Overseas Regulatory Announcement

368 Pages·2007·1.05 MB·English

(Incorporated in Hong Kong with limited liability)

(Stock Code: 013)

OVERSEAS REGULATORY ANNOUNCEMENT

Please refer to the attached Form 20-F which was filed with the U.S. Securities and Exchange
Commission on 27 June 2007 by Hutchison Telecommunications International Limited which is
a non wholly owned subsidiary of Hutchison Whampoa Limited.

As at the date of the announcement, the Directors of Hutchison Whampoa Limited are:

Executive Directors: Non-executive Directors:
Mr. LI Ka-shing (Chairman) Mr. George Colin MAGNUS
Mr. LI Tzar Kuoi, Victor (Deputy Chairman) Mr. William SHURNIAK
Mr. FOK Kin-ning, Canning
Mrs. CHOW WOO Mo Fong, Susan Independent Non-executive Directors:
Mr. Frank John SIXT The Hon. Sir Michael David KADOORIE
Mr. LAI Kai Ming, Dominic Mr. Holger KLUGE
Mr. KAM Hing Lam Mr. William Elkin MOCATTA
(Alternate to The Hon. Sir Michael
David Kadoorie)
Mr. OR Ching Fai, Raymond
Mr. WONG Chung Hin

Hong Kong, 28 June 2007
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20−F
(Mark One)
¤ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
OR
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
OR
¤ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
¤ SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of event requiring this shell company report:
For the transition period from to
Commission file number: 001−32309
HUTCHISON TELECOMMUNICATIONS INTERNATIONAL LIMITED
(Exact name of Registrant as specified in its charter)
HUTCHISON TELECOMMUNICATIONS INTERNATIONAL LIMITED
(Translation of Registrant’s name into English)
Source: Hutchison Telecommun, 20−F, June 27, 2007
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CAYMAN ISLANDS
(Jurisdiction of incorporation or organization)
20/F, Hutchison Telecom Tower
99 Cheung Fai Road
Tsing Yi
Hong Kong
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class Name of each exchange on which registered
American Depositary Shares, each representing 15 Ordinary Shares of New York Stock Exchange
nominal value HK$0.25 each; and
Ordinary Shares, nominal value HK$0.25 each Hong Kong Stock Exchange
New York Stock Exchange*
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Ordinary Shares, nominal value HK$0.25 each 4,765,972,542
Indicate by check mark if the registrant is a well−known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¤
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. Yes ¤ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes x No ¤
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non−accelerated filer. See definition of “accelerated filer and
large accelerated filer” in Rule 12b−2 of the Exchange Act of 1934. (Check one):
Large accelerated filer x Accelerated filer ¤ Non−accelerated filer ¤
Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ¤ Item 18 x
If this is an annual or transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b−2 of the Exchange
Act). Yes ¤ No x
* Not for trading, but only in connection with the registration of the American Depositary Shares
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
TABLE OF CONTENTS
Page
PRESENTATION OF FINANCIAL AND OTHER INFORMATION 1
FORWARD−LOOKING STATEMENTS 2
PART I 3
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 3
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 3
ITEM 3. KEY INFORMATION 3
A. Selected Financial Data 3
B. Capitalization and Indebtedness 6
C. Reasons for the Offer and Use of Proceeds 6
D. Risk Factors 7
ITEM 4. INFORMATION ON THE COMPANY 18
A. Business Overview 18
B. Property, Plants and Equipment 67
C. History and Development of the Company 67
D. Organizational Structure 71
ITEM 4A UNRESOLVED STAFF COMMENTS 73
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 73
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 102
A. Directors and Senior Management 102
B. Compensation 105
C. Board Practices 105
D. Employees 106
E. Share Ownership 108
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 110
A. Major Shareholders 110
B. Related Party Transactions 112
C. Interest of Experts and Counsel 121
ITEM 8. FINANCIAL INFORMATION 121
A. Consolidated Statements and Other Financial Information 121
B. Significant Changes 122
ITEM 9. THE OFFER AND LISTING 123
A. Offer and Listing Details 123
B. Plan of Distribution 123
C. Markets 123
D. Selling Shareholders 123
E. Dilution 123
F. Expenses of the Issue 123
ITEM 10. ADDITIONAL INFORMATION 124
A. Share Capital 124
B. Memorandum and Articles of Association 124
C. Material Contracts 129
D. Exchange Controls 130
E. Taxation 130
F. Dividends and Paying Agents 134
G. Statement by Experts 134
H. Documents on Display 134
I. Subsidiary Information 135
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 135
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 137
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
PART II 139
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 139
ITEM 14. MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 139
ITEM 15. CONTROLS AND PROCEDURES 139
ITEM 16. RESERVED 140
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 140
ITEM 16B. CODE OF ETHICS 140
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 140
ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 141
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 141
PART III 141
ITEM 17. FINANCIAL STATEMENTS 141
ITEM 18. FINANCIAL STATEMENTS 141
ITEM 19. EXHIBITS 142
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
In this annual report on Form 20−F, references to “our company”, “we”, “us”, “our” and similar terms refer to Hutchison Telecommunications
International Limited and, unless the context otherwise requires, to its subsidiaries and associated companies.
Unless indicated otherwise, the financial information in this annual report has been prepared in accordance with Hong Kong Financial Reporting
Standards, or HKFRS, which term collectively includes Hong Kong Accounting Standards, or HKAS, and related interpretations issued by the Hong Kong
Institute of Certified Public Accountants, and is presented in Hong Kong dollars. HKFRS differs in some material respects from United States generally accepted
accounting principles, or US GAAP. For a discussion of these differences and a reconciliation of net profit / (loss) attributable to equity holders of the company
and shareholders’ equity to US GAAP, see “Operating and Financial Review and Prospects” below and note 36 to our consolidated accounts.
• references to “Ghanaian Cedi” or “GHC” are to the currency of Ghana;
• references to “Hong Kong dollars” or “HK$” are to the currency of Hong Kong;
• references to “Indian Rupee” or “INR” are to the currency of India;
• references to “Indonesian Rupiah” or “IDR” are to the currency of Indonesia;
• references to “Japanese Yen” or “JPY” are to the currency of Japan;
• references to “New Israeli Shekel” or “NIS” are to the currency of Israel;
• references to “Sri Lankan Rupee” or “LKR” are to the currency of Sri Lanka;
• references to “Thai Baht” or “THB” are to the currency of Thailand; and
• references to “U.S. dollars,” “USD” or “US$” are to United States dollars.
Discrepancies between totals and the sums of the amounts contained in any table may be as a result of rounding.
For your convenience, this annual report contains translations of certain Hong Kong dollar amounts into U.S. dollars at the noon buying rate in New York
for cable transfers as certified by the Federal Reserve Bank of New York in effect on December 29, 2006, which was HK$7.78 = US$1.00. In addition, this
annual report contains translations of Indian Rupees, New Israeli Shekels, Indonesian Rupiah, Japanese Yen and Thai Baht into Hong Kong dollars at the rates of
INR1.00 = HK$0.1744, NIS1.00 = HK$1.86, IDR1.00 = HK$0.00086, JPY1.00 = HK$0.0657 and THB1.00 = HK$0.2134, respectively. This does not mean that
the currencies have been or could be converted at any of these rates.
1
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
FORWARD−LOOKING STATEMENTS
The Securities and Exchange Commission, or the SEC, encourages companies to disclose forward−looking information so that investors can better
understand a company’s future prospects and make informed investment decisions. This annual report contains forward−looking statements within Section 27A
of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
We use words such as “will,” “aim,” “will likely result,” “will continue,” “contemplate,” “seek to,” “future,” “objective,” “goal,” “should,” “will pursue,”
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and words and terms of similar substance to identify forward−looking statements, but
they are not the only way we identify such statements. All forward−looking statements are management’s present expectations of future events and are subject to
a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward−looking statements. In addition to
the risks related to our business discussed under “Key Information—Risk Factors,” other factors could cause actual results to differ materially from those
described in the forward−looking statements. These factors include, but are not limited to:
• our ability to successfully implement our business strategy;
• uncertainties about the degree of growth in the number of consumers in the markets in which we operate using mobile personal communications
services and the growth in the population in those areas;
• the risks associated with the implementation of new networks, including risks relating to the operation of new systems and technologies, substantial
expenditures required and potential unanticipated costs, uncertainties regarding the adequacy of suppliers on whom we must rely to provide both
network and consumer equipment and consumer acceptance of the products and services to be offered;
• the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less expensive products and
services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing;
• the effects of rapid technological changes and vigorous competition in the markets in which we operate, which may cause prices charged to decline,
increase movement of customers among providers of mobile telecommunications services, known as churn, or change our customer mix,
profitability or average revenue per user;
• other factors or trends affecting the telecommunications industry generally and our financial condition in particular; and
• the effects of the higher degree of regulation in the markets in which we operate.
