutchison Whampoa Limited (“HWL”)
since 1985 and 1984 respectively, both of which were
previously listed on The Stock Exchange of Hong Kong
Limited (“SEHK”) and 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, 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) since 2001 and March 2021 respectively,
a director of Cenovus Energy Inc. (“Cenovus Energy”)
since January 2021 and deputy president commissioner
of PT Indosat Tbk (“PT Indosat”) 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.
(“Husky Energy”) (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 73, 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 51, 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 BSc
(alias CHOW WOO Mo Fong, Susan)
Director
Susan Mo Fong Chow, aged 69, 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. 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 SEHK, 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.
Hutchison Telecommunications (Australia) Limited 5
5
6
7
8
9
5. Justin Herbert GARDENER BEc, FCA, AGIA
8. Frank John SIXT MA, LLL
Director
Director
Justin Herbert Gardener, aged 86, 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 BSc, MBA
Director
Lai Kai Ming, Dominic, aged 69, 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 the CKHH group, 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. 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 commissioner of PT Duta Intidaya
Tbk 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
Vodafone Hutchison Australia Pty Limited (“VHA”) (now
known as TPG Telecom Limited) 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 81, 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 71, 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) and HWL. 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 commissioner
of PT Indosat 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. He 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 BSc
Director
Woo Chiu Man, Cliff, aged 69, 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 commissioner
of PT Indosat 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 VHA 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 VHA from 2016 to 2020. He possesses extensive
operations experience in the telecommunications industry
and has been involved in cellular technology for over 32 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 2022 6
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is dated
24 February 2023 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
2022 financial year (“Reporting Period”), noting where
the Company does not comply with the ASX Corporate
Governance Council’s Corporate Governance Principles
and Recommendations (4th edition) (“ASX Corporate
Governance Recommendations”).
The Board
ROLE OF THE BOARD
The Board has responsibility for approving strategy,
monitoring the implementation of the strategy and the
performance of the Group, protecting the rights and
interests of shareholders and overseeing the overall
corporate governance within the Group.
The Board Charter is available on the Company’s website.
The Board’s responsibilities include:
– reviewing and approving the statement of values,
strategic direction of the Group and establishing goals,
both short-term and long-term, to ensure these strategic
objectives are met and ensuring appropriate resources
are available to meet these objectives;
– overseeing management in its implementation of the
Group’s strategic objectives, instilling of the Group’s
values and performance generally;
– overseeing the integrity of the Group’s accounting and
corporate reporting systems, including the external
audit, control and accountability systems;
– satisfying itself that the Group has in place an
appropriate risk management framework (for both
financial and non-financial risks) and setting the risk
appetite within which the Board expects management
to operate;
– satisfying itself that the Group’s remuneration
policies are aligned with its purpose, values, strategic
objectives and risk appetite;
– ensuring the business risks facing the Group are
identified and reviewing, ratifying and monitoring sound
systems of risk management and internal compliance
and control, codes of conduct and legal compliance;
– satisfying itself of the effectiveness of the governance
processes in place and that an appropriate framework
exists for relevant information to be reported by
management to the Board and whenever required,
challenging management and holding it to account;
– monitoring the performance of management against
these goals and objectives and initiating corrective
action when required;
– ensuring that there are adequate internal controls
and ethical standards of behaviour adopted and met
within the Group;
– reviewing and approving annual financial plans
and monitoring corporate performance against both
short-term and long-term financial plans;
– appointing the chief executive officer, evaluating
performance and determining the remuneration of
senior executives and ensuring that appropriate policies
and procedures are in place for recruitment, training,
occupational health & safety, environmental issue,
remuneration and succession planning; and
– delegating to the chief executive officer the authority
to manage and supervise the business of the Group with
senior executives and other management, including the
making of all decisions regarding the Group’s operations
that are not specifically reserved to the Board.
COMPOSITION OF THE BOARD
The Board comprises nine Directors whose appointment
reflects the shareholding of the Company and the need
to ensure that the Company is run in the best interest
of all shareholders. Eight of the Directors, including the
Chairman, Mr Fok Kin Ning, Canning, are non-executives.
One Director, Mr Frank Sixt is considered to be an executive
Director as he is the person directly responsible to the
Board in respect of carrying out the Chief Executive Officer
function and Chief Financial Officer function pursuant to
section 295A of the Corporations Act 2001 (Cth). Mr Sixt
is not formally appointed to either role and accordingly,
the Company does not have “senior executives”.
The Board has considered the factors relevant to assessing
the independence of a Director contained in the ASX
Corporate Governance Recommendations, and in light of
this, the Board determined that the independent Directors
are not substantial shareholders or officers of substantial
shareholders, have not been employed as an executive of the
Group or its majority shareholder, nor are they associated
with any significant supplier, customer or professional
adviser of the Group. Further, an independent Director does
not have any significant contractual relationship with the
Group nor is there any business relationship which could
materially interfere with a Director’s ability to act in the best
interest of the Company.
Mr Justin Herbert Gardener and Mr John Michael Scanlon,
being the only Directors who are not, or have not been,
officers of a significant shareholder or have not been
employed as an executive of the Group, are considered by
the Board to be independent Directors. The Board does not
consider that the length of service of either Mr Gardener
or Mr Scanlon has compromised their independence. In
light of the majority ownership by CK Hutchison Holdings
Limited (“CKHH”), the Board has resolved that, at this
stage, it is not in the best interests of the Company that
a majority of Directors or the Chairman be independent.
Hutchison Telecommunications (Australia) Limited 7
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 4 and 5 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 16 to 19.
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 2023 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.
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
Reporting Period.
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 2021
was undertaken at the beginning of 2022 and that for the
financial year ended 31 December 2022 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 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.
Annual Report 2022 8
CORPORATE GOVERNANCE STATEMENT CONTINUED
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 Corporate
Governance Recommendations. 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 5 and 13 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 2022 as well as the full year
results for the year ended 31 December 2022, 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 4, 5 and 13 of the Annual Report. No meetings
of this Committee were required during the year ended
31 December 2022, as any matters that arose for possible
consideration by this Committee were dealt with by the
full Board.
Hutchison Telecommunications (Australia) Limited 9
COMPENSATION RESPONSIBILITIES
This Committee is responsible for the review of
remuneration and other benefits, and the Group’s policies
in relation to recruitment and retention of staff. It will,
where relevant, obtain independent advice from external
consultants on the appropriateness of the remuneration
policies of the Group.
Details of the compensation philosophy and practices
of the Company, including equity-based remuneration
schemes, are set out in the Remuneration Report. As the
Company does not currently have any senior executives, no
process is in place for the evaluation of the performance of
senior executives, although formal performance evaluation
has been a part of the Company’s practices in the past.
