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+Company
+China Mobile Limited (the "Company", and together
+with its subsidiaries, the "Group") was incorporated in
+Hong Kong on 3 September 1997. The Company was
+listed on the New York Stock Exchange ("NYSE") and
+The Stock Exchange of Hong Kong Limited ("HKEX"
+or the "Stock Exchange") on 22 October 1997 and 23
+October 1997, respectively. The Company was admitted
+as a constituent stock of the Hang Seng Index in Hong
+Kong on 27 January 1998.
+As the leading telecommunications services provider in
+Mainland China, the Group provides full communications
+services in all 31 provinces, autonomous regions
+and directly-administered municipalities throughout
+Mainland China and in Hong Kong Special Administrative
+Region, and boasts the world's largest mobile network
+and the world's largest mobile customer base. Its
+businesses primarily consist of mobile voice and data
+business, wireline broadband and other information and
+communications services. As of 31 December 2016,
+the Group had a total of 460,647 employees, 849 million
+mobile customers and 77.62 million wireline broadband
+customers with its annual revenue exceeding RMB700
+billion.
+The Company's ultimate controlling shareholder is
+CMCC, which, as of 31 December 2016, indirectly held
+approximately 72.72% of the total number of issued
+shares of the Company. The remaining approximately
+27.28% was held by public investors.
+In 2016, the Company was once again selected as one
+of "The World's 2,000 Biggest Public Companies" by
+Forbes magazine, and recognized again on the Dow
+Jones Sustainability Emerging Markets Index. Currently,
+the Company's corporate credit ratings are equivalent to
+China's sovereign credit ratings, namely, AA-/Outlook
+Negative from Standard & Poor's and Aa3/Outlook
+Negative from Moody's.
+ANNUAL REPORT 2016
+COMPANY PROFILE
+China Mobile Organizational Structure and Majority Shareholding
+*
+As of 31 December 2016
+*
+Except those indicated, the rest are wholly-owned.
+China Mobile
+(Shenzhen) Co., Ltd.
+China Mobile
+Hong Kong Co., Ltd.
+China Mobile
+Communications Corporation
+China Mobile (Hong Kong)
+Group Limited
+China Mobile Hong Kong
+(BVI) Limited
+CHINA MOBILE LIMITED
+72.72%
+Company Profile
+02
+Comprehensive Income
+14
+22
+Business Review
+30
+Financial Review
+36
+53
+Human Resources Development
+54
+Report of Directors
+Corporate Governance Report
+377
+75
+76
+Consolidated Balance Sheet
+Consolidated Statement of Changes in Equity
+Consolidated Statement of Cash Flows
+78 Notes to the Consolidated Financial Statements
+138 Financial Summary
+22
+Consolidated Statement of
+China Mobile Limited
+Public shareholders
+"Asiamoney"
+Best Managed Large Cap in China
+ASTRID
+AWARDS
+2016
+"The Asset"
+The Asset Platinum Award
+EXCELLENCE IN DESIGN
+BRONZE WINNER
+China Mobile Limited
+www.chinamobileltd.com
+Websites Redesign Relaunch
+ASTRID
+AWARDS
+2016
+EXCELLENCE IN DESIGN
+SILVER WINNER
+CHINA
+FINANC
+MARKE
+League of American Communications Professionals
+2015 VISION AV
+ANNUAL REPORT COMPE
+China Mobile Lim
+iOne Financial Press L
+is presented with the
+Bronze Award
+Corporate Recognitions
+China Mobile
+Communication Co., Ltd
+03
+8.00%
+27.28%
+China Mobile
+International Ltd
+31 Provincial
+operating subsidiaries
+China Mobile Group Design
+Institute Company Limited
+China Mobile Investment
+Holdings Co., Ltd.
+China Mobile loT Co., Ltd.
+66.41%
+Aspire Holdings Ltd.
+China Mobile Online
+Services Co., Ltd.
+China Mobile (Suzhou)
+Software Technology Co., Ltd.
+China Mobile (Hangzhou)
+Info Technology Co., Ltd.
+MIGU Co., Ltd.
+China Mobile Internet Co., Ltd.
+China Mobile Tietong Co., Ltd.
+0.03%
+China Mobile Group
+Device Co., Ltd.
+52.44%
+99.97%
+China Mobile Group
+Finance Co., Ltd.
+China Mobile Group Beijing Co., Ltd holds 39.56%
+for excellence within its industry on the d
+71
+65
+of 8 provincial mobile companies
+including Anhui and Jiangxi.
+2006
+28 MARCH
+The Company completed the acquisition
+and privatization of former China
+Resources Peoples Telephone Company
+Limited and became a wholly-owned
+subsidiary which later changed its name
+to China Mobile Hong Kong Company
+Limited.
+29 MAY
+The Company changed its name to China
+Mobile Limited.
+2012
+23 AUGUST
+The Company's wholly-owned subsidiary,
+CMC, entered into a share subscription
+agreement with IFLYTEK Co., Ltd.
+("IFLYTEK") to acquire 70,273,935
+ordinary shares of IFLYTEK, representing
+15% of its enlarged issued share capital,
+in an effort to speed up our mobile
+Internet deployment.
+2014
+9 JUNE
+The Company agreed to, through its
+wholly-owned subsidiary, subscribe
+for shares in True Corporation Public
+Company Limited ("True Corporation")
+in Thailand through a private placement
+for a total consideration of approximately
+RMB5.5 billion. Upon completion of the
+transaction, the Company indirectly holds
+18% equity interest in True Corporation.
+1997
+2000
+2004
+2010
+2012
+2014
+1998
+The Company completed the acquisition
+4 JUNE
+1 JULY
+of Fujian Mobile, Henan Mobile and
+Hainan Mobile.
+China Mobile Limited
+Stock Code: 941
+中国移动
+China Mobile
+Visionary
+擇高處立·向寬處行
+Inclusive
+Annual Report 2016
+20 years of excellence
+1997
+3 SEPTEMBER
+China Telecom (Hong Kong) Limited
+was incorporated in Hong Kong and
+later changed its name to China Mobile
+(Hong Kong) Limited and its name was
+subsequently changed to China Mobile
+Limited (the "Company").
+22 & 23 OCTOBER
+The Company raised US$4.2 billion
+in its initial public offering, with its
+shares listed on the NYSE and HKEX,
+respectively.
+1999
+12 NOVEMBER
+The Company completed the acquisition
+2002
+Independent Auditor's Report
+The Company completed the acquisition
+of Jiangsu Mobile.
+28 JUNE
+The Company's growth rate of revenue
+from telecommunications services
+achieved a five-year high and ranked the
+first in the industry.
+Wireless data traffic revenue became the
+biggest revenue source for the first time
+in the Company's history, surpassing the
+combined revenue of voice, SMS (Short
+Message Service) and MMS (Multimedia
+Messaging Service).
+2015
+2017
+27 NOVEMBER
+The Company, through its wholly-
+owned subsidiary, China Mobile
+TieTong Company Limited, entered
+into an acquisition agreement with
+China TieTong Telecommunications
+Corporation ("TieTong") (a wholly-
+owned subsidiary of CMCC) to acquire
+TieTong's assets and businesses at a
+final consideration of RMB31.967 billion.
+This acquisition enables the Company to
+obtain a wireline broadband license and
+resources.
+Reaching its 20th anniversary of listing,
+the Company has become a world-class
+telecommunications operator with the
+world's largest network and customer
+base, industry-leading profitability and
+market capitalization.
+Contents
+04 Corporate Recognitions
+02
+Company Profile
+06
+Financial Highlights
+07
+Biographies of Directors and Senior
+Management
+Chairman's Statement
+61 Notice of the Annual General Meeting
+64
+Corporate Information
+2016
+2000
+The Company completed its transfer
+of existing telecommunications towers
+and related assets to China Tower. After
+China Tower's issue of new shares to
+the Company pursuant to the transaction
+agreement, the Company, through its
+subsidiary, holds a 38.0% shareholding
+interest in China Tower.
+2015
+The Company changed its name to China
+Mobile (Hong Kong) Limited.
+13 NOVEMBER
+The Company completed the acquisition
+of 7 provincial mobile companies
+including Beijing and Shanghai.
+2004
+1 JULY
+The Company completed the acquisition
+of 10 provincial mobile companies
+including Neimenggu and Jilin, China
+Mobile Communication Co., Ltd ("CMC")
+and Beijing P&T Consulting & Design
+Institute Company Limited. The Company
+became the first overseas-listed PRC
+telecommunications company operating
+in all 31 provinces, autonomous regions
+and directly-administered municipalities
+in Mainland China.
+2010
+10 MARCH
+The Company's wholly-owned subsidiary,
+Guangdong Mobile and Shanghai Pudong
+Development Bank Co., Ltd. ("SPD
+Bank"), entered into a share subscription
+agreement to acquire 20% interest in
+SPD Bank at a consideration of RMB39.5
+billion. Completion of the subscription
+took place in October.
+On 25 November, China Mobile Limited
+and SPD Bank entered into a strategic
+cooperation agreement, thereby officially
+commenced their cooperation in areas of
+mobile finance and mobile e-Commerce
+businesses.
+2013
+4 DECEMBER
+China Mobile Communications
+Corporation ("CMCC") (the Company's
+parent company) was granted a 4G
+(TD-LTE) license. The Company has
+thus taken the lead in launching its 4G
+services.
+18 DECEMBER
+The Company launched the new
+commercial brand "and!".
+11 JULY
+The Company together with China
+Telecom and China Unicom jointly
+established China Communications
+Facilities Services Corporation Limited
+(subsequently renamed as China Tower
+Corporation Limited) ("China Tower").
+Theme:
+Striving to achieve a higher position in our journey towards
+Internet of Everything, we bolster our competitive
+advantages and consolidate around our core strengths in
+this wave of information technology progress. We address
+stakeholder needs and strike a balance between short-
+term interests and long-term development, cultivating a
+healthy ecosystem with the ultimate goal of achieving
+sustainable growth.
+OCTOBER
+of the organization's annual report for the p
+2017
+China Mobile Limited
+www.chinamobileltd.com
+5.31
+5.30
+15.3%
+16.2%
+108,741
+108,539
+- Full year (HK$)
+- Final (HK$)
+- Interim (HK$)
+Dividend per share
+Basic earnings per share (RMB)
+Margin of profit attributable to equity shareholders³
+Profit attributable to equity shareholders (RMB million)
+41.2%
+41.1%
+EBITDA as % of revenue from telecommunications services
+36.2%
+35.9%
+EBITDA margin²
+1.525
+256,677
+1.489
+1.243
+108,741
+Margin of profit attributable to equity shareholders = Profit attributable to equity shareholders/Operating revenue
+3
+2
+EBITDA margin = EBITDA/Operating revenue
+costs, interest income, other gains, depreciation, amortization of other intangible assets and gain on the transfer of Tower Assets.
+The Company defines EBITDA as profit for the year before taxation, share of profit of investments accounted for using the equity method, finance
+1
+108,539
+2016
+2015
+2016
+2015
+(RMB million)
+Profit Attributable to
+Equity Shareholders
+2015 2016
+708,421
+2.732
+2.721
+1.196
+Revenue from
+Telecommunications
+240,028
+623,422
+INOVA AWARDS
+2016
+Interior Designs Telecommunications
+China Mobile Limited - Annual Report 2015
+China Mobile Limited
+iOne Financial Press Limited
+GOLD WINNER
+30 ACADEMY AWARDS OF ANNUAL REPORTS
+ANNIVERSARY
+PEARL
+China Mobil
+Shang Bing
+Executive Director and
+Asian Corporate Director
+Recognition Award
+2016
+BEST OF ASIA
+THE
+CorporateGovernance Asia
+China Mobile Ltd
+MERICAN
+Excellence in Corporate Websites
+EBITDA¹ (RMB million)
+THE 16TH ANNUAL INTERNATIONAL COMPETITION
+China Mobile Limited
+584,089
+Of which: Revenue from telecommunications services (RMB million)
+708,421
+668,335
+Operating revenue (RMB million)
+2016
+2015
+Financial Highlights
+90
+06
+668,335
+(RMB million)
+Operating
+Revenue
+256,677
+240,028
+EBITDA
+(RMB million)
+maton my af Communications Arts and SciencesCommi
+Corporate Websites: Telecommunications
+Corporate Website
+SILVER WINNER
+Services
+Governanco
+584,089
+ARK
+THE Asset
+RESEARCH
+CHINA MOBILE
+PLATINUM AWARD
+EXCELLENCE IN GOVERNANCE, CSR & INVESTOR RELATIONS
+THE ASSET CORPORATE AWARDS 2016
+L
+THE Asset
+ASIAMONEY
+| 2016中國融資
+上市公司大獎
+BEST
+最佳上市公司
+MANAGED
+COMPANIES
+2016
+Best Managed Company
+in China-Large Cap
+中国移动
+BENCHMAN
+WINNER
+Tysor
+COMPETITION
+(RMB million)
+Websites Corporate
+League of American Communications Profe
+2015 VISION AWARDS
+ANNUAL REPORT COMPETITION
+China Mobile Limited
+iOne Financial Press Limited
+is presented with the
+Gold Award
+for excellence within its industry on the development
+China Mobile
+of the organization's annual report for the past fiscal year.
+Christine Kennedy
+COMPETITION DIRECTOR
+COMPETITION
+LACP
+WINNER
+CATIONS
+& PROFE
+Chiline) Kennedy
+Christine Kennedy
+COMPETITION DIRECTOR
+Christine Kennedy
+中國移動
+LACP
+THE Asset
+Corporate Governance Asia
+THE **
+BEST ASIA
+2016
+**
+Asia's
+Outstanding
+07
+Age 57, Executive Director and Chief Executive
+Officer of the Company, in charge of the operation
+and strategic development of the Company, joined
+the Board of Directors of the Company in March 2003.
+He is also the President and Director of CMCC and
+CMC. Mr. Li started his career in 1976 and previously
+served as Deputy Director General and Chief Engineer
+of Tianjin Long-Distance Telecommunications
+Bureau, Deputy Director General of Tianjin Posts and
+Telecommunications Administration, President of Tianjin
+Mobile Communications Company, Deputy Head of the
+preparatory team and Vice President of CMCC, Chairman
+of Aspire, non-executive director of Phoenix Satellite
+Television Holdings Limited and Chairman of Union
+Mobile Pay Limited. Mr. Li holds a Bachelor's degree in
+telephone exchange from the Correspondence College
+of Beijing University of Posts and Telecommunications,
+a Master's degree in business administration from
+Tianjin University and a doctoral degree in business
+administration from Hong Kong Polytechnic University.
+He is a professor-level senior engineer and had won
+many national, provincial and ministerial level scientific
+and technological progress awards. Mr. Li has been
+engaging in telecommunications network operations
+and maintenance, planning and construction, operational
+management, development strategies and has many
+years of experience in the telecommunications industry.
+MR. LI YUE
+Age 61, Executive Director and Chairman of the
+Company, in charge of the overall management of the
+Company, joined the Board of Directors of the Company
+in September 2015. He is currently the Chairman
+of CMCC and a director and the Chairman of CMC.
+Mr. Shang formerly served as a Director of Industrial
+Technology Development Centre in Liaoning Province,
+a General Manager of Economic and Technological
+Development Company in Liaoning Province, a
+General Manager of China United Telecommunications
+Corporation Liaoning Branch, a Director and President
+of China United Telecommunications Corporation,
+an Executive Director and President of China United
+Telecommunications Corporation Limited and
+China Unicom Limited, a Vice President of China
+Telecommunications Corporation, an Executive
+Director, President and Chief Operating Officer of China
+Telecom Corporation Limited and the Vice Minister of
+the Ministry of Industry and Information Technology of
+China (the "MIIT"). Mr. Shang graduated from Shenyang
+Chemical Industry Institution with a Bachelor's degree
+in 1982. He received a Master's degree in business
+administration from the State University of New York in
+2002 and a Doctor's degree in business administration
+from the Hong Kong Polytechnic University in 2005. Mr.
+Shang is a senior economist and has spent many years
+working in basic telecommunications enterprises, with
+extensive experience in enterprise management and
+telecommunications industry.
+MR. SHANG BING
+EXECUTIVE DIRECTORS
+Biographies of Directors and
+Senior Management
+ANNUAL REPORT 2016
+CHINA MOBILE LIMITED
+有限公司
+623,422
+2015 2016
+亞洲週刊有限公司 主辦
+最大市值企業大獎
+中國移動有限公司
+40
+YAZHOU ZHOUKAN
+全球視野 本土情懷。
+"Corporate Governance Asia"
+Asian Corporate Director Recognition
+Award
+中國
+融資
+AL
+亞洲週刊
+"Corporate Governance Asia"
+Asia's Outstanding Company on
+Corporate Governance
+中國大陸企業
+2016
+☆ questar
+香港股市排行榜
+(2015-2016)
+SILVER JUBILEE
+BRONZE
+China Mob
+mited
+2016
+galaxy
+awards
+The 27th Annual International Competition
+for Excellence in Product & Service Marketing
+BRONZE WINNER
+China Mobile Limit
+F
+Interest on entrusted loans and bank deposits (note 36(a))
+194
+7
+764
+4
+235
+257
+455
+96
+Others
+228
+1,131
+Million
+Million
+2015
+2016
+1,800
+1,968
+1,204
+11
+Notes to the Consolidated Financial Statements (Continued)
+658
+Interest on bonds
+(Expressed in RMB unless otherwise indicated)
+'000
+Directors' remuneration during 2016 is as follows:
+Million
+404.9
+452.0
+470.0
+130.4
+'000
+and bonuses
+Directors' fees
+allowances
+Salaries,
+CHOW Man Yiu, Paul
+CHENG MO Chi, Moses
+WONG Kwong Shing, Frank
+**
+LO Ka Shui**
+(Expressed in Hong Kong dollar)
+Independent non-executive directors
+SHA Yuejia
+XUE Taohai**
+LIU Aili
+LI Yue (Chief Executive Officer)
+SHANG Bing*
+Executive directors (Expressed in RMB)
+10 DIRECTORS' REMUNERATION
+2015
+274
+FINANCE COSTS
+1
+97
+103
+(ii)
+7,614
+27,134
+29,461
+7,216
+(4)
+(180)
+6,186
+4,248
+13,447
+11,628
+CHINA MOBILE LIMITED
+499
+272
+282
+4,839
+3,734
+53,991
+53,852
+Million
+Million
+1
+9
+4
+(iii)
+9
+Others
+Dividend income from unlisted securities
+Penalty income
+OTHER GAINS
+8
+The gain arising from the transfer of CMC's Tower Assets, which has eliminated unrealized profits due to the
+Group's interest in China Tower, is recorded as "Gain on the transfer of Tower Assets" in the consolidated
+statement of comprehensive income for the year ended 31 December 2015.
+On 31 October 2015, CMC completed the transfer of Tower Assets to China Tower. In return, China Tower
+issued equity shares to CMC and shall pay CMC the remaining cash consideration within which China
+Tower has made the first payment of RMB5,000,000,000 in February 2016. The remaining balance of cash
+consideration was deferred and to be settled before 31 December 2017. In addition, China Tower will pay
+interest associated with the unpaid cash consideration to CMC from 1 November 2015 at a pre-determined
+interest rate, which is 90% of the financial institution's one year benchmark lending rate announced by the
+People's Bank of China ("PBOC") on the completion date of the transaction, i.e. 31 October 2015.
+On 14 October 2015, China Mobile Communication Co., Ltd. ("CMC"), a wholly-owned subsidiary of the
+Company, jointly with China United Network Communications Corporation Limited ("China Unicom"), China
+Telecom Corporation Limited ("China Telecom"), and China Reform Holdings Corporation Ltd. ("CRHC"),
+entered into an agreement with China Tower Corporation Limited ("China Tower"), pursuant to which China
+Tower (i) purchased telecommunications towers and related assets ("Tower Assets") from CMC, China
+Unicom and China Telecom and (ii) issued new equity shares to CRHC. The consideration of Tower Assets
+was determined based on the appraised value and subject to adjustment in accordance with the terms of the
+transaction agreement by each party as of the date of delivery. China Tower agreed to settle the consideration
+by way of issuing its equity shares to each party, plus cash consideration equalling to the excess of total
+consideration over the amount settled by equity shares. Upon completion of the above transactions, China
+Tower would be owned by CMC, China Unicom, China Telecom and CRHC with their respective shares of
+equity interests of 38.0%, 28.1%, 27.9% and 6.0%.
+7 PROCEEDS RECEIVABLE FOR THE TRANSFER OF TOWER ASSETS
+95
+2016
+Million
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Others consist of office expenses, travelling expenses, entertainment expenses, spectrum charges, consultancy and professional fees,
+consumables and supplies, and other miscellaneous expenses.
+Audit services include reporting on the Group's internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley
+Act of the United States of America with the service fee amount of RMB22,000,000 (2015: RMB20,000,000).
+(iii)
+(ii)
+Other operating lease charges represent the operating lease charges for motor vehicles, computer and other office equipment.
+(i)
+Note:
+162,293
+167,073
+48,438
+56,220
+ANNUAL REPORT 2016
+Contributions
+relating to social
+insurance,
+housing fund
+WONG Kwong Shing, Frank
+scheme
+138.8
+521.5
+134.6
+386.9
+498.1
+132.7
+365.4
+574.9
+137.8
+437.1
+489.6
+113.0
+376.6
+136.7
+30.0
+106.7
+'000
+'000
+2015 Total
+scheme
+97
+insurance,
+housing fund
+and retirement
+Contributions
+relating to social
+21.6
+1,565.0
+160.4
+132.7
+Note
+The unpaid portion of executive directors' performance related bonuses for 2016 will be paid based on the
+evaluation conducted in 2017, and the additional bonuses related to their term of service will be paid based on
+the evaluation conducted upon the completion of three-year evaluation period.
+In 2016 and 2015, executive directors of the Company voluntarily waived their directors' fees.
+Mr. DONG Xin was appointed as an executive director of the Company and Mr. Stephen YIU Kin Wah was
+appointed as an independent non-executive director of the Company with effect from 23 March 2017.
+Madam HUANG Wenlin resigned from the position as executive director of the Company with effect from 19 March 2015.
+###
+Mr. XI Guohua resigned from the position as executive director and chairman of the Company with effect from 24 August 2015.
+##
+Mr. SHANG Bing was appointed as an executive director and chairman of the Company with effect from 10 September 2015.
+#
+Mr. LO Ka Shui resigned from the position as independent non-executive director of the Company with effect from 26 May 2016.
+***
+Mr. XUE Taohai resigned from the position as executive director of the Company with effect from 23 March 2017.
+**
+The unpaid portion of executive directors' performance related bonuses for 2015 was included in executive directors' salaries,
+allowances and bonuses in 2016. Mr. SHANG Bing has been serving the Company since September 2015.
+1,565.0
+330.0
+470.0
+325.0
+2,879.3
+702.4
+2,176.9
+498.1
+365.4
+and retirement
+330.0
+470.0
+470.0
+130.4
+3,878.8
+694.7
+3,184.1
+803.1
+141.4
+661.7
+789.0
+143.3
+645.7
+803.1
+141.4
+661.7
+863.8
+146.5
+717.3
+619.8
+122.1
+497.7
+'000
+'000
+2016 Total
+452.0
+440.0
+404.9
+1,457.3
+325.0
+'000
+'000
+and bonuses
+Directors' fees
+Salaries,
+allowances
+CHOW Man Yiu, Paul
+CHENG MO Chi, Moses
+LO Ka Shui
+(Expressed in Hong Kong dollar)
+Independent non-executive directors
+SHA Yuejia
+HUANG Wenlin*#*#
+XUE Taohai
+LIU Aili
+LI Yue (Chief Executive Officer)
+XI Guohua##
+SHANG Bing#
+Executive directors (Expressed in RMB)
+Directors' remuneration during 2015 is as follows:
+10 DIRECTORS' REMUNERATION (CONTINUED)
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+1,457.3
+440.0
+5 EMPLOYEE BENEFIT AND RELATED EXPENSES
+- other services
+Others
+2
+91
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The Company and subsidiaries have no obligations for the payment of retirement and other post-
+retirement benefits of staff other than the contributions described above.
+The employees of the subsidiaries in Mainland China participate in the defined contribution
+retirement plans managed by the local government authorities whereby the subsidiaries are
+required to contribute to the schemes at fixed rates of the employees' salary costs. In addition to
+the local governmental defined contribution retirement plans, the subsidiaries also participate in a
+pension scheme launched by the Group managed by an independent insurance company whereby
+the subsidiaries are required to make contributions to the retirement plans at fixed rates of the
+employees' salary costs or in accordance with the terms of the plans. The Group's contributions to
+these plans are charged to profit or loss when incurred.
+The Company and subsidiaries incorporated in Hong Kong are required to make contributions to
+Mandatory Provident Funds under the Hong Kong Mandatory Provident Fund ("MPF") Schemes
+Ordinance. Under the MPF scheme, the employer and its employees are each required to make
+contributions to the scheme at 5% of the employees' relevant income, subject to a cap of monthly
+relevant income of HK$30,000. Such contributions are recognized as an expense in profit or loss as
+incurred.
+Short-term employee benefits and contributions to defined contribution retirement plans
+Salaries, annual bonuses, paid annual leave, leave passage, contributions to defined contribution
+retirement plans and the cost of non-monetary benefits are accrued in the year in which the
+associated services are rendered by employees. Where payment or settlement is deferred and the
+effect would be material, these amounts are stated at their present values.
+(i)
+Employee benefits
+Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
+estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow
+of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
+occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities
+unless the probability of outflow of economic benefits is remote.
+Provisions are recognized for liabilities of uncertain timing or amount when the Group has a legal or
+constructive obligation arising as a result of a past event, it is probable that an outflow of economic
+benefits will be required to settle the obligation and the amount can be estimated reliably. Where the
+time value of money is material, provisions are stated at the present value of the expenditures expected
+to settle the obligation.
+Provisions and contingent liabilities
+(v)
+(n)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+CHINA MOBILE LIMITED
+2
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Notes to the Consolidated Financial Statements (Continued)
+(v) Employee benefits (Continued)
+Share-based payments
+Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency
+are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and
+liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign
+exchange rates ruling at the dates the fair value was determined.
+CHINA MOBILE LIMITED
+Translation of foreign currencies (Continued)
+(x)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+92
+Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the
+transaction dates. Monetary assets and liabilities denominated in currencies other than the functional
+currency are retranslated at the foreign exchange rates ruling at the balance sheet date. Exchange gains
+and losses are recognized in profit or loss.
+The functional currency of major entities within the Group is RMB. The Group adopted RMB as its
+presentation currency in the preparation of the financial statements, which is the currency of the primary
+economic environment in which most of the Group's entities operate.
+(x) Translation of foreign currencies
+The capitalization of borrowing costs as part of the cost of a qualifying asset commences when
+expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are
+necessary to prepare the asset for its intended use or sale are in progress. Capitalization of borrowing
+costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset
+for its intended use or sale are interrupted or completed.
+Borrowing costs that are directly attributable to the acquisition, construction or production of an
+asset which necessarily takes a substantial period of time to get ready for its intended use or sale are
+capitalized as part of the cost of that asset. Other borrowing costs are expensed in the period in which
+they are incurred.
+(w) Borrowing costs
+Termination benefits are recognized when, and only when, the Group demonstrably commits itself
+to terminate employment which is without realistic possibility of withdrawal or to provide benefits as
+a result of voluntary redundancy by having a detailed formal plan which is without realistic possibility
+of withdrawal.
+(iii) Termination benefits
+During the vesting period, the number of share options that is expected to vest is reviewed at each
+balance sheet date. Any resulting adjustment to the cumulative fair value recognized in prior years
+is credited/charged to the profit or loss for the year of the review, unless the original employee
+expenses qualify for recognition as an asset, with a corresponding adjustment to the capital reserve.
+On vesting date, the amount recognized as an expense is adjusted to reflect the actual number of
+share options that vest (with a corresponding adjustment to the capital reserve). The equity amount
+is recognized in the capital reserve until either the option is exercised (when it is transferred to the
+share capital account) or the option expires (when it is released directly to retained profits). In the
+Company's balance sheet, share-based payment transactions in which the Company grants share
+options to subsidiaries' employees are accounted for as an increase in value of investments in
+subsidiaries, which is eliminated on consolidation.
+The fair value of share options granted to employees is recognized as an employee cost with a
+corresponding increase in a capital reserve within equity. The fair value is measured at grant date
+using the binomial lattice model, taking into account the terms and conditions upon which the
+options were granted. Where the employees have to meet vesting conditions before becoming
+unconditionally entitled to the options, the total estimated fair value of the options is spread over
+the vesting period, taking into account the probability that the options will vest.
+(ii)
+The results of overseas entities are translated into RMB at the exchange rates approximating the foreign
+exchange rate ruling at the dates of transactions. Balance sheet items are translated into RMB at the
+exchange rates ruling at the balance sheet date. The resulting exchange differences are recognized in
+other comprehensive income and accumulated separately in equity in the exchange reserve. On disposal
+of an overseas entity, the cumulative amount of the exchange differences relating to that particular
+foreign operation is reclassified from equity to profit or loss.
+90
+the same taxable entity; or
+sales of products are recognized when the title is passed to the buyer;
+(ii)
+(i) revenue derived from voice and data services are recognized when the service is rendered;
+Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable
+that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be
+measured reliably, revenue is recognized in profit or loss as follows:
+Revenue recognition
+(r)
+Cash and cash equivalents comprise bank deposits with original maturity within three months, cash at
+banks and in hand, demand deposits with banks, and short-term, highly liquid investments that are readily
+convertible into known amounts of cash and which are subject to an insignificant risk of changes in value,
+having been within three months of maturity at acquisition.
+(q) Cash and cash equivalents
+Accounts payable and other payables are initially recognized at fair value and subsequently stated at
+amortized cost unless the effect of discounting would be immaterial.
+(p) Accounts payable and other payables
+Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs.
+Subsequent to initial recognition, interest-bearing borrowings are stated at amortized cost with any
+difference between the amount initially recognized and redemption value being recognized in profit or
+loss over the period of the borrowings, together with any interest and fees payable, using the effective
+interest method.
+Interest-bearing borrowings
+(o)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2
+CHINA MOBILE LIMITED
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+88
+2016
+(iii)
+different taxable entities, which, in each future period in which significant amounts of deferred
+tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax
+assets and settle the current tax liabilities on a net basis or realize and settle simultaneously.
+(iv)
+for transactions which offer customer points reward when services are provided, the consideration
+allocated to the customer points reward is based on its fair value which is recorded as deferred
+revenue when the rewards are granted and recognized as revenue when the points are redeemed
+or expired.
+in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same
+taxation authority on either:
+in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or
+to realize the asset and settle the liability simultaneously; or
+Current tax balances and deferred tax balances, and movements therein, are presented separately from
+each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax
+assets against deferred tax liabilities, if the Group has the legally enforceable right to set off current tax
+assets against current tax liabilities and the following additional conditions are met:
+The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is
+reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
+allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it becomes
+probable that sufficient taxable profits will be available.
+The amount of deferred tax recognized is measured based on the expected manner of realization or
+settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively
+enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.
+The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences
+arising from initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither
+accounting nor taxable profit (provided they are not part of a business combination), and temporary
+differences relating to investments in subsidiaries and associates to the extent that, in the case of taxable
+temporary differences, the Group controls the timing of the reversal and it is probable that the differences
+will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable
+that they will reverse in the future.
+Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent
+that it is probable that future taxable profits will be available against which the asset can be utilized,
+are recognized. Future taxable profits that may support the recognition of deferred tax assets arising
+from deductible temporary differences include those that will arise from the reversal of existing taxable
+temporary differences, provided those differences relate to the same taxation authority and the same
+taxable entity, and are expected to reverse either in the same period as the expected reversal of the
+deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can
+be carried back or forward. The same criteria are adopted when determining whether existing taxable
+temporary differences support the recognition of deferred tax assets arising from unused tax losses and
+credits, that is, those differences are taken into account if they relate to the same taxation authority and
+the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit
+can be utilized.
+(t) Income tax (Continued)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+89
+2
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively,
+being the differences between the carrying amounts of assets and liabilities for financial reporting
+purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax
+credits.
+Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
+substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
+years.
+Income tax for the year comprises current tax and movements in deferred tax assets and liabilities.
+Current tax and movements in deferred tax assets and liabilities are recognized in profit or loss except
+items recognized in other comprehensive income or directly in equity, in which case the relevant amounts
+of tax are recognized in other comprehensive income or directly in equity, respectively.
+(t) Income tax
+Interest income is recognized as it accrues using the effective interest method.
+(s) Interest income
+for offerings which include the provision of services and sale of mobile handset, the Group
+determines the revenue from the sale of the mobile handset by deducting the fair value of the
+service element from the total contract consideration; and
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas entities within
+the Group are translated into RMB by using the exchange rates approximating the foreign exchange rate
+ruling at the dates of the cash flows.
+2015
+Related parties
+2015
+2016
+668,335
+708,421
+84,246
+84,999
+Revenue from sales of products and others
+584,089
+623,422
+18,768
+18,536
+Others
+303,425
+394,937
+Data services
+261,896
+209,949
+Voice services
+Revenue from telecommunications services
+Million
+2015
+Million
+Salaries, wages, labor service expenses and other benefits
+Retirement costs: contributions to defined contribution retirement plans
+67,622
+(y)
+- tax services
+- audit services
+Auditors' remuneration
+Power and utilities expenses
+Write-off and impairment of property, plant and equipment (note 14)
+Gain on disposal of property, plant and equipment
+- others
+- land and buildings
+Operating lease charges
+Amortization of other intangible assets
+Write-down of inventories
+Impairment loss of doubtful accounts
+Maintenance
+6 OTHER OPERATING EXPENSES
+74,805
+79,463
+7,183
+9,917
+69,546
+Million
+Million
+CHINA MOBILE LIMITED
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+Close members of the family of a person are those family members who may be expected to influence,
+or be influenced by, that person in their dealings with the entity.
+(vii) A person identified in note 2(y)(a)(i) has significant influence over the entity or is a member of
+the key management personnel of the entity (or of a parent of the entity).
+(vi) The entity is controlled or jointly controlled by a person identified in note 2(y)(a); or
+(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group
+or an entity related to the Group;
+(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third
+entity;
+(iii) Both entities are joint ventures of the same third party;
+(ii)
+93
+The entity and the Group are members of the same group (which means that each parent,
+subsidiary and fellow subsidiary is related to the others);
+(b) An entity is related to the Group if any of the following conditions applies:
+(iii) is a member of the key management personnel of the Group or the Group's parent.
+has significant influence over the Group; or
+(ii)
+has control or joint control of the Group;
+(i)
+2016
+(a)
+A person, or a close member of that person's family, is related to the Group if that person:
+(i)
+2
+One entity is an associate or joint venture of the other entity (or an associate or joint venture
+of a member of a group of which the other entity is a member);
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+OPERATING REVENUE
+4
+Notes to the Consolidated Financial Statements (Continued)
+94
+The adoption of the above amended standards did not have any significant impact on the Group's financial
+statements. The Group did not apply any other amendments, new standards or interpretation that is not yet
+effective for the current accounting year (see note 41).
+Annual Improvement to IFRSS/HKFRSS 2012-2014 cycle.
+Amendment to IAS/HKAS 27, "Separate Financial Statements".
+Amendment to IAS/HKAS 28, "Investments in Associates and Joint Ventures".
+Amendment to IFRS/HKFRS 10, "Consolidated Financial Statements".
+Amendment to IAS/HKAS 38, "Intangible Assets".
+(Expressed in RMB unless otherwise indicated)
+(z) Segment reporting
+Amendment to IAS/HKAS 16, "Property, Plant and Equipment".
+Amendment to IFRS/HKFRS 11, "Joint Arrangements".
+The Group has adopted certain amended IFRS/HKFRS effective for accounting period beginning on 1 January
+2016. Details of the adoption are as follows:
+3 CHANGES IN ACCOUNTING POLICIES
+Dividend distribution to the Company's shareholders is recognized as a liability in the Group's and the
+Company's financial statements in the period in which the dividends are approved by the Company's
+shareholders or directors, where appropriate.
+(aa) Dividend distribution
+-
+An operating segment is a component of the Group that engages in business activities from which
+the Group may earn revenue and incur expenses, and is identified on the basis of the internal financial
+reports that are provided to and regularly reviewed by the Group's Chief Operating Decision Maker
+("CODM") in order to allocate resources and assess performance of the segment. The CODM has been
+identified as the Executive Directors of the Company. For the years presented, the Group as a whole is
+an operating segment since the Group is only engaged in telecommunications and related businesses. No
+geographical information has been disclosed as the majority of the Group's operating activities are carried
+out in Mainland China. The Group's assets located and operating revenue derived from activities outside
+Mainland China are less than 5% of the Group's assets and operating revenue, respectively.
+PRC
+RMB3,277,579,314
+100%
+China Mobile Group
+Jilin Co., Ltd.
+China Mobile Group
+PRC
+RMB4,500,508,035
+Telecommunications operator
+Neimenggu Co., Ltd.
+100%
+100%
+RMB2,862,621,870
+PRC
+China Mobile Group
+Shanxi Co., Ltd.
+Telecommunications operator
+PRC
+100%
+RMB2,773,448,313
+Telecommunications operator
+Telecommunications operator
+RMB1,702,599,589
+China Mobile Group
+China Mobile Group
+Telecommunications operator
+100%
+PRC
+China Mobile Group
+Telecommunications operator
+- 100%
+RMB848,643,686
+PRC
+China Mobile Group
+Xizang Co., Ltd.
+Yunnan Co., Ltd.
+Telecommunications operator
+100%
+RMB4,137,130,733
+PRC
+China Mobile Group
+Guizhou Co., Ltd.
+Telecommunications operator
+100%
+RMB2,541,981,749
+PRC
+Heilongjiang Co., Ltd.
+Shaanxi Co., Ltd.
+Principal activity
+100%
+China Mobile Group
+Jiangxi Co., Ltd.
+Telecommunications operator
+100%
+RMB2,932,824,234
+PRC
+China Mobile Group
+Anhui Co., Ltd.
+Telecommunications operator
+100%
+RMB4,099,495,494
+PRC
+China Mobile Group
+Guangxi Co., Ltd.
+Telecommunications operator
+100%
+Gansu Co., Ltd.
+subsidiary
+RMB2,340,750,100
+PRC
+China Mobile Group
+PRC
+Telecommunications operator
+RMB3,029,645,401
+Telecommunications operator
+RMB3,171,267,431
+PRC
+China Mobile Group
+Hunan Co., Ltd.
+Telecommunications operator
+100%
+RMB4,015,668,593
+PRC
+China Mobile Group
+Hubei Co., Ltd.
+Telecommunications operator
+100%
+RMB3,961,279,556
+PRC
+China Mobile Group
+Sichuan Co., Ltd.
+100% Telecommunications operator
+RMB7,483,625,572
+PRC
+China Mobile Group
+Chongqing Co., Ltd.
+100%
+ANNUAL REPORT 2016
+US$30,000,000
+(Expressed in RMB unless otherwise indicated)
+100%
+US$5,000,000
+PRC
+Aspire Information
+maintenance
+development and
+(Shenzhen) Limited ***
+Technology platform
+100%
+US$10,000,000
+PRC
+Aspire Technologies
+Investment holding company
+100%
+US$1,000
+BVI
+Aspire (BVI) Limited #
+Investment holding company
+66.41%
+HK$93,964,583
+Cayman Islands
+Provision of mobile data
+Aspire Holdings Limited
+Network (Shenzhen)
+solutions, system
+services
+planning and optimizing,
+training and communication
+maintenance, network
+Network construction and
+maintenance
+development and
+Company Limited ***
+Communication Technology
+51%
+US$3,800,000
+PRC
+Fujian FUNO Mobile
+Limited ***
+Technologies (Beijing)
+Technology platform
+100%
+US$5,000,000
+PRC
+Aspire Information
+development
+integration and
+Limited ***
+Provision of roaming clearance
+services
+(Shenzhen) Limited **
+100%
+PRC
+China Mobile Group
+Qinghai Co., Ltd.
+Telecommunications operator
+100%
+Principal activity
+subsidiary
+RMB902,564,911
+PRC
+China Mobile Group
+Company
+Held by the
+Proportion of
+ownership interest
+Held by a
+issued and
+Particulars of
+paid up capital
+and operation
+Name of company*
+Place of
+incorporation/
+establishment
+107
+18 SUBSIDIARIES (CONTINUED)
+RMB740,447,232
+100%
+Telecommunications operator
+Ningxia Co., Ltd.
+US$7,633,000
+PRC
+China Mobile
+Holding Company Limited **
+100%
+Company
+PRC
+China Mobile
+Investment holding company
+and consulting services
+Notes to the Consolidated Financial Statements (Continued)
+network planning design
+Design Institute Co., Ltd.
+100%
+RMB160,232,500
+PRC
+China Mobile Group
+Xinjiang Co., Ltd.
+100% Telecommunications operator
+RMB2,581,599,600
+PRC
+China Mobile Group
+Provision of telecommunications
+paid up capital
+100%
+Name of company*
+(183,245)
+192,737
+185,086
+95,110
+88,012
+2015
+Million
+2016
+Million
+CHINA MOBILE LIMITED
+As at 31 December
+Transfer of Tower Assets to China Tower (note 7)
+Transferred to property, plant and equipment
+Additions
+As at 1 January
+15 CONSTRUCTION IN PROGRESS
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+104
+For the year ended 31 December 2015, with the rapid growth of the Group's 4G operation, the strategy
+of ramping up the internet connection speed with lower tariff, continuing technology changes, and further
+development of wireline broadband business, management anticipates more pressure on the growth and
+profitability of the Wireless Local Area Network ("WLAN") business. Therefore, based on the impairment
+testing results, management recognized an impairment loss of RMB5,967,000,000 on the WLAN and related
+terminal transmission equipment.
+585,631
+7,757
+485,239
+(193,609)
+(6,226)
+92,635
+89,853
+Construction in progress primarily comprises expenditure incurred on the network expansion projects but not
+yet completed as at 31 December 2016.
+Name of company*
+Place of
+incorporation/
+The following list contains only the particulars of subsidiaries which principally affected the results, assets or
+liabilities of the Group. The class of shares held is ordinary unless otherwise stated.
+18 SUBSIDIARIES
+105
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+ANNUAL REPORT 2016
+As at 31 December 2016, the goodwill of RMB35,300,000,000 is attributable to the cash-generating unit in
+relation to the operation in Mainland China which management currently monitors. The recoverable amount
+of the cash-generating unit is determined based on the value-in-use calculations by using the discounted cash
+flow method. This method considers the pre-tax cash flows of the subsidiaries (cash-generating unit) for the
+five years ending 31 December 2021 with subsequent transition to perpetuity. For the five years ending 31
+December 2021, the average growth rate is assumed 1.5% while for the years beyond 31 December 2021,
+the assumed continual growth rate to perpetuity is 1%. The present value of cash flows is calculated by
+discounting the cash flow using pre-tax interest rates of approximately 12%. The management performed
+impairment test for the goodwill in relation to the operation in Mainland China and determined such goodwill
+was not impaired. Reasonably possible changes in key assumptions will not lead to the goodwill impairment
+loss.
+As set out in IAS/HKAS 36 "Impairment of Assets", a cash-generating unit is the smallest identifiable group
+of assets that generate cash inflows from continuing use that are largely independent of the cash flows
+from other assets or groups of assets. For the purpose of impairment tests of goodwill, goodwill is allocated
+to groups of cash-generating units (being subsidiaries acquired in each acquisition). Such groups of cash-
+generating units represent the lowest level within the Group for which the goodwill is monitored for internal
+management purposes.
+Impairment tests for goodwill
+35,343
+35,343
+Million
+2015
+2016
+Million
+As at 1 January and 31 December
+Cost and carrying amount:
+17 GOODWILL
+For the year ended 31 December 2016, the amortization of land lease prepayments expensed in the profit or
+loss amounted to approximately RMB443,000,000 (2015: approximately RMB426,000,000).
+16 LAND LEASE PREPAYMENTS AND OTHERS
+88,012
+China Mobile Communication
+622,356
+520,046
+2,945
+129,915
+5,310
+Charge for the year
+741,416
+15,027
+689,564
+36,825
+As at 1 January 2016
+741,416
+15,027
+689,564
+36,825
+As at 31 December 2015
+162
+1
+146
+15
+Exchange differences
+(21,283)
+(1,014)
+138,170
+6,889
+Written back on disposals
+(2,336)
+95,421
+As at 31 December 2015
+As at 31 December 2016
+Net book value:
+823,825
+16,102
+766,221
+41,502
+As at 31 December 2016
+205
+3
+186
+16
+Exchange differences
+(53,116)
+(1,805)
+(51,108)
+(203)
+Assets written-off and impairment loss
+(2,850)
+(68)
+(446)
+and operation
+(BVI) Limited
+establishment
+PRC
+China Mobile Group
+Tianjin Co., Ltd.
+Telecommunications operator
+100%
+RMB2,151,035,483
+PRC
+China Mobile Group
+("Shanghai Mobile")
+Shanghai Co., Ltd.
+Telecommunications operator
+100%
+RMB6,038,667,706
+PRC
+China Mobile Group
+Beijing Co., Ltd.
+Telecommunications operator
+RMB6,124,696,053
+PRC
+China Mobile Group
+Hainan Co., Ltd.
+RMB4,314,668,600
+Telecommunications operator
+100%
+Hebei Co., Ltd.
+CHINA MOBILE LIMITED
+Held by the
+Proportion of
+ownership interest
+Held by a
+issued and
+Particulars of
+Place of
+incorporation/
+establishment
+18 SUBSIDIARIES (CONTINUED)
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+106
+Telecommunications operator
+100%
+RMB6,341,851,146
+PRC
+China Mobile Group
+Shandong Co., Ltd.
+Liaoning Co., Ltd.
+Telecommunications operator
+100%
+RMB5,140,126,680
+PRC
+China Mobile Group
+Telecommunications operator
+CMC **
+100%
+PRC
+("Guangdong Mobile")
+Guangdong Co., Ltd.
+Telecommunications operator
+100%
+RMB5,594,840,700
+PRC
+China Mobile Group
+Network and business
+coordination center
+100%
+Investment holding company
+Principal activity
+RMB1,641,848,326
+Islands ("BVI")
+100%
+HK$1
+British Virgin
+subsidiary
+Company
+Proportion of
+ownership interest
+Held by the
+Held by a
+Particulars of
+issued and
+paid up capital
+and operation
+China Mobile Group
+RMB643,000,000
+PRC
+100%
+China Mobile Group
+Henan Co., Ltd.
+Telecommunications operator
+100%
+RMB4,367,733,641
+PRC
+China Mobile Group
+Fujian Co., Ltd.
+Telecommunications operator
+100%
+RMB5,247,480,000
+PRC
+China Mobile Group
+Jiangsu Co., Ltd.
+Telecommunications operator
+100%
+RMB2,800,000,000
+PRC
+China Mobile Group
+Zhejiang Co., Ltd.
+Telecommunications operator
+RMB2,117,790,000
+PRC
+(18,456)
+(1,813)
+(1,576)
+(133)
+(122)
+Tax effect of deductible temporary difference for which no deferred
+tax asset was recognized
+1,562
+98
+Tax effect of deductible tax loss for
+(1,580)
+which no deferred tax asset was recognized
+356
+Tax effect on the eliminated unrealized profits related
+to the transfer of Tower Assets
+1,547
+Others
+(384)
+(158)
+1,349
+Taxation
+Rate differential of certain PRC operations (note 12(a)(ii))
+Rate differential on Hong Kong operations
+76
+143,734
+Notional tax on profit before tax, calculated
+at the PRC's statutory tax rate of 25% (Note)
+Tax effect of non-taxable items
+Share of profit of associates
+- Interest income
+36,116
+68
+35,934
+(2,023)
+(22)
+(31)
+Tax effect of non-deductible expenses on the PRC operations
+798
+986
+Tax effect of non-deductible expenses on Hong Kong operations
+(2,159)
+144,462
+35,623
+Note: The PRC's statutory tax rate is adopted as the majority of the Group's operations are subject to this rate.
+equity method
+(1,059)
+Currency translation differences
+774
+(1,059)
+774
+901
+Assets written-off and impairment loss
+accounted for using
+(106)
+(84)
+(1)
+Written back on disposals
+(89,179)
+(97)
+(80,765)
+(8,317)
+(21)
+35,079
+(loss)/income of investments
+24
+(c)
+The tax charge relating to components of other comprehensive income is as follows:
+2016
+Before tax Tax charge
+Million
+After tax
+Before tax
+2015
+Tax charge
+After tax
+Share of other comprehensive
+Million
+Million
+Million
+Million
+Change in value of
+available-for-sale financial assets
+32
+(8)
+Million
+Million
+2015
+2016
+Million
+2,000,001-2,500,000
+7,788.8
+10,097.1
+2016
+Number of
+individuals
+2015
+Number of
+individuals
+1,500,001-2,000,000
+5
+-
+1
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+12 TAXATION
+(a) Taxation in the consolidated statement of comprehensive income represents:
+Current tax
+4
+Note
+Emolument bands
+148.2
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+11 INDIVIDUALS WITH HIGHEST EMOLUMENTS
+The emoluments payable to the five individuals with highest emoluments during 2016 and 2015 are as follows:
+2016
+2015
+'000
+The emoluments fell within the following bands:
+'000
+Performance related bonuses
+5,602.4
+183,245
+2,029.2
+1,814.1
+Retirement scheme contributions
+157.2
+Salaries, allowances and benefits in kind
+99
+2016
+Million
+2015
+Million
+(i)
+(ii)
+(iii)
+(iv)
+The provision for Hong Kong profits tax is calculated at 16.5% (2015: 16.5%) of the estimated assessable profits for the year
+ended 31 December 2016.
+The provision for the PRC enterprise income tax is based on the statutory tax rate of 25% (2015: 25%) on the estimated taxable
+profits determined in accordance with the relevant income tax rules and regulations of the PRC for the year ended 31 December
+2016. Certain subsidiaries of the Company enjoy the preferential tax rate of 15% (2015: 15%).
+Deferred taxes of the Group are recognized based on tax rates that are expected to apply to the periods when the temporary
+differences are realized or settled.
+Note:
+On 22 April 2009, SAT issued the "Notice regarding Matters on Determination of Tax Residence Status of Chinese-controlled
+Offshore Incorporated Enterprises under Rules of Effective Management" ("2009 Notice"). The Company is qualified as a
+PRC offshore-registered resident enterprise for purposes of the 2009 Notice. In accordance with the 2009 Notice and the
+PRC enterprise income tax law, the dividend income of the Company from its subsidiaries in the PRC is exempted from PRC
+enterprise income tax.
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+12 TAXATION (CONTINUED)
+(b) Reconciliation between income tax expense and accounting profit at applicable tax
+rates:
+Profit before taxation
+100
+35,079
+35,623
+(4,673)
+Provision for Hong Kong profits tax
+on the estimated assessable profits for the year
+(i)
+193
+164
+Provision for the PRC enterprise income tax
+on the estimated taxable profits for the year
+(ii)
+39,709
+39,588
+39,902
+39,752
+Deferred tax
+Origination and reversal of temporary
+differences (note 20)
+(!!!)
+(4,279)
+Transfer of Tower Assets to China Tower (note 7)
+136,858
+2,428
+127,888
+Buildings
+equipment
+and others
+Total
+Million
+Million
+Million
+Office equipment,
+furniture,
+fixtures
+Million
+As at 1 January 2015
+143,602
+1,154,848
+21,537
+1,319,987
+Transferred from construction in progress
+13,225
+Cost:
+178,285
+switching centers,
+transmission and
+other network
+Telecommunications
+transceivers,
+20,475,482,897 20,473,119,088
+The calculation of diluted earnings per share for the year is based on the profit attributable to equity
+shareholders of the Company of RMB108,741,000,000 (2015: RMB108,539,000,000) and the weighted
+average number of 20,475,482,897 shares (2015: 20,479,705,763 shares), calculated as follows:
+Weighted average number of shares (diluted)
+Weighted average number of shares in issue during the year
+Dilutive equivalent shares arising from share options
+Weighted average number of shares (diluted) during the year
+2016
+Number of
+shares
+2015
+CHINA MOBILE LIMITED
+Number of
+20,475,482,897 20,473,119,088
+6,586,675
+20,475,482,897 20,479,705,763
+In 2016, there was no share options outstanding (note 33). Therefore, there was no dilution impact on
+weighted average number of shares (diluted) of the Company.
+102
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+14 PROPERTY, PLANT AND EQUIPMENT
+shares
+2,099
+193,609
+Other additions
+3
+331
+As at 31 December 2015
+129,460
+1,174,803
+22,784
+1,327,047
+211
+As at 1 January 2016
+1,174,803
+22,784
+1,327,047
+Transferred from construction in progress
+8,476
+172,502
+2,267
+129,460
+117
+Exchange differences
+(29,917)
+119
+837
+580
+1,536
+Transfer of Tower Assets to China Tower (note 7)
+(25,014)
+(133,164)
+(212)
+(158,390)
+Disposals
+(84)
+(24)
+(109)
+Assets written-off
+(2,588)
+(26,130)
+(1,199)
+34,692,574
+Notes to the Consolidated Financial Statements (Continued)
+(b) Diluted earnings per share
+Effect of share options exercised
+transceivers,
+switching centers,
+transmission and
+103
+Telecommunications
+14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+1,446,181
+Office equipment,
+22,991
+136,923
+As at 31 December 2016
+392
+1
+262
+129
+Exchange differences
+1,286,267
+(61,168)
+furniture,
+fixtures
+6,542
+Charge for the year
+714,964
+13,730
+660,835
+40,399
+As at 1 January 2015
+other network
+Accumulated depreciation and impairment:
+Million
+Million
+Million
+Total
+and others
+equipment
+Buildings
+Million
+(2,210)
+(58,650)
+(308)
+| |
+901
+603
+1,504
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+101
+(8)
+13 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 RMB108,741,000,000 (2015: RMB108,539,000,000) and the weighted
+average number of 20,475,482,897 shares (2015: 20,473,119,088 shares) in issue during the year,
+calculated as follows:
+Weighted average number of shares
+Issued shares as at 1 January
+2016
+Number of
+shares
+2015
+Number of
+shares
+20,475,482,897 20,438,426,514
+(a) Basic earnings per share
+(8)
+1,504
+(261)
+Assets written-off
+(6,203)
+(138)
+(5,017)
+(1,048)
+Disposals
+2,868
+287
+2,367
+214
+603
+Other comprehensive
+(loss)/income
+Current tax
+Deferred tax
+(253)
+(8)
+Weighted average number of shares in issue during the year
+98
+8,134.8
+Other additions
+research and development
+hardware and software
+Provision of computer
+100%
+RMB830,000,000
+China Mobile (Suzhou) Software PRC
+Technology Co., Ltd.
+Limited
+Provision of network services
+services
+100%
+PRC
+China Mobile loT Company
+financial services
+Provision of non-banking
+92%
+RMB11,627,783,669
+China Mobile Group Finance PRC
+Co., Ltd. ("China Mobile
+Finance")
+design and sale of related
+products
+RMB1,000,000,000
+China Mobile (Hangzhou)
+PRC
+RMB900,000,000
+Notes to the Consolidated Financial Statements (Continued)
+ANNUAL REPORT 2016
+digital content services
+Provision of Mobile Internet
+100%
+RMB7,000,000,000
+PRC
+MIGU Company Limited
+services
+Provision of call center
+100%
+RMB50,000,000
+China Mobile Online Service PRC
+Co., Ltd.
+research and development
+services
+Co., Ltd.
+hardware and software
+Information Technology
+Provision of computer
+100%
+communication products
+Provision of electronic
+99.97%
+RMB6,200,000,000
+US$1
+BVI
+Fit Best Limited
+& Clearing
+House Limited
+US$2
+BVI
+Advanced Roaming
+paid up capital
+and operation
+Name of company*
+issued and
+establishment
+incorporation/
+services
+Provision of roaming clearance
+Principal activity
+-
+subsidiary
+100%
+100%
+(Expressed in RMB unless otherwise indicated)
+Investment holding company
+Hong Kong
+PRC
+China Mobile Group
+Device Co., Ltd.
+services and value-added
+services
+clearance services, internet
+Provision of voice and roaming
+100%
+Investment holding company
+related services
+telecommunications and
+HK$3,000,000,000
+Hong Kong
+China Mobile International
+Limited
+100%
+HK$13,095,670,000
+Hong Kong
+China Mobile International
+Holdings Limited
+Provision of
+100%
+HK$951,046,930
+China Mobile Hong Kong
+Company Limited
+Company
+18 SUBSIDIARIES (CONTINUED)
+Particulars of
+Unlisted company
+Proportion of
+ownership interest
+held by
+the Company or
+its subsidiary
+Place of
+incorporation/
+establishment
+and operation
+Note
+Name of associate
+Details of major associates are as follows:
+19 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
+CHINA MOBILE LIMITED
+China Tower
+(Expressed in RMB unless otherwise indicated)
+110
+115,933
+124,039
+375
+2015
+Million
+115,558
+2016
+Million
+123,255
+784
+31 December
+31 December
+Notes to the Consolidated Financial Statements (Continued)
+PRC
+Principal Activity
+38%
+Note:
+services
+Provision of telecommunications
+18%
+Thailand
+True Corporation Public Company Limited
+("True Corporation")
+Provision of Chinese speech and
+language technology products
+and services
+14%
+PRC
+IFLYTEK Co., Ltd. ("IFLYTEK")
+Co., Ltd. ("SPD Bank")
+Provision of banking services
+19%
+PRC
+(i)
+Shanghai Pudong Development Bank
+Listed company
+towers
+Construction, maintenance and
+operation of telecommunications
+As at
+As at
+Joint ventures
+Associates
+100%
+RMB2,000,000,000
+China Mobile Internet Company PRC
+services
+telecommunications
+RMB31,880,000,000
+PRC
+CM TieTong
+paid up capital
+and operation
+Name of company*
+Provision of
+100%
+subsidiary
+Principal activity
+Company
+Held by the
+Proportion of
+ownership interest
+Held by a
+issued and
+Limited
+Place of
+incorporation/
+establishment
+Provision of value added
+telecommunications
+PRC
+The amounts recognized in the consolidated balance sheet are as follows:
+19 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
+CM Investment was established as at 9 December 2016, while the paid up capital has not been paid as at 31 December 2016.
+##
+Investment holding company
+services
+109
+100%
+Effective interest held by the Group is 66.41%.
+#
+Company registered as a sino-foreign equity joint venture in the PRC.
+***
+Companies registered as wholly owned foreign enterprises in the PRC.
+**
+The nature of all the legal entities established in the PRC is limited liability company.
+##
+("CM Investment") *
+Holdings Company Limited
+RMB20,000,000,000
+China Mobile Investment
+(i)
+Held by the
+Particulars of
+1,390
+8,832
+9,994
+(a) Aging analysis
+Aging analysis of accounts receivable, net of allowance for impairment loss of doubtful accounts is as
+follows:
+Within 30 days
+31-60 days
+61-90 days
+1,136
+Over 90 days
+31 December
+As at
+31 December
+2016
+Million
+2015
+Million
+10,974
+10,343
+2,726
+As at
+8,604
+7,696
+Million
+4,528
+197
+4,725
+4,575
+15
+4,590
+Note: The statutory deposit reserves are deposited by China Mobile Finance with PBOC as required, which are not available for use in the
+Group's daily operations.
+116
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+23 INVENTORIES
+SIM cards and handsets
+Other consumables
+24 ACCOUNTS RECEIVABLE
+CHINA MOBILE LIMITED
+As at
+As at
+31 December
+2016
+Million
+31 December
+2015
+2,082
+1,540
+1,457
+3,805
+4,921
+(4,584)
+(4,947)
+5,762
+6,549
+As at 31 December
+(c) Accounts receivable that are not impaired
+Accounts receivable that are neither individually nor collectively considered to be impaired are as follows:
+Neither past due nor impaired
+Less than 1 month past due
+As at
+31 December
+As at
+31 December
+2016
+Million
+18,468
+577
+2015
+Million
+17,240
+503
+19,045
+17,743
+Receivables that were neither past due nor impaired relate to a wide range of customers for which there
+was no recent history of default.
+3,797
+4,526
+64
+6,575
+Million
+3,861
+19,045
+17,743
+Accounts receivable primarily comprise receivables from customers and telecommunications operators.
+Accounts receivable from the provision of telecommunications services to customers are mainly due for
+payment within one month from date of billing. Customers with balances that are overdue or exceed
+credit limits are required to settle all outstanding balances before any further telecommunications
+services can be provided.
+Accounts receivable are expected to be recovered within one year.
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+117
+24 ACCOUNTS RECEIVABLE (CONTINUED)
+(b) Impairment of accounts receivable
+Impairment loss in respect of accounts receivable is recorded using an allowance account unless the
+Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written off
+against accounts receivable directly.
+The following table summarizes the changes in impairment loss of doubtful accounts:
+As at 1 January
+Impairment loss recognized
+Accounts receivable written off
+2016
+2015
+Million
+6,549
+Proportion of
+ownership interest
+Held by a
+15
+4,526
+(203)
+Total
+20,556
+4,673
+(9)
+25,220
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+(9)
+115
+Deferred tax assets are recognized for deductible temporary differences and tax losses carry-forwards only
+to the extent that the realization of the related tax benefit through future taxable profits is probable. Certain
+subsidiaries of the Group did not recognize deferred tax assets of RMB1,562,000,000 (2015: RMB98,000,000)
+and RMB1,349,000,000 (2015: RMB395,000,000) in respect of deductible temporary differences and tax losses
+amounting to RMB6,249,000,000 (2015: RMB391,000,000) and RMB5,504,000,000 (2015: RMB1,581,000,000)
+respectively that can be carried forward against future taxable income as at 31 December 2016. The tax losses
+are allowed to be carried forward in next five years to against the future taxable profits.
+21 AVAILABLE-FOR-SALE FINANCIAL ASSETS
+Equity investment
+Wealth management products issued by banks
+Less: current portion
+Non-current portion
+As at
+31 December
+As at
+31 December
+20 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+(96)
+(98)
+of related depreciation
+CHINA MOBILE LIMITED
+Place of
+18 SUBSIDIARIES (CONTINUED)
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+108
+(271)
+Impairment loss for doubtful accounts
+1,580
+(1)
+||||
+4,152
+14,125
+5,350
+1,579
+20,654
+4,769
+25,423
+Deferred tax liabilities arising from:
+Depreciation allowance in excess
+Note
+2016
+Million
+2015
+Million
+Current
+assets
+assets
+Million
+Million
+Total
+Million
+assets
+assets
+Million
+Million
+Total
+Million
+Restricted bank deposits
+- Statutory deposit reserves
+(Note)
+4,527
+- Pledged bank deposits
+1
+197
+4,527
+198
+Non-
+current
+49
+Current
+As at 31 December 2015
+==
+35
+3
+(ii)
+31,897
+19,167
+31,932
+19,170
+(31,897)
+(19,167)
+35
+3
+Note:
+(i)
+(ii)
+The equity investment represents Shanghai Mobile's investment in Bank of Shanghai Co., Ltd. ("Bank of Shanghai"), the latter of which
+has been listed in November 2016. The equity investment is accounted for using its fair value based on quoted market price (level 1:
+quoted price (unadjusted) in active markets) as at 31 December 2016 without any deduction for transaction costs.
+The wealth management products issued by banks will mature within one year with variable return rates indexed to the performance
+of underlying assets. As at 31 December 2016, the carrying amount approximated the fair value (level 3: inputs for the assets or liability
+that are not based on observable market data (that is, unobservable inputs)). The fair values are based on cash flow discounted using
+the judgement that expected return will be obtained upon maturity.
+22 RESTRICTED BANK DEPOSITS
+As at 31 December 2016
+Non-
+current
+amount
+Carrying
+In June 2016, the Group completed the subscription of additional 1,510 million new ordinary shares issued by True Corporation at the
+price of Baht7.15 per share with a total consideration of approximately Baht10.8 billion (equivalent to approximately RMB2.0 billion).
+Upon the completion of the subscription, the Group's shareholding percentage in True Corporation remains unchanged.
+14%
+14%
+of the Group
+Percentage of ownership
+126,127
+125,552
+13,441
+24,714
+18%
+6,268
+equity shareholders
+Total equity attributable to
+126,127
+125,552
+13,560
+24,842
+6,523
+7,219
+7,061
+18%
+38%
+38%
+(5,474)
+Interest in associates
+of Tower Assets and its
+realization
+resulting from the transfer
+3,077
+2,847
+827
+814
+acquisition and goodwill
+Elimination of unrealized profits
+adjustments at the time of
+The impact of fair value
+47,928
+47,710
+2,419
+4,449
+878
+962
+to the Group
+Total equity attributable
+Total equity
+96,535
+14,548
+17,279
+5,533
+Total current assets
+Million
+Million
+Million
+Million
+Million
+Million
+2015
+2016
+2015
+2016
+2015
+2016
+China Tower
+As at 31 December
+As at 31 December
+As at 31 December
+True Corporation
+IFLYTEK
+4,767
+(5,989)
+23,135
+39,565
+29,492
+266
+674
+Total non-current liabilities
+47,717
+171,568
+20,158
+30,333
+1,601
+2,521
+Total current liabilities
+231,793
+272,103
+36,959
+61,532
+3,623
+4,881
+Total non-current assets
+38,586
+14,038
+111
+1,776
+7,296
+839
+(437)
+10,325
+54,474
+21,416
+23,520
+(Loss)/profit for the year
+(Loss)/profit before taxation
+(776)
+Revenue
+Million
+Million
+Million
+2015
+2016
+2015
+2016
+China Tower
+Million
+(3,864)
+(531)
+795
+Carrying
+As at 31 December 2016
+Interest in listed associates
+True Corporation
+IFLYTEK
+SPD Bank
+As at 31 December 2015
+The fair values of the interests in SPD Bank, IFLYTEK and True Corporation are disclosed as follows:
+5
+(2,944)
+(575)
+795
+(618)
+(87)
+Dividends received from associates
+Total comprehensive (loss)/income
+Other comprehensive loss
+(2,944)
+(575)
+True Corporation
+18
+18
+2,824
+146,550
+160,792
+Revenue
+Million
+2015
+2016
+Million
+Million
+Million
+2015
+2016
+IFLYTEK
+SPD Bank
+19 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
+Summary financial information on principal associates (Continued):
+CHINA MOBILE LIMITED
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+112
+41,939
+42,236
+5,496
+3,320
+1,705
+2,501
+69,975
+1,921
+Dividends received from associates
+425
+484
+54,162
+45,894
+Total comprehensive income
+4,458
+(5,480)
+Other comprehensive (loss)/income
+425
+484
+49,704
+51,374
+shareholders for the year
+Profit attributable to ordinary equity
+465
+561
+66,877
+Profit before taxation
+The Group's shareholding percentage in SPD Bank has been diluted from 20.00% to 18.98% as a result from SPD Bank's issuance of
+new ordinary shares to other companies in March 2016.
+Summary financial information on principal associates (Continued):
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+25,423
+4,352
+(8)
+29,767
+Deferred tax liabilities arising from:
+Depreciation allowance in excess of
+related depreciation
+(203)
+(73)
+(8)
+(16)
+Total
+25,220
+4,279
+(8)
+(16)
+29,475
+Deferred tax assets and liabilities recognized and the movements during 2015
+As at
+(292)
+(8)
+financial assets
+Change in value of available-for-sale
+(42)
+175
+Write-off and impairment of certain
+network equipment and related assets
+4,152
+386
+4,538
+Accrued operating expenses
+14,125
+3,844
+17,969
+Deferred revenue from Reward Program
+5,350
+446
+5,796
+Impairment loss for doubtful accounts
+1,579
+(282)
+1,297
+1 January
+Credited/
+(charged) to
+As at
+2015
+Total equity attributable to the Group
+20%
+19%
+285,250
+338,027
+318,600
+4,725,752
+5,484,329
+372,934
+5,044,352
+5,857,263
+Percentage of ownership of the Group
+Total equity attributable to ordinary equity shareholders
+Total equity
+Total assets
+Total liabilities
+Million
+2015
+2016
+Million
+SPD Bank
+As at 31 December
+Summary financial information on principal associates:
+64,158
+217
+57,050
+5,621
+Million
+profit or loss
+Million
+Exchange
+differences
+31 December
+Million
+2015
+Million
+Deferred tax assets arising from:
+Write-down for obsolete inventories
+188
+29
+217
+Write-off and impairment of certain network
+equipment and related assets
+2,624
+1,528
+Accrued operating expenses
+10,641
+3,484
+Deferred revenue from Reward Program
+The impact of fair value adjustments at the time of acquisition and goodwill
+Write-down for obsolete inventories
+Deferred tax assets arising from:
+Million
+5,496
+5,339
+81,010
+79,673
+73,612
+80,138
+The fair values of interest in SPD Bank, IFLYTEK and True Corporation are based on quoted market prices (level
+1: quoted price (unadjusted) in active markets) at the balance sheet date without any deduction for transaction
+costs.
+The Group assesses at the end of each reporting period whether there is objective evidence that interest in
+associates are impaired.
+8,297
+ANNUAL REPORT 2016
+113
+19
+INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
+As at 31 December 2016, the fair value of investment in SPD Bank was RMB66,522,000,000 (2015:
+RMB68,160,000,000), below its carrying amount by approximately 7.5% (2015: exceeding approximately
+2.6%). Management performed impairment test accordingly considering such impairment indicator. The
+recoverable amount of the interest in SPD Bank is determined by value-in-use. The calculation used pre-tax
+cash flow projections for the five years ending 31 December 2021 with subsequent extrapolation to perpetuity.
+The discount rate used was based on a cost of capital used to evaluate investments in Mainland China.
+Management judgement is required in estimating the future cash flows of SPD Bank. The key assumptions are
+determined with reference to external sources of information. Based on management's assessment results,
+there was no impairment as at 31 December 2016. Reasonably possible changes in key assumptions will not
+lead to the impairment loss.
+As at 31 December 2016, the fair value of investment in True Corporation was RMB8,297,000,000 (2015:
+RMB5,339,000,000), exceeding its carrying amount by approximately 13.7% (2015: approximately 2.9%
+below). The management has determined that there was no impairment indicator of the Group's interests in
+True Corporation as at 31 December 2016.
+Based on the current operation status and business prospects of China Tower, there was no objective evidence
+of impairment associated with the investment in China Tower as at 31 December 2016.
+In 2015, CMC together with State Development & Investment Corporation and China Mobile State
+Development & Investment Management Company Limited (45% of its registered capital is owned by
+CMCC), established China Mobile Innovative Business Fund (Shenzhen) Partnership (Limited Partnership)
+(the "Fund"). The Group recognized the investment as interest in a joint venture. CMC committed to invest
+RMB1,500,000,000 in cash, which represents 58.8% equity interest in the Fund. As at 31 December 2016,
+CMC has contributed RMB721,000,000 (2015: RMB360,000,000) to the Fund and has a commitment to
+invest RMB779,000,000 (2015: RMB1,140,000,000) to the Fund upon the request by the Fund. There are no
+contingent liabilities relating to the Group's interest in the joint ventures.
+20
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+7,296
+6,639
+1,705
+ANNUAL REPORT 2016
+66,411
+71,938
+Interest in associates
+9,361
+7,780
+Fair value
+amount
+Fair value
+Million
+Million
+Million
+Million
+71,938
+66,522
+66,411
+68,160
+1,776
+4,854
+DEFERRED TAX ASSETS AND LIABILITIES
+19 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
+The analysis of deferred tax assets and liabilities are as follows:
+- Deferred tax asset to be recovered after 12 months
+114
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+20 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+Deferred tax assets and liabilities recognized and the movements during 2016
+As at
+(Charged)/
+Charged
+to other
+As at
+1 January
+2016
+credited to comprehensive
+profit or loss
+Million
+Million
+income
+Million
+Exchange
+differences
+31 December
+2016
+Million
+(203)
+(292)
+(37)
+Million
+- Deferred tax asset to be recovered within 12 months
+Deferred tax liabilities:
+- Deferred tax liabilities to be settled after 12 months
+- Deferred tax liabilities to be settled within 12 months
+As at
+As at
+31 December
+31 December
+2016
+Million
+2015
+Deferred tax assets:
+(ii)
+6,607
+4,935
+23,160
+20,488
+29,767
+25,423
+(248)
+(166)
+(44)
+Receivables that were past due but not impaired relate to a number of independent customers that have
+a good track record with the Group. Based on past experience, management believes that no impairment
+allowance is necessary in respect of these balances as there has not been a significant change in credit
+quality and the balances are still considered fully recoverable. The Group does not hold any collateral over
+these balances.
+118
+Notes to the Consolidated Financial Statements (Continued)
+1,470
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+34 CAPITAL, RESERVES AND DIVIDENDS
+(a) Movements in components of equity
+The reconciliation between the opening and closing balances of each component of the Group's
+consolidated equity is set out in the consolidated statement of changes in equity. Details of the changes
+in the Company's individual components of equity between the beginning and the end of the year are set
+out below:
+Share
+Capital
+General Retained
+capital
+reserve
+reserve
+profits
+Million
+Million
+Million
+Million
+Total
+Million
+As at 1 January 2015
+400,737
+461
+72
+Notes to the Consolidated Financial Statements (Continued)
+83,700
+122
+(9,177,039)
+2016
+2015
+Weighted
+average
+exercise
+Number of
+shares
+involved in
+Weighted
+Number of
+average
+exercise
+shares
+involved in
+price
+the options
+price
+the options
+HK$
+HK$
+34.87
+46,233,422
+34.87
+(37,056,383)
+34.87
+I
+484,970
+Changes in equity for 2015:
+Profit for the year
+72
+79,734
+481,936
+72
+79,734
+481,936
+49,074
+49,074
+49,074
+49,074
+(20,764)
+(20,764)
+(26,227)
+(26,227)
+402,130
+72
+81,817
+484,019
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+34 CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+402,130
+As at 31 December 2016
+Dividends approved in respect
+of previous year (note 34(b)(ii))
+Dividends declared in respect
+of current year (note 34(b)(i))
+for the year
+43,854
+43,854
+Total comprehensive
+income for the year
+Dividends approved in respect
+of previous year (note 34(b)(ii))
+Dividends declared in respect
+of current year (note 34(b)(i))
+Shares issued under share
+option scheme (note 34(c))
+Transfer between reserves
+upon expiry of options
+43,854
+43,854
+(22,283)
+(22,283)
+(25,629)
+Options vested as at 31 December
+(25,629)
+(369)
+1,024
+(92)
+92
+As at 31 December 2015
+402,130
+As at 1 January 2016
+Changes in equity for 2016:
+Profit for the year
+Total comprehensive income
+1,393
+(b) Dividends
+As at 31 December
+Exercised
+Recognized in the consolidated statement of comprehensive income
+(352,553)
+(307,412)
+As at 31 December
+Less: Current portion
+86,464
+79,391
+(84,289)
+(78,100)
+Non-current portion
+2,175
+1,291
+120
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+31 ACCRUED EXPENSES AND OTHER PAYABLES
+CHINA MOBILE LIMITED
+As at
+As at
+31 December
+31 December
+2016
+321,417
+2015
+359,626
+37,056,383
+4,342
+3,488
+7,813
+8,385
+250,838
+All of the accounts payable are expected to be settled within one year or are repayable on demand.
+30 DEFERRED REVENUE
+243,579
+Deferred revenue primarily includes prepaid service fees received from customers and unredeemed point
+rewards.
+2016
+2015
+Million
+Million
+As at 1 January
+79,391
+65,386
+Current portion
+78,100
+63,916
+- Non-current portion
+1,291
+Additions during the year
+Million
+Million
+Receipts-in-advance
+4,995
+(4,998)
+4,995
+As at 31 December 2016, the bonds represent the balance of fifteen-year guaranteed bonds issued by Guangdong Mobile, a subsidiary of the
+Company, with a principal amount of RMB5,000,000,000, at an issue price equal to the face value of the bonds. The bonds are unsecured and
+bear interest at the rate of 4.5% per annum which is payable annually. The bonds, redeemable at 100% of the principal amount, will mature on
+28 October 2017.
+The Company has issued a joint and irrevocable guarantee (the "Guarantee") for the performance of the bonds. CMCC, the ultimate holding
+company, has also issued a further guarantee in relation to the performance by the Company of its obligations under the Guarantee.
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+121
+33 EQUITY SETTLED SHARE-BASED TRANSACTIONS
+Pursuant to a resolution passed at the Annual General Meeting held on 24 June 2002, the current share option
+scheme (the "Current Scheme") was adopted.
+Under the Current Scheme, the directors of the Company may, at their discretion, invite employees, including
+executive directors and non-executive directors of the Company, any of its holding companies and any of their
+respective subsidiaries and any entity in which the Company or any of its subsidiaries holds an equity interest,
+to receive options to subscribe for shares of the Company. The consideration payable for the grant of option
+under the Current Scheme is HK$1.00.
+The maximum aggregate number of shares which can be subscribed for pursuant to options that are or may be
+granted under the above scheme equals to 10% of the total issued share capital of the Company as at the date
+of adoption of the Current Scheme. Options lapsed or cancelled in accordance with the terms of the Current
+Scheme will not be counted for the purpose of calculating this 10% limit.
+The HKEX requires the exercise price of options to be at least the higher of the closing price of the shares on
+the HKEX on the date on which the option was granted and the average closing price of the shares on the
+HKEX for the five trading days immediately preceding the date on which the option was granted.
+For options granted under the Current Scheme, the exercise price of options shall be determined by the
+directors of the Company at their discretion provided that such price may not be set below a minimum price
+which is the highest of:
+(i)
+the closing price of the shares on the HKEX on the date on which the option was granted; and
+(ii)
+the average closing price of the shares on the HKEX for the five trading days immediately preceding the
+date on which the option was granted.
+Under the Current Scheme, the term of the option is determined by the directors at their discretion, provided
+that all options shall be exercised within 10 years after the date on which the option is granted.