By their nature, certain disclosures relating to these and other risks are only estimates and could be materially different from what actually occurs in the
future. As a result, actual future gains, losses or the impact on our financial condition and results of operations could differ materially from those that have been
estimated.
In addition, other factors that could cause actual results to differ materially from those estimated by the forward−looking statements contained in this
annual report which are beyond our control include, but are not limited to:
• general economic and political conditions in the countries in which we operate or other countries which have an impact on our business activities or
investments;
• the monetary and interest rate policies of the countries in which we operate;
• inflation or deflation;
• unanticipated volatility in interest rates;
• foreign exchange rates;
• the performance of the financial markets in the countries in which we operate and globally;
• changes in domestic and foreign laws, regulations and taxes;
• changes in competition and the pricing environments in the countries in which we operate; and
• regional or general changes in asset valuations.
For further discussion of the factors that could cause actual results to differ, see the discussion under “Key Information—Risk Factors” contained in this
annual report. We caution you not to place undue reliance on the forward−looking statements, which speak only as of the date of this annual report. Except as
required by law, we are not under any obligation, and expressly disclaim any obligation, to update or alter any forward−looking statements, whether as a result of
new information, future events or otherwise.
2
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
All subsequent forward−looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section.
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable
ITEM 3. KEY INFORMATION
A. Summary Consolidated Financial Data
The following tables set forth summary consolidated financial data about our company. We have derived the consolidated financial data as of
December 31, 2002, 2003 and 2004 and for the years ended December 31, 2002 and 2003 from our audited consolidated accounts which are not included in this
annual report on Form 20−F. We have derived the consolidated financial data as of December 31, 2005 and 2006 and for the years ended December 31, 2004,
2005 and 2006 from our audited consolidated accounts included in this annual report on Form 20−F. The summary financial data should be read in conjunction
with, and is qualified in its entirety by reference to, these consolidated accounts, including the related notes. These accounts have been audited by
PricewaterhouseCoopers, Hong Kong, independent registered public accounting firm.
You should read the following summary consolidated financial data in conjunction with the rest of this annual report, including our consolidated accounts
and the related notes and the more detailed information contained in “Operating and Financial Review and Prospects.” For a description of the basis of
presentation of these accounts, see note 2 to our accounts and “Operating and Financial Review and Prospects—Basis of Preparation of Accounts.”
Our consolidated accounts have been prepared in accordance with HKFRS, which differ in some material respects from US GAAP. For a discussion of
these differences and a reconciliation of net loss attributable to shareholders and shareholders’ funds to US GAAP, see note 36 to our accounts.
We completed a restructuring of our company in September 2004, which is described in “Information on the Company—History and Development of the
Company—The Restructuring” and elsewhere in this annual report. Under HKFRS, the restructuring was accounted for as if it had been consummated as of the
beginning of the years presented, except that the capitalization of net long−term amount due to related companies and related interest expenses were not reflected
until the restructuring occurred on September 22, 2004.
Under US GAAP, the restructuring was accounted for as if it had been consummated as of the beginning of the years presented. This resulted in our share
capital when reconciled to US GAAP being retroactively restated for the effect of the capitalization of the long−term amounts due to related companies in
exchange for our ordinary shares issued to members of the Hutchison Whampoa Limited group of companies. Pursuant to the restructuring, HK$20,869 million
of the net amount due to related companies was capitalized on September 22, 2004 as share capital and share premium of our company, which comprised both
amounts payable included in amounts due to related companies and amounts receivable included in amounts due from related companies on our balance sheet
under HKFRS. In addition to this amount, retroactive effect has also been given to the interest expense related to the net amounts due to related companies for the
years presented. Thus, under US GAAP, the related interest expense prior to the date of capitalization was debited against additional paid in capital. Under
HKFRS, this interest expense was included in the consolidated income statement.