GOVERNANCE AND NOMINATION RESPONSIBILITIES
The governance and nomination responsibilities related
to Board performance and evaluation are:
– to periodically assess and provide recommendations
to the Chairman of the Board on the effectiveness
of the Board as a whole, the Board Committees, the
contribution of individual Directors, and assessment
of Directors;
– to periodically review the Company’s investor relations
and public relations activities to ensure that procedures
are in place for the effective monitoring of the
shareholder base, receipt of shareholder feedback
and response to shareholder concerns in respect of
Board nomination and remuneration matters;
– to oversee and periodically review the induction
and education, and continuing professional
development programs for Directors including
whether there is a need for existing directors to
undertake professional development;
– to ensure appropriate structures and procedures are
in place so that the Board can function independently
of management;
– to receive and consider any concerns of individual
Directors relating to governance matters; and
– to review all related party transactions to ensure they
reflect market practice and are in the best interests of
the Group and consider any disclosure requirements.
The governance and nomination responsibilities related
to the Directors are:
– to recommend to the Board criteria regarding
personal qualifications for Board membership such
as background, experience, technical skills, affiliations
and personal characteristics; and
– to consider and recommend to the Board the skills
matrix required for the Board generally including
Director independence.
The governance and nomination responsibilities related
to Board Committees are:
– to review from time to time and recommend to the
Board the types, terms of reference and composition
of Board Committees, and the nominees as chair of
the Board Committees; and
– to review from time to time and make recommendations
to the Board the length of service of members on Board
Committees, meeting procedures, quorum and notice
requirements, records and minutes, resignations and
vacancies on Board Committees.
DIVERSITY
The Company recognises the corporate benefit of diversity
as that term is defined in the ASX Corporate Governance
Recommendations and its Diversity Policy is available on
the Company’s website.
The Company recognises the benefits of a Board that
possesses a balance of skills set, experience, expertise and
diversity of perspectives appropriate for the strategies
of the Company. The Company supports diversity,
with Directors from various parts of the world with
experience of different cultures and possessing varied
expertise, in finance and accounting, sales and marketing,
operations, legal and technology relevant to operating a
telecommunications company.
In assessing candidates for appointment to the Board,
the Board or Governance, Nomination & Compensation
Committee will have regard to the diversity balance on
the Board and the skills and experience of each candidate.
The Board will give due consideration to ensuring that the
diversity of the Board increases.
No measurable gender diversity objectives have been set
having regard to the Company’s current structure, size and
type of operations. The Company currently only has 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%) (2021: 78% male, 22% female). The Company
has only two (male) employees who are not considered to
be senior executives (2021: 100% male).
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.
Annual Report 2022 10
CORPORATE GOVERNANCE STATEMENT CONTINUED
An analysis of fees paid to the external auditor, including
a break-down of fees for non-audit services, is provided in
Note 8 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.
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 has been appointed as a member from
September 2021 until 1 September 2022 and served as
an observer as from 1 September 2022 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.
In February 2022, the HTAL Board approved the Risk
Appetite Statement and Risk Management Framework for
HTAL. HTAL’s Audit & Risk Committee oversees that the
operations of HTAL are within the scope of its Risk Appetite
Statement. The Audit & Risk Committee has undertaken a
review of its risk management framework in respect of the
Reporting Period and considers it continues to be sound
and HTAL is operating with due regard to the risk appetite
as set by the Board.
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.
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.
Hutchison Telecommunications (Australia) Limited 11
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 or corporate
representatives, 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). Shareholders may elect to be sent
such communication in either physical or electronic form.
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 2022 AGM were conducted by a
poll with the results of the meeting announced to the ASX.
The Company’s investor relations program is based upon
appropriately responding to requests from shareholders
and analysts for information to enable them to gain an
understanding of the Company’s business, governance,
financial performance and prospects.
The Company’s existing practices on information disclosure
and shareholder communications are documented in
the Continuous Disclosure Policy and the Shareholder
Communications Policy, details of which are available on
the Company’s website.
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 19 to the financial statements.
Dealing in shares
The Company has the following policy regarding dealing
in its shares:
– the Chairman of the Board discusses any proposed
dealing in HTAL shares with an independent Director
prior to any dealing;
– Directors or the Chief Executive Officer discuss any
proposed dealing in HTAL shares with the Chairman
of the Board 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 Chairman of the Board or either
of the Company Secretaries prior to any dealing.
Unless there are unusual circumstances, dealings in HTAL
shares by Directors and any other 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 the Share
Dealing 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.
Annual Report 2022 12
DIRECTORS’ REPORT
The Directors present their report of Hutchison
Telecommunications (Australia) Limited (“HTAL” or
the “Company”, and together with its controlled entity,
the “Group”) at the end of, or during, the year ended
31 December 2022.
Principal activities
The Group’s principal activity is the ownership of a
combined 25.05%1 equity interest in TPG Telecom Limited
(“TPG”). 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.
Review of operations
Comments on the operations of the Group, results of
those operations, the Company’s business strategies
and its prospects for future years are set out on
pages 2 to 3. Details of the financial position of the
Company are contained in page 24 of this report.
Significant changes in the state of affairs
and matters subsequent to the end of the
financial year
(a) Update on TPG’s regional MOCN agreement with Telstra
On 21 February 2022, TPG announced a regional
Multi-Operator Core Network (“MOCN”) agreement
with Telstra Corporation Limited (“Telstra”) (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.
On 21 December 2022, the Australian Competition
and Consumer Commission decided not to grant
authorisation for the proposed arrangement.
Consequently, TPG has submitted an application to
the Australian Competition Tribunal for a review of the
decision, with a tribunal decision expected in the first
half of 2023.
As a result, the potential financial impacts highlighted in
TPG’s half-year report 2022 (impairment of fixed assets
and right-of-use assets) have not been recognised in the
year ended 31 December 2022 by TPG.
(b) There has been no other matter or circumstance that
has arisen after the reporting date that has significantly
affected or may significantly affect:
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 Energy
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
There are no dividends/distributions declared or paid
and there are no dividend/distribution reinvestment
plans existing during or subsequent to the year ended
31 December 2022 to the date of this report.
Directors
The following persons were Directors of HTAL during the
whole of the year ended 31 December 2022 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
(i) the operations of the Group in future financial
years, or
Further information on the Directors is set out on
pages 4 and 5.
(ii) the results of those operations in future
financial years, or
(iii) the state of affairs of the Group in future
financial years.
1
HTAL’s 25.05% ownership interest in TPG 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.
Hutchison Telecommunications (Australia) Limited
13
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
–
–
Particulars of Directors’
Interests in ordinary
shares of HTAL
5,100,000*
83,918,337**
–
–
Justin Herbert Gardener Chairman of Audit & Risk Committee,
Member of Governance, Nomination & Compensation Committee
1,957,358
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
Woo Chiu Man, Cliff
–
–
* Direct holding of 100,000 shares
** Direct holding of 4,540 share
Notes:
–
–
1,000,000
–
Mr 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.
Mrs Susan Mo Fong Chow holds a relevant interest in (i) 129,960 ordinary shares of CKHH; and (ii) 250,000 ordinary
shares of HTHKH.
Mr Lai Kai Ming, Dominic holds a relevant interest in 34,200 ordinary shares of CKHH.
Mr Frank John Sixt holds a relevant interest in (i) 166,800 ordinary shares of CKHH; and (ii) 255,000 ordinary shares
of HTHKH.
Mr 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.
