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CHINA MOBILE LIMITED
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock Code: 941)
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2007 ANNOUNCEMENT OF FINAL RESULTS
.
CHAIRMAN’S STATEMENT
Dear Shareholders,
In 2007, the steady growth of China
Financial Results
In 2007, the Group
Business Developments
During 2007, the Group enjoyed continued growth in a number of areas, including new customers, new business and new voice usage. These have, in turn, provided momentum for our financial performance. Our subscriber base continued to expand and value-added data services were popular among customers, further optimizing our revenue structure. In addition, we successfully promoted informatization and industry specific application solutions to corporate customers. We have steadily proceeded with tariff adjustments to meet regulatory requirements and market demand. This has enabled the Group to fulfill customer requirements while stimulating voice usage volume. The last year has seen steady growth not only in voice usage volume but also overall revenue. As at 31 December 2007, the total number of subscribers had reached 369.339 million, with a net increase of 68.107 million subscribers
Network
We are the world
Preparing for the Olympics
We are the sole mobile telecommunications services partner for the 2008 Beijing Olympics. During 2007 we defined our Olympics strategy, established a number of working groups for Olympics product designs and project implementation. Network projects at the different Olympic venues progressed swiftly and smoothly, as did the promotion of a number of Olympics-themed activities. In August, for example, the Beijing Olympic One-year Countdown theme song
Management of the Company
I am convinced that refined and effective management can lead to strong operational performance. In 2007, we went further with the improvement of management and the implementation of the
Corporate Social Responsibility
Corporate social responsibility (CSR) is one of our core values. In 2007, as well as establishing a systematic corporate responsibility management structure, we also formulated a work plan for 2008-to- 2010. The plan will help us continue the effective and consistent implementation of our corporate social responsibility management initiatives. The theme of our CSR program for 2007 was Growing Together Harmoniously. In simple terms this means balancing the goal of corporate growth against the desire to help communities develop while also preserving the natural environment. With this objective in mind, we have made great strides in promoting informatization in rural areas, care for the underprivileged, actively participate in disaster relief efforts, encourage education, conserve energy and reduce emission, as well as helping communities to grow. We have actively undertaken Rural Program, Life Program, Culture Program and Green Program, in pursuit of harmonious growth with industry, society and the environment. Details of our corporate social responsibility initiatives are contained in the Company
Dividends
We determine and commit to hold in the highest regard the interests of our shareholders and the returns achieved for them, especially the minority shareholders. In consideration of the Company
Looking to the Future
The combination of continued rapid growth in China
Fundamentally, our focus remains unchanged
Wang Jianzhou
Chairman and Chief Executive Officer
Hong Kong, 19 March 2008
GROUP RESULTS
China Mobile Limited (the
CONSOLIDATED INCOME STATEMENT
(Expressed in Renminbi)
Year ended 31 December
2007
Note
Operating revenue (Turnover)
Usage fees
Monthly fees
Value-added services fees
Other operating revenue
356,959
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Operating expenses
Leased lines
Interconnection
Depreciation
Personnel
Other operating expenses 5
232,891
Profit from operations 124,068
Other net income 2,323
Non-operating net income 657
Interest income 4,015
Finance costs (1,825)
Profit before taxation 129,238
Taxation
Profit for the year 87,179
Attributable to:
Equity shareholders of the Company
Minority interests
Dividends paid/payable to equity shareholders of
the Company attributable to the year:
Ordinary interim dividend declared and paid during the year 7
Special interim dividend declared and paid during the year 7
Ordinary final dividend proposed after the balance sheet date 7
Special final dividend proposed after the balance sheet date 7
39,883
Earnings per share
Dividend per share
—
RMB million
EBITDA 194,003
CONSOLIDATED BALANCE SHEET
As at 31 December
Non-current assets
Property, plant and equipment, net
Construction in progress
Land lease prepayments
Goodwill
Other intangible assets
Interest in associates
Deferred tax assets
Other financial assets
355,858
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
Current assets
Inventories
Accounts receivable, net 9
Other receivables
Prepayments and other current assets
Amount due from ultimate holding company
Tax recoverable
Deposits with banks
Cash and cash equivalents
207,635
Current liabilities
Accounts payable 10
Bills payable
Deferred revenue
Accrued expenses and other payables
Amount due to ultimate holding company
Amount due to immediate holding company
Interest-bearing borrowings
Obligations under finance leases
Current taxation
154,953
Net current assets 52,682
Total assets less current liabilities 408,540
Non-current liabilities
Deferred revenue, excluding current portion
Deferred tax liabilities
(34,301)
NET ASSETS 374,239
CAPITAL AND RESERVES
Share capital
Reserves
Total equity attributable to equity shareholders of the Company 373,751
Minority interests 488
TOTAL EQUITY 374,239
Notes
1. Basis of preparation
These financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (
The Group
2. Changes in accounting policies
The IASB has issued a number of new and revised IFRSs and Interpretations that are first effective for the current accounting period commencing 1 January 2007 or available for early adoption. The equivalent new and revised HKFRSs and Interpretations consequently issued by HKICPA have the same effective date as those issued by the IASB and are in all material respects identical to the pronouncements issued by the IASB. There have been no other material changes to HKFRSs. These developments have not resulted in any significant changes to the accounting policies applied in these financial statements compared to those applied in the Group
3. Segment reporting
No analysis of the Group
4. Turnover
Turnover represents usage fees, monthly fees, value-added services fees and other operating revenue derived from the Group
5. Other operating expenses
Selling and promotion
Maintenance
Impairment loss for doubtful accounts
Impairment loss of inventories
Amortization of other intangible assets
Operating lease charges
(Gain)/loss on disposal of property, plant and equipment
Write-off of property, plant and equipment
Auditors
Others
123,430
Note:
6. Taxation
Taxation in the consolidated income statement represents:
Current tax
Provision for Hong Kong profits tax on the estimated assessable profits for the year
Under-provision in respect of Hong Kong profits tax for prior year
Provision for PRC enterprise income tax on the estimated taxable profits for the year
Over-provision in respect of PRC enterprise income tax for prior years
Deferred tax
Origination and reversal of temporary differences
(i) The provision for Hong Kong profits tax for 2007 is calculated at 17.5 per cent. (2006: 17.5 per cent.) of the estimated assessable profits for the year.