+The number and weighted average exercise prices of share options are as follows:
+As at 1 January
+4,998
+Million
+2015
+31 December
+Other payables
+75,819
+74,040
+24,523
+21,789
+Accrued salaries, wages, labor service expenses and other benefits
+Accrued expenses
+6,241
+5,776
+74,367
+61,799
+Expired
+180,950
+32
+32
+INTEREST-BEARING BORROWINGS
+Bonds
+Less: current portion
+Non-current portion
+Note:
+As at
+As at
+31 December
+2016
+Million
+163,404
+(i)
+Dividends attributable to the year:
+123
+485,108
+487,290
+1
+2015
+Million
+31 December
+As at
+31 December
+2016
+Million
+Note
+As at
+CHINA MOBILE LIMITED
+Total equity and liabilities
+Total equity
+Reserves
+Share capital
+Equity
+Total liabilities
+Amount due to a subsidiary
+Non-current liabilities
+Accrued expenses and other payables
+Current taxation
+Amount due to a subsidiary
+Current liabilities
+487,290
+Liabilities
+485,109
+1,346
+402,130
+402,130
+81,889
+34(c)
+34(a)
+5,276
+5,415
+4,995
+4,995
+281
+5,415
+1
+10
+10
+271
+5,404
+487,212
+489,434
+2,103
+2,144
+753
+4
+2
+796
+1,346
+Equity and liabilities
+Total assets
+Cash and cash equivalents
+34
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The difference between the consideration and the aggregate carrying amounts of Target Assets
+and Businesses acquired from the controlling party under business combinations under
+common control (see note 2(b)).
+The changes in fair value of available-for-sale financial assets through other comprehensive
+income, net of tax, until the financial assets are derecognised; and
+RMB295,665,000,000 debit balance brought forward as a result of the elimination of goodwill
+arising on the acquisition of subsidiaries before 1 January 2001 against the capital reserve;
+The fair value of unexercised share options granted to employees of the Group recognized in
+accordance with the accounting policy adopted for share-based payments in note 2(v)(ii);
+The capital reserve mainly comprises the following:
+Capital reserve
+(i)
+(d)
+Nature and purpose of reserves
+The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
+entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to
+the Company's residual assets.
+402,130
+382,263
+402,130 20,475,482,897
+382,263
+20,475,482,897
+As at 31 December
+1,393
+1,673
+CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+125
+(d) Nature and purpose of reserves (Continued)
+(ii)
+Other receivables
+Amounts due from subsidiaries
+Current assets
+Investments in subsidiaries
+Property, plant and equipment
+Non-current assets
+Assets
+35 BALANCE SHEET OF THE COMPANY
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+79,806
+126
+As at 31 December 2016, the Group's total debt-to-book capitalization ratio was 0.5% (2015: 0.5%).
+The Group monitors capital on the basis of total debt-to-book capitalization ratio. This ratio is calculated as
+total borrowings divided by book capitalization (equal to the total equity attributable to equity shareholders
+of the Company as shown in the consolidated balance sheet and total borrowings).
+The Group's primary objectives of capital management are to maintain a reasonable capital structure
+and to safeguard the Group's ability to continue as a going concern in order to provide returns for
+shareholders. The Group actively and regularly reviews and manages its capital structure to stabilize the
+capital position and prevent operation risk. Meanwhile, the Group will maximize the shareholders' return
+when having high level of borrowings and will make adjustment on the capital structure in accordance
+with the changes in economic conditions.
+(e) Capital management
+The exchange reserve comprises all foreign exchange differences arising from the translation of
+the financial statements of overseas entities. The reserve is dealt with in accordance with the
+accounting policies set out in note 2(x).
+(iii) Exchange reserve
+In accordance with relevant regulations issued by the Ministry of Finance of the PRC, a subsidiary
+of the Company, China Mobile Finance, is required to set aside a reserve through appropriations of
+profit after tax according to a certain ratio of the ending balance of its gross risk-bearing assets to
+cover potential losses against such assets.
+The statutory and discretionary surplus reserves can be used to reduce previous years' losses,
+if any, and may be converted into paid-up capital, provided that the statutory reserve after such
+conversion is not less than 25% of the registered capital of relevant subsidiaries.
+PRC statutory reserves mainly include statutory surplus reserve and discretionary surplus reserve.
+In accordance with the Company Law of the PRC, domestic enterprises in Mainland China are
+required to transfer 10% of their profit after taxation, as determined under accounting principles
+generally accepted in the PRC ("PRC GAAP"), to the statutory surplus reserve until such reserve
+balance reaches 50% of the registered capital of relevant subsidiaries. Moreover, upon a resolution
+Imade by the shareholders, a certain percentage of domestic enterprises' profit after taxation, as
+determined under PRC GAAP, is transferred to the discretionary surplus reserve. During the year,
+appropriations were made by such subsidiaries to the statutory surplus reserves and discretionary
+surplus reserves accordingly.
+PRC statutory reserves
+Except China Mobile Finance, the Company and its subsidiaries are not subject to externally imposed
+capital requirements.
+484,019
+481,936
+489,434
+(c) Share capital
+Ordinary shares, issued and fully paid:
+CHINA MOBILE LIMITED
+2016
+2015
+Number of
+shares
+HK$ Million
+Equivalent
+RMB Million
+Number of
+shares
+HK$ Million
+Equivalent
+RMB Million
+As at 1 January
+Shares issued under
+20,475,482,897
+382,263
+402,130 20,438,426,514
+380,590
+400,737
+The amounts represent the entrusted loans/bank deposits received from or repaid to CMCC and interest expenses paid/payable
+to CMCC in respect of the entrusted loans/bank deposits.
+The amounts represent the network assets leasing settlement received/receivable from or paid/payable to CMCC Group and
+the TD-SCDMA network capacity charges paid/payable to CMCC Group. On 29 December 2008, the Company entered into a
+network capacity leasing agreement with CMCC Group for the provision of TD-SCDMA related services. Based on the lease
+classification assessments, the Group does not substantially bear the risks and reward incidental to the ownership of the
+leased network assets, and accordingly the Group accounts for the network assets leasing and the network capacity leasing as
+operating leases.
+The amount represents the rental and property management fees received/receivable from or paid/payable to CMCC Group in
+respect of business premises and offices, retail outlets and warehouses.
+34 CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+124
+2016
+Million
+2015
+Million
+Ordinary interim dividend declared and paid of HK$1.489
+(equivalent to approximately RMB1.273)
+(2015: HK$1.525 (equivalent to approximately RMB1.203))
+per share
+26,227
+25,629
+Ordinary final dividend proposed after the balance sheet date of
+HK$1.243 (equivalent to approximately RMB1.112)
+(2015: HK$1.196 (equivalent to approximately RMB1.002))
+per share
+22,766
+20,516
+The amounts represent telecommunications services settlement received/receivable from CMCC Group for the
+telecommunications project planning, design and construction services, telecommunications line and pipeline construction
+services, telecommunications line maintenance services, and installation and maintenance services in respect of transmission
+towers.
+48,993
+The proposed ordinary final dividend which is declared in Hong Kong dollar is translated into RMB
+at the rate HK$1 = RMB0.89451, being the rate announced by the State Administration of Foreign
+Exchange in the PRC on 31 December 2016. As the ordinary final dividend is declared after the
+balance sheet date, such dividend is not recognized as liability as at 31 December 2016.
+In accordance with the 2009 Notice and the PRC enterprise income tax law, the Company is
+required to withhold enterprise income tax equal to 10% of any dividend when it is distributed
+to non-resident enterprise shareholders whose names appeared on the Company's register of
+members, as of the record date for such dividend, and who were not individuals.
+(ii)
+Dividends attributable to the previous financial year, approved and paid during the year:
+2016
+Million
+2015
+Million
+Ordinary final dividend in respect of the previous financial year,
+approved and paid during the year, of HK$1.196 (equivalent to
+approximately RMB1.002)
+(2015: HK$1.380 (equivalent to approximately RMB1.089))
+per share
+20,764
+22,283
+46,145
+8,980
+(iv)
+(ii)
+Short-term bank deposits repaid
+Interest expenses
+Short-term bank deposits received
+Entrusted loans repaid
+Entrusted loans received
+Network capacity leasing charges
+Network assets leasing charges
+Property leasing and management services revenue
+Property leasing and management services charges
+Telecommunications services revenue
+The following is a summary of principal related party transactions entered into by the Group with CMCC
+and its subsidiaries ("CMCC Group"), for the years ended 31 December 2016 and 2015. The majority
+of these transactions also constitute continuing connected transactions as defined under Chapter 14A
+of Listing Rules. Further details of these continuing connected transactions are disclosed under the
+paragraph "Connected Transactions" in the Report of Directors.
+(a) Transactions with CMCC Group
+36 RELATED PARTY TRANSACTIONS
+127
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+ANNUAL REPORT 2016
+Name of Director
+Dong Xin
+Name of Director
+Li Yue
+The balance sheet of the Company was approved by the Board of Directors on 23 March 2017 and was signed
+on its behalf.
+487,212
+Note
+2016
+Million
+2015
+Million
+(i)
+Note:
+194
+7
+(iv)
+4,181
+7,274
+(iv)
+7,274
+5,552
+(iii)
+18,834
+4,757
+2,696
+4,376
+2,738
+956
+976
+191
+197
+474
+159
+8,592
+8,231
+share option scheme
+As at
+31 December
+90,413
+79,842
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+119
+Accounts payable primarily include payables for network expansion projects expenditure, maintenance and
+interconnection expenses.
+The aging analysis of accounts payable is as follows:
+Should be paid in the periods below:
+Within 1 month or on demand
+After 1 month but within 3 months
+After 3 months but within 6 months
+After 6 months but within 9 months
+After 9 months but within 12 months
+As at
+31 December
+2016
+Million
+2015
+Million
+215,775
+205,724
+14,677
+17,002
+72,530
+75,298
+29 ACCOUNTS PAYABLE
+15,115
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+25 OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENT ASSETS
+Other receivables comprise certain items which are expected to be recovered within one year, primarily
+including interest receivable from banks, utilities deposits and rental deposits, and short-term loans of
+RMB4,650,000,000 (2015: RMB5,000,000,000) granted to other companies through China Mobile Finance at
+the interest rate agreed by each party with reference to the market interest rate.
+7,312
+As at 31 December 2016 and 2015, there were no significant overdue amounts for other receivables.
+26 AMOUNTS DUE FROM/TO ULTIMATE HOLDING COMPANY
+Amount due from ultimate holding company is unsecured, interest free, repayable on demand and arising in the
+ordinary course of business.
+As at 31 December 2016, amount due to ultimate holding company comprises the short-term deposits
+of CMCC in China Mobile Finance amounting to RMB5,552,000,000 (2015: RMB7,274,000,000) and the
+corresponding interest payable arising from the deposits. The deposits are unsecured and carry interest at
+prevailing market rate.
+27 BANK DEPOSITS
+Bank deposits represent term deposits with banks with original maturity exceeding three months. The
+applicable interest rate is determined in accordance with the benchmark interest rate published by PBOC.
+Prepayments and other current assets primarily consist of rental prepayments, maintenance prepayments and
+input VAT to be deducted.
+Bank deposits with original maturity within three months
+28 CASH AND CASH EQUIVALENTS
+2015
+Million
+Million
+31 December
+31 December
+2016
+As at
+Cash at banks and in hand
+As at
+As at 31 December 2016
+Million
+Within one year
+Million
+Million
+Million
+Total
+Land and
+assets
+buildings
+network
+Leased
+lines and
+The total future minimum lease payments under non-cancellable operating leases as at 31 December are as
+follows:
+(b) Operating lease commitments
+9,222
+Others
+40,078
+Accounts payable
+50,484
+34,666
+As at 31 December 2015
+194,821
+2,041
+160,566
+32,214
+5,715
+45
+860
+4,810
+After five years
+138,622
+812
+119,628
+18,182
+but within five years
+After one year
+1,184
+34,935
+Fair value
+26,147
+Within one year
+As at 31 December 2015
+As at 31 December 2016
+Carrying
+Amount
+Million
+Interest-bearing borrowings – bonds
+All financial instruments are carried at amounts not materially different from their fair values as at 31
+December except as follows:
+Fair values
+Accrued expenses and other payables
+Carrying
+Amount
+Million
+The Group has foreign currency risk as certain cash and deposits with banks are denominated in foreign
+currencies, principally US dollars and Hong Kong dollars. As the amount of the Group's foreign currency
+cash and deposits with banks represented 1.2% (2015: 1.4%) of the total cash and deposits with banks
+and predominantly all of the business operations of the Group are transacted in RMB, the Group does
+not expect the appreciation or depreciation of the RMB against foreign currency will materially affect the
+Group's financial position and result of operations.
+(d) Foreign currency risk
+As at 31 December 2016, total cash and bank balances of the Group amounted to RMB430,435,000,000
+(2015: RMB407,762,000,000), and interest-bearing receivables amounted to RMB62,235,000,000 (2015:
+RMB63,085,000,000), which mainly included undiscounted deferred consideration of RMB57,585,000,000
+in connection with the transfer of Tower Assets and short-term loans of RMB4,650,000,000 (2015:
+RMB5,000,000,000) provided to other companies. The interest income for 2016 was RMB16,005,000,000
+(2015: RMB15,852,000,000) and the average interest rate was 3.44% (2015: 3.75%). Assuming the total
+cash and bank balances and interest-bearing receivables are stable in the coming year and interest rate
+increases/decreases by 100 basis points, the profit for the year and total equity would approximately
+increase/decrease by RMB3,695,000,000 (2015: RMB3,531,000,000).
+The Group consistently monitors the current and potential fluctuation of interest rates to monitor the
+interest rate risk on a reasonable level. As at 31 December 2016, the Group did not have any interest-
+bearing borrowings at variable rates, but had RMB5,000,000,000 (2015: RMB5,000,000,000) of bonds
+and RMB5,552,000,000 (2015: RMB7,274,000,000) of short-term bank deposits placed by CMCC, both of
+which were at fixed rate and expose the Group to fair value interest rate risk. The Group determines the
+amount of its fixed rate borrowings depending on the prevailing market condition. Management does not
+expect fair value interest rate risk to be high as the interest involved will not be significant.
+(c) Interest rate risk
+37 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (CONTINUED)
+CHINA MOBILE LIMITED
+(Expressed in RMB unless otherwise indicated)
+(e)
+Fair value
+4,998
+4,995
+9,054
+8,788
+Million
+2015
+2016
+Million
+Telecommunications equipment
+Land and buildings
+The Group's capital expenditure contracted for as at 31 December but not provided in the consolidated
+financial statements were as follows:
+(a) Capital commitments
+38 COMMITMENTS
+133
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The fair value of bonds is based on quoted market prices (level 1: quoted price (unadjusted) in active
+markets) at the balance sheet date without any deduction for transaction costs.
+5,150
+Million
+Million
+5,045
+25,612
+9,785
+CHINA MOBILE LIMITED
+1,197
+1 January 2018
+1 January 2018
+on or after
+periods
+beginning
+Effective for
+accounting
+IFRS/HKFRS 16 "Leases"
+IFRS/HKFRS 9 "Financial Instrument"
+1 January 2019
+IFRS/HKFRS 15 "Revenue from Contracts with Customers"
+Up to the date of issue of these financial statements, the IASB/HKICPA has issued a number of amendments
+and new standards and interpretations which are not yet effective for the year ended 31 December 2016 and
+which have not been adopted in these financial statements.
+41 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS, INTERPRETATIONS
+AND DISCLOSURES ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31
+DECEMBER 2016
+CHINA MOBILE LIMITED
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+136
+The Group has a number of lease arrangements. The Group follows the guidance of HKAS/IAS 17 "Leases"
+to determine the classification of leases as operating leases versus finance leases. Significant judgements and
+assumptions are required in the assessment of the classification. The determination of classification depends
+on whether the lease transfers substantially all the risks and rewards of the assets to the Group. In particular,
+during the assessment, the management estimates (i) economic lives of lease assets, (ii) the discount rate
+used in the calculation of present value of minimum lease payments, and (iii) the fair value of the leased assets.
+Any future changes to these judgements or assumptions will affect the classification and hence the results of
+operation and financial position of the Group.
+Classification of leases
+Of these developments, the following relate to matters that may be relevant to the Group's operations and
+financial statements:
+The recoverable amount of an asset is the greater of its fair value less costs of disposal and value-in-use. In
+assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax
+discount rate that reflects current market assessments of the time value of money and the risks specific to
+the asset, which requires significant judgement relating to level of revenue and amount of operating costs.
+The Group uses all readily available information in determining an amount that is a reasonable estimation
+of the recoverable amount, including estimates based on reasonable and supportable assumptions and
+projections of revenue and operating costs. Changes in these estimates could have a significant impact on the
+carrying value of the assets and could result in further impairment charge or reversal of impairment in future
+periods. Additional information for the impairment assessment of property, plant and equipment, goodwill and
+investments accounted for using the equity method is disclosed in notes 14, 17 and 19, respectively.
+IFRS/HKFRS 15 "Revenue from contracts with customers"
+IFRS/HKFRS 15 will replace IAS/HKAS 18 which covers contracts for goods and services and IAS/HKAS 11
+which covers construction contracts. The new standard is based on the principle that revenue is recognized
+when control of a good or service transfers to a customer. IFRS/HKFRS 15 specifies how and when the Group
+will recognize revenue as well as requiring the Group to provide users of financial statements with more
+informative and relevant disclosures.
+IFRS/HKFRS 15 is mandatory for financial years commencing on or after 1 January 2018. The standard permits
+either a full retrospective or a modified retrospective approach for the adoption. The Group plans to adopt the
+modified retrospective approach. At this stage, the Group does not intend to adopt the standard before its
+effective date.
+There are no other IFRSS/HKFRSS or IFRIC/HK(IFRIC) interpretations that are not yet effective that would be
+expected to have a material impact on the Group.
+IFRS/HKFRS 16 is mandatory for financial years commencing on or after 1 January 2019. At this stage, the
+Group does not intend to adopt the standard before its effective date.
+Upon initial evaluation, given that the Group leases certain telecommunications facilities for time periods longer
+than a year, the application of IFRS/HKFRS 16 "Leases" in 2019 is expected to have impact on the Group's
+consolidated financial statements to certain extent because present values of lease liabilities and leased
+assets will be recorded on the balance sheet when the standard is applied. Accordingly, the Group expects
+a corresponding increase in its assets and liabilities. In addition, related operating lease expenses will be
+reclassified as depreciation and financial expenses.
+IFRS/HKFRS 16 will result in almost all leases being recognized on the balance sheet, as the distinction
+between operating and finance leases is removed. Under the new standard, an asset (the right to use the
+leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-
+value leases. This accounting treatment is significantly different from the lessee accounting for leases that are
+classified as operating leases under the predecessor standard, IAS/HKAS 17. The accounting for lessors will
+not significantly change.
+IFRS/HKFRS 16 "Leases"
+IFRS/HKFRS 9 must be applied for financial years commencing on or after 1 January 2018. Based on the
+transitional provisions in the completed IFRS/HKFRS 9, early adoption in phases was only permitted for annual
+reporting periods beginning before 1 February 2015. After that date, the new rules must be adopted in their
+entirety. The Group does not intend to adopt IFRS/HKFRS 9 before its mandatory date.
+The new standard also introduces expanded disclosure requirements and changes in presentation. These are
+expected to change the nature and extent of the Group's disclosures about its financial instruments particularly
+in the year of the adoption of the new standard.
+The Group has been analyzing the impact of the new standard on the Group's financial statements and has
+initially identified areas which are likely to be affected, including the identification of separate performance
+obligations, the capitalization of sales commission, the determination of stand-alone selling price and its relative
+allocation. The Group will continue to assess the impact on the Group's consolidated financial statements. In
+addition, the Group has started to upgrade the accounting systems and the processes of the business to reflect
+the impact of this standard.
+The new impairment model requires the recognition of impairment provisions based on expected credit losses
+(ECL) rather than only incurred credit losses as is the case under IAS/HKAS 39. The Group has been in the
+process of assessment of how its impairment provisions would be affected by the new model, it may result in
+an earlier recognition of credit losses.
+The new standard addresses the classification, measurement and derecognition of financial assets and financial
+liabilities, and a new impairment model for financial assets.
+IFRS/HKFRS 9 "Financial instruments"
+POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS, INTERPRETATIONS
+AND DISCLOSURES ISSUED BUT NOT YET EFFECTIVE FOR THE YEAR ENDED 31
+DECEMBER 2016 (CONTINUED)
+41
+137
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The Group has been in the process of assessment of the classification and measurement of financial assets,
+management anticipates the application of IFRS/HKFRS 9 may affect the classification and measurement of the
+Group's available-for-sale investments and may have an impact on amounts reported in respect of the Group's
+other financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of
+that effect until a detailed review has been completed.
+The Group's property, plant and equipment comprise a significant portion of the Group's total assets. Changes
+in technology or industry conditions may cause the estimated period of use or the value of these assets
+to change. Property, plant and equipment, other intangible assets subject to amortization and investments
+accounted for using the equity method, are reviewed at least annually to determine whether there is any
+indication of impairment. The recoverable amount is estimated whenever events or changes in circumstances
+have indicated that their carrying amounts may not be recoverable. In addition, for goodwill and other intangible
+assets with indefinite useful lives, the recoverable amount is estimated annually whether or not there is any
+indication of impairment.
+Impairment of property, plant and equipment, goodwill, other intangible assets and
+investments accounted for using the equity method
+40 ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
+60,740
+2,481
+23,888
+34,371
+8,114
+73
+2,666
+The Group leases certain land and buildings, leased lines and network assets, motor vehicles, computer
+and other office equipment under operating leases.
+5,375
+26,868
+1,211
+6,446
+19,211
+but within five years
+After one year
+25,758
+After five years
+(c) Investment commitments
+The Group has an investment commitment to a joint venture (see note 19).
+134
+135
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The Group is subject to income taxes mainly in Mainland China and Hong Kong. Significant judgment is
+required in determining the provision for income taxes. There are many transactions and calculations for which
+the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes
+liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the
+final tax outcome of these matters is different from the amounts that were initially recorded, such differences
+will impact the income tax and deferred tax provisions in the period in which such determination is made.
+Taxation
+Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated
+residual value, if any, using the straight-line method over their estimated useful lives. The Group reviews
+the estimated useful lives and residual values of the assets annually in order to determine the amount of
+depreciation expense to be recorded during any reporting period. The useful lives and residual values are
+determined based on the Group's historical experience with similar assets and take into account anticipated
+technological changes. The depreciation expense for future periods is adjusted if there are significant changes
+from previous estimates.
+Depreciation
+The Group assesses impairment loss for doubtful accounts based upon evaluation of the recoverability of
+the accounts receivable and other receivables at each balance sheet date. The estimates are based on the
+aging of the accounts receivable and other receivables balances and the historical write-off experience, net
+of recoveries. If the financial conditions of the customers were to deteriorate, additional impairment may be
+required.
+Impairment loss for doubtful accounts
+Note 17 contains information about the assumptions relating to goodwill impairment, and note 36 contains
+information about the judgements on the lease classification of leasing of TD-SCDMA network capacity and
+Leased Tower. Other key sources of estimation uncertainty are as follows:
+Key sources of estimation uncertainty
+40 ACCOUNTING ESTIMATES AND JUDGEMENTS
+After the balance sheet date, the Board of Directors proposed a final dividend for the year ended 31 December
+2016. Further details are disclosed in note 34(b)(i).
+39 POST BALANCE SHEET EVENT
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Notes to the Consolidated Financial Statements (Continued)
+14,776
+132
+For temporary differences which give rise to deferred tax assets, the Group assesses the likelihood that the
+deferred tax assets could be recovered. Deferred tax assets are recognised based on the Group's estimates
+and assumptions that they will be recovered from taxable income arising from continuing operations in the
+foreseeable future.
+415,192
+Note:
+(c) Significant transactions with associates of the Group and of CMCC Group (Continued)
+36 RELATED PARTY TRANSACTIONS (CONTINUED)
+129
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+6
+1
+(vi)
+Property leasing and management services revenue
+2,842
+1,944
+Dividend income
+5,563
+28,144
+(i)
+Charges for use of tower assets
+15,525
+(i)
+Gain on the transfer of Tower Assets
+774
+422
+(v)
+Telecommunications services charges
+767
+637
+(iv)
+Telecommunications services revenue
+1,699
+(i)
+4,140
+(ii)
+(iv)
+Notes to the Consolidated Financial Statements (Continued)
+ANNUAL REPORT 2016
+The deferred consideration for the transfer of Tower Assets are due from China Tower, which is the
+Company's associate. China Tower is expected to generate stable cash flows from its principal business
+of leasing tower related assets. Therefore, management considers the risk that the deferred consideration
+for the transfer of Tower Assets are uncollectible is low.
+Except for the deferred consideration for the transfer of Tower Assets, concentrations of credit risk with
+respect to accounts receivable are limited due to the Group's customer base being large and unrelated.
+As such, management does not expect any significant losses of accounts receivable that have not been
+provided for by way of allowances as shown in note 24(c).
+The accounts receivable of the Group is primarily comprised of receivables due from customers and
+telecommunications operators. Accounts receivable from customers are spread among an extensive
+number of customers and the majority of the receivables from customers are due for payment within
+one month from the date of billing. Other receivables primarily comprise interest receivable from banks,
+utilities deposits and rental deposits. Management has a credit policy in place and the exposures to these
+credit risks are monitored on an ongoing basis, taking into account the counter parties' financial position,
+the Group's past experience and other factors. As such, management considers the aggregate risks
+arising from the possibility of credit losses is limited and to be acceptable.
+Substantially all the Group's cash at banks and bank deposits are deposited in financial institutions in
+Mainland China and Hong Kong. The credit risk on liquid funds is limited as the majority of counterparties
+are financial institutions with high credit ratings assigned by international credit-rating agencies and large
+state-controlled financial institutions. Wealth management products are issued by major domestic banks
+investing in low risk underlying assets, which mainly consist of bank deposits, treasury bond, central bank
+bill, local government debt, corporate bond or debt with high credit ratings and low credit risks.
+The Group's credit risk is primarily attributable to the financial assets in the balance sheet, which mainly
+include deposits with banks, wealth management products issued by banks, accounts receivable, other
+receivables and deferred consideration for the transfer of Tower Assets. The maximum exposure to credit
+risk is represented by the carrying amount of the financial assets.
+(a) Credit risk and concentration risk
+Exposure to credit, liquidity, interest rate and foreign currency risks arises in the normal course of the Group's
+business. The Group's exposure to these risks and the financial risk management policies and practices used
+by the Group to manage these risks are described below:
+37 FINANCIAL RISK MANAGEMENT AND FAIR VALUES
+CHINA MOBILE LIMITED
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+130
+(e) For key management personnel remuneration, please refer to note 10.
+These transactions are conducted in the ordinary course of the Group's business on terms comparable
+to the terms of transactions with other entities that are not government-related. The Group prices its
+telecommunications services and products in accordance with rules and regulations stipulated by related
+authorities of the PRC Government, where applicable, or based on commercial negotiations. The Group
+has also established its procurement policies and approval processes for purchases of products and
+services, which do not depend on whether the counterparties are government-related entities or not.
+placing of bank deposits
+purchasing of goods, including use of public utilities
+rendering and receiving telecommunications services, including interconnection revenue/charges
+Apart from transactions with CMCC Group (notes 26 and 36(a)) and associates (note 36(c)) and the
+transaction to increase contribution to the Fund (note 19), the Group has collectively, but not individually,
+significant transactions with other government-related entities which include but not limited to the
+following:
+The Group is a government-related enterprise and operates in an economic regime currently dominated
+by entities directly or indirectly controlled by the PRC government through government authorities,
+agencies, affiliations and other organization (collectively referred to as "government-related entities").
+(d) Transactions with other government-related entities in the PRC
+The amount represents the property leasing services revenue received/receivable from SPD Bank.
+The amount represents the telecommunications services charges paid/payable to Union Mobile Pay Co., Ltd., an associate of
+CMCC Group until July 2016.
+The amount represents the telecommunications services revenue received/receivable from SPD Bank and China Tower.
+Interest income primarily represents interest earned from deposits placed with SPD Bank and interest earned from the proceeds
+receivable for the transfer of Tower Assets (note 7). The interest rate of deposits placed with SPD Bank is determined in
+accordance with the benchmark interest rate published by PBOC.
+Other receivables primarily represent the short-team loans granted by China Mobile Finance to China Tower and receivable due
+from China Tower in connection with the transfer of Tower Assets. The loans will mature by December 2017.
+The amounts represent the gain arising from the transfer of Tower Assets on 31 October 2015 (note 7) and the charges payable
+to China Tower for the use of telecommunications tower and related assets ("Leased Tower"). On 8 July 2016, CMC and China
+Tower finalized the leasing and pricing arrangement in relation to the lease of Leased Tower, and entered into an agreement
+(the "Lease Agreement"). Accordingly, the respective provincial companies of CMC and China Tower enter into provincial
+company service agreements for the leasing of individual Leased Tower based on their actual service requirements. Pursuant
+to the management's assessment, the 5 years lease terms of the Lease Agreement does not account for the major part of
+the economic lives of the Leased Tower and the present value of the minimum lease payments is not considered substantial
+comparing to the fair value of the corresponding Leased Tower. At the end of the lease term, there is no purchase option
+granted to the Group to purchase the Leased Tower. The Group also does not bear any gains or losses in the fluctuation in
+the fair value of the Leased Tower at the end of the lease terms. As a result, the Group does not substantially bear the risks
+and reward incidental to the ownership of the Leased Tower, and hence the Group accounts for the Leased Tower leasing as
+operating leases.
+(vi)
+(v)
+(iii)
+(iii)
+Interest income
+Million
+As at
+31 December
+31 December
+As at
+Significant transactions with associates of the Group and of CMCC Group
+The Group has entered into transactions with associates over which the Group or CMCC Group can
+exercise significant influence. The major transactions entered into by the Group and the associates and
+amount due from/to the associates are follows:
+The amounts are unsecured, interest-free, repayable on demand/on contract terms and arise in the
+ordinary course of business.
+181
+4,564
+519
+558
+88
+4,251
+105
+354
+11
+2015
+Million
+31 December
+2016
+Million
+31 December
+As at
+128
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+36 RELATED PARTY TRANSACTIONS (CONTINUED)
+(b) Amounts due from/to CMCC Group
+(c)
+CHINA MOBILE LIMITED
+Amounts due from/to CMCC Group, other than amount due from/to ultimate holding company, are
+included in the following accounts captions summarized as follows:
+As at
+Accounts receivable
+Other receivables
+Note
+2016
+Million
+2015
+Million
+Million
+Note
+2015
+2016
+8,907
+9,862
+(ii)
+Other receivables
+56,737
+57,152
+Proceeds receivable for the transfer of Tower Assets (note 7)
+128
+2,759
+Other payable
+(Expressed in RMB unless otherwise indicated)
+5,563
+(i)
+Accrued expenses
+358
+225
+Accounts payable
+1,187
+2,134
+Interest receivable
+9,300
+17,222
+Available-for-sale financial assets
+33,888
+37,631
+Bank deposits
+5,277
+5,185
+131
+(b) Liquidity risk
+243,579
+Million
+More than 3
+years but less
+than 5 years
+than 3 years
+Million
+Million
+More than 1
+year but less
+cash flow
+Million
+243,579
+amount
+Million
+243,579
+Accounts payable
+undiscounted
+Carrying
+contractual
+Total
+As at 31 December 2015
+443,742
+Bills payable
+443,742
+645
+Accrued expenses and other payables
+7,276
+7,339
+7,339
+Interest-bearing borrowings
+4,995
+5,410
+225
+5,185
+37 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (CONTINUED)
+419,899
+420,377
+Amount due to ultimate holding company
+645
+163,404
+163,404
+163,404
+645
+443,555
+Within 1 year
+or on demand
+5,185
+Million
+Million
+Million
+Million
+More than 3
+years but less
+than 5 years
+than 3 years
+cash flow or on demand
+amount
+5,185
+Within 1 year
+contractual
+undiscounted
+Carrying
+As at 31 December 2016
+Total
+The following table sets out the remaining contractual maturities at the balance sheet date of the
+Group's financial liabilities, which are based on the undiscounted cash flows (including interest payments
+computed using contractual rates or, if floating, based on prevailing rates at the balance sheet date) and
+the earliest date the Group would be required to repay:
+Liquidity risk refers to the risk that funds will not be available to meet liabilities as they fall due, and
+results from timing and amount mismatches of cash inflow and outflow. The Group manages liquidity
+risk by maintaining sufficient cash balances and bank deposits (which are readily convertible to known
+amounts of cash) to meet its funding needs, including working capital, principal and interest payments on
+debts, dividend payments and capital expenditures.
+Million
+Accounts payable
+More than 1
+year but less
+250,838
+4,998
+250,838
+Interest-bearing borrowings
+5,563
+5,563
+Amount due to ultimate holding company
+180,950
+180,950
+5,563
+Accrued expenses and other payables
+1,206
+1,206
+1,206
+180,950
+Bills payable
+250,838
+8,597
+138,090
+Depreciation
+25,156
+21,668
+21,779
+Interconnection
+136,832
+25,983
+122,805
+66,681
+105,658
+Employee benefit and related
+expenses
+79,463
+74,805
+70,385
+59,499
+Selling expenses
+57,493
+14,816
+111,493
+15,843
+(Expressed in RMB)
+39,083
+138
+Financial Summary
+RESULTS
+CHINA MOBILE LIMITED
+2016
+Million
+2015
+Million
+2014
+Million
+2013
+Million
+2012
+Million
+Operating revenue
+Revenue from telecommunications
+services
+623,422
+584,089
+591,602
+600,424
+569,522
+Leased lines and network assets
+Operating expenses
+591,006
+640,048
+651,509
+668,335
+20,668
+708,421
+39,624
+59,907
+84,246
+84,999
+others
+Revenue from sales of products and
+21,484
+23,502
+Website: www.chinamobileltd.com
+75,655
+Land lease prepayments and others
+59,850
+26,773
+24,883
+19,784
+14,266
+Goodwill
+35,343
+35,343
+35,343
+36,937
+36,938
+Other intangible assets
+1,708
+68,551
+768
+1,090
+952
+Investments accounted for using
+the equity method
+124,039
+115,933
+70,451
+53,946
+48,356
+Deferred tax assets
+29,767
+25,423
+20,654
+17,522
+787
+91,600
+95,110
+88,012
+115,960
+126,884
+140
+Financial Summary (Continued)
+(Expressed in RMB)
+ASSETS AND LIABILITIES
+CHINA MOBILE LIMITED
+As at
+As at
+As at
+As at
+As at
+31 December 31 December 31 December 31 December 31 December
+2016
+2015
+2014
+2013
+89,853
+Construction in progress
+469,627
+520,571
+605,023
+585,631
+13,622
+622,356
+Million
+Million
+Million
+Million
+Million
+2012
+Property, plant and equipment
+Available-for-sale financial assets
+35
+3
+Total liabilities
+Total equity
+4,995
+4,992
+5,989
+29,619
+2,175
+292
+1,291
+1,470
+1,187
+764
+203
+98
+104
+51
+538,856
+507,527
+Fax: (852) 3121 8809
+Tel: (852) 3121 8888
+60/F., The Center, 99 Queen's Road Central, Hong Kong
+China Mobile Limited
+China Mobile
+中国移动
+Deferred tax liabilities
+726,820
+888,983
+920,368
+982,138
+383,658
+401,561
+459,052
+821,123
+110,398
+- non-current
+- non-current
+128
+128
+128
+Proceeds receivable for the transfer of
+Tower Assets
+56,737
+Restricted bank deposits
+4,528
+4,575
+8,731
+6,816
+5,418
+Current assets
+586,645
+488,697
+486,925
+474,290
+Interest-bearing borrowings
+353,224
+394,281
+452,492
+501,038
+536,389
+Deferred revenue
+Current liabilities
+1,222,684
+1,348,035
+1,427,895
+1,520,994
+Total assets
+452,620
+1,110,478
+110,159
+26,720
+FOR THE YEAR
+15,852
+16,270
+15,368
+12,696
+Finance costs
+(235)
+(455)
+(487)
+(1,195)
+(949)
+Share of profit of investments
+accounted for using the equity
+method
+8,636
+8,090
+8,248
+7,063
+(41,887)
+(36,746)
+108,578
+(33,179)
+(35,079)
+(35,623)
+16,005
+168,793
+142,522
+143,734
+144,462
+Taxation
+Profit before taxation
+5,685
+153,649
+PROFIT FOR THE YEAR
+Interest income
+989
+91,719
+79,987
+Cost of products sold
+87,352
+89,297
+74,495
+61,409
+41,497
+Other operating expenses
+167,073
+162,293
+151,504
+136,523
+119,923
+590,333
+565,413
+534,189
+1,171
+1,800
+1,968
+Other gains
+15,525
+Gain on the transfer of Tower Assets
+672
+150,689
+117,320
+102,922
+118,088
+Profit from operations
+440,317
+508,624
+131,424
+108,839
+1,224
+109,343
+Financial Summary (Continued)
+This annual report is printed on environmentally friendly paper
+901
+(1,043)
+equity method
+accounted for using the
+(loss)/income of investments
+Share of other comprehensive
+(6)
+(176)
+(169)
+603
+774
+statements of overseas entities
+translation of financial
+Exchange differences on
+24
+(Expressed in RMB)
+RESULTS (CONTINUED)
+Other comprehensive (loss)/income
+for the year, net of tax:
+Item that will not be subsequently
+reclassified to profit or loss
+Share of other comprehensive
+loss of investments accounted
+for using the equity method
+Items that may be subsequently
+reclassified to profit or loss
+Change in value of available-for-
+108,655
+2016
+Million
+2014
+Million
+2013
+Million
+(16)
+139
+2012
+Million
+sale financial assets
+2015
+Million
+(16)
+(767)
+FOR THE YEAR
+TOTAL COMPREHENSIVE INCOME
+Total comprehensive income
+attributable to:
+Equity shareholders of the Company
+Non-controlling interests
+108,480
+98
+116,903
+110,043
+116
+115,849
+111
+126,777
+107
+TOTAL COMPREHENSIVE INCOME
+ANNUAL REPORT 2016
+126,906
+116,903
+110,273
+125
+109,343
+126,906
+108,839
+108,578
+110,159
+110,398
+115,960
+108,655
+Profit attributable to:
+Equity shareholders of the Company
+Non-controlling interests
+126,884
+98
+108,539
+116
+109,218
+125
+116,791
+112
+126,799
+107
+PROFIT FOR THE YEAR
+108,741
+08
+BIOGRAPHIES OF DIRECTORS AND
+SENIOR MANAGEMENT
+CHINA MOBILE LIMITED
+MR. LIU AILI
+Age 53, Executive Director and Vice President of
+the Company, principally in charge of planning and
+construction, human resources of the Company, joined
+the Board of Directors of the Company in March 2006.
+He is also a Vice President of CMCC, a Director and Vice
+President of CMC, a Vice President of China Internet
+Infrastructure Resources Association, and Chairman of
+China Tower Corporation Limited (formerly known as
+China Communications Facilities Services Corporation
+Limited). He previously served as Deputy Director
+General of Shandong Mobile Telecommunications
+Administration, Director General of Shandong Mobile
+Telecommunications Administration and General
+Manager of Shandong Mobile Communications
+Enterprises, Vice President of Shandong Mobile
+Communications Company, Director-General of Network
+Department of CMCC, Chairman and President of
+China Mobile Group Shandong Company Limited
+and China Mobile Group Zhejiang Company Limited,
+Chairman of CMPak Limited, and a non-executive
+director of China Communications Services Corporation
+Limited. Mr. Liu graduated from Heilongjiang Posts and
+Telecommunications School with an associate degree.
+Mr. Liu also received a Master of Management degree
+from Norwegian School of Management BI and a
+Doctoral degree in business administration from Hong
+Kong Polytechnic University. He is a professor-level
+senior engineer with many years of experience in the
+telecommunications industry.
+ANNUAL REPORT 2016
+Age 58, Executive Director and Vice President of
+the Company, principally in charge of marketing,
+corporate customer and international businesses of
+the Company, joined the Board of Directors of the
+Company in March 2006. He is also a Vice President
+of CMCC, a Director and Vice President of CMC, non-
+executive director of Phoenix Satellite Television
+Holdings Limited and Shanghai Pudong Development
+Bank Co., Ltd.. He previously served as Director of the
+Engineering Construction Department IV Division of
+Beijing Telecommunications Administration, President of
+Beijing Telecommunications Planning Design Institute,
+Deputy Director General of Beijing Telecommunications
+Administration, Vice President of Beijing Mobile
+Communications Company, and Chairman and President
+of China Mobile Group Beijing Company Limited. Mr.
+Sha graduated from Beijing University of Posts and
+Telecommunications, and received a master's degree
+from the Academy of Posts and Telecommunications
+of the Ministry of Posts and Telecommunications and a
+Doctoral degree in business administration from Hong
+Kong Polytechnic University. He is a professor-level
+senior engineer with many years of experience in the
+telecommunications industry.
+For a more detailed analysis of operating and financial
+performance in 2016, please refer to the "Business.
+Review" and "Financial Review" sections.
+OUTSTANDING ACHIEVEMENTS IN
+BUSINESS TRANSFORMATION
+Harnessing the rapid developments in technology and
+business trends and aligning with our goal for inclusive
+development, our initiatives in accelerating business
+transformation driven by the "four growth engines"
+have yielded encouraging results in 2016.
+Telecommunications Services Revenue +6.7%
+Reached 5-year High M
+Ranked 1st in Industry
+16
+CHAIRMAN'S STATEMENT
+CHINA MOBILE LIMITED
+We maintained our market leading position in terms of
+the overall development of 4G business, particularly in
+the areas of coverage and network quality. In 2016, we
+had a net addition of 223 million 4G customers, bringing
+the total number of 4G customers to 535 million. The
+4G penetration rate of our mobile customers reached
+63.0% and we have acquired the largest customer base.
+We have the world's largest 4G network and added a
+further 0.4 million 4G base stations to our network in
+2016, increasing the total number of stations to 1.51
+million and covering a population of more than 1.3 billion.
+Our average download speed on urban roads reached
+40Mbps. We launched high quality commercial VoLTE
+(Voice over LTE) services in more than 300 cities. These
+were all part of our continued efforts to enhance our
+industry-leading 4G customer experience and business
+application. The TD-LTE key technology and application
+for 4G, which China Mobile took pride in and contributed
+significantly to developing, won the Outstanding Prize
+in the 2016 National Science and Technology Progress
+Awards. The broader application of the TD-LTE standard
+around the world is a breakthrough for the industry.
+China Mobile adopted a high-end approach to the
+development of the flourishing household market. In
+2016, we had a net addition of 22.59 million wireline
+broadband customers, driving the total number of
+customers for this service up to 77.62 million, 76.9%
+of which subscribed to services with a bandwidth of
+20Mbps or above. The number of customers of our
+home digital product "Mobaihe", the set-top box that
+provides high-definition video-on-demand service,
+has exceeded 22.80 million. Customer value for our
+broadband service has also increased steadily.
+Our corporate customer market has also been
+expanding. We have focused our resources on
+developing corporate services in key industry sectors
+such as public administration, finance, transportation,
+education, healthcare and energy, while at the same time
+broadening our product portfolio of dedicated lines, IDC
+(Internet Data Centres) and converged communications
+such as IMS (IP Multimedia Subsystem). In 2016, we
+served 5.45 million corporate customers and generated
+an increased proportion of product-related revenue.
+Our corporate telecommunications and informatisation
+services revenue continued to grow and accounted for
+approximately one-third of the total market.
+We continued to grow our digital services in 2016
+and built the world's largest dedicated core network
+for the Internet of Things, with the total number of
+connections exceeding 100 million. We enhanced the
+user experience for our Internet service customers
+by further increasing the website access success rate
+and shortening front-page loading latency for the top
+100 most-visited websites. We applied the innovative
+distributed caching technology in our video services,
+increasing the download speed by 3 times. Our mobile
+payment service "and-Wallet" enjoyed stable growth
+and recorded a total transaction amount exceeding
+RMB1 trillion.
+To provide impetus to collaboration with external parties,
+we introduced a number of new service systems in
+2016 including launching external services for OneNET
+platform and the smart home gateway platform, as
+well as further developing the telecommunications
+capability open platform and the unified authentication
+platform. We are progressing the application of big data
+technology to support our precision marketing. Our
+data analytics are now augmented with external service
+capabilities such as improved public security and credit
+scoring, further unleashing creativity within our services.
+REGULATION AND COMPETITION
+It has been the management's resolute belief that China
+Mobile needs to be proactive in adapting to regulatory
+changes in order to capture opportunities amid intense
+competition. Such an approach would maintain the
+initiative of increasing the company's value, as well as
+meeting shareholders' expectations in a responsible way.
+Wireless Data Traffic 46.2%
+Revenue Took up
+According to the estimates obtained from the static calculation based on the Company's current business structure, the three "tariff reduction"
+measures are expected to result in a decrease of each of the operating revenue and the operating profit in 2017 (i) by around RMB4.0 billion
+for one quarter due to cancellation of domestic long-distance and roaming tariffs; and (ii) by around RMB3.0 billion for the whole year due to
+reductions of the dedicated Internet access tariffs for SMEs and international long-distance call tariffs. The Company will strive to reduce the
+impact by stepping up efforts to business development, achieving a higher turnover despite a lower profit margin.
+1
+For a more detailed analysis of our corporate
+governance, please refer to the "Corporate Governance
+Report".
+We have always upheld the principles of integrity,
+transparency, openness and efficiency to ensure good
+corporate governance and strict compliance with the
+rules and regulations on listed companies. With an
+emphasis on risk management, we continue to enhance
+our risk and internal control mechanisms to ensure
+effective risk detection and management, strengthen
+our supervision of key issues, prevent business risk in
+critical areas, and finally to close any gaps in business
+management process to ensure sound and quality
+operations.
+CORPORATE GOVERNANCE
+Against this backdrop, we see a clear need to
+establish our own competitive advantages and, in the
+meantime, take bold and innovative steps to provide
+new momentum for growth by entering new business
+areas such as the broader digital services industry.
+This emerging competitive landscape will challenge
+us to consolidate around our core strengths while also
+deepening our relationships with other participants on
+the open platform, as we work to create a harmonious
+ecosystem.
+To this end, the Board recommends the dividend
+payout ratio of 46% for the full financial year of 2016.
+The Board recommends payment of a final dividend of
+HK$1.243 per share, together with the interim dividend
+of HK$1.489 per share paid earlier, this amounts to an
+aggregate dividend payment of HK$2.732 per share
+for the full 2016 financial year. Taking into account the
+Company's financial position, its ability to generate cash
+flow and its capital demands for future development,
+the Company will maintain a stable dividend payout
+ratio for the full financial year of 2017, striving to attain
+a stable-to-rising dividend payout ratio to create higher
+shareholder value.
+On the one hand, cross-disciplinary convergence has
+intensified competition in the industry. Telecommunications
+operators, Internet companies as well as device and
+terminal manufacturers have all been strengthening their
+digital capabilities, in order to occupy a position further
+up the value chain and extend their core competence.
+On the other hand, a new competition landscape in basic
+telecommunications services has emerged, whereby
+our competitors are seeking multi-layered cooperation
+to provide 4G business. Our competitors have been
+granted permission to refarm a valuable spectrum to
+develop the 4G network, offering them complementary
+advantages when they cooperate with Internet
+companies to grow their data traffic operations.
+The State has announced that a new round of "speed
+upgrade and tariff reduction" policies will be launched
+this year in order to promote the development of
+"Internet+" and growth of the digital economy. The
+policies will require operators to further enhance
+network infrastructure and increase Internet bandwidth
+while cancelling handset domestic long-distance and
+roaming tariffs from October 2017. In addition, the
+policies also require operators to reduce substantially
+the dedicated Internet access tariffs for small and
+medium enterprises (SMEs) and lower international long-
+distance call tariffs in the year. We expect that the new
+policies will have certain impact on our 2017 operating
+results. However, we believe these initiatives will, in
+the long run, accelerate our transformation towards
+predominantly data traffic and digital services. We will
+maintain close communication with regulators to make
+the best operating decisions and find the sweet spot
+between "speed upgrade and tariff reduction" and the
+need for our stable and long-term development.
+The focus for regulators in 2016 continued to be
+"speed upgrade and tariff reduction". We were fully
+dedicated to complying with regulatory requirements
+by lowering the service cost and increasing efficiency,
+so that our customers can continue to benefit from
+our business success. In 2016, data traffic tariff was
+lowered by 36% compared with the previous year.
+At the same time, based on our strategic visioning on
+the regulatory direction, we have taken an orderly and
+balanced approach to mitigate the risks associated with
+the cancellation of domestic long-distance and roaming
+tariffs by proactively removing standalone non-flat rate
+domestic long-distance and roaming packages from our
+current product portfolio and focusing our promotional
+efforts on the sales of flat-rate packages. The results of
+this initiative have so far been satisfactory.
+17
+CHAIRMAN'S STATEMENT
+ANNUAL REPORT 2016
+The Biggest Revenue Source
+The focus of industry competition has been shifting from
+network, products and services to a new and higher
+plane that is more concerned with the platform and the
+ecosystem.
+MR. SHA YUEJIA
+Exceeding investors' expectations is our overriding
+priority. We hope to create better returns for our
+shareholders and share with them the fruits of
+our success, while also securing the Company's
+development and maintaining shareholder value in the
+longer term.
+2016 PERFORMANCE
+MR. PAUL CHOW MAN YIU, GBS, SBS, JP
+Age 70, Independent Non-Executive Director of the
+Company, joined the Board of Directors of the Company
+in May 2013. He was appointed as the Chairman of
+the Nomination Committee in May 2016. He was an
+executive director and Chief Executive of Hong Kong
+Exchanges and Clearing Limited from April 2003 to
+January 2010, the Chief Executive of the Asia Pacific
+Region (ex-Japan) of HSBC Asset Management (Hong
+Kong) Limited from 1997 to 2003, the Chairman of
+Hong Kong Cyberport Management Company Limited
+from June 2010 to May 2016 and an independent non-
+executive director of Bank of China Limited from October
+2010 to August 2016. Mr. Chow currently serves as
+a member of the Advisory Committee on Innovation
+and Technology of the Government of the Hong Kong
+Special Administrative Region, an independent non-
+executive director of Julius Baer Group Ltd. and Bank
+Julius Baer & Co. Ltd, and CITIC Limited.
+Age 67, Independent Non-Executive Director of the
+Company, joined the Board of Directors of the Company
+in March 2003. He was appointed as the Chairman of
+the Remuneration Committee in May 2016. Dr. Cheng
+is a practising solicitor and a consultant of Messrs.
+P.C. Woo & Co. after serving as its Senior Partner from
+1994-2015. Dr. Cheng was a member of the Legislative
+Council of Hong Kong. He is the founder chairman of
+the Hong Kong Institute of Directors of which he is now
+the Honorary President and Chairman Emeritus. Dr.
+Cheng currently holds directorships in Liu Chong Hing
+Investment Limited, China Resources Beer (Holdings)
+Company Limited, Towngas China Company Limited,
+Kader Holdings Company Limited, K. Wah International
+Holdings Limited, Guangdong Investment Limited and
+Tian An China Investments Company Limited, all of
+which are public listed companies in Hong Kong. He
+is also an independent non-executive director of ARA
+Asset Management Limited, a company whose shares
+are listed on Singapore Exchange Limited. His other
+directorships in public listed companies in the last 3
+years includes Hong Kong Television Network Limited
+(formerly known as City Telecom (H.K.) Limited).
+DR. MOSES CHENG MO CHI, GBS, OBE, JP
+CHINA MOBILE LIMITED
+BIOGRAPHIES OF DIRECTORS AND
+SENIOR MANAGEMENT
+10
+ANNUAL REPORT 2016
+10
+MR. FRANK WONG KWONG SHING
+Age 50, Executive Director, Vice President and Chief
+Financial Officer of the Company, principally in charge
+of corporate affairs, finance, internal audit, legal matters
+and investor relations of the Company, joined the Board
+of Directors of the Company in March 2017. He is also
+a Vice President and General Counsel of CMCC. Mr.
+Dong formerly served as a Deputy Director of Corporate
+Finance Division of Finance Department of the former
+Ministry of Posts and Telecommunications, a Director
+of Economic Adjustment Division of the Department
+of Economic Adjustment and Communication Clearing
+of the former Ministry of Information Industry of China,
+Director General of the Finance Department of CMCC,
+Chairman and President of China Mobile Group Hainan
+Company Limited, Director General of the Planning
+and Construction Department of CMCC, Chairman
+and President of China Mobile Group Henan Company
+Limited and China Mobile Group Beijing Company
+Limited. Mr. Dong received a Bachelor's degree from
+Beijing University of Posts and Telecommunications
+in 1989, a Master's degree in financial and accounting
+management from Australian National University, and
+a Doctoral degree in business administration jointly
+issued by Shanghai Jiao Tong University and ESC
+Rennes School of Business, France. Mr. Dong is a
+senior engineer and senior accountant with many years
+of experience in the telecommunications industry and
+financial management.
+MR. DONG XIN
+09
+INDEPENDENT NON-EXECUTIVE
+DIRECTORS
+BIOGRAPHIES OF DIRECTORS AND
+SENIOR MANAGEMENT
+Age 69, Independent Non-Executive Director of the
+Company, joined the Board of Directors of the Company
+in August 2002. He was appointed Chairman of the Audit
+Committee in May 2013. He currently also serves as the
+Non-Executive Director of PSA International Pte Ltd and
+PSA Corporation Limited in Singapore. He previously
+served as Vice Chairman of DBS Bank in Singapore,
+Chairman of DBS Bank (Hong Kong) in Hong Kong and
+DBS Bank (China) in China and was a member of the
+Boards of DBS Bank and DBS Group Holdings. Early on
+in his professional career, Mr. Wong held a series of
+progressively senior positions at Citibank, JP Morgan and
+NatWest. More recently, Mr. Wong was the Chairman
+and Independent Non-Executive Director of Mapletree
+Greater China Commercial Trust Management Ltd, an
+Independent Non-Executive Director of Industrial and
+Commercial Bank of China Limited (China), Mapletree
+Investments Pte Ltd and National Healthcare Group
+Pte Ltd in Singapore. Committed to public service, he
+had held various positions with Hong Kong government
+bodies including Chairman of the Hong Kong Futures
+Exchange between 1993 and 1998 and member of
+HKSAR's Financial Services Development Council
+between 2013 and 2015.
+BIOGRAPHIES OF DIRECTORS AND
+SENIOR MANAGEMENT
+MR. STEPHEN YIU KIN WAH
+Age 56, an Independent Non-Executive Director of the
+Company, joined the Board of Directors and the Audit
+Committee of the Company in March 2017. Mr. Yiu
+is currently a Non-Executive Director of the Insurance
+Authority and a Council member of The Hong Kong
+University of Science and Technology. Mr. Yiu has
+also been appointed as an Independent Non-Executive
+Director of Hong Kong Exchanges and Clearing Limited,
+with effect from the conclusion of its annual general
+meeting to be held on 26 April 2017. Mr. Yiu joined the
+global accounting firm KPMG ("KPMG") in Hong Kong
+in 1983 and was seconded to KPMG in London, the
+United Kingdom from 1987 to 1989. Mr. Yiu became
+a partner of KPMG in 1994, served as the Partner in
+Charge of Audit of KPMG from 2007 to 2010, and
+served as the Chairman and Chief Executive Officer
+of KPMG China and Hong Kong as well as a member
+of the Executive Committee and the Board of KPMG
+International and KPMG Asia Pacific from April 2011 to
+March 2015. Mr. Yiu formerly also served as a member
+of the Audit Profession Reform Advisory Committee
+and the Mainland Affairs Committee of the Hong Kong
+Institute of Certified Public Accountants. Mr. Yiu is a
+fellow member of the Association of Chartered Certified
+Accountants, a fellow member of the Hong Kong
+Institute of Certified Public Accountants and a member
+of the Institute of Chartered Accountants of England
+and Wales. Mr. Yiu received a professional diploma in
+accountancy from The Hong Kong Polytechnic (now
+known as The Hong Kong Polytechnic University)
+in 1983, and holds a master's degree in business
+administration from the University of Warwick in the
+United Kingdom.
+China Mobile achieved outstanding results on all fronts
+in 2016, maintaining our market leading profitability
+among all global telecommunications operators and
+laying a solid foundation for future growth. These hard-
+earned results were particularly encouraging against
+a backdrop of rapidly advancing information network
+and technology, an evolving business landscape and
+accelerating convergence in the information and
+communications technology industry, coupled with ever-
+changing external and internal operating environments.
+The results demonstrated our ability to harness new
+trends as well as our focus on innovation and delivering
+ever-greater value. The timely implementation of the "Big
+Connectivity" strategy helped us to not only speed up
+our business transformation but also to consolidate our
+position as the market leader.
+Dear Shareholders,
+15
+CHAIRMAN'S STATEMENT
+ANNUAL REPORT 2016
+CHINA MOBILE LIMITED
+China Mobile's operating revenue reached RMB708.4
+billion in 2016, representing an increase of 6.0% from
+the previous year. The growth rate of revenue from
+telecommunications services stood at 6.7%, achieving
+a five-year high and ranking the first in the industry.
+Our revenue structure improved further with wireless
+data traffic revenue increasing by 43.5% from the
+previous year, accounting for 46.2% of revenue from
+telecommunications services. Wireless data traffic
+became the biggest revenue source in 2016 for the first
+time in the Company's history, surpassing the combined
+revenue of voice, SMS (Short Message Service) and
+MMS (Multimedia Messaging Service).
+Looking back at 2016, I am very pleased with
+the outstanding results that China Mobile has
+achieved in the period. And now turning to the
+future, my team and I will continue to work
+together, remaining committed to creating
+a brighter future for China Mobile and more
+value for our investors.
+Being at the helm of China Mobile makes
+me reflect on my own beliefs in life - in
+particular that a true leader is not only
+measured by accomplishments he achieved
+and the heights he aspires to attain, but also
+by his all-embracing magnanimity. Only by
+doing this can we broaden our perspective
+and sustain our development. This wave of
+information technology progress brings ample
+opportunities, as well as challenges, for the
+industry. It will test our ability to adapt and
+generate new momentum, without losing
+sight of the unique aspects of China Mobile.
+I feel privileged to have the mission of
+steering this large ship at this point,
+positioning ourselves as the visionary industry
+leader and travelling forward to a period of
+inclusive growth for the Company.
+Chairman's Statement
+14
+a firm step.
+Aiming high,
+our journey
+begins with
+11
+"Big Connectivity" is our response to this
+vision. In 2016, China Mobile set out this
+overarching strategy, together with the "four
+growth engines", that will guide us toward
+balanced development. This was a result
+of a comprehensive process of thorough
+research, brainstorming and deliberation.
+We have created a development blueprint
+for the next five years that commits China
+Mobile to expanding our network connectivity,
+optimising our services and strengthening
+applications within our network to lay the
+foundations for the Internet of Everything and
+developing innovative digital services.
+Profit attributable to equity shareholders reached
+RMB108.7 billion in 2016, or basic earnings per share
+of RMB5.31. Excluding the one-off gain in 2015 on the
+transfer of Tower Assets, profit attributable to equity
+shareholders increased by 10.5% in 2016.
+Capital expenditure amounted to RMB187.3 billion in 2016, slightly higher than the RMB186.2 billion budgeted at
+the beginning of the year. The variance was mainly attributable to respective investments of RMB83.0 billion and
+RMB25.5 billion in the 4G and wireline broadband networks, as the Group stepped up efforts to strengthen these
+capacities particularly in response to the rapid growth of data traffic business in certain hotspot areas.
+The Group will, at a reasonable pace, continue to prioritize investment choices with a refined direction to ensure
+investment efficiency in 2017. Capital expenditure is expected to record a reduction of RMB11.3 billion from the
+previous year to RMB176.0 billion in 2017, with resources mainly invested in areas that, amongst others, align with
+the Group's endeavours to strengthen its competitive edge in the 4G network, establish a high-quality full-fibre
+broadband network, construct network infrastructure for the advance planning of future development and enhance
+IT integration capabilities, which are all central to the Group's plan to underpin its market leading position in network
+capabilities and customer perception.
+www
+71.3
+535.04
+312.28
+2.7
+848.90
+826.24
+Net Additional Customers (million)
+Of Which: 4G Customer Base (million)
+19.61
+Customer Base (million)
+2016
+2015
+KEY OPERATING DATA
+2016 was a robust year marked by accelerated strategic transformation for the Group. With ardent dedication,
+the Group continued to promote entrepreneurship and innovative development amid a complicated competitive
+environment, making most earnest endeavours to bolster its core competences and innovative calibre. Coupled with
+its redoubled efforts to further the integrated development of the "four growth engines", the Group managed to
+maintain relatively rapid and sound growth momentum and achieve encouraging overall results.
+CHINA MOBILE LIMITED
+Business Review
+22
+22
+Change %
+Seizing
+opportunities,
+we forge
+ahead.
+22.66
+Of Which: Net Additional 4G Customers (million)
+37.4
+1,027
+748
+(MB/user/month)
+Average Handset Data Traffic per 4G User per Month (DOU)
+105.7
+697
+339
+15.6
+(MB/user/month)
+-5.2
+408
+430
+(minutes/user/month)
+Average Minutes of Usage per User per Month (MOU)
+0.2
+222.75
+222.22
+Average Handset Data Traffic per User per Month (DOU)
+Average Revenue per User per Month (ARPU)
+23 March 2017, Hong Kong
+Shang Bing
+Household
+Market
+Market
+Mobile
+First, we will take a more macro and comprehensive
+view of the entire market. We will explore business
+opportunities, attract new customers, broaden our
+revenue base, optimise our business structure and
+continue to innovate. We will establish operations
+that capitalise on the potential of fast-growing areas
+to facilitate our business transformation from mobile
+communications between people to a business model
+that is driven by the "four growth engines". Such
+Looking ahead, China's ambition to become a
+"Cyberpower" and the implementation of the
+"Internet+" initiative will boost data usage and create
+new growth opportunities for the information and
+telecommunications industry. As well as being a driving
+force for infrastructure and strategic progress, this
+initiative will also raise the bar for industry players when
+it comes to innovation and quality. We will proactively
+align our business objectives with these developments,
+seizing opportunities as they emerge, rising to new
+challenges and making headway alongside our "Big
+Connectivity" strategy.
+FUTURE OUTLOOK
+In 2016, Moody's and Standard & Poor's continued to
+maintain our corporate credit ratings at the same level as
+that awarded to China's sovereign ratings.
+Our continued efforts in governance and corporate social
+responsibility have gained us widespread recognition in
+the community. In 2016, China Mobile received the "Best
+Managed Large Cap in China" award from financial
+magazine Asiamoney and "The Asset Platinum Award"
+from The Asset. Most recently, Corporate Governance
+Asia presented the Company with the "Asia's
+Outstanding Company on Corporate Governance" award
+and the "Asian Corporate Director Recognition Award".
+We have been included in the Dow Jones Sustainability
+Indices for the ninth year in a row. In addition, China
+Mobile was the first and only company from Mainland
+China to be awarded a position on CDP's 2016 Climate
+A List.
+wwwwwww
+Through our China Mobile Charity Foundation, we have
+sponsored professional training for more than 90,000
+primary and secondary school principals in villages in
+Central and Western China cumulatively. We have also
+funded surgeries for 3,633 children with congenital heart
+disease cumulatively.
+overseas.
+We have invested dedicated resources to protect our
+customers' interests by ensuring privacy and information
+security, with the help of cutting-edge technology and
+effective management. In 2016, we suspended and
+blacklisted 1.96 million nuisance call numbers and
+intercepted more than 100 million fraudulent calls from
+We have endeavoured to narrow the digital divide and
+continuously improve mobile communications and
+broadband Internet services in villages and remote
+areas of China. As of the end of 2016, we have, by
+fulfilling universal service obligations, introduced wireline
+broadband access to 4,909 administrative villages
+cumulatively, and our wireline broadband services have
+achieved an increasing rural coverage ratio. We have
+also launched innovative applications in areas such as
+rural healthcare and smart grazing to offer more inclusive
+information services.
+We wish to excel as a corporate citizen and become
+a leading industry player in fulfilling our social
+responsibilities.
+CORPORATE SOCIAL RESPONSIBILITY AND
+ACCOLADES
+CHINA MOBILE LIMITED
+CHAIRMAN'S STATEMENT
+18
+China Mobile has been taking proactive actions to
+alleviate its impact on climate change. We have
+implemented a "Green Action Plan" over the last 10
+years, with the aim of reducing energy consumption
+and carbon emissions in the course of corporate
+development. In 2016, overall energy consumption per
+unit of information flow decreased by 36% from the
+previous year.
+Chairman
+Corporate
+Customer
+Market
+Emerging
+Business
+尚水
+As we develop, China Mobile remains committed to
+realising our vision of becoming the global leader in
+digital innovation and successfully implementing our "Big
+Connectivity" strategy. All of us here at China Mobile
+will continue to strive for a better digital future and, in
+doing so, look forward to delivering greater value and
+returns for our shareholders, customers, staff and other
+stakeholders.
+On behalf of the Board of Directors, I would also like to
+extend my most sincere gratitude to Mr. Xue Taohai,
+who has retired from his positions as Executive Director,
+Vice President and Chief Financial Officer of the
+Company. Mr. Xue has served important roles in China
+Mobile and made a tremendous contribution to the
+development of our Company over the years.
+I would like to take this opportunity to express my
+heartfelt gratitude to our shareholders for their continued
+endorsement and loyalty, to our customers for their
+unwavering support and trust, to our staff for their
+relentless efforts and selfless dedication, to the wider
+community for their support and to our various partners
+for their valuable collaboration. Without our strong
+relationships with all of these groups, it would not
+have been possible for China Mobile to scale the ever-
+extending heights on this wonderful journey.
+This year marks the 20th anniversary of China
+Mobile's public listing. From the 1987 launch of the
+first generation analogue mobile network in Mainland
+China, to the extensive use of the 4G network and our
+pioneering research and planning for 5G technology
+today, China Mobile has always been able to anticipate
+and capture developing industry trends, address.
+customer needs and forge ahead on this miraculous
+journey. In just two decades, our revenue has grown by
+68 times, profit increased by 24 times and our market
+capitalization expanded by 13.5 times. As I write to you
+now, China Mobile boasts the world's largest network
+and customer base, industry-leading profitability and
+market capitalization. I am proud to say that all of these
+factors combine to make China Mobile a world-class
+telecommunications operator.
+ACKNOWLEDGEMENT ON THE 20TH
+ANNIVERSARY OF LISTING
+2017 is the year of China deepening supply-side
+structural reform, and is also a milestone year for the
+implementation of our "Big Connectivity" strategy.
+We will spare no effort, maintain the high standards
+investors expect of us and deliver more favourable
+results and returns to our shareholders. In the event
+that the policy environment matches our expectations,
+in 2017 China Mobile will strive to maintain revenue
+growth from telecommunications services above the
+industry average, while also delivering industry-leading
+profitability.
+Finally, we will create a mechanism that will generate
+greater synergies. Through this mechanism, our
+operating procedures will become flatter and more.
+customer-oriented. By looking for more effective ways
+of cooperating externally, we hope to pursue a more
+balanced approach to development and increasing
+synergies on the open platform.
+wwwww
+Third, we will strengthen our capability. We will
+expedite the top-down design and secure resources
+to strengthen our own core competence for business
+expansion in IT, big data and universal platforms. We
+will continue to innovate within our digital services
+product range, develop specialised competencies
+along the vertical value chain, bolster our research and
+development capability to support the growth of a world-
+class innovative company while establishing an open,
+integrated platform and service system.
+a model will extend all of our connections to join
+people and things, and also connect things with each
+other. This will lead our evolution from a domestic
+telecommunications operator to a global service provider
+with a strong international network.
+19
+19
+CHAIRMAN'S STATEMENT
+ANNUAL REPORT 2016
+wwwwwww
+of Four Growth
+Engines
+Integrated
+Development
+Second, we will build a strong foundation that will
+enable the growth of our comprehensive network.
+We will leverage our advantages in 4G to reinforce our
+transmission network and upgrade it in a coordinated
+manner that supports our business transformation.
+While we accelerate the transition to a cloud-based NFV/
+SDN network, we will step up our efforts to conduct
+research and tests on 5G technology. We will also
+construct our application infrastructure to encompass
+areas such as cloud computing, big data, the Internet of
+Things, industrial Internet and content delivery networks.
+(RMB/user/month)
+Mobile Business
+57.5
+Wireline Broadband
+In 2016, the Group continued to strengthen its core competences and operational management by promoting
+best practices and taking a number of measures with a special focus on spreading the tenets of "centralised
+management, operational specialisation, market-oriented mechanism, lean organisation structure and process
+standardisation".
+UPGRADING CORE COMPETENCES WITH VIGOUR
+As a consistent effort to optimise customer experience, the Group has expedited the launch of competitive digital
+service products, proactively conceived and developed new ideas for applications and content businesses, and
+continuously performed industry benchmarking. Spurred by these initiatives, the Group managed to obtain various
+achievements in 2016, among which, the "One Hundred Schools Project" under the NFC (Near-field communication)
+business was successfully concluded, and "and-Wallet", the Group's mobile payment service, recorded a total
+annual transaction amount of more than RMB1 trillion. The Group has also established the world's largest dedicated
+core network for loT with more than 100 million connections as at the end of 2016. At the same time, the Group
+launched the market-leading OneNET platform, an open loT platform aiming to nurture and accelerate the growth
+of the overall loT industry ecology. The OneNET platform currently connects more than 7 million devices, serving
+around 30,000 developers and more than 3,000 companies.
+The Emerging Business
+The Group is devoted to enlarging its market share in the corporate customer market, forging ahead with keen
+determination to upsize its revenue market share and to refine its product portfolio, at the same time continuously
+strengthening its initiatives to promote business expansion in this sector. The Group continued to expend efforts
+to structure its service offerings for six key industry sectors including public administration, finance, transportation,
+education, healthcare and energy, placing a special focus on providing information solutions to major sectors. Buoyed
+by these initiatives, revenues from the Group's data dedicated line services and IDC (Internet Data Centres) recorded
+respective increases of 32.1% and 76.3% from the previous year, and the Group basically achieved its target to
+obtain one-third revenue market share in the corporate telecommunications and informatisation service market.
+The Corporate Customer Market
+25
+Customer Net Adds
+BUSINESS REVIEW
+4G Customer DOU >1GB
++128%
+Handset Data Traffic = 1))
+The Group's overarching strategy for its wireline broadband business is to expedite a boost to business quality and
+market competitiveness by consistently adopting a high-end marketing approach which aims at delivering products
+and services with enhanced network speed and quality and targeting at specific customer groups. The total number
+of wireline broadband customers grew to exceed 77.62 million in 2016, of which, net additional customers amounted
+to 22.59 million and accounted for over 63% of the total net additions in the market. Buoyed by the Group's focused
+efforts to promote mid to high-bandwidth products, the proportion of customers subscribing to products with
+bandwidth of 20Mbps or above has reached 76.9%. An emphasis has been placed on raising returns on investment,
+and APRU has risen to RMB32.1. In the meantime, the Group has devised plans to proactively tap into the household
+market and endeavored to establish its presence in homes with an expanding range of home broadband products. It
+has recorded an encouraging result for its home digital product "Mobaihe", a set-top box that provides high-definition
+video-on-demand service, with the number of customers surpassing 22.80 million. The wireline broadband ARPU
+that included home digital services reached RMB33.8.
+The Household Market
+Building on its exceptional strategic visioning competence, the Group has made a tactical move by taking the
+initiative to cancel domestic long distance and roaming tariffs in 2016. By completely ceasing the sales of non-flat
+rate packages, the Group managed to migrate customers to flat rate packages in a balanced and orderly manner,
+leading to mitigation of operating risks. In 2016, the number of flat rate packages took up 63.6% of the total.
+In addition to network upgrade, the Group also proactively developed signature 4G products. The Group has built
+the world's largest VoLTE (Voice over LTE) network, providing high quality VoLTE for commercial use in 313 cities
+and progressively enabling implicit, automatic connection within the entire network. To tally with this development,
+the Group took measures to bolster the growth of the terminal industry which drives the development of VOLTE.
+As at the end of 2016, there were a total of 1,090 4G terminal models in stock, of which 927 models supported
+VOLTE. The Group has proactively rolled out a number of measures to continuously expand its data traffic operations
+in response to the "speed upgrade and tariff reduction" regulatory initiative. Reaping the benefits of the buoyant
+growth of 4G, the Group offered a rich range of data products and launched a series of actions to enhance data
+value. The Group's efforts bore fruit and its data traffic business scaled new heights. Handset data traffic increased
+by 127.7%, with DOU recording a 105.7% increase year-on-year to reach 697MB. Revenue from the wireless data
+traffic business has surpassed that of the traditional business to become the largest source of revenue of the Group.
+Thanks to the Group's considerable efforts to promote the migration of 2G/3G customers to the 4G network, the
+4G penetration rate of its mobile customers has reached 63% and its market share for net additional 4G customers
+has exceeded 64% as at the end of 2016, enabling it to be the largest operator in the world in terms of 4G customer
+base. The rapid development of the 4G business also led to a marked uplift in the Group's overall customer value,
+with 4G customer DOU maintaining its upward trajectory to reach an annual average of 1,027MB, which was 7.5
+times as high as 2G/3G customer DOU. These results have together provided a strong testament to the value of the
+Group's 4G network.
+ANNUAL REPORT 2016
+CHINA MOBILE LIMITED
+22.59 million
+>63%
+Taking a critical step on the road to transformation, the Group has evolved a two-pronged strategy to address the
+rising demands for high data traffic and high bandwidth buoyed by the implementation of the "four growth engines"
+initiative. While the Group will place an emphasis on establishing premium networks to upscale its core business and
+lay a solid foundation for upcoming market competition, it will, at the same time, strive to lower construction costs
+and raise capital expenditure efficiency through sophisticated planning and sensible deployment of resources.
+CAPITAL EXPENDITURE
+The Group's professional companies including the International Company, China Mobile Device and the Research
+Institute continued to witness prosperous growth. By taking measures such as continuously optimising the
+international roaming tariff model and rolling out the "Hand-in-Hand Program" in harness with international
+counterparts, the Group managed to propel a 229% increase in international data roaming business. Total sales
+volumes of the Group's self-branded handsets and set-top box "Mobaihe" terminals reached 3.62 million and 2.25
+million respectively in 2016. In pursuit of its 5G aspirations, the Group has made active participation in relevant
+research and development activities, including overseeing 5G overall frameworks in 3GPP (the third Generation
+Partnership Project) and establishing the 5G Joint Innovation Centre.
+An Accelerating Uplift in Professional Operational Competences
+Buoyed by its promotion efforts, the Group recorded a rising proportion of the Third-generation Business Operating
+Support System that transformed to the "All Cloud" network. The Group has also forged ahead with plans to expand
+its big data capacity, and following the completion of phase one of the centralised big data platform, the number of
+invocation services provided by the Group has exceeded 10 billion times. Meanwhile, every effort has been stepped
+up to reinforce business support and unlock synergy across operations, and the Group was empowered with "single-
+source billing" ability as a result of the completion of the centralised billing system for international roaming.
+An Immense Boost to IT Support Capability
+22
+27
+Net Add Market Share
+BUSINESS REVIEW
+56.3
+At the heart of its operations is the Group's unflagging pursuit of customer service excellence: its unwavering
+devotion to providing exceptional customer services and a relentless focus on its valued customers. Honoring this
+commitment, the Group strives to continuously upgrade its service quality management and create a transparent
+and secure communication platform. The Group has started the full centralization of its 10086 customer service
+hotline operation in 2016, pooling resources effectively that resulted in increased service efficiency and a further
+improvement in the overall hotline connection rate. Furthermore, the Group continuously upgraded its service
+capacity in electronic channels, with the number of customers visiting its virtual outlets approaching 200 million.
+Regarding communication security, the Group has taken steps to further enhance its performance in terms of
+safeguarding communication networks and upholding information security. The Group suspended and blacklisted
+over 1.96 million nuisance call numbers and intercepted more than 100 million fraudulent calls from overseas,
+successfully curbing new types of unlawful behaviours and crimes taken place in the telecommunications networks.
+As a result of the further refinement of its close-loop management mechanism of service quality, the Group achieved
+a market-leading customer satisfaction rate and a Net Promoter Score according to independent survey results.
+An Unflagging Pursuit of Customer Service Excellence
+"Network quality is the lifeline for any telecommunications company". With a clear determination, the Group sets
+its sights on crafting a premium network and continuously taking initiatives in its quest to reinforce its network
+infrastructure. In respect of the wireless network, the Group has placed a special focus on enhancing network
+blind spots and business hotspots. Together with the 58% increase in indoor coverage area, the Group managed
+to realize full 4G coverage of major areas including high speed railways, subways and scenic spots, resulting in
+a further increase in the 4G retain ability rate. In respect of the wireline network, the Group has constructed an
+efficient and precise network with a FTTH (Fibre-to-the-home) coverage ratio of over 80%. Concurrently, the Group
+has taken prompt actions to upgrade its service support for the household market, leading to a drastic reduction
+in the processing time for device installation and complaint handling. In respect of transmission, the Group has
+directed efforts to establish high speed, high efficiency and intelligent backbone transmission networks, quickly
+establishing its leading position in the industry. The Group saw relatively visible improvements in its international
+internet bandwidth and international transmission capabilities. Backbone network capability was also enhanced
+with interprovincial transmission network bandwidth increasing by 204T to reach 285.7T. In respect of contents,
+the Group has endeavoured to promote distributed caching technology with efforts also devoted to accelerating the
+construction of a cache-enabled CDN (content delivery network) that resulted in a significant reduction in front-page
+loading latency and video jam frequency. In respect of maintenance, the Group saw a significant advancement of
+centralised network failure management, and by possessing fundamental abilities in managing big data's network
+quality, the Group managed to bring its maintenance efficiency initiatives into full play.
+Network Capability Scaling New Heights
+CHINA MOBILE LIMITED
+BUSINESS REVIEW
+26
+ANNUAL REPORT 2016
+BUSINESS REVIEW
+IoT Connections f
+> 100 million
+24
+5.8
+33.8
+31.9
+(Including Home Digital Services) (RMB/user/month)
+Average Revenue per User per Month (ARPU)
+0.5
+32.1
+31.9
+Internet of Things ("loT") Business
+(RMB/user/month)
+22.59
+Net Additional Customers (million)
+77.62
+55.03
+Customer Base (million)
+Wireline Broadband Business
+2.2
+24
+Average Revenue per User per Month (ARPU)
+Connections (million)
+41.1
+559
+Customer Base and Network
+65
+The World's Largest
+1.51 million
+4G Base Stations
+4G Customers
+The Group added 0.4 million 4G base stations in 2016, bringing the total number to 1.51 million. As an operator
+boasting the world's largest 4G network, the Group provides coverage for a population of over 1.3 billion. Meanwhile,
+the average download speed on urban roads has improved to 40Mbps, resulting in enhanced customer experience.
