Report of the Directors

Share Capital

The share capital of the Company as at 31 December 2011 was RMB80,932,368,321, divided into 80,932,368,321 shares of RMB1.00 each. As at 31 December 2011, the share capital of the Company comprised:

 

Share category

Number of shares

as at

31 December 2011

Percentage of the

total number of shares

in issue as at

31 December 2011

   

(%)
 

Domestic shares (total):

67,054,958,321

82.85
 

Domestic shares held by:
 

China Telecommunications Corporation

57,377,053,317

70.89
 

Guangdong Rising Assets Management Co., Ltd.

5,614,082,653

6.94
 

Zhejiang Financial Development Company

2,137,473,626

2.64
 

Fujian Investment & Development Group Co., Ltd

969,317,182

1.20
 

Jiangsu Guoxin Investment Group Co., Ltd.

957,031,543

1.18
 

Total number of H shares (including ADSs)

13,877,410,000

17.15
 

Total

80,932,368,321

100.00
       

Material Interests and Short Positions in Shares and Underlying Shares of the Company

As at 31 December 2011, the interests or short position of persons who are entitled to exercise or control the exercise of 5% or more of the voting power at any of the Company’s general meetings (excluding the Directors and Supervisors) in the shares and underlying shares of equity derivatives of the Company as recorded in the register required to be maintained under Section 336 of the Securities and Futures Ordinance (the “SFO”) are as follows:

 

Name of shareholders

Number of

shares

Type of shares

Percentage of the

respective type

of shares

Percentage of the

total number of

shares in issue

Capacity
 

China Telecommunications Corporation

57,377,053,317

(Long Position)

Domestic shares

85.57%

70.89%

Beneficial owner
 

Guangdong Rising Assets Management Co., Ltd.

5,614,082,653

(Long Position)

Domestic shares

8.37%

6.94%

Beneficial owner
 

JPMorgan Chase & Co.

1,663,316,937

(Long Position)

H shares

11.99%

2.06%

131,001,855 shares as beneficial owner; 379,026,000 shares as investment manager; and1,153,289,082 shares as security interest holder/approved lending agent
   

47,412,908

(Short Position)

H shares

0.34%

0.06%

Beneficial owner
   

1,153,289,082

(Shares available

for lending)

H shares

8.31%

1.43%

Security interest holder/ approved lending agent
 

Commonwealth Bank of Australia

1,110,034,681

(Long Position)

H shares

8.00%

1.37%

Interest of controlled corporation
 

Blackrock, Inc.

1,006,713,763

(Long Position)

H shares

7.25%

1.24%

Interest of controlled corporation
   

48,612,755

(Short Position)

H shares

0.35%

0.06%

Interest of controlled corporation
 

RFS Holdings B.V.

907,191,530

(Long Position)

H shares

6.54%

1.12%

Interest of controlled corporation
   

1,180,327,134

(Short Position)

H shares

8.51%

1.46%

Interest of controlled corporation
             

Save as stated above, as at 31 December 2011, in the register required to be maintained under Section 336 of the SFO, no other persons were recorded to hold any interests or short positions in the shares or underlying shares of the equity derivatives of the Company.