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 2022 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
4
4
4
4
4
4
4
4
4
4
4
3
4
4
4
3
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
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
Governance,
Nomination &
Compensation
Committee
Meetings
attended as
Member of the
Committee
Nil
N/A
N/A
N/A
Nil
Nil
N/A
N/A
N/A
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.
Annual Report 2022 14
DIRECTORS’ REPORT CONTINUED
Retirement, election and continuation in
office of Directors
Swapna KESKAR
MCom., LLB, FGIA, FCIS, FCS, GAICD
Mr Barry Roberts-Thomson, is a Director retiring by
rotation in accordance with the Constitution who, being
eligible, offers himself for re-election.
Mrs Susan Mo Fong Chow, is a Director retiring by rotation
in accordance with the Constitution who, being eligible,
offers herself for re-election.
Mr Lai Kai Ming, Dominic, is a Director retiring by rotation
in accordance with the Constitution who, being eligible,
offers himself for re-election.
Company secretaries
Edith SHIH
BSE, MA, MA, EdM, Solicitor, FCG(CS, CGP),
HKFCG(CS, CGP)(PE)
Edith Shih has been one of the Company Secretaries of the
Company since 1999. She has over 40 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 Hutchison Whampoa Limited (“HWL”) from 1991
to 2015. Both Cheung Kong (Holdings) Limited and HWL
were previously listed on The Stock Exchange of Hong
Kong Limited and 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 and Hutchison Port Holdings
Management Pte. Limited as the trustee-manager of
Hutchison Port Holdings Trust, as well as a commissioner
of PT Duta Intidaya Tbk. 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
past International President and current member of the
Council of The Chartered Governance Institute (“CGI”) as
well as a past President and current Honorary Adviser of
The Hong Kong Chartered Governance Institute (“HKCGI”)
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, Master of Arts degrees and
a Master of Education degree.
Swapna Keskar has been one of the Company Secretaries
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.
Non-audit services
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
Independence Standards), 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 8, Remuneration of auditors, on page 34 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 20.
Hutchison Telecommunications (Australia) Limited 15
Corporate Governance
Rounding of amounts
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Legislative
Instrument 2016/191 (“ASIC Instrument”) issued by the
Australian Securities and Investments Commission relating
to the ‘rounding off’ of amounts in the directors’ report
and financial report. Amounts in the directors’ report and
financial report have been rounded off in accordance with
the ASIC 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).
HTAL is committed to conduct the business with the
highest standards of business ethics and adhering to the
legal and regulatory obligations. The 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 current and former 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.
Indemnity of auditors
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).
Annual Report 2022 16
DIRECTORS’ REPORT CONTINUED
Remuneration Report
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 year
from 1 January 2022 to 31 December 2022.
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 to HTAL. The remuneration details of
these directors are available from the disclosure in their
respective CKHH group annual reports.
As at 31 December 2022, 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 year ended 31 December 2022 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.
Hutchison Telecommunications (Australia) Limited 17
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
2022
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,125
–
5,125
–
–
10,250
–
–
–
–
–
–
–
–
–
–
–
–
–
–
55,125
–
55,125
–
–
110,250
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 the CKHH group, are remunerated for their duties within the CKHH group which include their
directorships 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
Annual Report 2022 18
DIRECTORS’ REPORT CONTINUED
STATUTORY PERFORMANCE INDICATORS
The below table shows measures of the Company’s financial performance over the last five years as required by the
Corporations Act 2001 (Cth).
Profit/(loss) for the year attributable to owners
of HTAL ($’000)
Basic earnings/(loss) per share (cents)
Dividend payments ($’000)
Dividend payout ratio (%)
Increase/(decrease) in share price (%)
Total KMP incentives as percentage of profit/(loss)
for the year (%)
2022
2021
2020
2019
2018
(398,378)
(21,677)
825,441
(154,870)
(2.94)
–
N/A
(50)
(0.16)
–
N/A
(17)
6.08
–
N/A
21
(1.14)
–
N/A
9
(0.03)
(0.51)
0.01
(0.1)
4,475
(0.03)
–
N/A
69
2.3
No dividends were paid over the last five years. The dividend payout ratio, where applicable, will be 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.
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
5,100,000*
83,918,337**
–
–
Justin Herbert Gardener
1,957,358
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
–
–
1,000,000
–
ORDINARY SHARES
Balance at the
start of the year
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
–
Hutchison Telecommunications (Australia) Limited 19
SHARES UNDER OPTION
The Company has no share option scheme. No options were granted during the year ended 31 December 2022. 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 2022 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 2022 and 31 December 2021.
OTHER TRANSACTIONS WITH DIRECTORS AND KEY MANAGEMENT PERSONNEL
There were no other transactions with Directors for the years ended 31 December 2022 or 31 December 2021.
The above Remuneration Report has been audited by PricewaterhouseCoopers.
This Directors’ report is made in accordance with a resolution of the Directors, in accordance with section 298(2) of the
Corporations Act 2001 (Cth).
Director
27 February 2023
Director
27 February 2023
Annual Report 2022 20
AUDITOR’S INDEPENDENCE DECLARATION
Hutchison Telecommunications (Australia) Limited 21
FINANCIAL REPORT
for the year ended 31 December 2022
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 27 February 2023. The Company
has the power to amend and reissue
the financial statements.
Annual Report 2022 22
FINANCIAL REPORT
for the year ended 31 December 2022
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 Operating expenses
Note 4
Impairment of investment accounted for using the equity method
Note 5
Income tax
Note 6 Loss per share
Note 7 Director and key management personnel compensation
Note 8 Remuneration of auditors
Note 9 Current assets – Cash and cash equivalents
Note 10 Non-current assets – Investment accounted for using the equity method
Note 11 Controlled entities
Note 12 Current liabilities – Payables
Note 13 Current liabilities – Other financial liabilities
Note 14 Contributed equity
Note 15 Reserves and accumulated losses
Note 16 Reconciliation of loss after income tax to net cash inflows from operating activities
Note 17 Contingencies
Note 18 Commitments
Note 19 Related party transactions
Note 20 Deed of cross guarantee
Note 21 Segment reporting
Note 22 Financial risk management
Note 23 Events occurring after the reporting date
Note 24 Parent entity disclosures
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
23
24
25
26
27
27
32
32
32
32
33
34
34
35
35
38
38
39
39
40
41
42
42
43
44
46
46
49
49
51
52
58
60
Hutchison Telecommunications (Australia) Limited CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2022
23
Revenue
Operating expenses
Impairment loss on equity accounted investments
Share of net profit/(loss) of equity accounted investments, net of tax
Loss before income tax
Income tax expense
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
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 loss for the year attributable to members of the
Company
Notes
2
3
4
10
5
10
2022
$’000
194
2021
$’000
121
(1,676)
(1,901)
(444,617)
–
47,721
(19,897)
(398,378)
(21,677)
–
–
(398,378)
(21,677)
–
–
636
–
636
150
–
150
(397,742)
(21,527)
Cents
Cents
Loss per share for loss attributable to members of the Company
Basic loss per share
Diluted loss per share
6
6
(2.94)
(2.94)
(0.16)
(0.16)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
Annual Report 2022 24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Prepayments
Total Current Assets
Non-current Assets
Notes
2022
$’000
2021
$’000
9
5,808
3,737
117
45
–
52
5,970
3,789
Investment accounted for using the equity method
10
339,680
774,578
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
339,680
774,578
345,650
778,367
12
13
14
15
15
853
5,359
6,212
6,212
474
38,316
38,790
38,790
339,438
739,577
4,204,488
4,204,488
69,505
71,266
(3,934,555)
(3,536,177)
339,438
739,577
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Hutchison Telecommunications (Australia) Limited CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
25
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 2021
4,204,488
54,887
(333)
15,880
(3,514,500)
760,422
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
Share-based payment reserve
(share of equity accounted
investments), net of tax
–
–
–
–
–
–
–
–
–
–
–
–
(21,677)
(21,677)
150
–
150
–
–
–
–
–
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
Balance at 1 January 2022
4,204,488
54,887
(183)
16,562
(3,536,177)
739,577
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
Share-based payment reserve
(share of equity accounted
investments), net of tax
Acquisition of shares (share of
equity accounted investments),
net of tax
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(398,378)
(398,378)
636
–
636
–
–
–
–
–
1,163
(3,560)
–
–
636
–
(398,378)
(397,742)
–
–
1,163
(3,560)
Balance at 31 December 2022
4,204,488
54,887
453
14,165
(3,934,555)