+The Group is well aware that maintaining a leading position in the mobile business is vital to its success as a whole.
+To firmly and timely grasp the divergent growth opportunities arising from the current market, the Group has devoted
+great efforts to ramp up its 4G business, leading to a continuing enhancement to network quality and an expansion
+of customer base. Harnessing these positive results, the Group has comprehensively established its 4G competitive
+edges.
+The Mobile Market
+*** 535 million
+ACTUATING THE FOUR GROWTH ENGINES
+The Group ended 2016 with continuing market leadership. The total number of mobile customers reached 849
+million, with a net addition of 22.66 million in 2016. Mobile ARPU reached RMB57.5, representing an increase of 2.2%
+from the previous year. The Group demonstrated comprehensive leadership in the 4G market, with its 4G customer
+base recording a net addition of 223 million from 2015 to reach 535 million. Riding on the burgeoning growth of data
+traffic business, wireless data traffic became the largest contributor to the Group's telecommunications services
+revenue with its 46.2% contribution. In 2016, the Group has initiated the cancellation of domestic long distance
+and roaming tariffs in its efforts to mitigate the associated risks and this measure, together with the substitution
+by Internet business, has cast a pall over the Group's voice and SMS/MMS businesses characterised by declining
+revenues from these lines. The Group's wireline broadband business achieved significant progress with its customer
+base leaping to 77.62 million as at the end of 2016 and wireline broadband ARPU (including home digital services)
+growing by 5.8% from the previous year. The loT business also witnessed notable growth with the number of
+connections exceeding 100 million.
+OPERATING PERFORMANCE
+103
+23
+BUSINESS REVIEW
+ANNUAL REPORT 2016
+57.0
+Over the past year, the Group has accelerated business transformation and striven to explore room for future
+development, with a shifted focus from the traditional operating model to the integrated development of the "four
+growth engines".
+COMPLIANCE WITH THE CODE PROVISIONS OF THE CORPORATE GOVERNANCE CODE
+-43.4%
+39,512
+66,410
+68.1%
+CREDIT RATINGS
+CHINA MOBILE LIMITED
+Currently, the Company's corporate credit ratings are equivalent to China's sovereign credit ratings, namely, AA-/
+Outlook Negative from Standard & Poor's and Aa3/Outlook Negative from Moody's. These ratings reflect that the
+Group's sound financial strength, favourable business potential and solid financial management are highly recognized
+by the market.
+36
+Corporate Governance Report
+Our goal has always been to enhance our corporate value, maintain our sustainable long-term development and
+generate greater returns for our shareholders. In order to better achieve the above objectives, we have established
+good corporate governance practices following the principles of integrity, transparency, openness and efficiency, and
+have implemented sound governance structure and measures. We have established and improved various policies,
+internal control system and other management mechanisms and procedure for the key participants involved in good
+corporate governance, including shareholders, board of directors and its committees, management and staff, internal
+auditors, external auditors and other stakeholders (including our customers, local communities, industry peers,
+regulatory authorities, etc.).
+48,958
+In addition, as a company listed in both Hong Kong and New York, we also set forth in this report a summary of the
+significant differences between the corporate governance practices of the Company and the corporate governance
+practices required to be followed by U.S. companies under the NYSE's listing standards.
+Our Board of Directors (the "Board") is responsible for performing the corporate governance duties and setting out
+the terms of reference on corporate governance functions. Throughout the financial year ended 31 December 2016,
+the Company has complied with all other code provisions of the Corporate Governance Code (the "CP") as set forth
+in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the
+"Hong Kong Listing Rules"), except the followings:
+86,510
+2015
+RMB million
+194,523
+FINANCIAL REVIEW
+ANNUAL REPORT 2016
+The Company and its directors (including independent non-executive directors ("INED")) have not entered into any
+service contract with a specified term. All directors are subject to retirement by rotation and re-election at our annual
+general meetings (the "AGM") every three years, and all newly-appointed directors are subject to re-election by
+shareholders at the first annual general meeting after their appointment.
+35
+FUND MANAGEMENT AND CASH FLOW
+The Group firmly adhered to its sound and prudent financial policies and stringent fund management systems and
+strived to maintain a healthy cash flow level, thereby ensuring the safety and integrity of its funds through its highly
+centralized management of investing and financing activities. Meanwhile, the Group continued to reinforce its
+centralized fund management efforts and made appropriate allocations of its funds, thereby enhancing the efficiency
+of funds utilization.
+7.9%
+36.3%
+In 2016, the Group's cash flow remained healthy. Net cash inflow from operating activities, net cash outflow from
+investing activities and net cash outflow from financing activities were RMB253.7 billion, RMB194.5 billion and
+RMB49.0 billion respectively. Free cash flow was RMB66.4 billion, up by 68.1% compared to the previous year. As
+at the end of 2016, the Group's cash and bank balances were RMB430.4 billion, of which 98.8%, 0.4% and 0.8%
+were denominated in Renminbi, U.S. dollars and Hong Kong dollars, respectively. The steady fund management and
+healthy cash flow provided a solid foundation for the sustainable healthy development of the Group.
+2016
+Change
+RMB million
+235,089
+253,701
+142,743
+Net cash inflow from operating activities
+Net cash outflow from investing activities
+Net cash outflow from financing activities
+Free cash flow
+In accordance with the principles of the CP, we require our Board, the Board committees and other internal organs to
+strictly comply with their internal procedures. The following are the major respects in which China Mobile meets the
+CP:
+•
+More than one-third of the Board (4 out of 9) are INEDs.
+6.7%
+CHINA MOBILE LIMITED
+PROFITABILITY
+As a result of revenue growth and cost management, the Group's profitability in 2016 continued to be industry-
+leading. Profit from operations was RMB118.1 billion, up by 14.7% compared to the previous year. EBITDA was
+RMB256.7 billion and EBITDA margin was 36.2%, up by 0.3 percentage points compared to the previous year. Profit
+attributable to equity shareholders was RMB108.7 billion and its margin was 15.3%. Excluding the one-off gain on
+the transfer of Tower Assets in 2015, net profit increased by 10.5%.
+2015
+2016
+Change
+Published China Mobile Environmental Management Policy, improved our Corporate Social Responsibility
+Management Measures, once again recognized on the Dow Jones Sustainability Emerging Markets Index,
+being on the DJSI family for nine consecutive years. China Mobile was the first and only company from
+Mainland China to be awarded a position on CDP's Climate A List 2016.
+Published our Policy for a Responsible Supply Chain of Conflict Minerals and Due Diligence Guidance for
+Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, aiming at responsible
+procurement; and
+Formulated the Administrative Measures on China Mobile News Disclosure, the Administrative Measures on
+China Mobile Public Opinion, and the Management Measures on New Media Operation of China Mobile, to
+maintain our brand names and strengthen communications with the public and staff;
+Officially launched our Compliance + Escort program, specifying its objectives, principles, initiatives and
+implementation assurance, putting forward 20 specific measures in four major aspects, formulating four
+compliance guidance in marketing competition, anti-commercial bribery, administrative law enforcement and
+cooperation, and information security, to provide with the requirements and code of conduct in key areas and
+promote the on-going compliance management mechanism;
+Redesigned and established the top-level organization of China Mobile with Rule of Law, which are led by our
+Chairman and participated by various lines. We also improved our general counsel system and furthered our
+legal progress;
+Improved China Mobile Internal Control Auditing Management Measures, to review and evaluate the design
+and effectiveness of our internal control system by means of systematic and standardized approach;
+Provided training on directors' duties and obligations to our directors and management;
+.
+Evolution of China Mobile Corporate Governance in 2016:
+The Company and its operating subsidiaries have set up internal audit departments, which independently audit
+the business units of the Company and its operating subsidiaries. The head of the internal audit department
+of the Company (the "IA Dept.") directly reports to the Audit Committee which, in turn, reports to the Board
+regularly.
+✓
+China Mobile discloses the interests of its directors and senior management in the shares of China Mobile
+and their confirmation of compliance with the "Model Code for Securities Transactions by Directors of Listed
+Issuers" set out in Appendix 10 to the Hong Kong Listing Rules (the "Model Code").
+We publish the terms of reference and membership of the board committees on the HKEX's and the
+Company's websites.
+All members of our board committees are INEDs, with appropriate professional qualifications and/or expertise
+in finance, business management, accounting, legal and compliance.
+China Mobile provides trainings to its directors and management on an annual basis.
+Each director discloses to the Company at the time of his appointment and then annually for any change of, his
+position holding in any public companies or organizations and other significant commitments.
+✓
+ANNUAL REPORT 2016
+37
+China Mobile publishes a Sustainability Report along with its annual report for ten consecutive years, reporting
+its performance on ESG issues, which, in many respects, exceed the terms of the ESG Reporting Guide set out
+in Appendix 27 to the Listing Rules.
+✓
+We give more than 20 working days notice for our AGMs.
+Our CEO and CFO shall make annual written statements to the US SEC, and our management shall make
+annual back-up certifications to the Company, confirming their personal responsibilities with respect to a series
+of risk management and internal control systems.
+Our Audit Committee conducts annual evaluation with respect to the effectiveness of risk management and
+internal control and procedures, and publishes its results.
+CORPORATE GOVERNANCE REPORT
+982,138
+RMB million
+Total equity
+The Group's financial position continued to remain steady. As at the end of 2016, total assets grew from RMB1,427.9
+billion as at the end of the previous year to RMB1,521.0 billion. Total liabilities changed from RMB507.5 billion as at
+the end of the previous year to RMB538.9 billion. Liabilities-to-assets ratio changed from 35.5% at the end of the
+previous year to 35.4%.
+CAPITAL STRUCTURE
+0.2%
+108,741
+1.6%
+35,623
+35,079
+108,539
+Profit attributable to equity shareholders
+Taxation
+6.7%
+Profit from operations
+102,922
+118,088
+14.7%
+Gain on the transfer of Tower Assets
+15,525
+Other gains
+FINANCIAL REVIEW
+using the equity method
+Share of profit of investments accounted for
+-48.4%
+235
+455
+Total borrowings was RMB5.0 billion, representing 0.5% of total book capitalization (being the sum of total debt
+and total equity attributable to equity shareholders). The borrowings represented the fixed-interest guaranteed RMB
+bonds issued by Guangdong Mobile, which will mature and be redeemed in October 2017. The Group firmly adhered
+to its prudent financial risk management policies and maintained sound repayment capabilities. The effective average
+interest rate of borrowings was 4.70% and its effective interest coverage multiple was 548 times.
+Finance costs
+16,005
+15,852
+Interest income
+9.3%
+1,968
+1,800
+1.0%
+As at
+As at
+31 December
+Total liabilities
+507,527
+536,389
+2,467
+538,856
+7.1%
+-62.0%
+6.2%
+501,038
+6,489
+Non-controlling interests
+3,117
+2.8%
+Total equity attributable to equity shareholders
+917,336
+979,021
+6.7%
+3,032
+920,368
+Non-current liabilities
+6.5%
+2015
+RMB million
+31 December
+2016
+RMB million
+Change
+Current assets
+488,697
+586,645
+Current liabilities
+20.0%
+939,198
+934,349
+-0.5%
+Total assets
+1,427,895
+1,520,994
+Non-current assets
+34
+584,089
+Other operating expenses
+108,539
+108,741
+0.2%
+Margin of profit attributable to equity shareholders
+16.2%
+Basic earnings per share (RMB)
+5.30
+15.3%
+5.31
+-0.9pp
+0.2%
+OPERATING REVENUE
+In 2016, operating revenue reached RMB708.4 billion, up by 6.0% compared to the previous year, of which revenue
+from telecommunications services was RMB623.4 billion, up by 6.7% compared to the previous year. The growth
+rate of revenue from telecommunications services reached a five-year high.
+ANNUAL REPORT 2016
+FINANCIAL REVIEW
+Revenue from telecommunications services
+(RMB million)
+8,090
+Others
+Applications and
+information services
+Wireline
+broadband
+Wireless
+data traffic
+SMS/MMS
+Voice
+Profit attributable to equity shareholders (RMB million)
+2015
+(232)
+623,422
+(399)
+7,279
+87,321
+(51,947)
+(2,689)
+2016
+0.3pp
+35.9%
+RMB million
+Keeping up
+with the trends,
+we foster
+inclusive growth.
+30
+Financial Review
+CHINA MOBILE LIMITED
+In 2016, the Group continued to maintain its leading
+position in 4G business, developed vigorously its wireline
+broadband business, and achieved an encouraging
+growth in its revenue. The growth rate of the Group's
+telecommunications services revenue ranked No.1 in
+the industry and the Group continued to consolidate its
+position as a leading operator in the industry.
+At the same time, the Group actively promoted its
+low-cost, high-efficiency operation model, conducted
+resources utilization evaluation in key areas, and
+optimized its strategies, budget and performance-based
+salary management. Operational efficiency increased
+favorably, with operating expenses as a proportion of
+operating revenue decreasing for the first time since
+2008, thereby maintaining its leading profitability and
+continuously creating value for shareholders.
+Create
+Value For
+Shareholders
+2015
+2016
+Change
+Operating revenue (RMB million)
+668,335
+EBITDA margin
+6.9%
+256,677
+240,028
+0.9%
+84,999
+36.2%
+84,246
+6.7%
+623,422
+584,089
+Revenue from telecommunications services (RMB million)
+6.0%
+708,421
+Revenue from sales of products and others (RMB million)
+EBITDA (RMB million)
+Other operating expenses were RMB167.1 billion, up by 2.9% compared to the previous year and representing
+23.6% of operating revenue. Maintenance expenses, operating lease charges and utilities expenses constituted
+the majority of other operating expenses, totaling RMB99.2 billion, down by 1.6% compared to the previous year,
+mainly due to changes in tower operating model and refined cost management. Administrative expenses such
+as conference, office, travelling and business entertainment expenses were RMB3.2 billion, remaining flat and
+representing a further decreased proportion of operating revenue.
+31
+Due to the substitution effect of mobile Internet and other factors, as well as the Group's anticipation of policy
+changes in advance which resulted in the proactive promotion of customers' migration to flat rate packages and
+accelerated the mitigation of risks associated with long-distance roaming tariffs, revenue from voice services
+continued to decline to RMB209.9 billion, down by an ever-accelerating rate of 19.8% compared to the previous
+year, representing 33.7% of telecommunications services revenue, down by 11.1 percentage points compared to
+the previous year.
+74,805
+79,463
+6.2%
+Selling expenses
+59,850
+57,493
+-3.9%
+Cost of products sold
+89,297
+87,352
+-2.2%
+162,293
+167,073
+2.9%
+Other operating expenses
+Leased lines and network assets
+Leased lines and network assets expenses were RMB39.1 billion, up by 89.1% compared to the previous year and
+representing 5.5% of operating revenue. The Group paid RMB28.1 billion for charges for use of tower assets in
+accordance with the price stated in tower leasing agreements and the actual quantity of rented towers, being the
+main reason for the increased leasing fees. With customers' migration from 3G to 4G, the utilization rate of TD-
+SCDMA network kept falling and the leasing fees for TD-SCDMA network capacity were RMB2.7 billion, down
+by 43.3% compared to the previous year. Because of the transfer of tower related assets and the original cost
+decreased on the scale of leased assets, the leasing fees of "Village Connect" assets were RMB2.7 billion, down by
+37.4% compared to the previous year.
+Cost of products sold were RMB87.4 billion, down by 2.2% compared to the previous year, of which subsidies for
+handset sales were RMB10.1 billion, down by 9.0% compared to the previous year. With the Group's promotion of
+the sale of handsets through open channels, cost of products sold decreased and subsidies for handset sales were
+further reduced.
+Cost of products sold
+resources.
+Selling expenses were RMB57.5 billion, down by 3.9% compared to the previous year and representing 8.1%
+of operating revenue. The Group actively promoted the transformation of its marketing model and enhanced its
+precision marketing to customers, resulting in a further improvement in the efficiency of its use of marketing
+Selling expenses
+Employee benefit and related expenses were RMB79.5 billion, up by 6.2% compared to the previous year and
+representing 11.2% of operating revenue. The Group adjusted and optimized its personnel structure, and increased
+the compensation allocation and motivation in favor of primary frontline employees. Together with the increase in
+social insurance expense standard, employee benefit and related expenses increased accordingly.
+Employee benefit and related expenses
+Employee benefit and related expenses
+Depreciation
+Interconnection expenses were RMB21.8 billion, up by 0.5% compared to the previous year and representing 3.1%
+of operating revenue.
+Interconnection
+33
+FINANCIAL REVIEW
+ANNUAL REPORT 2016
+Depreciation was RMB138.1 billion, up by 0.9% compared to the previous year and representing 19.5% of operating
+revenue. On one hand, the Group continued to maintain its investments and expanded its assets scale which
+resulted in an increase in depreciation; on the other hand, due to the change in tower operating model, the transfer
+of existing towers helped offset the increase in depreciation.
+Revenue from voice services
+0.9%
+136,832
+Revenue from data services
+Revenue from data services was RMB394.9 billion, up by 30.2% compared to the previous year, representing 63.3%
+of revenue from telecommunications services, up by 11.3 percentage points compared to the previous year. The
+revenue structure further optimized.
+As a result of the Group continued to focus on its 4G business, deepened its data traffic operation and enriched
+its various applications, data traffic business recorded a rapid growth. Revenue from wireless data traffic reached
+RMB288.2 billion, up by 43.5% compared to the previous year, and was the main engine of revenue growth.
+Wireless data traffic revenue as a proportion of revenue from telecommunications services rose to 46.2%, which
+I was higher than the total of voice services revenue and SMS/MMS services revenue of the year and became the
+largest source of revenue of our Group. SMS/MMS services revenue was RMB28.6 billion, down by 8.6% compared
+to the previous year.
+The Group firmly adhered to the "higher speed, better quality and orientation" strategy, steadily promoted the
+development of its wireline broadband business, perfected its quality service system for broadband products and
+achieved a satisfactory outcome. Revenue from wireline broadband services reached RMB25.6 billion, up by 39.7%
+compared to the previous year.
+Revenue from applications and information services was RMB52.6 billion, down by a reduced 0.8% compared to the
+previous year. The Group's digital services business is at a stage of active exploration and will see more room for
+development in the future.
+Revenue from sales of products and others
+In order to provide customers with a broader offering of terminals with more diversified functions, the Group
+actively promoted the sale of handsets through open channels. Revenue from the sales of products and others was
+RMB85.0 billion, up by a falling 0.9% compared to the previous year.
+32
+FINANCIAL REVIEW
+CHINA MOBILE LIMITED
+OPERATING EXPENSES
+The Group continued to adhere to the principles of
+forward-looking planning, effective resources allocation,
+rational investment and refined management in cost
+allocation, further strengthened the cost control and
+made a concrete progress.
+In 2016, the Group's operating expenses were
+RMB590.3 billion, up by 4.4% compared to the
+previous year. Operating expenses represented 83.3%
+of operating revenue, down by 1.3 percentage points
+compared to the previous year, which was a decrease
+for the first time since 2008 and continued to be
+industry-leading. Of all operating expenses, selling
+expenses declined by 3.9%, maintenance expenses,
+operating lease charges and utilities expenses totally
+declined by 1.6%, administrative expenses remained
+flat, representing a further improved cost management
+level.
+Operating
+Efficiency
+Enhanced
+2015
+2016
+Change
+Depreciation
+0.5%
+21,779
+21,668
+Interconnection
+89.1%
+138,090
+39,083
+Leased lines and network assets
+4.4%
+590,333
+565,413
+Operating expenses
+RMB million RMB million
+20,668
+8,636
+Ordinary
+Dividend
+Per Share
+CORPORATE GOVERNANCE REPORT
+The Board has adopted a Board Diversity Policy since 2013. In considering the composition of the Board, diversity
+can be considered from a number of perspectives, including professional experience and qualifications, regional and
+industry experience, educational and cultural background, skills, industry knowledge and reputation, knowledge of
+the laws and regulations applicable to the Group, gender, ethnicity, language skills and length of service etc. Such
+perspectives shall be taken into account in determining the optimal composition of the Board and be considered on a
+case-by-case basis in light of the actual circumstances of the Company.
+To ensure the timely disclosure of any change of directors' personal information, the Company has set up a
+specific communication channel with each of our directors. There is no financial, business, family or other material
+relationships among members of the Board. The Company purchases directors and officers' liabilities insurance on
+behalf of its directors and officers and reviews the terms of such insurance annually.
+ANNUAL REPORT 2016
+CORPORATE GOVERNANCE REPORT
+43
+In compliance with the requirement of Hong Kong Listing Rules, the Company has received a confirmation of
+independence from each of our INEDs, namely Mr. Frank WONG Kwong Shing, Dr. Moses CHENG Mo Chi, Mr. Paul
+CHOW Man Yiu and Mr. Stephen YIU Kin Wah, and considers them to be independent. The Board is of the view
+that they not only are able to completely fulfill their responsibilities as an INED, but will also continue to play a role
+and contribute to our Board Committees. They being our INEDs will benefit the Company and all shareholders as a
+whole.
+The directors have disclosed to the Company the positions held by them in other listed public companies or
+organizations or associated companies, and the information regarding their directorships in other listed public
+companies in the last three years is set out in the biographies of directors and senior management on pages 7 to 11
+of this annual report and on the Company's website. The Company has also received acknowledgments from the
+directors of their responsibility for preparing the financial statements and the representation by the auditors of the
+Company about their reporting responsibilities.
+All our directors confirmed that they have complied with Paragraph A.6.5 of the Corporate Governance Code with
+respect to directors' training. Throughout the financial year ended 31 December 2016, we have provided a training
+session with respect to director responsibility and obligation to our directors and management and all our directors
+attended the training.
+38
+THE BOARD COMMITTEES
+The Board currently has three principal board committees, which are the Audit Committee, the Remuneration
+Committee and the Nomination Committee, and all of which are comprised solely of INEDs. With the appointment
+and authorization of the Board, each of the board committees operates under its written terms of reference. The
+terms of reference of the board committees are available on the HKEX's and the Company's websites, and can be
+obtained from the Company Secretary upon written request.
+44
+CORPORATE GOVERNANCE REPORT
+The Board is responsible for performing the corporate governance duties and setting out the terms of reference on
+corporate governance functions, which you may review or download on our company website. In 2016, the Board
+met and discussed matters relating to the corporate governance of the Company.
+CHINA MOBILE LIMITED
+Membership
+The current members of the Company's Audit Committee are Mr. Frank WONG Kwong Shing (chairman), Dr.
+Moses CHENG Mo Chi, Mr. Paul CHOW Man Yiu and Mr. Stephen YIU Kin Wah, who are all INEDs. All members
+of our Audit Committee have many years of finance and business management experience and expertise and
+appropriate professional qualifications.
+Responsibilities
+The duties of our Audit Committee are to be primarily responsible for, among other things, making
+recommendations to the Board on the appointment, re-appointment and removal of external auditors, approving
+the remuneration and terms of engagement of external auditors, dealing with any questions of resignation
+or dismissal of such auditors; reviewing and monitoring external auditors' independence and objectivity and
+the effectiveness of the audit process in accordance with applicable standards; developing and implementing
+policies on the engagement of external auditors to provide non-audit services; monitoring the integrity of financial
+statements of the Company and the annual reports and accounts, interim report and, if prepared for publication,
+quarterly reports, and reviewing significant financial reporting judgments contained in them; and overseeing the
+Company's financial reporting system, risk management and internal control procedures.
+Work Done in 2016
+In 2016, the Audit Committee met on five occasions and the attendance of each member is disclosed on page 42
+of this annual report. In addition, the Audit Committee met with the external auditors for three times in 2016 and
+one of such meeting was held without any executive directors being present.
+In 2016, the principal work performed by the Audit Committee includes:
+•
+•
+reviewed and approved the financial statements and results announcement, the report of the directors,
+financial review and final dividend for the financial year ended 31 December 2015;
+reviewed and approved our 2015 Annual Report on Form 20-F, which was filed with the United States
+Securities and Exchange Commission ("US SEC");
+reviewed and approved the 2015 conflict mineral report to be filed with the US SEC;
+reviewed and approved the interim report, interim results announcement and interim dividend for the six
+months ended 30 June 2016;
+Audit Committee
+reviewed and approved the budgets and remuneration of the external auditors;
+All board meetings and committee meetings were attended by the directors in person. In 2016, the Board has met
+and discussed the matters relating to the annual results, interim results, dividend, continuing connected transactions,
+investment company project, adjustment of the Board and its committee members, sustainability report, policy on
+shareholder communications, the evaluation report on the effectiveness of the Board performance and others.
+1
+Executive Directors
+Mr. SHANG Bing (Chairman)
+Mr. LI Yue (CEO)
+Mr. LIU Aili
+Mr. XUE Taohai (CFO)³
+Mr. SHA Yuejia
+Board of
+directors
+Audit
+committee
+Remuneration
+committee
+2 2 2 I
+5 45
+2444
+44344
+1
+Nomination
+AGM
+222 I
+1
+1
+1
+1
+2
+Dr. Lo resigned from his position as an INED of the Company with effect from 26 May 2016.
+3
+Mr. Xue resigned from his positions as an Executive Director, Vice President and CFO of the Company with effect from 23 March 2017.
+0
+1
+1
+committee
+reviewed and approved the assessment report on the disclosure controls and procedures;
+reviewed and approved the 2015 assessment report in relation to effectiveness of compliance with section
+404 of the U.S. Sarbanes-Oxley Act of 2002 (the "SOX Act");
+reviewed and approved the 2016 project plan of internal audit department and budget for external
+engagements;
+MANAGEMENT AND EMPLOYEES
+The task of the Company's management is to implement the strategy and direction as determined by the Board, and
+to take care of day-to-day operations and functions of the Company. The division of responsibilities among our Chief
+Executive Officer and other members of the senior management is set out in the biographies of directors and senior
+management on pages 7 to 11 of this annual report and on the Company's website.
+Our management is required to adhere to certain business principles and ethics while performing management
+duties. For the purpose of promoting honest and ethical conducts and deterring wrongdoings, the Company, in
+2004, adopted a code of ethics, which is applicable to our chief executive officer, chief financial officer, deputy chief
+financial officer, assistant chief financial officer and other designated senior officers of the Group, in accordance with
+the requirements of the SOX Act. In the event of a breach of the code of ethics, the Company may take appropriate
+preventive or disciplinary actions after consultation with the Board. The code of ethics has been filed with the U.S.
+SEC as an exhibit to our annual report on Form 20-F for the financial year ended 31 December 2003, which may also
+be viewed and downloaded from our website.
+The Company established an on-going disclosure control procedure to formulate potential insider dealings. Our CEO
+and CFO have a personal obligation to maintain the effectiveness of the disclosure controls and internal controls over
+financial reporting, and to report to the Audit Committee and the external auditor any significant changes, deficiencies
+and material weaknesses in, and fraud related to, such controls. Besides, the Company provides directors' monthly
+reports to board members giving the latest development of the Company to enable them to discharge their duties.
+ANNUAL REPORT 2016
+CORPORATE GOVERNANCE REPORT
+47
+To prevent and discipline corruption, we further refined our management system and business processes to
+improve internal control and prevent risks, enhancing anti-corruption education. We have formulated the Anti-Bribery
+Guidance for employees to learn more about business bribery and how to deal with it. In 2016, we furthered our anti-
+corruption construction to establish a 4-in-1 anti-corruption system combining education, prevention, penalty and
+accountability. Meanwhile, we further deepened our auditing rectification and accountability mechanism to make
+sure all issues found in auditing process shall be raised with rectification requirement. To major violation and loss
+cases in audit findings, the Company shall hold the relevant personnel accountable.
+We revised and improved our decision-making policies and implementation method, refined our major issue
+catalogue and criteria to prevent risks in decision-making. We strengthened the inspection mechanism, especially on
+key areas such as procurement biddings to look for loopholes in our management system and resolve them and urge
+for honest operation, healthy development, good performance and shareholders' interests protection.
+For whistle blowing, the Company has set a post office box, an e-mail account (jubao@chinamobile.com), CEO
+mailbox, a telephone hotline (010-52616186), fax and other channels to encourage employees and the public to raise
+concerns about misconducts, malpractices or irregularities in any matters related to the Company. The Company will
+keep the whistleblowers' personal information strictly confidential to protect his/her rights, and carefully verify and
+investigate issues reported. During 2016, there were 860 cases of whistle-blowing, 70.23% of which were solved
+and closed.
+Indicators
+2014
+2015
+In 2017, the nomination and appointment of Mr. Stephen YIU Kin Wah and Mr. DONG Xin was conducted in
+accordance with the above standards and procedures. Their respective remuneration and director's fee were
+determined by the Board with reference to their respective duties, responsibilities, experience and prevailing market
+conditions.
+2016
+3,071
+The aggregate number of attendees of anti-corruption education
+Corruption cases handled
+461,137
+54
+1,986
+761,800
+96
+3,951
+696,106
+232
+The number of persons dismissed and fined for corruption
+87
+140
+302
+INTERNAL AUDIT
+IA Dept. conducts independent and objective supervision and assessment and provides consulting services in
+respect of the appropriateness, compliance and effectiveness of the Company's operational activities and internal
+controls by applying systematic and standardized auditing procedures and methods. The IA Dept. also assists the
+Company in improving the effectiveness of corporate governance, risk management and control process, with an
+aim to increasing its corporate value, improving its operations, promoting its sustainable and healthy development as
+well as contributing to the achievement of its strategic objectives.
+The Company and its operating subsidiaries have set up internal audit departments, which independently audit the
+business units of the Company and its operating subsidiaries. The head of the IA Dept. directly reports, four times
+a year, to the Audit Committee which, in turn, reports to the Board regularly. The Board and Audit Committee give
+instructions with respect to internal auditing. The IA Dept. regularly reports to the senior management for auditing
+resources and authorization as well as deployment of rectification. The IA Dept. has unrestricted access to the
+relevant businesses, assets, records and personnel in the course of performing their duties.
+The number of Anti-corruption education activities
+All newly-appointed directors receive a comprehensive induction of directors' duties to make sure that they have
+a proper understanding of the operations and business of the Company, and that they are fully aware of their
+responsibilities as a director, the listing rules of the stock exchanges on which the Company is listed, applicable laws
+and regulations, and the operation and governance policies of the Company. All newly-appointed directors are subject
+to re-election by shareholders at the first annual general meeting after their appointment. Every director is subject to
+retirement by rotation and needs to stand for re-election at least once every three years.
+Currently, executive directors are mainly selected internally within the Group from executives who have considerable
+years of management experience and expertise in the telecommunications industry, whereas for the identification of
+non-executive directors, importance is attached to the individual's independence as well as his or her experience and
+expertise in finance and business management, and taking into consideration the requirements of the jurisdictions
+where the Company is listed and the structure and composition of the Board. The Nomination Committee identifies,
+reviews and nominates, with diligence and care, individuals suitably qualified as board members of the Company
+before making recommendations to the Board for their final appointment.
+The Remuneration Committee is responsible for determining the remuneration packages of all executive directors
+and senior management. The remuneration package of our executive directors consists of a basic salary, a
+performance-linked annual bonus and a term incentive. The remuneration of independent non-executive directors is
+determined in part by reference to the prevailing market conditions and their workload as independent non-executive
+directors and members of the board committees of the Company. Please refer to note 10 to the consolidated
+financial statements on page 96 of this annual report for directors' and senior management's remuneration in 2016.
+approved the 2015 evaluation report on accounting and financial reporting system;
+• reviewed and approved the report on compliance with relevant laws and regulations in 2015; and
+•
+reviewed and approved various internal audit reports.
+In 2016, our Audit Committee has completed its review on risk management and internal control systems and
+their enforcement.
+ANNUAL REPORT 2016
+CORPORATE GOVERNANCE REPORT
+49
+45
+Remuneration Committee
+Membership
+The current members of the Company's Remuneration Committee are Dr. Moses CHENG Mo Chi (chairman), Mr.
+Frank WONG Kwong Shing and Mr. Paul CHOW Man Yiu, who are all INEDs.
+Responsibilities
+The duties of the Remuneration Committee are, among others, to make recommendations to the Board on the
+remuneration packages of individual executive directors and senior management, including benefits in kind,
+pension rights and compensation payments including any compensation payable for loss or termination of their
+office or appointment, and make recommendations to the Board on the remuneration of non-executive directors;
+to review and approve the management's remuneration proposals with reference to corporate goals and objectives
+resolved by the Board from time to time; to review and approve compensation payable to executive directors
+and senior management for any loss or termination of office or appointment, and compensation arrangements
+relating to dismissal or removal of directors for misconduct to ensure that they are consistent with contractual
+terms; to ensure that no director or any of his associates is involved in deciding his own remuneration; to make
+recommendations to the Board on the policy and structure for remuneration of all directors, senior management
+and employees including salaries, incentive schemes and other share option schemes, and on the establishment
+of formal and transparent procedures for developing remuneration policy; to make recommendations to the Board
+on disclosure of directors' remuneration in the annual report (if applicable) sent by the Board to the shareholders;
+to make recommendations to the Board annually on whether the shareholders shall be requested to approve the
+policies set out in the report on directors' remuneration (if applicable) at the AGM.
+Work Done in 2016
+In 2016, the Remuneration Committee met twice, during which the committee:
+reviewed and approved the revision of the remuneration package and appraisal method of the senior
+management; and
+reviewed and approved its member adjustment.
+Nomination Committee
+Membership
+The current members of the Company's Nomination Committee are Mr. Paul CHOW Man Yiu (chairman), Mr.
+Frank WONG Kwong Shing and Dr. Moses CHENG Mo Chi, who are all INEDs.
+Responsibilities
+The duties of the Nomination Committee, among other things, are to review the structure, size and composition
+(including the skills, knowledge and experience) of the Board at least annually and make recommendations on
+any proposed changes to the Board to complement the corporate strategy; to identify individuals suitably qualified
+to become board members and select or make recommendations to the Board on the selection of, individuals
+nominated for directorships; to assess the independence of independent non-executive directors; to make
+recommendations to the Board on the appointment or reappointment of directors and succession planning for
+directors, in particular the Chairman and the Chief Executive Officer.
+Work Done in 2016
+In 2016, the Nomination Committee met twice, during which the committee approved the evaluation report of the
+effectiveness of the Board performance, and approved its member adjustment.
+46
+CORPORATE GOVERNANCE REPORT
+CHINA MOBILE LIMITED
+REMUNERATION, APPOINTMENT AND ROTATION OF DIRECTORS
+Mr. Paul CHOW Man Yiu
+Dr. Moses CHENG Mo Chi
+The Company has adopted the Model Code set out in Appendix 10 to the Hong Kong Listing Rules to regulate the
+directors' securities transactions. Save and except for the interests disclosed in the report of the directors on page 56
+of this annual report, none of the directors had any other interest in the shares of the Company as of 31 December
+2016. All directors have confirmed, following enquiry by the Company, that they have complied with the Model Code
+during the period between 1 January 2016 and 31 December 2016.
+Dr. LO Ka Shui²
+Dividend
+Payout Ratio
+(HKD)
+(HKD)
+2016
+final¹
+1.243
+2.732
+46%
+interim
+1.489
+2015
+final
+1.196
+Total
+Dividend
+Per Share
+2.721
+interim
+1.525
+2014
+final
+1.380
+2.920
+43%
+interim
+1.540
+2013
+final
+1.615
+3.311
+43%
+43%
+Financial Year
+Shareholder Value and Communication
+CHINA MOBILE LIMITED
+SHAREHOLDERS
+The Company is established in Hong Kong and owned by all shareholders. Our ultimate controlling shareholder is
+CMCC, which, as of 31 December 2016, indirectly held approximately 72.72% of the total number of issued shares
+of the Company. The remaining approximately 27.28% of the total number of issued shares were held by public
+investors. During 2016, there is no change in the Articles of Association (the "Articles") of the Company, which are
+available on our website and the HKEX website.
+Shareholder Rights
+According to the Articles and the Companies Ordinance (Cap 622 of the Laws of Hong Kong) (the "Hong Kong
+Companies Ordinance"), shareholders holding the requisite voting rights may: (i) move a requisition to move a
+resolution at the AGM; (ii) requisition to convene an extraordinary general meeting (the "EGM"); and (iii) propose a
+person other than a retiring director for election as a director at a general meeting. Such details and procedures are
+available in our website.
+Shareholders may make inquiries in writing to the Board. The requisition must be deposited at our registered office at
+60/F, The Center, 99 Queen's Road Central, Hong Kong (the "Registered Office"), for the attention of the Company
+Secretary, providing sufficient contact information so that such inquiries can be properly handled. In addition,
+shareholders may also raise their concerns and suggestions in the Q&A session at our AGMs.
+I.
+Requisition to move a resolution at an AGM
+The Company holds a general meeting as its AGM every year, which is usually held in May. In accordance with
+section 615 of the Hong Kong Companies Ordinance, a requisition to move a resolution at the AGM may be
+submitted by:
+(i)
+(ii)
+any number of shareholders representing not less than one-fortieth (1/40th) of the total voting rights of all
+shareholders having the right to vote on that resolution at the AGM; or
+not less than 50 shareholders having the right to vote on that resolution at the AGM.
+The Company's established principle is to strive to create value and bring favorable returns for shareholders. Since
+our first dividend payment for the fiscal year 2002, we have made efforts to achieve a sustained and stable growth
+in dividend to create better returns for shareholders. In fact, although the Company's profitability in the recent years
+has been fluctuating, we recommend the dividend payout ratio of 46% for the full financial year of 2016.
+The requisition must identify the resolution and must be signed by all the requisitionists. The requisition must
+II.
+(i)
+6 weeks before the AGM to which the request relates; or
+(ii)
+if later, when the Notice of AGM is dispatched.
+Mr. Frank WONG Kwong Shing
+Shareholders holding not less than one-twentieth (1/20th) of the total voting rights of all the members having
+a right to vote at general meetings of the Company can deposit a requisition to convene an EGM pursuant to
+sections 566 to 568 of the Hong Kong Companies Ordinance. The requisition must state the general nature of
+the business to be dealt with at the meeting, and must be signed by the requisitionists. The requisition must
+be deposited at our Registered Office for the attention of the Company Secretary.
+ANNUAL REPORT 2016
+CORPORATE GOVERNANCE REPORT
+39
+III.
+Proposing a person other than a retiring director for election as a director at a general meeting
+If a shareholder wishes to propose a person other than a retiring director for election as a director at a general
+meeting, he/she must lodge a written notice to that effect at our Registered Office for the attention of the
+Company Secretary. The written notice must state the full name and biographical details of the person
+proposed for election as a director as required by Rule 13.51(2) of the Hong Kong Listing Rules and signed
+by such shareholder. A written notice signed by the person proposed for election as a director indicating his/
+her willingness to be elected must also be lodged with the Company. The above shall be dispatched during a
+period of not less than seven days commencing no earlier than the dispatch of the notice of the AGM and at
+least seven days before the date of the AGM.
+For requesting the Company to circulate to shareholders a statement with respect to a matter mentioned in a
+proposed resolution or any other business to be dealt with at a general meeting, shareholders are requested to
+follow the requirements and procedures as set out in section 580 of the Hong Kong Companies Ordinance.
+be deposited at the Registered Office, for the attention of the Company Secretary, not later than:
+interim
+Requisition to convene an EGM
+2012
+11
+Shareholders' Calendar
+The following table sets out the tentative key dates for our shareholders for the financial year ending 31 December
+2017. Such dates are subject to change pursuant to actual situations. Shareholders should note our announcements
+issued from time to time.
+FY 2017 Shareholders' Calendar
+23 March
+12 April
+13 April
+25 May
+End of June
+Mid-August
+End of September
+Announcement of final results and final dividend for the financial year ended 31 December
+2016
+41
+Upload of 2016 annual report on the websites of the Company and the HKEX
+Dispatch of 2016 annual reports to shareholders
+Payment of final dividend for the financial year ended 31 December 2016
+Announcement of interim results and interim dividend for the six months ending 30 June
+2017, if any
+THE BOARD OF DIRECTORS AND THE BOARD COMMITTEES
+The Board of Directors
+The key responsibilities of the Board include, among others, formulating the Group's overall strategies, setting
+management targets, monitoring internal controls and financial management, supervising the performance of our
+management, developing and reviewing the policies and practices of corporate governance (the Terms of Reference
+of its corporate governance function are available on the websites of our Company and the HKEX), while day-to-day
+operations and management are delegated by the Board to the executives of the Company. The Board operates in
+accordance with established practices (including those relating to reporting and supervision).
+The Board currently comprises nine directors, namely Mr. SHANG Bing (Chairman), Mr. LI Yue (Chief Executive
+Officer), Mr. LIU Aili, Mr. SHA Yuejia and Mr. DONG Xin as executive directors, and Mr. Frank WONG Kwong Shing,
+Dr. Moses CHENG MO Chi, Mr. Paul CHOW Man Yiu and Mr. Stephen YIU Kin Wah as INEDs. The list of directors
+and their role and function is available on the websites of our Company and HKEX. The biographies of our directors
+are presented on pages 7 to 11 of this annual report and on our website.
+As proposed by the Nomination Committee of the Company and after review and approval by the Board, Mr. Stephen
+YIU Kin Wah has been appointed as an INED and Mr. DONG Xin as an Executive Director, Vice President and CFO of
+the Company with effect from 23 March 2017. Dr. LO Ka Shui has resigned from his positions as an INED as well as
+the Chairman and a member of the Nomination Committee and Remuneration Committee of the Company by reason
+of his desire to focus on his own company's businesses with effect from 26 May 2016. With effect from 23 March
+2017, Mr. XUE Taohai resigned from his positions as an Executive Director, Vice President and CFO of the Company
+by reason of retirement. Both Dr. LO and Mr. Xue have confirmed that there is no disagreement with the Board
+and that there is no matter relating to their respective resignation that needs to be brought to the attention of the
+shareholders of the Company.
+42
+CORPORATE GOVERNANCE REPORT
+CHINA MOBILE LIMITED
+Board meetings are held at least once a quarter and as and when necessary. Directors are requested to declare their
+direct or indirect interests, if any, in any proposals or transactions to be considered by the Board at Board meetings
+and withdraw from the meetings as appropriate. During the financial year ended 31 December 2016, the Board met
+on four occasions and the directors' attendances at the meetings are as follows:
+1.696
+INEDS
+2017 AGM
+CORPORATE GOVERNANCE REPORT
+Payment of interim dividend for the six months ending 30 June 2017, if any
+Pending approval at the AGM.
+ANNUAL REPORT 2016
+1.778
+final
+interim
+3.411
+43%
+1.633
+1
+To ensure the effective communications between the Company and its shareholders, we have formulated the
+communication policies with shareholders. We regularly review the policies to ensure its effectiveness. We have
+established an investor relations department, dedicated to provide necessary information and services to, and
+communicate with, shareholders and investors and other participants in the capital market, to maintain an active
+dialogue with them and make sure they are fully informed of the Company's operation and development.
+We use a number of formal channels to report to shareholders on the performance and operations of the Company,
+particularly through our annual and interim reports. Generally, when announcing interim results, annual results or
+any major transactions in accordance with the relevant regulatory requirements, the Company arranges investment
+analyst conferences, press conferences and investor telephone conferences to explain the relevant results or major
+transactions to the shareholders, investors and the general public, listen to their opinions and address any questions
+that they may have. In addition, the Company adheres to the practice of voluntarily disclosing on a quarterly basis
+certain key, unaudited operational and financial data, and on a monthly basis the net increase in the number of
+customers on its website to further increase the Group's transparency and to provide shareholders, investors and
+the general public with additional information so as to facilitate their understanding of the Group's operations.
+40
+CORPORATE GOVERNANCE REPORT
+The Company maintains close communication with investors through investment conferences, one-on-one meetings,
+video-conferencing and other forms of exchange interaction to timely deliver our operating conditions to the capital
+markets. In 2016, our management attended 13 investor conferences and 222 routine investor meetings, met with
+538 investment institutions and 702 investors in total. We will continue our efforts to enhance our investor relations
+work.
+The Company also attaches high importance to the AGMs, and makes substantial efforts to enhance communications
+between the Board and the shareholders. At the AGMs, the Board always makes efforts to fully address the
+questions raised by shareholders. In 2016, we held our AGM on one occasion on 26 May 2016 (Thursday) in the
+Conference Room, Conrad Hotel, Pacific Place, 88 Queensway, Hong Kong. The major items discussed and the
+percentage of votes cast in favor of the resolutions are set out as follows:
+1.
+CHINA MOBILE LIMITED
+3.
+All resolutions were duly passed at the 2016 AGM. As at the date of the AGM, the number of issued shares of the
+Company was 20,475,482,897 shares, which was the total number of shares entitling the holders to attend and
+vote for or against all the resolutions proposed at the AGM. No shareholders were required to abstain from voting
+on the resolutions proposed at the AGM. Hong Kong Registrars Limited, the share registrar of the Company, acted
+as scrutineer for vote-taking at the AGM. Poll results were announced at the meeting and on the websites of the
+Company and the HKEX on the day of the AGM.
+To extend the general mandate granted to the directors of the Company to issue, allot and deal with shares by
+the number of shares bought back (85.2916%).
+To give a general mandate to the directors of the Company to issue, allot and deal with additional shares in the
+Company not exceeding 20% of the number of issued shares (84.6627%);
+To give a general mandate to the directors of the Company to buy back shares in the Company not exceeding
+10% of the number of issued shares (99.9123%);
+The re-appointment of PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP (hereinafter
+collectively as "PwC") as auditors of the Group for Hong Kong financial reporting and US financial reporting
+purposes, respectively, and authorizing the Board to fix their remuneration (99.9326%);
+2.
+The declaration of a final dividend for the year ended 31 December 2015 (99.9992%);
+The re-election of Mr. SHANG Bing, Mr. LI Yue, Mr. SHA Yuejia, Mr. LIU Aili as executive director (88.8288%
+to 99.6082%);
+The approval of the audited financial statements and the reports of the directors and auditors for the year
+ended 31 December 2015 (99.9984%);
+7.
+6.
+5.
+4.
+CORPORATE GOVERNANCE REPORT
+42
+52
+Section 303A.01 of the NYSE Listed Company Manual provides that listed companies must have a majority of
+independent directors. As a listed company in Hong Kong, the Company is subject to the requirement under the
+Hong Kong Listing Rules that at least one-third of its board be independent non-executive directors as determined
+under the Hong Kong Listing Rules. The Company has 4 independent non-executive directors out of a total of 9
+directors. The Hong Kong Listing Rules set forth standards for establishing independence, which differ from those
+set forth in the NYSE Listed Company Manual.
+As a foreign private issuer (as defined in Rule 3b-4 under the U.S. Securities Exchange Act of 1934, as amended),
+we are permitted to follow home country practices in lieu of some of the corporate governance practices required
+to be followed by U.S. companies listed on the NYSE. As a result, our corporate governance practices differ in some
+respects from those required to be followed by U.S. companies listed on the NYSE.
+In accordance with the requirements of section 303A.11 of the NYSE Listed Company Manual, the following is a
+summary of the significant differences between the Company's corporate governance practices and those required
+to be followed by U.S. companies under the NYSE's listing standards.
+CHINA MOBILE LIMITED
+SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATE GOVERNANCE
+PRACTICES OF THE COMPANY AND THE CORPORATE GOVERNANCE PRACTICES
+REQUIRED TO BE FOLLOWED BY U.S. COMPANIES UNDER THE NYSE'S LISTING
+STANDARDS
+中国移动学院
+Our IA Dept. conducts annual evaluation with respect to the effectiveness of disclosure internal control and
+procedures and its performance, and issues audit reports. Depending on such reports, the Board and the
+management shall make written statements with respect to our annual report on Form 20-F and take personal
+responsibilities in accordance with the requirements of the US Securities Act. The Disclosure Committee can revise
+the disclosure internal control and procedure in accordance with its performance and the development of relevant
+laws with approval of the senior management. The revised internal control procedure and articles shall be circulated
+to all departments and subsidiaries within the Group.
+Under the circumstances where any department or officer are in breach of disclosure procedures and internal control
+resulting in reporting or disclosure errors, or in breach of disclosure related laws and regulations, the Company shall
+hold the relevant personnel accountable. Members of the Disclosure Committee, heads of our IA Dept. and other
+relevant departments and each of our subsidiaries shall give confirmations annually and take personal responsibilities
+with respect to their disclosure duties.
+According to the Hong Kong Listing Rules and United States Securities Act, since 2003, the Company has
+implemented the information disclosure internal control and procedures. We have established the Disclosure
+Committee, including our Chairman, chief executive officer, chief financial officer and heads of main functional
+departments. Empowered by the Board, the Disclosure Committee is responsible for organizing and coordinating the
+routine reporting and disclosure job to prompt timely, fair, truthful and complete disclosure of information, ensure
+good corporate governance and transparency, properly get back to the investors, analysts and media inquiries, to
+prevent our share price volatility caused by error messages.
+INFORMATION DISCLOSURE AND INSIDER DEALINGS
+51
+CORPORATE GOVERNANCE REPORT
+ANNUAL REPORT 2016
+Section 303A.03 of the NYSE Listed Company Manual provides that listed companies must schedule regular
+executive sessions in which non-management directors meet without management participation. As a listed
+company in Hong Kong, we are subject to the requirement under the Hong Kong Listing Rules that our Chairman
+should hold meetings at least annually with the non-executive directors (including INEDs) without the presence of
+executive directors.
+All disclosure of material information relating to the Company is made through the unified leadership and
+management of the Board, with the Company's management performing its relevant duties. The Company has
+performed an annual review of the effectiveness of the Company's disclosure controls and procedures, and
+concluded that, as of 31 December 2016, the Company's disclosure controls and procedures were effectively
+executed at a reasonable assurance level.
+The Company attach great importance to the handling of insider information. In compliance with the provisions of
+Hong Kong Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO"), the Company
+also set up rules and black-out periods on directors, management and employees in dealing in the shares of the
+Company or exercising share options while they are in possession of inside information. In about every six months,
+staff in our Hong Kong office are required to sign a duty of confidentiality and prohibition against insider dealing.
+Unauthorized use of confidential or inside information for profits is strictly prohibited to prevent violation of laws and
+regulations and internal disciplines. In general, any authorized speaker from the Company only makes clarification
+and explanation on information already available in the market, avoiding any unpublished inside information. Before
+any external interview, such speaker shall seek verification from the relevant department about any information to be
+disclosed.
+Section 303A.04 of the NYSE Listed Company Manual provides that the nominating/corporate governance committee
+of a listed company must have a written charter that addresses the committee's purpose and responsibilities, which
+include, among others, the development and recommendation of corporate governance guidelines to the listed
+company's board of directors. Our Board is responsible for performing the corporate governance duties, including
+developing and reviewing our policies and practices of corporate governance.
+In 2016, the number of users of our online learning platform China Mobile University reached 395,000, of whom
+278,000 users accessed the platform on mobile phones, with a total of 17.56 million learning hours. At the same
+time, the Group focused on the common learning needs of employees and developed the "New Business" series
+of courses via face-to-face training, live broadcast, learning zone and other modes. Such courses were delivered
+480,000 times, effectively improving our employees' overall level of knowledge and skills and enhancing the
+Company's innovation and development capabilities. In the same year, China Mobile University received awards
+such as "China's Best Enterprise University Award" and "Implementation Excellence Award in China E-Learning
+Industry", and was highly recognized and widely praised for its achievements in enterprise training and development.
+Section 303A.10 of the NYSE Listed Company Manual provides that listed companies must adopt and disclose a
+code of business conduct and ethics for directors, officers and employees. While the Company is not required, under
+the Hong Kong Listing Rules, to adopt such similar code, as required under the SOX Act, the Company has adopted
+a code of ethics that is applicable to the Company's principal executive officers, principal financial officers, principal
+accounting officers or persons performing similar functions.
+Based on the evaluation conducted by the management of the Company, the management believes that, as of 31
+December 2016, the Company's internal control over financial reporting was effective which provided reasonable
+assurance regarding the reliability of financial reporting and the preparation of financial statements for reporting
+purposes in accordance with generally accepted accounting principles.
+卓越实施奖
+2016中国E-learning行业年度评选
+中国最佳企业大学
+2016年度
+授予:中国移动学院
+评委机构:
+In respect of training management, first, we standardized our training management system, refined our training
+management and promoted the use of our centralized management system for group training. Second, we enhanced
+our reshaping capabilities and strengthened our training for technical backbone personnel in areas such as 4G
+marketing and operations, information and communications technology (ICT) transition, digital services, broadband
+networks and so on, thereby supporting our strategic transformation and innovative development.
+Section 303A.07 of the NYSE Listed Company Manual provides that if an audit committee member simultaneously
+serves on the audit committee of more than three public companies, and the listed company does not limit the
+number of audit committees on which its audit committee members serve to three or less, then in each case, the
+board of directors must determine that such simultaneous service would not impair the ability of such member to
+effectively serve on the listed company's audit committee and disclose such determination. The Company is not
+required, under the applicable Hong Kong law, to make such determination.
+In respect of remuneration incentive, first, we reformed our remuneration system. With a performance-oriented core,
+we improved the efficiency of our remuneration resources allocation. Second, we continued to improve our hierarchical
+and categorized remuneration incentive system. Third, we allocated more resources to our core backbone staff and
+enhanced the effectiveness of our remuneration incentives.
+In respect of talent team construction, first, we enhanced the intensity of our recruitment of key talents. We
+implemented an open recruitment system, established a multi-level staff recruitment system and launched a
+standardized written test for campus recruitment, thereby building up an open, fair and impartial recruitment
+atmosphere. Second, we selected and recommended talents with expertise. We seriously carried out various types
+of expert selection, optimized our selection procedures, improved our selection criteria and enhanced the efficiency
+of our selection.
+In 2016, our human resources work closely adhered to the Group's strategies and business development with
+"flexible structure, good quality, high efficiency and strong vitality" as the focus and "improving personnel selection,
+reforming personnel structure, optimizing incentive mechanism, strengthening talent retention and reshaping
+staff skills" as the emphasis, continuously improving our organizational capability and work efficiency and actively
+promoting the Group's transformational development.
+53
+Human Resources Development
+ANNUAL REPORT 2016
+We will closely study the development of corporate governance practices among the world's leading corporations,
+future evolution of the relevant regulatory environment and the requirements of the investors on an ongoing basis.
+We will also review and enhance our corporate governance procedures and practices from time to time so as to
+ensure the long-term sustainable development of the Company.
+CONTINUOUS EVOLVEMENT OF CORPORATE GOVERNANCE
+Section 303A. 12(a) of the NYSE Listed Company Manual provides that each listed company's chief executive officer
+must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate
+governance listing standards. The Company's chief executive officer is not required, under the applicable Hong Kong
+law, to make similar certifications.
+In respect of personnel structure reform, first, we thoroughly reformed our personnel structure. We fully implemented
+the national policy requirements by completing our personnel restructuring within the statutory transition period.
+Second, we continued to optimize our human resources structure. We strictly controlled the number of employees in
+our traditional business and gradually reduced the number of employees in low-end and low-efficiency areas. Third, we
+achieved human resources synergies. We promoted the centralization of provincial operations, internally transferred
+our network calls businesses and organized incubation-based innovation and start-up projects.
+We established a hierarchical top-down risk assessment mechanism, relying on the strategic level risk assessment
+(material risk assessment), the management level risk assessment (major projects risk assessment) and the
+operational level risk assessment (procedure risk assessment), to assist the management to acknowledge risk
+information in a timely manner in order to make a reasonable decision. Based on risk assessment, we established a
+three-tier internal controls of "the top level internal control system, the internal control professional system and the
+internal control practices guidelines", which brought the control requirements to the whole process of marketing,
+production and management. Base on our business operation, we focus on high risk and key management areas and
+perform risk assessment, so as to enforce our internal control requirement into our daily operation. Meanwhile, we
+assigned specific responsibilities to individuals and input the control requirements in our IT systems to strengthen the
+internal controls. And through multiple internal and external supervision and inspections, including self-assessment,
+management evaluation, external audit, etc., we effectively improved the execution efficiency and effectiveness of
+our internal controls.
+In 2016, the Group engaged PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP as statutory
+auditors of the Group for Hong Kong financial reporting and U.S. financial reporting purposes, respectively. The
+principal services provided by PwC included:
+The management of the Company reports to Audit Committee annually about the building-up and performance of
+its risk management and internal control systems, including interim and annual evaluation reports, and receives
+guidance and supervision from Audit Committee. In 2016, the Company has received the management affirmation
+with respect to the effectiveness of the risk management and internal control systems.
+Apart from providing the above-mentioned audit services to the Group, the external auditors also provided other non-
+audit services to the Group, which were permitted under section 404 of the SOX Act and pre-approved by the Audit
+Committee.
+audit of the effectiveness of the Group's internal control over financial reporting as of 31 December 2016.
+audit of annual consolidated financial statements of the Group and annual financial statements of its
+subsidiaries; and
+review of interim consolidated financial information of the Group;
+.
+EXTERNAL AUDITORS
+49
+CORPORATE GOVERNANCE REPORT
+The following table sets forth the types of, and fees for, the principal audit services and non-audit services provided
+by the external auditors (please refer to note 6 to the consolidated financial statements for details):
+ANNUAL REPORT 2016
+We report regularly to the Board and Audit Committee with respect to the building up of our internal audit
+organization, its human resources and qualifications, staff training, annual audit plan and budget, and the audit
+results. In 2016, we focused our audit on the establishment plan of our internal audit branches, the main findings
+of each audit projects and their rectification. We provide specific guidance on audit focus, rectification advice, team
+building and others to ensure the effectiveness of internal audit functions.
+In 2016, the IA Dept., focusing on high-risk areas of the operation, further strengthened auditing on data products,
+important information system, procurement tender, cooperation businesses and newly-established subsidiaries, to
+prevent major risks and identify new risks. We expanded the application of remote real-time audit technology and
+further rectified the mechanism with respect to some common issues to plug loopholes. With the expansion of our
+business, more and more subsidiaries have been set up in recent years. In 2016, we actively improved the internal
+audit organization and set up internal audit branches in three cities, which greatly strengthened our audit capacity and
+centralization, and further strengthened the audit function and independency.
+The IA Dept. makes improvement recommendations in respect of its findings in the course of the audits and
+requests the management to undertake and to confirm the implementation plan, the methods and the timing. It
+regularly monitors the status of the implementation of the recommendations to ensure their completion.
+The IA Dept. establishes an internal audit scope and framework and carries out risk investigations on an annual
+basis. According to the results of the risk investigations, the IA Dept. formulates an internal audit project rolling plan
+and an annual audit plan and, together with the Audit Committee, reviews and approves the annual audit plan and
+resources allocation. The annual audit plan of the internal audit department covers various areas, namely financial
+audit, internal control audit, risk assessment, audit investigation and consultancy services. For financial audit, the
+IA Dept. audits and assesses the truthfulness, accuracy, compliance and efficiency of the Company's financial
+activities and financial information as well as the management and utilization of the Company's capital and assets.
+For internal control audit, the IA Dept. audits and assesses the effectiveness in the design and implementation of the
+Company's internal control system. According to the requirements under the Corporate Governance Code of Hong
+Kong Listing Rules, section 404 of the SOX Act and Mainland China laws and regulations, the IA Dept. organizes and
+performs audit assessment on the internal control over financial and non-financial reporting of the Group covering
+all material areas of financial, operation and compliance controls, on an annual basis, to provide assurance for the
+Company's management in its issuance of the internal control assessment report. The IA Dept. shall report to the
+senior management and the Board on an interim and annual basis. At the same time, the IA Dept. carries on special
+projects and investigations in response to requests from the Company's management or the Audit Committee or if
+otherwise required. In addition, without prejudice to its independence, if requested by the Company's management
+and as required by business needs, the IA Dept. provides management advice or consultancy services by making use
+of audit resources and audit information to facilitate the Company's decision-making and operational management.
+CHINA MOBILE LIMITED
+CORPORATE GOVERNANCE REPORT
+48
+JACENT
+In 2017, the IA Dept. will continue focusing on new tasks of strategy transformation to find in-depth risk and
+plug management loopholes, and promoting process control and mechanism optimization to further enhance the
+effectiveness of internal audit.
+Our management is responsible for establishing and maintaining internal control over financial reporting. We adopted
+the control criteria framework set out in the Internal Control Integrated Framework issued by the Committee of
+Sponsoring Organizations of the Treadway Commission (COSO) (2013). In compliance with the provisions and
+requirements under section 404 of the SOX Act and the CP issued by HKEX, we refined our routine management
+mechanism of internal controls, in establishing a stringent internal control system over financial reporting.
+Audit fees 4
+2015
+Our Audit Committee under the Board is responsible for conducting regular reviews of the effectiveness of the
+Group's risk management and internal control systems to reasonably ensure that the Company is operating legally
+and the assets are safeguarded and to ensure the accuracy and reliability of the financial information that the
+Company employs in its business or releases to the public. The said systems are designed to manage rather than
+eliminate the risk of failure to meet business targets and to make reasonable but not absolute assurances with
+respect to material misrepresentations or losses. As of 31 December 2016, our Audit Committee has evaluated
+the effectiveness of the Group's risk management and internal control systems, covering all important aspects
+including financial, operational and compliance internal controls, to ensure we provide sufficient resources, staff
+qualification and experience, training courses and budget in accounting, internal audit and financial reporting. Based
+on such review, we consider the Group's risk management and internal control systems to be effective. Our Audit
+Committee under the Board is responsible for, among other things, monitoring the Company's financial reporting
+procedures, internal controls and risk management.
+RISK MANAGEMENT AND INTERNAL CONTROLS
+CHINA MOBILE LIMITED
+CORPORATE GOVERNANCE REPORT
+50
+In 2016, we were recognized on the Dow Jones Sustainability Emerging Markets Index, and had been on the DJSI
+family for nine consecutive years. China Mobile was the first and only company from Mainland China to be awarded
+a position on CDP's Climate A List 2016.
+Good corporate governance practices require due attention to the impact of our business decisions on our
+shareholders as well as other relevant stakeholders such as customers, local communities, industry peers and
+regulatory authorities. Our sustainability report for the year of 2016 (the "Sustainability Report"), which is issued
+together with this annual report, highlights our philosophy of corporate social responsibility and our performance in
+the areas of social and environmental management in 2016. This annual report and the Sustainability Report illustrate
+our efforts and development in the areas of industry development, community advancement and environmental
+protection and also explain how we have fulfilled our obligations to our employees, customers, environment, local
+communities and other stakeholders.
+OTHER STAKEHOLDERS
+Non-audit services fees 5
+Including the fees rendered for the audit of internal control over financial reporting as required by section 404 of the SOX Act.
+Including the fees for tax compliance and advisory services, risk assessment and compliance advisory services and performance improvement
+and business process optimization advisory services.
+4
+10
+5
+103
+97
+RMB million
+RMB million
+2016
+5
+BAUER
+Percentage of
+total number of
+中教新媒
+REPORT OF DIRECTORS
+ANNUAL REPORT 2016
+The calculation is based on the total number of issued ordinary shares of the Company (i.e. 20,475,482,897 ordinary shares) as at 31 December
+2016, and rounded off to two decimal places.
+0.00%
+0.00%
+150,000
+400,000
+of issued shares
+the total number
+Ordinary
+shares held
+Beneficial owner
+Beneficial owner
+Capacity
+57
+Moses CHENG Mo Chi
+Director
+Percentage of
+Long Positions in the Shares and Underlying Shares of the Company
+Certain directors of the Company personally held ordinary shares of the Company. Details of the directors' holding of
+ordinary shares of the Company as at 31 December 2016 are as follows:
+DIRECTORS' AND CHIEF EXECUTIVE'S INTEREST AND SHORT POSITIONS IN SHARES,
+UNDERLYING SHARES AND DEBENTURES
+Pursuant to Article 159 of the Company's Articles of Association, every director or other officer of the Company shall
+be indemnified out of the assets of the Company against all liabilities (to the extent permitted by the Hong Kong
+Companies Ordinance) sustained or incurred by such director or officer in or about the execution of his office or
+otherwise in relation thereto. In addition, the Company has purchased directors and officers' liabilities insurance on
+behalf of its directors and officers.
+PERMITTED INDEMNITY PROVISION
+No transaction, arrangement or contract of significance to which the Company or any of its subsidiaries has been
+a party and in which a director of the Company or an entity connected with a director of the Company is or was
+materially interested, whether directly or indirectly, subsisted at the end of the year or at any time during the year.
+DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+Save as disclosed herein, there are no other matters relating to the re-election of the Directors for Re-election that
+need to be brought to the attention of the shareholders of the Company nor is there any information to be disclosed
+pursuant to any of the requirements of Rule 13.51(2) of the Hong Kong Listing Rules.
+Frank WONG Kwong Shing
+None of the Directors for Re-election has an unexpired service contract which is not determinable by the Company
+or any of its subsidiaries within one year without payment of compensation, other than under normal statutory
+obligations.
+DIRECTORS', CHIEF EXECUTIVE'S AND EMPLOYEES' RIGHTS TO ACQUIRE SHARES
+SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT
+POSITIONS IN SHARES AND UNDERLYING SHARES
+telecommunications service charges, prices of transmission towers and spare parts and the charges payable
+for installation and maintenance services in respect of transmission towers paid by the Group to CMCC were
+below 0.1% of each of the applicable percentage ratios set out in Rule 14.07 of the Hong Kong Listing Rules.
+The telecommunications service charges, prices of transmission towers and spare parts and the charges
+payable for installation and maintenance services in respect of transmission towers are determined with
+reference to and cannot exceed relevant standards laid down and revised from time to time by the government
+of the PRC. Where there are no government standards, the prices and charges are determined according to
+market rates; the charges in respect of telecommunications services provided by the Group payable by CMCC
+and its subsidiaries to the Group did not exceed RMB1,800 million;
+(2)
+(1) rental and property management service charges paid by the Group to CMCC did not exceed RMB2,800
+million. The charges payable by the Group in respect of properties owned by CMCC and its subsidiaries are
+determined with reference to market rates whilst the charges payable in respect of properties which CMCC
+or its subsidiaries lease from third parties and sub-let to the Group are determined according to the actual rent
+payable by CMCC or its subsidiaries to such third parties together with the amount of any tax payable;
+For the financial year ended 31 December 2016, the following continuing connected transactions (the "Continuing
+Connected Transactions") have not exceeded their respective annual caps:
+Details of the continuing connected transactions are set out in note 36 to the consolidated financial statements.
+Continuing Connected Transactions
+CONNECTED TRANSACTIONS
+Apart from the foregoing, as at 31 December 2016, no other person (other than a director or the chief executive of
+the Company) had any interests or short positions in the shares and underlying shares of the Company as recorded
+in the register required to be kept under section 336 of the SFO, or as otherwise notified to the Company and the
+Stock Exchange.
+Note: In light of the fact that CMCC and CMHK (Group) directly or indirectly control one-third or more of the voting rights in the shareholders'
+meetings of CMHK (BVI), in accordance with the SFO, the interests of CMHK (BVI) are deemed to be, and have therefore been included in, the
+interests of CMCC and CMHK (Group).
+72.72%
+At no time during the year ended 31 December 2016 was the Company or any of its holding companies or
+subsidiaries a party for any arrangement to enable the directors or chief executive of the Company or any of their
+spouses or children under eighteen years of age to acquire benefits by means of the acquisition of shares in or
+debentures of the Company or any other body corporate.
+72.72%
+issued shares
+14,890,116,842
+中国E-learning行业年度评选组委会
+14,890,116,842
+14,890,116,842
+indirectly
+Ordinary shares held
+directly
+(ii) China Mobile (Hong Kong) Group Limited ("CMHK (Group)")
+(iii) China Mobile Hong Kong (BVI) Limited ("CMHK (BVI)")
+(i) China Mobile Communications Corporation ("CMCC")
+Long Positions in the Shares and Underlying Shares of the Company
+The Company has been notified of the following interests in the Company's issued shares as at 31 December 2016
+amounting to 5% or more of the ordinary shares in issue:
+72.72%
+The service contracts of all the Directors for Re-election do not provide for a specified length of service and each of
+such directors will be subject to retirement by rotation and re-election at annual general meetings of the Company
+every three years. Each of the Directors for Re-election is entitled to an annual director's fee of HK$180,000 as
+proposed by the Board and approved by the shareholders of the Company. Director's fees are payable on a time pro-
+rata basis for any non-full year's service. Mr. DONG Xin has voluntarily waived his director's fees for the year ended
+31 December 2017. The remuneration of the Directors for Re-election has been determined with reference to the
+individual's duties, responsibilities, experience and prevailing market conditions. Details of the remuneration of the
+directors of the Company are set out in note 10 to the consolidated financial statements.
+Apart from those disclosed herein, as at 31 December 2016, none of the directors nor the chief executive of the
+Company had any interests or short positions in any of the shares, underlying shares or debentures of the Company
+or any of its associated corporations (within the meaning of Part XV of the SFO) that is recorded in the register
+required to be kept under section 352 of the SFO or any interests otherwise notified to the Company and the Stock
+Exchange pursuant to the Model Code.
+REPORT OF DIRECTORS
+55
+REPORT OF DIRECTORS
+ANNUAL REPORT 2016
+The Board recommends the dividend payout ratio of 46% for the full financial year of 2016. The Board recommends
+payment of a final dividend of HK$1.243 per share, together with the interim dividend of HK$1.489 per share paid
+earlier, this amounts to an aggregate dividend payment of HK$2.732 per share for the full 2016 financial year. Taking
+into account the Company's financial position, its ability to generate cash flow and its capital demands for future
+development, the Company will maintain a stable dividend payout ratio for the full financial year of 2017, striving to
+attain a stable-to-rising dividend payout ratio to create higher shareholder value.
+DIVIDENDS
+The profit of the Group for the year ended 31 December 2016 and the financial conditions of the Company and the
+Group as at that date are set out in the consolidated financial statements on pages 71 to 137.
+FINANCIAL STATEMENTS
+At no time during the year ended 31 December 2016 have the directors, their close associates or any shareholder of
+the Company (which to the knowledge of the directors owns more than 5% of the number of issued shares of the
+Company) had any interest in these five largest suppliers.
+Purchases from the largest supplier for the year represented 11% of the Group's total purchases. The five
+largest suppliers accounted for an aggregate of 36% of the Group's purchases in 2016. Purchases for the Group
+include network equipment purchases, leasing of transmission lines and payments in relation to interconnection
+arrangements. Purchases from suppliers, other than suppliers of leased lines and network equipment and
+interconnection arrangements, were not material to the Group's total purchases.
+The Group's aggregate revenue with its five largest customers did not exceed 30% of the Group's total revenue in
+2016.
+DONATIONS
+MAJOR CUSTOMERS AND SUPPLIERS
+PRINCIPAL ACTIVITIES
+The directors take pleasure in submitting their annual report together with the audited financial statements for the
+year ended 31 December 2016.
+CHINA MOBILE LIMITED
+Report of Directors
+54
+54
+2016年4月
+CHINA MOBILE LIMITED
+SUBSIDIARIES AND INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
+Particulars of the Company's subsidiaries and the Group's investments accounted for using the equity method as at
+31 December 2016 are set out in notes 18 and 19, respectively, to the consolidated financial statements, and the list
+of directors of each of the Company's subsidiaries is available on the Company's website.
+The revenue of the Group during the financial year consisted primarily of revenue generated from the provision of
+mobile telecommunications services.
+Donations made by the Group during the year amounted to RMB66,762,930 (2015: RMB55,655,059).
+The Group's principal activity is providing mobile telecommunications and related services in 31 provinces,
+autonomous regions and directly-administered municipalities in Mainland China and Hong Kong. The principal activity
+of the Company is investment holding.
+Changes to the property, plant and equipment of the Group during the year ended 31 December 2016 are set out in
+note 14 to the consolidated financial statements.
+PROPERTY, PLANT AND EQUIPMENT
+56
+In accordance with Article 99 of the Company's Articles of Association, Mr. DONG Xin and Mr. Stephen YIU Kin Wah
+will hold office until the forthcoming annual general meeting of the Company and will then be eligible for re-election.
+Besides, in accordance with Article 95 of the Company's Articles of Association, Mr. Frank WONG Kwong Shing,
+Dr. Moses CHENG Mo Chi and Mr. Paul CHOW Man Yiu will retire by rotation at the forthcoming annual general
+meeting of the Company and, being eligible, offer themselves for re-election.
+Stephen YIU Kin Wah (appointed on 23 March 2017)
+Paul CHOW Man Yiu
+Frank WONG Kwong Shing
+LO Ka Shui (resigned on 26 May 2016)
+Independent Non-Executive Directors:
+DONG Xin (appointed on 23 March 2017)
+SHA Yuejia
+Moses CHENG Mo Chi
+LIU Aili
+SHARE CAPITAL
+XUE Taohai (resigned on 23 March 2017)
+Details of the bonds of the Group are set out in note 32 to the consolidated financial statements.
+RESERVES
+Changes to the reserves of the Group during the year are set out in the consolidated statement of changes in
+equity. Changes to the reserves of the Company during the year are set out in note 34 to the consolidated financial
+statements.
+DIRECTORS
+Details of the Company's share capital are set out in note 34 to the consolidated financial statements.
+BONDS
+The directors of the Company during the financial year were:
+LI Yue
+The biographies of the directors proposed for re-election at the forthcoming annual general meeting ("Directors
+for Re-election") are set out on pages 7 to 11 of this annual report. Except as disclosed in such biographies, the
+Directors for Re-election have not held any other directorships in any listed public companies in the last three years.
+Further, except as noted in the biographies, none of the Directors for Re-election is connected with any directors,
+senior management or substantial or controlling shareholders of the Company and, except as disclosed in the
+paragraph headed "Directors' and Chief Executive's Interest and Short Positions in Shares, Underlying Shares and
+Debentures" below, none of them has any interests in the shares of the Company within the meaning of Part XV of
+the SFO.
+Executive Directors:
+SHANG Bing (Chairman)
+(a)
+"THAT a general mandate be and is hereby unconditionally given to the directors of the Company to exercise
+full powers of the Company to allot, issue and deal with additional shares in the Company (including the making
+and granting of offers, agreements and options which might require shares to be allotted, whether during the
+continuance of such mandate or thereafter) provided that, otherwise than pursuant to (i) a rights issue where
+shares are offered to shareholders on a fixed record date in proportion to their then holdings of shares; (ii)
+the exercise of options granted under any share option scheme adopted by the Company; or (iii) any scrip
+dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend in
+accordance with the articles of association of the Company, the aggregate number of the shares allotted shall
+not exceed the aggregate of:
+CHINA MOBILE LIMITED
+(b)
+(1) the conclusion of the next annual general meeting of the Company; or
+NOTICE OF THE ANNUAL GENERAL MEETING
+62
+62
+the revocation or variation of the authority given under this resolution by ordinary resolution of the
+shareholders of the Company in general meeting."
+the expiration of the period within which the next annual general meeting of the Company is
+required by law to be held; or
+(3)
+(2)
+7.
+To re-appoint PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP as the auditors of the
+Group for Hong Kong financial reporting and U.S. financial reporting purposes, respectively, and to authorize the
+directors to fix their remuneration.
+(c)
+(b) the aggregate number of Shares which may be bought back on The Stock Exchange of Hong Kong
+Limited (the "Stock Exchange") or any other stock exchange on which securities of the Company
+may be listed and which is recognized for this purpose by the Securities and Futures Commission of
+Hong Kong and the Stock Exchange pursuant to the approval in paragraph (a) above shall not exceed or
+represent more than 10 per cent. of the number of issued shares of the Company at the date of passing
+this resolution, and the said approval shall be limited accordingly;
+subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period
+(as defined below) of all the powers of the Company to buy back shares in the capital of the Company
+including any form of depositary receipt representing the right to receive such shares ("Shares") be and is
+hereby generally and unconditionally approved;
+ORDINARY RESOLUTIONS
+(a)
+"THAT:
+6.
+And to consider and, if thought fit, to pass the following as ordinary resolutions:
+To re-elect independent non-executive directors.
+5.
+4.
+To re-elect executive director.
+20 per cent. of the number of issued shares of the Company at the date of passing this resolution, plus
+for the purpose of this resolution "Relevant Period" means the period from the passing of this resolution
+until whichever is the earlier of:
+(if the directors of the Company are so authorized by a separate ordinary resolution of the shareholders
+of the Company) the number of Shares bought back by the Company subsequent to the passing of this
+resolution (up to a maximum equivalent to 10 per cent. of the number of issued shares of the Company
+at the date of passing this resolution).
+5.
+8.
+CHINA MOBILE LIMITED
+Corporate Information
+64
+Concerning resolution number 6 above, the directors of the Company wish to state that they will exercise the powers conferred thereby to buy
+back shares of the Company in circumstances which they deem appropriate for the benefit of the shareholders. The explanatory statement
+containing the information necessary to enable the shareholders to make an informed decision on whether to vote for or against the resolution
+to approve the buy-back by the Company of its own shares, as required by the Rules Governing the Listing of Securities on the Stock Exchange
+will be set out in a separate circular from the Company to be enclosed with the 2016 Annual Report.
+To ascertain shareholders' entitlement to the proposed final dividend upon passing resolution number 2, the register of members of the
+Company will be closed from 6 June 2017 to 8 June 2017 (both days inclusive), during which period no transfer of shares in the Company will
+be effected. In order to qualify for the proposed final dividend, all transfers, accompanied by the relevant share certificates, must be lodged
+with the Company's share registrar, Hong Kong Registrars Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
+Wan Chai, Hong Kong, not later than 4:30 p.m. on 5 June 2017.
+To ascertain shareholders' eligibility to attend and vote at the annual general meeting, the register of members of the Company will be closed
+from 19 May 2017 to 25 May 2017 (both days inclusive), during which period no transfer of shares in the Company will be effected. In order to
+be entitled to attend and vote at the annual general meeting, all transfers, accompanied by the relevant share certificates, must be lodged with
+the Company's share registrar, Hong Kong Registrars Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
+Wan Chai, Hong Kong, not later than 4:30 p.m. on 18 May 2017.
+3.
+4.
+63
+NOTICE OF THE ANNUAL GENERAL MEETING
+ANNUAL REPORT 2016
+The Board of Directors has recommended a final dividend of HK$1.243 per share for the year ended 31 December 2016 and, if such dividend
+is declared by the members passing resolution number 2, it is expected to be paid on or about 28 June 2017 to those shareholders whose
+names appear on the Company's register of members on 8 June 2017. Shareholders should read the announcement issued by the Company
+on 23 March 2017 regarding the closure of register of members and the withholding and payment of enterprise income tax for non-resident
+enterprises in respect of the proposed 2016 final dividend.