(ii) Pursuant to the PRC enterprise income tax law passed by the Tenth National People
7. Dividends
Dividends attributable to the year:
Ordinary interim dividend declared and paid of HK$0.837 (equivalent to approximately RMB0.816 (2006: HK$0.62 (equivalent to approximately RMB0.64)) per share
Special interim dividend declared and paid of HK$0.085 (equivalent to approximately RMB0.083) (2006: HK$0.09 (equivalent to approximately RMB0.09)) per share
Ordinary final dividend proposed after the balance sheet date of HK$1.160 (equivalent to approximately RMB1.086) (2006: HK$0.763 (equivalent to approximately RMB0.767)) per share
Special final dividend proposed after the balance sheet date of HK$0.016 (equivalent to approximately RMB0.015) (2006: HK$0.069 (equivalent to approximately RMB0.069)) per share
The proposed ordinary and special final dividends which are declared in Hong Kong dollars are translated into RMB at the rate HK$1 = RMB0.93638, being the rate announced by the State Administration of Foreign Exchange in the PRC on 28 December 2007. As the ordinary and special final dividends are declared after the balance sheet date, such dividends are not recognized as liabilities as at 31 December 2007.
8. Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share for the year is based on the profit attributable to equity shareholders of the Company of RMB87,062,000,000 (2006: RMB66,026,000,000) and the weighted average number of 20,005,123,269 shares (2006: 19,892,968,234 shares) in issue during the year, calculated as follows:
Weighted average number of shares
Number of shares
Issued shares at 1 January
Effect of share options exercised
Weighted average number of shares at 31 December
(b) Diluted earnings per share
The calculation of diluted earnings per share for the year is based on the profit attributable to equity shareholders of the Company of RMB87,062,000,000 (2006: RMB66,026,000,000) and the weighted average number of shares 20,339,428,112 (2006: 20,078,548,959 shares), calculated as follows:
Weighted average number of shares (diluted)
Effect of deemed issue of shares under the Company
Weighted average number of shares (diluted) at 31 December
9. Accounts receivable, net
Aging analysis of accounts receivable, net of impairment loss for doubtful accounts, is as follows:
Within 30 days
31
61
Over 90 days
6,985
Accounts receivable primarily comprise receivables from subscribers. Accounts receivable from subscribers are due for payment within one month from date of billing. Subscribers with balances that are overdue or exceed credit limits are required to settle all outstanding balances before any further phone calls can be made. Accounts receivable are expected to be recovered within one year.
10. Accounts payable
The aging analysis of accounts payable as at 31 December is as follows:
Amounts payables in the next:
1 month or on demand
2
4
7
10
63,927
All of the accounts payable are expected to be settled within one year or are repayable on demand.
11. Comparative figures
Certain comparative figures have been reclassified to conform with current year
AUDIT COMMITTEE
The Audit Committee reviewed with management the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters including the review of the audited financial statements for the year ended 31 December 2007.
COMPLIANCE WITH THE CODE PROVISIONS OF THE CODE ON CORPORATE GOVERNANCE PRACTICES
Throughout the year ended 31 December 2007, other than the roles of the Chairman and the Chief Executive Officer being performed by Mr. Wang Jianzhou, the Company has complied with all the code provisions of the Code on Corporate Governance Practices as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Mr. Wang Jianzhou joined the Board of Directors of the Company in November 2004 and since then has been the Chairman and the Chief Executive Officer of the Company in charge of the overall management of the Company. The Company considers that the combination of the roles of the Chairman and the Chief Executive Officer can promote the efficient formulation and implementation of the Company
PURCHASE, SALE OR REDEMPTION OF THE COMPANY
The Company and its subsidiaries did not purchase, sell or redeem any of the listed securities of the Company during the year.
CLOSURE OF REGISTER OF MEMBERS
The register of members of the Company will be closed from 6 May 2008 to 8 May 2008 (both days inclusive), during which period no transfer of shares in the Company will be effected. In order to qualify for the proposed final and special dividends, all transfers, accompanied by the relevant share certificates, must be lodged with the Company
PUBLICATION OF ANNUAL REPORT ON THE INTERNET WEBSITE OF THE STOCK EXCHANGE OF HONG KONG LIMITED
The 2007 annual report will be published on the website of The Stock Exchange of Hong Kong Limited in due course.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this announcement may be viewed as
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