339,438
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
1 See note 15 (a) and (c).
2 See note 15 (b).
Annual Report 2022 26
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
Cash Flows from Operating Activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Dividends from investment accounted for using the equity method
Net cash inflows from operating activities
Cash Flows from Investing Activities
Net cash inflows from investing activities
Cash Flows from Financing Activities
Notes
2022
$’000
2021
$’000
(1,407)
(2,443)
194
36,241
35,028
121
32,099
29,777
16
–
–
Repayment of borrowings – entity within the CKHH Group
13
(32,957)
(49,697)
Net cash outflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
(32,957)
(49,697)
2,071
3,737
5,808
(19,920)
23,657
3,737
9
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Hutchison Telecommunications (Australia) Limited NOTES TO THE FINANCIAL STATEMENTS
27
(d) PRINCIPLES OF CONSOLIDATION
(i) Subsidiaries
A subsidiary is an entity over which the Group has control.
The Group controls an entity when the Group is exposed,
or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns
through its power over the entity.
(ii) Joint arrangements
A joint arrangement is an arrangement of which two
or more parties have joint control and over which none
of the participating parties has unilateral control.
Investments in joint arrangements are classified either
as joint operations or joint ventures, depending on the
contractual rights and obligations each investor has
under the relevant contract. Joint operations arise where
the investors have rights to the assets and obligations
for the liabilities of an arrangement. A joint operator
accounts for its share of the assets, liabilities, revenue and
expenses. Joint ventures arise where the investors have
rights to the net assets of the arrangement. Joint ventures
are accounted for under the equity method, after initially
being recognised at cost in the consolidated statement
of financial position. (Refer to Note 10 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 10 for
further details).
Note 1
Summary of significant
accounting policies
(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 (“ASX”).
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 12 to 19.
These consolidated financial statements were authorised
for issue by the Board on the 27 February 2023. The
Company has the power to amend and reissue the
financial statements.
(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 (Cth). For the purposes of preparing
the financial statements, the Company is a for-profit entity.
Disclosures in relation to the parent entity financial
statements required under paragraph 295(3)(a) of the
Corporations Act 2001 (Cth) are included in Note 24.
These financial statements have been prepared under
the historical cost convention. Unless otherwise stated,
the accounting policies adopted have been consistently
applied to all the years presented. Comparative figures
have been adjusted to conform to the presentation of these
financial statements and notes for the current financial
year, where required, to enhance comparability.
(c) WORKING CAPITAL MANAGEMENT
As at 31 December 2022, the Group has a deficiency of
net current assets of $0.2 million (2021: a deficiency of
$35.0 million). Included in the Group’s current liabilities
is an amount of $5.4 million (2021: $38.3 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 $1,594.6 million
at 31 December 2022 (2021: $1,561.7 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.
Annual Report 2022 28
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 1
Summary of significant accounting
policies (continued)
(d) PRINCIPLES OF CONSOLIDATION (CONTINUED)
(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.
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.
(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.
Hutchison Telecommunications (Australia) Limited 29
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.
(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.
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.
(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. For the purposes of assessing
impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units).
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
Impairment losses are recognised in the consolidated
statement of profit or loss and other comprehensive
income unless an asset has previously been revalued, in
which case the impairment loss is recognised as a reversal
to the extent of that previous revaluation with any excess
recognised through profit or loss. Non-financial assets
other than goodwill that 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.
(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) 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 2022, 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.
(l) GOODWILL
Goodwill as part of equity accounted investments is initially
measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interests in
the acquiree, and the fair value of the acquirer’s previously
held equity interest in the acquiree (if any) over the fair
value of the net identifiable assets acquired and the liabilities
assumed. If, after reassessment, the Group’s interest in the
fair value of the 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 consolidated 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.
(m) PAYABLES
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial period
and which are unpaid. The amounts are unsecured and are
usually paid or payable within 30 days of recognition.
Annual Report 2022 30
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 1
Summary of significant accounting
policies (continued)
(n) 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.
(o) CONTRIBUTED EQUITY
Ordinary shares are classified as equity. Refer to Note 14
for further information.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(p) EARNINGS/(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.
(q) GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority
is included within other receivables or payables in the
consolidated statement of financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the
taxation authority, are presented as operating cash flows.
(r) SEGMENT REPORTING
An operating segment is a component of an entity that
engages in business activities from which it may earn
revenues and incur expenses, whose operating results are
regularly reviewed by the entity’s chief operating decision
maker to make decisions about resources to be allocated
to the segment and assess its performance and for which
discrete financial information is available.
Operating segments have been identified based on the
information provided to the chief operating decision
maker. Operating segments that meet the quantitative
criteria as prescribed by AASB 8 Operating Segments
are reported separately. Refer to Note 21 for details of
the Group’s operating segment, being investment in
telecommunication services.
(s) 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.
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 is carried out at
31 December 2022. 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
(‘FVLCOD’), which is higher than its value in use (‘VIU’).
FVLCOD is derived using the closing share price and
a block premium is considered on the basis of HTAL’s
significant influence on TPG. In determining the VIU, the
Group estimate the present value of the estimated future
cash flows expected to arise from dividends to be received
from the investment and from its ultimate disposal. There
are a number of estimates and assumptions involved in the
estimation including the amount and timing of the expected
cash flows from dividend, long-term dividend growth rate
and discount rate.
Hutchison Telecommunications (Australia) Limited The result of the impairment testing undertaken on
31 December 2022 indicated that the recoverable amount
is less than the carrying amount. As a result an impairment
of the investment is deemed necessary for the year (refer
to Note 4 for further details).
(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 5 for further details).
(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.
In implementing the revised useful lives, management
applied the change in the depreciation of the TPG existing
network assets based on an assessment of individual
asset lives prospectively from 1 January 2019 as required
under Australian Accounting Standards. This resulted in
a decrease in the share of net profit of equity accounted
investment of $20.6 million (2021: an increase in the share
of net loss of equity accounted investment of $25.8 million).