+In order to be valid, a form of proxy together with the power of attorney or other authority (if any) under which it is signed, or a notarially
+certified copy thereof, must be deposited at the Company's registered office at 60/F, The Center, 99 Queen's Road Central, Hong Kong at least
+24 hours before the time for holding the annual general meeting. Completion and return of a form of proxy will not preclude a member from
+attending and voting in person if he is subsequently able to be present.
+Any member entitled to attend and vote at the annual general meeting is entitled to appoint one or, if he is the holder of two or more shares,
+more proxies to attend and, on a poll, vote in his stead. A proxy need not be a member of the Company.
+3.
+2.
+1.
+Notes:
+12 April 2017
+By Order of the Board
+China Mobile Limited
+Wong Wai Lan, Grace
+Company Secretary
+"THAT the directors of the Company be and are hereby authorized to exercise the powers of the Company
+referred to in the resolution set out in item 7 in the notice of the annual general meeting in respect of the
+shares of the Company referred to in paragraph (b) of such resolution.'
+the date of any revocation or variation of the mandate given under this resolution by ordinary resolution of
+the shareholders of the Company at a general meeting."
+the expiration of the period within which the next annual general meeting of the Company is required by
+law to be held; or
+(3)
+(2)
+the conclusion of the next annual general meeting of the Company; or
+(1)
+Such mandate shall expire at the earlier of:
+To declare a final dividend for the year ended 31 December 2016.
+CHINA MOBILE LIMITED
+2.
+were not, in all material respects, in accordance with the pricing policies of the Group as stated in this annual
+report;
+(C)
+(B)
+have not been approved by the Board;
+(A)
+The auditors of the Company were engaged to report on the Group's Continuing Connected Transactions in
+accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other
+Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 "Auditor's
+Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the Hong Kong Institute
+of Certified Public Accountants. The auditors have issued their unqualified letter containing their findings and
+conclusions in respect of the Continuing Connected Transactions in accordance with Rule 14A.56 of the Hong Kong
+Listing Rules. The auditors' letter has confirmed that nothing has come to their attention that cause them to believe
+that the Continuing Connected Transactions:
+(iii) according to the agreements governing such transactions on terms that are fair and reasonable and in the
+interests of the shareholders of the Company as a whole.
+on normal commercial terms or better; and
+(ii)
+(i)
+in the ordinary and usual course of its business;
+In the opinion of the independent non-executive directors, the Continuing Connected Transactions were entered into
+by the Group:
+59
+REPORT OF DIRECTORS
+ANNUAL REPORT 2016
+CMCC is the ultimate controlling shareholder of the Company and therefore, a connected person of the Company.
+Accordingly, all the transactions referred to in paragraphs (1) to (4) above constitute connected transactions for the
+Company under the Hong Kong Listing Rules.
+The transactions referred to in paragraph (4) above were entered into pursuant to the telecommunications network
+operation assets leasing agreement between the Company and CMCC dated 18 August 2011 (the "Network Assets
+Leasing Agreement"). The entering into of the Network Assets Leasing Agreement was announced by the Company
+on 18 August 2011. The Network Assets Leasing Agreement has been renewed and announced by the Company (i)
+on 6 December 2011 for a period of one year from 1 January 2012; (ii) on 12 December 2012 for a period of one year
+from 1 January 2013; (iii) on 15 August 2013 for a period of one year from 1 January 2014; (iv) on 14 August 2014 for
+a period of one year from 1 January 2015; (v) on 21 August 2015 for a period of one year from 1 January 2016; and (vi)
+on 11 August 2016 for a period of one year from 1 January 2017.
+The transactions referred to in paragraph (3) above were entered into pursuant to the network capacity leasing
+agreement between the Company and CMCC dated 29 December 2008 (the "Network Capacity Leasing
+Agreement"). The entering into of the Network Capacity Leasing Agreement was announced by the Company on 29
+December 2008. The Network Capacity Leasing Agreement has been renewed and announced by the Company (i)
+on 6 November 2009 for a period of one year from 1 January 2010; (ii) on 21 December 2010 for a period of one year
+from 1 January 2011; (iii) on 6 December 2011 for a period of one year from 1 January 2012; (iv) on 12 December
+2012 for a period of one year from 1 January 2013; (v) on 15 August 2013 for a period of one year from 1 January
+2014; (vi) on 14 August 2014 for a period of one year from 1 January 2015; (vii) on 21 August 2015 for a period of
+one year from 1 January 2016; and (viii) on 11 August 2016 for a period of one year from 1 January 2017.
+The transactions referred to in paragraph (2) above were entered into pursuant to the 2014-2016 telecommunications
+services agreement dated 15 August 2013 between the Company and CMCC (the "2014-2016 Telecommunications
+Services Agreement"). The Company announced the entering into and the terms of the 2014-2016
+Telecommunications Services Agreement on 15 August 2013. The 2014-2016 Telecommunications Services
+Agreement expired on 31 December 2016.
+The transactions referred to in paragraph (1) above were entered into pursuant to the 2014-2016 property leasing
+and management services agreement dated 15 August 2013 between the Company and CMCC (the "2014-2016
+Property Leasing Agreement"). The Company announced the entering into and the terms of the 2014-2016 Property
+Leasing Agreement on 15 August 2013. The 2014-2016 Property Leasing Agreement expired on 31 December
+2016 and the arrangements under the agreement have been renewed by way of the parties to such agreement
+entering into the 2017-2019 property leasing and management services agreement which has a term of three years
+commencing on 1 January 2017.
+leasing fees paid by the Company to CMCC for the leasing of telecommunications network operation assets by
+the Company from CMCC did not exceed RMB5,500 million. The leasing fees are determined with reference
+to the prevailing market rates. In determining the market rates for the leasing fees, the Company has taken
+into account the charges payable by the Company and CMCC to other industry players as well as the charges
+receivable by the Company and CMCC from other industry players. The leasing fees payable by the Company
+to CMCC were not more than the leasing fees charged to other industry players, being independent third
+parties, for same kinds of network operation assets. The aggregate amount of leasing fees received by
+the Company from CMCC under the Network Assets Leasing Agreement was below 0.1% of each of the
+applicable percentage ratios set out in Rule 14.07 of the Hong Kong Listing Rules.
+leasing fees paid by the Company to CMCC for the leasing of the TD-SCDMA network capacity by the
+Company from CMCC did not exceed RMB10,000 million. The leasing fees are determined on a basis that
+reflects the Group's actual usage of CMCC's TD-SCDMA network capacity and to compensate CMCC for the
+costs of such network capacity; and
+(4)
+(3)
+CHINA MOBILE LIMITED
+REPORT OF DIRECTORS
+58
+were not entered into, in all material respects, in accordance with the relevant agreements governing the
+Continuing Connected Transactions; and
+(D) have exceeded their respective annual caps for the financial year ended 31 December 2016 set out in the
+previous announcements of the Company.
+A copy of the auditors' letter in relation to the Continuing Connected Transactions has been provided by the
+Company to the Stock Exchange.
+In respect of the Continuing Connected Transactions, the Company has complied with the disclosure requirements
+under the Hong Kong Listing Rules in force from time to time, and has followed the policies and guidelines as laid
+down in the guidance letter HKEX-GL73-14 issued by the Stock Exchange when determining the price and terms of
+the transactions conducted during the year ended 31 December 2016.
+1.
+Notice is hereby given that the Annual General Meeting of China Mobile Limited (the "Company") will be held
+on Thursday, 25 May 2017 at 10:00 a.m. in the Ballroom, InterContinental Hong Kong, 18 Salisbury Road, Kowloon,
+Hong Kong for the following purposes:
+61
+Notice of the Annual General Meeting
+ANNUAL REPORT 2016
+Hong Kong, 23 March 2017
+Chairman
+Shang Bing
+By order of the Board
+Please also refer to the sections headed "Chairman's Statement", "Business Review", "Financial Review" and
+"Human Resources Development" in this annual report (which form part of this Report of Directors) for further
+details.
+OTHERS
+A resolution will be proposed at the forthcoming annual general meeting for the re-appointment of
+PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP as the auditors of the Group for Hong Kong
+financial reporting and U.S. financial reporting purposes, respectively.
+AUDITORS
+To receive and consider the audited financial statements and the Reports of the Directors and Auditors of the
+Company and its subsidiaries for the year ended 31 December 2016.
+As at the date of this annual report and based on the information that is publicly available to the Company and to the
+knowledge of the directors of the Company, the Company has maintained the public float prescribed under the Hong
+Kong Listing Rules.
+Particulars of the employee retirement benefits of the Group are set out in note 2 to the consolidated financial
+statements.
+EMPLOYEE RETIREMENT BENEFITS
+In order to continue to maintain the sustainable development of the Group's competitiveness, the Group has
+always emphasized the importance of recruiting, incentivizing, developing and retaining its employees, paid close
+attention to the external competitiveness, internal fairness of its remuneration structure and the cost-effectiveness
+of remuneration and emphasized the importance of the correlation between remuneration management and
+performance management. For the year ended 31 December 2016, employees' remuneration comprised a basic
+salary and a performance-based bonus.
+EMOLUMENT POLICY
+A summary of the results and of the statements of the assets and liabilities of the Group for the last five financial
+years is set out on pages 138 to 140 of this annual report.
+FINANCIAL SUMMARY
+BOARD OF DIRECTORS
+REPORT OF DIRECTORS
+60
+Particulars of bank and other loans of the Group as at 31 December 2016 are set out in note 32 to the consolidated
+financial statements.
+BANK AND OTHER LOANS
+The Company and its subsidiaries did not purchase, sell or redeem any of the listed securities of the Company during
+the year ended 31 December 2016.
+PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
+PUBLIC FLOAT
+Executive Directors
+Audit Committee
+(Executive Director & Chairman)
+•
+Key audit matters identified in our audit are summarized as follows:
+Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit
+of the consolidated financial statements as a whole and, in forming our opinion thereon, and we do not provide a
+separate opinion on these matters.
+KEY AUDIT MATTERS
+CHINA MOBILE LIMITED
+Independent Auditor's Report
+66
+We are independent of the Group in accordance with the HKICPA's Code of Ethics for Professional Accountants ("the
+Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code.
+Independence
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
+We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAS") issued by the HKICPA.
+Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
+Consolidated Financial Statements section of our report.
+BASIS FOR OPINION
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position
+of the Group as at 31 December 2016, and of its consolidated financial performance and its consolidated cash
+flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSS") issued by
+the International Accounting Standards Board ("IASB") and Hong Kong Financial Reporting Standards ("HKFRSS")
+issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and have been properly prepared in
+compliance with the Hong Kong Companies Ordinance.
+Our opinion
+the notes to the consolidated financial statements, which include a summary of significant accounting policies.
+the consolidated statement of cash flow for the year then ended; and
+•
+pwc
+Independent Auditor's Report
+To the Members of China Mobile Limited
+(incorporated in Hong Kong with limited liability)
+OPINION
+What we have audited
+Revenue recognition
+羅兵咸永道
+•
+the consolidated balance sheet as at 31 December 2016;
+•
+the consolidated statement of comprehensive income for the year then ended;
+•
+the consolidated statement of changes in equity for the year then ended;
+The consolidated financial statements of China Mobile Limited (the "Company") and its subsidiaries (the "Group")
+set out on pages 71 to 137, which comprise:
+65
+•
+•
+Based on the procedures performed, the key
+assumptions and estimates made by management were
+supported by the audit evidences we gathered and
+consistent with our understanding.
+checked sensitivity analysis around the key
+assumptions, to ascertain the extent to which
+adverse changes, both individually or in aggregate,
+would result in the investment being impaired.
+tested mathematical accuracy and considered the
+appropriateness of the type of cash flows included
+in the enterprise discounted free cash flow model;
+and
+reconciled input data to supporting evidence, such
+as approved budgets;
+assessed the recoverable amount based on its
+value-in-use as determined by the enterprise
+discounted free cash flow model, reviewed
+documentation supporting key judgements and
+assumptions, considered external evidence and
+historical accuracy of management's assumptions
+and forecasts, particularly the growth rate, the
+margin and the discount rate;
+evaluated management's process for preparing
+its impairment assessment and evaluated
+management's prior years experiences and the
+critical judgement in the assessment;
+In response to this key audit matter, we performed
+the following procedures to determine whether the
+management's conclusion that the investment in
+associates was not impaired was appropriate:
+How our audit addressed the Key Audit Matter
+In the impairment assessment, judgements were
+required in the assessment of assumptions, particularly
+the growth rate, the margin and the discount rate as
+they are sensitive to the enterprise discounted free cash
+flow model.
+As at 31 December 2016, due to the market downturn,
+the Group found the carrying amount of an investment
+in one of the associates exceeded its market value.
+Hence, the Group performed an impairment assessment
+on this investment by calculating its recoverable amount
+based on value-in-use as determined by the enterprise
+discounted free cash flow model. Based on the
+assessment result, the management determined that
+there was no impairment loss on the investment in the
+associate.
+The Group held interest in associates, which is
+accounted for using the equity method. When the
+objective evidences that indicate impairment are
+identified, the management performed impairment
+assessments by comparing the recoverable amounts of
+the interest in associates with its carrying amounts.
+Refer to Note 2 - Significant accounting policies (d)
+and (i), Note 19 - Investments accounted for using the
+equity method and Note 40 - Accounting estimates and
+judgements to the consolidated financial statements.
+Impairment assessment on the interest in associates
+Key Audit Matter
+67
+INDEPENDENT AUDITOR'S REPORT
+ANNUAL REPORT 2016
+Leasing arrangement
+Key Audit Matter
+Revenue recognition
+Refer to Note 2 - Significant accounting policies (r) and
+Note 4 - Operating revenue to the consolidated financial
+statements.
+We focused on this area due to the volume of
+transactions, the complexity of the IT systems,
+the variety of tariff and package structures and the
+complexity of multi-element arrangements, such as
+voice and data service package, handset and service
+bundled package and customer points reward, involving
+a number of key judgements and estimates on the
+allocation of cash consideration among various elements
+and timing when the revenue of each element can be
+recognized.
+How our audit addressed the Key Audit Matter
+Impairment assessment on the interest in associates
+In response to this key audit matter, our audit work
+included controls testing and substantive procedures:
+evaluated and tested the design and operating
+effectiveness of controls over the capture and
+measurement of revenue transactions;
+evaluated the appropriateness of the accounting
+policies on revenue recognition for multi-element
+arrangements;
+examined the allocation of cash consideration
+among various elements and tested the accuracy
+of revenue recognition by using sampling
+techniques;
+performed substantive testing on the accuracy
+and completeness of revenue using sampling
+techniques by examining customer bills, billing
+reports and financial records; and
+tested the balances of account receivables and
+advance from customers in billing system by using
+computer assisted audit techniques and examined
+the reconciliation of such balances between billing
+system and financial records.
+Based on the procedures performed, the revenue
+recognized was supported by the audit evidences we
+obtained and consistent with the accounting policies of
+the Group.
+tested the IT environment in which billing and
+other relevant support systems reside;
+Mr. SHANG Bing
+Independent Auditor's Report
+USA
+99 Queen's Road Central
+60/F, The Center
+REGISTERED OFFICE
+Sullivan & Cromwell (Hong Kong) LLP
+LEGAL ADVISER
+PricewaterhouseCoopers Zhong Tian LLP
+PricewaterhouseCoopers
+Ms. WONG Wai Lan, Grace (FCS, FCIS)
+AUDITORS
+COMPANY SECRETARY
+Dr. Moses CHENG Mo Chi
+Mr. Paul CHOW Man Yiu (Chairman)
+Mr. Frank WONG Kwong Shing
+Nomination Committee
+Dr. Moses CHENG MO Chi (Chairman)
+Mr. Frank WONG Kwong Shing
+Mr. Paul CHOW Man Yiu
+Remuneration Committee
+Mr. Paul CHOW Man Yiu
+Mr. Stephen YIU Kin Wah
+Dr. Moses CHENG Mo Chi
+Mr. Frank WONG Kwong Shing (Chairman)
+Mr. LI Yue
+(Executive Director & Chief Executive Officer)
+Mr. LIU Aili
+(Executive Director & Vice President)
+Mr. SHA Yuejia
+(Executive Director & Vice President)
+Hong Kong
+Mr. DONG Xin
+& Chief Financial Officer)
+Independent Non-Executive Directors
+Mr. Frank WONG Kwong Shing
+Dr. Moses CHENG Mo Chi
+Mr. Paul CHOW Man Yiu
+Mr. Stephen YIU Kin Wah
+PRINCIPAL BOARD COMMITTEES
+(Executive Director, Vice President
+ANNUAL REPORT 2016
+PUBLIC AND INVESTOR RELATIONS
+Fax: 852 2511 9092
+New York, NY 10286
+101 Barclay Street, 22/F
+BNY Mellon
+The United States:
+99 Queen's Road Central
+Hong Kong
+60/F, The Center
+China Mobile Limited
+Hong Kong:
+As required by the United States securities laws and
+regulations, the Company shall file an annual report on
+Form 20-F with the US SEC before 30 April each year.
+Copies of the annual report of the Company as well
+as the annual report on Form 20-F, once filed, will be
+available at:
+PUBLICATIONS
+Email: shrrelations@cpushareownerservices.com
+Website: www.mybnymdr.com
+Tel: 1-888-269-2377 (toll free in USA)
+1-201-680-6825 (international call)
+USA
+BNY Mellon Shareowner Services
+211 Quality Circle, Suite 210
+College Station, TX 77845
+Tel: 852 3121 8888
+Overnight Correspondence:
+College Station, TX 77842-3170
+Website: www.chinamobileltd.com
+Stock code: (HKEX) 941
+(NYSE) CHL
+CUSIP Reference Number: 16941M109
+SHARE REGISTRAR
+Hong Kong Registrars Limited
+USA
+Shops 1712-1716,
+183 Queen's Road East
+Wanchai
+Hong Kong
+AMERICAN DEPOSITARY RECEIPTS
+DEPOSITARY
+BNY Mellon Shareowner Services
+P.O. Box 30170
+17/F Hopewell Centre
+(31,967)
+1,024
+917,336
+20,542
+Consolidated Statement of Cash Flows (Continued)
+for the year ended 31 December 2016 (Expressed in RMB)
+77
+Note
+2016
+Million
+2015
+Million
+Investing activities
+Capital expenditure
+Land lease prepayments
+Acquisition of other intangible assets
+(188,209)
+(1,157)
+(1,399)
+(172,243)
+(1,450)
+(212)
+Proceeds from disposal of property, plant and equipment
+(Increase)/decrease in bank deposits
+564
+(11,967)
+2,842
+1,944
+19
+(376)
+(2,451)
+Payment for investment accounted for using the equity method
+Dividends received from associates
+ANNUAL REPORT 2016
+15,655
+Interest received
+4,877
+(135)
+(Increase)/decrease in restricted bank deposits
+30,177
+7
+13,862
+Dividends received from unlisted securities
+235,089
+Net cash generated from operating activities
+(5,830)
+Increase in other receivables
+(4,668)
+(1,341)
+(Increase)/decrease in prepayments and other current assets
+(5,071)
+276
+Decrease/(increase) in amount due from ultimate holding company
+26
+Increase/(decrease) in accounts payable
+11,931
+(135)
+(6,832)
+Increase in bills payable
+227
+Increase in deferred revenue
+7,231
+12
+14,005
+(232)
+(37,562)
+(236)
+(39,505)
+- PRC enterprise income tax paid
+- Hong Kong profits tax paid
+Tax paid
+272,883
+253,701
+293,442
+(32)
+10
+Increase/(decrease) in amount due to ultimate holding company
+18,633
+17,545
+Increase in accrued expenses and other payables
+Cash generated from operations
+(4,930)
+8
+Purchase of available-for-sale financial assets
+Repayment of entrusted loans
+36(a)
+8,592
+(18,834)
+Short-term deposits placed by ultimate holding company
+36(a)
+5,552
+7,274
+Maturity of short-term deposits placed by ultimate holding company
+Repayment of bonds
+36(a)
+(7,274)
+(4,181)
+(1,000)
+Net cash used in financing activities
+(48,958)
+(86,510)
+Net increase in cash and cash equivalents
+Cash and cash equivalents at beginning of year
+The notes on pages 78 to 137 are an integral part of these consolidated financial statements.
+The Group recorded payables of RMB103,940,000,000 (2015: RMB125,210,000,000) to equipment suppliers as at 31
+December 2016 for additions of construction in progress during the year then ended.
+79,842
+90,413
+28
+194
+36(a)
+351
+79,842
+5,836
+10,220
+Significant non-cash transactions
+Cash and cash equivalents at end of year
+Effect of changes in foreign exchange rate
+73,812
+11
+(21)
+(31,880)
+(13)
+(77,320)
+(24,965)
+Maturity of available-for-sale financial assets
+65,881
+8,294
+Short-term loans granted by China Mobile Finance and other
+investments
+(1,650)
+(5,500)
+Maturity of short-term loans granted by China Mobile Finance and
+other investments
+2,500
+Proceeds from disposal of other financial assets
+140
+Receipt of consideration from China Tower
+7
+5,000
+14
+Dividends paid to non-controlling shareholders of subsidiaries
+(47,912)
+(442)
+(232)
+(46,991)
+34(b)
+Dividends paid to the Company's equity shareholders
+Consideration for business combination under common control
+Proceeds from entrusted loans
+870
+Proceeds from issuance of shares under share option scheme
+Capital injection from non-controlling shareholders of a subsidiary
+Interest paid
+Financing activities
+Net cash used in investing activities
+Others
+(142,743)
+(194,523)
+1,024
+Increase in accounts receivable
+(1,005)
+886
+Transfer to PRC statutory reserves (note 34(d)(ii))
+As at 31 December 2016
+108,741 108,741
+98
+108,839
+24
+24
+774
+774
+774
+(1,043)
+.
+(16)
+(1,059)
+(1,059)
+-
+(1,019)
+196
+(25,525)
+25,721
+(26,227)
+(26,227) (26,227)
+(20,777)
+(note 34(b)(i))
+(13)
+(20,764)
+108,578
+98
+108,480
+108,725
+774
+(20,764)
+196
+Dividends declared in respect of current year
+Dividends approved in respect of previous year
+(20,502)
+40
+40
+92
+I
+(31,967)
+(31,967)
+(808)
+(808)
+870
+870
+402,130 (264,289)
+72
+(165) 279,484
+500,104
+3,032
+920,368
+Total comprehensive income for the year
+accounted for using the equity method
+Share of other comprehensive loss of investments
+Currency translation differences
+Change in value of available-for-sale financial assets
+Profit for the year
+(note 34(b)(ii))
+920,368
+917,336
+500,104
+(165) 279,484
+72
+(264,289)
+402,130
+3,032
+402,130 (265,308)
+72
+609
+16
+7
+443
+426
+(15,525)
+(180)
+(4)
+7,216
+7,614
+3,734
+4,839
+282
+272
+(16,005)
+(15,852)
+08
+9
+Decrease/(increase) in inventories
+255,132
+270,255
+Operating cash flows before changes in working capital
+(14)
+Gain on disposal of other financial assets
+274
+182
+(8,636)
+115
+- Unrealized exchange loss, net
+(11)
+8
+455
+235
+(8,090)
+499
+6696660
+136,832
+2015
+Million
+2016
+Million
+Note
+CHINA MOBILE LIMITED
+for the year ended 31 December 2016 (Expressed in RMB)
+Consolidated Statement of Cash Flows
+Operating activities
+76
+The notes on pages 78 to 137 are an integral part of these consolidated financial statements.
+982,138
+3,117
+979,021
+536,313
+305,205
+76
+1,024
+Profit before taxation
+- Depreciation of property, plant and equipment
+138,090
+143,734
+144,462
+- Share of profit of investments accounted for using the equity method
+- Dividend income from unlisted securities
+Finance costs
+Adjustments for:
+- Interest income
+- Impairment loss of doubtful accounts
+- Write-off and impairment of property, plant and equipment
+- Gain on disposal of property, plant and equipment
+- Gain on the transfer of Tower Assets
+- Amortization of land lease prepayments
+- Amortization of other intangible assets
+- Write-down of inventories
+24
+(92)
+Independent Auditor's Report
+645
+78,100
+180,950
+163,404
+26
+Current taxation
+5,563
+8,545
+7,276
+8,034
+536,389
+501,038
+1,206
+84,289
+74
+Consolidated Balance Sheet (Continued)
+as at 31 December 2016 (Expressed in RMB)
+Non-current liabilities
+CHINA MOBILE LIMITED
+As at
+As at
+31 December
+31 December
+Note
+2016
+Million
+74
+2015
+30
+4,998
+250,838
+1,097
+31,897
+197
+335,297
+90,413
+746
+19,167
+15
+323,330
+79,842
+Total assets
+Equity and liabilities
+Current liabilities
+586,645
+488,697
+243,579
+1,520,994
+Interest-bearing borrowings
+Accounts payable
+Bills payable
+Deferred revenue
+Accrued expenses and other payables
+31
+Amount due to ultimate holding company
+22 32
+32
+29
+1,427,895
+Million
+Interest-bearing borrowings - non-current
+Deferred revenue - non-current
+979,021
+917,336
+3,117
+3,032
+982,138
+920,368
+1,520,994
+1,427,895
+The financial statements on pages 71 to 137 were approved by the Board of Directors on 23 March 2017 and were
+signed on its behalf.
+Li Yue
+515,206
+Name of Director
+Name of Director
+The notes on pages 78 to 137 are an integral part of these consolidated financial statements.
+ANNUAL REPORT 2016
+Consolidated Statement of Changes in Equity
+for the year ended 31 December 2016 (Expressed in RMB)
+Attributable to equity shareholders of the Company
+75
+Share
+Capital General Exchange
+PRC
+statutory
+Dong Xin
+576,891
+402,130
+402,130
+Deferred tax liabilities
+332
+32
+4,995
+30
+2,175
+1,291
+20
+292
+203
+Total liabilities
+Equity
+Share capital
+Reserves
+Total equity attributable to equity shareholders of the Company
+Non-controlling interests
+Total equity
+Total equity and liabilities
+2,467
+6,489
+538,856
+507,527
+34(c)
+28
+27
+247
+221
+Current assets
+939,198
+934,349
+56,737
+4,575
+4,528
+3
+35
+21
+25,423
+29,767
+Inventories
+20
+124,039
+19
+22272
+Restricted bank deposits
+Proceeds receivable for the transfer of Tower Assets
+Available-for-sale financial assets
+Deferred tax assets
+Investments accounted for using the equity method
+768
+1,708
+115,933
+Accounts receivable
+Other receivables
+Proceeds receivable for the transfer of Tower Assets
+11,427
+16,801
+25
+57,152
+7
+26,186
+25,693
+25
+17,743
+19,045
+24
+9,994
+8,832
+23
+22222 2220
+21
+Available-for-sale financial assets
+Cash and cash equivalents
+Bank deposits
+Restricted bank deposits
+Tax recoverable
+Amount due from ultimate holding company
+Prepayments and other current assets
+Other intangible assets
+Non-
+35,343
+17
+The notes on pages 78 to 137 are an integral part of these consolidated financial statements.
+RMB5.30
+RMB5.31
+13(b)
+RMB5.30
+RMB5.31
+13(a)
+110,159
+108,578
+110,043
+116
+ANNUAL REPORT 2016
+108,480
+98
+108,839
+116
+108,539
+108,741
+98
+2015
+Million
+2016
+Million
+Note
+(808)
+68
+26
+108,655
+Consolidated Balance Sheet
+as at 31 December 2016 (Expressed in RMB)
+Assets
+Goodwill
+26,773
+26,720
+16
+Land lease prepayments and others
+88,012
+89,853
+15
+Construction in progress
+585,631
+622,356
+14
+Property, plant and equipment
+Million
+2015
+2016
+Million
+31 December
+31 December
+As at
+As at
+73
+Note
+Non-current assets
+35,343
+Retained
+Liabilities
+Total
+LO
+136,832
+138,090
+21,668
+21,779
+20,668
+39,083
+Other operating expenses
+Cost of products sold
+Employee benefit and related expenses
+Selling expenses
+5
+Depreciation
+Leased lines and network assets
+Operating expenses
+708,421
+84,246
+584,089
+623,422
+84,999
+Revenue from sales of products and others
+Revenue from telecommunications services
+4
+Operating revenue
+Interconnection
+79,463
+74,805
+57,493
+Profit before taxation
+Share of profit of investments accounted for
+using the equity method
+Finance costs
+Interest income
+1,800
+1,968
+8
+Other gains
+15,525
+7
+Gain on the transfer of Tower Assets
+102,922
+118,088
+Profit from operations
+565,413
+590,333
+162,293
+167,073
+6
+CO
+89,297
+87,352
+59,850
+2015
+Million
+Taxation
+2016
+Million
+71
+ANNUAL REPORT 2016
+If, based on the work we have performed, we conclude that there is a material misstatement of this other
+information, we are required to report that fact. We have nothing to report in this regard.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other
+information and, in doing so, consider whether the other information is materially inconsistent with the consolidated
+financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express
+any form of assurance conclusion thereon.
+The directors of the Company are responsible for the other information. The other information comprises all of the
+information included in the annual report other than the consolidated financial statements and our auditor's report
+thereon.
+OTHER INFORMATION
+Based on the procedures performed, the key
+assumptions and estimates made by the management
+were agreed with the audit evidences we reviewed, and
+consistent with our understanding.
+evaluated the appropriateness of the
+economic lives and the fair value of leased
+assets.
+assessed reasonableness of the interest rate
+implicit in the lease and performed sensitivity
+analysis; and
+tested mathematical accuracy of the present
+value of minimum lease payment calculation
+and verified relevant data;
+INDEPENDENT AUDITOR'S REPORT
+examined the impact of the agreed terms in
+the Lease Agreement on the classification;
+CHINA MOBILE LIMITED
+Key Audit Matter
+Leasing arrangement
+Refer to Note 2 - Significant accounting policies (h) and
+Note 40 - Accounting estimates and judgements to the
+consolidated financial statements.
+On 8 July 2016, the Group and China Tower Corporation
+Limited ("China Tower") finalized the leasing and
+pricing arrangement in relation to the leases of
+telecommunications towers (including newly-added
+towers and acquired towers) and related assets, and
+entered into an agreement accordingly (the "Lease
+Agreement").
+In accordance with IAS17, "Leases", the management
+assessed the classification of the leases and concluded
+they should be classified as operating leases. Significant
+judgements are required in the assessment of the
+classification. In particular, the management assessed
+the impact of the lease term and the present value of
+minimum lease payments, the nature of leased assets,
+no ownership transfer and no purchase option in the end
+of the lease term. The key judgements are in respect of
+economic lives and fair value of the leased assets and
+the interest rate implicit in the leases in the calculation
+of present value of minimum lease payments.
+How our audit addressed the Key Audit Matter
+In response to this key audit matter, we performed
+the following procedures to assess the management's
+conclusion that the leases were operating leases:
+examined the Lease Agreement and discussed
+with the management about the key terms in
+order to identify any inconsistency from our
+understanding;
+in respect of the appropriateness of the
+judgements made by the management in the
+determination of classification of the Lease
+Agreement, we performed the following:
+controlling
+69
+RESPONSIBILITIES OF DIRECTORS AND AUDIT COMMITTEE FOR THE CONSOLIDATED
+FINANCIAL STATEMENTS
+The directors of the Company are responsible for the preparation of the consolidated financial statements that give a
+true and fair view in accordance with IFRSS issued by the IASB, HKFRSS issued by the HKICPA, and the Hong Kong
+Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation
+of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+for the year ended 31 December 2016 (Expressed in Renminbi ("RMB"))
+Consolidated Statement of Comprehensive Income
+ANNUAL REPORT 2016
+Hong Kong, 23 March 2017
+PricewaterhouseCoopers
+Certified Public Accountants
+The engagement partner on the audit resulting in this independent auditor's report is Yeung Wai Chi.
+From the matters communicated with the Audit Committee, we determine those matters that were of most
+significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
+matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
+the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
+our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
+interest benefits of such communication.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
+regarding independence, and to communicate with them all relationships and other matters that may reasonably be
+thought to bear on our independence, and where applicable, related safeguards.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the
+audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
+audit.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
+activities within the Group to express an opinion on the consolidated financial statements. We are responsible
+for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
+opinion.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including
+the disclosures, and whether the consolidated financial statements represent the underlying transactions and
+events in a manner that achieves fair presentation.
+•
+CHINA MOBILE LIMITED
+Independent Auditor's Report
+70
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based
+on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
+cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material
+uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
+are based on the audit evidence obtained up to the date of our auditor's report. However, future events or
+conditions may cause the Group to cease to continue as a going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
+related disclosures made by the directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
+Group's internal control.
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
+fraud or error; design and perform audit procedures responsive to those risks; and, obtain audit evidence that is
+sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
+resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations, or the override of internal control.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
+are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
+opinion. We report our opinion solely to you, as a body, in accordance with Section 405 of the Hong Kong Companies
+Ordinance and for no other purpose. We do not assume responsibility towards or accept liability to any other person
+for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
+conducted in accordance with HKSAS will always detect a material misstatement when it exists. Misstatements
+can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
+expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional
+skepticism throughout the audit. We also:
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL
+STATEMENTS
+The Audit Committee is responsible for overseeing the Group's financial reporting process.
+In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to
+continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
+basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
+realistic alternative but to do so.
+Note
+16,005
+668,335
+9
+Total comprehensive income for the year
+Dividends approved in respect of previous year
+(note 34(b)(ii))
+Dividends declared in respect of current year
+(note 34(b)(i))
+Shares issued under share option scheme (note 34(c))
+Transfer to PRC statutory reserves (note 34(d)(ii))
+Transfer between reserves upon expiry of options
+Consideration for business combination under
+common control
+Capital injection from non-controlling interests
+of a subsidiary
+As at 31 December 2015
+As at 1 January 2016
+Changes in equity for 2016:
+I
+901
+901
+1
+603
+108,539 108,539
+116
+108,655
+603
+603
+901
+901
+603
+108,539
+of investments accounted for using the
+equity method
+110,043
+Share of other comprehensive income
+Profit for the year
+capital
+reserve
+reserve
+Million
+Million
+Million
+reserve
+Million
+400,737
+(231,954)
+72
+15,852
+(768)
+reserves profits
+Million Million
+258,942 459,887
+Total interests
+equity
+Million
+Million
+Million
+886,916
+2,067
+888,983
+As at 1 January 2015
+Changes in equity for 2015:
+Currency translation differences
+116
+Transfer of assets of entities under common control
+to the ultimate holding company
+1
+901
+(1,043)
+603
+774
+24
+TOTAL COMPREHENSIVE INCOME FOR THE YEAR
+Items that may be subsequently reclassified to profit or loss
+Change in value of available-for-sale financial assets
+Exchange differences on translation of financial statements of
+overseas entities
+(16)
+Other comprehensive (loss)/income for the year, net of tax:
+Item that will not be subsequently reclassified to profit or loss
+Share of other comprehensive loss of investments accounted for
+using the equity method
+108,655
+108,578
+108,839
+(35,623)
+110,159
+12(a)
+143,734
+144,462
+8,090
+8,636
+PROFIT FOR THE YEAR
+(455)
+(235)
+(35,079)
+110,159
+Share of other comprehensive (loss)/income of investments
+accounted for using the equity method
+72
+(22,283)
+(22,304)
+(25,629)
+(25,629)
+(25,629)
+22
+1,393
+(369)
+(21)
+Earnings per share - Diluted
+Earnings per share - Basic
+CHINA MOBILE LIMITED
+Non-controlling interests
+Consolidated Statement of Comprehensive Income (Continued)
+for the year ended 31 December 2016 (Expressed in RMB)
+Profit attributable to:
+Equity shareholders of the Company
+Non-controlling interests
+TOTAL COMPREHENSIVE INCOME FOR THE YEAR
+PROFIT FOR THE YEAR
+(22,283)
+Equity shareholders of the Company
+Total comprehensive income attributable to:
+If any such evidence exists, any impairment loss is determined and recognized as follows:
+a significant or prolonged decline in the fair value of an investment in an equity instrument
+below its cost.
+For unquoted equity securities carried at cost, the impairment loss is measured as the
+difference between the carrying amount of the financial asset and the estimated future cash
+flows, discounted at the current market rate of return for a similar financial asset where the
+effect of discounting is material. Impairment losses for such equity securities are not reversed.
+For debt instruments classified as available-for-sale financial assets, if any impairment evidence
+exists, the cumulative loss (measured as the difference between the acquisition cost (net
+of any principal repayment and amortization) and the current fair value, less any impairment
+loss on that financial asset previously recognized in profit or loss) is reclassified from equity
+and recognized in profit or loss. If, in a subsequent period, the fair value of a debt instrument
+classified as available-for-sale increases and the increase can be objectively related to an event
+occurring after the impairment loss was recognized in profit or loss, the impairment loss is
+reversed through profit or loss. For equity instruments classified as available-for-sale financial
+assets, a significant or prolonged decline in the fair value of the security below its cost is also
+evidence that the assets are impaired. If any impairment evidence exists, the cumulative loss
+(measured as the difference between the acquisition cost and the current fair value, less any
+impairment loss on that financial asset previously recognized in profit or loss) is reclassified
+from equity and recognized in profit or loss. Impairment losses recognized in profit or loss on
+equity instruments are not reversed through profit or loss.
+significant financial difficulty of the entity;
+significant changes in the technological, market, economic or legal environment that have an
+adverse effect on the entity; and
+a breach of contract, such as a default or delinquency in interest or principal payments;
+it becoming probable that the entity will enter bankruptcy or other financial reorganization;
+For investment accounted for using the equity method (see note 2(d)), the impairment loss is
+measured by comparing the recoverable amount of the investment with its carrying amount
+in accordance with note 2(i)(ii). The impairment loss is reversed if there has been a favourable
+change in the estimates used to determine the recoverable amount in accordance with note
+2(i)(ii).
+2
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+For trade and other current receivables carried at amortized cost, the impairment loss is
+measured as the difference between the asset's carrying amount and the present value of
+estimated future cash flows, discounted at the financial asset's original effective interest rate
+(i.e. the effective interest rate computed at initial recognition of these assets), where the
+effect of discounting is material. This assessment is made collectively where these financial
+assets share similar risk characteristics, such as similar past due status, and have not been
+individually assessed as impaired. Future cash flows for financial assets which are assessed
+for impairment collectively are based on historical loss experience for assets with credit risk
+characteristics similar to the collective group. If in a subsequent period the amount of an
+impairment loss decreases and the decrease can be linked objectively to an event occurring
+after the impairment loss was recognized, the impairment loss is reversed through profit or
+loss. A reversal of an impairment loss shall not result in the asset's carrying amount exceeding
+that which would have been determined had no impairment loss been recognized in prior
+years.
+85
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(i)
+Impairment of assets (Continued)
+(i)
+Investments in equity securities (other than investments in subsidiaries), available-for-sale financial
+assets and receivables are reviewed at the end of each reporting date to determine whether there is
+objective evidence of impairment. Objective evidence of impairment includes observable data that
+comes to the attention of the Group about one or more of the following loss events:
+Impairment of investments in equity securities, available-for-sale financial assets and
+receivables (Continued)
+ANNUAL REPORT 2016
+Impairment of investments in equity securities, available-for-sale financial assets and
+receivables
+Assets acquired under finance leases
+(i) Impairment of assets
+An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group
+determines that the arrangement conveys a right to use a specific asset or assets for an agreed period
+of time in return for a payment or a series of payments. Such a determination is made based on an
+evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the
+legal form of a lease.
+Impairment losses are written off against the corresponding assets directly, except for impairment
+losses recognized in respect of debtors included within trade and other receivables, whose recovery
+is considered doubtful but not remote. In this case, the impairment losses for doubtful debts are
+recorded using an allowance account. When the Group is satisfied that recovery is remote, the
+amount considered irrecoverable is written off against trade debtors directly and any amounts held
+in the allowance account relating to that debt are reversed. Subsequent recoveries of amounts
+previously charged to the allowance account are reversed against the allowance account. Other
+changes in the allowance account and subsequent recoveries of amounts previously written off
+directly are recognized in profit or loss.
+(i)
+(ii)
+Classification of assets leased to the Group
+Assets that are held by the Group under leases which transfer to the Group substantially all the risks
+and rewards of ownership are classified as being held under finance leases. Leases which do not
+transfer substantially all the risks and rewards of ownership to the Group are classified as operating
+leases.
+Where the Group acquires the use of assets under finance leases, the amounts representing the
+fair value of the leased asset, or, if lower, the present value of the minimum lease payments of
+such assets is included in property, plant and equipment and the corresponding liabilities, net of
+finance charges, are recorded as obligations under finance leases. Depreciation is provided for at
+rates, which write off the cost of the assets over the term of the relevant lease or, where it is likely
+the Group will obtain ownership of the asset, the useful life of the asset as set out in note 2(g).
+Impairment losses are accounted for in accordance with the accounting policy as set out in note 2(i).
+Finance charges implicit in the lease payments are charged to profit or loss over the period of the
+leases so as to produce an approximately constant periodic rate of charge on the remaining balance
+of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the
+accounting period in which they are incurred.
+(iii) Leased lines and network assets and operating lease charges
+(h) Leased assets
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Where the Group has the use of assets held under operating leases, payments made under the
+leases are charged to profit or loss in equal instalments over the accounting periods covered by the
+lease term, except where an alternative basis is more representative of the pattern of benefits to
+be derived from the leased asset. Lease incentives received are recognized in profit or loss as an
+integral part of the aggregate net lease payments made. Contingent rentals are charged to profit or
+loss in the accounting period in which they are incurred.
+The cost of acquiring land held under an operating lease is amortized on a straight-line basis over
+the period of the lease term.
+(iv) Sale and leaseback
+A sale and leaseback transaction involves the sale of an asset and the leasing back of the same
+asset. The accounting treatment of a sale and leaseback transaction depends upon the type of lease
+involved. If a sale and leaseback transaction results in a finance lease, any excess of sales proceeds
+over the carrying amount shall not be immediately recognized as income by a seller-lessee. Instead,
+it shall be deferred and amortized over the lease term. If a sale and leaseback transaction results
+in an operating lease, and it is clear that the transaction is established at fair value, any profit or
+loss shall be recognized immediately. If the sale price is below fair value, any profit or loss shall be
+recognized immediately except that, if the loss is compensated for by future lease payments at
+below market price, it shall be deferred and amortized in proportion to the lease payments over the
+period for which the asset is expected to be used. If the sale price is above fair value, the excess
+over fair value shall be deferred and amortized over the period for which the asset is expected to be
+used.
+84
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(i)
+(ii) Impairment of other assets
+Interest on available-for-sale debt instruments calculated using the effective interest method is recognized
+in profit or loss. Dividends on available-for-sale equity instruments are recognized in profit or loss when
+the Group's right to receive payments is established.
+property, plant and equipment;
+Construction in progress is stated at cost less impairment losses (see note 2(i)). Cost comprises direct
+costs of construction as well as interest expense and exchange differences capitalized during the periods
+of construction and installation. Capitalization of these costs ceases and the construction in progress is
+transferred to property, plant and equipment when substantially all the activities necessary to prepare the
+assets for their intended use are completed. No depreciation is provided for in respect of construction in
+progress until it is completed and ready for its intended use.
+2
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(k) Inventories
+Inventories are carried at the lower of cost and net realizable value. Cost represents purchase cost
+of goods calculated using the weighted average cost method. Net realizable value is determined by
+reference to the sales proceeds of items sold in the ordinary course of business or to management's
+estimates based on prevailing market conditions.
+When inventories are sold, the carrying amount of those inventories is recognized as cost of products
+sold. The amount of any write-down of inventories to net realizable value and all losses of inventories are
+recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any
+write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction
+in the amount of inventories recognized as an expense in the period in which the reversal occurs. No
+reversal of any write-down of inventories occurred during the years presented.
+(I) Accounts receivable and other receivables
+Accounts receivable and other receivables are initially recognized at fair value and thereafter stated at
+amortized cost using the effective interest method less allowance for impairment loss (see note 2(i)),
+except where the effect of discounting would be immaterial.
+(m) Available-for-sale financial assets
+Available-for-sale financial assets are non-derivatives that are either designated in this category or not
+classified in any of the other categories. They are included in non-current assets unless the investment
+matures or management intends to dispose of it within 12 months of the end of the reporting period.
+Regular way purchases and sales of available-for-sale financial assets are recognized on the trade-date (the
+date on which the Group commits to purchase or sell the asset). The investments are initially recognized
+at fair value plus transaction costs and are subsequently carried at fair value. Changes in the fair value of
+available-for-sale financial assets are recognized in other comprehensive income.
+Available-for-sale financial assets are derecognized when the rights to receive cash flows from the
+investments have expired or have been transferred and the Group has transferred substantially all risks
+and rewards of ownership.
+When available-for-sale financial assets are sold, the accumulated fair value adjustments recognized in
+equity is removed and recognized in profit or loss.
+(n) Deferred revenue
+2
+The prepaid service fees are stated at the amount of proceeds received less the amount already
+recognized as revenue.
+Deferred revenue consists primarily of prepaid service fees received from customers which are generally
+not refundable and revenue deferred for unredeemed point rewards under Customer Point Reward
+Program ("Reward Program", see note 2(r)(iv)).
+Construction in progress
+A reversal of an impairment loss is limited to the asset's carrying amount that would
+have been determined had no impairment loss been recognized in prior years. Reversals
+of impairment losses are credited to profit or loss in the year in which the reversals are
+recognized.
+In respect of assets other than goodwill, an impairment loss is reversed if there has been a
+favourable change in the estimates used to determine the recoverable amount. An impairment
+loss in respect of goodwill is not reversed.
+Reversals of impairment losses
+construction in progress;
+prepaid interests in leasehold land classified as being held under an operating lease;
+investments in subsidiaries;
+goodwill; and
+other intangible assets.
+86
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+Internal and external sources of information are reviewed at the end of each reporting period to
+identify indications that the following assets may be impaired or, except in the case of goodwill and
+intangible assets with indefinite useful lives, an impairment loss previously recognized no longer
+exists or may have decreased:
+2
+(i)
+(j)
+Impairment of assets (Continued)
+(ii) Impairment of other assets (Continued)
+If any such indication exists, the asset's recoverable amount is estimated. For goodwill and other
+intangible assets that have indefinite useful lives, the recoverable amount is estimated annually
+whether or not there is any indication of impairment.
+Calculation of recoverable amount
+The recoverable amount of an asset is the greater of its fair value less costs of disposal and
+value in use. In assessing value in use, the estimated future cash flows are discounted to their
+present value using a pre-tax discount rate that reflects current market assessments of the
+time value of money and the risks specific to the asset. Where an asset does not generate
+cash inflows largely independent of those from other assets, the recoverable amount is
+determined for the smallest group of assets that generates cash inflows independently (i.e. a
+cash-generating unit).
+Recognition of impairment losses
+An impairment loss is recognized in profit or loss if the carrying amount of an asset, or the
+cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses
+recognized in respect of cash-generating units are allocated first to reduce the carrying amount
+of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the
+carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except
+that the carrying value of an asset will not be reduced below its individual fair value less costs
+of disposal, or value in use, if determinable.
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+83
+(Expressed in RMB unless otherwise indicated)
+ANNUAL REPORT 2016
+The acquisition of the Target Assets and Businesses was considered as a business combination under
+common control as CM TieTong and the Target Assets and Businesses are both ultimately controlled by
+CMCC. Under IFRSS and HKFRSS, the acquisition of the Target Assets and Businesses was accounted
+for using merger accounting in accordance with the Accounting Guideline 5 "Merger Accounting for
+Common Control Combinations" ("AG 5") issued by the HKICPA (note 2(c)(iv)).
+(c) Subsidiaries and non-controlling interests
+(i)
+Subsidiaries
+Subsidiaries are all entities (including structured entities) over which the Group has control. The
+Group controls an entity when the Group is exposed to, 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.
+An investment in a subsidiary is consolidated into the consolidated financial statements from
+the date that control commences until the date that control ceases. Intra-group balances and
+transactions and any unrealized gains arising from intra-group transactions are eliminated in full
+in preparing the consolidated financial statements. Unrealized losses resulting from intra-group
+transactions are eliminated in the same way as unrealized gains but only to the extent that there is
+no evidence of impairment. Accounting policies of subsidiaries would be changed where necessary
+in the consolidated financial statements to ensure consistency with the policies adopted by the
+Group.
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly
+to the Company, and in respect of which the Group has not agreed any additional terms with
+the holders of those interests which would result in the Group as a whole having a contractual
+obligation in respect of those interests that meets the definition of a financial liability. For each
+business combination, the Group can elect to measure any non-controlling interests either at fair
+value or at their proportionate share of the subsidiary's net identifiable assets.
+Non-controlling interests are presented in the consolidated balance sheet within equity, separately
+from equity attributable to the equity shareholders of the Company. Non-controlling interests in the
+results of the Group are presented on the face of the consolidated statement of comprehensive
+income as an allocation of the total profit or loss and total comprehensive income for the year
+between non-controlling interests and the equity shareholders of the Company.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted
+for as equity transactions, whereby adjustments are made to the amounts of controlling and non-
+controlling interests within consolidated equity to reflect the change in relative interests, but no
+adjustments are made to goodwill and no gain or loss is recognized.
+80
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+CHINA MOBILE LIMITED
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(c)
+Subsidiaries and non-controlling interests (Continued)
+(i)
+Subsidiaries (Continued)
+When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest
+in that subsidiary, with a resulting gain or loss being recognized in profit or loss. Any interest
+retained in that former subsidiary at the date when control is lost is recognized at fair value and this
+amount is regarded as the fair value on initial recognition of a financial asset or, when appropriate,
+the cost on initial recognition of an investment in an associate or a joint venture.
+(ii) Separate financial statements
+In the Company's balance sheet, an investment in a subsidiary is stated at cost less impairment
+losses (see note 2(i)). The results of subsidiaries are accounted for by the Company on the basis of
+dividends received and receivable.
+Acquisition of Target Assets and Businesses from China Tietong Telecommunications Corporation
+On 27 November 2015, China Mobile TieTong Company Limited ("CM TieTong"), a wholly-owned
+subsidiary of the Company, entered into an acquisition agreement with China Tietong Telecommunications
+Corporation ("TieTong"), a wholly-owned subsidiary of CMCC, under which CM TieTong has agreed
+to acquire, and TieTong has agreed to sell, certain assets, businesses and related liabilities as well as
+its related employees in relation to the fixed-line telecommunications operations ("Target Assets and
+Businesses"). The final consideration for the acquisition of the Target Assets and Businesses based on
+the acquisition agreement was RMB31,967,000,000. The acquisition was completed on 31 December
+2015.
+(b) Basis of preparation (Continued)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2
+87
+78
+Notes to the Consolidated Financial Statements
+1
+GENERAL INFORMATION
+CHINA MOBILE LIMITED
+2
+China Mobile Limited (the "Company") was incorporated in the Hong Kong Special Administrative Region
+("Hong Kong") of the People's Republic of China (the "PRC") on 3 September 1997. The principal activities of
+the Company and its subsidiaries (together referred to as the "Group") are the provision of telecommunications
+and related services in Mainland China and in Hong Kong (for the purpose of preparing these consolidated
+financial statements, Mainland China refers to the PRC excluding Hong Kong, Macau Special Administrative
+Region of the PRC and Taiwan). The Company's immediate holding company is China Mobile Hong Kong (BVI)
+Limited (incorporated in British Virgin Islands), and the Company's ultimate holding company is China Mobile
+Communications Corporation ("CMCC"). The address of the Company's registered office is 60th Floor, The
+Center, 99 Queen's Road Central, Hong Kong.
+The shares of the Company were listed on The Stock Exchange of Hong Kong Limited (the "HKEX") on
+23 October 1997 and the American Depositary Shares of the Company were listed on the New York Stock
+Exchange on 22 October 1997.
+SIGNIFICANT ACCOUNTING POLICIES
+(iii) Business combination other than under common control
+(a)
+These financial statements have been prepared in accordance with all applicable International Financial
+Reporting Standards ("IFRSS") issued by the International Accounting Standards Board ("IASB"), which
+collective term includes all applicable individual International Financial Reporting Standards, International
+Accounting Standards ("IASS") and Interpretations issued by the IASB. Hong Kong Financial Reporting
+Standards ("HKFRSS"), which collective term includes all applicable individual Hong Kong Financial
+Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations issued by the
+Hong Kong Institute of Certified Public Accountants ("HKICPA"), are consistent with IFRSS as it relates to
+the Group's financial statements. These financial statements also comply with HKFRSS, the requirements
+of Hong Kong Companies Ordinance Cap. 622, and the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules"). A
+summary of the significant accounting policies adopted by the Group is set out below.
+(b) Basis of preparation
+The consolidated financial statements for the year ended 31 December 2016 comprise the Group and the
+Group's interest in associates and joint ventures.
+The measurement basis used in the preparation of the financial statements is the historical cost basis, as
+modified by the revaluation of available-for-sale financial assets which are carried at fair value.
+The preparation of financial statements in conformity with IFRSS and HKFRSS requires management
+to make judgements, estimates and assumptions that affect the application of policies and reported
+amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are
+based on historical experience and various other factors that are believed to be reasonable under the
+circumstances, the results of which form the basis of making the judgements about carrying values of
+assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
+estimates.
+The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
+estimates are recognized in the period in which the estimate is revised if the revision affects only that
+period, or in the period of the revision and future periods if the revision affects both current and future
+periods.
+Judgements made by management in the application of IFRSS and HKFRSS that have significant effect on
+the financial statements and major sources of estimation uncertainty are discussed in note 40.
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+79
+Statement of compliance
+The Group applies the acquisition method to account for business combination of entities and
+businesses which are not under common control. The consideration transferred for the acquisition
+of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former
+owners of the acquiree and the equity interests issued by the Group. The consideration transferred
+includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
+Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
+combination are measured initially at their fair values at the acquisition date. Acquisition-related
+costs are expensed as incurred.
+(iv) Business combination under common control
+Under IFRSS and HKFRSS, the Group use merger accounting to account for the business
+combination of entities and businesses under common control in accordance with AG 5.
+(e)
+Goodwill (Continued)
+CHINA MOBILE LIMITED
+(f)
+Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business
+combination is allocated to each cash-generating unit, or groups of cash-generating units, that is expected
+to benefit from the synergies of the combination and is tested annually for impairment (see note 2(i)).
+Each unit or groups of units to which the goodwill is allocated represents the lowest level within the
+Group at which the goodwill is monitored for internal management purpose. Goodwill is monitored at the
+operating segment level.
+On disposal of a cash-generating unit during the year, any attributable amount of purchased goodwill is
+included in the calculation of the gain or loss on disposal.
+Other intangible assets
+Other intangible assets that are acquired by the Group are stated in the balance sheet at cost less
+accumulated amortization (where the estimated useful life is finite) and impairment losses (see note 2(i)).
+Amortization of intangible assets with finite useful lives is recorded in other operating expenses on a
+straight-line basis over the assets' estimated useful lives, from the date they are available for use. Both
+the period and method of amortization are reviewed annually.
+Intangible assets are not amortized where their useful lives are assessed to be indefinite. The useful life
+of an intangible asset that is not being amortized is reviewed annually to determine whether events and
+circumstances continue to support the indefinite useful life assessment for that asset. Otherwise, the
+change in useful life assessment from indefinite to finite is accounted for prospectively from the date of
+change and in accordance with the policy for amortization of intangible assets with finite lives as set out
+above.
+(g) Property, plant and equipment
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Property, plant and equipment are stated in the balance sheet at cost less accumulated depreciation and
+impairment losses (see note 2(i)).
+Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are
+determined as the difference between the net disposal proceeds and the carrying amount of the item and
+are recognized in profit or loss on the date of retirement or disposal.
+Depreciation is calculated to write off the cost of items of property, plant and equipment, less their
+estimated residual value, if any, using the straight-line method over their estimated useful lives as
+follows:
+Buildings
+Telecommunications transceivers, switching centers,
+transmission and other network equipment
+Office equipment, furniture, fixtures and others
+Both the assets' useful lives and residual values, if any, are reviewed annually.
+8-30 years
+5-10 years
+3-10 years
+The cost of property, plant and equipment comprises the purchase price and any directly attributable
+costs of bringing the asset to its working location and condition for its intended use. Subsequent
+expenditure relating to an item of property, plant and equipment that has already been recognized is
+added to the carrying amount of the asset when it is probable that future economic benefits, in excess
+of the originally assessed standard of performance of the existing asset, will flow to the entity. All other
+subsequent expenditure is recognized as an expense in the period in which it is incurred.
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+62
+The consolidated financial statements incorporate the financial statements of the combining entities
+or businesses in which the common control combination occurs as if they had been combined from
+the date when the combining entities or businesses first came under the control of the controlling
+party.
+The assets and liabilities of the combining entities or businesses are combined using the carrying
+book values from the controlling parties' perspective. No amount is recognized in consideration
+for goodwill or excess of acquirers' interest in the net fair value of acquiree's identifiable
+assets, liabilities and contingent liabilities over the consideration at the time of common control
+combination, to the extent of the continuation of the controlling party's interest.
+The consolidated statement of comprehensive income includes the results of each of the combining
+entities or businesses from the earliest date presented or since the date when the combining
+entities or businesses first came under the common control, where there is a shorter period,
+regardless of the date of the common control combination. Transaction costs, including professional
+fees, registration fees, costs of furnishing information to shareholders, costs or losses incurred
+in combining operations of the previously separate businesses, etc., incurred in relation to the
+common control combination that is to be accounted for by using merger accounting is recognized as
+an expense in the period in which they were incurred.
+ANNUAL REPORT 2016
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+81
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(d) Investments accounted for using the equity method
+Investments accounted for using the equity method include investment in associates and joint ventures.
+An associate is an entity in which the Group has significant influence, but not control or joint control, over
+its management, including participation in the financial and operating policy decisions.
+Notes to the Consolidated Financial Statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+The Group has applied IFRS/HKFRS 11 to all joint arrangements. Under IFRS/HKFRS 11, investments in
+joint arrangements are classified as either joint operations or joint ventures depending on the contractual
+rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and
+determined them to be joint ventures.
+When the Group's share of losses exceeds its interest in the associate or joint ventures, the Group's
+interest is reduced to nil and recognition of further losses is discontinued except to the extent that the
+Group has incurred legal or constructive obligations or made payments on behalf of the investee. For this
+purpose, the Group's interest in the investee is the carrying amount of the investment under the equity
+method together with the Group's long-term interests that in substance form part of the Group's net
+investment in the associates or joint ventures.
+Unrealized profits and losses resulting from transactions between the Group and its associates or joint
+ventures are eliminated to the extent of the Group's interest in the investee, except where unrealized
+losses provide evidence of an impairment of the asset transferred, in which case they are recognized
+immediately in profit or loss. Accounting policies of associates or joint ventures would be changed where
+necessary in the consolidated financial statements to ensure consistency with the policies adopted by the
+Group.
+Gain or loss on dilution of equity interest in associates and joint ventures are recognized in profit or loss.
+(e) Goodwill
+Goodwill represents the excess of
+(i) the aggregate of the fair value of the consideration transferred, the amount of any non-controlling
+interest in the acquiree and the fair value of the Group's previously held equity interest in the
+acquiree; over
+(ii)
+the net fair value of the acquiree's identifiable assets and liabilities measured as at the acquisition
+date.
+When (ii) is greater than (i), then this excess is recognized immediately in profit or loss as a gain on a
+bargain purchase.
+82
+Under the equity method, the investment is initially recorded at cost. Thereafter, the investment is
+adjusted for the post-acquisition change in the Group's share of the investee's net assets and any
+impairment loss relating to the investment (see note 2(i)). The Group's share of the post-acquisition post-
+tax results of the investee for the year is recognized as share of profit or loss of investments accounted
+for using the equity method in the consolidated statement of comprehensive income, whereas the
+Group's share of the post-acquisition post-tax items of the investee's other comprehensive income is
+recognized as its share of other comprehensive income in the consolidated statement of comprehensive
+income.
+40
+CHINA MOBILE LIMITED
+ANNUAL REPORT
+PRINCIPAL BOARD COMMITTEES
+Audit Committee
+Mr. Stephen YIU Kin Wah (Chairman)
+Dr. Moses CHENG Mo Chi
+Mr. Paul CHOW Man Yiu
+Dr. YANG Qiang
+Remuneration Committee
+Dr. Moses CHENG Mo Chi
+(Chairman)
+Mr. Paul CHOW Man Yiu
+Mr. Stephen YIU Kin Wah
+Nomination Committee
+Mr. Paul CHOW Man Yiu (Chairman)
+Dr. Moses CHENG Mo Chi
+Mr. Stephen YIU Kin Wah
+COMPANY SECRETARY
+Mr. Paul CHOW Man Yiu
+Mr. Stephen YIU Kin Wah
+Dr. YANG Qiang
+Ms. WONG Wai Lan, Grace
+KPMG
+Registered Public Interest
+Entity Auditor
+KPMG Huazhen LLP
+Recognised Public Interest
+Entity Auditor
+LEGAL ADVISER
+Sullivan & Cromwell (Hong Kong)
+LLP
+REGISTERED OFFICE
+60/F, The Center
+99 Queen's Road Central
+Hong Kong
+PUBLIC AND INVESTOR RELATIONS
+Tel: 852 3121 8888
+Fax: 852 2511 9092
+AUDITORS
+Website: www.chinamobileltd.com
+Stock code: (HKEX) 941
+Dr. Moses CHENG Mo Chi
+Mr. LI Ronghua
+(Executive Director &
+Chief Financial Officer)
+November 2021
+The RMB Share Issue
+was approved by the
+Issuance Examination
+Committee of the
+CSRC
+December 2021
+Our Hong Kong Fotan
+Data Center in the
+Guangdong-Hong
+Kong-Macao Greater
+Bay Area officially
+started construction
+December 2021
+Jointly released
+the Smart Port 2.0
+commercial operating
+solution comprising
+5G, Beidou and
+driverless services
+January 2022
+China Mobile Limited
+was successfully listed
+on the Main Board of
+the Shanghai Stock
+Exchange (stock code:
+600941)
+STONES
+Independent Non-Executive
+Directors
+04 China Mobile Limited
+INFORMATION
+BOARD OF DIRECTORS
+Executive Directors
+Mr. YANG Jie
+(Executive Director & Chairman)
+Mr. DONG Xin
+(Executive Director &
+Chief Executive Officer)
+Mr. WANG Yuhang
+(Executive Director)
+CORPORATE
+Released the China
+Mobile Computing
+Force Network
+Whitepaper jointly with
+industry partners
+(SSE) 600941
+HK SHARE REGISTRAR
+2021
+116,148
+2020
+107,843
+EBITDA
+(RMB million)
+2021
+311,008
+2020
+285,135
+Dividend per Share (Full Year)
+(HK$)
+2021
+4.06
+(RMB million)
+2020
+3.29
+2021
+2020
+Operating revenue (RMB million)
+848,258
+768,070
+Of which: Revenue from telecommunications services (RMB million)
+751,409
+695,692
+EBITDA (RMB million)
+311,008
+Annual Report 2021 05
+CUSIP Reference Number: 16941M109
+Profit Attributable to Equity Shareholders
+2020
+Hong Kong Registrars Limited
+Shops 1712-1716,
+17/F Hopewell Centre
+183 Queen's Road East
+Wanchai, Hong Kong
+RMB SHARE REGISTRAR
+China Securities Depository and
+Clearing Corporation Limited
+(CSDC)
+Head Office Address:
+No. 17 Tai Ping Qiao Street,
+Xicheng District,
+Beijing, P.R. China
+Postal Code: 100033
+www.chinaclear.cn
+PUBLICATIONS
+As required by the laws and
+regulations of People's Republic
+of China, Hong Kong SAR and the
+United States, the Company shall
+file an annual report with Shanghai
+Stock Exchange, Hong Kong Stock
+Exchange, and an annual report on
+Form 20-F with the US SEC by the
+end of April each year. Copies of the
+annual reports of the Company as
+well as the annual report on Form
+20-F, once filed, will be available at:
+Hong Kong and the mainland of
+China:
+768,070
+China Mobile Limited
+99 Queen's Road Central
+Hong Kong
+29 Jing Rong Avenue,
+Xi Cheng District, Beijing,
+China
+www.chinamobileltd.com
+SSE: www.sse.com.cn
+HKEX: www.hkexnews.hk
+US SEC: www.sec.gov
+FINANCIAL
+HIGHLIGHTS
+Operating Revenue
+(RMB million)
+2021
+848,258
+60/F, The Center,
+285,135
+November 2021
+EDGE
+2021
+ANNUAL REPORT
+ABILITY
++
+COMPUTING FORCE
++
+CONNECTIVITY
+000
+000
+Human Resources Development
+中国移动
+4
+68
+Report of Directors
+5
+Financial Highlights
+79
+Independent Auditor's Report
+6
+Company Profile
+84
+Consolidated Statement of
+Corporate Information
+7
+China Mobile
+Stock Code: 941
+CONTENTS
+MAIN BOARD OF THE A-SHARE MARKET
+RED-CHIP COMPANY LISTED ON THE
+THE FIRST
+53
+ΑΙ
+0
+83.
+દ
+China Mobile endeavours to build a
+new information service system of
+"connectivity, computing force and
+ability" based on 5G, computing force
+network and smart mid-end platforms,
+promoting computing force as an
+essential service serving the whole
+society in the same plug-and-play way
+as access to water and electricity,
+thus achieving ubiquitous network,
+omnipresent computing force and
+omnipotent intelligence.
+China Mobile Limited
+THEME
+China Moble
+中国移动
+2021
+67
+ABILITY
+COMPUTING FORCE
+CONNECTIVITY
+ter
+Certain statements contained in
+this annual report may be viewed as
+"forward-looking statements" within
+the meaning of Section 27A of the U.S.
+Securities Act of 1933, as amended,
+and Section 21E of the U.S. Securities
+Exchange Act of 1934, as amended.
+Such forward-looking statements involve
+known and unknown risks, uncertainties
+and other factors, which may cause the
+actual performance, financial condition or
+results of operations of the Company to
+be materially different from those implied
+by such forward-looking statements.
+In addition, we do not intend to update
+these forward-looking statements.
+Further information regarding these
+risks, uncertainties and other factors is
+included in the Company's most recent
+Annual Report on Form 20-F filed and
+other filings with the U.S. Securities and
+Exchange Commission.
+FORWARD-LOOKING
+STATEMENTS
+China Mobile Limited
+Annual Report 2021 03
+Biographies of Directors and Senior
+Management
+1 0 1
+100
+0 1
+January 2021
+Signed specific
+collaboration
+agreements in relation
+to 5G co-construction
+and sharing with China
+Broadcasting Network
+Corporation Ltd.
+March 2021
+Officially announced
+the "Joint Innovation
+Plus" action plan
+May 2021
+The Board approved
+the proposed RMB
+Share Issue
+June 2021
+0 1 0
+China Mobile Hong
+Kong accumulated
+more than 5 million
+mobile customers
+Officially started the
+C² Three Energy-China
+Mobile Carbon Peak
+Carbon Neutrality
+Action Plan
+July 2021
+China Mobile Wing
+Loong, a large
+and long-duration
+UAV emergency
+communication
+system, was deployed
+to fully support
+communications in
+disaster-stricken areas
+in Henan
+August 2021
+China Mobile
+accumulated more
+than 300 million 5G
+package customers
+MILE
+July 2021
+Comprehensive Income
+0 1
+02 China Mobile Limited
+86
+Consolidated Balance Sheet
+14
+Chairman's Statement
+88
+26
+Corporate Recognitions
+Consolidated Statement of Changes
+in Equity
+89
+28
+CO
+Business Review
+36
+Financial Review
+Consolidated Statement of Cash Flows
+Notes to the Consolidated Financial
+Statements
+42
+Sustainability Report
+164
+Financial Summary
+46
+Corporate Governance Report
+92
+EBITDA margin²
+36.7%
+37.1%
+•
+China Mobile (Shanghai) ICT Co., Ltd.
+•
+• China Mobile Financial Technology Co., Ltd.
+• China Mobile Investment Holdings Co., Ltd.
+• China Mobile Internet Company Limited
+• China Mobile (Suzhou) Software Technology
+Co., Ltd.
+• China Mobile Online Services Co., Ltd.
+• China Mobile Group Device Co., Ltd.
+China Mobile Group Design Institute Co., Ltd.
+•
+Other specialized subsidiaries include:
+Operating subsidiaries in 31 provinces, autonomous
+regions and directly-administered municipalities in
+the mainland of China and Hong Kong
+China Mobile Communication Co., Ltd.
+China Mobile International Limited
+China Mobile Xiong'an ICT Co., Ltd.
+•
+China Mobile Group Finance Co., Ltd.
+Aspire Holdings Ltd.
+2
+China Mobile Information System Integration Co., Ltd.
+• China Mobile e-Commerce Co., Ltd.
+China Mobile (Chengdu) ICT Co., Ltd.
+•
+China Mobile System Integration Co., Ltd.
+.
+Public shareholders
+China Mobile TieTong Company Limited
+China Mobile (Hangzhou) Information Technology Company
+Limited
+•
+China Mobile Information Technology Company Limited
+•
+• MIGU Co., Ltd.
+• China Mobile loT Company Limited
+Other specialized subsidiaries*
+•
+China Mobile Limited
+Milestones
+72.72%
+1.53
+1.63
+- Interim (HK$)
+Dividend per share
+5.27
+5.67
+Basic earnings per share (RMB)
+- Final (HK$)
+14.0%
+Margin of profit attributable to equity shareholders³
+107,843
+116,148
+41.0%
+41.4%
+27.28%
+EBITDA as % of revenue from telecommunications services
+13.7%
+- Full year (HK$)
+Profit attributable to equity shareholders (RMB million)
+1.76
+2.43
+China Mobile (Hong Kong) Group Limited
+China Mobile Hong Kong (BVI) Limited
+In 2021, the Company was once again selected as one
+of The Global 2,000 World's Largest Public Companies
+by Forbes magazine and Fortune Global 500 by Fortune
+magazine. The China Mobile brand was once again listed
+in BrandZTM Top 100 Most Valuable Global Brands 2021
+by Millward Brown ranking 68. Currently, the Company's
+corporate credit ratings are equivalent to China's
+sovereign credit ratings, namely, A+/Outlook Stable from
+Standard & Poor's and A1/Outlook Stable from Moody's.
+The Company's ultimate controlling shareholder is China
+Mobile Communications Group Co., Ltd. ("CMCC"),
+which, as of 31 December 2021, indirectly held
+approximately 72.72% of the total number of issued
+shares of the Company. The remaining approximately
+27.28% was held by public investors.
+and customer base, a leading position in profitability and
+market value ranking. Its businesses primarily consist
+of mobile voice and data business, broadband and other
+services. As of 31 December 2021, the Group had a
+total of 449,934 employees, and a total of 957 million
+mobile customers and 240 million wireline broadband
+customers, with its annual revenue totalling RMB848.3
+billion.
+As the leading ICT services provider in the mainland
+of China, the Group provides communications and
+information services in all 31 provinces, autonomous
+regions and directly-administered municipalities
+throughout the mainland of China and in Hong Kong
+SAR, and boasts a world-class telecommunications and
+information operator with the world's largest network
+China Mobile Limited (the "Company", and together
+with its subsidiaries, the "Group") was incorporated in
+Hong Kong on 3 September 1997. The Company was
+listed on the New York Stock Exchange ("NYSE") and
+The Stock Exchange of Hong Kong Limited ("HKEX"
+or the "Hong Kong Stock Exchange") on 22 October
+1997 and 23 October 1997, respectively. The Company
+was admitted as a constituent stock of the Hang Seng
+Index in Hong Kong on 27 January 1998. On 7 May
+2021, the NYSE filed a Form 25 with the US Securities
+and Exchange Commission (the "US SEC") to strike the
+Company's ADSS from listing and registration, which
+have taken effect on 18 May 2021. On 5 January 2022,
+the Company's RMB ordinary shares ("RMB Shares" or
+"A-Shares") were listed on the Main Board of Shanghai
+Stock Exchange ("SSE").
+China Mobile Principal Organizational Structure
+as at 31 December 2021
+06 China Mobile Limited
+4.06
+COMPANY
+PROFILE
+3.29
+123
+China Mobile Communications Group Co., Ltd.
+EBITDA = profit from operations + depreciation and amortization
+EBITDA margin = EBITDA/operating revenue
+Margin of profit attributable to equity shareholders = profit attributable to equity shareholders/operating revenue
+Other non-current assets
+Investments accounted for using the equity method
+20(a)
+161,811
+Deferred tax assets
+21
+43,216
+38,998
+Financial assets measured at fair value through other comprehensive
+income
+Financial assets measured at fair value through profit or loss
+Restricted bank deposits
+7,213
+169,556
+1000
+22
+22
+689
+78,600
+1,111
+23
+7,046
+8,836
+24
+37,198
+36,345
+1,245,956
+1,148,139
+Current assets
+8,171
+2222
+Other intangible assets
+Right-of-use assets
+35,344
+CONSOLIDATED BALANCE SHEET
+as at 31 December 2021 (Expressed in RMB)
+As at
+31 December
+Note
+2021
+Million
+As at
+31 December
+2020
+Million
+Assets
+Non-current assets
+Property, plant and equipment
+Construction in progress
+35,344
+Inventories
+15
+723,305
+705,547
+16
+71,742
+71,651
+17(a)
+55,350
+65,091
+17(b)
+15,739
+16,192
+Goodwill
+18
+Land use rights
+Contract assets
+2,612
+Other receivables
+128,603
+2,163
+2,830
+89,049
+110,382
+32
+243,943
+212,729
+595,371
+579,743
+1,841,327
+1,727,882
+Total assets
+Equity and liabilities
+Liabilities
+Current liabilities
+Accounts payable
+Bills payable
+Contract liabilities
+Accrued expenses and other payables
+Amount due to ultimate holding company
+Income tax payable
+Lease liabilities
+33
+33
+152,712
+167,990
+12,747
+4,561
+34
+132,995
+22
+36,724
+33,884
+Amount due from ultimate holding company
+25
+10,203
+8,044
+26
+6,551
+3,841
+27
+34,668
+38,401
+10,137
+9,923
+28
+Prepayments and other current assets
+Accounts receivable
+29
+1,396
+28,291
+25,713
+Prepaid income tax
+875
+1,157
+Other financial assets measured at amortized cost
+Financial assets measured at fair value through profit or loss
+Restricted bank deposits
+Bank deposits
+31
+Cash and cash equivalents
+3223
+30
+22
+23
+(897)
+(188,106)
+Share option scheme
+(note 38(d)(ii))
+Transfer to PRC statutory reserves
+(note 38(b)(i))
+Dividends declared in respect of current year
+(note 38(b)(ii))
+Dividends approved in respect of previous year
+(882)
+(761)
+Total comprehensive income for the year
+(212)
+accounted for using the equity method
+Share of other comprehensive loss of investments
+(882)
+Currency translation differences
+(143)
+Remeasurement of defined benefit liabilities
+(406)
+comprehensive income
+I
+579
+79
+116,148 116,148
+-Value of share options (note 37)
+(579)
+(27,669)
+(27,669) (27,669)
+(29,988)
+(72)
+(29,916) (29,916)
+114,663
+158
+measured at fair value through other
+116,148 114,505
+(212)
+(882)
+(882)
+(143)
+(143)
+(406)
+(406)
+116,306
+158
+(212)
+Changes in the fair value of financial assets
+Profit for the year
+Changes in equity for 2021:
+21
+(94)
+(430)
+(430)
+(430)
+232
+232
+(636)
+636
+(1,128) (1,201)
+(571)
+(27,557)
+(27,557)
+(27,557)
+(32,180)
+(11)
+(32,169)
+(32,169)
+106,565
+297
+571
+413
+54
+402,130
+As at 1 January 2021
+As at 31 December 2020
+Others
+using the equity method
+investments accounted for
+Changes in the share of other reserves of
+232
+-Value of share options (note 37)
+Share option scheme
+(1,147)
+3,856 1,152,772
+3,786
+(198) 346,794
+(264,308)
+402,130
+3,856 1,152,772
+660,712 1,148,916
+3,786
+(198) 346,794
+(264,308)
+660,712 1,148,916
+106,268
+43
+13
+(902)
+(2,439)
+Increase in inventories
+297,701
+325,954
+Operating cash flows before changes in working capital
+232
+413
+- Share options expenses
+(32)
+(11)
+- Net exchange gain
+(12,678)
+(11,914)
+- Income from investments accounted for using the equity method
+(1)
+2,996
+(14,341)
+196
+(Increase)/decrease in contract assets
+(3,337)
+1,228
+(Increase)/decrease in contract costs
+Increase in accounts payable
+5,546
+7,896
+Increase in bills payable
+4,211
+Decrease/(increase) in deposited customer reserves
+(46)
+(1,216)
+Increase in amount due from ultimate holding company
+280
+(16,729)
+2,679
+1,538
+(Increase)/decrease in prepayments and other current assets
+(585)
+(255)
+Increase in other receivables
+(10,812)
+(297)
+Increase in accounts receivable
+1,500
+(3,353)
+(4,667)
+710
+- Dividend income from equity investments at fair value through
+other comprehensive income
+- Finance costs
+Operating activities
+for the year ended 31 December 2021 (Expressed in RMB)
+CONSOLIDATED STATEMENT OF CASH FLOWS
+The notes on pages 92 to 163 are an integral part of these consolidated financial statements.
