Report of the Directors
Donations
For the year ended 31 December 2011, the Group made charitable and other donations with a total amount of RMB13 million.
Subsidiaries and Associated Companies
Please refer to note 8 and note 9 of the audited financial statements for details of the Company’s subsidiaries and the Group’s interests in associated companies as at 31 December 2011.
Changes in Equity
Please refer to the consolidated statement of changes in equity as contained in the audited financial statements of this year (page 93 of this annual report).
Retirement Benefits
Please refer to note 37 of the audited financial statements for details of the retirement benefits provided by the Group.
Stock Appreciation Rights
Please refer to note 38 of the audited financial statements for details of the stock appreciation rights offered by the Company.
Pre-Emptive Rights
There are no provisions for pre-emptive rights in the Articles of Association requiring the Company to offer new shares to the existing shareholders in proportion to their shareholdings.
Major Customers and Suppliers
For the year ended 31 December 2011, sales to the five largest customers of the Group accounted for an amount no more than 30% of the operating revenues of the Group.
For the year ended 31 December 2011, purchases from the five largest suppliers of the Group accounted for an amount no more than 30% of the total annual purchases of the Group.
To the knowledge of the Board, no Director of the Company, their associates, or any person holding more than 5% of the issued share capital in the Company has any interests in such suppliers.
Continuing Connected Transactions
The following table sets out the amounts of continuing connected transactions between the Group and China Telecom Group for the year ended 31 December 2011:
Transactions |
Transaction Amounts |
Annual monetary cap for continuing connected transactions |
|
(RMB millions) |
(RMB millions) |
||
Net transaction amount of centralised services |
625 |
800 |
|
Net expenses for interconnection settlement |
450 |
1,000 |
|
Mutual leasing of properties |
412 |
600 |
|
Provision of IT services by China Telecommunications Corporation and its subsidiaries (except for the Group) (the “China Telecom Group”)1 |
692 |
1,200 |
|
Provision of IT services to China Telecom Group |
365 |
500 |
|
Provision of supplies procurement services by China Telecom Group |
2,764 |
3,800 |
|
Provision of supplies procurement services to China Telecom Group |
1,642 |
1,800 |
|
Provision of engineering services by China Telecom Group |
8,293 |
8,800 |
|
Provision of community services by China Telecom Group |
2,362 |
2,900 |
|
Provision of ancillary telecommunications services by China Telecom Group |
7,878 |
9,000 |
|
CDMA network capacity lease fee |
15,8602 |
21,000 |
|
1 China Telecommunications Corporation is a controlling shareholder of the Company. Each of China Telecommunications Corporation and its subsidiaries (except for the Group) constitutes a connected person of the Company under the Listing Rules.
2 The CDMA network capacity lease fee has already deducted the capacity maintenance related costs of CDMA network payable to the Company by China Telecommunications Corporation amounted to RMB3,151 million.