The change has been included in the summarised financial
information of TPG as disclosed in Note 10.
31
TPG management have made changes to the prior period
comparative amounts in the annual report 2022 due to
a voluntary amendment to the accounting policy for
government grants (please refer to Note 2(l) in TPG’s
annual financial report 2022 for more information). The
impact of TPG’s changes will result in a decrease in HTAL’s
share of net loss of equity accounted investments, net of
tax for the year ended 31 December 2021 by $0.8 million
and an increase in HTAL’s share of net assets of equity
accounted investments as at 31 December 2021 and
31 December 2022 by $0.5 million. The Directors of HTAL
have assessed that the impact on the results is deemed
to be immaterial, and therefore no changes have been
made to HTAL’s prior period comparatives in HTAL’s
annual financial report 2022.
(t) ROUNDING OF AMOUNTS
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Legislative
Instrument 2016/191 (“ASIC Instrument”) 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.
(u) PARENT ENTITY FINANCIAL INFORMATION
The financial information for the parent entity disclosed
in Note 24 has been prepared on the same basis as the
consolidated financial statements, except investments
in subsidiaries and investments in associates, which are
accounted for at cost in the financial statements of HTAL.
(v) 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 2022. The Group did not have to change
its accounting policies or make retrospective adjustments
as a result of adopting these standards.
Adoption of these standards has not had a material impact
for the year ended 31 December 2022.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations
have been published that are not mandatory for
31 December 2022 reporting period and have not been
early adopted by the Group. The adoption of these
standards in future periods is not expected to have a
material impact on the Group’s financial statements.
Annual Report 2022 32
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 2
Revenue
Other revenue
Interest
Note 3
Operating expenses
Consultancy fee
Accounting and tax support services fees to a related party (Note 19)
Auditors’ remuneration (Note 8)
Directors’ emoluments (Note 7)
Employee benefits
Others
2022
$’000
2021
$’000
194
121
2022
$’000
2021
$’000
529
441
283
110
224
89
1,676
558
479
240
110
248
266
1,901
Note 4 Impairment of investment accounted for using the equity method
HTAL accounts for its interests3 in TPG and Vodafone Hutchison (Australia) Holdings Limited (“VHAH”) using the equity
method of accounting. In accordance with the Group’s accounting policy, the investments in these equity accounted
investments are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable.
There was a further decline in the share price of TPG in the second half of 2022 from $5.97 at 30 June 2022 to $4.89 at
31 December 2022. The price decline is an indicator and plays a key role in establishing the fair value less costs of disposal
“FVLCOD” of HTAL’s equity-accounted investment in TPG. The investment in TPG accounted for using the equity method
was written down to its recoverable amount of $339.7 million, which was determined by reference to the FVLCOD of TPG
shares as it was higher than its value in use. The main valuation inputs used in arriving at the FVLCOD were the closing
price of TPG shares at 31 December 2022 (level 1 input of the fair value hierarchy). A block premium (level 3 input of the
fair value hierarchy) on the basis of HTAL’s significant influence on TPG is included with reference to specific, comparable
and current transactions within the investee’s industry. As a result an impairment of the investment of $444.6 million for
the amount by which the carrying amount exceeds the recoverable amount was recognised for the current year.
Note 5
Income tax
(a) INCOME TAX EXPENSE
Deferred tax
2022
$’000
2021
$’000
–
–
3 HTAL’s 25.05% ownership interest in TPG 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 VHAH, a company domiciled in the United Kingdom in which H3GAH
has a 50% shareholding. VHAH has a direct 27.82% interest in TPG.
Hutchison Telecommunications (Australia) Limited 33
2022
$’000
2021
$’000
(398,378)
(21,677)
(119,513)
(6,503)
133,384
(14,316)
(445)
27
(7)
425
–
–
5,969
(534)
46
–
488
–
(b) NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO
PRIMA FACIE TAX PAYABLE
Loss from operations before income tax expense
Tax at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are not deductible or taxable/(non-assessable or deductible) in
calculating taxable income:
Impairment loss on equity accounted investments
Share of net (profit)/loss of equity accounted investments
Deferred tax on temporary difference not recognised
Adjustments for current tax of prior periods
Additional tax losses not recognised in the current period
Income tax expense
All unused tax losses were incurred by Australian entities.
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.
(c) UNRECOGNISED TAX LOSSES
Opening balance
Adjustments for current tax of prior periods
Additional tax losses generated
Unused tax losses for which no deferred tax assets have been recognised
Potential tax benefit @ 30% (2021: 30%)
2022
$’000
2021
$’000
162,437
160,811
(23)
1,416
–
1,626
163,830
162,437
49,149
48,731
(d) RECOGNISED DEFERRED TAX ASSETS
There are no recognised deferred tax assets or liabilities at 31 December 2022 and 31 December 2021.
Note 6
Loss per share
(a) BASIC LOSS PER SHARE
Loss attributable to members of the Company
(b) DILUTED LOSS PER SHARE
Loss attributable to members of the Company
CONSOLIDATED
2022
Cents
2021
Cents
(2.94)
(0.16)
(2.94)
(0.16)
Annual Report 2022
34
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 6
Loss per share (continued)
CONSOLIDATED
2022
$’000
2021
$’000
(c) EARNINGS USED IN CALCULATING LOSS PER SHARE
Basic loss per share
Loss attributable to members of the Company used in calculating basic loss per share
(398,378)
(21,677)
Diluted loss per share
Loss attributable to members of the Company used in calculating diluted loss per share
(398,378)
(21,677)
CONSOLIDATED
2022
Number
2021
Number
(d) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
Weighted average number of ordinary shares used as the denominator in calculating
basic 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 loss per share
13,572,508,577 13,572,508,577
There were no options and no other potential ordinary shares outstanding at 31 December 2022 (2021: nil) and
accordingly there was no impact on the diluted loss per share calculation for the years ended 31 December 2022 and
31 December 2021.
Note 7
Director and key management personnel compensation
(a) DIRECTOR AND KEY MANAGEMENT PERSONNEL COMPENSATION
Short term benefits (included in Operating expenses – see Note 3)
2022
$
2021
$
110,250
109,750
(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 2022 and 31 December 2021. There were no transactions with the Directors of the Company for the years
ended 31 December 2022 and 31 December 2021.