+3,942 1,210,292
+3,908 718,696 1,206,350
+402,130 (264,677) (1,080) 347,373
+As at 31 December 2021
+(21)
+Annual Report 2021 89
+221
+(21)
+122
+122
+(21)
+equity method
+Others
+investments accounted for using the
+Changes in the share of other reserves of
+43
+86 China Mobile Limited
+413
+122
+413
+Note
+2020
+Million
+- Interest and other income
+- Write-down of inventories
+(62)
+88
+- Impairment losses of contract assets
+5,084
+4,171
+7
+- Expected credit impairment losses
+2021
+Million
+1,547
+7
+- Net loss on disposal and write-off of property, plant and equipment
+172,401
+193,045
+- Depreciation and amortization
+Adjustments for:
+142,359
+152,184
+Profit before taxation
+1,748
+107,843
+(1,915)
+(617)
+4,305
+(32)
+Increase in other non-current liabilities
+4,209
+4,923
+354,158
+343,868
+Cash generated from operations
+Tax paid
+- The mainland of China and other countries and regions' enterprise
+income tax paid
+- Hong Kong profits tax paid
+(38,991)
+(403)
+(35,776)
+(331)
+Net cash generated from operating activities
+314,764
+307,761
+90 China Mobile Limited
+Consolidated Statement of Cash Flows (Continued)
+Increase/(decrease) in amount due to ultimate holding company
+18,584
+24,696
+Increase in accrued expenses and other payables
+Annual Report 2021 87
+517,274
+582,148
+24,173
+26,059
+17(c)
+13,856
+13,575
+26,714
+for the year ended 31 December 2021 (Expressed in RMB)
+23,478
+200,952
+274,509
+829
+Increase in contract liabilities
+40
+21,203
+(Decrease)/increase in deferred revenue
+(114)
+1,740
+28
+2021
+Million
+2020
+Million
+Purchase of investments accounted for using the equity method
+Dividends received from investments accounted for using the equity
+method
+(277)
+(1,346)
+3,926
+Purchase of financial assets measured at fair value through profit or loss
+Proceeds from disposal of financial assets measured at fair value
+through profit or loss
+(136,813)
+4,362
+(114,893)
+57,687
+103,479
+417
+Purchase of financial assets measured at fair value through other
+comprehensive income
+through other comprehensive income
+Others
+Net cash used in investing activities
+(205)
+35
+500
+16
+12
+(238,296)
+Proceeds from disposal of financial assets measured at fair value
+Consolidated Balance Sheet (Continued)
+523
+13,361
+Investing activities
+Payment for property, plant and equipment
+Payment for land use rights
+Payment for other intangible assets
+Proceeds from disposal and write-off of property, plant and equipment
+Decrease in bank deposits
+Decrease/(increase) in other financial assets measured at amortized cost
+Decrease/(increase) in restricted bank deposits (excluding deposited
+customer reserves)
+Interest and other finance income received
+Proceeds from disposal of investments accounted for using the equity
+method
+(202,673)
+(44)
+(4,594)
+12,999
+(189,577)
+(703)
+505
+266
+25,596
+15,008
+2,483
+(17,921)
+2,008
+(335)
+(169)
+as at 31 December 2021 (Expressed in RMB)
+As at
+As at
+614,930
+Total
+Capital Exchange statutory
+Other
+Retained
+controlling
+capital
+reserve
+reserves reserves profits Total interests equity
+Million Million Million Million Million Million Million Million Million
+402,130 (264,356) 1,717 346,223 3,129
+1,103,773 3,516 1,107,289
+reserve
+Share
+Non-
+PRC
+Attributable to equity shareholders of the Company
+measured at fair value through other
+957
+Changes in the fair value of financial assets
+Changes in equity for 2020:
+As at 1 January 2020
+for the year ended 31 December 2021 (Expressed in RMB)
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+88 China Mobile Limited
+The notes on pages 92 to 163 are an integral part of these consolidated financial statements.
+Name of Director
+Li Ronghua
+Name of Director
+Profit for the year
+Dong Xin
+(1,915)
+40
+(617)
+957
+(1,915)
+(1,915)
+957
+297 108,140
+107,843
+107,843
+Transfer to other reserves (note 38(d)(iii))
+Transfer to PRC statutory reserves (note 38(d)(ii))
+comprehensive income
+(note 38(b)(i))
+(note 38(b)(ii))
+Dividends approved in respect of previous year
+440
+340
+Total comprehensive income for the year
+(617)
+investments accounted for using the equity
+method
+Share of other comprehensive loss of
+Currency translation differences
+Dividends declared in respect of current year
+875
+The consolidated financial statements on pages 84 to 163 were approved by the Board of Directors on 23 March
+2022 and were signed on its behalf.
+1,841,327
+7,109
+Other non-current liabilities
+1,668
+2,369
+21
+8,601
+8,487
+36
+42,460
+5,107
+30,922
+Deferred revenue
+Deferred tax liabilities
+Lease liabilities - non-current
+Non-current liabilities
+Million
+2020
+2021
+Million
+Note
+31 December
+31 December
+17(c)
+1,727,882
+48,887
+Total liabilities
+1,152,772
+1,210,292
+3,856
+3,942
+1,148,916
+1,206,350
+746,786
+804,220
+402,130
+57,836
+402,130
+Total equity and liabilities
+Total equity
+Non-controlling interests
+Total equity attributable to equity shareholders of the Company
+Reserves
+Share capital
+Equity
+575,110
+631,035
+38(a)
+The notes on pages 92 to 163 are an integral part of these consolidated financial statements.
+79,068
+96,083
+16,729
+14,341
+(2,679)
+(2,996)
+11,914
+12,678
+152,184
+142,359
+13(a)
+(35,878)
+(34,219)
+116,306
+108,140
+Other comprehensive income for the year, net of tax:
+Items that will not be subsequently reclassified to profit or loss
+Changes in the fair value of financial assets measured at fair value
+through other comprehensive income
+Remeasurement of defined benefit liabilities
+(406)
+(143)
+5,602
+957
+8,257
+9
+193,045
+172,401
+6
+118,680
+106,429
+48,243
+RMB5.27
+49,943
+RMB5.27
+73,100
+7
+49,234
+47,039
+730,295
+655,336
+117,963
+112,734
+810
+Share of other comprehensive income/(loss) of investments
+accounted for using the equity method
+7
+Annual Report 2021 85
+RMB5.67
+Consolidated Statement of Comprehensive Income (Continued)
+for the year ended 31 December 2021 (Expressed in RMB)
+Note
+2021
+Million
+2020
+Million
+116,148
+158
+107,843
+297
+116,306
+108,140
+114,505
+158
+106,268
+297
+114,663
+106,565
+14(a)
+RMB5.67
+Earnings per share - Diluted
+Earnings per share - Basic
+TOTAL COMPREHENSIVE INCOME FOR THE YEAR
+Non-controlling interests
+(32)
+Items that may be subsequently reclassified to profit or loss
+Currency translation differences
+(882)
+(1,915)
+Share of other comprehensive loss of investments accounted for
+using the equity method
+(219)
+(585)
+206,424
+TOTAL COMPREHENSIVE INCOME FOR THE YEAR
+106,565
+Profit attributable to:
+Equity shareholders of the Company
+Non-controlling interests
+PROFIT FOR THE YEAR
+79,028
+Total comprehensive income attributable to:
+Equity shareholders of the Company
+114,663
+225,010
+14(b)
+Taxation
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+84 China Mobile Limited
+23 March 2022
+Central, Hong Kong
+10 Chater Road
+8th Floor, Prince's Building
+Certified Public Accountants
+KPMG
+The engagement partner on the audit resulting in this independent auditor's report is Wan Chi Yau, Charles.
+From the matters communicated with the Audit Committee, we determine those matters that were of most
+significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
+matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
+the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
+our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
+interest benefits of such communication.
+We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
+regarding independence and communicate with them all relationships and other matters that may reasonably be
+thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
+We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the
+audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
+audit.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
+activities within the Group to express an opinion on the consolidated financial statements. We are responsible
+for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
+opinion.
+Evaluate the overall presentation, structure and content of the consolidated financial statements, including
+the disclosures, and whether the consolidated financial statements represent the underlying transactions and
+events in a manner that achieves fair presentation.
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based
+on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
+cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material
+uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
+are based on the audit evidence obtained up to the date of our auditor's report. However, future events or
+conditions may cause the Group to cease to continue as a going concern.
+for the year ended 31 December 2021 (Expressed in Renminbi ("RMB"))
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
+related disclosures made by the directors.
+Operating revenue
+Revenue from sales of products and others
+00
+Employee benefit and related expenses
+LO
+5
+Network operation and support expenses
+Depreciation and amortization
+768,070
+848,258
+72,378
+695,692
+751,409
+96,849
+4
+2020
+Million
+2021
+Million
+Note
+Operating expenses
+Revenue from telecommunications services
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
+appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the
+Group's internal control.
+•
+Independent Auditor's Report (Continued)
+the appropriateness of the key assumptions adopted
+by management in the discounted cash flow forecast
+relating to assets growth rates and discount rate;
+the appropriateness of the methodology used in the
+discounted cash flow forecast;
+with the assistance of our valuation specialists, evaluating:
+assessing the design, implementation and operating
+effectiveness of key internal controls relating to the
+impairment assessment of the Group's investment in SPD
+Bank;
+Our audit procedures to assess the impairment assessment of
+the Group's investment in SPD Bank included the following:
+How the matter was addressed in our audit
+We identified the impairment assessment
+of the Group's investment in SPD Bank
+as a key audit matter because there were
+significant judgements and estimates made by
+management in determining the discounted cash
+flow forecast.
+As at 31 December 2021, an impairment
+assessment for the investment in SPD Bank
+was performed by the Group to determine the
+recoverable amount based on its value in use by
+discounted cash flow forecast, which involves
+management's significant judgements and
+estimates on certain key assumptions including
+assets growth rates and discount rate. Based
+on the result of the assessment, management
+determined that there was no impairment loss in
+this investment.
+In accordance with IAS/HKAS 36 "Impairment
+of Assets", where an indication of impairment
+of these assets exists, the Group will estimate
+the recoverable amounts of the relevant assets,
+based on the higher of its fair value less costs of
+disposal and its value in use. An impairment loss
+is recognized if the carrying amount of an asset
+exceeds its recoverable amount.
+The fair value of the Group's investment in
+Shanghai Pudong Development Bank Co., Ltd.
+("SPD Bank") based on quoted market price has
+been persistently below the carrying amount
+for a period of time. This is considered as an
+indicator of impairment.
+The Key Audit Matter
+Refer to note 2(d), note 2(j) and note 20 of the consolidated financial statements.
+Impairment assessment on the interest in an associate
+Independent Auditor's Report (Continued)
+Annual Report 2021 81
+comparing the key assumptions used in prior year's
+discounted cash flow forecast with the current year's actual
+performance to consider if there was any indication of
+management bias;
+evaluating the sensitivity analyses prepared by management
+for the key assumptions adopted in the discounted cash
+flow forecast and considering if there is any indication of
+management bias; and
+assessing the reasonableness of the disclosures in
+the consolidated financial statements in respect of the
+impairment assessment of the Group's investment in SPD
+Bank with reference to the requirements of the prevailing
+accounting standards.
+82 China Mobile Limited
+Annual Report 2021 83
+Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
+fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
+sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
+resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
+intentional omissions, misrepresentations or the override of internal control.
+•
+PROFIT FOR THE YEAR
+Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
+with HKSAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
+and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
+economic decisions of users taken on the basis of these consolidated financial statements.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
+are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
+opinion. This report is made solely to you, as a body, in accordance with section 405 of the Hong Kong Companies
+Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person
+for the contents of this report.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
+Selling expenses
+The directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group's
+financial reporting process.
+The directors are responsible for the preparation of the consolidated financial statements that give a true and
+fair view in accordance with IFRSS issued by the IASB and HKFRSS issued by the HKICPA and the Hong Kong
+Companies Ordinance and for such internal control as the directors determine is necessary to enable the preparation
+of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
+RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+If, based on the work we have performed, we conclude that there is a material misstatement of this other
+information, we are required to report that fact. We have nothing to report in this regard.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the other
+information and, in doing so, consider whether the other information is materially inconsistent with the consolidated
+financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
+Our opinion on the consolidated financial statements does not cover the other information and we do not express
+any form of assurance conclusion thereon.
+INFORMATION OTHER THAN THE CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
+The directors are responsible for the other information. The other information comprises all the information included
+in the annual report, other than the consolidated financial statements and our auditor's report thereon.
+Independent Auditor's Report (Continued)
+In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to
+continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
+basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
+realistic alternative but to do so.
+Cost of products sold
+As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional
+scepticism throughout the audit. We also:
+Profit before taxation
+Income from investments accounted for using the equity method
+Finance costs
+Interest and other income
+Other gains
+Profit from operations
+Other operating expenses
+At inception or on reassessment of a contract that contains a lease component, the Group allocates
+the consideration in the contract to each lease and non-lease component on the basis of their
+relative stand-alone prices. Unless the group applies the practical expedient permitted under IFRS/
+HKFRS 16 "Leases".
+On disposal of a cash-generating unit, any attributable amount of purchased goodwill is included in the
+calculation of the gain or loss on disposal.
+Goodwill is stated at cost less accumulated impairment losses. Goodwill arising in a business combination
+allocated to each cash-generating unit, or groups of cash-generating units, that is expected to benefit
+from the synergies of the combination and is tested annually for impairment (see note 2(j)). Each unit or
+groups of units to which the goodwill is allocated represents the lowest level within the Group at which
+the goodwill is monitored for internal management purpose. Goodwill is monitored at the operating
+segment level.
+When (ii) is greater than (i), then this excess is recognized immediately in profit or loss as a gain on a
+bargain purchase.
+the net fair value of the acquiree's identifiable assets and liabilities measured as at the acquisition
+date.
+Goodwill represents the excess of:
+(ii)
+(i)
+(f)
+the aggregate of the fair value of the consideration transferred, the amount of any non-controlling
+interest in the acquiree and the fair value of the Group's previously held equity interest in the
+acquiree; over
+Other intangible assets
+Notes to the consolidated financial statements (Continued)
+Intangible assets are not amortized where their useful lives are assessed to be indefinite. The useful life
+of an intangible asset that is not being amortized is reviewed annually to determine whether events and
+circumstances continue to support the indefinite useful life assessment for that asset. Otherwise, the
+change in useful life assessment from indefinite to finite is accounted for prospectively from the date of
+change and in accordance with the policy for amortization of intangible assets with finite lives as set out
+above.
+98 China Mobile Limited
+(e) Goodwill
+(Expressed in RMB unless otherwise indicated)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(g) Property, plant and equipment
+Property, plant and equipment are stated in the balance sheet at cost less accumulated depreciation and
+impairment losses (see note 2(j)).
+The cost of property, plant and equipment comprises the purchase price and any directly attributable
+costs of bringing the asset to its working location and condition for its intended use. Subsequent costs
+are recognized in the carrying amount of an item of property, plant and equipment, only when it is
+probable that future economic benefits associated with the item will flow to the Group and the cost of
+the item can be measured reliably. All other subsequent expenditure is recognized as an expense in the
+period in which it is incurred.
+Other intangible assets such as operating license and copyrights that are acquired by the Group are stated
+in the balance sheet at cost less accumulated amortization (where the estimated useful life is finite) and
+impairment losses (see note 2(j)). Amortization of intangible assets with finite useful lives is recorded
+in depreciation and amortization on a straight-line basis over the shorter of the assets' estimated useful
+lives or each asset's contractual period, from the date they are available for use. Both the useful lives and
+method of amortization of other intangible assets are reviewed at least annually by the Group.
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Gain or loss on dilution of equity interest in associates and joint ventures are recognized in profit or loss.
+Annual Report 2021 97
+The Group applies the acquisition method to account for combination of entities and businesses
+which are not under common control. The consideration transferred for the acquisition of a
+subsidiary includes the fair values of the assets transferred, the liabilities incurred to the former
+owners of the acquiree, the equity interests issued by the Group and the fair value of any asset
+or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and
+liabilities and contingent liabilities assumed in a business combination are measured initially at their
+fair values at the acquisition date. Acquisition-related costs are expensed as incurred.
+(iv) Business combination under common control
+Under IFRSS and HKFRSS, the Group uses merger accounting to account for the combination of
+entities and businesses under common control in accordance with the Accounting Guideline 5
+"Merger Accounting for Common Control Combinations" issued by the HKICPA.
+The consolidated financial statements incorporate the financial statements of the combining entities
+or businesses in which the common control combination occurs as if they had been combined from
+the date when the combining entities or businesses first came under the control of the controlling
+party.
+The assets and liabilities of the combining entities or businesses are combined using the carrying
+book values from the controlling parties' perspective. No amount is recognized in consideration
+for goodwill or excess of acquirers' interest in the net fair value of acquiree's identifiable
+assets, liabilities and contingent liabilities over the consideration at the time of common control
+combination, to the extent of the continuation of the controlling party's interest.
+The consolidated statement of comprehensive income includes the results of each of the combining
+entities or businesses from the earliest date presented or since the date when the combining
+entities or businesses first came under the common control, where there is a shorter period,
+regardless of the date of the common control combination. Transaction costs, including professional
+fees, registration fees, costs of furnishing information to shareholders, costs or losses incurred
+in combining operations of the previously separate businesses, etc., incurred in relation to the
+common control combination that is to be accounted for by using merger accounting is recognized as
+an expense in the period in which they were incurred.
+96 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+An associate is an entity, not being a subsidiary, in which the Group exercises significant influence, but
+not control or joint control, over its management. Significant influence is the power to participate in the
+financial and operating decisions of the investee but is not control or joint control over those policies.
+The Group has applied IFRS/HKFRS 11 to all joint arrangements. Under IFRS/HKFRS 11, investments in
+joint arrangements are classified as either joint operations or joint ventures depending on the contractual
+rights and obligations of each investor. A joint operation is an arrangement whereby the Group and
+other parties contractually agree to share control of the arrangement, and have rights to the assets and
+obligations for the liabilities relating to the arrangement. The Group accounts for its assets, liabilities,
+revenue and expenses, and its share thereof, in relation to its interests in the joint operation. A joint
+venture is an arrangement whereby the Group and other parties contractually agree to share control of
+the arrangement, and have rights to the net assets of the arrangement.
+Investments accounted for using the equity method
+The Group accounted for its investment in associates and joint ventures using the equity method.
+Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the
+Group's share of the acquisition-date fair values of the investee's net identifiable assets over the cost
+of the investment after reassessment (if applicable). Thereafter, the investment is adjusted for the post-
+acquisition change in the Group's share of the investee's net assets and any impairment loss relating to
+the investment (see note 2(j)). The Group's share of the post-acquisition post-tax results of the investee
+for the year is recognized as income from investments accounted for using the equity method in the
+consolidated statement of comprehensive income, whereas the Group's share of the post-acquisition
+post-tax items of the investee's other comprehensive income is recognized as its share of other
+comprehensive income in the consolidated statement of comprehensive income.
+When the Group's share of losses exceeds its interest in the associates or joint ventures, the Group's
+interest is reduced to nil and recognition of further losses is discontinued except to the extent that the
+Group has incurred legal or constructive obligations or made payments on behalf of the investee. For this
+purpose, the Group's interest in the investee is the carrying amount of the investment under the equity
+method together with the Group's long-term interests that in substance form part of the Group's net
+investment in the associates or joint ventures.
+Unrealized profits and losses resulting from transactions between the Group and its associates or joint
+ventures are eliminated to the extent of the Group's interest in the investee, except where unrealized
+losses provide evidence of an impairment of the asset transferred, in which case they are recognized
+immediately in profit or loss. Accounting policies of associates and joint ventures would be changed
+where necessary in the consolidated financial statements to ensure consistency with the policies adopted
+by the Group.
+Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are
+determined as the difference between the net disposal proceeds and the carrying amount of the related
+assets and are recognized in profit or loss on the date of retirement or disposal.
+2
+(d) Investments in associates and joint arrangements
+Depreciation is calculated to write off the cost of property, plant and equipment, less their estimated
+residual value, if any, using the straight-line method over their estimated useful lives as follows:
+Estimated
+Telecommunications transceivers, switching centers,
+transmission and other network equipment
+Office equipment, furniture, fixtures and others
+residual
+Other than land use right, the Group primarily leases telecommunications towers, buildings and
+premises and other network equipment. Lease contracts are typically made for fixed periods with
+no extension options.
+As lessee
+(i)
+A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
+for a period of time in exchange for consideration. At inception of a contract, the Group assesses whether
+the contract is, or contains, a lease. Control is conveyed where the customer has both the right to direct
+the use of the identified asset and to obtain substantially all of the economic benefits from that use.
+Leases
+(i)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Recognition and measurement of lease liabilities
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Construction in progress is stated at cost less impairment losses (see note 2(j)). Cost comprises direct
+costs of construction as well as interest expense and exchange differences capitalized during the periods
+of construction and installation. Capitalization of these costs ceases and the construction in progress is
+transferred to property, plant and equipment when substantially all the activities necessary to prepare the
+assets for their intended use are completed. No depreciation is provided for in respect of construction in
+progress.
+(h) Construction in progress
+Both the assets' useful lives and residual values are reviewed at least annually. During the year, the
+Group adjusted the residual value rate of certain wireless and transmission assets (mainly comprising
+2G wireless equipment, telecommunications optic cables and pipelines, etc) to zero. The effect of such
+change in accounting estimate is disclosed in note 15.
+3%
+3-10 years
+0-3%
+5-10 years
+3%
+8-30 years
+Annual Report 2021 99
+Buildings
+Lease liabilities are initially measured at the present value of unpaid lease payments at the
+commencement date. Lease payments include fixed payments, variable lease payments that are
+based on an index or a rate, residual value guarantees payments, lease payments to be made
+under reasonably certain extension options and payments of penalties for exercising an option to
+terminate the lease.
+Recognition and measurement of right-of-use asset
+Estimated
+(iii) Business combination other than under common control
+Lease income from operating leases where the Group is a lessor is recognized in income on a
+straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease
+are added to the carrying amount of the lease asset and recognized as expense over the lease term
+on the same basis as lease income. The respective leased assets are included in the balance sheet
+based on their nature.
+As lessor
+Short-term lease payments, payments for leases of low-value assets and variable lease payments
+that are not included in the measurement of the lease liabilities of the Group are included in the
+cash used in operating activities. Repayment of principal and interest of lease liabilities of the Group
+is included in the cash used in financing activities.
+Classification of lease related cash flow
+Payments associated with short-term leases and leases of low-value assets are recognized on a
+straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of
+12 months or less. Leases of low-value asset are leases for which the underlying asset is of low
+value, when new. Variable lease payments not based on an index or a rate are recognized in profit
+or loss in the period in which the condition that triggers those payments occurs.
+Other lease expenses
+For a lease modification that is not accounted for as a separate lease, at the effective date of
+the lease modification the Group redetermine the period of the modified lease and remeasure
+the lease liability by discounting the revised lease payments using a revised discount rate. The
+Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of
+the right-of-use asset to reflect the partial or full termination of the lease for lease modifications
+that decrease the scope of the lease and recognizing in profit or loss any gain or loss relating to
+the partial or full termination of the lease. For all other lease modifications, the Group makes a
+corresponding adjustment to the carrying amount of the right-of-use asset.
+As the interest rate implicit in the lease of the Group cannot be readily determined, the Group
+uses incremental borrowing rate as the discounted rate for calculating the present value of lease
+payments. When determine the incremental borrowing rate, the Group makes adjustments on risk-
+free interest rate based on lease term and credit risk for leases, as the Group does not have recent
+third party loan financing. Lease payments are allocated between principal and finance cost. The
+Group calculates interest on the lease liability based on a constant periodic rate, which is charged to
+profit or loss as finance cost over the lease period.
+The Group accounts for a lease modification as a separate lease if both: (1) the modification
+increases the scope of the lease by adding the right to use one or more underlying assets; (2)
+the consideration for the lease increases by an amount commensurate with the stand-alone price
+for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the
+circumstances of the particular contract.
+(ii)
+(i) As lessee (Continued)
+Leases (Continued)
+(i)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+100 China Mobile Limited
+Right-of-use assets of the Group are measured at cost, comprising the amount of the initial
+measurement of lease liabilities, any lease payments made at or before the commencement date,
+initial direct costs and restoration costs, etc. Right-of-use assets are generally depreciated over the
+shorter of the asset's useful life and the lease term on a straight-line basis.
+Lease modification
+Impairment testing of the investments in subsidiaries is required upon receiving a dividend from
+these investments if the dividend exceeds the total comprehensive income of the subsidiary in the
+period the dividend is declared or if the carrying amount of the investment in the separate financial
+statements exceeds the carrying amount in the consolidated financial statements of the investee's
+net assets including goodwill.
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(ii) Separate financial statements
+Net increase in cash and cash equivalents
+Cash and cash equivalents at beginning of year
+Effect of changes in foreign exchange rate
+(131)
+(28,502)
+(65)
+(170)
+(27,346)
+(68)
+(45,201)
+(82,252)
+31,267
+37,403
+212,729
+175,933
+(53)
+In the Company's balance sheet, an investment in a subsidiary is stated at cost less impairment
+losses (see note 2(j)). The results of subsidiaries are accounted for by the Company on the basis of
+dividends received and receivable.
+Cash and cash equivalents at end of year
+32
+Net cash used in financing activities
+Others
+Interest paid in relation to short-term deposits placed by CMCC Group
+Repayment of principal and interest of lease liabilities
+5,069
+Annual Report 2021 91
+Consolidated Statement of Cash Flows (Continued)
+for the year ended 31 December 2021 (Expressed in RMB)
+Note
+2021
+Million
+2020
+Million
+Financing activities
+Subscription funds received from issuance of RMB Shares
+243,943
+35
+48,695
+(57,585)
+(59,726)
+Dividends paid to non-controlling shareholders of subsidiaries
+(72)
+(11)
+Net (repayment)/receipts of short-term deposits placed by CMCC Group
+40(a)
+(7,541)
+Dividends paid to the Company's equity shareholders
+212,729
+(607)
+There are no changes in liabilities arising from financing activities other than the subscription funds received from
+issuance of RMB Shares (note 35), the receipts and repayment of short-term deposits placed by CMCC Group (note
+40(a)), the initial recognition of lease liabilities at the commencement date, and repayment of the related principal and
+interest associated with lease liabilities.
+94 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Changes in liabilities arising from financing activities
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(c) Subsidiaries and non-controlling interests
+(i)
+Subsidiaries
+Subsidiaries are all entities (including structured entities) over which the Group has control. The
+Group controls an entity when the Group is exposed to, 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.
+Judgements made by management in the application of IFRSS and HKFRSS that have significant effect on
+the financial statements and major sources of estimation uncertainty are disclosed in note 45.
+An investment in a subsidiary is consolidated into the consolidated financial statements from
+the date that control commences until the date that control ceases. Intra-group balances and
+transactions and any unrealized gains arising from intra-group transactions are eliminated in full
+in preparing the consolidated financial statements. Unrealized losses resulting from intra-group
+transactions are eliminated in the same way as unrealized gains but only to the extent that there is
+no evidence of impairment. Accounting policies of subsidiaries would be changed where necessary
+in the consolidated financial statements to ensure consistency with the policies adopted by the
+Group.
+Non-controlling interests are presented in the consolidated balance sheet within equity, separately
+from equity attributable to the equity shareholders of the Company. Non-controlling shareholders'
+interests in the results of the Group are presented on the face of the consolidated statement of
+comprehensive income as an allocation of the total profit or loss and total comprehensive income
+for the year between non-controlling interests and the equity shareholders of the Company.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted
+for as equity transactions, whereby adjustments are made to the amounts of controlling and non-
+controlling interests within consolidated equity to reflect the change in relative interests, but no
+adjustments are made to goodwill and no gain or loss is recognized.
+When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest
+in that subsidiary, with a resulting gain or loss being recognized in profit or loss. Any interest
+retained in that former subsidiary at the date when control is lost is recognized at fair value and this
+amount is regarded as the fair value on initial recognition of a financial asset or, when appropriate,
+the cost on initial recognition of an investment in an associate or a joint venture.
+2
+Annual Report 2021 95
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+value rate
+(c) Subsidiaries and non-controlling interests (Continued)
+Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly
+to the Company, and in respect of which the Group has not agreed any additional terms with
+the holders of those interests which would result in the Group as a whole having a contractual
+obligation in respect of those interests that meets the definition of a financial liability. For each
+business combination, the Group can elect to measure any non-controlling interests either at fair
+value or at their proportionate share of the subsidiary's net identifiable assets.
+The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
+estimates are recognized in the period in which the estimate is revised if the revision affects only that
+period, or in the period of the revision and future periods if the revision affects both current and future
+periods.
+2
+All of the amended standards that effective for the year beginning on 1 January 2021 have been applied
+for the first time by the Group. The details of adopting these amended standards are disclosed in note 3.
+The notes on pages 92 to 163 are an integral part of these consolidated financial statements.
+92 China Mobile Limited
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Expressed in RMB unless otherwise indicated)
+The preparation of financial statements in conformity with IFRSS and HKFRSS requires management
+to make judgements, estimates and assumptions that affect the application of policies and reported
+amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are
+based on historical experience and various other factors that are believed to be reasonable under the
+circumstances, the results of which form the basis of making the judgements about carrying values of
+assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
+estimates.
+2
+China Mobile Limited (the "Company") was incorporated in the Hong Kong Special Administrative Region
+("Hong Kong") of the People's Republic of China (the "PRC") on 3 September 1997. The principal activities of
+the Company and its subsidiaries (together referred to as the "Group") are the provision of telecommunications
+and information related services in the mainland of China and in Hong Kong (for the purpose of preparing
+the consolidated financial statements, the mainland of China refers to the PRC excluding Hong Kong, Macau
+Special Administrative Region of the PRC and Taiwan). The Company's immediate holding company is China
+Mobile Hong Kong (BVI) Limited (incorporated in the British Virgin Islands), and the Company's ultimate holding
+company is China Mobile Communications Group Co., Ltd. ("CMCC", incorporated in the mainland of China).
+The address of the Company's registered office is 60th Floor, The Center, 99 Queen's Road Central, Hong
+Kong.
+The shares of the Company have been listed on The Stock Exchange of Hong Kong Limited (the "HKEX”)
+since 23 October 1997 and the American Depositary Shares ("ADSS") of the Company had been listed on the
+New York Stock Exchange LLC (the "NYSE") since 22 October 1997. In January 2021, the NYSE announced to
+commence delisting proceedings of the ADSS of the Company and on 7 May 2021, the NYSE filed a Form 25
+with the US Securities and Exchange Commission to strike the Company's ADSs from listing and registration.
+The delisting of the Company's ADSS became effective on 18 May 2021. On 5 January 2022, the Company
+completed the initial public offering of ordinary shares subscribed for and traded in RMB (the "RMB Shares"),
+which were listed on the Shanghai Stock Exchange (the "RMB Share Issue").
+SIGNIFICANT ACCOUNTING POLICIES
+1 GENERAL INFORMATION
+These financial statements have been prepared in accordance with all applicable International Financial
+Reporting Standards ("IFRSS") issued by the International Accounting Standards Board ("IASB"), which
+collective term includes all applicable individual International Financial Reporting Standards, International
+Accounting Standards ("IASS") and Interpretations issued by the IASB. Hong Kong Financial Reporting
+Standards ("HKFRSS"), which collective term includes all applicable individual Hong Kong Financial
+Reporting Standards, Hong Kong Accounting Standards ("HKASS") and Interpretations issued by the
+Hong Kong Institute of Certified Public Accountants ("HKICPA"), are consistent with IFRSs that relates to
+the Group's financial statements. These financial statements also comply with HKFRSS, the requirements
+of Hong Kong Companies Ordinance Cap. 622, and the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on the HKEX (the "Listing Rules"). A summary of the significant
+accounting policies adopted by the Group is set out below.
+(a) Statement of compliance
+The measurement basis used in the preparation of the financial statements is the historical cost basis, as
+modified by the revaluation of certain financial instruments measured at fair value.
+The consolidated financial statements for the year ended 31 December 2021 comprise the Group and the
+Group's interest in associates and joint ventures.
+(b) Basis of preparation
+useful lives
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 93
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Borrowing costs that are directly attributable to the acquisition, construction or production of an
+asset which necessarily takes a substantial period of time to get ready for its intended use or sale are
+capitalized as part of the cost of that asset. Other borrowing costs are expensed in the period in which
+they are incurred.
+The capitalization of borrowing costs as part of the cost of a qualifying asset commences when
+expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are
+necessary to prepare the asset for its intended use or sale are in progress. Capitalization of borrowing
+costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset
+for its intended use or sale are interrupted or completed.
+(y) Translation of foreign currencies
+The functional currency of majority of the entities within the Group is RMB, which is the currency of the
+primary economic environment in which most of the Group's entities operate. The Group adopted RMB
+as its presentation currency in the preparation of the consolidated financial statements, which is also the
+functional currency of the Company.
+Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the
+transaction dates. Monetary assets and liabilities denominated in currencies other than the functional
+currency are retranslated at the foreign exchange rates ruling at the balance sheet date. Exchange gains
+and losses are recognized in profit or loss. Non-monetary assets and liabilities that are measured in
+terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at
+the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are
+stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was
+determined.
+The results of overseas entities are translated into RMB at the exchange rates approximating the
+foreign exchange rate ruling at the dates of transactions. Assets and liabilities are translated into RMB
+at the exchange rates ruling at the balance sheet date. The resulting currency translation differences
+are recognized in other comprehensive income and accumulated separately in equity in the exchange
+reserve. On disposal of an overseas entity, the cumulative amount of the currency translation differences
+relating to that particular foreign operation is reclassified from equity to profit or loss.
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas entities within
+the Group are translated into RMB by using the exchange rates approximating the foreign exchange rate
+ruling at the dates of the cash flows.
+(x) Borrowing costs
+The Group usually controls the services and the products it provided before they are transferred
+to the customer. In certain situations, the Group would consider the primary responsibilities in the
+arrangement, the establishment of selling price, and the inventory risks, etc. to determine if the
+Group is acting as a principal or agent. If the Group has assessed and concluded that it does not
+obtain the control of a specified product before transferring to the customer, the Group is acting as
+agent in satisfying a performance obligation, and the revenue is recognized in the net amount of any
+fee or commission to which it expects to be entitled from another party.
+2
+When inventories are sold, the carrying amount of those inventories is recognized as cost of products
+sold. The amount of any write-down of inventories to net realizable value and all losses of inventories are
+recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any
+write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction in
+the amount of inventories recognized as an expense in the period in which the reversal occurs.
+2
+Annual Report 2021 103
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(1)
+Investments and other financial assets
+Recognition and derecognition
+Regular way purchases and sales of financial assets are recognized on trade-date, the date on which
+the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to
+receive cash flows from the financial assets have expired or have been transferred and the Group has
+transferred substantially all the risks and rewards of ownership.
+Classification
+The Group classifies its financial assets, depending on the Group's business model for managing the
+financial assets and the contractual terms of the related cash flows, under the following measurement
+categories:
+• those to be measured at amortized cost, and
+those to be measured at fair value (either through other comprehensive income, or through profit or
+loss).
+Measurement
+At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
+asset not measured at fair value through profit or loss ("FVPL"), transaction costs that are directly
+attributable to the acquisition of the financial asset. Transaction costs of financial assets measured at
+FVPL are expensed in profit or loss.
+(i)
+Inventories are carried at the lower of cost and net realizable value. Cost represents purchase cost
+of goods calculated using the weighted average cost method. Net realizable value is determined by
+reference to the sales proceeds of items sold in the ordinary course of business or to management's
+estimates based on prevailing market conditions.
+(k) Inventories
+A reversal of an impairment loss is limited to the asset's carrying amount that would
+have been determined had no impairment loss been recognized in prior years. Reversals
+of impairment losses are credited to profit or loss in the year in which the reversals are
+recognized.
+In respect of assets other than goodwill, an impairment loss is reversed if there has been a
+favourable change in the estimates used to determine the recoverable amount. An impairment
+loss in respect of goodwill is not reversed.
+right-of-use assets;
+construction in progress;
+land use rights;
+investments in subsidiaries; and
+other intangible assets with definite life.
+If any such indication exists, the asset's recoverable amount is estimated. For goodwill and other
+intangible assets that have indefinite useful lives, the recoverable amount is estimated annually
+whether or not there is any indication of impairment.
+102 China Mobile Limited
+(ii)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(j) Impairment of non-financial assets (Continued)
+(ii) Impairment of other assets (Continued)
+Calculation of recoverable amount
+The recoverable amount of an asset is the higher of its fair value less costs of disposal and
+value in use ("VIU"). In assessing VIU, the estimated future cash flows are discounted to their
+present value using a pre-tax discount rate that reflects current market assessments of the
+time value of money and the risks specific to the asset. Where an asset does not generate
+cash inflows largely independent of those from other assets, the recoverable amount is
+determined for the smallest group of assets that generates cash inflows independently (i.e. a
+cash-generating unit).
+Recognition of impairment losses
+An impairment loss is recognized in profit or loss if the carrying amount of an asset, or the
+cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses
+recognized in respect of cash-generating units are allocated first to reduce the carrying amount
+of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the
+carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except
+that the carrying value of an asset will not be reduced below its individual fair value less costs
+of disposal, or VIU, if determinable.
+Reversals of impairment losses
+2
+property, plant and equipment;
+The Group's financial assets measured at amortized cost represent those financial assets that are
+held for collection of contractual cash flows where those cash flows represent solely payments
+of principal and interest. Interest from these financial assets is included in interest income using
+the effective interest rate method. Any gain or loss arising on derecognition is recognized directly
+in profit or loss and presented in other gains together with foreign exchange gains and losses.
+Impairment losses are presented in other operating expenses.
+For equity instruments that are not held for trading, the Group has made an irrevocable election
+at the time of initial recognition to account for these equity investments at FVOCI. There is no
+subsequent reclassification of fair value gains and losses to profit or loss following the derecognition
+of the investments. Dividends from such investments continue to be recognized in profit or loss
+when the Group's right to receive payments is established.
+Interest-bearing borrowings are recognized initially at fair value less directly attributable transaction costs.
+Subsequent to initial recognition, interest-bearing borrowings are stated at amortized cost with any
+difference between the amount initially recognized and redemption value being recognized in profit or
+loss over the period of the borrowings, together with any interest and fees payable, using the effective
+interest method.
+2
+Annual Report 2021 105
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(r) Revenue recognition from contracts with customers
+The Group mainly provides voice, data and other telecommunications services to its customers through
+entering into contracts that are either cancellable on monthly basis or for a fixed contract period generally
+with prepayment term and/or penalty for early termination. The Group also sells telecommunication
+related products to its customers.
+For the telecommunications services and telecommunication related products and/or other services/
+products provided by the Group, if the customer can benefit from the services or products and the
+Group's promise to transfer the services or products is separately identifiable, the Group identifies them as
+separate performance obligations.
+Revenue is measured at the transaction price which is the amount of consideration to which the Group
+is entitled in exchange for transferring promised performance obligations to the customer excluding
+amounts collected on behalf of third parties. The amount of consideration is generally explicitly stated in
+the contract and does not include significant financing component.
+When control of a service or product is transferred to a customer, revenue is generally recognized in
+profit or loss as follows:
+(i)
+(!!)
+(!!!)
+Revenue for each performance obligation is recognized when the Group satisfies the performance
+obligation by transferring the promised services or products to the customer. Generally, revenue
+is recognized when the customer obtains the control of the telecommunications services over the
+time of provision of the services. Revenue is recognized when a customer obtains the control of the
+product at a point of time.
+For contracts which include the provision of multiple performance obligations including services and
+products, the Group allocates the transaction price to each performance obligation based on the
+relative stand-alone selling price. The stand-alone selling price of services and products are mainly
+based on its observable selling price. If a stand-alone selling price is not directly observable, the
+Group considers all information that is reasonably available and maximise the use of observable
+inputs to estimate the stand-alone selling price. Revenue for each performance obligation is then
+recognized when the control of the promised services or products is transferred to the customer.
+(q) Interest-bearing borrowings
+A government grant related to an asset is recognized as deferred revenue and amortized over the useful
+life of the related asset on a reasonable and systematic manner in other gains. A grant that compensates
+the Group for expenses or losses to be incurred in the future is recognized as deferred revenue,
+and included in other gains in the periods in which the expenses or losses are recognized. It shall be
+recognized in profit or loss immediately when as compensation for expenses or losses already incurred.
+(p) Deferred revenue
+Accounts payable and other payables are initially recognized at fair value. After initial recognition, both of
+them are stated at amortized cost or invoiced amount if the effect of discounting would be immaterial.
+Assets that do not meet the criteria for amortized cost or are not elected/classified as FVOCI are
+classified as FVPL. A gain or loss on a financial instrument that is subsequently measured at FVPL
+is recognized in profit or loss and presented net within interest and other income in the period in
+which it arises.
+104 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(1)
+Debt investments are classified as fair value through other comprehensive income ("FVOCI"), if the
+investment is held within a business model whose objective is achieved by both the collection of
+contractual cash flows and sale and the contractual cash flows of the investment comprise solely
+payments of principal and interest. Changes in fair value are recognized in other comprehensive
+income, except for the recognition in profit or loss of expected credit losses, interest income
+(calculated using the effective interest method) and foreign exchange gains and losses. When the
+investment is derecognized, the amount accumulated in other comprehensive income is recycled
+from equity to profit or loss.
+Investments and other financial assets (Continued)
+Impairment
+For other financial instruments carried at amortized cost, which have low credit risk at both the beginning
+and end of the reporting period, the Group recognizes a loss allowance equal to 12-month expected
+credit loss unless there has been a significant increase in credit risk of the financial instrument since initial
+recognition, in which case the loss allowance is measured at an amount equal to lifetime expected credit
+loss.
+Financial assets are written off when the Group is satisfied that recovery is remote. When loans or
+receivables have been written off, the Group continues to attempt to recover the receivables due. When
+recoveries are made, the recovered amount is recognized in profit or loss.
+(m) Accounts receivable and other receivables
+Accounts receivable are initially recognized at the amount of consideration that is unconditional and other
+receivables are initially recognized at fair value. Both of them are thereafter measured using the effective
+interest rate method and stated at amortized cost less related loss allowance for impairment (see note
+2(1)).
+(n) Cash and cash equivalents
+Cash and cash equivalents comprise bank deposits with original maturity within three months, cash at
+banks and in hand, demand deposits with banks, and short-term, highly liquid investments that are readily
+convertible into cash of known amounts and which are subject to an insignificant risk of changes in value,
+having been within three months of maturity at acquisition.
+(o) Accounts payable and other payables
+The Group assesses on a forward looking basis the expected credit losses associated with its financial
+instruments carried at amortized cost. The Group has adopted the simplified expected credit loss model
+for its accounts receivable and contract assets, which requires expected lifetime losses to be recognized
+from their initial recognition.
+106 China Mobile Limited
+-
+Impairment of other assets
+Short-term employee benefits and contributions to defined contribution retirement plans
+Salaries, annual bonuses, paid annual leave, leave passage, contributions to defined contribution
+retirement plans and the cost of non-monetary benefits are accrued in the year in which the
+associated services are rendered by employees. Where payment or settlement is deferred and the
+effect would be material, these amounts are stated at their present values.
+(i)
+(v) Employee benefits
+Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
+estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow
+of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
+occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities
+unless the probability of outflow of economic benefits is remote.
+Provisions are recognized for liabilities of uncertain timing or amount when the Group has a legal or
+constructive obligation arising as a result of a past event, it is probable that an outflow of economic
+benefits will be required to settle the obligation and the amount can be estimated reliably. Where the
+time value of money is material, provisions are stated at the present value of the expenditures expected
+to settle the obligation.
+(u) Provisions and contingent liabilities
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+108 China Mobile Limited
+different taxable entities, which, in each future period in which significant amounts of deferred
+tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax
+assets and settle the current tax liabilities on a net basis or realize and settle simultaneously.
+the same taxable entity; or
+in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same
+taxation authority on either:
+in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or
+to realize the asset and settle the liability simultaneously; or
+Current tax balances and deferred tax balances, and movements therein, are presented separately from
+each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax
+assets against deferred tax liabilities, if the Group has the legally enforceable right to set off current tax
+assets against current tax liabilities and the following additional conditions are met:
+The Company and subsidiaries incorporated in Hong Kong are required to make contributions to
+Mandatory Provident Funds under the Hong Kong Mandatory Provident Fund Schemes Ordinance.
+Such contributions are recognized as an expense in profit or loss as incurred.
+The employees of the subsidiaries in the mainland of China participate in the defined contribution
+retirement plans managed by the local government authorities whereby the subsidiaries are
+required to contribute to the schemes at fixed rates of the employees' salary costs. In addition to
+the local governmental defined contribution retirement plans, the subsidiaries also participate in a
+pension scheme launched by the Group managed by an independent insurance company whereby
+the subsidiaries are required to make contributions to the retirement plans at fixed rates of the
+employees' salary costs or in accordance with the terms of the plans. The Group's contributions
+to these plans are charged to profit or loss when incurred. During the reporting period, no forfeited
+contributions were used by the Group to reduce the existing level of contributions.
+2
+Annual Report 2021 109
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+110 China Mobile Limited
+The development expenses of the Group are capitalized when capitalization criteria are fulfilled, and other
+research and development expenses are recognized in profit or loss as incurred.
+(w) Research and development expenses
+Termination benefits are recognized when, and only when, the Group demonstrably commits itself
+to terminate employment which is without realistic possibility of withdrawal or to provide benefits as
+a result of voluntary redundancy by having a detailed formal plan which is without realistic possibility
+of withdrawal.
+(iv) Termination benefits
+The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is
+reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
+allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it becomes
+probable that sufficient taxable profits will be available.
+During the vesting period, the number of share options that is expected to vest is reviewed at each
+balance sheet date. Any resulting adjustment to the cumulative fair value recognized in prior years is
+recognized in profit or loss for the year of the review, unless the original employee expenses qualify
+for recognition as an asset, with a corresponding adjustment to the capital reserve. On vesting date,
+the amount recognized as an expense is adjusted to reflect the actual number of share options that
+vest (with a corresponding adjustment to the capital reserve). The equity amount is recognized in
+the capital reserve until either the option is exercised (when it is transferred to the share capital
+account) or the option expires (when it is released directly to retained profits). In the Company's
+balance sheet, share-based payment transactions in which the Company grants share options to
+subsidiaries' employees are accounted for as an increase in value of investments in subsidiaries,
+which is eliminated in consolidated financial statements.
+(iii) Share-based payments
+In addition to participating in local governmental defined contribution social insurance, the Group
+also provides other post retirement supplementary retirement benefits to those retired employees
+qualified for certain criteria in accordance with the governmental requirement since 2020. Under
+such plan, the Group provides or reimburses certain medical benefits to retired employees
+annually based on certain criteria. The Group's payment obligation in the future under such plan
+are discounted and recognized as liabilities, the costs of which are recognized in profit or loss.
+Changes arising from remeasurement of the liability due to changes in the actuarial assumptions are
+recognized in other comprehensive income when incurred.
+Supplementary retirement benefits
+(ii)
+(v) Employee benefits (Continued)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+The fair value of share options granted to employees is recognized as an employee cost with a
+corresponding increase in a capital reserve within equity. The fair value is measured at grant date
+using the binomial lattice model, taking into account the terms and conditions upon which the
+options were granted. Where the employees have to meet vesting conditions before becoming
+unconditionally entitled to the options, the total estimated fair value of the options is spread over
+the vesting period, taking into account the probability that the options will vest.
+Internal and external sources of information are reviewed at each balance sheet date to identify
+indications that the following assets may be impaired or, an impairment loss previously recognized
+no longer exists or may have decreased, except in the case of goodwill and other intangible assets
+with indefinite useful lives:
+The amount of deferred tax recognized is measured at the tax rates that are expected to apply to the
+period when the asset is realized or the liability is settled, based on tax rates enacted or substantively
+enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.
+Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent
+that it is probable that future taxable profits will be available against which the asset can be utilized,
+are recognized. Future taxable profits that may support the recognition of deferred tax assets arising
+from deductible temporary differences include those that will arise from the reversal of existing taxable
+temporary differences, provided those differences relate to the same taxation authority and the same
+taxable entity, and are expected to reverse either in the same period as the expected reversal of the
+deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can
+be carried back or forward. The same criteria are adopted when determining whether existing taxable
+temporary differences support the recognition of deferred tax assets arising from unused tax losses and
+credits, that is, those differences are taken into account if they relate to the same taxation authority and
+the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit
+can be utilized.
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(j) Impairment of non-financial assets
+(i)
+Impairment of investments accounted for using the equity method
+Investments accounted for using the equity method are reviewed at each balance sheet date to
+determine whether there is objective evidence of impairment. Objective evidence of impairment
+includes observable data that comes to the attention of the Group about one or more of the
+following loss events:
+significant financial difficulty of the entity;
+a breach of contract, such as a default or delinquency in interest or principal payments;
+-
+it becoming probable that the entity will enter bankruptcy or other financial reorganization;
+(ii)
+If
+significant changes in the technological, market, economic or legal environment that have an
+adverse effect on the entity; and
+decline in the fair value of an investment in an equity instrument below its carrying amount.
+any such evidence exists, the impairment loss is measured by comparing the recoverable amount
+of the investment with its carrying amount in accordance with note 2(j)(ii). The impairment loss is
+reversed if there has been a favourable change in the estimates used to determine the recoverable
+amount in accordance with note 2(j)(ii).
+Annual Report 2021 101
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(t) Income tax (Continued)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 107
+2
+Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively,
+being the differences between the carrying amounts of assets and liabilities for financial reporting
+purposes and their tax bases. Deferred tax assets may also arise from unused tax losses and unused tax
+credits.
+years.
+The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences
+arising from initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither
+accounting nor taxable profit (provided they are not part of a business combination), and temporary
+differences relating to investments in subsidiaries and associates to the extent that, in the case of taxable
+temporary differences, the Group controls the timing of the reversal and it is probable that the differences
+will not reverse in the foreseeable future, or in the case of deductible differences, and it is not probable
+that they will reverse in the future.
+Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
+substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
+(t) Income tax
+Interest income is recognized as it accrues using the effective interest method.
+(s) Interest income
+Cost incurred to fulfil a contract represents the cost directly related to the Group's telecommunications
+service contracts which are not within the scope of another accounting standard. The amount is
+amortized on a systemic basis that is consistent with the transfer to the customer of the services or
+products to which the costs incurred to fulfil a customer contract relates over the expected duration of
+the contract and recorded as network operation and support expenses, if it is expected to be recovered.
+Capitalized cost incurred to fulfil a contract is recorded as inventory or other non-current assets based on
+its amortization period.
+Contract costs include costs incurred to obtain a contract and cost incurred to fulfil a contract. Costs
+incurred to obtain a contract represents incremental costs incurred to obtain a contract, which mainly
+comprise sales commissions payable to third party agents and are amortized on a systemic basis that is
+consistent with the transfer to the customer of the services or products to which such costs relates over
+the expected duration of the contract and recorded in selling expense, if it is expected to be recovered.
+When the expected amortization period is one year or less, the Group utilizes the practical expedient and
+expenses the costs as incurred. Capitalized incremental costs incurred to obtain a contract is recorded as
+other non-current assets.
+Contract assets primarily relate to the Group's rights to consideration for services or products provided
+to the customers but for which the Group does not have an unconditional right at the balance sheet date.
+The contract asset is reclassified to accounts receivable as services are provided and billed. Contract
+liabilities arise when the Group receives consideration in advance of providing the services or products
+promised in the contract. Contract liabilities mainly comprise non-refundable prepaid service fees received
+from customers, unredeemed point rewards under customer point reward program ("Reward Program")
+and unused data traffic carried over. The refundable prepaid service fees received from customers is
+recorded as receipts-in-advance.
+(r) Revenue recognition from contracts with customers (Continued)
+Income tax for the year comprises current tax and movements in deferred tax assets and liabilities.
+Current tax and movements in deferred tax assets and liabilities are recognized in profit or loss except
+items recognized in other comprehensive income or directly in equity, in which case the relevant amounts
+of tax are recognized in other comprehensive income or directly in equity, respectively.
+2
+(iii) Others consist of administrative expenses and other miscellaneous expenses.
+The RMB Shares publicly offered but had yet to be listed on the Shanghai Stock Exchange as at 31
+December 2021 (note 43).
+8 OTHER GAINS
+(iii)
+fees
+(ii)
+16,729
+2,894
+5,795
+Net gains on hold/disposal of financial assets
+11,447
+10,934
+Interest income
+Million
+Million
+2020
+2021
+9 INTEREST AND OTHER INCOME
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+116 China Mobile Limited
+5,602
+8,257
+14,341
+2,031
+10
+Interest for lease liabilities
+insurance,
+relating
+to social
+Contributions
+2,996
+2,679
+20
+165
+170
+131
+2,806
+2,383
+Million
+Million
+2020
+2021
+11 DIRECTORS' AND OTHER SENIOR MANAGEMENT'S REMUNERATION
+Directors' remuneration during 2021 is as follows:
+Interest paid for short-term deposits received (note 40(a))
+Others
+FINANCE COSTS
+Salaries,
+allowances
+2,878
+4,411
+An entity is related to the Group if any of the following conditions applies:
+(i)
+The entity and the Group are members of the same group (which means that each parent,
+subsidiary and fellow subsidiary is related to the others);
+(ii)
+One entity is an associate or joint venture of the other entity (or an associate or joint venture
+of a member of a group of which the other entity is a member);
+(iii)
+Both entities are joint ventures of the same third party;
+(iv)
+One entity is a joint venture of a third entity and the other entity is an associate of the third
+entity;
+(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group
+or an entity related to the Group;
+(vi) The entity is controlled or jointly controlled by a person identified in note 2(z)(a); or
+(vii) A person identified in note 2(z)(a)(i) has significant influence over the entity or is a member of
+the key management personnel of the entity (or of a parent of the entity).
+Close members of the family of a person are those family members who may be expected to influence,
+or be influenced by, that person in their dealings with the entity.
+112 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2
+(b)
+2,813
+is a member of the key management personnel of the Group or the Group's parent.
+has significant influence over the Group; or
+758
+968
+2020
+Million
+2021
+Million
+Others
+Additional deduction of input VAT
+Compensation income
+Annual Report 2021 111
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2
+(z)
+Related parties
+(a) A person, or a close member of that person's family, is related to the Group if that person:
+(i)
+has control or joint control of the Group;
+(ii)
+(iii)
+housing
+fund and
+Directors'
+'000
+'000
+'000
+Total
+scheme
+and bonuses
+2020
+retirement
+fund and
+Salaries,
+allowances
+Directors'
+housing
+relating
+to social
+insurance,
+Contributions
+11 DIRECTORS' AND OTHER SENIOR MANAGEMENT'S REMUNERATION (CONTINUED)
+Directors' remuneration during 2020 is as follows:
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 117
+'000
+1,385
+Executive directors (Expressed in RMB)
+DONG Xin*
+3,031
+492
+2,539
+161
+38
+123
+906
+149
+757
+977
+148
+829
+987
+157
+830
+LI Ronghua**
+WANG Yuhang
+YANG Jie
+1,385
+470
+455
+1,132
+214
+918
+LI Ronghua
+WANG Yuhang
+DONG Xin
+YANG Jie
+Executive directors (Expressed in RMB)
+'000
+'000
+Total
+scheme
+2021
+retirement
+'000
+and
+bonuses
+fees
+'000
+929
+214
+1,143
+850
+460
+470
+455
+460
+YANG Qiang
+YIU Kin Wah, Stephen
+CHOW Man Yiu, Paul
+CHENG MO Chi, Moses
+3
+(Expressed in Hong Kong dollar)
+4,136
+839
+3,297
+805
+205
+600
+1,056
+206
+Independent non-executive directors
+Independent non-executive directors
+SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+An operating segment is a component of the Group that engages in business activities from which the
+Group may earn revenue and incur expenses, and is identified on the basis of the internal financial reports
+that are provided to and regularly reviewed by the Group's Chief Operating Decision Maker ("CODM") in
+order to allocate resources and assess performance of the segment. The CODM has been identified as
+the Executive Directors of the Company. For the years presented, the Group as a whole is an operating
+segment since the Group is only engaged in telecommunications and information related businesses.
+No geographical information has been disclosed as the majority of the Group's operating activities are
+carried out in the mainland of China. The Group's assets located and operating revenue derived from
+activities outside the mainland of China are less than 5% of the Group's assets and operating revenue,
+respectively.
+Million
+Million
+4,615
+Defined benefit costs included in profit or loss
+- service cost
+1,178
+4,615
+- interest cost
+145
+Defined benefit costs included in other comprehensive income
+Payments during the year
+143
+(267)
+As at 31 December
+5,814
+4,615
+7
+OTHER OPERATING EXPENSES
+2020
+2021
+2021
+The movement of defined benefit plan liabilities for the year is as follows:
+2020
+Million
+Million
+Salaries, wages, labor service expenses and other benefits
+102,943
+Retirement costs: contributions to defined contribution retirement plans
+Share-based compensation expenses
+15,324
+95,254
+10,943
+413
+232
+118,680
+106,429
+Since 2020, the Group has implemented the transfer of the socialized management of existing retirees to
+external organizations in accordance with the governmental requirement. The Group is also obliged to pay
+for certain of such retirees' post-retirement benefits (mainly including supplementary medical benefits, etc.)
+in the future with the principle that the level of such benefits would not be decreased. This benefit plan is
+accounted for as a long-term defined benefits obligation and does not have any plan assets. As at the end of
+the reporting period, the Group engaged an independent qualified actuary to calculate the Group's obligation
+for this benefit plan using the projected unit credit method, and such obligation was recognized as liability.
+Actuarial assumptions mainly included discount rate and life expectancy. For the year ended 31 December
+2021, the discount rate was 3.00% per annum (2020: 3.25%). Life expectancy was determined in accordance
+with relevant information on the "China Life Insurance Mortality Table (2010-2013) - CL5/CL6". Reasonable
+changes in actuarial assumptions would not have a significant impact on the consolidated financial statements
+of the Group.
+6
+Annual Report 2021 115
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+EMPLOYEE BENEFIT AND RELATED EXPENSES (CONTINUED)
+As at 1 January
+2021
+2020
+Million
+- tax services
+- other services
+Taxes and surcharges
+Others
+3
+2
+2,722
+2,462
+(iii)
+13,475
+12,917
+49,234
+47,039
+Note:
+(i)
+(!!)
+The item does not include depreciation and amortization and employee benefit and related expenses related to research and
+development.
+Audit services include reporting on the Group's internal controls over financial reporting pursuant to regulatory requirements at a service
+fee of RMB19 million (2020: RMB22 million).
+109
+Note
+98
+- audit services
+Million
+Interconnection
+20,064
+19,821
+Expected credit impairment losses
+4,171
+5,084
+Write-down of inventories
+280
+196
+Net loss on disposal and write-off of property, plant and equipment
+Research and development expenses
+1,748
+1,547
+(i)
+6,676
+4,898
+Auditors' remuneration
+(ii)
+EMPLOYEE BENEFIT AND RELATED EXPENSES
+6
+For the year ended 31 December 2021, short-term lease payments and lease payments of low-value assets amounted to RMB6,576
+million (2020: RMB4,462 million), and variable lease payments not based on an index or a rate, which are recorded in profit or loss as
+incurred, amounted to RMB7,160 million (2020: RMB7,770 million).
+29,485
+Wireless data traffic services
+392,859
+385,679
+Wireline broadband services
+94,230
+80,808
+Applications and information services
+136,961
+101,038
+Others
+20,096
+19,900
+751,409
+695,692
+Revenue from sales of products and others
+96,849
+31,100
+72,378
+SMS & MMS services
+76,163
+(ab) Dividend distribution
+Dividend distribution to the Company's shareholders is recognized as a liability in the Group's and the
+Company's financial statements in the period in which the dividends are approved by the Company's
+shareholders or directors, where appropriate.
+CHANGES IN ACCOUNTING POLICIES
+The following amendments are mandatory for the first time for the Group's financial year beginning on 1
+January 2021 and are applicable for the Group:
+Amendments to IFRS/HKFRS 9 "Financial Instruments", IAS/HKAS 39 "Financial Instruments: Recognition and
+Measurement", IFRS/HKFRS 7 "Financial Instruments: Disclosures", IFRS/HKFRS 4 "Insurance Contracts"
+and IFRS/HKFRS 16 "Leases" - Interest rate benchmark reform - phase 2
+The above amendments to IFRS/HKFRS and IAS/HKAS effective for the financial year beginning on 1 January
+2021 do not have a material impact on the Group.
+In addition, the IASB and HKICPA also published a number of new standards and amendments to standards
+which are effective for the Group's financial year beginning on or after 1 January 2022 and have not been early
+adopted by the Group (see note 46). Management is assessing the impact of such standards and will adopt the
+relevant standards in the subsequent periods as required.
+4
+OPERATING REVENUE
+Annual Report 2021 113
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+2021
+2020
+Million
+Million
+Revenue from telecommunications services
+Voice services
+78,782
+848,258
+768,070
+The majority of the Group's operating revenue is from contracts with customers, and the remaining is not
+material. The revenue recognition policy has been disclosed in note 2(r), while majority of the Group's revenue
+from contracts with customers was recognized over time.
+8,272
+8,224
+Charges for use of other assets
+(ii) (iii)
+6,521
+6,149
+Others
+9,996
+9,796
+225,010
+206,424
+Note:
+(i)
+(ii)
+(iii)
+Charges for use of tower assets include the non-lease components charges (maintenance, certain ancillary facilities usage and related
+support services) for use of telecommunications towers and variable lease payments not based on an index or a rate, which are
+recorded in profit or loss as incurred.
+Charges for use of lines and network assets and other assets mainly include the non-lease components charges and the lease
+components charges for lease contracts that are exempted from recognition of right-of-use assets and lease liabilities, such as short-
+term lease payments, lease payments of low-value assets and variable lease payments not based on an index or a rate, which are
+recorded in profit or loss as incurred.
+(ii) (iii)
+Charges for use of lines and network assets
+26,836
+26,248
+Operating revenue is subject to value-added tax ("VAT"). The VAT rate for basic telecommunications services is
+9%. The VAT rate for value-added telecommunications services, information technology services and technical
+consulting services is 6% and the VAT rate for sales of telecommunications terminals is 13%. VAT is excluded
+from the revenue.
+The unsatisfied performance obligation of the Group is mainly related to telecommunications services.
+The Group generally enters into service contracts with customers monthly or for a fixed term, and bills the
+customers monthly based on the contract terms for the Group's unconditional right to consideration. Almost all
+of the transaction considerations that were allocated to unsatisfied performance obligations as at the end of the
+reporting period are expected to be recognized within one year when services are provided. For the contracts
+that have an original expected duration of one year or less and the performance obligations which are regarded
+as satisfied as billed, the Group has applied the practical expedient permitted under IFRS/HKFRS 15 "Revenue
+from Contracts with Customers", therefore, the information about the remaining performance obligations were
+not disclosed.
+114 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+5 NETWORK OPERATION AND SUPPORT EXPENSES
+2021
+2020
+Note
+(aa) Segment reporting
+Million
+Maintenance, operation support and related expenses
+137,095
+117,758
+Power and utilities expenses
+36,878
+37,661
+Charges for use of tower assets
+(i)(iii)
+Million
+Share options issued by the Company that were outstanding during the periods (note 37); and
+(Expressed in Hong Kong dollar)
+CHOW Man Yiu, Paul
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+13
+TAXATION (CONTINUED)
+(c) The tax (charged)/credited relating to components of other comprehensive income is as
+follows:
+2021
+2020
+Tax
+120 China Mobile Limited
+Before tax
+After tax
+Before tax
+credited
+After tax
+Million
+Million
+Million
+Million
+charged
+Note: The PRC's statutory tax rate is adopted as the majority of the Group's operations are subject to this rate.
+34,219
+35,878
+35,590
+Tax effect of non-taxable items
+- Income from investments accounted for using the equity method
+- Other non-taxable income
+(2,855)
+(3,086)
+(33)
+(47)
+Tax effect of non-deductible expenses
+1,162
+1,205
+Tax rate differential (note 13(a)(i)(ii))
+(1,881)
+(1,194)
+Tax effect of deductible temporary difference and deductible tax loss
+for which no deferred tax asset was recognized (note 21)
+Additional deduction for qualified research and development costs
+1,972
+2,109
+(533)
+(358)
+Taxation
+Million
+Million
+Changes in value of financial assets
+measured at FVOCI
+(398)
+For the year ended 31 December 2021 and 2020, the Group has considered the impact from the following
+factors when calculating diluted earnings per share:
+(b) Diluted earnings per share
+The calculation of basic earnings per share for the year ended 31 December 2021 is based on the profit
+attributable to equity shareholders of the Company of RMB116,148 million (2020: RMB107,843 million)
+and the weighted average number of 20,475,482,897 shares (2020: 20,475,482,897 shares) in issue
+during the year.
+(a) Basic earnings per share
+EARNINGS PER SHARE
+14
+1
+CHENG MO Chi, Moses
+1
+(8)
+(8)
+Deferred tax
+Current tax
+(1,575)
+1
+(1,576)
+(1,643)
+(8)
+(1,635)
+Other comprehensive loss
+(i)
+38,046
+Convertible bonds issued by an associate of the Group ("CB") that were outstanding during the
+periods (note 22);
+(617)
+(8)
+(406)
+956
+1
+957
+Remeasurement of defined benefit
+liabilities
+(143)
+(143)
+Currency translation differences
+(882)
+(882)
+(1,915)
+(1,915)
+Share of other comprehensive loss
+of investments accounted for
+using the equity method
+(212)
+(212)
+(617)
+Notional tax on profit before tax, calculated at the PRC's statutory tax
+rate of 25% (Note)
+Tax
+152,184
+Performance related bonuses
+Retirement scheme contributions
+The emoluments fell within the following bands:
+Emolument bands
+2,000,001-2,500,000
+2,500,001-3,000,000
+4,000,001-4,500,000
+2021
+2020
+'000
+'000
+7,765
+7,684
+5,775
+4,545
+336
+215
+13,876
+12,444
+Salaries, allowances and benefits in kind
+2021
+For the year ended 31 December 2021 and 2020, none of the five individuals with the highest emoluments in
+the Group are directors or other senior management. The emoluments paid/payable to the five individuals with
+the highest emoluments are as follows:
+12
+YIU Kin Wah, Stephen
+YANG Qiang
+460
+455
+470
+||||
+460
+455
+470
+1,385
+1,385
+*
+142,359
+**
+Mr. LI Ronghua was appointed as an executive director and the chief financial officer of the Company with effect from 15 October
+2020.
+In 2021 and 2020, executive directors and independent non-executive director Dr. YANG Qiang of the Company
+voluntarily waived their directors' fees.
+Directors' remuneration paid during 2021 included directors' performance related bonuses related to their term
+of service for previous years determined and paid during the year. The unpaid portion of executive directors'
+performance related bonuses for 2021 will be paid in 2022 based on their performance, and the additional
+bonuses related to their term of service will be paid based on their performance upon the completion of three-
+year evaluation period.
+The Company's other senior management's remuneration includes basic remuneration for the year,
+performance related bonuses for prior year, and additional bonuses related to their three-year term of service
+(if any). For the year ended 31 December 2021, the Company's other senior management's remuneration was
+within the range between RMB1,000,000 to RMB1,050,000 (2020: RMB400,000 to RMB900,000).
+118 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+INDIVIDUALS WITH HIGHEST EMOLUMENTS
+Number of
+individuals
+Mr. DONG Xin was appointed as the chief executive officer of the Company with effect from 13 August 2020 and had ceased to serve as
+the chief financial officer of the Company.
+3
+40,270
+Deferred tax
+Origination and reversal of temporary differences,
+net (note 21)
+Note:
+(3,510)
+(6,051)
+35,878
+34,219
+(i)
+(!!)
+The provision for enterprise income tax in the mainland of China and other countries and regions has been calculated on the
+estimated assessable profits for the year at the rates of taxation prevailing in the regions in which the Group operates. The
+Company's subsidiaries operate mainly in the mainland of China. The provision for the PRC enterprise income tax is based on
+the statutory tax rate of 25% (2020: 25%) on the estimated assessable profits determined in accordance with the relevant
+income tax rules and regulations of the PRC for the year ended 31 December 2021. Certain subsidiaries of the Company entitle
+to the preferential tax rate of 15% (2020: 15%), and certain research and development costs of the Company's PRC subsidiaries
+are qualified for 75% (2020: 75%) additional deduction for tax purpose.
+The provision for Hong Kong profits tax is calculated at 16.5% (2020: 16.5%) of the estimated assessable profits for the year
+ended 31 December 2021.
+(iii) Pursuant to the "Notice regarding Matters on Determination of Tax Residence Status of Chinese-controlled Offshore
+Incorporated Enterprises under Rules of Effective Management" issued by SAT in 2009 ("2009 Notice"), the Company
+is qualified as a PRC offshore-registered resident enterprise. Accordingly, the dividend income of the Company from its
+subsidiaries in the PRC is exempted from PRC enterprise income tax.
+2021
+2020
+Million
+Million
+Profit before taxation
+2020
+Number of
+individuals
+39,388
+400
+(b) Reconciliations between income tax expense and accounting profit at applicable tax rates:
+(ii)
+1
+1
+431
+4
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+13
+TAXATION
+(a) Taxation in the consolidated statement of comprehensive income represents:
+Note
+Annual Report 2021 119
+2020
+Million
+Current tax
+Provision for enterprise income tax in the mainland
+39,870
+of China and other countries and regions on
+the estimated assessable profits for the year
+Provision for Hong Kong profits tax on the estimated
+assessable profits for the year
+2021
+Million
+38,957
+(i)
+133,912
+Accumulated depreciation and impairment:
+As at 1 January 2020
+58,117
+1,046,055
+16,758
+(1,333)
+Reclassification
+6,600
+(5,267)
+Charge for the year
+2,054,110
+6,073
+1,120,930
+17,148
+(51,454)
+170,833
+As at 31 December 2021
+(446)
+(6)
+(304)
+Exchange differences
+(2,099)
+(48,667)
+(688)
+Write-off
+(101)
+(30)
+2,897
+(66)
+1,866,129
+Written back on disposals
+12,668
+(59)
+(5)
+Write-off
+(69)
+(14)
+(52)
+(3)
+Written back on disposals
+162,321
+1,692
+154,461
+6,168
+Charge for the year
+1,217,912
+1,142,724
+62,520
+As at 1 January 2021
+1,217,912
+Write-off
+(292)
+(43,643)
+(1,654)
+142,882
+(88)
+(45,589)
+Exchange differences
+(27)
+(43)
+(7)
+(223)
+As at 31 December 2020
+62,520
+1,142,724
+12,668
+(173)
+Disposals
+116,148
+536
+furniture,
+other network
+fixtures
+Buildings
+equipment
+and others
+Total
+Million
+Office equipment,
+Million
+Million
+As at 1 January 2020
+161,490
+1,608,355
+25,917
+1,795,762
+Reclassification
+(2,092)
+Million
+switching centers,
+transmission and
+Telecommunications
+transceivers,
+Cost:
+Annual Report 2021 121
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+14 EARNINGS PER SHARE (CONTINUED)
+(b) Diluted earnings per share (Continued)
+Of the above, (i) the CB had a dilutive effect on earnings per share for the year ended 31 December
+2021 but not 2020, as the assumed conversion would have decreased the profit attributable to equity
+shareholders of the Company for the year ended 31 December 2021 (2020: increased). The other two
+factors had no dilutive effect for both periods, since (ii) the exercise price of the share options exceeded
+the average market price of the Company's ordinary shares on the HKEX during the periods the share
+options were outstanding, (iii) the offer price of the RMB Shares was not lower than its fair value during
+the period from the subscription date to 31 December 2021.
+For the year ended 31 December 2021, the calculation of diluted earnings per share is based on the profit
+attributable to equity shareholders of the Company of RMB116,120 million (2020: RMB107,843 million)
+as a result of the assumed conversion of CB and the weighted average number of 20,475,482,897 shares
+(2020: 20,475,482,897 shares) in issue during the year.
+2021
+Million
+Profit attributable to equity shareholders of the Company used in
+calculating basic earnings per share
+Add: changes in share of profit of the associate
+308
+Less: fair value gain and interest income relating to the CB held by the Group,
+net of tax
+(336)
+Profit attributable to equity shareholders of the Company used in calculating
+diluted earnings per share
+116,120
+For the year ended 31 December 2020, diluted earnings per share were the same as basic earnings per
+share.
+122 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+15 PROPERTY, PLANT AND EQUIPMENT
+12,387
+3,995
+(10,295)
+5,339
+As at 31 December 2020
+164,369
+1,741,288
+17,802
+1,923,459
+As at 1 January 2021
+164,369
+1,741,288
+(653)
+17,802
+Transferred from construction in progress
+6,751
+170,961
+945
+178,657
+Other additions
+542
+2,917
+1,923,459
+(20)
+(444)
+(189)
+164,378
+3,032
+172,749
+Other additions
+163
+1,935
+982
+3,080
+Disposals
+(5)
+(63)
+(81)
+(149)
+Write-off
+(337)
+(45,260)
+(1,733)
+(47,330)
+Exchange differences
+Transferred from construction in progress
+(136)
+18,956
+(46,815)
+32
+China Mobile Group
+Ningxia Co., Ltd.
+the mainland of
+China
+RMB740,447,232
+100%
+Telecommunications operator
+33
+33
+Telecommunications operator
+China Mobile Group
+Xinjiang Co., Ltd.
+RMB9,381,599,639
+100%
+Telecommunications operator
+34
+China Mobile Group
+Design Institute Co., Ltd.
+the mainland of
+China
+RMB160,232,547
+the mainland of
+China
+100%
+RMB3,422,564,911
+the mainland of
+China
+RMB4,137,130,733
+100%
+Telecommunications operator
+29
+China Mobile Group
+Xizang Co., Ltd.
+the mainland of
+China
+RMB5,698,643,686
+100%
+Telecommunications operator
+30
+China Mobile Group
+Gansu Co., Ltd.
+the mainland of
+China
+RMB1,702,599,589
+100%
+Telecommunications operator
+31
+China Mobile Group
+Qinghai Co., Ltd.
+100%
+Provision of
+telecommunications
+network planning design and
+consulting services
+Aspire (BVI) Limited#
+BVI
+US$1,000
+100%
+Investment holding company
+19 SUBSIDIARIES (CONTINUED)
+Place of
+incorporation/
+establishment
+No.
+Name of company*
+and operation
+39
+Aspire Technologies
+(Shenzhen) Limited***
+the mainland of
+China
+Annual Report 2021 129
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Particulars of issued
+38
+the mainland of
+China
+88
+66.41%
+Investment holding company
+35
+China Mobile Holding
+Company Limited**
+the mainland of
+China
+US$30,000,000
+100%
+36
+China Mobile Information
+Technology Co., Ltd.**
+the mainland of
+China
+US$7,633,000
+100%
+Provision of roaming clearance,
+IT system operation technology
+support services
+37
+Aspire Holdings Limited
+Cayman Islands
+HK$93,964,583
+Investment holding company
+Yunnan Co., Ltd.
+China Mobile Group
+28
+21
+China Mobile Group
+Hunan Co., Ltd.
+the mainland of
+China
+RMB4,015,668,593
+100%
+Telecommunications operator
+22
+China Mobile Group
+Shaanxi Co., Ltd.
+the mainland of
+China
+RMB3,171,267,431
+100%
+Telecommunications operator
+23
+China Mobile Group
+Shanxi Co., Ltd.
+the mainland of
+China
+RMB2,773,448,313
+Telecommunications operator
+100%
+100%
+the mainland of
+China
+100%
+Telecommunications operator
+18
+China Mobile Group
+Chongqing Co., Ltd.
+the mainland of
+China
+RMB3,029,645,401
+100%
+Telecommunications operator
+19
+China Mobile Group
+Sichuan Co., Ltd.
+the mainland of
+China
+RMB7,483,625,572
+100%
+Telecommunications operator
+20
+China Mobile Group
+Hubei Co., Ltd.
+RMB3,961,279,556
+and paid up capital
+Telecommunications operator
+China Mobile Group
+incorporation/
+establishment
+and operation
+the mainland of
+China
+Particulars of issued
+and paid up capital
+RMB4,500,508,035
+Proportion of
+ownership interest
+Held by a
+Held by the
+Company
+subsidiary
+Principal activity
+100%
+Telecommunications operator
+27
+China Mobile Group
+Guizhou Co., Ltd.
+the mainland of
+China
+RMB2,541,981,749
+100%
+Telecommunications operator
+Place of
+24
+Heilongjiang Co., Ltd.
+26
+Neimenggu Co., Ltd.
+the mainland of
+China
+RMB2,862,621,870
+100%
+Telecommunications operator
+25
+China Mobile Group
+the mainland of
+RMB3,277,579,314
+100%
+Telecommunications operator
+Jilin Co., Ltd.
+China
+128 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+19 SUBSIDIARIES (CONTINUED)
+No.
+Name of company*
+China Mobile Group
+RMB2,932,824,234
+Proportion of
+Held by the
+the mainland of
+China
+RMB3,172,000,000
+100%
+Provision of Mobile Cloud
+research and development
+and operation support
+services
+62
+China Mobile (Suzhou)
+Software Technology
+Co., Ltd.
+52
+Co., Ltd. ("China Mobile
+E-Commerce")
+the mainland of
+China
+RMB500,000,000
+100%
+Provision of e-payment,
+e-commerce and internet
+finance services
+53
+China Mobile E-Commerce
+51
+Provision of network services
+100%
+and operation
+49
+China Mobile Group
+Finance Co., Ltd.
+the mainland of
+China
+Particulars of issued
+and paid up capital
+RMB11,627,783,669
+("China Mobile Finance")
+Proportion of
+ownership interest
+Held by a
+Held by the
+Company
+subsidiary
+Principal activity
+92%
+Provision of non-banking
+financial services
+50
+China Mobile loT Company
+Limited
+the mainland of
+China
+RMB3,300,000,000
+China Mobile (Hangzhou)
+Information Technology
+Co., Ltd.
+the mainland of
+China
+RMB1,550,000,000
+100%
+Provision of engineering,
+maintenance, sales and
+telecommunications
+services
+57
+China Mobile Internet
+Company Limited
+the mainland of
+China
+RMB3,000,000,000
+100%
+Provision of internet related
+services
+58
+China Mobile Investment
+the mainland of
+RMB1,675,920,000
+100%
+Investment holding company
+Holdings Company Limited
+China
+RMB31,880,000,000
+No. Name of company*
+the mainland of
+China
+56
+100%
+Provision of family information
+products, technology
+research and development
+services
+54
+China Mobile Online
+Services Co., Ltd.
+the mainland of
+China
+RMB2,000,000,000
+100%
+Provision of call center and
+internet information services
+55
+MIGU Company Limited
+the mainland of
+China
+RMB10,400,000,000
+100%
+Provision of mobile internet
+digital content services
+90
+China Mobile TieTong
+Company Limited
+establishment
+incorporation/
+Place of
+Operation support and
+capability service of digital
+content
+42
+Fujian FUNO Mobile
+Communication Technology
+the mainland of
+China
+RMB60,000,000
+51%
+Network construction and
+Company Limited**
+***
+maintenance, network
+planning and optimizing
+training and information
+services
+Provision of roaming clearance
+services
+Investment holding company
+43
+Advanced Roaming & Clearing
+BVI
+US$2
+100%
+100%
+US$5,000,000
+(Beijing) Limited***
+Company
+US$10,000,000
+Held by a
+subsidiary
+Principal activity
+100%
+Development, services and
+maintenance of industry
+value-added platform
+Provision of mobile data
+40
+Aspire Information Network
+(Shenzhen) Limited***
+the mainland of
+China
+US$5,000,000
+100%
+solutions, system integration
+and development
+41
+Aspire Information Technologies
+the mainland of
+China
+ownership interest
+House Limited
+Fit Best Limited
+100%
+Provision of voice and roaming
+48
+China Mobile Group
+the mainland of
+RMB6,200,000,000
+99.97%
+Device Co., Ltd.