3
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
Year ended December 31,
2002 2003 2004 2005 2006 2006
HK$ HK$ HK$ HK$ HK$ US$
Consolidated income statements (in millions, except per share data)
HKFRS
Continuing operations:
Turnover 7,635 10,045 14,845 24,356 33,378 4,290
Cost of inventories sold (529) (524) (1,373) (2,331) (2,305) (296)
Staff costs (978) (1,061) (1,586) (2,319) (2,666) (343)
Depreciation and amortization (1,676) (2,277) (3,117) (4,367) (5,076) (652)
Other operating expenses (4,754) (5,855) (8,913) (13,256) (18,330) (2,356)
Operating profit/(loss) before disposal of investments and others (302) 328 (144) 2,083 5,001 643
(1)
Profit on disposal of investments and others, net 278 — 1,300 71 44 6
Operating profit/(loss) (24) 328 1,156 2,154 5,045 649
Interest income 87 56 24 65 121 16
Interest and other finance costs (862) (880) (1,039) (1,669) (2,763) (356)
Share of results of associates 53 842 338 86 (1) —
Share of results of jointly controlled entities (37) — — — — —
Profit/(loss) before taxation (783) 346 479 636 2,402 309
Taxation (125) (443) (185) (434) (826) (106)
Profit/(loss) for the year from continuing operations (908) (97) 294 202 1,576 203
Discontinued operations:
Loss from discontinued operations (76) (75) (54) (352) — —
Profit/(loss) for the year (984) (172) 240 (150) 1,576 203
Attributable to:
Equity holders of the Company:
− continuing operations (966) (321) 24 (416) 201 26
− discontinued operations (76) (75) (54) (352) — —
(1,042) (396) (30) (768) 201 26
Minority interest – continuing operations 58 224 270 618 1,375 177
(984) (172) 240 (150) 1,576 203
Earnings/(loss) per share from continuing operations, basic and diluted (0.21) (0.07) 0.01 (0.09) 0.04 0.01
Earnings/(loss) per share from discontinued operations, basic and diluted (0.02) (0.02) (0.01) (0.08) N/A N/A
(2)
US GAAP
Loss attributable to shareholders (791) (330) (232) (915) (493) (63)
Loss per share, basic and diluted (0.18) (0.07) (0.05) (0.20) (0.10) (0.01)
(1) The HK$1,300 million profit for the year ended December 31, 2004 is a one−time gain from the placement of shares in Hutchison Global Communications
Holdings Limited, as further described in “Operating and Financial Review and Prospects—Year Ended December 31, 2005 Compared to Year Ended
December 31, 2004.”
(2) Both HKFRS and US GAAP data for the years presented reflect the effects of our restructuring in September 2004 as if the restructuring had occurred on
January 1, 2002. However, the HKFRS data presented above does not reflect the effects of the capitalization of the net amount due to related companies as
share capital and share premium of our company until the restructuring occurred on September 22, 2004. See note 36 to our accounts for further
information regarding US GAAP and the reconciliation of our net profit/(loss) attributable to shareholders and shareholders’ equity/(deficit) under HKFRS
to US GAAP.
4
Source: Hutchison Telecommun, 20−F, June 27, 2007
Table of Contents
As at December 31,
2002 2003 2004 2005 2006 2006
HK$ HK$ HK$ HK$ HK$ US$
Consolidated balance sheets (in millions)
HKFRS
Assets
Cash and cash equivalents 2,859 1,993 2,102 2,436 2,048 263
Restricted cash 575 6 10 1 — —
Other current assets 1,639 3,177 4,211 10,706 10,549 1,356
Total non−current assets 26,724 31,991 34,397 46,448 67,121 8,627
Total assets 31,797 37,167 40,720 59,591 79,718 10,246
Liabilities
Current borrowings 6,354 5,483 13,844 7,690 16,048 2,063
Other current liabilities 4,792 6,016 6,852 10,781 13,817 1,776
Non−current borrowings 6,548 7,485 3,582 19,002 23,369 3,004
(1)
Amounts due to related companies 18,805 22,903 — — — —
Deferred tax liabilities — 46 148 963 1,075 138
Other non−current liabilities 1,251 1,255 1,428 1,333 2,992 384
Total liabilities 37,750 43,188 25,854 39,769 57,301 7,365
Capital and reserves
Share capital — — 1,125 1,188 1,191 153
Reserves (6,279) (6,716) 12,705 14,982 15,468 1,988
Shareholders’ equity/(deficit) (6,279) (6,716) 13,830 16,170 16,659 2,141
Minority interest 326 695 1,036 3,652 5,758 740
Total equity (5,953) (6,021) 14,866 19,822 22,417 2,881
(1)
US GAAP
(2)
Shareholders’ equity 10,909 13,154 12,709 13,680 13,349 1,716
(1) Both HKFRS and US GAAP data for the years presented reflect the effects of our restructuring in September 2004 as if the restructuring had occurred on
January 1, 2002. However, the HKFRS data presented above does not reflect the effects of the capitalization of the net amount due to related companies as
share capital and share premium of our company until the restructuring occurred on September 22, 2004. See note 36 to our accounts for further
information regarding US GAAP and the reconciliation of our net profit/(loss) attributable to shareholders and shareholders’ equity/(deficit) under HKFRS
to US GAAP.
(2) In connection with our restructuring in September 2004, we issued additional ordinary shares to capitalize HK$20,869 million of the net outstanding loans
from Hutchison Whampoa Limited and its group companies. The balance of HK$2,367 million of outstanding debt was offset by HK$2,056 million of
receivables in our restructuring, leaving HK$311 million of non−capitalized debt.
5
Source: Hutchison Telecommun, 20−F, June 27, 2007