Note 8
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
2022
$
2021
$
283,200
228,000
283,200
228,000
–
12,000
283,200
240,000
Hutchison Telecommunications (Australia) Limited
35
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 9
Current assets – Cash and cash equivalents
Cash at bank
2022
$’000
5,808
2021
$’000
3,737
Note 10 Non-current assets – Investment accounted for using the equity method
Equity accounted investments
2022
$’000
2021
$’000
339,680
774,578
The Group held a combined 25.05% interest in TPG at 31 December 2022 (2021: 25.05%). This comprises a 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 joint venture company domiciled in the United Kingdom in which H3GAH has a 50% shareholding. VHAH
has a direct 27.82% interest in TPG. Further information in respect of TPG and VHAH, which are associated and joint
venture companies of the Group at 31 December 2022, are set out below:
Name of entities
Associate:
Principal activity
OWNERSHIP INTEREST
Country of
operation
2022
%
2021
%
TPG Telecom Limited
Telecommunications Services
Australia
11.14%
11.14%
Joint venture:
Vodafone Hutchison (Australia)
Holdings Limited
Financing and investing activities
United
Kingdom
50.00%
50.00%
Set out below are the movements in the carrying value of these investments:
At 1 January
Share of profit/(loss) of equity accounted investments, net of tax
Share of TPG’s net gain on cash flow hedges taken to equity, net of tax
Share of TPG’s share-based payment reserve, net of tax
Share of TPG’s acquisition of shares, net of tax
Share of dividend received from equity accounted investment4
Impairment of equity accounted investment
At 31 December
2022
$’000
2021
$’000
774,578
825,742
47,721
(19,897)
636
1,163
(3,560)
150
682
–
(36,241)
(32,099)
(444,617)
–
339,680
774,578
Further details of the carrying amount of these equity accounted investments are included in the section below under
“Summarised statement of financial position”.
The market value of the Group’s combined 25.05% interests in TPG based on the quoted closing share price of TPG at
31 December 2022 was $2,277.6 million (2021: $2,743.4 million). This amount is before the Group’s 50% share of VHAH’s
net debt of $4,553.9 million (2021: $4,524.0 million).
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.
Annual Report 2022 36
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 10 Non-current assets – Investment accounted for using the equity method (continued)
SUMMARISED FINANCIAL INFORMATION
Summarised Statement of Profit or Loss and Other Comprehensive Income
Summarised financial information with respect to the profit or loss and other comprehensive income of the Group’s equity
accounted investments 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(s)(iii) Critical accounting estimates and judgements in the consolidated financial statements
for the year ended 31 December 2022 for further background.
Gross amount of the following items
of the equity accounted investments:
Revenues
Other income
Expenses
2022
2021
VHAH
$’000
TPG
$’000
VHAH
$’000
TPG5
$’000
–
–
5,415,000
438,000
–
–
5,293,000
45,000
(233)
(3,718,000)
(719)
(3,607,000)
Share of profits from investment in TPG, net of tax
119,828
–
2,023
–
Depreciation and amortisation
Net finance costs
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Other comprehensive income
Total comprehensive profit/(loss)
Reconciliation to the Group’s share of profit/(loss)
of the equity accounted investments:
Group interest:
Group’s share of the following items:
Profit/(loss) for the year
Group’s share of profit/(loss) of equity accounted investments
–
(1,471,271)
–
(1,525,725)
(120,118)
(187,000)
(42,718)
(149,000)
(523)
476,729
(41,414)
56,275
–
(46,000)
–
(49,000)
(523)
430,729
(41,414)
707
184
2,000
166
432,729
(41,248)
7,275
597
7,872
50%
11.14%
50%
11.14%
(262)
(262)
47,983
47,983
(20,707)
(20,707)
810
810
HTAL’s share of profit/loss of these equity accounted investments of $47.7 million profit for the year ended
31 December 2022 (2021: $19.9 million loss) represents the combined total of:
(i) the Group’s 50% share of net loss of VHAH of $0.3 million (2021: $20.7 million net loss), and
(ii) the Group’s 11.14% direct share of net profit of TPG of $48.0 million (2021: $0.8 million).
5 The comparatives are derived from TPG’s annual financial report 2021.
Hutchison Telecommunications (Australia) Limited 37
TPG management have made changes to the prior period comparative amounts in TPG’s annual report 2022 due to a
voluntary amendment to the accounting policy for government grants (please refer to Note 2(l) in TPG’s annual financial
report 2022 for more information). The impact of TPG’s changes will result in a decrease in HTAL’s share of net loss of
equity accounted investments, net of tax for the year ended 31 December 2021 by $0.8 million. The Directors of HTAL have
assessed that the impact on the results is deemed to be immaterial, and therefore no changes have been made to HTAL’s
prior period comparatives in HTAL’s annual financial report 2022.
Summarised statement of financial position
Summarised financial information with respect to the statement of financial position of the Group’s equity accounted
investments 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
Reconciliation to the carrying amount of the Group’s
investment accounted for using the equity method
2022
2021
VHAH
$’000
TPG
$’000
VHAH
$’000
TPG6
$’000
604,243
1,033,000
361,456
833,000
3,399,681
18,653,727
3,372,270
18,757,684
(5,158,107) (1,732,000)
(7,331)
(1,667,000)
–
(5,734,000)
(4,878,173)
(5,801,000)
(1,154,183)
12,220,727
(1,151,778)
12,122,684
Group interest
50%
11.14%
50%
11.14%
Group’s share of net (liabilities)/assets
(577,092)
1,361,389
(575,889)
1,350,467
Group’s provision for impairment
(246,891)
(197,726)
–
–
Carrying amount
(823,983)
1,163,663
(575,889)
1,350,467
The carrying amount of these equity accounted investments of $339.7 million at 31 December 2022 (2021: $774.6 million)
represents the combined total of:
(i) the Group’s 50% share of net liabilities of VHAH of $577.1 million (2021: $575.9 million), and
(ii) the Group’s 11.14% direct share of net assets of TPG of $1,361.4 million (2021: $1,350.5 million), and
(iii) provision for impairment totalling $444.6 million (31 December 2021: $nil) (see Note 4).
TPG management have made changes to the prior period comparative amounts in TPG’s annual report 2022 due to a
voluntary amendment to the accounting policy for government grants (please refer to Note 2(l) in TPG’s annual financial
report 2022 for more information). The impact of TPG’s changes will result in an increase in HTAL’s share of net assets of
equity accounted investments at 31 December 2021 and 31 December 2022 by $0.5 million. The Directors of HTAL have
assessed that the impact on the Group’s net assets is deemed to be immaterial, and therefore no changes have been made
to HTAL’s prior period comparatives in HTAL’s annual financial report 2022.
6 The comparatives are derived from TPG’s annual financial report 2021.
Annual Report 2022 38
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 10 Non-current assets – Investment accounted for using the equity method (continued)
SUMMARISED FINANCIAL INFORMATION (CONTINUED)
Summarised statement of financial position (continued)
The summarised statement of financial position includes the following items:
Cash and cash equivalents
Current financial liabilities
Non-current financial liabilities
2022
2021
VHAH
$’000
TPG
$’000
VHAH
$’000
TPG
$’000
355,688
114,000
361,456
202,000
(5,158,107)
(93,000)
(7,331)
(61,000)
–
(5,562,000)
(4,878,173)
(5,649,000)
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 Vodafone
Group Plc (“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 Vodafone Hutchison Finance Pty Limited, its 100% owned subsidiary, which matured on
20 November 2020.
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.
Note 11 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 24(c):
Name of controlled entity
Country of
Incorporation
Hutchison 3G Australia Holdings Pty Limited8
Australia
Class
of Shares
Ordinary
Note 12 Current liabilities – Payables
Trade payables
Payables to related parties (Note 19)
Further information relating to payables to related parties is set out in Note 19.