+China
+clearance services, internet
+services and value-added
+services
+Provision of electronic
+communication products
+design services and sale of
+related products
+130 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+19 SUBSIDIARIES (CONTINUED)
+Investment holding company
+44
+related services
+HK$8,100,000,000
+BVI
+US$1
+100%
+45
+China Mobile Hong Kong
+Hong Kong
+HK$951,046,930
+100%
+Provision of
+Company Limited
+46
+China Mobile International
+Hong Kong
+HK$19,319,810,000
+100%
+Holdings Limited
+47
+China Mobile International
+Limited
+Hong Kong
+telecommunications and
+(421)
+the mainland of
+China
+China Mobile Group
+(47)
+(47)
+As at 31 December 2021
+89,018
+49,242
+5,395
+143,655
+Accumulated amortization and
+Exchange differences
+impairment:
+29,761
+19,656
+2,694
+52,111
+Charge for the year
+15,883
+9,179
+950
+As at 1 January 2020
+(3,173)
+(389)
+(1,304)
+137,244
+As at 1 January 2021
+84,112
+48,159
+4,973
+137,244
+Additions
+7,322
+9,400
+1,759
+18,481
+Termination of lease contracts
+(936)
+(6,966)
+(948)
+(8,850)
+Early termination and modification of
+lease contracts
+(1,480)
+26,012
+Termination of lease contracts
+(309)
+(3,496)
+9,232
+762
+26,539
+Termination of lease contracts
+(936)
+(6,966)
+(948)
+(8,850)
+Early termination and modification of
+lease contracts
+(456)
+(674)
+(380)
+(1,510)
+Exchange differences
+(27)
+(27)
+As at 31 December 2021
+59,555
+16,545
+4,973
+Charge for the year
+3,239
+(341)
+(4,146)
+Early termination and modification of
+lease contracts
+(933)
+(782)
+(64)
+(1,779)
+Exchange differences
+(45)
+(45)
+As at 31 December 2020
+44,402
+24,512
+3,239
+72,153
+As at 1 January 2021
+44,402
+24,512
+72,153
+48,159
+84,112
+As at 31 December 2020
+Annual Report 2021 123
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
+With the accelerating construction of the Group's 5G telecommunications network, changes in subscribers'
+behaviour and market conditions, the Group continually terminated or retired the inefficient or invalid assets
+to further improve network quality. During the process, the Group increasingly noted that the corresponding
+net disposal proceeds of certain assets may not fully compensate their remaining net book value. In 2021,
+the Group reviewed the residual value rate of assets, and decided to adjust the residual value rate of certain
+wireless and transmission assets (mainly comprising 2G wireless equipment, telecommunications optic cables
+and pipelines, etc) to zero. The aforesaid changes in accounting estimates were made using the prospective
+application method. The depreciation and amortization for the year ended 31 December 2021 increased by
+approximately RMB9,420 million as a result of the aforesaid changes in accounting estimates.
+The Group adjusted the depreciable lives of the 4G wireless assets from 5 years to 7 years with effect
+from 2020. The aforesaid changes in accounting estimates were made using the prospective application
+method, resulting in the depreciation and amortization for the year ended 31 December 2020 decreased by
+approximately RMB19,685 million.
+16
+CONSTRUCTION IN PROGRESS
+2021
+2020
+Million
+Million
+Additions
+As at 1 January
+Transferred to property, plant and equipment
+As at 31 December
+71,651
+67,978
+178,748
+176,422
+705,547
+(178,657)
+5,134
+101,849
+(1,984)
+(49,220)
+Exchange differences
+(24)
+(111)
+(4)
+(139)
+As at 31 December 2021
+68,240
+1,250,207
+12,358
+1,330,805
+Net book value:
+As at 31 December 2021
+102,593
+615,922
+4,790
+723,305
+As at 31 December 2020
+598,564
+26,077
+(172,749)
+71,651
+126,419
+Additions
+7,100
+10,554
+1,302
+Termination of lease contracts
+(309)
+(3,496)
+(341)
+(4,146)
+Early termination and modification of
+lease contracts
+(1,654)
+(2,127)
+(105)
+(3,886)
+Exchange differences
+(99)
+(99)
+4,117
+71,742
+43,327
+As at 1 January 2020
+Construction in progress primarily comprises expenditure incurred on the network expansion projects but not
+yet completed.
+124 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+17
+LEASES
+This note provides lease information about the Group as a lessee.
+(a) Right-of-use assets
+Cost:
+Telecommunications
+Towers and
+related assets
+Buildings and
+premises
+Others
+Total
+Million
+Million
+Million
+Million
+78,975
+Jiangxi Co., Ltd.
+2,673
+Net book value:
+China Mobile Group
+Shanghai Co., Ltd.
+the mainland of
+China
+RMB6,038,667,706
+100%
+Telecommunications operator
+11
+China Mobile Group
+Tianjin Co., Ltd.
+10
+the mainland of
+China
+100%
+Telecommunications operator
+12
+China Mobile Group
+Hebei Co., Ltd.
+the mainland of
+RMB4,314,668,531
+100%
+Telecommunications operator
+RMB2,151,035,483
+Telecommunications operator
+100%
+RMB6,124,696,053
+Telecommunications operator
+7
+China Mobile Group
+Henan Co., Ltd.
+the mainland of
+China
+RMB4,367,733,641
+100%
+Telecommunications operator
+8
+China Mobile Group
+Hainan Co., Ltd.
+the mainland of
+China
+RMB643,000,000
+100%
+Telecommunications operator
+9
+China Mobile Group
+Beijing Co., Ltd.
+the mainland of
+China
+China
+19 SUBSIDIARIES (CONTINUED)
+Annual Report 2021 127
+Notes to the consolidated financial statements (Continued)
+China Mobile Group
+Shandong Co., Ltd.
+the mainland of
+China
+RMB6,341,851,146
+100%
+Telecommunications operator
+15
+China Mobile Group
+Guangxi Co., Ltd.
+the mainland of
+China
+RMB2,340,750,100
+100%
+Telecommunications operator
+16
+China Mobile Group
+Anhui Co., Ltd.
+the mainland of
+China
+RMB4,099,495,494
+100%
+Telecommunications operator
+17
+14
+100%
+Telecommunications operator
+Principal activity
+(Expressed in RMB unless otherwise indicated)
+Place of
+incorporation/
+establishment
+No.
+Name of company*
+and operation
+and paid up capital
+Particulars of issued
+Proportion of
+ownership interest
+Held by the
+Company
+13
+China Mobile Group
+Liaoning Co., Ltd.
+the mainland of
+China
+RMB5,140,126,680
+Held by a
+subsidiary
+100%
+RMB5,247,480,000
+the mainland of
+China
+Fujian Co., Ltd.
+2021
+Million
+2020
+Million
+35,344
+35,343
+1
+35,344
+35,344
+Impairment tests for goodwill
+As at 31 December 2021, the goodwill of RMB35,300 million is attributable to the cash-generating units in
+relation to the operation in the mainland of China which management currently monitors. The recoverable
+amount of the cash-generating unit is determined based on the VIU calculations by using the discounted cash
+flow method. This method considers the pre-tax cash flows of the subsidiaries (cash-generating unit) for the
+five years ending 31 December 2026 and the projected perpetual cash flows after the fifth year. For the five
+years ending 31 December 2026, the average growth rate is assumed to be 1.5%, while for the years beyond
+31 December 2026, the assumed continual growth rate to perpetuity is 1%. The present value of cash flows
+is calculated by discounting the cash flow using pre-tax interest rates of approximately 11%. The management
+performed impairment test for the goodwill in relation to the operation in the mainland of China and determined
+such goodwill was not impaired. Reasonably possible changes in key assumptions would not lead to the
+goodwill impairment losses.
+126 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+No.
+Name of company*
+19
+SUBSIDIARIES
+The following list contains only the particulars of subsidiaries which principally affected the results, assets or
+liabilities of the Group. The class of shares held is ordinary unless otherwise stated.
+Place of
+incorporation/
+establishment
+As at 31 December
+and operation
+Additions
+18 GOODWILL
+As at 31 December 2021
+29,463
+23,165
+2,722
+55,350
+As at 31 December 2020
+39,710
+23,647
+1,734
+65,091
+Annual Report 2021 125
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+17 LEASES (CONTINUED)
+(b) Land use rights
+For the year ended 31 December 2021, the amortization of land use rights expensed in the profit or loss
+amounted to RMB477 million (2020: RMB459 million).
+(c)
+Lease liabilities
+For the year ended 31 December 2021, lease liabilities of RMB16,467 million (2020: RMB16,870 million)
+was incurred relating to additions of right-of-use assets.
+As at 31 December 2021 and 2020, the maturity analysis of lease liabilities was set out in note 41(b).
+As at 1 January
+88,305
+Particulars of issued
+and paid up capital
+Held by a
+100%
+Telecommunications operator
+("Guangdong Mobile")
+4
+China Mobile Group
+Zhejiang Co., Ltd.
+the mainland of
+China
+RMB2,117,790,000
+100%
+Telecommunications operator
+5
+China Mobile Group
+Jiangsu Co., Ltd.
+the mainland of
+China
+RMB2,800,000,000
+100%
+Telecommunications operator
+6
+China Mobile Group
+RMB5,594,840,700
+Proportion of
+ownership interest
+Held by the
+the mainland of
+China
+China Mobile Group
+Company
+subsidiary
+Principal activity
+China Mobile Communication
+the British Virgin
+HK$1
+100%
+Investment holding company
+(BVI) Limited
+Islands ("BVI")
+2
+China Mobile Communication
+Co., Ltd. ("CMC")**
+the mainland of
+China
+RMB1,641,848,326
+100%
+Network and business
+coordination center
+3
+Guangdong Co., Ltd.
+1
+(1,164)
+1,004
+20 INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS (CONTINUED)
+(a) Investments accounted for using the equity method (Continued)
+Summarised financial information on principal associates (Continued):
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 135
+5,192
+4,903
+49,790
+51,246
+Interest in associates
+(2,228)
+(1,641)
+Assets
+the transfer of Tower
+profits resulting from
+Elimination of unrealized
+1,855
+2,103
+of acquisition, goodwill
+and others
+adjustments at the time
+The impact of fair value
+3,337
+2,800
+(iii)
+52,018
+SPD Bank
+2020
+China Tower
+3,201
+2,561
+Dividends received from associates
+55,034
+equity shareholders of the company
+Total comprehensive income attributable to the
+(3,291)
+equity shareholders of the company
+Other comprehensive loss attributable to the
+58,325
+53,003
+Profit attributable to the equity shareholders of the company
+66,682
+59,071
+Profit before taxation
+196,384
+190,982
+Revenue
+Million
+Million
+2021
+52,887
+to the Group
+Total equity attributable
+100,326
+294,176
+274,915
+Total non-current assets
+22,748
+19,143
+43,204
+48,344
+Total current assets
+Million
+Million
+Million
+Million
+2020
+2021
+2020
+2021
+As at 31 December
+True Corporation
+As at 31 December
+China Tower
+111,806
+Total current liabilities
+76,182
+106,635
+18%
+18%
+28%
+28%
+18,540
+15,554
+186,245
+189,354
+to equity shareholders
+Percentage of ownership
+of the Group
+Total equity attributable
+True Corporation
+18,655
+186,246
+189,354
+Total equity
+77,598
+70,572
+44,499
+57,723
+Total non-current liabilities
+38,301
+33,255
+15,642
+102,102
+2021
+2021
+- Deferred tax liabilities to be settled within 12 months
+- Deferred tax liabilities to be settled after 12 months
+Net deferred tax liabilities after offsetting:
+38,998
+43,216
+35,351
+37,346
+3,647
+5,870
+- Deferred tax assets to be recovered after 12 months
+- Deferred tax assets to be recovered within 12 months
+Million
+Million
+2020
+2021
+As at
+31 December
+31 December
+As at
+Net deferred tax assets after offsetting:
+The analysis of net deferred tax assets and liabilities taking into consideration the offsetting of balances related
+to the same tax authority are as follows:
+DEFERRED TAX ASSETS AND LIABILITIES
+To efficiently enhance its 5G network coverage, the Group entered into a series of collaboration
+agreements with China Broadcasting Network Corporation Ltd. ("CBN") to co-construct and share
+700MHz 5G wireless network (the "Co-construction and Sharing Agreement"). In accordance with the Co-
+construction and Sharing Agreement, the parties shall co-construct and share 700MHz wireless network
+(including but not limited to base stations and antennas) based on all 700MHz frequency bands of the
+radio spectrum in respect of which CBN had been permitted to use by relevant national departments.
+The parties shall jointly determine network construction plans. Without consent from the other party, any
+party may not dispose of (including transfer, mortgage or pledge, etc) all or any of the 700MHz wireless
+network assets within the scope of collaboration. The Group initially bear the construction costs of the
+700MHz 5G wireless network within the agreed scope under the Co-construction and Sharing Agreement
+and shall initially own the assets underlying the said wireless network. CBN shall pay the Group network
+usage fees based on fair and reasonable negotiations. Therefore, both parties have the right to use
+the 700MHz wireless network. Subject to compliance with applicable laws, regulations and regulatory
+requirements, CBN may purchase 50% of the 700MHz 5G wireless network assets from the Group by
+stages, at the then assessed fair value.
+(2,016)
+INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS (CONTINUED)
+(b) Investments in a joint operation
+(1,420)
+(248)
+Million
+Million
+2021
+As at 31
+December
+Exchange
+differences
+(charged) to comprehensive
+income
+Million
+Million
+Million
+profit or loss
+2021
+January
+Charged
+to other
+Credited/
+As at 1
+The components of deferred tax assets and liabilities recognized and the movements during the year ended 31
+December 2021 are as follows:
+DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+21
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 137
+(1,668)
+(2,369)
+(353)
+21
+20
+(Expressed in RMB unless otherwise indicated)
+(332)
+6,428
+7,329
+of the company
+equity shareholders
+Profit/(loss) attributable to
+208
+(318)
+8,407
+9,615
+Profit/(loss) before taxation
+30,485
+33,385
+81,099
+86,585
+Revenue
+Million
+Million
+Million
+Million
+2020
+231
+Other comprehensive (loss)/
+income attributable to
+equity shareholders
+Notes to the consolidated financial statements (Continued)
+136 China Mobile Limited
+The aggregate carrying amount of investments in other associates and joint ventures and related financial
+information are not material to the Group.
+In 2015, CMC, a wholly-owned subsidiary of the Company, together with State Development &
+Investment Corporation and China Mobile State Development & Investment Management Company
+Limited (45% of its registered capital is owned by CMCC), established China Mobile Innovative Business
+Fund (Shenzhen) Partnership (Limited Partnership) (the "Fund"). The Group recognized the investment
+as interest in a joint venture. CMC committed to invest RMB1,500 million, which represents 50% of
+the equity interest of the Fund. As at 31 December 2021, CMC had contributed RMB1,256 million (as at
+31 December 2020: RMB1,256 million) to the Fund with an outstanding commitment to further invest
+RMB244 million (as at 31 December 2020: RMB244 million) to the Fund upon request to be lodged by
+the Fund. There were no contingent liabilities related to the Group's interest in this joint venture as at 31
+December 2021 and 2020.
+Details of a major joint venture are as follows:
+114
+88
+715
+1,099
+associates
+2020
+Dividends received from
+(324)
+6,428
+7,328
+company
+equity shareholders of the
+Total comprehensive income/
+(9)
+8
+(1)
+of the company
+222
+Deferred tax assets before offsetting:
+107,982
+6,084
+65
+including digital technology
+Provision of IT solution
+100%
+RMB1,000,000,000
+the mainland of
+China
+Technology Co., Ltd.
+Zhongyidong Information
+64
+development services
+technology research and
+technology products and
+Provision of information
+100%
+RMB570,000,000
+the mainland of
+China
+China Mobile Xiong'an
+ICT Co., Ltd.
+63
+finance services
+e-commerce and internet
+Provision of e-payment,
+China Mobile Information
+100%
+System Integration Co., Ltd.
+RMB50,000,000
+The amounts recognized in the consolidated balance sheet are as follows:
+(a) Investments accounted for using the equity method
+INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS
+20
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+132 China Mobile Limited
+No subsidiaries in which the Group have non-controlling interests are material to the Group.
+technology development
+services
+Effective interest held by the Group is 66.41%.
+#
+Company registered as a sino-foreign equity joint venture in the mainland of China.
+***
+Companies registered as wholly owned foreign enterprises in the mainland of China.
+The nature of all the legal entities established in the mainland of China is limited liability company.
+**
+*
+maintenance and related
+integration, construction,
+Provision of computer system
+100%
+the mainland of
+China
+RMB555,410,800
+the mainland of
+China
+China Mobile Financial
+Technology Co., Ltd.
+100%
+subsidiary
+Held by a
+Company
+Held by the
+Proportion of
+ownership interest
+Particulars of issued
+and paid up capital
+RMB1,500,000,000
+and operation
+the mainland of
+China
+incorporation/
+establishment
+Place of
+"China Mobile Quantong
+System Integration
+(formerly known as
+Integration Co., Ltd.
+China Mobile System
+59
+Name of company*
+No.
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+Annual Report 2021 131
+19 SUBSIDIARIES (CONTINUED)
+Principal activity
+Provision of computer system
+integration, construction,
+maintenance and related
+62
+development services
+technology research and
+technology products and
+Provision of information
+100%
+RMB1,000,000,000
+the mainland of
+China
+China Mobile (Shanghai)
+ICT Co., Ltd.
+61
+Associates
+technology research and
+development services
+Provision of information
+100%
+RMB1,650,000,000
+the mainland of
+China
+ICT Co., Ltd.
+China Mobile (Chengdu)
+60
+Co., Ltd.")
+services
+technology development
+technology products and
+Interest in associates
+Joint ventures
+As at
+134 China Mobile Limited
+As at 31 December 2021, there was no impairment indicator of the Group's interests in other
+associates or joint ventures.
+As at 31 December 2021, the fair value of investment in China Tower was RMB34,560 million (as
+at 31 December 2020: RMB47,159 million) based on its quoted market price, which was below
+its carrying amount by approximately 32.6% (as at 31 December 2020: approximately 5.3%). The
+management of the Group performed an impairment assessment and determined the recoverable
+amount of the investment based on its VIU. Based on the management's assessment result, there
+was no impairment of the investment as at 31 December 2021.
+2021.
+As at 31 December 2021, the fair value of investment in SPD Bank was RMB45,507 million (as at
+31 December 2020: RMB51,642 million) based on its quoted market price, which was below its
+carrying amount by approximately 57.9% (as at 31 December 2020: approximately 49.4%). The
+management of the Group performed an impairment assessment and determined the recoverable
+amount of the investment based on its VIU. The calculation has considered pre-tax cash flow
+projections of SPD Bank for the five years ending 31 December 2026 with an extrapolation made
+to perpetuity. The discount rate used to discount the cash flows to their respective net present
+values was based on cost of capital used to evaluate investments of similar nature in the mainland
+of China. Management judgement is required in estimating the future cash flows of SPD Bank. The
+key assumptions are determined with reference to external sources of information. Based on the
+management's assessment result, there was no impairment of the investment as at 31 December
+The Group assesses whether there is objective evidence that interests in associates are impaired at
+each balance sheet date.
+4,502
+5,192
+5,489
+4,903
+47,159
+49,790
+34,560
+51,246
+51,642
+102,102
+45,507
+107,982
+Million
+Million
+Million
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Million
+20 INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS (CONTINUED)
+(a) Investments accounted for using the equity method (Continued)
+Summarised financial information on principal associates:
+SPD Bank
+6,084
+The impact of fair value adjustments at the time of acquisition,
+goodwill and others
+96,018
+101,898
+Total equity attributable to the Group
+18%
+18%
+Percentage of ownership of the Group
+528,288
+560,098
+Total equity attributable to ordinary equity shareholders
+645,817
+678,218
+Total equity
+7,304,401
+7,458,539
+7,950,218
+8,136,757
+Total assets
+Total liabilities
+2020
+Million
+As at 31 December
+2021
+Million
+(iii)
+Fair value
+amount
+Fair value
+The PRC
+Shanghai Pudong Development Bank
+or its subsidiary
+and operation
+Name of associate
+by the Company
+ownership
+interest held
+Proportion of
+incorporation/
+establishment
+Place of
+Details of principal associates, all of which are listed on exchanges, are as follows:
+161,811
+169,556
+1,079
+160,732
+168,552
+Million
+2020
+2021
+Million
+31 December
+31 December
+18%
+Co., Ltd. ("SPD Bank")
+Principal activity
+Provision of banking services
+China Tower Corporation Limited
+("China Tower")
+amount
+As at 31 December 2020
+Carrying
+As at 31 December 2021
+Carrying
+True Corporation
+China Tower
+SPD Bank
+The fair values of the interests in listed associates are based on quoted market prices (level 1:
+unadjusted quoted price in active markets) at the balance sheet date without any deduction for
+transaction costs and disclosed as follows:
+(i)
+(a) Investments accounted for using the equity method (Continued)
+20 INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS (CONTINUED)
+As at
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Management has assessed and determined that the Group has significant influence over these associates,
+including those investments where the ownership interest held by the Group is less than 20%, taking
+into factors including but not limited to the Group's representation on the boards of the directors of these
+entities.
+Note: Up to the approval date of these financial statements, SPD Bank has not yet disclosed their annual financial statements for the
+year ended 31 December 2021. The numbers presented in the table below are extracted from financial information which was
+released and publicly disclosed by SPD Bank, with some information such as other comprehensive income attributable to the
+equity shareholders of the company and total comprehensive income attributable to the equity shareholders of the company not
+being disclosed. The consistency of the accounting policies between the Group and its associates has been considered when
+the Group recognized its interests in these associates.
+telecommunications services
+Provision of
+18%
+Thailand
+True Corporation Public Company
+Limited ("True Corporation")
+Provision of construction,
+maintenance and operation of
+telecommunications towers
+28%
+The PRC
+Annual Report 2021 133
+Write-down of obsolete inventories
+(loss) attributable to
+42
+Disposal
+Purchase
+2020
+31 December
+As at
+Recognized in
+other
+The movements during the year in the balance of these Level 3 fair value measurements are as follows:
+22 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (CONTINUED)
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+140 China Mobile Limited
+There were no transfers between the levels of fair value hierarchy for the year ended 31 December 2021 and
+2020.
+For the year ended 31 December 2021, the Group didn't exercise any CB into SPD Bank's common stock (2020: Nil).
+As at 31 December 2021 and 2020, the CB, monetary funds and bond funds were measured at fair value as level 1 of fair value
+hierarchy.
+The WMPs will mature with variable return rates indexed to the performance of underlying assets. As at 31 December 2021 and 2020,
+they were measured at fair value as level 3 of fair value hierarchy. The fair values were determined based on cash flow discounted
+assuming the expected return will be obtained upon maturity.
+Recognized in
+profit or loss
+Million
+Million
+Million
+3,112
+(57,687)
+106,682
+118,022
+at FVPL
+Financial assets measured
+89
+The category of FVPL mainly comprises wealth management products ("WMPS") offered by various financial institutions in China
+amounting to RMB169,395 million (as at 31 December 2020: RMB117,289 million), monetary funds and bond funds amounting to
+RMB30,346 million (as at 31 December 2020: Nil) and the Group's investment in the CB amounting to RMB9,618 million (as at 31
+December 2020: RMB9,259 million).
+---45
+at FVOCI
+Financial assets measured
+Million
+2021
+As at
+31 December
+comprehensive
+income
+Million
+Million
+44
+The category of FVOCI is primarily the equity investments in listed companies that are not held for trading.
+(ii)
+(i)
+Financial assets measured
+at FVOCI
+Level 1
+Million
+Note
+The following table presents the Group's assets that are measured at fair value at 31 December 2020:
+170,218
+170,129
+689
+(i)
+89
+41,466
+Total
+(!!)
+Financial assets measured
+at FVPL
+600
+(i)
+Financial assets measured
+at FVOCI
+42,066
+170,129
+1,067
+at FVPL
+Note:
+129,714
+118,066
+128,603
+118,022
+1,111
+44
+Financial assets measured
+Total
+Million
+211,595
+Level 3
+Million
+Level 2
+Million
+11,648
+Total
+10,581
+(!!)
+212,284
+118,066
+106,682
+(57,687)
+As at
+Others
+Long-term prepaid expenses
+Certificates of deposits
+Contract costs (Note)
+Contract assets (note 26)
+24 OTHER NON-CURRENT ASSETS
+As at
+Note: The statutory deposit reserves and the deposited customer reserves are deposited by the subsidiaries of the Company, China Mobile
+Finance and China Mobile E-Commerce, respectively, in accordance with relevant requirements of the People's Bank of China ("PBOC”),
+which are not available for use in the Group's daily operations.
+2,830
+8,836
+9,209
+2,163
+7,046
+606
+498
+11,666
+108
+31 December
+2021
+Note: Contract costs capitalized mainly related to the relevant costs incurred for the customers accessing to the Group's telecommunications
+network (such as wireline broadband access). As at 31 December 2021, capitalized contract costs that are expected to be amortized
+exceeding one year amounted to RMB5,178 million (as at 31 December 2020: RMB3,763 million). For the year ended 31 December
+2021, the amortization of capitalized contract costs amounted to RMB23,837 million (2020: RMB20,034 million).
+36,345
+37,198
+853
+2,783
+4,445
+4,466
+31 December
+15,000
+14,487
+17,840
+1,560
+2,099
+Million
+Million
+2020
+10,010
+Note
+1,032
+326
+assets
+Total
+Million
+Million
+Million
+assets
+assets
+Current
+assets
+Non-current
+Non-current
+As at 31 December 2020
+As at 31 December 2021
+23 RESTRICTED BANK DEPOSITS
+170,218
+45
+3,112
+Current
+706
+Total
+Million
+others
+- Performance bonds and
+2,332
+2,332
+43
+1,457
+reserves (Note)
+Million
+- Deposited customer
+8,728
+6,720
+6,720
+reserves (Note)
+- Statutory deposit
+Restricted bank deposits
+Million
+8,728
+Total
+Million
+1,457
+Level 2
+Million
+(5,710)
+19
+(8)
+(1,468)
+(4,253)
+(499)
+1
+(8)
+(136)
+(356)
+Others
+(4,047)
+18
+(470)
+(3,595)
+Total
+37,330
+3,510
+(8)
+As at 31
+December
+Exchange
+differences
+Credited
+to other
+comprehensive
+income
+Million
+Credited/
+(charged) to
+profit or loss
+Million
+Million
+2020
+January
+plant and equipment
+As at 1
+DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+21
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+138 China Mobile Limited
+40,847
+15
+The components of deferred tax assets and liabilities recognized and the movements during the year ended 31
+December 2020 are as follows:
+Accelerated depreciation of property,
+(862)
+(302)
+80
+2,302
+Expected credit impairment losses
+1,139
+8,676
+Unredeemed Reward Program
+1,866
+8,226
+18,744
+1,611
+6,615
+property, plant and equipment
+Depreciation, write-off and impairment of
+85
+42
+Level 3
+Million
+Accrued expenses
+2020
+20,610
+2,382
+at FVPL
+Change in value of financial assets measured
+Deferred tax liabilities before offsetting:
+46,557
+(4)
+4,978
+41,583
+9,815
+4,786
+333
+4,457
+Others
+653
+746
+lease liabilities
+Recognition of right-of-use assets and
+(4)
+Million
+(93)
+Deferred tax assets before offsetting:
+(4,253)
+39
+1
+(294)
+(3,999)
+(356)
+155
+Total
+(512)
+(3,595)
+39
+(546)
+(3,088)
+plant and equipment
+Accelerated depreciation of property,
+(302)
+Others
+--
+31,240
+1
+Level 1
+Million
+Million
+The following table presents the Group's assets that are measured at fair value at 31 December 2021:
+Level 3 valuations: fair value measured using significant unobservable inputs.
+.
+Level 2 valuations: observable inputs which fail to meet Level 1, and not using significant unobservable
+inputs.
+Level 1 valuations: unadjusted quoted prices in active markets for identical assets or liabilities at the
+measurement date.
+6,051
+•
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 139
+FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
+22
+Deferred tax assets are recognized for deductible temporary differences and tax losses carry-forwards only
+to the extent that the realization of the related tax benefit through future taxable profits is probable. Certain
+subsidiaries of the Group did not recognize deferred tax assets of RMB12,953 million (2020: RMB11,284
+million) in respect of deductible temporary differences and tax losses amounting to RMB68,571 million (2020:
+RMB58,154 million) that can be carried forward against future taxable income as at 31 December 2021. The
+deductible tax losses are allowed to be carried forward within next five years against future taxable profits,
+while those of high-tech enterprises are allowed to be within next ten years, and entities operating in Hong
+Kong can carry forward tax losses for unlimited period.
+37,330
+38
+The following table presents the fair value and fair value hierarchy of the Group's financial instruments
+measured at the end of the reporting period on a recurring basis. The level into which a fair value measurement is
+classified is determined with reference to the lowest level input that is significant to the entire measurement.
+The different levels have been defined as follows:
+97
+As at 31 December 2021, the offsetting amount of deferred tax assets and deferred tax liabilities was
+RMB3,341 million (as at 31 December 2020: RMB2,585 million).
+at FVPL
+499
+1,803
+Expected credit impairment losses
+2,923
+5,753
+Unredeemed Reward Program
+3,676
+15,068
+(313)
+6,928
+property, plant and equipment
+Depreciation, write-off and impairment of
+43
+30
+(399)
+13
+Write-down of obsolete inventories
+6,615
+18,744
+Accrued expenses
+2,302
+(1)
+8,676
+41,583
+Deferred tax liabilities before offsetting:
+Change in value of financial assets measured
+6,345
+35,239
+4,457
+E
+4,844
+(386)
+lease liabilities
+Others
+746
+(84)
+830
+Recognition of right-of-use assets and
+The statutory and discretionary surplus reserves can be used to reduce previous years' losses,
+if any, and may be converted into paid-up capital, provided that the statutory reserve after such
+conversion is not less than 25% of the registered capital of relevant subsidiaries.
+The closing price at the Grant Date
+Risk-free interest rate
+Expected dividend yield
+HK$54.25
+0.65%
+Granted on 12 June 2020
+In accordance with relevant regulations issued by the Ministry of Finance of the PRC, a subsidiary
+of the Company, China Mobile Finance, is required to set aside a reserve through appropriations of
+profit after tax according to a certain ratio of the ending balance of its gross risk-bearing assets to
+cover potential losses against such assets.
+The weighted average fair value of the Share Options granted by the Company was HK$4.00 per share.
+Other than the exercise price mentioned above, the model inputs to determine the fair value of Share
+Options granted included:
+(iii) Other reserves
+The Company used the Binomial Model to determine the fair value of the Share Options as at the Grant
+Date, which is to be recorded in profit or loss over the vesting period.
+91,410,811
+37 SHARE-BASED PAYMENT (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 147
+The options outstanding as at 31 December 2021 had a weighted average remaining contractual life of 8.5
+years (as at 31 December 2020: 9.5 years).
+90,629,063
+HK$55.00
+12 June 2024-12 June 2030
+12 June 2020
+In accordance with the Company Law of the PRC, domestic enterprises in the mainland of China
+are required to transfer 10% of their profit after taxation, as determined under accounting principles.
+generally accepted in the PRC ("PRC GAAP"), to the statutory surplus reserve until such reserve
+balance reaches 50% of the registered capital of relevant mainland subsidiaries. Moreover, upon
+a resolution made by the shareholders, a certain percentage of domestic enterprises' profit after
+taxation, as determined under PRC GAAP, is transferred to the discretionary surplus reserve. During
+the year, appropriations were made by such subsidiaries to the statutory surplus reserves and
+discretionary surplus reserves accordingly.
+90,629,063
+12 June 2023-12 June 2030
+HK$55.00
+(c) Fair value of share options
+PRC statutory reserves mainly include statutory surplus reserve and discretionary surplus reserve.
+94,789
+The fair value of share options granted to employees of the Group that are recognized in
+accordance with the accounting policy in note 2 (v)(iii).
+(27,669)
+(27,669)
+12 June 2020
+(29,916)
+- Value of share options
+413
+413
+As at 31 December 2021
+402,130
+645
+72
+497,636
+150 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+38
+CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+(d) Nature and purpose of different reserves
+(i)
+(ii)
+Capital reserve
+The capital reserve mainly comprises the following:
+RMB295,665 million debit balance brought forward as a result of the elimination of goodwill
+arising on the acquisition of subsidiaries before 1 January 2001 against the capital reserve;
+Share of other comprehensive income/(loss) of investments accounted for using the equity
+method;
+The changes in fair value of financial assets measured at FVOCI, net of tax, until the financial
+assets are derecognized;
+The difference between the consideration and the carrying amounts of net assets of acquired
+business under business combinations under common control; and
+PRC statutory reserves
+Exercise price
+HK$55.00
+146 China Mobile Limited
+12 June 2020
+As at 1 January 2020
+Movements in the numbers of share options outstanding and their related weighted average exercise
+prices are as follows:
+(a) Movements in share options
+SHARE-BASED PAYMENT (CONTINUED)
+37
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+For the year ended 31 December 2021, share options compensation expenses recorded in profit or loss
+amounted to RMB413 million (2020: RMB232 million).
+On 12 June 2020 (the "Grant Date"), the Board of Directors of the Company approved the grant of Share
+Options representing an aggregate of 305,601,702 shares to 9,914 participants of the Scheme pursuant to the
+aforementioned authorization, which represented 1.5% of the Company's issued share capital. Participants
+are backbone management, technical and business personnel who have a direct impact on the Company's
+operating performance and sustainable development. No Share Options had been granted to the directors,
+chief executive or substantial shareholders of the Company or any of their related parties. The exercise price
+was HK$55.00 per share.
+The exercise price of options shall be determined in accordance with the fair market price principle, with the
+base day for pricing being the grant date. The exercise price shall not be lower than the higher of the following
+prices: (i) the closing price of the shares on the grant date; and (ii) the average closing price of the shares on the
+HKEX for the five trading days prior to the grant date. Subject to the satisfaction of the conditions for vesting as
+provided under the Scheme, the Share Options granted shall be vested in three batches as follows: (i) the first
+batch (being 40% of the Share Options granted) will be vested on the first trading day after 24 months from
+the grant date; (ii) the second batch (being 30% of the Share Options granted) will be vested on the first trading
+day after 36 months from the grant date; and (iii) the third batch (being 30% of the Share Options granted) will
+be vested on the first trading day after 48 months from the grant date. Vesting period ends ten years from the
+grant date.
+The maximum number of shares to be issued upon the exercise of the Share Options granted under the
+Scheme shall not in aggregate exceed 10% of the total share capital of the Company as at the date of approval
+of the Scheme at a general meeting of shareholders.
+At the Company's Annual General Meeting ("AGM") held on 20 May 2020, the shareholders of the Company
+approved the adoption of the Share Option Scheme (the "Scheme"), for the grant of share options ("Share
+Options") to qualified participants.
+Granted
+SHARE-BASED PAYMENT
+8,601
+8,487
+As at 31 December
+(1,695)
+(1,984)
+Recognized in the consolidated statement of comprehensive income
+3,435
+1,870
+6,861
+(29,916)
+8,601
+37
+Forfeited
+As at 31 December 2020
+As at 1 January 2021
+Forfeited
+Grant Date
+91,410,811
+121,881,080
+No. of shares
+involved in the
+options
+outstanding as at
+31 December 2020
+120,838,750
+No. of shares
+involved in
+the options
+outstanding as at
+31 December 2021
+Details of the expiry dates, exercise prices and the respective numbers of share options which remained
+outstanding as at 31 December 2021 and 2020 are as follows:
+(b) Share options outstanding
+For the year ended 31 December 2021, as the condition for vesting of the Share Options had not been
+satisfied, no Share Options had been vested (2020: Nil), and no ordinary shares had been issued by the
+Company as none of Share Options was exercisable (2020: Nil).
+302,096,876
+HK$55.00
+(2,605,826)
+304,702,702
+HK$55.00
+HK$55.00
+304,702,702
+HK$55.00
+305,601,702
+(899,000)
+HK$55.00
+HK$55.00
+options
+exercise prices
+Numbers of
+Average
+Share option scheme
+Vested and exercisable as at 31 December 2021
+As at 31 December 2021
+Normal exercise period
+12 June 2022-12 June 2030
+63,058
+Profit for the year
+63,058
+Retained
+Other
+Capital
+Share
+capital
+for the year
+Total comprehensive income
+Changes in equity for 2020:
+As at 1 January 2020
+The reconciliation between the opening and closing balances of each component of the Group's
+consolidated equity is set out in the consolidated statement of changes in equity. Details of the changes
+in the Company's individual components of equity between the beginning and the end of the year are set
+out below:
+(c) Movements in components of equity
+38 CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+Total
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+32,169
+29,916
+(equivalent to approximately RMB1.543)) per share
+Ordinary final dividend in respect of the previous financial year,
+approved and paid during the year, of HK$1.760
+(equivalent to approximately RMB1.481) (2020: HK$1.723
+Million
+Million
+2020
+2021
+Dividends attributable to the previous financial year, approved and paid during the year:
+(ii)
+In accordance with the 2009 Notice and the PRC enterprise income tax law, the Company is
+required to withhold enterprise income tax equal to 10% of any dividend, when it is distributed
+to non-resident enterprise shareholders whose names appeared on the Company's register of
+members, as at the record date for such dividend, and who were not individuals.
+Annual Report 2021 149
+Million
+reserve
+Million
+reserves
+Additions during the year
+232
+- Value of share options
+Share option scheme
+(27,557)
+(27,557)
+current year (note 38(b)(i))
+(32,169)
+(32,169)
+Dividends declared in respect of
+previous year (note 38(b)(ii))
+Dividends approved in respect of
+61,344
+61,344
+61,344
+61,344
+489,900
+87,698
+72
+402,130
+Million
+Million
+Million
+equity
+profits
+In case of any change in the total number of issued shares of the Company between the date of
+approval for these financial statements and the record date for the implementation of the 2021 final
+dividend, the Company intends to keep the total amount of profit distribution unchanged and adjust
+the amount of dividend per share accordingly.
+The proposed ordinary final dividend, which is declared in Hong Kong dollar is translated into
+RMB with reference to the rate HK$1 = RMB0.81760, being the rate announced by the State
+Administration of Foreign Exchange in the PRC on 31 December 2021. As the ordinary final dividend
+was declared after the balance sheet date, such dividend is not recognized as liability as at 31
+December 2021.
+57,887
+70,112
+Expected volatility (Note)
+5.9%
+232
+As at 31 December 2020
+402,130
+232
+72
+89,316
+491,750
+As at 1 January 2021
+402,130
+232
+72
+89,316
+491,750
+Changes in equity for 2021:
+Profit for the year
+Total comprehensive income
+for the year
+Dividends approved in respect of
+previous year (note 38(b)(ii))
+Dividends declared in respect of
+current year (note 38(b)(i))
+Share option scheme
+63,058
+21.34%
+63,058
+Note: The expected volatility is determined based on the historical average daily trading price volatility of the shares of the Company.
+(a) Share capital
+30,330
+42,443
+27,557
+27,669
+Million
+Million
+2020
+2021
+Ordinary interim dividend declared and paid of HK$1.630
+(equivalent to approximately RMB1.356) (2020: HK$1.530
+(equivalent to approximately RMB1.398)) per share
+Ordinary final dividend proposed after the balance sheet date
+of HK$2.430 (equivalent to approximately RMB1.987) (2020:
+HK$1.760 (equivalent to approximately RMB1.481)) per share
+Dividends attributable to the year:
+(i)
+(b) Dividends
+CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+38
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+148 China Mobile Limited
+The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
+entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to
+the Company's residual assets.
+402,130
+382,263
+Equivalent
+RMB Million
+HK$
+Million
+of shares
+20,475,482,897
+As at 1 January and 31 December 2021 and 2020
+Number
+Ordinary shares, issued and fully paid:
+38 CAPITAL, RESERVES AND DIVIDENDS
+As at 1 January
+25 INVENTORIES
+Million
+As at 31 December
+Written-off
+Recognized/(reversed)
+As at 1 January
+The following table summarizes the changes in expected credit impairment loss allowance of accounts
+receivable:
+(b) Expected credit impairment loss allowance of accounts receivable
+ACCOUNTS RECEIVABLE (CONTINUED)
+27
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+142 China Mobile Limited
+The accounts receivable of the Group are primarily comprised of receivables due from customers and
+other telecommunications operators.
+28
+38,401
+3,021
+3,113
+13,076
+11,457
+3,255
+4,045
+4,132
+3,855
+14,917
+12,198
+Million
+34,668
+AMOUNT DUE FROM/TO ULTIMATE HOLDING COMPANY
+2021
+2020
+9,326
+17,173
+18,523
+Others
+Prepaid VAT and input VAT to be deducted, etc.
+Prepayments (Note)
+Million
+2020
+2021
+Million
+31 December
+31 December
+As at
+As at
+PREPAYMENTS AND OTHER CURRENT ASSETS
+29
+As at 31 December 2021, amount due to ultimate holding company primarily comprises the short-term deposits
+of CMCC in China Mobile Finance amounting to RMB19,165 million (as at 31 December 2020: RMB26,706
+million) and the corresponding interest payable. The deposits are unsecured and carry interest at prevailing
+market rate. Apart from the above, amount due from and other balance of amount due to ultimate holding
+company arises from the ordinary course of business, which is unsecured, interest free and repayable on
+demand.
+11,590
+13,117
+(3,072)
+(2,503)
+5,105
+4,030
+9,557
+11,590
+Million
+Million
+Million
+8,385
+2020
+31 December
+31 December
+31 December
+As at
+As at
+8,044
+10,203
+1,782
+2,887
+6,262
+7,316
+Million
+2021
+Million
+31 December
+31 December
+2021
+As at
+As at
+(Expressed in RMB unless otherwise indicated)
+Notes to the consolidated financial statements (Continued)
+Annual Report 2021 141
+CONTRACT ASSETS
+Others
+Handsets and other terminals
+2020
+Million
+2020
+2020
+Million
+Million
+31 December
+As at
+As at
+Over 1 year
+91 days-1 year
+61-90 days
+31-60 days
+Within 30 days
+Base on invoice date:
+Aging analysis of accounts receivable, net of loss allowance is as follows:
+(a) Aging analysis
+27 ACCOUNTS RECEIVABLE
+3,841
+6,551
+(1,560)
+(2,099)
+Less: non-current portion included in other non-current assets
+5,401
+8,650
+(245)
+(322)
+5,646
+8,972
+Loss allowance
+Contract assets
+2021
+442
+26
+28,291
+As at
+35 ACCRUED EXPENSES AND OTHER PAYABLES
+Contract liabilities would be recognized as operating revenue upon the rendering of services. Almost all of the
+contract liability balance as at 31 December 2020 was recognized as operating revenue in the consolidated
+statement of comprehensive income within one year.
+79,028
+79,068
+(651)
+(707)
+79,679
+79,775
+3,864
+3,492
+31 December
+11,156
+40,005
+45,957
+24,654
+17,280
+Million
+Million
+2020
+2021
+As at
+31 December
+31 December
+13,046
+As at
+31 December
+2021
+2020
+155
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 145
+DEFERRED REVENUE
+36
+36
+Note: As at 31 December 2021, the Company's RMB Share Issue was in progress, and shares subscription funds received (prior to the
+deduction of related issuance and professional expenses) amounting to RMB48,695 million.
+200,952
+274,509
+27,782
+28,843
+Other payables
+48,695
+Subscription funds received from issuance of RMB Shares (Note)
+93,725
+106,216
+Accrued expenses
+6,100
+5,463
+Accrued salaries, wages and other benefits
+73,345
+85,292
+Receipts-in-advance
+Million
+Million
+As at
+Less: non-current portion
+2021
+Non-refundable prepaid service fees
+8,346
+25,713
+5,268
+Million
+Million
+2020
+2021
+31 December
+31 December
+As at
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+238,675
+Annual Report 2021 143
+33
+Cash at banks and on hand
+Bank deposits with original maturity within three months
+32 CASH AND CASH EQUIVALENTS
+Bank deposits represent term deposits with banks with original maturity exceeding three months. The
+applicable interest rate is determined in accordance with the benchmark interest rate published by PBOC
+or with reference to the market interest rate. As at 31 December 2021, interest receivable amounting to
+RMB3,734 million (as at 31 December 2020: RMB4,461 million) was included in this item.
+31 BANK DEPOSITS
+Other financial assets measured at amortized cost primarily include short-term loans granted to China Tower
+through China Mobile Finance of principal and interest RMB2,502 million (as at 31 December 2020: RMB2,502
+million), as well as other short-term loans and debt instrument investments to banks, other financial institutions
+and other third parties of principal and interest RMB31,641 million (as at 31 December 2020: RMB34,335
+million). The interest rates of short-term loans are mutually agreed among the parties with reference to the
+market interest rates.
+OTHER FINANCIAL ASSETS MEASURED AT AMORTIZED COST
+30
+Note: Prepayments mainly include terminal prepayments, power and utilities prepayments, maintenance prepayments, etc.
+Unredeemed Reward Program
+Unused data traffic carried over
+Others
+ACCOUNTS PAYABLE
+204,383
+As at
+212,729
+34 CONTRACT LIABILITIES
+243,943
+144 China Mobile Limited
+All the accounts payable are expected to be settled within one year or are repayable on demand.
+167,990
+152,712
+40,802
+37,219
+41,316
+28,948
+85,872
+86,545
+Over 1 year
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Within 180 days
+Accounts payable primarily include payables for expenditure of network expansion, maintenance and support
+expenses and interconnection expenses, etc.
+Base on invoice date:
+Million
+Million
+2020
+2021
+As at
+31 December
+31 December
+As at
+The aging analysis of accounts payable is as follows:
+181 days to 1 year
+2021
+Million
+31 December
+31 December
+As at
+Right-of-use assets
+Amount due to ultimate holding company
+Accrued expenses and other payables
+Accounts payable
+2020
+As at
+Million
+6
+995
+372
+1
+2,612
+1,396
+631
+679
+728
+770
+2,992
+Lease liabilities
+228
+Amount due from ultimate holding company
+2021
+Million
+Other receivables
+Note
+4,770
+2020
+Million
+= = = ? > >
+1,607
+979
+329
+280
+271
+188
+4,341
+1,895
+1,641
+1,365
+(v)
+712
+458
+(vi)
+131
+170
+(vi)
+(7,541)
+5,069
+The outstanding balances related to transactions with CMCC Group are included in the following accounts
+captions summarized as follows:
+Accounts receivable
+Prepayments and other current assets
+578
+Revenue from telecommunications services
+23,478
+582
+2,515
+Property leasing and management services revenue
+Dividend received
+=
+33
+32
+3,927
+4,362
+Related costs for use of tower assets
+Additions of right-of-use assets
+(iv)
+22
+4,847
+(iv)
+41,438
+4,393
+4,168
+Increase/decrease) in cash, cash equivalents and
+bank deposits, net
+(v)
+17,179
+(3,228)
+Increase/(decrease) in other financial assets measured
+Net (repayment)/receipts of short-term deposits
+at amortized cost
+41,486
+(ii)
+796
+(i)
+26,714
+These amounts arise in the ordinary course of business and with terms determined through mutual
+negotiation which are fair and reasonable.
+Note:
+(i)
+The Group provides telecommunications facilities construction services to CMCC Group for the telecommunications project
+planning, design, construction, maintenance and other services.
+(ii)
+The Group provides comprehensive management, support and other services to CMCC Group.
+(iii)
+The Group purchases technical support and other services from CMCC Group.
+(iv)
+The Group leases network assets from CMCC Group.
+(v)
+(vi)
+The Group leases offices, retail outlets and machinery rooms from CMCC Group, with additions of right-of-use assets
+and charges of property leasing and management services. For the year ended 31 December 2021, property leasing and
+management services charges include the depreciation of right-of-use assets in relation to the property leasing amounting
+to RMB413 million (2020: RMB393 million), charges for property leasing and interest for lease liabilities, etc. amounting to
+RMB1,228 million (2020: RMB972 million).
+The amounts represent the bank deposits received from or repaid to CMCC Group and related interest expenses. The interest
+rate of short-term bank deposits is negotiated based on the benchmark interest rate published by the PBOC.
+154 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+40
+RELATED PARTY TRANSACTIONS (CONTINUED)
+(b) Principal transactions with associates and joint ventures of the Group
+The following is a summary of principal related party transactions entered into by the Group with the
+associates and joint ventures of the Group for the year ended 31 December 2021 and 2020, the terms of
+which are fair and reasonable.
+Note
+2021
+Million
+2020
+Million
+Technical support services charges
+1,696
+Interest expenses
+753
+Property leasing and management services charges
+Property, plant and equipment
+Investments in subsidiaries
+As at
+31 December
+Note
+2021
+Million
+As at
+31 December
+2020
+Million
+1
+1
+Non-current assets
+494,647
+494,648
+494,236
+Current assets
+Amounts due from subsidiaries
+6,347
+1,346
+Prepayments and other current assets
+38
+Prepaid income tax
+5
+5
+494,235
+Assets
+39 BALANCE SHEET OF THE COMPANY
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+(vi)
+Annual Report 2021 151
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+38 CAPITAL, RESERVES AND DIVIDENDS (CONTINUED)
+(d) Nature and purpose of different reserves (Continued)
+(iv) Exchange reserve
+The exchange reserve comprises all foreign currency translation differences arising from the
+translation of foreign currency denominated financial statements of overseas enterprises. The
+reserve is dealt with in accordance with the accounting policies set out in note 2(y).
+(e) Capital management
+The Group's primary objectives of capital management are to maintain a reasonable capital structure
+and to safeguard the Group's ability to continue as a going concern in order to provide returns for
+shareholders. The Group actively and regularly reviews and manages its capital structure to stabilize the
+capital position and prevent operation risk. Meanwhile, the Group will maximize the shareholders' return
+and will make adjustment on the capital structure in accordance with the changes in economic conditions.
+The Group monitors capital on the basis of liabilities-to-assets ratio. This ratio is calculated as total
+liabilities divided by total assets. At the end of reporting period, the Group's liabilities-to-assets ratio is as
+follows:
+Total assets
+Total liabilities
+Liabilities-to-assets ratio
+As at
+31 December
+2021
+Million
+As at
+31 December
+2020
+Million
+1,841,327
+1,727,882
+631,035
+575,110
+34.3%
+33.3%
+Except for China Mobile Finance that is subject to certain capital requirements imposed by China Banking
+and Insurance Regulatory Commission, the Company and its other subsidiaries are not subject to
+externally imposed capital requirements.
+152 China Mobile Limited
+Other receivables
+Additions of right-of-use assets
+1
+Bank deposits
+402,130
+95,506
+89,620
+497,636
+491,750
+550,587
+496,419
+The balance sheet of the Company was approved by the Board of Directors on 23 March 2022 and was signed
+on its behalf.
+Dong Xin
+Name of Director
+402,130
+Li Ronghua
+40
+Annual Report 2021 153
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+RELATED PARTY TRANSACTIONS
+(a) Transactions with CMCC Group
+The following is a summary of principal related party transactions entered into by the Group with CMCC
+and its subsidiaries excluding the Group ("CMCC Group") for the years ended 31 December 2021 and
+2020. The majority of these transactions also constitute continuing connected transactions as defined
+under Chapter 14A of Listing Rules. Further details of these continuing connected transactions are
+disclosed under the paragraph "Connected Transactions" in the Report of Directors.
+Revenue from telecommunications
+facilities construction services
+Revenue from comprehensive support services
+Technical support services charges
+Charges for use of network assets
+Name of Director
+38(a)
+38(c)
+4,669
+52,951
+536
+Cash and cash equivalents
+48,795
+294
+55,939
+2,183
+Total assets
+550,587
+496,419
+Equity and liabilities
+Liabilities
+Current liabilities
+Amount due to a subsidiary
+Accrued expenses and other payables
+Total liabilities
+Equity
+Share capital
+Reserves
+Total equity
+Total equity and liabilities
+4,234
+48,717
+4,656
+13
+52,951
+4,669
+2
+304
+152,712
+Purchase of financial assets measured at FVPL
+amount
+Million
+Carrying undiscounted
+More than
+3 years but
+but
+year
+1
+1 year
+Within
+More than
+Total
+contractual
+The following table sets out the remaining contractual maturities at the balance sheet date of the
+Group's financial liabilities, which are based on the undiscounted cash flows (including interest payments
+computed using contractual rates or, if floating, based on prevailing rates at the balance sheet date) and
+the earliest date the Group would be required to repay:
+Liquidity risk refers to the risk that funds will not be available to meet liabilities as they fall due, and
+results from timing and amount mismatches of cash inflow and outflow. The Group maintains sufficient
+cash balances and bank deposits (which are readily convertible to known amounts of cash) to meet its
+funding needs, including working capital, payments for short-term deposits of CMCC Group received by
+China Mobile Finance, dividend payments and capital expenditures, etc.
+(b) Liquidity risk
+Other financial assets measured at amortized cost include cash and cash equivalents, bank
+deposits, restricted bank deposits, other receivables, short-term loans, debt instrument investments
+and amount due from ultimate holding company, etc. They are considered to be of low credit risk
+and the relevant expected credit loss is insignificant.
+Other financial assets measured at amortized cost
+Expected credit impairment losses on accounts receivable are presented within other operating
+expenses. Subsequent recoveries of amounts previously written off are credited against the same
+line item. Individual receivables which were known to be uncollectible were written off by reducing
+the carrying amount directly.
+Accounts receivable and contract assets (Continued)
+(ii) Impairment of financial assets (Continued)
+Credit risk and concentration risk (Continued)
+cash flow
+(a)
+Million
+less than
+264,545
+Accrued expenses and other payables
+12,747
+12,747
+12,747
+Bills payable
+152,712
+152,712
+Accounts payable
+As at 31 December 2021
+Million
+years
+5
+years
+Million
+5
+years
+Million
+3
+More than
+less than
+or on
+demand
+Million
+41
+FINANCIAL RISK MANAGEMENT AND FAIR VALUES MEASUREMENT (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Million
+Over 3
+2 years
+to 3 years
+1 year
+to 2 years
+181 days
+to 1 year
+Million
+Within
+180 days
+Million
+(1,531)
+(1,418)
+(169)
+(62)
+Loss allowance
+1,531
+1,772
+846
+3,112
+Gross carrying amount
+100%
+80%
+20%
+Million
+years
+Million
+As at 31 December 2020
+Corporate customers
+Annual Report 2021 159
+The expected credit loss of the receivables from other customers is insignificant.
+As at 31 December 2021 and 2020, the expected loss rates for contract assets are from 2% to 5%.
+(1,438)
+(1,218)
+(2,185)
+(1,512)
+(462)
+Loss allowance
+264,545
+1,438
+3,361
+6,048
+15,405
+100%
+85%
+65%
+25%
+3%
+Expected loss rate
+Gross carrying amount
+1,433
+2%
+264,545
+company
+66,633
+Other non-current liabilities
+Lease liabilities
+26,714
+26,714
+26,714
+company
+Amount due to ultimate holding
+200,952
+200,952
+200,952
+Accrued expenses and other payables
+4,561
+4,561
+4,561
+Bills payable
+167,990
+167,990
+167,990
+72,291
+Accounts payable
+23,780
+17,513
+(3,448)
+The Group has foreign currency risk as certain cash and deposits with banks are denominated in foreign
+currencies, principally Hong Kong dollars and US dollars that is different from the functional currency of
+the respective group entities. As the amount of the Group's foreign currency cash and deposits with
+banks represented 1.8% (2020: 3.1%) of the total cash and deposits with banks, the Group considered
+the related foreign currency risk was immaterial.
+(d) Foreign currency risk
+The carrying amount of the financial instruments carried at amortized cost are not materially different
+from their respective fair values at the balance sheet dates due to the short-terms or repayable on
+demand nature.
+As at 31 December 2021, total cash and bank deposits balances of the Group amounted to RMB342,201
+million (as at 31 December 2020: RMB334,777 million), interest-bearing other financial assets measured
+at amortized cost amounted to RMB34,426 million (as at 31 December 2020: RMB36,837 million),
+certificates of deposits amounted to RMB10,010 million (as at 31 December 2020: RMB15,000 million)
+and WMPs, monetary funds and other investment products amounted to RMB199,741 million (as at
+31 December 2020: RMB117,289 million). The interest and other income generated by the assets
+mentioned above for 2021 was RMB16,361 million (2020: RMB14,332 million) and the average interest
+rate was 3.00% (2020: 3.02%). Assuming the total cash and bank balances, interest-bearing receivables
+and WMPs are stable in the coming year and interest rate increases/decreases by 100 basis points, the
+profit for the year and total equity would approximately increase/decrease by RMB4,396 million (2020:
+RMB3,779 million).
+The Group consistently monitors the current and potential fluctuation of interest rates in managing the
+interest rate risk on a reasonable level. As at 31 December 2021, the Group did not have any interest-
+bearing borrowings at variable rates, but had RMB19,165 million (as at 31 December 2020: RMB26,706
+million) of short-term bank deposits placed by CMCC, which were at fixed rate and expose the Group to
+fair value interest rate risk. The Group determines the amount of its fixed rate borrowings depending on
+the prevailing market condition. Management does not expect fair value interest rate risk to be high as
+the interest involved will not be significant.
+(c) Interest rate and fair value risk
+8,413
+17,583
+22,994
+423,997
+472,987
+467,310
+342
+70
+67
+479
+460
+8,071
+22,927
+As at 31 December 2020
+Million
+Million
+7,102
+8,627
+19,953
+480,001
+515,683
+510,836
+272
+6,830
+8,552
+75
+19,875
+78
+425
+373
+26,519
+61,776
+56,981
+Lease liabilities
+23,478
+23,478
+23,478
+160 China Mobile Limited
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+41
+FINANCIAL RISK MANAGEMENT AND FAIR VALUES MEASUREMENT (CONTINUED)
+Million
+Million
+Million
+Million
+More than
+5 years
+less than
+5 years
+3 years
+demand
+cash flow
+Amount due to ultimate holding
+amount
+or on
+More than
+3 years but
+More than
+1 year but
+1 year
+contractual
+undiscounted
+Carrying
+Within
+Total
+(b) Liquidity risk (Continued)
+less than
+Expected loss rate
+Other non-current liabilities
+Million
+The Group provides telecommunications services to Group's associates and joint ventures for the telecommunications project
+planning, design and construction services and telecommunications services.
+(viii)
+(vii)
+(vi)
+(v)
+(iv)
+(iii)
+(!!)
+(i)
+Note:
+(b) Principal transactions with associates and joint ventures of the Group (Continued)
+RELATED PARTY TRANSACTIONS (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 155
+40
+8,228
+9,908
+1,214
+3,534
+The Group purchases technical support and other services from the Group's associates and joint ventures.
+The Group provides property leasing and management service to China Tower and other associates and joint ventures.
+The amounts primarily represent the right-of-use assets and lease liabilities recognized and other services charges to China
+Tower for the use of telecommunications towers. For the year ended 31 December 2021, related costs for use of tower assets
+include the depreciation of right-of-use assets amounting to RMB14,162 million (2020: RMB13,500 million), charges for use of
+tower assets and the finance cost associated with the lease liabilities, etc. amounting to RMB27,324 million (2020: RMB27,938
+million).
+The amounts represent the deposits placed with SPD Bank, the interest rate of which is negotiated based on the benchmark
+interest rate published by PBOC.
+Exposure to credit, liquidity, interest rate and foreign currency risks arises in the normal course of the Group's
+business. The Group's exposure to these risks and the financial risk management policies and practices used
+by the Group to manage these risks are described below:
+FINANCIAL RISK MANAGEMENT AND FAIR VALUES MEASUREMENT
+41
+(e) For key management personnel remuneration, please refer to note 11.
+These transactions are conducted during the ordinary course of the Group's business based on terms
+comparable to the terms of transactions enacted with other entities that are not government-related.
+The Group prices all its telecommunications services and products based on commercial negotiations
+with reference to rules and regulations stipulated by related authorities of the PRC Government, where
+applicable. The Group has also established its procurement policies and approval processes for purchases
+of products and services, which do not depend on whether the counterparties are government-related
+entities or not.
+placing of bank deposits and purchasing of investment products
+purchasing of goods, including use of public utilities
+rendering and receiving telecommunications services, including interconnection revenue/charges
+sharing certain telecommunications network infrastructures and frequency bands of the radio
+spectrum
+Apart from transactions with CMCC Group (notes 28 and 40(a)) and associates and joint ventures (note
+40(b)), the Group has collectively, but not individually, significant transactions with other government-
+related entities which include but not limited to the following:
+Accrued expenses and other payables
+The Group is a government-related enterprise and operates in an economic regime currently dominated
+by entities directly or indirectly controlled by the PRC government through government authorities,
+agencies, affiliations and other organization (collectively referred to as "government-related entities").
+RELATED PARTY TRANSACTIONS (CONTINUED)
+40
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+156 China Mobile Limited
+In addition, the Group has entered into transactions with associates and joint ventures of CMCC Group
+during the ordinary course of the Group's business based on terms comparable to terms of transactions
+enacted with other entities, the amounts of such transactions and related outstanding balances were not
+material.
+(c) Transactions with associates and joint ventures of CMCC Group
+The amounts primarily represent interest income from the deposits placed with SPD Bank, the short-term loans granted to China
+Tower and debt instrument investments placed with SPD Bank, and the income derived from WMPs purchased from SPD Bank
+and the CB publicly issued by SPD Bank.
+The amounts represent the WMPs purchased from SPD Bank and the CB publicly issued by SPD Bank. The return rates of
+WMPs are determined with reference to market conditions and the fair values of CB are based on quoted market prices (level 1).
+The amounts represent the short-term loans granted to China Tower and debt instrument investments placed with SPD Bank.
+The related interest rates are mutually agreed among both parties with reference to the market interest rates.
+(d) Transactions with other government-related entities in the PRC
+(a) Credit risk and concentration risk
+Bills payable
+4,692
+2020
+2021
+Million
+31 December
+31 December
+As at
+As at
+The outstanding balances related to transactions with the associates and joint ventures of the Group are
+included in the following accounts captions summarized as follows:
+969
+3,174
+(viii)
+Interest and other income
+44,414
+14,549
+(vii)
+Disposal of financial assets measured at FVPL
+16,250
+18,500
+Million
+(vii)
+Million
+Accounts receivable
+Right-of-use assets
+260
+20,169
+37,729
+22,836
+Lease liabilities
+23
+-
+Prepayments and other current assets
+25,692
+30,623
+Financial assets measured at FVPL
+4,691
+5,449
+Other financial assets measured at amortized cost
+56,466
+75,362
+Cash, cash equivalents and bank deposits
+459
+340
+Other receivables
+30,355
+185
+5,783
+The Group's credit risk is primarily attributable to the financial assets in the balance sheet, which mainly
+include deposits with banks, WMPs (recorded in financial assets measured at FVPL), CB (recorded in
+financial assets measured at FVPL), accounts receivable, other receivables and other financial assets
+measured at amortized cost. The maximum exposure to credit risk is represented by the carrying amount
+of the financial assets.
+Accounts payable
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Individual customers
+As at 31 December 2020
+Loss allowance
+Gross carrying amount
+Expected loss rate
+Corporate customers
+As at 31 December 2021
+years
+Million
+Over 3
+2 years
+to 3 years
+Million
+to 2 years
+Million
+1 year
+181 days
+to 1 year
+Million
+Million
+180 days
+Within
+(1,420)
+(1,214)
+(158)
+3%
+65%
+85%
+100%
+Million
+1 year
+Annual Report 2021 157
+1 year
+90 days
+30 days
+Million
+Over
+91 days to
+31 days to
+(59)
+Within
+(2,000)
+(2,754)
+(1,579)
+(462)
+2,072
+2,353
+4,237
+6,315
+15,403
+(2,072)
+Loss allowance
+25%
+1,518
+Notes to the consolidated financial statements (Continued)
+158 China Mobile Limited
+The expected loss rates are based on the payment profiles of sales over a period before 31
+December 2021 or 31 December 2020 respectively and the corresponding historical credit losses
+experienced within this period. The Group's expected loss rates are mainly determined based on
+the corresponding historical credit losses. The Group also has considered the expected changes in
+macroeconomic factors, such as Consumer Price Index ("CPI"), Producer Price Index ("PPI") and
+Gross Domestic Product ("GDP"), and adjusted the historical loss rates based on expected changes
+in these factors accordingly to reflect current and forward-looking information affecting the ability of
+the customers to settle the receivables.
+To measure the expected credit losses, accounts receivable have been grouped by amounts due
+from individual customers, corporate customers, and other miscellaneous customer groups based
+on similar credit risk characteristics and ages.
+The Group applies the simplified approach to measuring expected credit losses which uses a
+lifetime expected loss allowance for all accounts receivable and contract assets.
+Accounts receivable and contract assets
+Other financial assets measured at amortized cost
+The Group has 2 types of assets that are subject to expected credit loss model:
+Impairment of financial assets
+The accounts receivable of the Group are primarily comprised of receivables due from customers
+and other telecommunications operators. Accounts receivable from individual customers are
+spread among an extensive number of customers and the majority of the receivables from
+individual customers are due for payment within one month from the date of billing. For corporate
+customers, the credit period granted by the Group is based on the service contract terms, normally
+not exceeding 1 year. Other receivables primarily comprise receivables due from deposits and
+guarantees. Management has a credit policy in place and the exposures to these credit risks are
+monitored on an ongoing basis, taking into account the counter parties' financial position, the
+Group's past experience and other factors. Meanwhile, concentrations of credit risk with respect
+to accounts receivables are limited due to the Group's customer base being large and unrelated.
+As such, management considers the aggregate risks arising from the possibility of credit losses is
+limited and acceptable.
+Substantially all the Group's cash at banks, and bank deposits are deposited in financial institutions
+in the mainland of China and Hong Kong. The credit risk on liquid funds is limited as the majority of
+counterparties are financial institutions with high credit ratings assigned by international credit-rating
+agencies and large state-controlled financial institutions. The Group's WMPs are issued by major
+domestic banks and other financial institutions investing in low risk underlying assets, which mainly
+consist of bank deposits, treasury bond, central bank bill, local government debt, corporate bond or
+debt with high credit ratings. CB are bonds with AAA credit rating bonds issued by SPD Bank. Other
+financial assets measured at amortized cost primarily include short-term loans and debt instrument
+investments with banks and financial institutions with high credit or short-term loans granted to
+China Tower, as such, the related credit risk is considered as immaterial.
+Risk management
+(ii)
+Credit risk and concentration risk (Continued)
+(i)
+FINANCIAL RISK MANAGEMENT AND FAIR VALUES MEASUREMENT (CONTINUED)
+1,420
+(a)
+41
+(Expressed in RMB unless otherwise indicated)
+41
+Accounts receivable and contract assets
+790
+Gross carrying amount
+FINANCIAL RISK MANAGEMENT AND FAIR VALUES MEASUREMENT (CONTINUED)
+100%
+80%
+20%
+2%
+Expected loss rate
+Individual customers
+2,943
+1 year
+Million
+Over
+1 year
+Million
+91 days to
+31 days to
+90 days
+Million
+Million
+Within
+30 days
+As at 31 December 2021
+The expected credit loss as at 31 December 2021 and 2020 was determined as follows for each
+customers group of accounts receivables due from individual customers and corporate customers,
+respectively:
+Accounts receivable and contract assets (Continued)
+(ii) Impairment of financial assets (Continued)
+(a) Credit risk and concentration risk (Continued)
+ASSETS AND LIABILITIES
+As at
+(Expressed in RMB)
+As at
+107,691
+150
+As at
+Financial Summary (Continued)
+31 December 31 December 31 December 31 December 31 December
+As at
+As at
+TOTAL COMPREHENSIVE INCOME
+112,636
+120,191
+107,841
+106,565
+106,268
+297
+114,663
+FOR THE YEAR
+112,501
+135
+120,021
+170
+2021
+166 China Mobile Limited
+2020
+78,112
+2018
+65,091
+158
+74,308
+Land use rights
+55,350
+Right-of-use assets
+72,180
+67,978
+71,651
+71,742
+648,029
+666,496
+674,832
+705,547
+723,305
+Construction in progress
+Property, plant and equipment
+Million
+Million
+Million
+Million
+Million
+2017
+2019
+114,505
+60
+attributable to:
+(219)
+income of investments accounted for
+using the equity method
+Share of other comprehensive (loss)/
+(735)
+1,160
+683
+(1,915)
+(882)
+Currency translation differences
+(5)
+(585)
+financial assets
+reclassified to profit or loss
+Items that may be subsequently
+14
+(32)
+7
+using the equity method
+(loss) of investments accounted for
+15,739
+Share of other comprehensive income/
+(143)
+Changes in value of available-for-sale
+428
+1,188
+(1,038)
+Total comprehensive income
+114,414
+117,951
+106,791
+108,140
+116,306
+PROFIT FOR THE YEAR
+114,279
+135
+117,781
+170
+106,641
+150
+107,843
+297
+158
+Non-controlling interests
+116,148
+Equity shareholders of the Company
+Profit attributable to:
+112,636
+120,191
+107,841
+106,565
+114,663
+FOR THE YEAR
+TOTAL COMPREHENSIVE INCOME
+Equity shareholders of the Company
+Non-controlling interests
+16,192
+1,055,809
+16,593
+6,861
+8,601
+8,487
+- non-current
+Deferred revenue
+51,635
+42,460
+30,922
+529,982
+474,398
+Deferred tax liabilities
+462,067
+582,148
+1,522,113
+1,535,910
+1,629,240
+1,727,882
+1,841,327
+558,196
+535,116
+529,866
+579,743
+517,274
+2,369
+1,668
+1,388
+7,109
+liabilities
+5,107
+Total liabilities
+631,035
+575,110
+521,951
+480,101
+533,232
+Total equity
+1,210,292
+1,152,772
+1,107,289
+988,881
+中国移动
+China Mobile
+China Mobile Limited
+60/F., The Center, 99 Queen's Road Central, Hong Kong
+Tel:(852) 3121 8888
+Fax: (852) 3121 8809
+Website: www.chinamobileltd.com
+Welcome to China Mobile Limited's website
+This annual report is printed on environmentally friendly paper
+4,881
+822
+595,371
+16,489
+11,756
+28,517
+43,216
+Deferred tax assets
+132,499
+145,325
+155,228
+161,811
+169,556
+equity method
+Investments accounted for using the
+1,721
+38,998
+2,620
+7,213
+8,171
+Other intangible assets
+35,343
+35,343
+35,343
+35,344
+35,344
+Goodwill
+16,566
+3,475
+32,628
+29,654
+33,343
+36,345
+6,504
+12,369
+10,063
+8,836
+7,046
+37,198
+- non-current
+Lease liabilities
+Current liabilities
+Total assets
+Current assets
+Other non-current assets
+Restricted bank deposits
+44
+Available-for-sale financial assets
+78,600
+through profit or loss
+587
+513
+1,111
+689
+through other comprehensive income
+Financial assets measured at fair value
+Financial assets measured at fair value
+19,627
+(168)
+IFRS/HKFRS Practice Statement 2, "Making materiality judgements" -
+Disclosure of accounting policies
+957
+2020
+Million
+2021
+Million
+RESULTS
+(Expressed in RMB)
+FINANCIAL SUMMARY
+(75)
+Management is assessing the impact of such new standards and amendments to standards and will adopt the
+relevant standards and amendments to standards in the subsequent periods as required.
+To be determined
+of assets between an investor and its associate or joint venture
+IAS/HKAS 28, "Investments in associates and joint ventures" - Sale or contribution
+2019
+Million
+Amendments to IFRS/HKFRS 10, "Consolidated Financial Statements" and
+Amendments to IAS/HKAS 12, "Income taxes" - Deferred tax related
+to assets and liabilities arising from a single transaction
+1 January 2023
+and errors" - Definition of accounting estimates
+Amendments to IAS/HKAS 8, "Accounting policies, changes in accounting estimates
+1 January 2023
+Amendments to IAS/HKAS 1, "Presentation of financial statements" and
+1 January 2023
+1 January 2023
+1 January 2022
+Amendments to IAS/HKAS 1, "Presentation of financial statements" - Classification
+of liabilities as current or non-current
+1 January 2023
+IFRS/HKFRS 17 and Amendments to IFRS/HKFRS 17, "Insurance contracts"
+2018
+Million
+Million
+206,424
+225,010
+Network operation and support expenses
+Operating expenses
+740,514
+736,819
+745,917
+768,070
+848,258
+72,163
+2017
+65,912
+72,378
+96,849
+Revenue from sales of products and others
+668,351
+670,907
+674,392
+695,692
+751,409
+Revenue from telecommunications services
+Operating revenue
+71,525
+1 January 2022
+1 January 2022
+1 January 2022
+After the balance sheet date, the Board of Directors proposed a final dividend for the year ended 31 December
+2021. Further details are disclosed in note 38(b)(i).
+Proposed dividend
+At the annual general meeting of the Company held on 29 April 2021, the shareholders of the Company
+granted to the Board of Directors the authority to buy back up to 2,047,548,289 shares listed on the HKEX (the
+"Hong Kong Shares"). From the balance sheet date to the date of approval of these financial statements, the
+Company has bought back accumulatively 15,424,000 Hong Kong Shares. Such buy-backs were financed from
+the Company's available cash flow or working capital facilities.
+Buy back Hong Kong Shares
+On 5 January 2022, the Company completed the RMB Share Issue and issued 845,700,000 RMB Shares (before
+the exercise of the over-allotment option). On 9 February 2022, the Company further issued 57,067,867 RMB
+Shares pursuant to the exercise of the over-allotment option. The final number of RMB Shares issued under
+the RMB Share Issue was 902,767,867 shares, representing 4.22% of the total number of issued shares of the
+Company immediately after the exercise of the over-allotment option.
+43 EVENTS AFTER THE REPORTING PERIOD
+RMB Share Issue
+46,574
+33,559
+37,967
+29,510
+44 COMPARATIVE FIGURES
+8,607
+Million
+2020
+2021
+Million
+Telecommunications equipment and others
+Land and buildings
+The Group's capital expenditure contracted for as at 31 December but not provided for in the consolidated
+financial statements are as follows:
+42 CAPITAL COMMITMENTS
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 161
+Other non-current liabilities
+4,049
+Certain comparative figures on the consolidated financial statements have been reclassified to conform to the
+presentation for the year.
+45 ACCOUNTING ESTIMATES AND JUDGEMENTS
+Critical estimations and judgements are as follows:
+Annual Improvements to IFRS/HKFRS Standards 2018-2020 Cycle
+Amendments to IAS/HKAS 37, "Provisions, Contingent Liabilities and
+Contingent Assets" – Onerous contracts - cost of fulfilling a contract
+Amendments to IAS/HKAS 16, "Property, plant and equipment" - Property,
+plant and equipment: Proceeds before intended use
+Amendments to IFRS/HKFRS 3, "Business combinations" - Reference
+to the conceptual framework
+on or after
+Effective for
+accounting
+periods
+beginning
+Up to the date of issue of these financial statements, the IASB/HKICPA has issued a number of amendments
+and new standards which are not yet effective or mandatory for the year ended 31 December 2021 and which
+have not been adopted in these financial statements. Of these developments, the following relate to matters
+that may be relevant to the Group's operations and financial statements:
+46 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS, INTERPRETATIONS AND DISCLOSURES ISSUED BUT NOT
+YET EFFECTIVE OR MANDATORY FOR THE YEAR ENDED 31 DECEMBER 2021
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+Annual Report 2021 163
+The recoverable amount of an asset is the greater of its fair value less costs of disposal and VIU. In assessing
+VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
+that reflects current market assessments of the time value of money and the risks specific to the asset.
+The calculation of the estimated future cash flow requires significant judgement relating to level of revenue
+and amount of operating costs. The Group uses all readily available information in determining an amount
+that is a reasonable estimation of the recoverable amount, including estimates based on reasonable and
+supportable assumptions and projections of revenue and operating costs. Changes in these estimates could
+I have a significant impact on the carrying value of the assets and could result in further impairment charge or
+reversal of impairment in future periods. Additional information for the impairment assessment of goodwill and
+investments accounted for using the equity method is disclosed in notes 18 and 20, respectively.
+The Group's property, plant and equipment, goodwill, right-of-use assets, other intangible assets and
+investments accounted for using the equity method comprise a significant portion of the Group's total assets.
+Changes in technology or industry conditions may cause the value of these assets to change. Property, plant
+and equipment, right-of-use assets, other intangible assets subject to amortization and investments accounted
+for using the equity method, are reviewed at least annually to determine whether there is any indication
+of impairment. The recoverable amount is estimated whenever events or changes in circumstances have
+indicated that their carrying amounts may not be recoverable. In addition, for goodwill and other intangible assets
+with indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication
+of impairment.
+Impairment of property, plant and equipment, goodwill, right-of-use assets, other intangible assets
+and investments accounted for using the equity method
+For temporary differences which give rise to deferred tax assets, the Group assesses the likelihood that the
+deferred tax assets could be recovered. Deferred tax assets are recognized based on the Group's estimates
+and assumptions that they will be recovered from taxable income arising from continuing operations in the
+foreseeable future.
+The Group is subject to income taxes mainly in the mainland of China and Hong Kong. Significant judgment
+is required in determining the provision for income taxes. There are many transactions and calculations for
+which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes
+liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final
+tax outcome of these matters is different from the amounts that were initially recorded, such differences will
+impact the income tax and deferred tax provisions in the period in which such determination is made.
+Taxation
+Depreciation is calculated to write off the cost of property, plant and equipment, less their estimated residual
+value, if any, using the straight-line method over their estimated useful lives. The Group reviews the estimated
+useful lives and residual values of the assets annually in order to determine the amount of depreciation
+expense to be recorded during any reporting period. The useful lives and residual values are determined
+based on the Group's historical experience with similar assets and take into account anticipated technological
+changes. The depreciation expense for future periods is adjusted if there are significant changes from previous
+estimates.
+Depreciation
+45 ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
+Notes to the consolidated financial statements (Continued)
+(Expressed in RMB unless otherwise indicated)
+162 China Mobile Limited
+The impairment loss allowance of accounts receivable is based on assumptions about risk of default and
+expected loss rates. The Group assesses these assumptions and selects the inputs to the impairment
+calculation, based on the Group's historical credit losses, macroeconomic factors as well as expected changes
+in these factors at each balance sheet date.