Liquidity risk
A summarised analysis of the Group’s sensitivity of payables to liquidity risk is set out in Note 22.
EQUITY HOLDING7
2022
%
100
2022
$’000
374
479
853
2021
%
100
2021
$’000
355
119
474
7 The proportion of ownership interest is equal to the proportion of voting power held.
8 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.
Hutchison Telecommunications (Australia) Limited 39
Note 13 Current liabilities – Other financial liabilities
Loan from an entity within the CKHH Group (Note 19)
2022
$’000
5,359
2021
$’000
38,316
(a) LOAN FROM AN ENTITY WITHIN THE CKHH GROUP
Further information relating to the loan from an entity within the CKHH Group is set out in Note 19. 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 2022 is $1,594.6 million (31 December 2021: $1,561.7 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
Note 14 Contributed equity
2022
$’000
2021
$’000
1,600,000
1,600,000
(5,359)
(38,316)
1,594,641
1,561,684
Share capital
Ordinary shares (fully paid)
13,572,508,577
13,572,508,577
4,204,488
4,204,488
2022
Shares
2021
Shares
2022
$’000
2021
$’000
(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 2022 and 31 December 2021.
(c) OPTIONS
There are no options outstanding as at the statement of financial position date.
Annual Report 2022
40
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 14 Contributed equity (continued)
(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 less net debt.
The gearing ratios at 31 December 2022 and 31 December 2021 were as follows:
Gearing ratio
Note 15 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 (2021: 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
Acquisition of shares
Balance at 31 December
9 N/A for 2022 as the Group is at net cash position at 31 December 2022 (see Note 16).
2022
%
N/A9
2021
%
5
2022
$’000
2021
$’000
54,887
54,887
453
14,165
69,505
(183)
16,562
71,266
2022
$’000
2021
$’000
(183)
636
453
(333)
150
(183)
2022
$’000
2021
$’000
16,562
1,163
(3,560)
14,165
15,880
682
–
16,562
Hutchison Telecommunications (Australia) Limited
41
2022
$’000
2021
$’000
(3,536,177)
(3,514,500)
(398,378)
(21,677)
(3,934,555)
(3,536,177)
(b) ACCUMULATED LOSSES
Accumulated losses at 1 January
Loss attributable to members of the Company
Accumulated losses at 31 December
(c) NATURE AND PURPOSE OF RESERVES
Capital redemption reserve
The capital redemption reserve relates to the surplus arising on initial consolidation of a 19.9% stake in Hutchison 3G
Australia Holdings Pty Limited (“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(k).
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.
Note 16 Reconciliation of loss after income tax to net cash inflows from operating activities
Loss after income tax
Share of (profit)/loss of equity accounted investments (Note 10)
Impairment loss on equity accounted investments (Note 4)
Dividends from associate
Change in operating assets and liabilities
Increase in other assets
Increase/(decrease) in payables
Net cash inflows from operating activities
Net cash/(debt) reconciliation
Cash and cash equivalents
Borrowings
Net cash/(debt)
2022
$’000
2021
$’000
(398,378)
(21,677)
(47,721)
19,897
444,617
–
36,241
32,099
(110)
379
(25)
(517)
35,028
29,777
5,808
3,737
(5,359)
(38,316)
449
(34,579)
Annual Report 2022 42
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 16 Reconciliation of loss after income tax to net cash inflows from operating
activities (continued)
Net debt as at 1 January 2022
Cash flows
Net cash as at 31 December 2022
Note 17 Contingencies
Borrowings
due within
1 year
$’000
Total
$’000
(38,316)
(34,579)
32,957
35,028
(5,359)
449
Cash
$’000
3,737
2,071
5,808
There were no contingencies for HTAL or its controlled entities at 31 December 2022 and 31 December 2021. The Directors
are not aware of any other material contingent liabilities existing at the reporting date.
At 31 December 2022 and 31 December 2021, HTAL’s share of guarantees incurred jointly with other investors of TPG are
as follows:
Guarantees
Secured guarantees
Unsecured guarantees
Total guarantees
Note 18 Commitments
2022
VHAH
$’000
–
–
–
TPG
$’000
–
6,263
6,263
2021
VHAH
$’000
–
–
–
TPG
$’000
–
4,509
4,509
There were no commitments contracted by HTAL or its controlled entities not recognised as liabilities or payables at
31 December 2022 and 31 December 2021.
At 31 December 2022 and 31 December 2021, there is no commitment existing in respect of the joint venture VHAH
contracted but not provided for in the financial statements.
Hutchison Telecommunications (Australia) Limited 43
Note 19 Related party transactions
(a) PARENT ENTITIES
The holding company and parent entity is Hutchison Telecommunications (Amsterdam) B.V. which, at 31 December 2022,
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 7.
(d) TRANSACTIONS WITH RELATED PARTIES
During the year, the following transactions occurred with related parties:
Loans from related parties
Repayments to an entity within the CKHH Group
(32,956,620) (49,696,962)
Operating expenses
Paid to TPG equity accounted investment
(440,516)
(478,509)
(e) OUTSTANDING BALANCES
The following balances are outstanding at 31 December 2022 and 31 December 2021 in relation to transactions with
related parties:
2022
$
2021
$
Payables
TPG equity accounted investment (Note 12)
Current liabilities – Other financial liabilities
Entity within the CKHH Group (Note 13)
2022
$
2021
$
(479,254)
(119,627)
(5,359,401) (38,315,620)
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.
Annual Report 2022 44
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 20 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 2022 in comparison to
31 December 2021.
(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 2022
and 31 December 2021.
Statement of profit or loss and other comprehensive income
Revenue
Impairment of TPG investment held within the Closed Group
Other operating expenses
Loss before income tax
Income tax expense
Loss for the year
Movements in consolidated accumulated losses
Accumulated losses at 1 January
Loss for the year (i)
Accumulated losses at 31 December
2022
$’000
2021
$’000
36,435
32,220
(294,826)
(187,868)
(1,676)
(1,901)
(260,067)
(157,549)
–
–
(260,067)
(157,549)
(3,003,574)
(2,846,025)
(260,067)
(157,549)
(3,263,641)
(3,003,574)
(i) During the financial year, the Closed Group recognised an impairment of $294.8 million (2021: impairment of
$187.9 million) on H3GAH’s investment in TPG 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 of disposal.
Hutchison Telecommunications (Australia) Limited 45
(b) STATEMENT OF FINANCIAL POSITION
Set out below is a statement of financial position as at 31 December 2022 and 31 December 2021 of the Closed Group
consisting of H3GAH and HTAL.
ASSETS
Current Assets
Cash and cash equivalents
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
2022
$’000
2021
$’000
5,808
3,737
117
45
52
–
5,970
3,789
1,011,856
1,306,682
1,011,856
1,306,682
1,017,826
1,310,471
853
5,359
6,212
6,212
474
38,316
38,790
38,790
1,011,614
1,271,681
4,204,488
4,204,488
70,767
70,767
(3,263,641) (3,003,574)
1,011,614
1,271,681
Annual Report 2022 46
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 21 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 2022, 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)*
2022
$’000
2021
$’000
1,356,458
1,325,897
47,721
(19,897)
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 10.