+Impairment losses of accounts receivable
+175,810
+200,007
+164 China Mobile Limited
+Depreciation and amortization
+(35,944)
+(35,342)
+(34,219)
+(35,878)
+Taxation
+148,137
+153,895
+142,133
+142,359
+152,184
+(33,723)
+Profit before taxation
+13,861
+12,641
+12,678
+11,914
+using the equity method
+Income from investments accounted for
+(210)
+(144)
+(3,246)
+(2,996)
+9,949
+PROFIT FOR THE YEAR
+116,306
+108,140
+(406)
+other comprehensive income
+Remeasurement of defined benefit
+2017
+Million
+Million
+2018
+2019
+Million
+Million
+2020
+2021
+Million
+(Expressed in RMB)
+Financial Summary (Continued)
+Annual Report 2021 165
+assets measured at fair value through
+Changes in the fair value of financial
+reclassified to profit or loss
+Items that will not be subsequently
+year, net of tax:
+Other comprehensive income for the
+RESULTS (CONTINUED)
+114,414
+117,951
+106,791
+192,340
+(2,679)
+Finance costs
+2,888
+362
+15,885
+193,045
+172,401
+182,818
+154,154
+73,668
+150,295
+Employee benefit and related expenses
+118,680
+102,518
+93,939
+85,513
+Selling expenses
+48,243
+49,943
+52,813
+60,326
+61,086
+Cost of products sold
+96,083
+73,100
+72,565
+66,231
+15,883
+Other operating expenses
+49,234
+106,429
+46,244
+15,560
+14,341
+47,039
+Interest and other income
+2,389
+2,906
+4,029
+5,602
+8,257
+Other gains
+120,126
+121,387
+16,729
+112,734
+113,149
+40,775
+730,295
+655,336
+632,768
+57,486
+620,388
+Profit from operations
+117,963
+615,432
+BIOGRAPHIES OF
+Annual Report 2021 09
+INDEPENDENT NON-EXECUTIVE DIRECTORS
+Age 56, Executive Director and Chief Financial
+Officer of the Company, joined the Board of
+Directors of the Company in October 2020,
+principally in charge of finance, internal audit and
+investor relations of the Company. Currently he is
+also the Chief Accountant of CMCC, and a director
+and Vice President of CMC. Mr. Li formerly served
+as Vice Manager and Manager of Finance and
+Assets Department of State Grid Corporation of
+China, Deputy General Accountant of State Grid
+Corporation of China, Director and Chairman
+of State Grid Overseas Investment Limited
+(Hong Kong), and Chairman of State Grid Yingda
+International Holdings Group Ltd. During the period
+between December 2019 and September 2020,
+Mr. Li had served as the Head of the preparatory
+team, and Director and Chairman of State Grid
+Yingda Co., Ltd. (listed in Shanghai). Mr. Li
+received a Bachelor's degree in Accounting from
+Zhongnan University of Economics in 1998, and
+an Executive Master of Business Administration
+degree from Wuhan University in 2004.
+Mr. LI Ronghua
+Age 60, Executive Director of the Company, joined
+the Board of Directors of the Company in October
+2019, principally in charge of human resources and
+inspection matters. He is also a Director of CMCC
+and CMC. Mr. Wang formerly served as a deputy
+general manager of Development Department,
+general manager of Supervision Department,
+deputy director of Supervision and Inspection Office,
+the chief director of Legal Center, general manager
+of Human Resources Department and executive
+vice president of China Ocean Shipping (Group)
+Company; a vice president of COSCO Americas
+Inc.; the general manager of COSCO Shipbuilding
+Industry Company; the general manager of COSCO
+Shipyard Group Co., Ltd. as well as the executive
+vice president of China COSCO SHIPPING
+Corporation Limited. Over the past three years,
+Mr. Wang had served as a non-executive director
+and vice chairman of China International Marine
+Containers (Group) Co., Ltd. (listed in Hong Kong
+and Shenzhen), a non-independent and non-
+executive director and the chairman of COSCO
+SHIPPING International (Singapore) Co., Ltd. (listed
+in Singapore), a non-executive director of COSCO
+SHIPPING Holdings Co., Ltd. (listed in Hong Kong
+and Shanghai), and an executive director and the
+chairman of COSCO SHIPPING International (Hong
+Kong) Co., Ltd. (listed in Hong Kong). Mr. Wang
+graduated from Dalian Maritime College in 1983
+with a major in marine engineering management.
+He is a senior engineer with many years of
+experience in the shipping industry and in human
+resources and corporate management.
+Mr. WANG Yuhang
+DIRECTORS AND
+SENIOR MANAGEMENT
+BIOGRAPHIES OF
+Mr. YANG Jie
+Age 55, Executive Director and Chief Executive
+Officer of the Company, joined the Board of
+Directors of the Company in March 2017, in
+charge of the operation of the Company. He
+is also a Director and President of CMCC and
+CMC. Mr. Dong formerly served as a deputy
+director of Corporate Finance Division of Finance
+Department of the former Ministry of Posts and
+Telecommunications, a director of Economic
+Adjustment Division of the Department of
+Economic Adjustment and Communication Clearing
+of the former Ministry of Information Industry of
+China, director general of the Finance Department
+and Planning and Construction Department of
+CMCC, chairman and president of Hainan Mobile,
+Henan Mobile and Beijing Mobile, Vice President
+and Chief Accountant of CMCC, and Vice President
+and CFO of the Company. During the period
+between May 2018 and August 2020, Mr. Dong
+served as a Non-Executive Director of China Tower
+Corporation Limited (listed in Hong Kong). Mr.
+Dong received a Bachelor's degree from Beijing
+University of Posts and Telecommunications in
+1989, a Master's degree in financial and accounting
+management from Australian National University,
+and a Doctoral degree in business administration
+jointly issued by Shanghai Jiao Tong University
+and ESC Rennes School of Business, France. Mr.
+Dong is a senior engineer and senior accountant
+with many years of operational and financial
+management experience in the ICT industry.
+Mr. DONG Xin
+Age 59, Executive Director and Chairman of the
+Company, joined the Board of Directors of the
+Company in March 2019, in charge of the overall
+management of the Company. He is currently
+the Chairman of China Mobile Communications
+Group Co., Ltd. ("CMCC") and a Director and
+the Chairman of China Mobile Communication
+Co., Ltd. ("CMC"). Mr. Yang formerly served
+as deputy director general of Shanxi Posts and
+Telecommunications Administration, general
+manager of Shanxi Telecommunications
+Corporation, vice president of China Telecom
+Beijing Research Institute, general manager of
+Business Department of the Northern Telecom
+of China Telecommunications Corporation, vice
+president, president and chairman of China
+Telecommunications Corporation, and president
+and chief operating officer, and chairman and chief
+executive officer of China Telecom Corporation
+Limited. Mr. Yang graduated from the Beijing
+University of Posts and Telecommunications
+majoring in radio engineering in 1984 and obtained
+a doctorate degree in business administration from
+the ESC Rennes School of Business, France in
+2008. Mr. Yang is a professor-level senior engineer
+with long-term involvement in the operation
+and management of basic telecommunications
+enterprises as well as extensive experience in
+management and the ICT industry.
+Annual Report 2021 07
+EXECUTIVE DIRECTORS
+SENIOR MANAGEMENT
+DIRECTORS AND
+BIOGRAPHIES OF
+DIRECTORS AND
+08 China Mobile Limited
+SENIOR MANAGEMENT
+Mr. LI Huidi
+Mr. Paul CHOW Man Yiu, GBS, SBS, JP
+Age 75, Independent Non-Executive Director of
+the Company, joined the Board of Directors of
+the Company in May 2013. He was appointed
+as the Chairman of the Nomination Committee
+in May 2016. He was the Chief Executive of the
+Asia Pacific Region (ex-Japan) of HSBC Asset
+Management (Hong Kong) Limited from 1997 to
+2003, an executive director and Chief Executive of
+Hong Kong Exchanges and Clearing Limited from
+April 2003 to January 2010, the Chairman of Hong
+Kong Cyberport Management Company Limited
+from June 2010 to May 2016, an independent non-
+executive director of Bank of China Limited from
+October 2010 to August 2016, a member of the
+Advisory Committee on Innovation and Technology
+of the Government of the Hong Kong Special
+Administrative Region from April 2015 to March
+2017, an independent non-executive director of
+CITIC Limited from March 2016 to June 2019 and
+an independent non-executive director of Julius
+Baer Group Ltd. and Bank Julius Baer & Co. Ltd.
+from April 2015 to May 2020.
+EDGE
+HIGH-SPEED AND
+UBIQUITOUS
+SPACE-GROUND
+INTEGRATION
+وه
+ОНА 3392-НІН
+2U0TIUDIGU
+СИНОЯТ-А2
+ПОІТАЯЭЭТИ
+LLLL
+LLLLLL
+Co
+EDGE
+000+
+D
+K
+14 China Mobile Limited
+The information and communications sector, as the key driver
+of the burgeoning growth of digital economy, has ample room
+for development. The Company will advance towards its new
+position of becoming a world-class information services and
+sci-tech innovation enterprise and implement its new strategy
+of becoming a world-class enterprise by building a dynamic
+"Powerhouse", striving to drive new infrastructure, integrate
+new elements and instigate new growth momentum and
+consistently creating greater value for its shareholders and
+customers.
+CHAIRMAN'S
+STATEMENT
+e
+Dr. Moses CHENG MO Chi, GBM, GBS, OBE, JP
+Age 72, Independent Non-Executive Director of
+the Company, joined the Board of Directors of
+the Company in March 2003. He was appointed
+as the Chairman of the Remuneration Committee
+in May 2016. Dr. Cheng is a practising solicitor
+and a consultant of Messrs. P.C. Woo & Co.
+after serving as its Senior Partner from 1994 to
+2015. Dr. Cheng was a member of the Legislative
+Council of Hong Kong and chairman of the
+Insurance Authority. He is the founder chairman
+of the Hong Kong Institute of Directors of which
+he is now the Honorary President and Chairman
+Emeritus. Dr. Cheng currently holds directorships
+in Liu Chong Hing Investment Limited, China
+Resources Beer (Holdings) Company Limited,
+Towngas Smart Energy Company Limited (formerly
+known as Towngas China Company Limited), K.
+Wah International Holdings Limited, Guangdong
+Investment Limited, Tian An China Investments
+Company Limited and The Hong Kong and China
+Gas Company Limited, all of which are public listed
+companies in Hong Kong. Dr. Cheng was formerly
+a non-executive director of Kader Holdings
+Company Limited.
+Age 51, Vice President of the Company, appointed
+in September 2019, principally in charge of
+corporate customers, software technology
+R&D, IOT, ICT and other matters. He is also a
+Vice President of CMCC and a Director and Vice
+President of CMC. Previously he served as the
+chairman and president of Shaanxi Mobile and
+Sichuan Mobile. Mr. Zhao graduated in 1993 from
+Southeast University majoring in Radio Technology
+and received an EMBA from Nanjing University.
+Age 56, Vice President of the Company, appointed
+in September 2019, principally in charge of
+marketing, customer service, terminals, mobile
+Internet, financial technology and others. He is
+also a Vice President of CMCC, a Director and Vice
+President of CMC and a Director of Phoenix Media
+Investment (Holdings) Limited. Previously he served
+as a deputy director of the Nanchang Telecom
+Bureau, chairman and president of Jiangxi Mobile,
+Sichuan Mobile and Guangdong Mobile. Mr. Jian
+graduated in 1989 from Beijing University of Posts
+and Telecommunications majoring in Computer and
+Communication, and received a doctoral degree
+in Industrial Economics from Jiangxi University of
+Finance and Economics.
+10 China Mobile Limited
+BIOGRAPHIES OF
+DIRECTORS AND
+SENIOR MANAGEMENT
+Mr. Stephen YIU Kin Wah
+Age 61, Independent Non-Executive Director of
+the Company, joined the Board of Directors of
+the Company in March 2017. He was appointed
+as the Chairman of the Audit Committee in May
+2018. Mr. Yiu is currently the Chairman of the
+Hong Kong Insurance Authority, a director of
+Hong Kong Academy of Finance, an Independent
+Non-Executive Director of Hong Kong Exchanges
+and Clearing Limited and ANTA Sports Products
+Limited, a Council member and the Treasurer
+of The Hong Kong University of Science and
+Technology, and a member of the Exchange Fund
+Advisory Committee of The Hong Kong Monetary
+Authority and ICAC Complaints Committee. Mr. Yiu
+joined the global accounting firm KPMG ("KPMG")
+in Hong Kong in 1983 and was seconded to KPMG
+in London, the United Kingdom from 1987 to
+1989. Mr. Yiu became a partner of KPMG in 1994,
+served as the Partner in Charge of Audit of KPMG
+from 2007 to 2010, and served as the Chairman
+and Chief Executive Officer of KPMG China and
+Hong Kong as well as a member of the Executive
+Committee and the Board of KPMG International
+and KPMG Asia Pacific from April 2011 to March
+2015. Mr. Yiu formerly also served as a member of
+the Audit Profession Reform Advisory Committee
+and the Mainland Affairs Committee of the Hong
+Kong Institute of Certified Public Accountants.
+Mr. Yiu is a fellow member of the Association of
+Chartered Certified Accountants, the Hong Kong
+Institute of Certified Public Accountants and the
+Institute of Chartered Accountants in England and
+Wales. Mr. Yiu received a professional diploma in
+accountancy from The Hong Kong Polytechnic (now
+known as The Hong Kong Polytechnic University)
+in 1983, and holds a master's degree in business
+administration from the University of Warwick in
+the United Kingdom.
+Dr. YANG Qiang
+Age 60, Independent Non-Executive Director of
+the Company, joined the Board of Directors of the
+Company in May 2018. Dr. Yang is currently the
+Chief Al Officer of WeBank Co., Ltd., the Chair
+Professor and the former Head of the Department
+of Computer Science and Engineering of the
+Hong Kong University of Science and Technology
+(HKUST), as well as the Co-founder and a non-
+executive director of Shenzhen Qianhai 4Paradigm
+Data Technology Co., Ltd. (now known as Beijing
+Fourth Paradigm Technology Co., Ltd.). Dr. Yang
+had served as, among other posts, an Assistant
+Professor and a Tenured Associate Professor
+at the Department of Computer Science of the
+University of Waterloo in Canada from September
+1989 to August 1995, a Tenured Associate
+Professor, an Industrial Research Chair and a Full
+Professor at the School of Computing Science of
+Simon Fraser University in Canada from August
+1995 to August 2001, and an Associate Professor,
+a Full Professor and an Associate Head of the
+Department of Computer Science and Engineering
+of HKUST from August 2001 to June 2012. From
+2012 to November 2014, Dr.Yang was also the
+Founding Head of Huawei's Noah's Ark Research
+Lab. He was the President of International Joint
+Conference on Artificial Intelligence (IJCAI) from
+2017 to 2019 and an executive committee member
+of the Association for the Advancement of Artificial
+Intelligence (AAAI) from 2016 to 2019. He was
+the AAAI Conference Chair in 2021. Dr. Yang
+is a Fellow of several international professional
+societies, including AAAI, Association for
+Computing Machinery (ACM), Institute of Electrical
+and Electronic Engineering (IEEE), etc. Dr. Yang
+received a bachelor's degree in astrophysics from
+Peking University in 1982, master's degrees in
+astrophysics and computer science from the
+University of Maryland, College Park in the United
+States in 1985 and 1987 respectively, and a
+doctor's degree in computer science from the
+University of Maryland, College Park in 1989.
+SENIOR MANAGEMENT
+Annual Report 2021 11
+BIOGRAPHIES OF
+DIRECTORS AND
+SENIOR MANAGEMENT
+Age 53, Vice President of the Company, appointed
+in September 2019, principally in charge of
+planning and construction, network, information
+harbor, information security, procurement and
+others. He is also a Vice President and Chief Cyber
+Security Officer of CMCC, and a Director and
+Vice President of CMC. Previously he served as
+a research fellow in Lucent Technologies - Bell
+Labs Innovations, a vice president of UTStarcom
+Inc., a vice president and general manager of New
+Mobile Technology and High-end Products Division
+of Lenovo Group Limited, chief technology officer
+and chairman of Technology Innovation Committee
+of Lenovo Mobile Communication Technology
+Co., Ltd. Mr. Li graduated in 1990 with a Bachelor
+of Electronic Engineering from Harbin Institute of
+Technology, and received a master's degree in
+Mobile Communications from Polytechnic Institute
+of New York University and a doctoral degree
+in management from Hong Kong Polytechnic
+University.
+Mr. Gao Tongqing
+Age 58, Vice President of the Company, appointed
+in February 2020, principally in charge of legal and
+regulatory matters, technology R&D, international
+business, investment, information technology and
+others. He is also a Vice President and General
+Counsel of CMCC, a Director and Vice President
+of CMC. In June 2020, Mr. Gao was appointed as
+a non-executive director of China Communications
+Services Corporation Limited (listed in Hong Kong)
+and vice chairman of True Corporation. In August
+2020, Mr. Gao was appointed as a Non-Executive
+Director of China Tower (listed in Hong Kong). Mr.
+Gao previously served as a deputy director general
+of Xinjiang Uygur Autonomous Region Posts
+and Telecommunications Administration, deputy
+general manager and general manager of Xinjiang
+Uygur Autonomous Region Telecom Company,
+general manager of China Telecom Jiangsu branch,
+vice president of China Telecommunications
+Corporation, and executive director and executive
+vice president of China Telecom Corporation
+Limited. He graduated from the Changchun
+Institute of Posts and Telecommunications with
+a major in telecommunications engineering
+and received a doctorate degree in business
+administration from the Hong Kong Polytechnic
+University.
+12 China Mobile Limited
+BIOGRAPHIES OF
+DIRECTORS AND
+SENIOR MANAGEMENT
+Mr. JIAN Qin
+Mr. ZHAO Dachun
+7
+We are blessed with valuable opportunities and a solid foundation from which to accelerate the expansion of
+information services. To start with, 5G traction has gradually emerged, which has not only unleashed domestic
+consumption demand but also effectively transformed traditional industries, nurturing new revenue growth areas.
+"Connectivity, computing force and ability" have gradually become the pillars that support the digital-intelligent
+transformation of the whole society. It is estimated that by 2025, the revenue of China's information services
+industry will exceed RMB20 trillion, with a compound annual growth rate (CAGR) of 14.4%, while its computing
+force network market size will exceed RMB1 trillion, with a CAGR of 25%. At the same time, in order to increase the
+strength, quality and scope of its digital economy, China has provided very favorable policy support. More proactive
+steps are taken to strengthen the overall planning of the construction of Digital China, build digital information
+infrastructure, launch the scale application of 5G, promote the digital transformation of industries and develop smart
+cities and digital villages. The industry has reached a consensus on high-quality development and is competing in
+a more rational manner, launching more co-construction and sharing initiatives. All these are steering the industry
+towards healthier and more orderly development.
+VALUE-ORIENTED OPERATING PRACTICES AND INTEGRATED DEVELOPMENT ACHIEVED SIGNIFICANT PROGRESS
+Capturing the new opportunities presented to the industry by accelerated 5G development and digital economic
+growth, we focused on value-oriented practices while drawing on the advantages of our business scale. Through
+continuous efforts to promote their comprehensive and integrated development, all four of the CHBN markets
+delivered outstanding performance, with increasing customer satisfaction.
+"8" refers to and-Caiyun, super SIM, mobile certification, 5G message, video connecting tones, cloud-based games, cloud VR and cloud AR; "2"
+refers to FinTech and HDICT (Home data, information and communications technology solutions).
+12
+Extended open collaboration. We proactively formed and deepened strategic partnerships with local governments,
+enterprises and public institutions, collaborating on the promotion of digital industry and digitalization of industries.
+In doing so, we worked to create cross-disciplinary synergy in information services, to support the innovation and
+development of the digital economy. We made concerted efforts to help upgrade the industry chain through capital
+investment and funding. We followed the guiding direction of digital and intelligent transformation, further expanding
+the information service ecosystem and forming the "Circle of Relatives" to encourage diversity. We launched the
+"Yunshang Yidong", "Wutong Yinfeng" and "Jiutian Lanyue" programs to share data services and capabilities with
+a view to promoting cooperation and helping traditional sectors with digital and intelligent upgrades. We set up a
+joint fund with the National Natural Science Foundation of China to carry out advance research into next-generation
+information and communications technologies, including 6G. Drawing on the complementary effects of collaborative
+and proprietary research, we established the Joint Innovation Plus scheme. Through collaboration with national
+platforms and tertiary institutes, we also supported applied and fundamental research. In addition, we explored
+enterprise joint research with a view to speeding up the formation of our hard capabilities.
+Stable enhancements to product development capabilities. We have further improved the work mechanism of
+our Product Management Committee and strengthened the "five-in-one" product management system incorporating
+product development, operations, support, sales, and service. In particular, product managers were given
+responsibility for their respective products. We further strengthened the closed-loop management of competitive
+product benchmarking and full life-cycle product management. We systematically organized our products across all
+portfolios and set out clearer details of the "8+2" 12 strategic product layout that guides the formation of a product
+system that fully covers our CHBN businesses. We formed taskforces for strategic products with the aim of
+enhancing both the quantity and quality of these products. The outcome of these taskforces has been encouraging.
+Ten of the products, including video connecting tones, MIGU Video and "and-Duohao" (add-on numbers) have each
+recorded more than 100 million customers. Mobile certification boasted the highest penetration rate in the industry,
+while the revenue share of our public cloud ranked in the top 7 in the market; that of private cloud ranked fifth; that
+of public administration cloud ranked third. We have also achieved an industry-leading position in terms of additions
+of 5G dedicated network projects, and delivered more than 100 solutions for 5G application scenarios. Our "9 one
+platform" functionalities for smart city, smart transportation, smart healthcare and other vertical industry sectors
+steadily improved, with a gradual expansion of the scale of implementation.
+CHAIRMAN'S
+STATEMENT
+Annual Report 2021 21
+R&D investment as a proportion of revenue = R&D investment / operating revenue. R&D investment includes expensed R&D investments and
+capitalized R&D investments.
+11
+22 China Mobile Limited
+Deepened technological innovation. We continued to increase investment in research and development (R&D),
+with R&D investment as a proportion of revenue¹¹ reaching 2.2% and R&D staff force numbering around 14,000.
+As part of the national technological innovation system and strategic technological force, we devoted ourselves to
+scaling critical technological breakthroughs and made sound progress, developing first-class original technologies
+and serving as a leader in the modern industrial chain. The innovation consortia we founded with industry partners
+worked together effectively to yield breakthroughs in areas including cloud and network convergence, 5G+BeiDou,
+and a cooperative vehicle infrastructure system. We are an industry leader in standard-setting, having cumulatively
+led 155 5G international standard-setting projects and applied for 3,600 5G patents, which positioned us among
+the top-tier global telecommunications operators in terms of the number of applications. Further, we have rapidly
+enhanced critical digital and intelligent capabilities and managed to occupy a leading position among our peers in
+the world in terms of network digitalization standards, algorithms and application R&D. With our industry-leading
+technologies such as the proprietary Jiutian Al platform, cloud computing, Internet of Things (IoT), smart home and
+ultra-high-definition videos, we are able to fundamentally lay out a system of core competencies for digitalization.
+CONTINUOUSLY STRENGTHENING CAPABILITIES FOR SUSTAINABLE DEVELOPMENT
+Smart mid-end platform building up. We strove to build and fully implement our industry-leading smart mid-end
+platform by leveraging the abundant resources and outstanding capabilities in data, Al, blockchain and other fields
+that we have accumulated over time. By centralizing our capabilities, we were able to launch the unified gateway
+and branding of the China Mobile Smart Mid-end Platform, combining the salient features of telecommunications
+operators and our own. This platform has an AaaS (Ability as a Service) system that combines business, data, and
+technology. Internally, this platform supported our digital and intelligent transformation and has achieved initial
+outcomes. It has been further deployed to support various aspects of our business, including marketing and sales,
+service, management, and innovation. Externally, we explored potential digital and intelligent applications in wider
+society to support sectors including public administration, finance, and cultural tourism. To date, the China Mobile
+Smart Mid-end Platform has centralized 325 common capabilities and was deployed more than 8.1 billion times per
+month on average, empowering digitalization and intelligence in more than 2,000 internal and external scenarios.
+Our Wutong big data service cumulatively processed more than 600 petabyte of data, a scale that put us at the
+forefront of the industry. Through building a mutually beneficial AaaS ecosystem, we strove to scale up the service
+by strengthening its three pillars - mobile cloud, Wutong big data platform and Jiutian Al platform - in order to amass
+additional capabilities on the platform. We also plan to offer modular and ready-to-deploy services by launching
+feature capabilities such as basic communications, Al, big data, blockchain, security certification and precise
+positioning, empowering cloud migration, digitalization and intelligent transformation of all industries.
+CHAIRMAN'S
+STATEMENT
+20 China Mobile Limited
+N (numerous) central resources + 31 provincial level resource pools + X (multiple) edge cloud nodes.
+10
+4 hotspot regional centers + 3 trans-provincial centers + X (multiple) provincial centers and business nodes.
+9
+To seize the opportunities in the thriving digital economy, we drove technological innovation and enhanced our
+product portfolio. At the same time, we also deepened industry collaboration to bring benefits to all industry partners
+and furthered enterprise reforms. All these efforts have equipped us with future-proof capabilities for sustainable
+development.
+CHAIRMAN'S
+STATEMENT
+Deepened enterprise reforms. With the goal of establishing China Mobile as a world-class model enterprise, we
+systemically furthered reforms to governance, staff deployment and incentive mechanisms. Through reforming
+these three key areas, we built new momentum towards the high-quality development of our organization. We
+have furthered the "Double-hundred Action" - an initiative for reforming state-owned enterprises that benchmarks
+world-leading companies, and the national reform program that drives selected Chinese technology companies to
+implement market-oriented reforms. We spun off the chip business of our loT subsidiary to form XinSheng Tech,
+which saw us introduce strategic investors and kick off mixed-ownership reforms. We furthered the development
+of the Jiutian "special zone” to set the benchmark for technological research. To support research teams that are
+capable of independent operations, have a clear profit model and show outstanding core capabilities, we explored the
+possibility of allowing them to operate with an enterprise model and giving them market-based incentives. We also
+continued our efforts to build up our "T-H-T" (Ten-Hundred-Thousand) technical expert system, bringing into full play
+our leading industry expertise to continuously stimulate creativity and entrepreneurial spirit. We continued to connect
+with partners throughout the industry chain to form pan-terminal and cross-channel sales alliances in an effort to
+form an encompassing direct sales system to drive channel transformation and upgrade. We promoted reforms to
+the operations of our terminal business, enhancing its ability to provide support for our business transformation and
+to pool resources. At the same time, reforms were also launched at China Mobile Tietong, with the aim of improving
+efficiency and quality of localized services including installation, maintenance, marketing and sales. We have also
+taken steps to optimize the development direction of our design institute, building a digital-intelligent, transformative
+consulting service system. Our provincial and specialized subsidiaries continued to deliver synergy which strongly
+supported our high-quality development. We also deepened reforms to our grid operations, fully implementing plans
+to reduce the workload of frontline grid operations and forming an inverted pyramid under which managers have
+been urged to provide support to frontline staff to effectively unleash the vitality enabled by grid operations.
+SETTING THE BENCHMARK FOR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) PERFORMANCE
+With the advancement of a new wave of technological revolution and industry transformation, information technology
+has increasingly become the fiber of every aspect and process of the economy, society, and people's livelihoods. The
+pace at which the digital economy is developing, and the breadth and depth of its impact are at previously unseen
+levels. China's digital economy is expected to grow from 38.6% of its GDP in 2020 to more than 50% by 2025. The
+information and communications sector, as the key driver of digital economic development, will have ample room for
+growth.
+FUTURE OUTLOOK
+The Company will rigorously follow the regulatory rules of the jurisdictions in which it is listed. We will use the
+proceeds in a highly efficient manner, with the goal of creating new information infrastructure of first-class quality,
+as well as a new digital ecosystem that enables open collaboration. In addition, we will continue to improve our
+corporate governance structure and decision-making mechanism, providing premium information services and
+delivering remarkable operating results to our customers and investors.
+The Company's A-share listing raised net proceeds of around RMB51.4 billion, making it the largest IPO for the
+A-share Main Board listing in a decade. The Company has introduced 19 diverse and high-quality strategic investors,
+including national-level investment platforms, well-known leading enterprises in various fields, and long-term financial
+investors such as the National Social Security Fund. The powerful joint force resulting from the collaboration of
+strong enterprises is set to maximize synergies to create a brighter future for the digital economy.
+On 5 January 2022, the Company's A-shares were officially listed on the Main Board of the Shanghai Stock
+Exchange, making us the first red-chip stock listed on the Main Board of the A-share market and marking another
+milestone in our history of development. With the listing of our A-shares, we successfully formed a "Hong Kong+
+A-share" capital operation platform, effectively connecting customers, business, and the capital market, and allowing
+our customers to share the returns of our growth. Capital will also serve as a link for us to build a new ecosystem for
+open collaboration and create new advantages for our brand.
+A-SHARE LISTING MARKED A NEW MILESTONE
+CHAIRMAN'S
+STATEMENT
+24 China Mobile Limited
+With the overarching goal of improving the service capability of rural information infrastructure, the company has consistently heightened
+emphasis on securing resources on organizations, funds and talent, while fully integrating network information services into and serving the
+agricultural sector, the countryside and farmers, and promoting rural revitalization through digital and intelligent means.
+14
+Our overall performance has received widespread acclaim. We were named one of the top ten "National Pillar"
+brands at China Media Group's second China Brand Power Grand Ceremony. In addition, we won the Best of Asia
+"Asia's Icon on ESG", Best Investor Relations Company, Best Corporate Social Responsibility and Best Corporate
+Communications awards from Corporate Governance Asia, Asia's Honored Company award from Institutional
+Investor, and the Titanium Award from The Asset ESG Corporate Awards. Our parent company was named by the
+State-owned Assets Supervision and Administration Commission as a Model State-owned Enterprise on Corporate
+Governance, and won the 11th China Charity Award, which is the most prestigious government award in philanthropy
+in China.
+Enhanced corporate governance. We adhered to the principles of integrity, transparency, openness, and efficiency
+to fully comply with all applicable listing rules to ensure sound corporate governance. We pursued policies to
+maintain board member diversity and ensured the independent non-executive directors contribute their respective
+experience and expertise to help us further improve our corporate governance and decision-making mechanisms.
+By consistently following the compliance principles of "strictly observing laws, duly respecting rules, fulfilling
+commitments and upholding integrity", we implemented our "Compliance Escort Plan", which helped to strengthen
+our compliance management system, extend compliance practice to new businesses, and improve our compliance
+management capabilities. We are also committed to enhancing our risk detection ability and risk control through
+digital and intelligent means, in order to strengthen our supervision over key businesses, projects and areas, and to
+ensure sound operations.
+Fulfilled social responsibility. Drawing on our expertise, we continued to contribute to social development
+and endeavored to meet people's demands for a better life. In 2021, we accelerated the development of new
+infrastructure, and further implemented network speed upgrade and tariff reduction to benefit corporate and
+individual customers. We also assisted the digital and intelligent upgrades for a large number of industry sectors
+and facilitated the digital transformation of the economy and society. In addition, we made full use of 5G, big data,
+Al, and other network information technologies to build a strong defense against COVID-19, combating COVID-19
+using intelligent means, at the same time making every endeavor to provide reliable communications, maintain
+service continuity and step up comprehensive prevention and control measures. We have successfully completed
+telecommunications and network security missions for various large-scale events, including the Beijing Winter
+Olympics. In emergency rescue and disaster relief communications missions, we employed technological solutions
+such as using drones to form high-altitude base stations to support the rainstorm-stricken areas in Henan - an
+approach that received widespread acclaim. We proactively prevented and combated malicious telecommunications
+and cyber-crimes and strengthened personal information protection, creating a healthy and safe communications
+environment for our customers. Furthermore, based on the "1+3+X" 14 network plus rural revitalization model,
+we launched a digital-intelligent village revitalization plan with the aims of consolidating the outcomes of poverty
+alleviation, and narrowing the digital and application divide to empower the modernization and intelligentization of
+agriculture and of rural areas. We continued to initiate philanthropic campaigns to promote common prosperity.
+The "Blue Dream" project has now provided professional training for a cumulative of nearly 130,000 primary and
+secondary school headmasters in rural villages in the mid-west of China. Meanwhile, the "Heart Caring" campaign
+has provided free congenital heart disease surgery to more than 7,000 children from underprivileged families. China
+Mobile's philanthropy platform was approved by the Ministry of Civil Affairs as one of the third batch of online
+fundraising information platforms, making us the first and only domestic telecommunications operator to be granted
+this qualification.
+CHAIRMAN'S
+STATEMENT
+Annual Report 2021 23
+LLLLLL
+LLLL
+13
+Practiced green operations. We are committed to growing in harmony with the environment. Since the launch of
+our "Green Action Plan" 15 years ago, we have been devoted to full lifecycle environmental management covering
+three aspects: the Company ourselves, the industry, and society. We built green industry and supply chains and
+developed innovative environmental governance and ecological protection solutions to contribute to the goals of
+peaking carbon emissions and achieving carbon neutrality. In 2021, we published the C² Three Energy-China Mobile
+Carbon Peak Carbon Neutrality Action Plan whitepaper in order to establish a new development model based on
+three aspects of energy and six green initiatives ¹³. We conducted further research into energy-saving technology
+in our networks and applied the outcomes to our business. We promoted the green transformation of our network
+structure and proactively adopted clean energy. All these steps have helped us advance low-carbon development
+and contribute to society-wide efforts to reduce carbon emissions by means of information technology. As a result,
+the total energy consumption per unit of our telecommunications business decreased by 22.1% year-on-year.
+As a responsible corporate citizen, we consistently place importance on integrating ESG practice into our operations as
+we undergo business transformation and development. We are committed to achieving this goal by creating greater
+good for the wider community with the utmost sincerity. Leveraging our expertise and striving to become a model
+enterprise, we have placed particular emphasis on compliance, integrity, and green operations. In addition, we have
+consistently reinforced our risk management and internal controls, put people first and proactively contributed to
+society to ensure the healthy and sustainable development of the Company.
+8 ABCDNETS refers to Al, blockchain, cloud, data, network, edge, terminal and security.
+CFN took off the ground. CFN represents a new information infrastructure that puts computing at its core, with
+the network serving as its foundation. This infrastructure deeply integrates ABCDNETS8, making one-stop service
+possible. To meet the demand arising from the digital-intelligent development of productivity, we set the goal
+of developing ubiquitous computing, co-existing computing and network, smart orchestration, and integrated
+services to speed up the construction of an extensive and integrated CFN. We will promote computing force as
+an essential service serving the whole society in the same plug-and-play way as access to water and electricity.
+At the China Mobile Global Partners Conference, held in November 2021, we officially published Computing Force
+Network Whitepaper to clearly outline our overall strategy and implementation roadmap. In terms of the provision
+of computing force, we have responded to the national strategy of channeling more computing resources from the
+eastern areas to the western regions by establishing our "4+3+X"9 facilities, with a total of 407,000 IDC cabinets
+available for external use, representing a net addition of 47,000. We continued to build up our cloud infrastructure
+and enhance our "N+31+X" 10 mobile cloud infrastructure to include 13 central nodes, cumulatively commissioning
+more than 480,000 cloud servers. Going forward, we will explore market demand for computing force and provide
+diversified computing force services to society. For management of computing force, we will accelerate the
+convergence of computing force and network, evolving our network from one with connecting computing force to
+one with sensing, carrying and scheduling computing forces. By assimilating data and intelligence into the network,
+we will gradually build a brain system of computing network, promoting the intelligent arrangement and centralized
+management of computing network resources and capabilities. In terms of computing force services, we proactively
+explored business integration and innovation. During the Beijing Winter Olympics, we applied CFN and integrated the
+metaverse concept to create digital and intelligent sports personas, XR broadcasting studios, AR snow towns and
+other snow-themed applications to promote winter sports. In addition, China Mobile aims to make breakthroughs
+in original technologies, lay out research on frontier technologies such as next-generation optical communications
+and next-generation IP, and lead the formulation of more than ten domestic and foreign standards to accelerate the
+construction of a technologically advanced, open and integrated computing force trial network. Going forward, we
+will set omnipresence and synergy creation as our initial CFN goal. Building on this, we will optimize top-layer design
+and consolidate existing resources to enhance our CFN capabilities to promote the mature development of our CFN.
+"Three aspects of energy" refers to three courses of actions: energy saving, clean energy and empowerment; "Six green initiatives" alludes to
+six implementation roadmaps: green networks, green energy consumption, green supply chain, green office, green empowerment and green
+culture.
+CHAIRMAN'S
+STATEMENT
+To create higher returns for our shareholders and share the results of our operating gains, after giving full
+consideration to the Company's profitability, cash flow conditions and future development needs, in the three-year
+period from 2021, the profit to be distributed in cash for each year will gradually increase to 70% or above of the
+profit attributable to equity shareholders 5 of the Company for that year. The Company will strive to create more value
+for shareholders.
+The Board recommends a cash dividend of 60% of the profit attributable to equity shareholders 5 for the full
+year of
+2021. It also recommends a final dividend payment of HK$2.43 per share for the year ended 31 December 2021, an
+increase of 38.0% year-on-year. Together with the interim dividend of HK$1.63 per share already paid, total dividend
+for the full year of 2021 amounted to HK$4.06 per share, an increase of 23.4% from that of 2020.
+CHAIRMAN'S
+STATEMENT
+16 China Mobile Limited
+4 EBITDA = profit from operations + depreciation and amortization.
+3 Digital transformation revenue includes the revenues from new businesses from the "Customer" market (and-Caiyun and others), the revenues
+from smart home added-value businesses from the "Home" market, the revenues from DICT, IoT and dedicated lines businesses from the
+"Business" market and the revenue from the "New" market.
+CHBN refers to the "Customer" market (C), the "Home" market (H), the "Business" market (B) and the "New" market (N).
+Speed up the "three changes", which means extending our business from telecommunications services to information services, from primarily
+promoting the "Customer" (to C) market to comprehensively promoting the integrated development of all four CHBN markets, and from being
+resources-driven to being innovation-driven; follow the "three new directions", which means promoting new infrastructure, integrating new
+elements and instigating new momentum; reinforce the "three approaches", which means setting up a scale-based and value-oriented business
+operating system with an emphasis on business convergence, integration and digitalization; and strengthen the "three forces", which means
+building up an organizational structure that incorporates our capabilities, collaboration and vitality to deliver high operating efficiency and synergy
+across our operations.
+"Customer" Market: Scale Expansion with Value Uplift
+2
+We recorded operating revenue of RMB848.3 billion for the year of 2021, up by 10.4% year-on-year. Of this,
+telecommunications services revenue amounted to RMB751.4 billion, up by 8.0% year-on-year, and the growth rate
+was 4.8 percentage points higher than that of 2020. All four CHBN businesses expanded in terms of both customer
+base and revenue. The HBN business revenue contributed 35.7% to the revenue of telecommunications services,
+up by 4.3 percentage points year-on-year, showing a further enhanced revenue structure. Driven by rapid business
+expansion in areas including smart home services, DICT (data, information and communications technology)
+services, mobile cloud, and digital content, digital transformation revenue³ increased by 26.3% year-on-year to reach
+RMB159.4 billion, contributing 59.5% of the growth of telecommunications services revenue and to become our
+largest revenue growth driver. Overall, we have passed through a turning point and achieved a breakthrough in terms
+of revenue growth. Our most emphasized second curve of growth, with digital transformation revenue as the major
+component, is leading the Company to explore a boarder market in the blue-ocean of information services.
+2021 RESULTS
+In 2021, faced with various obstacles and challenges including the prevention and control of COVID-19, the
+disruption of industrial supply chains and the need for business transformation, we managed to mobilize everyone
+at China Mobile (the Company) to work together and firmly seize the opportunities arising from the accelerated
+digital transformation of the economy and society. By upholding our overarching strategy of becoming a world-
+class enterprise by building a dynamic "Powerhouse", focusing our efforts on spearheading our "4x3"1 strategy
+and furthering our "5G+" plans, we drove the comprehensive and integrated development of our CHBN2 markets.
+By doing so, we advanced towards our goal of becoming a world-class information services and sci-tech innovation
+enterprise. Our digital intelligent transformation and accelerated high-quality development have yielded fresh
+outcomes. Over the year, we achieved all-round growth in customer and enterprise values and shareholder
+returns, along with our fastest revenue growth rate in a decade. Our net profit grew favorably and overall business
+performance was remarkable.
+Dear Shareholders,
+CHAIRMAN'S
+STATEMENT
+Annual Report 2021 15
+However, we face uncertainties in our transformation and development. The shortage in chip supplies, fluctuations
+in energy and raw material prices, and other factors will all somehow affect our operations. While the information
+services market landscape has become more complex and volatile, the trend towards cross-disciplinary collaboration
+and convergence has become more prominent. Our core business has faced competition from multiple fronts
+which has become more intense. These challenge us to increase our efforts in digital-intelligent platform operations
+and product offerings. In addition, there is the rising threat of cyberattacks, which is driving us to further raise
+risk awareness of cybersecurity, and information and data protection, as well as continuously strengthening risk
+prevention and control.
+An industry-leading 5G network. We fully implemented our "5G+" plan while deepening network co-construction
+and sharing with China Broadcasting Network Corporation Limited. Leveraging these efforts, we were able to yield
+the combined advantages of the 2.6GHz/4.9GHz capacity and 700MHz coverage to create synergy from a multi-
+frequency network and enable efficient deployment, making our high-quality 5G offering more practical, open and
+secure. In 2021, our 5G-related investments amounted to RMB114.0 billion. We put in use a cumulative more than
+730,000 5G base stations, of which 200,000 were 700MHz 5G base stations. We have basically achieved continuous
+5G network coverage across urban districts, counties, towns and villages, with favorable coverage in some of the
+key regions and locations, developed villages, key buildings and venues. With the number of 5G network customers
+reaching 207 million, we boast the world's largest 5G network and customer base. In addition, we maintained our
+leadership in 5G network technology and perception by helping to promote the maturity of the R16 standard and
+leading 47 projects in relation to R17 standard-setting, and we have become one of the first-tier industry players
+in the world in this area. We published a whitepaper on 5G-Advanced technology, took steps to promote network
+digitalization upgrades and set the path for how R18 standards are developed. The cloud migration of our network
+saw steady progress, resulting in further streamlining and integration. We initiated the 5G voice function upgrade,
+equipping the 5G network with the VoNR (Voice over New Radio) feature for commercial use. In terms of typical 5G
+application scenarios, we launched network solutions for vertical industry sectors including ports and mining. We
+attached importance to low-carbon development by applying green technologies in base stations and terminals, and
+conducting research into an energy-saving smart 5G platform.
+As part of our consistent efforts to reduce costs and enhance operating efficiency, we tightened cost-control
+measures involving all staff members and elements of production, as well as our entire workflow, which generated
+favorable outcomes. Profit attributable to equity shareholders reached RMB116.1 billion, or RMB5.67 per share,
+up by 7.7% year-on-year. Our profitability remained in a leading position among top-tier global telecommunications
+operators. EBITDA4 increased by 9.1% year-on-year to RMB311.0 billion, with an EBITDA margin of 36.7%. EBITDA
+accounted for 41.4% of telecommunications services revenue, representing a 0.4 percentage point increase year-
+on-year. Return on equity was 9.8%, up by 0.3 percentage points compared to 2020. Our capital expenditure totaled
+RMB183.6 billion and we maintained a healthy cash flow, with free cash flow amounting to RMB131.2 billion, or an
+increase of 3.2% year-on-year. We have maintained industry-leading profitability, return on assets and cash flow for a
+number of consecutive years, demonstrating our outstanding operating level and management efficiency, and laying
+a solid ground for future development.
+We furthered the integrated operation of data access, applications, and customer benefits, while competing in the
+market in a rational and regulated way to drive an industry-wide value uplift. We stepped up efforts to encourage
+customers to switch from 4G to 5G and to create more synergy between the "Customer" market and the "Home"
+and "Business" markets, expanding our 5G customer base and value and continuously boosting personal information
+and communications consumption. At the same time, we implemented more measures to carry out customer
+segmentation and precision marketing and to generate revenue from our members. Through promoting diversified
+and dedicated products, applications and customer benefits, and further differentiating the services on offer from
+our three major brands (GoTone, M-zone and Easy Own), we continued to enhance customer value and user
+experience. In 2021, revenue from the "Customer" market reversed its downward trajectory and recorded positive
+growth, increasing by 1.4% year-on-year to RMB483.4 billion. Our mobile customer base reached 957 million, with
+a net addition of 14.97 million customers. Of these, 387 million customers were our 5G package customers - a net
+increase of 222 million customers. The scale of growth anchored us at the forefront of the industry. The number of
+customers with integrated benefit products reached 190 million, with a net addition of 112 million customers. The
+number of monthly active users of our cloud product "and-Caiyun" increased 32.43 million to reach 135 million.
+Thanks to the traction created by the upgrade of 5G and the incremental value engendered by integrated operations,
+the ARPU (average revenue per user per month) of our mobile business reached RMB48.8, up by 3.0% year-on-year.
+1
+6
+Annual Report 2021 19
+5
+As the digital economy continues to increase in strength, quality and scope, we have stressed further efforts to
+expedite the construction of a high-speed, ubiquitous, intelligent, agile and comprehensive digital information
+infrastructure that integrates space and ground, and the cloud and the network. The infrastructure is also green, low-
+carbon, secure and controllable, centering around 5G, CFN (computing force network) and smart mid-end platforms
+and serving as the 'artery' to help information flow throughout the economy and society.
+SYSTEMATIC OPTIMIZATION OF NEW INFORMATION INFRASTRUCTURE LAYOUT
+We spared no efforts in enhancing customer satisfaction, including by optimizing the service system that covers
+every aspect of services and processes and engages every member of staff, and by speeding up digital-intelligent
+service innovation. These efforts have resulted in continued improvements in service quality and rising customer
+recognition. In optimizing the all-round service system, we further integrated the service management process
+from standards-setting to evaluation and feedback - into our operations to support the development of the CHBN
+markets. We significantly improved our multi-scenario service capabilities and customer perceptions by identifying
+shortcomings that hamper customer perceptions, increasing consumer rights protection and delivering better
+service across consumer touchpoints. We initiated company-wide campaigns to increase service awareness among
+our employees. In terms of digital-intelligent service innovation, we sped up the transformation of our service
+management model by launching the industry's first enterprise-level digital and intelligent service management
+platform Dayin and setting up the 10086 integrated smart service gateway. Another industry first was our
+introduction of video customer service, as part of our new online service system. To reinforce our brand awareness,
+we launched the "Heartwarming Service" customer service brand, which has gained wide recognition among our
+customers.
+Upholding the spirit of innovation, entrepreneurship and originality, we strove for new breakthroughs in the "New"
+market by fostering synergetic growth across four key areas: international business, equity investment, digital
+content, and FinTech. Our efforts have yielded notable results. In 2021, revenue from the "New" market achieved
+rapid double-digit growth, increasing by 34.2% year-on-year to RMB30.3 billion. In the international business, we
+deepened synergy between the domestic and international markets and sped up the introduction of our quality and
+proven capabilities to overseas markets, with the goal of further optimizing the deployment of international resources
+and enhancing our international operations. In 2021, our international business revenue amounted to RMB13.3
+billion, representing an increase of 20.1% year-on-year. In terms of equity investment, we used the capital to achieve
+value growth, ecosystem formation, and synergy creation with a range of industries. We persisted in the dual
+approach of combining direct investment and investment in funds, focusing strategically on key areas. By establishing
+the dual links through industry and capital, we nurtured the digitalized and intelligent industry ecosystem. In 2021,
+our equity investment income accounted for 10.3% of our net profit. With regards to digital content and FinTech,
+we have developed high-quality Internet products in areas including videos, games, VR/AR, and payment systems.
+By constantly reinforcing our capabilities in combining scenarios, content, and operations, we expanded the scale of
+these products and enhanced user experience. In 2021, the revenue generated from digital content grew by 47.1%
+year-on-year and the number of monthly active users of MIGU Video across all platforms was up by 45.0% year-on-
+year. The revenue from Internet Finance increased 102.1% year-on-year and the number of monthly active users of
+"and-Wallet" also showed an increase of 155.7% year-on-year. During the Beijing Winter Olympics, MIGU Video's
+ubiquitous and immersive live coverage of the events won wide recognition and reached a cumulative 34 billion
+viewership on programmes related to the Olympics. MIGU Video was one of the most downloaded apps in the Apple
+App Store, delivering 71.8 billion instances of brand exposure for China Mobile.
+EDGE
+CHAIRMAN'S
+STATEMENT
+18 China Mobile Limited
+1+1+1+N is made up of one 5G industrial device module, one 5G dedicated industry network (with three (superior/exclusive/privileged) service
+modes, virtual networks for multiple tenants and other services), one industrial Internet platform OnePower, and 5G application scenarios for
+numerous (N) industry segments including smart factories, smart grid, smart metallurgy and smart mining.
+"New" Market: Innovative Strategic Layout with Visible Results
+Drawing on our innovative computing and network integration and our well-established nationwide localized services,
+we focused on key industries to foster the scale and integrated development of networks, cloud, and DICT. In 2021,
+the revenue from the "Business" market maintained rapid growth to reach RMB137.1 billion, up by 21.4% year-
+on-year. We gained 4.99 million corporate customers, bringing the total to 18.83 million. The revenue from DICT
+amounted to RMB62.3 billion, with an increase of 43.2% year-on-year, contributing 2.7 percentage points to the
+telecommunications services revenue growth. We nurtured our differentiated advantages in the convergences of
+cloud and networks, cloud and big data, cloud and intelligence, and cloud and edge computing, further strengthening
+our product structure with the goal of expediting our development to become a top-tier player in this space. Mobile
+cloud revenue amounted to RMB24.2 billion, up by 114% year-on-year. For 5G vertical industry sectors, we created
+an image of industry superiority and continued to make full use of our 5G industry-leading position to spearhead the
+development of dedicated network and promote the deep assimilation of 5G applications into industry sectors. A
+number of industry segments have seen their application solutions entering large-scale replication phase, and these
+efforts have underscored our leadership in 5G. We launched 200 leading 5G showcases, signed agreements with
+more than 2,800 high-quality commercial projects and developed 1,590 5G dedicated network projects, bringing the
+DICT contract value to more than RMB16.0 billion. We have started implementing these projects at scale across a
+wide range of industries, covering smart mining, smart factories, smart grid, smart metallurgy, smart ports and smart
+hospitals. In terms of Industrial Internet, we have built a "1+1+1+N"7 product suite and further promoted the deep
+integration of 5G and Industrial Internet. Considering the differentiated needs of industry customers, we have built
+a manageable and controllable 5G dedicated industry network that is adaptive to industry development with device-
+cloud integration, helping the industry boost digital transformation and upgrading.
+"Business" Market: Revenue Growth Driver with Strong Momentum
+With a focus on setting up a service suite that combines full-gigabit network connections with cloud-based
+applications, we strove to extend our smart home application services to the wider community, and to rural areas by
+supporting digital village development. To foster leadership in broadband services, we sped up the upgrade of gigabit
+broadband and optimized our end-to-end service and quality management system; to foster leadership in content-
+driven TV services, we further integrated the operation of big - and small-screen content and created a household
+information service portal consisting of broadband television, digital cinema and vertical content; to foster leadership
+in smart home services, we expanded our applications by covering more household service scenarios, boosting
+the uptake of household applications including smart home network deployment, home security and smart remote
+controls, and exploring more new application scenarios of HDICT (home data, information and communications
+technology) solutions. In 2021, revenue from the "Home" market maintained rapid growth and reached RMB100.5
+billion, up by 20.8% year-on-year. We added 25.88 million household broadband customers, bringing the total
+number to 218 million, which was the highest in the industry. We also made significant progress in expanding our
+smart home business, with customers of our digital set-top box service "Mobaihe" reaching 167 million, accounting
+for 76.8% of our household customer base. Customers deploying smart home networks increased by 110.2% year-
+on-year, while those using our home security services and smart remote controls grew by 164.7% and 132.3%,
+respectively. Household broadband blended ARPU increased 5.6% year-on-year to reach RMB39.8. The value
+contribution from smart home applications grew significantly.
+"Home" Market: Strong Growth Momentum with Increased Scale and Revenue
+CHAIRMAN'S
+STATEMENT
+Annual Report 2021 17
+7
+Dividends will be denominated and declared in Hong Kong dollars. Dividends for A-shares will be paid in Renminbi with the conversion rate to be
+calculated based on the average central parity rate between Hong Kong dollars and Renminbi announced by the People's Bank of China in the
+week before the date of the declaration of dividends at the annual general meeting, and a separate announcement will be made before the annual
+general meeting as regards the exact amount. Dividends for Hong Kong shares will be paid in Hong Kong dollars.
+The base of the Company's profit distribution is the profit attributable to equity shareholders under International Financial Reporting Standards.
+The "Customer" Market
+1,049
+873
+20.1
+AI
+REVIEW
+BUSINESS
+DEEPENED INTEGRATED OPERATIONS TO DRIVE COMPREHENSIVE GROWTH OF CHBN
+Centered around 5G, we further enhanced the unified product suite comprising data access, applications, and
+customer benefits, while strengthening the joint operations of our three major consumer brands. Our two key
+approaches in this market were: firstly, we put a focus on package, device and network customers, strove to
+occupy an advantageous position in the competitive device market and managed different customer groups with
+precision. Fully leveraging the intersective nature of the market, we integrated our business development efforts to
+drive 4G customers to switch to 5G plans. Secondly, we firmly seized the opportunities brought about by the digital
+economy, leveraging customer demand for digital services and tapping into the platform economy. We also focused
+on generating more revenue from members, and by providing a series of benefit products and off-the-shelf benefit
+experience, we fully integrated internal and external service touchpoints and optimize our resources, thus further
+refining our scale-based and value-oriented operating practices. The enormous traction of 5G, coupled with integrated
+product benefit operations, has helped us achieve rapid breakthroughs in 5G business. As of the end of December
+2021, our 5G network customer base reached 207 million, accounting for 21.6% of the total number of mobile
+customers. With a net addition of 148 million customers, equivalent to a monthly average net addition of more than
+12 million customers, we boasted an industry-leading growth rate in this area. Meanwhile, the ARPU and DOU of
+5G customers reached RMB82.8 and 22.0 gigabytes, or growth of 7.5% and 18.6% respectively, compared to the
+numbers before customers switched to 5G plans, helping the growth of overall mobile ARPU reverse its downward
+trajectory to return to positive growth.
+36.1
+Annual Report 2021 29
+13.84
+34.0
+IoT Smart Connections (million)
+Corporate Customer Base (million)
+Corporate Business
+5.6
+37.7
+39.8
+Household Broadband Blended ARPU (RMB/user/month)
+2.1
+34.7
+Wireline Broadband ARPU (RMB/user/month)
+30 China Mobile Limited
+13.5
+18.83
+BUSINESS
+In 2021, our capital expenditure amounted to approximately RMB183.6 billion. In 2022, we expect total capital
+expenditure to stand at approximately RMB185.2 billion, which will be primarily spent on areas including constructing
+premium 5G network, a ubiquitous and integrated computing force network, and an industry-leading smart mid-end
+platform, and will support the development of CHBN businesses. Of the total capital expenditure, 5G-related capital
+expenditure will account for approximately RMB110.0 billion. These funds will come mainly from cash flow from
+operating activities.
+The "Home" Market
+In the Home market, our focus was on broadband quality upgrade. Following China's Dual Gigabit Network
+Coordinated Development Action Plan, we strove for the synchronized coverage of Gigabit and 5G networks by
+promoting joint operation in high-value residential areas. We continued to optimize WiFi, FTTR (Fiber to the Room)
+and network deployment solutions and promoted scenario-based broadband services to drive broadband up-speed
+and value uplift. At the same time, we placed a focus on various new HDICT scenarios including pan security, home
+education, elderly healthcare and home office to consistently innovate family information services. Aligning with the
+smart community and digital village initiatives, we drove the scale and value growth of services such as family WiFi,
+home security, big screen content-on-demand, and smart voice services. By expanding the broadband customer
+base and consolidating the advantages of our gigabit broadband brand, we launched HDICT and other initiatives,
+resulting in rapid growth in the Home market and in its customer value. As of the end of December 2021, our
+household broadband customers reached 218 million, with a monthly average new addition of more than 2.15 million
+customers. Our digital set-top box "Mobaihe" registered a total of 167 million customers, with a net addition of
+26.57 million customers and a continuous increase in penetration rate. Smart home network deployment, big screen
+content, security and other smart home businesses scaled up rapidly with 134 HDICT showcases launched. Revenue
+for household broadband grew by 16.6% while smart home value-added business revenue increased by 33.1%,
+contributing to the further growth of household broadband blended ARPU.
+192
+Annual Report 2021 25
+VR
+revenue.
+Drawing on scenario-based operations, we explored opportunities for customer acquisition by establishing a
+proactive and targeted customer outreach system and transforming our marketing system to a channel-driven one.
+Our efforts have yielded notable outcomes. Firstly, we have built a full-fledged direct sales system. We joined
+hands with upstream 5G terminal manufacturers and downstream sales channels in the industry chain to build a
+sales alliance involving all terminals and sales channels. By doing so, we have optimized the choice of terminal
+products, built a direct sales system and provided high-quality after-sales service. We have also deeply integrated the
+system with 5G, smart home, customer benefits and other businesses, gradually establishing "the handset seller
+of choice" reputation in the market and driving the rapid development of the 5G terminal industry chain. Secondly,
+we have expanded new sales channels. We have developed online marketing and sales channels, promoted the
+integration of online touchpoints, strengthened cooperation with leading Internet companies and rapidly increased
+the proportion of online sales of key businesses. We also actively carried out cross-industry pan-channel cooperation,
+and built a cooperative ecosystem that covers customers' daily life and work scenarios, extending customer service
+touchpoints to a wide range of industries. Thirdly, we have furthered grid operations. We launched programs to
+drive quality improvements and clarified responsibilities. By improving grid frontline operations support, we have
+persistently reduced the burden on the frontline, continuously enhanced grid operations and unleashed the vitality of
+individual employees. As a result, we have continued to enhance our grid operation efficiency and the satisfaction of
+our frontline personnel. Thanks to effective channel transformation, we enhanced our go-to-market efforts in 2021,
+achieving favourable revenue growth, at the same time continuously lowering sales expenses as a proportion of
+Channel Transformation
+STEPPED UP MARKETING EFFORTS RESULTING IN GREATER CUSTOMER SATISFACTION
+We continued to optimize our international information infrastructure. As of the end of December 2021, we had
+more than 70 submarine and land cable resources that enabled global coverage. Our total bandwidth for international
+transmission reached 106Tbps and our 225 POPs covered all major countries and regions worldwide. In addition, our
+international roaming and 5G services covered 264 and 51 locations respectively. The worldwide users covered by
+our Hand-in-Hand global partnership program exceeded 3 billion.
+REVIEW
+BUSINESS
+32 China Mobile Limited
+High dynamic range video technology standard issued by China UHD Video Industry Alliance.
+REVIEW
+2
+Attributable to our forward-thinking and targeted approach to investment, we were able to lay out an ingenious
+new information infrastructure focusing on 5G, computing force network and smart mid-end platform. From this
+foundation, we drove cloud migration and the digitalization of our network to ensure our all-round leadership in
+network coverage, quality, technology and customer experience, and support the comprehensive and integrated
+development of the CHBN markets. At the same time, we strengthened investment control and specialized
+management to optimize our investment structure and ensure investment efficiency, with the aim of enabling high-
+quality development.
+TARGETED INVESTMENTS AND UPGRADED NETWORK CAPABILITIES
+Our international business strove to minimize the impact of COVID-19 and scaled a higher level of globalization
+and greater business scope. The international business maintained favourable growth. We continued to optimize
+the infrastructure of our international network that comprises our Information Highways (connectivity resources),
+Information Stations (PoPs) and Information Islands (data centers), while strengthening cross-border cloud
+networks, DICT and other key products, in order to enhance our end-to-end service quality and expand our business
+"circle of friends". During the year, revenue from the international business increased by 20.1% year-on-year to
+RMB13.3 billion. In terms of equity investment, we generated synergy through a complementary approach to direct
+investment and investment through funds. Our direct investment was focused on the key aspects of digital and
+intelligent transformation including products, networks and mid-end platforms to create a bigger collaborative "circle
+of relatives" through which to expand our information services. In terms of investment through funds, we strove
+to manage this with a more professional and market-oriented approach and on a larger scale, leveraging the funds'
+function as an amplifier and radar in the market. By doing so, we further unleashed the potential of capital. In the
+area of digital content, we served as a content disseminator, generator and aggregator to develop an industry-leading
+content ecosystem, centering around sports IP, to solidify our leadership in "sports+ culture" digital content. The
+number of active users for MIGU Video, cloud games and video connecting tones saw relatively fast growth. During
+the year, revenue from the content business increased by 47.1%. MIGU Video's monthly active customers across
+all platforms recorded a year-on-year increase of 45.0% and the customer base of video connecting tones exceeded
+240 million. During the Beijing Winter Olympics, MIGU Video exercised forward-planning and added creative features
+and innovative technology such as 5G+8K Ultra-high-definition streaming, Al-powered subtitles, multi-screen viewing
+and HDR Vivid². We were able to deliver uninterrupted, the most comprehensive livestreaming content that covered
+all 530 games and received very positive market feedback. In the area of FinTech, revenue from Internet finance
+increased 102.1% year-on-year, and monthly active customers of "and-Wallet" recorded a year-on-year increase of
+155.7%. Our advantages in big data helped us break new ground in finance credit scoring. We continued to enhance
+our business where our products can be purchased with credit and we ran the largest offline purchase by installment
+platform in China. We also joined hands with ICBC to launch the world's first super SIM-based digital currency
+payment product.
+The "New" Market
+REVIEW
+BUSINESS
+Annual Report 2021 31
+AICDE refers to artificial intelligence (AI), Internet of Things (IoT), cloud computing, big data and edge computing respectively.
+1
+</>
+For the Business market, we continued to grow in scale and customer value through our focus on key products,
+including by developing our government and corporate product and solution lists. Scale, quality, and service
+improvement represented our guiding direction, from which we continued to enhance the quality of fundamental
+offerings such as dedicated lines, IoT and enterprise SMS and MMS, while managing to sustain growth amidst the
+already large base of these businesses. Cloud leadership was another focus, which saw us building up cloud-based
+products and other core capabilities. The technology of more than 20 of our products, including cloud server, cloud
+hardware and elastic public network IP, was at the forefront of the industry, allowing us to drive scale growth with
+public cloud and revenue growth with private cloud, and achieve rapid growth rate for the cloud business. We also
+maintained our 5G leadership through delivering benchmark showcases for the accelerated commercialization of
+5G+AICDE to scale our business in various industry segments. The proliferation of 5G in the digital transformation
+of various sectors helped us achieve a breakthrough in our 5G dedicated network revenue. In 2021, industry cloud
+revenue amounted to RMB19.2 billion, with a year-on-year growth rate of 109.6%. We launched more than 230
+proprietary laaS, PaaS and SaaS products, alongside more than 2,700 jointly developed SaaS products. Our IDC,
+ICT and dedicated lines revenue reached RMB21.6 billion, RMB14.4 billion and RMB26.4 billion respectively,
+representing increases of 33.2%, 35.2% and 10.0% year-on-year. We boasted 1.049 billion smart loT connections, a
+net addition of 175 million connections, boosting loT revenue to RMB11.4 billion, or growth of 21.3% year-on-year.
+The "Business" Market
+As of the end of December 2021, the number of our commissioned base stations had exceeded 5.50 million, ranking
+first globally. Among them, 3.32 million were 4G base stations, covering more than 99% of the administrative villages
+across the country. The total length of our optical network reached 22.43 million cable kilometers. Our dedicated
+network for government administration and enterprises, and backbone transmission network boasted bandwidth
+of more than 1,520Tbps and 5,100Tbps respectively, while the bandwidth of CMNET, cloud dedicated network and
+IP dedicated network exceeded 365Tbps. We have developed digital and differentiated capacity to support public
+Internet, cloud-network convergence and other businesses.
+218
+CHAIRMAN'S
+STATEMENT
+14.2
+& Service Marketing
+32nd Annual
+International Competition
+for Excellence in Product
+AWARDS
+galaxy
+2021
+la
+ARC
+Cover design
+AWARD
+iada
+CORPORATE
+RECOGNITIONS
+China Mobile Ltd
+CSR
+Best
+Investor Relations
+Company
+SILVER
+WINNER
+AWARD
+AWNDS
+2021
+China Mobile Limited
+HK
+E AWARDS
+BEST ANNUAL REPORTS
+2021
+Annual Reports-Print Network Servi
+EMERALD
+ANNIVERSARY
+Annual Report 2021
+IONE Financial Press Limited
+HONORS
+Annual Report 2020
+China Mobile Limited
+IONE Financial Press Limited
+SILVER WINNER
+China Mobile Limited
+ASIAN EXCELLENCE
+Asia's Best
+AN EXCELLENCE
+TITANIUM AWARD
+CHINA MOBILE
+Institutional
+Investor
+CORPORATE
+26 China Mobile Limited
+Hong Kong, 23 March 2022
+EXCELLENCE IN EOS G
+Chairman
+733
+Finally, on behalf of the Board, I would like to take this opportunity to express my heartfelt gratitude for the support
+of our shareholders, customers, and the public, and for the dedication and contribution of our employees.
+ACKNOWLEDGEMENT
+2022 is a critical transitional year in the 14th Five-Year Plan, building on the past and preparing for the future. We will
+embrace the new phase of development, fully, accurately and comprehensively implement the new principles of
+development, and devote ourselves to the new paradigm to promote high-quality development. We will pursue stable
+progress while forging ahead with a steadfast focus on innovation-driven development. At the same time, we will
+advance towards the new position of becoming a world-class information services and sci-tech innovation enterprise
+and implement our new strategy of becoming a world-class enterprise by building a dynamic "Powerhouse". We
+will drive new infrastructure, integrate new elements and instigate new growth momentum, striving to achieve
+favourable growth in telecommunications services revenue and net profit and consistently creating greater value for
+our shareholders and customers.
+We need to be adept at long-term planning, while taking practical steps to deliver solid outcomes. Faced with a
+complex reality in which both opportunities and challenges exist, we reiterate our development goal of becoming
+a world-class information services and sci-tech innovation enterprise. We will spare no effort in building a new
+information service system of "connectivity, computing force and ability" based on 5G, computing force network
+and smart mid-end platforms, in order to create a new model of value growth. We will drive new infrastructure
+by systematically creating new information architecture centered around 5G, computing force, and smart mid-
+end platforms to accelerate the realization of ubiquitous network, omnipresent computing force and omnipotent
+intelligence. We will also fully integrate new elements, boosting the integration and application of information
+technology and data to develop a new growth model and an industry ecosystem driven by digitalization and
+intelligence. In addition, we will instigate new growth momentum through information technology integration and
+innovation, as well as deeply embedding information technology in the economy, society, and people's livelihoods.
+Through promoting the digital industry, we will help the digitalization of industries, thus nurturing new industries,
+new landscapes and new models of information services.
+Of Which: Household Broadband Customer Base (million)
+Yang Jie
+THE ASSET ESG CORPORATE AWARDS 202
+Institutional
+Investor
+All-Asia
+Executive Team
+Icon
+Anx
+2021
+SIANES GAWARD
+China Mobile L
+Best
+Corporate
+Communications
+Telecommunications
+China Mobile Limited
+Honored Company
+China Mobile Limited
+THE Asset
+2021
+HONORED COMPANY
+2021
+Asia
+Executive Team
+ASIAN EXCELLENCE
+Opporate Governance
+Certificate of Excellence in Environmental,
+Social and Governance Reporting
+Asset ESG
+</>
+Average Minutes of Usage per User per Month (MOU)
+36.5
+162
+222
+Net Additional 5G Package Customers (million)
+172.3
+(minutes/user/month)
+17
+Of Which: Net Additional 4G Customers (million)
+-8.36
+14.97
+Net Additional Customers (million)
+134.4
+165
+47
+387
+264
+-1.3
+210
+Vida de
+240
+Wireline Broadband Customer Base (million)
+Broadband Business
+3.0
+267
+47.4
+Average Revenue per User per Month (ARPU)
+34.0
+9.4
+12.6
+(GB/user/month)
+Average Handset Data Traffic per User per Month (DOU)
+(RMB/user/month)
+6.1
+48.8
+822
+++ A
+G
+***
+5G
+AI
+</>____
+רוו
+ཐ
+СГОЛД-ИЕДМОВК
+ІИДЕГГІСЕЙІ VOD VСІГЕ
+AI
+-|||||-
+VR
+775
+CLOUD-NETWORK
+INTEGRATION
+INTELLIGENT AND AGILE
+***
+=
+VR
+ИОІТАЯЭЭТИІ
+28 China Mobile Limited
+$
+942
+Of Which: 4G Customer Base (million)
+5G Package Customer Base (million)
+Mobile Business
+Change%
+2020
+Customer Base (million)
+KEY OPERATING DATA
+1.6
+BUSINESS
+2021
+REVIEW
+957
+In 2021, we continued our scale-based and value-oriented business operations while maintaining a clear focus on
+customers, driving the comprehensive and integrated development of our CHBN markets. We consolidated our
+fundamental competencies, and advanced channel transformation and delicate operations. Along with enhancing
+product competitiveness and service quality, we achieved favourable growth in our overall business, as well as
+increasing customer satisfaction. Our operating revenue amounted to RMB848.3 billion, of which revenue from
+telecommunications services was RMB751.4 billion, representing an increase of 8.0% year-on-year.
+Finance costs
+16.7%
+2,996
+Income from investments accounted for using the equity method
+Taxation
+16,729
+Interest and other income
+-10.6%
+47.4%
+5,602
+8,257
+2,679
+14,341
+117,963
+4.6%
+Change
+2020
+RMB million
+112,734
+Profit from operations
+RMB million
+2021
+In 2021, we continued to improve our quality and efficiency of operations, enhanced our value to shareholders,
+and maintained an industry-leading level of profitability. Profit from operations was RMB118.0 billion, up by 4.6%
+compared to the previous year. EBITDA was RMB311.0 billion, up by 9.1% compared to the previous year, and
+EBITDA margin was 36.7%, down by 0.4 percentage points compared to the previous year. Benefitting from steady
+growth in revenue and better cost control, profit attributable to equity shareholders was RMB116.1 billion in 2021, up
+by 7.7% compared to the previous year. The margin of profit attributable to equity shareholders was 13.7%.
+Profitability
+REVIEW
+FINANCIAL
+11,914
+40 China Mobile Limited
+Other operating expenses were RMB49.2 billion, up by 4.7% compared to the previous year and representing
+5.8% of operating revenue. In 2021, we continued to increase our investments in research and development, and
+promoted technical breakthroughs and construction of core capabilities to empower our smart development.
+Other Operating Expenses
+Other gains
+12,678
+31 December
+35,878
+6.6%
+1,727,882
+Cost of products sold was RMB96.1 billion, up by 31.4% compared to the previous year and representing 11.3% of
+operating revenue. The increase was mainly driven by the growth in revenue from the sales of products.
+1,841,327
+Total assets
+8.5%
+1,148,139
+2.7%
+579,743
+595,371
+1,245,956
+Non-current assets
+Current assets
+Change
+-6.0%
+RMB million
+2021
+RMB million
+31 December
+As at
+As at
+We consistently and firmly adhered to our prudent financial risk management policies and maintained sound
+repayment capabilities. The effective interest coverage multiple was 52 times.
+Our financial position continued to remain robust. As at the end of 2021, total assets and total liabilities were
+RMB1,841.3 billion and RMB631.0 billion, respectively. The liabilities to assets ratio was 34.3%.
+CAPITAL STRUCTURE
+7.7%
+107,843
+116,148
+Profit attributable to equity shareholders
+4.8%
+34,219
+2020
+Cost of Products Sold
+RMB million
+Selling Expenses
+2021
+Other operating expenses
+Cost of products sold
+Selling expenses
+Employee benefit and related expenses
+Depreciation and amortization
+Network operation and support expenses
+Operating expenses
+In 2021, our operating expenses were RMB730.3 billion, up by 11.4% compared to the previous year. Operating
+expenses represented 86.1% of operating revenue.
+We have continued to actively promote its low-cost, high-efficiency operating model, stepped up measures to reduce
+costs and enhance efficiency, strengthen "All Members, All Elements, All Processes" cost control. We continued
+to improve and refine our management level. Meanwhile, we have constantly optimized the structure of resource
+deployment, endeavoured to strike a balance between short-term operating results and long-term development in
+order to maintain its favourable profitability.
+OPERATING EXPENSES
+Driven by handsets, ICT equipment and other smart devices, revenue from the sales of products and others was
+RMB96.8 billion, up by 33.8% compared to the previous year. Our device sales business mainly serves to facilitate
+the expansion of core telecommunications services, and hence its contribution to our profit is relatively low.
+Revenue from Sales of Products and Others
+•
+REVIEW
+FINANCIAL
+38 China Mobile Limited
+Benefiting from rapid growth across DICT and other corporate businesses, "Mobaihe" and other family value-added
+services, as well as "MIGU Video" and other new businesses, our annual revenue from applications and information
+services reached RMB137.0 billion, up by 35.6% compared to the previous year, and contributed 5.2 percentage
+points of the increase in revenue from telecommunications services. It maintained a strong growth momentum and
+contributed to the further optimization of our overall revenue structure.
+Our broadband business continued to expand as we enhanced the quality and coverage of our high-speed broadband
+services and rolled out broadband speed enhancement and integrated marketing initiatives. Revenue from wireline
+broadband services reached RMB94.2 billion, up by 16.6% compared to the previous year, and continued to maintain
+a strong growth, and its relative contribution to the revenue from telecommunications services increased year-on-
+year.
+We persisted in advancing the integrated development of "data access, applications and customer benefits". The
+annual revenue from wireless data traffic stepped up its growth momentum and reached RMB392.9 billion, up by
+1.9% compared to the previous year.
+revenue.
+Our revenue from SMS & MMS services was RMB31.1 billion, up by 5.5% compared to the previous year, mainly
+because we further advanced value-oriented operations of our SMS services, thereby achieving stable growth in
+Our revenue from voice services continued to decline, with the annual revenue from voice services being RMB76.2
+billion, down by 3.3% compared to the previous year. Total voice usage decreased by 1.2% compared to the
+previous year.
+Revenue from Telecommunications Services
+REVIEW
+Current liabilities
+FINANCIAL
+2020
+RMB million
+Change
+730,295
+Employee benefit and related expenses were RMB118.7 billion, up by 11.5% compared to the previous year
+and representing 14.0% of operating revenue. We continued to adjust and optimize our personnel structure, and
+increased investments in research and development talents in the fields of 5G and AICDE as well as management
+talents in the "Business" and "New" markets, providing strong personnel support for our reform, innovation,
+transformation and development.
+Employee Benefit and Related Expenses
+Depreciation and amortization were RMB193.0 billion, up by 12.0% compared to the previous year and representing
+22.8% of operating revenue. The scale of assets increased due to accelerated network upgrades and business
+transformation, at the same time, annual depreciation of fixed assets increased by RMB9.4 billion in 2021 as a
+result of an adjustment in the residual value of certain assets to 0; after excluding the effect of such adjustment,
+depreciation and amortization would have increased by 6.5%.
+Depreciation and Amortization
+REVIEW
+FINANCIAL
+Annual Report 2021 39
+Network Operation and Support Expenses
+Network operation and support expenses were RMB225.0 billion, up by 9.0% compared to the previous year and
+representing 26.5% of operating revenue. Among these, maintenance, operation support and related expenses
+saw a 16.4% increase compared to the previous year and reached RMB137.1 billion, mainly affected by increased
+investments in development of smart home business, DICT product innovation and other efforts in transformation.
+Meanwhile, through initiatives such as controlling electricity cost, implementing a variety of cost-reduction and
+efficiency-enhancement measures and promoting application of innovative electricity-saving technologies, power and
+utilities expenses decreased by 2.1% compared to the previous year.
+4.7%
+47,039
+49,234
+31.4%
+73,100
+Selling expenses were RMB48.2 billion, down by 3.4% compared to the previous year and representing 5.7% of
+operating revenue. While ensuring necessary marketing and sales efforts, we have speeded up our transformation of
+channels, constantly upgraded our online sales and services capabilities, and continued to enhance our efficiency in
+utilization of marketing resources.
+96,083
+49,943
+48,243
+11.5%
+106,429
+118,680
+12.0%
+172,401
+193,045
+9.0%
+206,424
+225,010
+11.4%
+655,336
+-3.4%
+Non-current liabilities
+CO
+582,148
+48,887
+631,035
+ОНА ИЗЗЯ
+Total liabilities
+ОО
+XIX
+ooo
+Öö
+HB
+36 China Mobile Limited
+СОИДКОГГѴВГЕ
+ГЕСПВЕ ѴИД
+ГОМ-СУКВОЙ
+FINANCIAL
+In 2021, we firmly seize the opportunities arising from the accelerated digital transformation of the economy
+and society. Over the year, we achieved all-round growth in customer and enterprise values and shareholder
+returns, along with our fastest revenue growth rate in a decade. Our net profit grew favorably and overall business
+performance was remarkable.
+2021
+2020
+Change
+Operating revenue (RMB million)
+848,258
+768,070
+10.4%
+REVIEW
+Noo
+CONTROLLABLE
+SECURE AND
+Annual Report 2021 37
+Annual Report 2021 33
+BUSINESS
+REVIEW
+Brand Operations
+We further promoted brand awareness by optimizing our brand structure and carrying out joint brand operations.
+We focused on establishing brand propositions built around GoTone's exclusivity, M-zone's trendiness, and Easy-
+Own's popularity. Leveraging the opportunities arising from rapid 5G development, we launched products and
+created scenarios under these three major brands catering to customers' needs, throughout the lifecycle of market
+operations. This has helped us deliver targeted operations and maintenance, increase customer value, and enhance
+customer loyalty. In addition, by focusing on creating a sense of privilege among mid- to high-end customers, we
+rewarded them with more sought-after and exclusive benefits of a higher standard, to enhance their sense of gain.
+We also strengthened our brand assets surrounding philanthropy, culture, and health to create customer resonance.