* after equity accounted investment accounting adjustments.
Note 22 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.
Hutchison Telecommunications (Australia) Limited 47
(i) Interest rate risk
The Group’s main interest rate risk arises from cash balances and other financial assets. At 31 December 2022, 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 2022 balances (2021: 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.
(iii) Summarised sensitivity analysis
The following table summarises the sensitivity of the Group’s financial assets to interest rate risk.
31/12/2022
Financial assets
Cash and cash equivalents
Total increase/(decrease)
31/12/2021
Financial assets
Cash and cash equivalents
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
5,808
5,808
(58)
(58)
–
–
58
58
–
–
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
–
–
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.
Annual Report 2022 48
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 22 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 $5.4 million (2021: $38.3 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.
31/12/2022
Cash and cash equivalents
Payables
Other financial liabilities
Total
31/12/2021
Cash and cash equivalents
Payables
Other financial liabilities
Total
Weighted
average
interest
rate
0.15%
–
–
Weighted
average
interest
rate
0.03%
–
–
Less than
1 year
$’000
5,808
(853)
(5,359)
(404)
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
–
–
–
–
–
–
–
–
–
–
–
–
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
5,808
(853)
(5,359)
(404)
Total
$’000
3,737
(474)
(38,316)
(35,053)
Hutchison Telecommunications (Australia) Limited 49
Note 23 Events occurring after the reporting date
(a) Update on TPG’s regional MOCN agreement with Telstra
On 21 February 2022, TPG announced a regional Multi-Operator Core Network (“MOCN”) agreement with Telstra
Corporation Limited (“Telstra”) (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.
On 21 December 2022, the Australian Competition and Consumer Commission decided not to grant authorisation for the
proposed arrangement.
Consequently, TPG has submitted an application to the Australian Competition Tribunal for a review of the decision,
with a tribunal decision expected in the first half of 2023.
As a result, the potential financial impacts highlighted in TPG’s half-year report 2022 (impairment of fixed assets and
right-of-use assets) have not been recognised in the year ended 31 December 2022 by TPG.
(b) 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 24 Parent entity disclosures
(a) SUMMARY FINANCIAL INFORMATION
Financial position
ASSETS
Current Assets
Non-current Assets
Total Assets
LIABILITIES
Current Liabilities10
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
Financial performance
Loss for the year(i)
Total comprehensive loss for the year
2022
$’000
2021
$’000
5,970
3,789
339,680
1,080,200
345,650
1,083,989
74,553
74,553
70,888
70,888
271,097
1,013,101
4,204,488
4,204,488
15,880
15,880
(3,949,271)
(3,207,267)
271,097
1,013,101
(742,004)
(742,004)
(1,779)
(1,779)
(i) Loss for the year includes an impairment expense of $740.5 million impairment expense (2021: no impairment) of
HTAL’s investment in H3GAH.
10 As at 31 December 2022, current liabilities include $5.4 million (2021: $38.3 million) which relates to an interest free financing facility provided from a
subsidiary of CKHH, and an interest free advance repayable by HTAL to H3GAH of $68.3 million (2021: $32.1 million).
Annual Report 2022 50
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Note 24 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 2022
and 31 December 2021.
The Directors of the Parent Entity are not aware of any other material contingent liabilities existing at the reporting date.
As at 31 December 2022, the Parent Entity has a deficiency of net current assets of $68.6 million (2021: deficiency
of net current assets of $67.1 million). Included in the Parent Entity’s current liabilities is an amount of $5.4 million
(2021: $38.3 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 $1,594.6 million at
31 December 2022 (2021: $1,561.7 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
Accumulated impairment
Carrying amount
2022
$’000
2021
$’000
3,664,655
3,664,655
(3,324,975)
(2,584,455)
339,680
1,080,200
Hutchison Telecommunications (Australia) Limited DIRECTORS’ DECLARATION
51
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 21 to 50 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 2022 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 20 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 20.
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.
Director
27 February 2023
Director
27 February 2023
Annual Report 2022 52
INDEPENDENT AUDITOR’S REPORT
Hutchison Telecommunications (Australia) Limited 53
Annual Report 2022 54
INDEPENDENT AUDITOR’S REPORT CONTINUED
Hutchison Telecommunications (Australia) Limited 55
Annual Report 2022 56
INDEPENDENT AUDITOR’S REPORT CONTINUED
Hutchison Telecommunications (Australia) Limited 57
Annual Report 2022 58
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 27 February 2023.
Substantial shareholders
Substantial shareholders in the Company (as disclosed to the ASX) are:
Shareholder
CK Hutchison Holdings Limited and its subsidiaries1
Shareholding
12,009,393,175
Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust2
12,009,393,175
Vodafone Group Plc and subsidiaries3
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:
1
2
3
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. For further details, see form 603 lodged with the ASX on 5 June 2015.
Substantial shareholding arises solely because Li Ka-Shing Unity Trustee Company Limited as trustee for The Li Ka-Shing Unity Trust
has interests 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. For further details, see form 603 lodged with the ASX on 11 June 2015.
Substantial shareholding arises solely as a result of the relevant interests which Vodafone Group Plc and its subsidiaries have in shares
in the Company in which CK Hutchison Holdings Limited and its subsidiaries have a relevant interest. None of Vodafone Group Plc or
any of its subsidiaries holds any shares in the Company. Previously, Vodafone Group Plc’s relevant interests arose under a Shareholders
Agreement between Vodafone Group Plc, Hutchison Whampoa Limited (currently a subsidiary of CK Hutchison Holdings Limited)
and other parties in relation to Vodafone Hutchison Australia Pty Limited (name changed to Vodafone Hutchison Australia Limited
and then to TPG Telecom Limited) (the “VHA Shareholders Agreement”). The acquisition of the relevant interests was approved by
shareholders in April 2009. The VHA Shareholders Agreement was terminated in June 2020. At or about the time of termination of
the VHA Shareholders Agreement, Vodafone Group Plc, CK Hutchison Holdings Limited, the Company and other parties entered into
a Shareholders Agreement in relation to Vodafone Hutchison (Australia) Holdings Limited (the “New Shareholders Agreement”). As
a result of certain provisions in the New Shareholders Agreement, Vodafone Group Plc and its subsidiaries have a relevant interest in
shares in the Company in which CK Hutchison Holdings Limited and its subsidiaries have a relevant interest.
Distribution of equity securities
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 50,000
50,001 – 100,000
100,001 – and over
Total
Number of
Shareholders
% Issued
Capital
1,335
2,163
755
754
136
215
0.01
0.04
0.04
0.12
0.08
99.71
5,358
100.00
There were 3,964 holders of less than a marketable parcel of ordinary shares at a share price of $0.056 on
27 February 2023.
Hutchison Telecommunications (Australia) Limited Twenty largest shareholders
The names of the 20 largest holders of quoted ordinary shares as at 27 February 2023 are as follows:
Shareholder
Hutchison Telecommunications (Amsterdam) B.V.
Spark New Zealand Trading Limited
Leanrose Pty Ltd
Mr Dimitrios Piliouras & Mrs Konstantina Piliouras
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