+As a result, GoTone customers scaled up to exceed 170 million. Centering around the interests of young customers,
+we carried out in-circle campaigns and gradually expanded them to reach new customers. We innovatively launched
+virtual spokespeople for M-zone and cultivated social media connections, creating a sense of being part of an in-
+group. Thus, the number of customers for M-zone reached 67.02 million. Leveraging customer stickiness and
+expanding to different verticals and the "silver-haired" customer group, we further cultivated Easy-Own as an
+approachable popular brand.
+Customer Services
+Putting customers at its heart, we sped up the building of a service system covering every process and aspect of
+service and involving every member of staff. As a result, our service capability and quality increased steadily, helping
+us to generate better value from our services. We specified standards guiding the end-to-end process of responding
+to customers, the customer experience in information services consumption, and product quality management.
+By doing so, we established a pool of new service standards, as well as new methodologies of standard-setting
+covering every business and process. Additionally, we launched campaigns to increase customer satisfaction,
+protect consumer rights and increase complaint-handling efficiency, substantially improving customer experience.
+Our "10086" service hotline provided round-the-clock support to all customers across all four CHBN markets. We
+upgraded the hotline by replacing its traditional IVR (interactive voice response) model with a smart interactive voice
+system that can operate on a single voice instruction from callers. With the aim of providing caring, reliable, pleasant,
+and hassle-free services, we continue to enhance our customer communications while promoting and implementing
+our "China Mobile Heartwarming Service". In 2021, customer satisfaction with mobile Internet, household
+broadband and other businesses continued to improve. Customer satisfaction with our CHBN markets improved
+across-board, with customer complaints reducing significantly.
+34 China Mobile Limited
+BUSINESS
+REVIEW
+HIGHLIGHTS FOR 2022
+In 2022, we will focus on a new position, implement a new strategy, drive new infrastructure, integrate new
+elements and instigate new growth momentum. We will continue to be guided by digital and intelligent
+transformation and high-quality development and focus our efforts on the following four areas.
+Firstly, we will consolidate our foundation for business transformation and build new information infrastructure.
+With a clear strategic focus and leveraging our strong foundation, we will advance the systematic construction of
+new information infrastructure centered around 5G, CFN and a smart mid-end platform, serving as the artery to
+help information flow throughout the economy and society. We will continue to reinforce our leading position in 5G
+through delivering high-quality 5G services powered by advanced technology, while striving to establish a ubiquitous
+and integrated CFN and stepping up our efforts in CFN standard-setting to secure industry leadership. We also
+plan to build the industry's leading smart mid-end platform by spearheading its comprehensive construction and
+operations.
+Secondly, we will promote value-oriented operations by leveraging our business scale and continuously drive the
+comprehensive and integrated development of CHBN markets, as well as building the new information services
+system. Progress and consolidation will be the dual strategy for us to achieve value-oriented operations, drawing
+on advantages in our business scale. Delivering competitive products will stand at the core of our operations,
+which will see us develop more high-quality core products and seek new models for value-oriented operations to
+realize consistent quality improvements and rational scale growth. We will further advance the comprehensive
+and integrated development of CHBN markets. In terms of the Customer and Home markets, we will steer their
+development from scale expansion to value uplift, while doing the reverse for the Business and New markets. In
+addition, we will build the new information services system integrating "connectivity, computing force and ability",
+shifting our offerings from providing network connectivity and data traffic to computing force and ability, to further
+empower our information services with computing force.
+Thirdly, we will systematically optimize our management system and further improve our service quality. In pursuit
+of a scientific, standardized, smart and sophisticated management model, we will optimize our management by
+benchmarking world-class standards. We will deepen collaboration between headquarters, regional companies, and
+specialized teams to generate greater synergy while embracing more quality open cooperation to enhance the digital
+and intelligent operation and maintenance of our network. With the principles of putting quality first and striving for
+excellence, we will foster competitive advantage by winning wider customer recognition. We will fully implement
+a service suite that involves all staff members and elements of production, as well as our entire workflow. The
+deepened implementation of our comprehensive service system will help us continuously improve the quality of our
+network, service touchpoints and products, in order to increase customer satisfaction and enhance customers' sense
+of gain.
+Lastly, we will foster technological innovations while deepening system reforms. To attain technology-based and
+innovation-driven development, we will strive for critical technological breakthroughs, promote the effective operation
+of the 5G innovation consortia, develop more original technologies and consolidate our role as a leader of the modern
+industrial chain, carrying out our responsibilities to support, coordinate and lead innovation. To unleash the vitality
+of the Company and build momentum for future development, we will further reforms in corporate governance,
+staff deployment and incentive mechanisms, as well as in technology iteration and innovation. We will continue to
+implement precise grid operations to form a solid foundation for talent development.
+XIX
+GREEN AND
+LOW-CARBON
+Revenue from telecommunications services (RMB million)
+751,409
+M
+8.0%
+5.0%
+1,152,772
+1,210,292
+Total equity
+5.0%
+1,148,916
+1,206,350
+Total equity attributable to shareholders
+OPERATING REVENUE
+2.2%
+3,942
+Non-controlling interests
+9.7%
+575,110
+-15.5%
+57,836
+695,692
+517,274
+3,856
+We strived to reduce costs, enhance efficiency and strengthen "All Members, All Elements, All Processes" cost
+control, thereby maintaining its profitability at a leading level among international first-class telecommunications
+operators and continuously creating value for shareholders.
+12.5%
+5.27
+Revenue from sales of products and others (RMB million)
+7.7%
+96,849
+72,378
+33.8%
+EBITDA (RMB million)
+311,008
+285,135
+9.1%
+EBITDA margin
+In 2021, our operating revenue reached RMB848.3 billion, up by 10.4% compared to the previous year, of which
+revenue from telecommunications services was RMB751.4 billion, up by 8.0% compared to the previous year. We
+further promoted scale-based and value-oriented operations, fostered the all-round and integrated development of
+CHBN markets and achieved solid growth in revenue.
+37.1%
+-0.4pp
+Profit attributable to equity shareholders (RMB million)
+Margin of profit attributable to equity shareholders
+Basic earnings per share (RMB)
+116,148
+107,843
+7.7%
+13.7%
+5.67
+-0.3pp
+36.7%
+14.0%
+Implementation management
+Daily and task-oriented
+stakeholder communication
+sustainability reports
+Communication management
+CSR strategy and planning
+CSR management system
+and policies
+CSR philosophy
+Implementation Level
+China Mobile CSR Management System
+Departments and Subsidiaries
+•
+Organizational Level
+Sustainability Office
+Decision-Making Level
+Sustainability Steering Committee
+The Company continues to evolve the sustainability management structure and system around the sustainability
+model to facilitate its implementation.
+The Core Issues are "Leading in integrated and innovative development", "Empowering a digital-intelligent future",
+"Cultivating well-rounded talent", "Promoting common prosperity", "Practicing green and low-carbon operations"
+and "Supporting social initiatives in energy saving and environmental protection".
+The Main Actions are "Digital-Intelligent Innovation", "Inclusive Growth", and "Green and Low-Carbon Operations",
+which are streamlined to align with the three dimensions of our CSR philosophy, namely economy, society and
+environment, taking sustainability trends into account.
+Strategy management
+CSR team building
+Performance management
+Identification and management of
+material CSR issues
+China Mobile provides trainings to its directors and management on an annual basis.
+All members of our board committees are INEDs, with appropriate professional qualifications and/or expertise
+in business management, accounting and financial management, legal and compliance, artificial intelligence and
+scientific research, and so forth.
+We publish the terms of reference and membership of the board committees on the Company's and the
+HKEX's websites.
+China Mobile discloses the interests of its directors in the shares of China Mobile and their confirmation
+of compliance with the "Model Code for Securities Transactions by Directors of Listed Issuers" set out in
+Appendix 10 to the Hong Kong Listing Rules (the "Model Code").
+More than one-third of the Board (4 out of 8 as of 31 December 2021) are INEDS.
+✓
+We require our Board, the board committees and other internal organs to strictly comply with their internal
+procedures in accordance with the principles of the Corporate Governance Code. The following are the major
+respects in which China Mobile meets or exceeds the principles of the Corporate Governance Code:
+Research and training on CSR topics
+Our Board of Directors (the "Board") is responsible for performing the corporate governance duties and setting
+out the terms of reference on corporate governance functions. Throughout the financial year ended 31 December
+2021, the Company has complied with all the then-effective code provisions of the Corporate Governance Code
+as set forth in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
+Limited (the "Hong Kong Listing Rules"), except that the Company and its directors (including independent non-
+executive directors ("INEDS")) have not entered into any service contract with a specified term. All directors of our
+Company are subject to retirement by rotation and re-election at our annual general meetings (the "AGM(s)") every
+three years, and all newly-appointed directors are subject to re-election by shareholders at the first AGM after their
+appointment.
+Our goal has always been to enhance our corporate value, maintain our sustainable long-term development and
+generate greater returns for our shareholders. In order to better achieve the above objectives, we have established
+good corporate governance practices following the principles of integrity, transparency, openness and efficiency, and
+have implemented sound governance structure and measures. We have established and improved various policies,
+internal controls and other management mechanisms and procedures for the key participants involved in good
+corporate governance, including shareholders, board of directors and its committees, management and staff, internal
+auditors, external auditors and other stakeholders (including our customers, local communities, industry peers,
+regulatory authorities, etc.).
+CORPORATE GOVERNANCE
+46 China Mobile Limited
+For more detailed information about the sustainable development of the Company in 2021, please refer to China
+Mobile Limited 2021 Sustainability Report (https://www.chinamobileltd.com/en/esg/sd.php).
+• Awarding outstanding CSR
+practices
+• Integrating CSR into strategic
+performance management
+Integrating CSR into professional
+management
+COMPLIANCE WITH THE CODE PROVISIONS OF THE CORPORATE GOVERNANCE CODE
+REPORT
+1.530
+China Mobile has published a Sustainability Report for fifteen consecutive years, reporting its performance on
+ESG issues, which, in many respects, exceed the terms of the ESG Reporting Guide set out in Appendix 27 to
+the Hong Kong Listing Rules.
+interim
+3.217
+1.391
+final
+1.527
+interim
+3.250
+1.723
+final
+The CSR Philosophy is "Fullest sincerity and win-win development", meaning that China Mobile strives to fulfill the
+triple-sided responsibilities (economic, social and environmental responsibility) with fullest sincerity and that while
+pursuing sustainable growth of the enterprise (self-actualization), we leverage our strengths to contribute to the
+sustainable development of our economy, society, and environment (win-win development).
+interim
+3.290
+1.760
+final
+1.630
+4.060
+2.430²
+final¹
+interim
+(HKD)
+(HKD)
+(HKD)
+Per Share
+Per Share
+1.826
+Per Share
+final
+interim
+6.405
+The re-election of Dr. YANG Qiang as an independent non-executive director (99.4116%);
+6.
+The re-election of Mr. LI Ronghua as an executive director (99.4673%);
+5.
+The re-election of Mr. DONG Xin as an executive director (99.7794%);
+4.
+The re-election of Mr. YANG Jie as an executive director (99.2506%);
+3.
+The declaration of a final dividend for the year ended 31 December 2020 (99.9942%);
+2.
+The review and consideration of the audited financial statements and the reports of the directors and auditors
+for the year ended 31 December 2020 (99.9981%);
+1.
+The Company also attaches high importance to the AGMs, and makes substantial efforts to enhance communications
+between the Board and the shareholders. At the AGMs, the Board always makes efforts to fully address the
+questions raised by shareholders. We held our 2021 AGM on 29 April 2021 in the Grand Ballroom, Grand Hyatt Hong
+Kong, 1 Harbour Road, Wanchai, Hong Kong. The major items discussed and the percentage of votes cast in favor of
+the resolutions are set out as follows:
+The Company maintains close communication with investors through investment conferences, one-on-one meetings,
+video-conferencing and other forms of exchange interaction to timely deliver information on our operating conditions
+to the capital markets. In 2021, our management attended 13 investor conferences and 91 routine investor meetings,
+and met with nearly 700 investors. We will continue our efforts to enhance the investor relations work.
+We use a number of formal channels to report to shareholders on the performance and operations of the Company,
+particularly through our annual and interim reports. Generally, when announcing interim results, annual results or
+any major transactions in accordance with the relevant regulatory requirements, the Company arranges investment
+analyst conferences, press conferences and investor telephone conferences to explain the relevant results or major
+transactions to the shareholders, investors and the general public, listen to their opinions and address any questions
+that they may have. In addition, the Company adheres to the practice of voluntarily disclosing on a quarterly basis
+certain key, unaudited operational and financial data to further increase the Group's transparency and to provide
+shareholders, investors and the general public with additional information so as to facilitate their understanding of the
+Group's operations.
+To ensure the effective communications between the Company and its shareholders, we have formulated
+communication policies with shareholders. We regularly review these policies to ensure their effectiveness. We
+have established a securities affairs department, dedicated to provide necessary information and services to, and
+communicate with, shareholders and investors and other participants in the capital market, to maintain an active
+dialogue with them and make sure they are fully informed of the Company's operation and development.
+REPORT
+CORPORATE GOVERNANCE
+50 China Mobile Limited
+Being a special dividend of HK$3.200 per share in celebration of the 20th anniversary of our public listing.
+Dividends will be denominated and declared in Hong Kong dollars. Dividends for A-shares will be paid in Renminbi with the conversion rate to
+be calculated based on the average central parity rate between Hong Kong dollars and Renminbi announced by the People's Bank of China in
+the week before the date of the declaration of dividends at the annual general meeting, and a separate announcement will be made before the
+annual general meeting as regards the exact amount. Dividends for Hong Kong shares will be paid in Hong Kong dollars.
+3.2003
+1.623
+1.582
+Total
+Dividend
+Special
+Dividend
+Ordinary
+Dividend
+The Company holds a general meeting as its AGM every year, which is usually held in May. In accordance with
+section 615 of the Hong Kong Companies Ordinance, a requisition to move a resolution at the AGM may be
+submitted by:
+Requisition to move a resolution at an AGM
+I.
+Shareholders may make inquiries in writing to the Board. Inquiries must be deposited at our registered office at
+60/F, The Center, 99 Queen's Road Central, Hong Kong (the "Registered Office"), for the attention of the Company
+Secretary, providing sufficient contact information so that such inquiries can be properly handled. In addition,
+shareholders may also raise their concerns and suggestions in the Q&A session at our AGMs.
+According to the Articles of the Company and the Companies Ordinance (Cap. 622 of the Laws of Hong Kong) (the
+"Hong Kong Companies Ordinance"), shareholders holding the requisite voting rights may: (i) requisition to move
+a resolution at an AGM; (ii) requisition to convene an extraordinary general meeting (an “EGM"); and (iii) propose a
+person other than a retiring director for election as a director at a general meeting. Relevant details and procedures
+are available on our website.
+Shareholder Rights
+REPORT
+CORPORATE GOVERNANCE
+48 China Mobile Limited
+Full text of the amended Articles of the Company is available on the websites of the Company, the SSE and the
+HKEX.
+at the extraordinary general meeting of the Company held on 9 June 2021 (the "2021 EGM"), the shareholders
+of the Company approved as a special resolution to amend the Articles to satisfy the relevant regulatory
+requirements in relation to our corporate governance structure after the initial public offering and listing (the
+"RMB Share Issue") of RMB Shares on the SSE. The amended Articles took effect from the date of listing of
+RMB Shares on the SSE, being 5 January 2022.
+at the annual general meeting of the Company held on 29 April 2021 (the "2021 AGM"), the shareholders of
+the Company approved as a special resolution to adopt new Articles of the Company to modernize and improve
+certain provisions mainly in relation to the conducting of general meetings. The new Articles took effect from
+the date of approval by the shareholders, being 29 April 2021; and
+(2)
+(1)
+During 2021, the Board put forward to the shareholders for approval, and the shareholders approved, the following
+amendments to the Articles of Association (the "Articles") of the Company:
+The Company is established in Hong Kong and owned by all shareholders. Our ultimate controlling shareholder
+is China Mobile Communications Group Co., Ltd., which, as of 31 December 2021, indirectly held approximately
+72.72% of the total number of issued shares of the Company. The remaining approximately 27.28% of the total
+number of issued shares were held by public investors.
+SHAREHOLDERS
+The Company and its operating subsidiaries have set up internal audit departments, which independently audit
+the business units of the Company and its operating subsidiaries.
+Our Audit Committee conducts annual evaluation with respect to the effectiveness of risk management and
+internal control and procedures, and publishes its results.
+Our principal executive and principal financial officers shall make annual written statements to the US SEC,
+and our management shall make annual back-up certifications to the Company, confirming their personal
+responsibilities with respect to a series of risk management and internal controls.
+CORPORREPORTE
+CORPORATE GOVERNANCE
+Annual Report 2021 47
+(i)
+(ii)
+any number of shareholders representing not less than one-fortieth (1/40th) of the total voting rights of all
+shareholders having the right to vote at the AGM; or
+not less than 50 shareholders holding shares in the Company on which there has been paid up an average
+sum, per shareholder, of not less than HK$2,000.
+3
+Pending approval at the AGM.
+1
+2017
+2018
+2
+2019
+2020
+2021
+Financial Year
+On 4 January 2022, with the approval of the Board, the Company announced its plans to exercise its powers granted
+by the shareholders to make on-market buy-backs of shares on the HKEX after the completion of the RMB Share Issue
+and subject to compliance with all applicable laws, rules and regulations.
+Each director discloses to the Company at the time of his appointment and then annually for any change of, his
+position holding in any public companies or organizations and other significant commitments.
+The Company's established principle is to strive to create value and bring favorable returns for shareholders. The
+Company believes that our industry-leading profitability and ability to generate healthy cash flow will provide sufficient
+support for the Company's future development while continuing to create higher value for our shareholders.
+For requesting the Company to circulate to shareholders a statement with respect to a matter mentioned in a
+proposed resolution or any other business to be dealt with at a general meeting, shareholders are requested to
+follow the requirements and procedures as set out in section 580 of the Hong Kong Companies Ordinance.
+If a shareholder wishes to propose a person other than a retiring director for election as a director at a general
+meeting, he/she must lodge a written notice to that effect at our Registered Office for the attention of the
+Company Secretary. The written notice must state the full name and biographical details of the person
+proposed for election as a director as required by Rule 13.51(2) of the Hong Kong Listing Rules, and be signed
+by such shareholder. A written notice signed by the person proposed for election as a director indicating
+his/her willingness to be elected must also be lodged with the Company. The period for lodgment of such
+written notices shall be of not less than seven days and shall commence no earlier than the dispatch of the
+notice of the general meeting and end no later than seven days prior to the date of the general meeting. If the
+notices are received less than 15 days prior to the general meeting, the Company will need to consider the
+adjournment of the general meeting in order to allow shareholders 14 days' notice of the proposal.
+Proposing a person other than a retiring director for election as a director at a general meeting
+III.
+REPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 49
+Shareholders holding not less than one-twentieth (1/20th) of the paid-up capital of the Company which carries
+the right of voting at general meetings of the Company can deposit a requisition to convene an EGM. The
+requisition must state the objects of the meeting, and must be signed by the requisitionists and may consist of
+several documents in like form, each signed by one or more requisitionists. The requisition must be deposited
+at our Registered Office for the attention of the Company Secretary.
+Requisition to convene an EGM
+II.
+The requisition must state the resolution, and must be signed by all the requisitionists. The requisition must be
+deposited at our Registered Office for the attention of the Company Secretary not less than six weeks before
+the meeting in the case of a requisition requiring notice of a resolution and not less than one week in the case
+of any other requisition.
+Shareholder Value and Communication
+REPORT
+Preparation, release, and
+dissemination of
+CHINA MOBILE SUSTAINABILITY MODEL
+To build information service "lifelines". In 2021, we rose to one challenge after another and provided much-
+needed information service support for COVID-19 prevention and control, disaster relief, major events, cybersecurity,
+etc., honoring our promise to proactively serve the public with professionalism and commitment. We employed
+an array of information technologies such as 5G, big data and artificial intelligence (AI) to enable digital-intelligent
+prevention and control of COVID-19 while providing reliable communications, maintaining service continuity and
+stepping up comprehensive prevention and control measures. We rapidly restored mobile signals in designated
+areas and maintained connectivity for public affected by disasters using our Wing Loong large UAV-based Aerial
+Base Station (ABS) and other innovative core technologies. We launched the world's largest 5G+ BeiDou high-
+precision positioning system to improve early-warning of disasters and facilitate disaster prevention and relief.
+We reinforced our capabilities in safeguarding emergency communications, provided reliable communications and
+cybersecurity support for numerous major events, and achieved our established target of "no major network failure,
+no major cybersecurity incident and no major customer complaint". We proactively prevented and cracked down on
+communications and network crime and illegal activities and strengthened privacy communications environment for
+customers backed by network and information security.
+Adhering to its CSR philosophy of pursuing the fullest sincerity and win-win development, the Company supported
+the efficient functioning of the digital economy by innovatively integrating information technology and data, and
+took concrete moves to promote harmonic, symbiotic and sustainable development of the Company with the wider
+economy, environment and society.
+REPORT
+SUSTAINABILITY
+42 China Mobile Limited
+Currently, the Company's corporate credit ratings are equivalent to China's sovereign credit ratings, namely, A+/
+Outlook Stable from Standard & Poor's and A1/Outlook Stable from Moody's. These ratings reflect that our sound
+financial strength, favourable business potential and solid financial management are highly recognized by the market.
+3.2%
+127,127
+131,184
+-45.0%
+45,201
+26.7%
+188,106
+238,296
+2.3%
+307,761
+314,764
+Change
+2020
+RMB million
+RMB million
+2021
+CREDIT RATINGS
+Net cash inflow from operating activities
+Net cash outflow from investing activities
+Net cash outflow from financing activities
+Free cash flow
+In 2021, our cash flow remained healthy. Net cash inflow from operating activities was RMB314.8 billion, which
+continued to increase and remained at a high level. Net cash outflow from investing activities was RMB238.3 billion,
+up by 26.7% compared to the previous year. Net cash outflow from financing activities was RMB45.2 billion, down
+by 45.0% compared to the previous year, mainly consisting of subscription funds received in relation to the RMB
+Share Issue. Free cash flow was RMB131.2 billion, up by 3.2% compared to the previous year. As at the end of
+2021, our total cash and bank balances were RMB342.2 billion, of which 97.6%, 0.7% and 1.6% were denominated
+in Renminbi, U.S. dollars and Hong Kong dollars, respectively. Our robust fund management and healthy cash flow
+provided a solid foundation for our sustainable and healthy development.
+We consistently and firmly adhered to our sound and prudent financial policies and stringent fund management
+systems and strived to maintain a healthy cash flow level, thereby ensuring the safety and integrity of our funds
+through our highly centralized management of investing and financing activities. Meanwhile, we continued to
+reinforce our centralized fund management efforts and made appropriate allocations of our funds, thereby fully
+leveraging our fund scale efficiency.
+FUND MANAGEMENT AND CASH FLOW
+REVIEW
+FINANCIAL
+Annual Report 2021 41
+To drive the development of the digital economy through digital-intelligent innovation. We drove the rapid
+development of the digital economy through fully advancing the construction of information infrastructure and the
+digital-intelligent transformation of the entire society. In terms of connectivity, we are operating a world-leading
+communications network with more than 5.5 million base stations, including over 730,000 5G base stations, and
+our gigabit platform capabilities covered all cities and counties nationwide. In terms of computing force, our data
+centers formed a "4+3+X" nationwide layout, and those with external service capabilities had a total cabinet
+capacity of more than 400,000 units. In terms of abilities, we continued to refine our best-in-class core abilities
+such as Al, cloud computing, blockchain, big video and high-precision positioning, and our smart mid-end platform
+offered a catalogue of 325 common capabilities, processing over 8.1 billion requests per month on average. With a
+continued commitment to independent innovation, we also evolved the "One System and Four Rings" technological
+innovation layout and the Joint Innovation Plus scheme to push for key technological breakthroughs. We amplified
+the value of the 5G Innovation Coalition, and strove to develop high-level original technologies, and serve as a leader
+in the modern industrial chain. We launched the "Heartwarming Service" customer service brand and continued
+to innovate our rich offering of products, such as "and-Caiyun", MIGU Video and video connecting tones, to meet
+the common demand of an enriching digital lifestyle. Surrounding nine industrial innovation platforms, we built 200
+industry-leading 5G pilot projects and developed over 6,400 5G commercial use cases with our industry partners,
+driving the transformation, upgrade and improvement in cost-efficiency across sectors and industries.
+Annual Report 2021 43
+82,252
+REPORT
+SUSTAINABILITY
+SUSTAINABILITY
+Annual Report 2021 45
+Supporting social initiatives in energy saving and environmenta
+Practicing
+Promoting common prosperity
+Cultivating well-r
+Green and
+Win-Win
+Development
+Inclusive Growth
+Fullest Sincerity
+♡
+Low-Carbon Operations
+ဖဍ)
+To advance a common prosperity through inclusive growth. We acted on the people-centered philosophy of
+development, cared for the growth of our employees, shared the fruits of our development and promoted common
+prosperity while we pursued high-quality development. Under the "Talent Pipeline" strategic initiative, we continued
+to improve our talent structure and advance our employee caring programs such as the "Five Small Spaces" and
+"Happiness 1+1" programs. We took the initiative to serve China's regional development strategies, advanced
+coordinated regional development, and proactively took part in developing infrastructure along the "Belt and Road"
+and providing premium international information services. We evolved our products and services to bridge the digital
+divide for underserved groups, such as elderly people, people with disabilities and people living in remote areas, and
+to share with them the benefits of information technology. We upgraded the "Network+" poverty alleviation model
+into the "Network+" rural revitalization model and rolled out the 14th FYP Digital-Intelligent Rural Revitalization Plan:
+we consolidated the achievements of poverty alleviation through our "Seven Assistance Measures" and empowered
+rural revitalization in a digital-intelligent manner under our pioneering "Seven Rural Digital-Intelligence Projects”.
+China Mobile's philanthropy platform was approved by the Ministry of Civil Affairs as one of the third batch of online
+fundraising information platforms, making us the first and only domestic telecommunications operator to be granted
+this qualification. Our "Blue Dream" project has trained a total of close to 130,000 rural primary and secondary school
+principals in central and western China, contributing to greater educational equity across regions. Our "Hear Caring"
+campaign has offered free surgeries for over 7,000 impoverished children diagnosed with congenital heart disease
+(CHD), reigniting their hope in life. In 2021, our Parent Company won the highest government award for charity in
+China, the 11th China Charity Award.
+Digital-Intelligent
+Innovation
+To support carbon peaking and carbon neutrality goals through green and low-carbon operations. We fully
+implemented national policies on carbon peaking and carbon neutrality, by constantly reducing our own carbon
+emissions while empowering low-carbon growth across sectors and industries. We ran the "Green Action Plan"
+for the 15th consecutive year, and launched the "C2 Three Energy - Carbon Peaking and Carbon Neutrality Action
+Plan" and the new green development model, based on three aspects of energy (energy saving, clean energy and
+empowerment) and six green initiatives (green networks, green energy consumption, green supply chain, green
+office, green empowerment and green culture). In 2021, our energy saving measures saved us over 4.3 TWh of
+electricity in total. We aim to cut energy consumption intensity and carbon intensity by no less than 20% by the
+end of the 14th FYP period. We endorsed green procurement, whereby over 80% of our newly procured major
+equipment in 2021 used green packaging, saving 262,000 cubic meters of timber resources. We also introduced
+digital-intelligent services, such as smart green factory and a set of environmental management solutions, to drive
+energy conservation, consumption reduction and resource recycling in the wider society. We were listed for the
+fourth time in the climate change "A List" of CDP (Carbon Disclosure Project).
+44 China Mobile Limited
+SUSTAINABILITY
+Continuously improving sustainability strategy and management. In response to new changes, new
+requirements and new trends in and out of the Company, we further defined our sustainability model drawing on
+years of CSR management and practical experience. The model comprises CSR Philosophy, Main Actions and CSR
+Issues.
+REPORT
+Leading in integrated and innovative development
+Empowering
+a digital-intelligent future
+2.
+On 9 June 2021, we held the 2021 EGM in the Grand Ballroom, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai,
+Hong Kong. The major items discussed and the percentage of votes cast in favor of the resolutions are set out as
+follows:
+To consider and approve the RMB Share Issue and a specific mandate to allot and issue RMB Shares pursuant
+to the RMB Share Issue (99.1173%);
+11. To approve and adopt the new Articles of the Company (99.6181%).
+1.
+To consider and approve the authorization to the Board and its authorized persons to deal with matters relating
+to the RMB Share Issue (99.1463%);
+To consider and approve the plan for stabilization of the price of RMB Shares within three years following the
+RMB Share Issue (99.9660%);
+4.
+5.
+To consider and approve the plan for distribution of profits accumulated before the RMB Share Issue
+(99.9811%);
+6.
+To extend the general mandate granted to the Board to allot, issue and deal with shares by the number of
+shares bought back (93.4030%); and
+To consider and approve the shareholder return plan within three years following the RMB Share Issue
+(99.9811%);
+3.
+To give a general mandate to the Board to allot, issue and deal with additional shares in the Company not
+exceeding 20% of the number of issued shares (93.3407%);
+All our directors confirmed that they have complied with Paragraph A.6.5 of the Corporate Governance Code (effective
+as of 31 December 2021) with respect to directors' training. In 2021, all Board and senior management members
+participated in listing tutorial in relation to our RMB Share Issue on the SSE over, among other things, listing-related
+work requirements and procedures, conditions and overall procedures of listing, post-listing regulatory requirements,
+obligations and duties of independent directors, and internal control requirements in relation to listed companies.
+The Company has adopted the Model Code set out in Appendix 10 to the Hong Kong Listing Rules to regulate the
+directors' securities transactions. Save and except for the interests disclosed in the report of the directors on page 71
+of this annual report, none of the directors had any other interest in the shares of the Company as of 31 December
+2021. All directors have confirmed, following specific enquiry by the Company that they have complied with the
+Model Code during the period between 1 January 2021 and 31 December 2021.
+The appointment of KPMG and KPMG Huazhen LLP as auditors of the Group for Hong Kong financial
+reporting and US financial reporting purposes, respectively, and authorizing the Board to fix their remuneration
+(99.9141%);
+10.
+To ensure the timely disclosure of any change of directors' personal information, we have set up a specific
+communication channel with each of our directors. There is no financial, business, family or other material
+relationships among members of the Board. The Company purchases a directors and officers' liabilities insurance on
+behalf of its directors and officers and reviews the terms of such insurance annually.
+8.
+7.
+CORPORREPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 51
+56 China Mobile Limited
+The directors of the Company are responsible for the preparation of the consolidated financial statements of the
+Company. The Company has received acknowledgments from the directors of their responsibility for preparing the
+financial statements and the declaration by the auditors of the Company about their reporting responsibilities. For the
+reporting responsibilities of the auditors with respect to our financial statements, please refer to the Independent
+Auditor's Report on pages 79 to 83 in this annual report.
+The directors have disclosed to the Company the positions held by them in other listed public companies or
+organizations or associated companies, and the information regarding their directorships in other listed public
+companies in the last three years is set out on pages 7 to 12 of this annual report and on the Company's website.
+In compliance with the requirement of the Hong Kong Listing Rules, the Company has received a confirmation of
+independence from each of our INEDs, namely Dr. Moses CHENG Mo Chi, Mr. Paul CHOW Man Yiu, Mr. Stephen
+YIU Kin Wah and Dr. YANG Qiang, and considers them to be independent. The Board is of the view that they not
+only are able to completely fulfill their responsibilities as an INED, but will also continue to play a role and contribute
+to our board committees. They being our INEDs will benefit the Company and all shareholders as a whole.
+To consider and approve the use of proceeds from the RMB Share Issue (99.9730%);
+CORPORATE GOVERNANCE
+To give a general mandate to the Board to buy back shares in the Company not exceeding 10% of the number
+of issued shares (99.8964%);
+CORPORATE GOVERNANCE
+7.
+8.
+Dr. YANG Qiang
+1
+1
+1
+1
+7
+7
+Mr. Stephen YIU Kin Wah
+7
+1
+1
+1
+7
+7
+Mr. Paul CHOW Man Yiu
+1
+1
+7
+1
+7
+1
+Executive Directors
+Annual Report 2021 55
+The Board has adopted a Dividend Policy in 2019 to set out the principles and guidelines that the Company intends
+to apply in relation to the declaration, payment and distribution of dividends to the shareholders of the Company,
+which includes, among others, in recommending or declaring dividends, the Company shall allow its shareholders
+to participate in the Company's profits whilst retaining adequate cash reserves for meeting its working capital
+requirements and long-term sustainable development. The Company shall also take into account the actual financial
+performance of the Group, the Group's business strategies and operations, including future capital requirements
+and investment needs; economic conditions and other internal or external factors that may have an impact on the
+business or financial performance and situation of the Group, and any other factors that the Board may consider
+relevant, etc. To fully protect the rights and interests of the shareholders, to provide a sustainable, stable and
+reasonable investment return to the shareholders, to further improve the profits distribution mechanism, and to
+enable shareholders to supervise the Company's profits distribution, after taking into full account the Company's
+actual operation conditions and the needs for future development, the Company put forward to the shareholders for
+approval, and the shareholders approved at the 2021 EGM, a shareholder return plan within three years following the
+RMB Share Issue. Such shareholder return plan took effect from the date of listing of RMB Shares on the SSE.
+All board meetings and committee meetings were attended by the directors in person or by video or telephone
+conferencing. In 2021, the Board met and discussed various matters relating to the annual results, interim results,
+dividends, continuing connected transactions, corporate strategic planning, annual investment updates, sustainability
+report, change of auditors, revision of the Articles, RMB Share Issue, compliance with the Corporate Governance
+Code and related Hong Kong Listing Rules provisions and other matters. In addition, the Board reviewed and
+approved our quarterly results and others by means of written resolutions. The Board is responsible for performing
+the corporate governance duties and setting and reviewing the terms of reference on corporate governance
+functions, which you may review or download on the website of the Company, as well as our corporate governance
+policies and practices. In 2021, the Board also met and discussed the Company's corporate governance report.
+The Board has adopted a Board Diversity Policy since September 2013. In considering the composition of the Board,
+diversity will be considered from a number of perspectives in accordance with our business model and specific
+needs, including professional experience and qualifications, regional and industry experience, educational and
+cultural background, skills, industry knowledge and reputation, knowledge of the laws and regulations applicable to
+the Group, gender, ethnicity, language skills and length of service etc. Such perspectives under the Board Diversity
+Policy shall be taken into account in recommending appointment and re-election of directors and be monitored on
+an on-going basis by the Nomination Committee of the Company. In 2021, our Nomination Committee reviewed the
+structure and composition of the Board; at the committee meeting, the committee members discussed requirements
+relating to board diversity policy under the Hong Kong Listing Rules and in the relevant consultation papers published
+by the HKEX, and made recommendations to the Board on Board Diversity Policy and director succession planning
+based on the Company's circumstances.
+REPORT
+CORPORATE GOVERNANCE
+54 China Mobile Limited
+7375
+| | |│
+| | | |
+7--1
+1
+1
+1
+0
+0
+1
+1
+Mr. LI Ronghua (CFO)
+Mr. YANG Jie (Chairman)
+Mr. DONG Xin (CEO)
+Mr. WANG Yuhang
+7
+Dr. Moses CHENG Mo Chi
+INEDS
+EGM
+14 April
+13 April
+23 March
+FY 2022 Shareholders' Calendar
+The following table sets out the tentative key dates for our shareholders for the financial year ending 31 December
+2022. Such dates are subject to change depending on actual circumstance. Shareholders should note our
+announcements issued from time to time.
+Shareholders' Calendar
+All resolutions were duly passed at the 2021 AGM and 2021 EGM (collectively the "2021 General Meetings"). As at
+the date of each of the 2021 General Meetings, the number of issued shares of the Company was 20,475,482,897
+shares, which was the total number of shares entitling the holders to attend and vote for or against all the resolutions
+proposed at the 2021 General Meetings. No shareholders were required to abstain from voting on the resolutions
+proposed at the 2021 General Meetings. Hong Kong Registrars Limited, the share registrar of the Company, acted
+as scrutineer for vote-taking at the 2021 General Meetings. Poll results were announced on the websites of the
+Company and the HKEXnews on the day of each of the 2021 General Meetings.
+To consider and approve the amendments to the Articles (99.9689%).
+To consider and approve the adoption of the policy governing the procedures of Board meetings which will take
+effect on the date of listing of RMB Shares on the SSE (99.9932%); and
+To consider and approve the adoption of the policy governing the procedures of general meetings which will
+take effect on the date of listing of RMB Shares on the SSE (99.9931%);
+To consider and approve the proposed dealing with matter related to director and senior management liability
+insurance and A share prospectus liability insurance (99.8423%);
+12.
+11.
+10.
+9.
+REPORT
+CORPORATE GOVERNANCE
+52 China Mobile Limited
+To consider and approve the undertakings and corresponding binding measures for the RMB Share Issue
+(99.9728%);
+18 May
+To consider and approve the remedial measures for the potential dilution of immediate returns resulting from
+the RMB Share Issue (99.9810%);
+Mid-June
+Mid-August
+Announcement of final results and final dividend for the financial year ended 31
+AGM
+Nomination
+Committee
+Committee
+Audit Remuneration
+Committee
+Board of
+Directors
+Board meetings are held at least once a quarter and as and when necessary. Directors are requested to declare their
+direct or indirect interests, if any, in any proposals or transactions to be considered by the Board at Board meetings
+and abstain from voting as appropriate. In 2021, as all of our executive directors hold executive positions at CMCC,
+they have voluntarily abstained from voting on the board resolution approving the continuing connected transactions.
+During the financial year ended 31 December 2021, the Board met on seven occasions and the directors'
+attendances at the meetings are as follows:
+The Board currently comprises eight directors, namely Mr. YANG Jie (Chairman), Mr. DONG Xin (CEO), Mr. WANG
+Yuhang and Mr. LI Ronghua (CFO) as executive directors, and Dr. Moses CHENG Mo Chi, Mr. Paul CHOW Man Yiu,
+Mr. Stephen YIU Kin Wah and Dr. YANG Qiang as independent non-executive directors. The list of directors and their
+role and function is available on the websites of our Company and the HKEXnews. The biographies of our directors
+are presented on pages 7 to 12 of this annual report and on our website.
+The key responsibilities of the Board include, among others, formulating the Group's overall strategies, setting
+management targets, monitoring internal controls and financial management, supervising the performance of our
+management, developing and reviewing the policies and practices of corporate governance (the Terms of Reference
+of its corporate governance function are available on the websites of our Company and the HKEXnews), while
+day-to-day operations and management are delegated by the Board to the executives of the Company. The Board
+operates in accordance with established practices (including those relating to reporting and supervision).
+The Board of Directors
+THE BOARD OF DIRECTORS AND THE BOARD COMMITTEES
+CORPOREPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 53
+Payment of interim dividend for the six months ending 30 June 2022, if any
+Announcement of interim results and interim dividend for the six months ending 30
+June 2022, if any
+Payment of final dividend for the financial year ended 31 December 2021
+2022 AGM
+Upload of 2021 Hong Kong annual report on the websites of the Company and the HKEX
+Dispatch of 2021 Hong Kong annual reports to Hong Kong shareholders
+December 2021; Upload of 2021 A-Shares annual report on the website of the Company
+and the SSE
+End of September
+REPORT
+9.
+The Board currently has three principal board committees, which are the Audit Committee, the Remuneration
+Committee and the Nomination Committee, and all of which are comprised solely of INEDS. With the appointment
+and authorization of the Board, each of the board committees operates under its written terms of reference.
+Qualifications including professional qualifications, skills, knowledge and experience that are relevant to the
+Company's business and corporate strategy, and consideration on diversity under the Board Diversity Policy;
+Character and integrity;
+The Board Committees
+The Board has adopted a Director Nomination Policy. The Nomination Committee and/or the Board should, upon
+receipt of the proposal on appointment of new director and the biographical information (or relevant details) of the
+candidate, evaluate such candidate based on the criteria as set out below to determine whether such candidate
+is qualified for directorship. The Nomination Committee should then recommend to the Board to appoint the
+appropriate candidate for directorship, as applicable. Criteria in evaluating and selecting candidates for directorship
+include:
+The Remuneration Committee is responsible for determining the remuneration packages of all executive directors
+and senior management. The remuneration package of our executive directors consists of a basic salary, a
+performance-linked annual bonus and a term incentive. The remuneration of independent non-executive directors
+is determined in part by reference to their experience, the prevailing market conditions and their workload as
+independent non-executive directors and members of the board committees of the Company. Please refer to note
+11 to the consolidated financial statements on page 116 of this annual report for directors' and senior management's
+remuneration in 2021.
+Remuneration, Appointment and Rotation of Directors
+REPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 59
+Requirement for the Board to have independent directors in accordance with the Hong Kong Listing Rules and
+whether the candidate would be considered independent with reference to the independence guidelines set
+out in the Hong Kong Listing Rules;
+In 2021, the Nomination Committee met once and reviewed the structure and composition of the Board.
+The duties of the Nomination Committee, among other things, are to review the structure, size and composition
+(including the skills, knowledge and experience) of the Board at least annually and make recommendations on
+any proposed changes to the Board to complement the corporate strategy; to identify individuals suitably qualified
+to become board members and select or make recommendations to the Board on the selection of, individuals
+nominated for directorships; to assess the independence of independent non-executive directors; to make
+recommendations to the Board on the appointment or reappointment of directors and succession planning for
+directors, in particular the Chairman and the Chief Executive Officer.
+Responsibilities
+The current members of the Company's Nomination Committee are Mr. Paul CHOW Man Yiu (Chairman), Dr. Moses
+CHENG MO Chi and Mr. Stephen YIU Kin Wah, who are all INEDS.
+Membership
+Nomination Committee
+In 2021, the Remuneration Committee met once, during which the committee resolved to approve the target and
+attained levels of annual appraisal indicators of senior management.
+Work Done in 2021
+The duties of the Remuneration Committee are, among others, to make recommendations to the Board on the
+remuneration packages of individual executive directors and senior management, including benefits in kind, pension
+rights and compensation payments including any compensation payable for loss or termination of their office or
+appointment, and make recommendations to the Board on the remuneration of non-executive directors; to review
+and approve the management's remuneration proposals with reference to corporate goals and objectives resolved
+by the Board from time to time; to review and approve compensation payable to executive directors and senior
+management for any loss or termination of office or appointment, and compensation arrangements relating to
+dismissal or removal of directors for misconduct to ensure that they are consistent with contractual terms; to ensure
+that no director or any of his associates is involved in deciding his own remuneration; to make recommendations
+to the Board on the Company's policy and structure for remuneration of all directors, senior management and
+employees including salaries, incentive schemes and other share option schemes, and on the establishment of
+formal and transparent procedures for developing remuneration policy; to make recommendations to the Board
+on disclosure of directors' remuneration in the annual report (if applicable) sent by the Board to the shareholders;
+to make recommendations to the Board annually on whether the shareholders shall be requested to approve the
+policies set out in the report on directors' remuneration (if applicable) at the AGM.
+Responsibilities
+Work Done in 2021
+The current members of the Company's Remuneration Committee are Dr. Moses CHENG Mo Chi (Chairman), Mr.
+Paul CHOW Man Yiu and Mr. Stephen YIU Kin Wah, who are all INEDS.
+Any potential contributions the candidate can bring to the Board in terms of qualifications, skills, experience,
+independence and gender diversity;
+Such other perspectives that are appropriate to the Company's business and succession plan and where
+applicable, may be adopted and/or amended by the Board and/or the Nomination Committee from time to time
+for nomination of directors and succession planning.
+786,085
+899,109
+(person-times)
+Anti-corruption education and trainings – participations during the year
+11,390
+2021
+2020
+11,947
+Anti-corruption education events held during the year
+Indicator
+Willingness and ability to devote adequate time to discharge duties as a member of the Board and/or board
+committee(s) of the Company; and
+With respect to anti-corruption, we persisted in establishing anti-corruption systems that penetrate and cover all
+aspects of anti-corruption. We printed and distributed responsibility checklists and seven annual task lists, to ensure
+that each unit takes its responsibilities and makes contribution from its perspective. We formulated embedded
+guidance on corruption risk prevention and control, to enhance implementation of roles, prevention and control,
+and management and supervisory responsibilities. We also established a unified, embedded prevention and control
+management platform. By fully leveraging our technologies, we built early-warning models and launched pilot
+schemes addressing key grassroot, problem-prone areas. We established comprehensive control over corruption
+risk factors, and implemented corruption risk prevention and control at various levels. In 2021, more than 9,762
+prevention and control measures were introduced or updated, 1,089 non-compliant projects were suspended, and
+623 personnel in key positions were adjusted. Meanwhile, we also launched an anti-corruption education month,
+with a focus on educating our employees on our anti-corruption systems, work requirements and case studies.
+During the month we organized 11,300 trainings covering over 90% of our employees.
+For the purpose of promoting honest and ethical conducts and deterring wrongdoings, the Company, in 2004,
+adopted a code of ethics, which is applicable to our chief executive officer, chief financial officer, deputy chief
+financial officer, assistant chief financial officer and other designated senior officers of the Group, in accordance with
+the requirements of the SOX Act. In the event of a breach of the code of ethics, the Company may take appropriate
+preventive or disciplinary actions after consultation with the Board. The code of ethics has been filed with the US
+SEC as an exhibit to our annual report on Form 20-F for the financial year ended 31 December 2003, which may also
+be viewed and downloaded from our website.
+Code of Ethics and Anti-Corruption
+The Company provides clear guiding principles for our management and employees to do what is right and obey all
+laws and regulations. They are also subject to various trainings and continuous professional development, including
+a variety of online learning and information sources, formal executive development programs and attendance at
+executive briefings on relevant topics. These principles cover all aspects of our operations.
+The task of the management and employees is to implement the strategy and direction as determined by the Board,
+to take care of day-to-day operations and functions of the Company, and to maintain the values and corporate culture
+of China Mobile. The division of responsibilities among our principal executive officers and senior management is
+set out in the biographies of directors and senior management on pages 7 to 12 of this annual report and on the
+Company's website.
+MANAGEMENT AND EMPLOYEES
+REPORT
+CORPORATE GOVERNANCE
+60 China Mobile Limited
+All newly-appointed directors receive a comprehensive induction of directors' duties to make sure that they have
+a proper understanding of the operations and business of the Company, and that they are fully aware of their
+responsibilities as a director, the listing rules of the stock exchanges on which the Company is listed, applicable
+laws and regulations, and the operation and governance policies of the Company. All newly-appointed directors are
+subject to re-election by shareholders at the first AGM after their appointment. Every director is subject to retirement
+by rotation and needs to stand for re-election at least once every three years.
+On whistleblowing, the Company has set up a mailing address, a telephone hotline, work sites and a general
+manager mailbox as channels for employees and the public to raise concerns about misconduct, malpractices or
+improprieties in any matters related to the Company.
+Membership
+•
+REPORT
+•
+reviewed and approved the budgets and remuneration of the external auditors;
+•
+. reviewed and approved the interim results for the six months ended 30 June 2021;
+reviewed and approved the resolutions in relation to the RMB Share Issue;
+•
+reviewed and approved the 2020 conflict mineral report, which was filed with the US SEC;
+•
+reviewed and approved our 2020 Annual Report on Form 20-F, which was filed with the US SEC;
+.
+reviewed and approved the change of auditors of the Company;
+•
+reviewed and approved the assessment report on the disclosure controls and procedures;
+reviewed and approved the financial statements, annual results, report of the directors, financial review, etc. for
+the financial year ended 31 December 2020;
+In 2021, the Audit Committee met on seven occasions and the attendance of each member is disclosed on page 53
+of this annual report. In addition, the Audit Committee met with the external auditors for six times in 2021 and three
+of such meetings were held without any executive directors being present.
+Work Done in 2021
+REPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 57
+Audit Committee
+The Audit Committee is authorized by the Board to investigate any activity within its terms of reference. It is also
+authorized to seek any information it requires from any employee and to seek outside legal or other independent
+professional advice at the Company's expense. The duties of our Audit Committee are to be primarily responsible
+for, among other things, making recommendations to the Board on the appointment, re-appointment and removal
+of external auditors, approving the remuneration and terms of engagement of external auditors, dealing with any
+questions of resignation or dismissal of such auditors; reviewing and monitoring external auditors' independence
+and objectivity and the effectiveness of the audit process in accordance with applicable standards; developing
+and implementing policies on the engagement of external auditors to provide non-audit services; monitoring the
+truth, integrity and accuracy of financial statements of the Company and the annual reports and accounts, interim
+report and, where applicable, quarterly reports, and reviewing significant financial reporting judgments contained in
+them; overseeing the Company's financial reporting system, risk management and internal control procedures; and
+reviewing and supervising the training and continued professional development of and performance of duties by
+directors and senior management, and formulating and reviewing manuals (if any) on the performance of duties and
+compliance by employees and directors and supervising the implementation of such manuals (if applicable).
+Authorities and Responsibilities
+The current members of the Company's Audit Committee are Mr. Stephen YIU Kin Wah (Chairman), Dr. Moses
+CHENG MO Chi, Mr. Paul CHOW Man Yiu and Dr. YANG Qiang, who are all INEDs. The members of our Audit
+Committee possess professional qualifications in areas including finance, accounting and laws and have many years
+of experience and expertise in finance, legal, regulatory, artificial intelligence and/or business management.
+Remuneration Committee
+Audit Committee
+To satisfy the relevant regulatory requirements in relation to our RMB Share Issue, the Board reviewed and approved
+certain amendments to the terms of reference of the board committees. The amended terms of reference of the
+board committees took effect from the date of listing of RMB Shares on the SSE, and are available on the websites
+of the Company, the SSE and the HKEXnews, and can be obtained from the Company Secretary upon written
+request.
+In 2021, the principal work performed by the Audit Committee includes:
+•
+Membership
+CORPORREPORT
+reviewed and approved the internal control assessment report;
+•
+reviewed and approved the 2021 internal audit project plan and budget for external engagements;
+•
+reviewed and approved the 2021 risk assessment report;
+reviewed and approved the 2020 evaluation report on accounting and financial reporting system;
+•
+reviewed and approved the continuing connected transactions;
+.
+reviewed and approved the report on the accounting guidelines for the telecom industry;
+•
+reviewed and approved the report on compliance with relevant laws and regulations in 2020; and
+reviewed and approved the internal audit reports.
+In 2021, our Audit Committee has completed its review on risk management and internal control systems and their
+enforcement, and confirmed its discharge of its duties and responsibilities.
+CORPORATE GOVERNANCE
+58 China Mobile Limited
+5
+98
+Non-audit services fees5
+5
+4
+66 China Mobile Limited
+Under circumstances where any departments or officers are in breach of disclosure procedures and internal controls,
+resulting in reporting or disclosure errors, or in breach of disclosure related laws and regulations, the Company shall
+hold the relevant personnel accountable. Members of the Disclosure Committee, heads of our IA Dept. and other
+relevant departments and each of our subsidiaries shall give confirmations annually and take personal responsibilities
+with respect to their disclosure duties.
+To satisfy the relevant regulatory requirements in relation to our RMB Share Issue, the Board reviewed and approved
+the Rules for the Management of Information Disclosure and the Rules for the Management of Proceeds. These
+rules took effect from the date of listing of RMB Shares on the SSE and are available in Chinese on the websites of
+the Company, the SSE and the HKEX.
+According to the Hong Kong Listing Rules and United States Securities Act, since 2003, the Company has
+implemented the information disclosure internal controls and procedures, and established a Disclosure Committee,
+the members of which include our Chairman, chief executive officer, chief financial officer and heads of main
+functional departments. Empowered by the Board, the Disclosure Committee is responsible for organizing and
+coordinating routine reporting and disclosure to prompt timely, compliant, truthful and complete disclosure of
+information, ensure good corporate governance and transparency, properly get back to the investors, analysts and
+media inquiries, to prevent volatility of our share price caused by false market information.
+INFORMATION DISCLOSURE AND INSIDER DEALINGS
+All disclosure of material information relating to the Company is made through the unified leadership and
+management of the Board, with the Company's management performing its relevant duties. The Company has
+performed an annual review of the effectiveness of the Company's disclosure controls and procedures, and
+concluded that, as of 31 December 2021, the Company's disclosure controls and procedures were effectively
+executed at a reasonable assurance level.
+Based on the evaluation conducted by the management of the Company, the management believes that, as of 31
+December 2021, the Company's internal control over financial reporting was effective, which provided reasonable
+assurance regarding the reliability of financial reporting and the preparation of financial statements for reporting
+purposes in accordance with generally accepted accounting principles.
+We established a hierarchical top-down risk assessment mechanism, relying on the strategic level risk assessment
+(material risk assessment), the management level risk assessment (major projects risk assessment) and the
+operational level risk assessment (procedure risk assessment), to assist the management to acknowledge risk
+information in a timely manner in order to make a reasonable decision. Based on risk assessment, we established a
+three-tier internal controls of "the top level internal control system, the internal control professional system and the
+internal control practices guidelines", which brought the control requirements to the whole process of marketing,
+production and management. Based on our business operation, we focus on high risk and key management areas
+and perform risk assessment, so as to enforce our internal control requirement in our daily operations. Meanwhile,
+we assigned specific responsibilities to individuals and input the control requirements in our IT systems to
+strengthen the internal controls. And through multiple internal and external supervision and inspections, including
+self-assessment, management evaluation, external audit, etc., we effectively improved the execution efficiency and
+effectiveness of our internal controls.
+CORPORREPORT
+CORPORATE GOVERNANCE
+Annual Report 2021 65
+Our management is responsible for establishing and maintaining internal control over financial reporting. We adopted
+the control criteria framework set out in the Internal Control Integrated Framework issued by the Committee of
+Sponsoring Organizations of the Treadway Commission (COSO) (2013). In compliance with the provisions and
+requirements under section 404 of the SOX Act and the code provisions of the Corporate Governance Code issued
+by HKEX, we refined our routine management mechanism of internal controls, in establishing a stringent internal
+control system over financial reporting.
+The management of the Company reports to Audit Committee annually about the building-up and performance of
+its risk management and internal controls, including interim and annual evaluation reports, and receives guidance
+and supervision from the Audit Committee. In 2021, the Company has received the management's affirmation with
+respect to the effectiveness of the risk management and internal controls.
+Our Audit Committee under the Board is responsible for conducting annual review of the effectiveness of the
+Group's risk management and internal control systems to reasonably ensure that the Company is operating legally
+and the assets are safeguarded and to ensure the accuracy and reliability of the financial information that the
+Company employs in its business or releases to the public. The said systems are designed to manage rather than
+eliminate the risk of failure to meet business targets and to make reasonable but not absolute assurances with
+respect to material misrepresentations or losses. As of 31 December 2021, our Audit Committee has evaluated the
+effectiveness of the Group's risk management and internal controls covering all important aspects including financial,
+operational and compliance controls, to ensure we have sufficient resources in accounting, internal audit and financial
+reporting, staff qualification and experience, staff training courses and related budget. Based on such review, we
+consider the Group's risk management and internal control systems to be effective and adequate.
+109
+RISK MANAGEMENT AND INTERNAL CONTROLS
+Including the fees rendered for the audit of internal control over financial reporting as required by relevant regulatory requirements.
+Including the fees for tax compliance and advisory services, risk assessment and compliance advisory services, performance improvement and
+business process optimization advisory services, and other advisory services.
+Audit fees4
+RMB million
+RMB million
+The IA Dept. establishes an internal audit scope and framework and carries out risk investigations on an annual basis.
+According to the results of the risk investigations, the IA Dept. formulates an internal audit project rolling plan and an
+annual audit plan and, together with the Audit Committee and the Board, reviews and approves the annual audit plan
+and resources allocation. The annual audit plan of the IA Dept. covers various areas including financial audit, internal
+controls audit, information systems audit and risk assessment. For financial audit, the IA Dept. reviews and assesses
+the truthfulness, accuracy, compliance and efficiency of the Company's financial activities and financial information
+as well as the management and utilization of the Company's capital and assets. For internal controls audit, the IA
+Dept. audits and assesses the effectiveness in the design and implementation of the Company's internal control
+system. According to the requirements under the Corporate Governance Code under the Hong Kong Listing Rules,
+section 404 of the SOX Act, Basic Norms for Enterprise Internal Controls, Guidelines for Evaluation of Enterprise
+Internal Controls and other laws and regulations of the mainland of China, the IA Dept. organizes and performs audit
+assessment on the internal control over financial and non-financial reporting of the Group, covering all material areas
+such as financial, operational and compliance controls, on an annual basis, to provide assurance for the Company's
+management in its issuance of the internal control assessment report. The information systems audit focuses on
+reviewing and assessing the information systems, information technology applications, information security and the
+related internal controls and procedures. At the same time, the IA Dept. carries on special projects and investigations
+in response to requests from the Company's management or the Audit Committee or if otherwise required. In
+addition, without prejudice to its independence, if requested by the Company's management and as required by
+business needs, the IA Dept. provides management advice or consultancy services by making use of audit resources
+and audit information to facilitate the Company's decision-making and operational management.
+The Company and its operating subsidiaries have set up internal audit departments, which independently audit the
+business units of the Company and its operating subsidiaries. The head of the IA Dept. directly reports, four times a
+year, to the Audit Committee which, in turn, reports to the Board regularly. The Board and the Audit Committee give
+instructions with respect to internal auditing. The IA Dept. regularly reports to the senior management. The senior
+management ensures that adequate resources and level of authorization are allocated and granted for internal audit,
+and deploys and supervises follow-up and rectification in connection with issues identified in audit. The IA Dept. has
+unrestricted access to the relevant businesses and assets records and personnel in the course of performing their
+duties.
+The Internal Audit Department (the "IA Dept.") conducts independent and objective confirmation and provides
+consulting services in respect of the appropriateness, compliance and effectiveness of the Company's business
+activities, internal controls and risk management by applying systematic and standardized auditing procedures and
+methods. The IA Dept. also assists the Company in improving the effectiveness of corporate governance, risk
+management and internal controls, with an aim to promoting its corporate value, operations, and sustainable and
+healthy development as well as contributing to the achievement of its strategic objectives.
+INTERNAL AUDIT
+REPORT
+CORPORATE GOVERNANCE
+62 China Mobile Limited
+With respect to compliance management, aiming at "creating a world-class enterprise, becoming a cyberpower, a
+digital China, and the main force of a smart society", focusing on making breakthroughs based on "Compliance Escort
+Plan", we continue building our compliance management system, making practical moves in serving the Company's
+strategy and safeguarding the Company's high-quality development with compliance, as well as applying the concept
+of legal compliance throughout the entire operation and management process. As we accelerate the establishment
+of a new information service system of "connectivity, computing force and ability" and focus on 5G new
+infrastructure, 5G+ vertical industry applications, supply chain security innovation and others, we strengthened our
+pre-emptive compliance review and early identification of risk factors. As we expanded our compliance management
+to new businesses, we conducted extensive research on requirements relating to online transactions and customer
+personal information protection, and compiled relevant area-specific compliance guidelines. We strengthen our
+research and publicity efforts in laws and regulations in key areas, carried out specific trainings on Cyber Security
+Laws, Data Security Laws, Personal Information Protection Laws, Critical Information Infrastructure Security
+Protection Regulations and other topics, and also, compiled and issued research reports on Data Security Laws
+and Personal Information Protection Laws, among others. We further improved our information-based compliance
+management system to build a centralized and intelligent contract management system, gave full play to the role of
+the joint meeting on accountability for illegal business operations and investment, and strengthened the closed loop
+of compliance management.
+a reporting mechanism for major business risk events to maintain the bottom line of no major risks occurrence. In
+2021, we strengthened key risk management and control, conducted risk management by means of risk collection,
+risk identification, combined assessment, measure decomposition and quantitative monitoring, and formulated 24
+measures and more than 30 quantitative monitoring indicators with respect to five key risks. We regularly tracked
+down the implementation of these measures and indicators and found no major operating risks or losses that occurred
+throughout the year.
+-
+-
+We continued to optimize our management system and improve our business processes. With respect to risk
+management, we made great efforts on the closed-loop management process of "risk evaluation at the beginning
+of the year quarterly risk monitoring - interim risk assessment annual review and evaluation", and established
+The Company has established collective decision-making policies for major issues. We keep refining our major
+issue catalogue and criteria to prevent risks in decision-making. We have continuously strengthened the inspection
+mechanisms, especially on key areas such as procurement biddings to look for loopholes in our management system
+and resolve them. Within the Group, we urge for honest operation, healthy development, good performance and
+shareholders' interest protection.
+Management Mechanism
+CORPORREPORTE
+CORPORATE GOVERNANCE
+Annual Report 2021 61
+The IA Dept. makes improvement recommendations in respect of its findings in the course of the audits and
+requests the management to undertake and to confirm the implementation plans, methods and timeline. It regularly
+monitors the status of the implementation of the recommendations to ensure their completion.
+Annual Report 2021 63
+CORPORATE GOVERNANCE
+REPORT
+2021
+2020
+The following table sets forth the types of, and fees for, the principal audit services and non-audit services provided
+by the external auditors (please refer to note 7 to the consolidated financial statements for details):
+Apart from providing the above-mentioned audit services to the Group, the external auditors also provided other non
+- audit services to the Group, which were permitted under section 404 of the SOX Act and pre-approved by the Audit
+Committee.
+REPORT
+CORPORATE GOVERNANCE
+64 China Mobile Limited
+audit of the effectiveness of the Group's internal control over financial reporting as of 31 December 2021.
+CORPORATE GOVERNANCE
+•
+review of interim consolidated financial information of the Group;
+•
+At the recommendation by the Audit Committee, the Board proposed, and the shareholders approved at the 2021
+AGM, to appoint KPMG and KPMG Huazhen LLP as the auditors of the Group for the year ending 31 December 2021
+for financial reporting purposes. The principal services provided by the external auditors included:
+CMCC, our ultimate controlling shareholder, is a central state-owned enterprise regulated by the State-owned
+Assets Supervision and Administration Commission of the State Council of China ("SASAC"). Under the relevant
+requirements of the Ministry of Finance and SASAC, there are certain limits to the number of years for which
+an accounting firm may continuously undertake financial auditing work in respect of a central state-owned
+enterprise and its subsidiaries. Due to the relevant requirements, the former external auditors of the Group,
+PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP (collectively, "PwC"), retired as the auditors
+of the Group with effect from the conclusion of our 2021 AGM and were not re-appointed. PwC had confirmed
+in writing that there were no other matters or circumstances that need to be brought to the attention of the
+shareholders of the Company in connection with the above change. The Board confirmed that there were no other
+matters or circumstances that need to be brought to the attention of the shareholders of the Company in connection
+with the above change. The Board and the Audit Committee also confirmed that there were no disagreements or
+unresolved matters between the Company and PwC on any matter of accounting principles or practices, financial
+statement disclosure, or auditing scope or procedure.
+EXTERNAL AUDITORS
+In 2022, we will further improve the "1+3+N" internal audit system, strengthen the coordination between the
+two levels of auditing, and carry out auditing surrounding regulatory requirements and the Company's strategies.
+Meanwhile, we will also enhance our targeted audit policies, and continue to innovate and promote the digitalized
+and intelligent transformation of auditing, so as to promote the high-quality development of the Company.
+We report regularly to the Board and the Audit Committee with respect to the building up of our internal audit
+organization, its human resources and qualifications, staff training, annual audit plan and budget, and the audit
+results. In 2021, we focused our audit on the main findings of each audit project and their rectification. We provide
+specific guidance on audit focus, rectification advice, data audit, team building and others to ensure the effectiveness
+of internal audit functions.
+In 2021, based on the development strategy of building a world-class "Powerhouse", we conducted auditing
+with a focus on key fields such as business development, major financial income and expenditure, and network
+and information security. Meanwhile, we upgraded our "on-site + remote + cloud" auditing model and brought
+innovation to auditing. Auditing helped us prevent risks, strengthened the effectiveness of audit rectifications, and
+promoted the sustainable and healthy development of the Company.
+audit of annual consolidated financial statements of the Group and annual financial statements of its
+subsidiaries; and
+REPORT
+Moses CHENG Mo Chi
+The Company attaches great importance to the management of insider information. In compliance with the
+provisions of Hong Kong Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO")
+and others, we formulated China Mobile Management Method on Inside Information, setting up rules and black-
+out periods on directors, management and employees in dealing with the shares of the Company or exercising
+share options while they are in possession of inside information. Those who may come into possession of inside
+information in performing their duties are required to sign an undertaking on their duty of confidentiality and
+prohibition against insider dealing. Unauthorized use of confidential or inside information for profits is strictly
+prohibited to prevent violation of laws and regulations and internal disciplines. In general, any authorized speaker
+from the Company only makes clarification and explanation on information already available in the market, and avoid
+revealing any unpublished inside information. Before any external interview, such speaker shall seek verification from
+the relevant department about any information to be disclosed.
+The profit of the Group for the year ended 31 December 2021 and the financial conditions of the Company and the
+Group as at that date are set out in the consolidated financial statements on pages 84 to 163.
+DIVIDENDS
+The Board has adopted a dividend policy. In recommending or declaring dividends, the Company shall allow its
+shareholders to participate in the Company's profits whilst to retain adequate cash reserves for meeting its working
+capital requirements and long-term sustainable development. The Board has the discretion to propose, declare and
+distribute dividends to the shareholders of the Company, subject to the Articles of Association of the Company and
+all applicable laws and regulations and taking into account the following factors of the Company and its subsidiaries:
+•
+the actual financial performance of the Group;
+•
+the Group's business strategies and operations, including future capital requirements and investment needs;
+economic conditions and other internal or external factors that may have an impact on the business or financial
+performance and situation of the Group; and
+•
+any other factors that the Board may consider relevant.
+Annual Report 2021 69
+REPORT OF
+DIRECTORS
+The Board recommends a final dividend payment of HK$2.43 per share for the year ended 31 December 2021.
+Together with the interim dividend of HK$1.63 per share already paid, total dividend for the full year of 2021
+amounted to HK$4.06 per share. In case of any change in the total number of issued shares of the Company
+between the date of this report (being 23 March 2022) and the record date for the implementation of the 2021 final
+dividend, the Company intends to keep the total amount of profit distribution unchanged and adjust the amount of
+dividend per share accordingly, with the specific adjustments to be announced separately. To create higher returns
+for our shareholders and share the results of our operating gains, after giving full consideration to the Company's
+profitability, cash flow conditions and future development needs, in the three-year period from 2021, the profit
+to be distributed in cash for each year will gradually increase to 70% or above of the profit attributable to equity
+shareholders of the Company for that year. The Company will strive to create more value for shareholders.
+FINANCIAL STATEMENTS
+The Board believes that our industry-leading profitability and ability to generate healthy cash flow will provide
+sufficient support for the Company's future development and create favourable returns for our shareholders.
+Donations made by the Group during the year amounted to RMB79,833,821 (2020: RMB76,449,383).
+PROPERTY, PLANT AND EQUIPMENT
+Changes to the property, plant and equipment of the Group during the year ended 31 December 2021 are set out in
+note 15 to the consolidated financial statements.
+SHARE CAPITAL
+Details of the Company's share capital are set out in note 38 to the consolidated financial statements.
+RESERVES
+Changes to the reserves of the Group during the year are set out in the consolidated statement of changes in
+equity. Changes to the reserves of the Company during the year are set out in note 38 to the consolidated financial
+statements.
+DIRECTORS
+The directors of the Company during the financial year were:
+Executive Directors:
+YANG Jie (Chairman)
+DONG Xin
+WANG Yuhang
+LI Ronghua
+Independent Non-Executive Directors:
+DONATIONS
+Particulars of the Company's subsidiaries and the Group's investments accounted for using the equity method as at
+31 December 2021 are set out in notes 19 and 20, respectively, to the consolidated financial statements, and the list
+of directors of each of the Company's subsidiaries is available on the Company's website.
+SUBSIDIARIES AND INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
+At no time during the year ended 31 December 2021 have the directors, their close associates or any shareholder
+of the Company (which to the knowledge of the Board owns more than 5% of the number of issued shares of the
+Company) had any interest in these five largest suppliers.
+CONTINUOUS EVOLVEMENT OF CORPORATE GOVERNANCE PRACTICES
+We will closely study the development of governance practices among the world's leading corporations, future
+evolution of the relevant regulatory environment and the requirements of the investors on an ongoing basis. We will
+also review and enhance our corporate governance procedures and practices from time to time to keep improving
+our capabilities in fulfilling our governance responsibilities, so as to meet our shareholders' expectations and ensure
+the long-term sustainable development of the Company.
+Annual Report 2021 67
+HUMAN RESOURCES
+DEVELOPMENT
+Paul CHOW Man Yiu
+We continued to optimize our human resources planning. We further optimized our workforce structure through the
+"Diamond Plan" and implemented rigid control over the scale of our workforce. We adopted differential allocation of
+human resources: on the one hand, we expanded our allocation of resources to areas of transformation, emerging
+units and innovative teams; on the other hand, we strictly controlled the scale of our workforce in traditional areas.
+We continued to implement our "T-H-T" ("Ten-Hundred-Thousand") talent scheme and create a centralized,
+unified, Group-wide expert management system. We promoted the building of expert teams at each level and the
+collaboration of talents in scientific and technological innovation. We rolled out an innovative "Golden Seed Plan"
+campus recruitment program and proactively recruited high-quality graduates with great potential in key areas,
+cultivating top talents that could serve as our future backbones for innovation. Meanwhile, we also continued to
+implement our "Mobility Plan" talent exchange program, making the most out of the synergy within the Company's
+talent force.
+We continued to deepen our incentive mechanism reforms. We persisted to be performance-driven and
+implemented a labour cost allocation mechanism whereby one's reward is proportionate to the value created.
+We formulated special incentive schemes rewarding performance that exceeded expectations or made special
+contributions, and encouraged our different units to explore their limits and perform beyond expectations. In relation
+to key businesses, we offered tailored and targeted incentives to facilitate the integrated development of CHBN
+markets. We established a comprehensive incentive system dedicated to our scientific and technological innovation
+forces, and formulated incentive policies tailored for two "scientific reform" companies and the "Jiutian", "Wutong"
+and other core teams in areas of transformation. We thoroughly advanced our "special zone" market-based incentive
+mechanism and further embraced remuneration as a means to motivate. We also continued to offer a "basket" of
+remuneration and incentive policies including internalization of core capabilities and attractive annuity programs, and
+enhanced incentives for our core backbone employees.
+We continued to promote the transformation and reshaping of our staff's capabilities. We fully advanced our
+package of "new drivers capability enhancement" measures and speeded up our incubation of digitalized and
+intelligent professional talents. We required all our staff to be equipped with a set of standard skills, based on which
+we commenced a series of programs to empower them with knowledge on 5G+, smart mid-end platform, CHBN
+markets, products and so on, thereby forming a training model characterised by rapid acquisition of knowledge, low
+cost, broad coverage and high efficiency. Based on our internalized core capabilities, we provided dedicated training
+and skill certification to our talents in cloud reform, 5G and other core technical fields, reshaped our staff's skillset
+on security and software development, and offered practical training on areas such as cloud reform, 5G and DICT.
+Based on the improved capabilities of our frontline personnel, we formulated a Group-wide system on qualification
+of grid administrators and completed the first round of certification, and also provided training for senior customer
+managers and smart family engineers, thereby entering a "new highway" of transforming our talents' capabilities.
+68 China Mobile Limited
+REPORT OF
+DIRECTORS
+The directors take pleasure in submitting their annual report together with the audited financial statements for the
+year ended 31 December 2021.
+PRINCIPAL ACTIVITIES
+The Group's principal activity is providing telecommunications and information services in 31 provinces, autonomous
+regions and directly-administered municipalities in the mainland of China and Hong Kong. The principal activity of the
+Company is investment holding.
+The revenue of the Group during the financial year consisted primarily of revenue generated from the provision of
+telecommunications and information services.
+MAJOR CUSTOMERS AND SUPPLIERS
+Purchases for the Group mainly included network equipment purchases, and payments in relation to network
+operation and support expenses and interconnection arrangements. Purchases from the largest supplier for the year
+represented 16% of the Group's total purchases. The Group's aggregate purchases with its five largest suppliers
+was RMB180.0 billion, accounting for 36% of the Group's total purchases in 2021.
+Stephen YIU Kin Wah
+YANG Qiang
+70 China Mobile Limited
+OF
+"DIRECTORS
+Our IA Dept. conducts annual evaluation with respect to the effectiveness of disclosure internal controls and
+procedures and its performance, and issues audit reports for management and the Audit Committee to evaluate.
+Based on such reports, our principal executive and principal financial officers shall make written statements with
+respect to our annual report on Form 20-F and take personal responsibilities in accordance with the requirements
+of the US Securities Act. The Disclosure Committee can revise the disclosure internal controls and procedures in
+accordance with its performance and the development of relevant laws with approval of the senior management.
+The revised internal control procedures and articles shall be circulated to all departments and subsidiaries within the
+Group.
+Pursuant to Article 109 of the Company's Articles of Association, Mr. WANG Yuhang will retire by rotation at the
+forthcoming annual general meeting of the Company and, being eligible, offer himself for re-election. Besides, Dr.
+Moses CHENG Mo Chi and Mr. Paul CHOW Man Yiu will also retire by rotation at the forthcoming annual general
+meeting of the Company. Dr. Moses CHENG Mo Chi will not offer himself for re-election as he would like to devote
+more time to other businesses. Mr. Paul CHOW Man Yiu will also not offer himself for re-election by reason of
+age. Each of Dr. Moses CHENG Mo Chi and Mr. Paul CHOW Man Yiu has confirmed that there is no disagreement
+with the Board and there is no matter relating to his retirement that needs to be brought to the attention of the
+shareholders of the Company. The Company is actively identifying suitable candidates for new independent non-
+executive director(s), and will make relevant announcement(s) in due course.
+The service contract of Mr. WANG Yuhang does not provide for a specified length of service and Mr. WANG
+Yuhang will be subject to retirement by rotation and re-election at annual general meetings of the Company every
+three years. Mr. WANG Yuhang is entitled to an annual director's fee of HK$180,000 as proposed by the Board and
+approved by the shareholders of the Company. Director's fees are payable on a time pro-rata basis for any non-full
+year's service. Mr. WANG Yuhang has voluntarily waived his annual director's fees. The remuneration of Mr. WANG
+Yuhang has been determined with reference to his duties, responsibilities and experience, and to prevailing market
+conditions. Details of the remuneration of the directors of the Company are set out in note 11 to the consolidated
+financial statements.
+Mr. WANG Yuhang does not have an unexpired service contract which is not determinable by the Company or any of
+its subsidiaries within one year without payment of compensation, other than under normal statutory obligations.
+Save as disclosed herein, there are no other matters relating to the re-election of Mr. WANG Yuhang that need to be
+brought to the attention of the shareholders of the Company nor is there any information to be disclosed pursuant to
+any of the requirements of Rule 13.51(2) of the Hong Kong Listing Rules.
+DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF SIGNIFICANCE
+No transaction, arrangement or contract of significance to which the Company, any of its holding companies or
+subsidiaries, or any of its holding companies' subsidiaries has been a party and in which a director of the Company
+or an entity connected with a director of the Company is or was materially interested, whether directly or indirectly,
+subsisted at the end of the year or at any time during the year.
+The Group's aggregate revenue with its five largest customers was RMB25.6 billion, accounting for 3% of the
+Group's total revenue in 2021.
+The biography of Mr. WANG Yuhang is set out on page 8 of this annual report. Except as disclosed in his biography,
+Mr. WANG Yuhang has not held any other directorships in any listed public companies in the last three years. Further,
+except as noted in his biography, Mr. WANG Yuhang is not connected with any directors, senior management or
+substantial or controlling shareholders of the Company. Mr. WANG Yuhang does not have any interests in the shares
+of the Company within the meaning of Part XV of the SFO.
+In 2021, our human resources work was centered on further implementing China Mobile's "Powerhouse"
+strategy. With a focus on key areas such as allocation of resources, team transformation, reform of mechanisms
+and innovation in management, we strove to give full play to the potential of human resources work on driving
+implementation of strategies, business development, shaping of capabilities, attainment of operating results and so
+on, thereby providing strong organizational safeguards and talent support for building a world-class enterprise.
+Particulars of the employee retirement benefits of the Group are set out in note 6 to the consolidated financial
+statements.
+inspecting journals entries relating to revenue which met
+specific risk-based criteria, and comparing details of these
+journals entries with relevant underlying documentation.
+REPORT OF
+DIRECTORS
+SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES AND
+UNDERLYING SHARES
+The Company has been notified of the following interests in the Company's issued shares as at 31 December 2021
+amounting to 5% or more of the ordinary shares in issue:
+Long Positions in the Shares and Underlying Shares of the Company
+(i) China Mobile Communications Group Co., Ltd.
+("CMCC")
+(!!)
+China Mobile (Hong Kong) Group Limited
+("CMHK (Group)")
+(iii) China Mobile Hong Kong (BVI) Limited
+("CMHK (BVI)")
+Ordinary shares held
+directly
+indirectly
+14,890,116,842
+14,890,116,842
+14,890,116,842
+Percentage of the
+total number of
+issued shares
+72.72%
+72.72%
+Annual Report 2021 75
+Please refer to note 37 headed "Share-based Payment" to the consolidated
+financial statements for details.
+Due to the subjective nature of and uncertainty related to a number of
+assumptions of the expected future performance input to the binomial model
+as well as certain inherent limitations of the model itself, the calculation is
+subject to certain fundamental limitations. The value of share options varies
+with different variables of certain subjective assumptions, and any change to
+the variables used may materially affect the estimation of the fair value of the
+share options.
+HK$4.00 per ordinary share (weighted average fair value calculated using the
+binomial model with the grant date as the date of measurement)
+Grant date
+Exercise price
+Closing price immediately before
+the grant date
+302,096,876
+12 June 2020
+HK$55.00 per ordinary share (determined in accordance with the fair market
+price principle, with the base day for pricing being the grant date)
+HK$54.75 per ordinary share
+74 China Mobile Limited
+REPORT OF
+72.72%
+"DIRECTORS
+No share options shall be exercised within 24 months from the grant date;
+subject to the satisfaction of the conditions for vesting as provided under
+the Scheme, the share options granted shall be vested in three batches as
+follows:
+(i)
+The first batch (being 40% of the share options granted) will be vested
+on the first trading day after 24 months from the grant date
+(ii)
+The second batch (being 30% of the share options granted) will be
+vested on the first trading day after 36 months from the grant date
+Time when vesting period ends
+Value of share options granted
+(iii)
+The third batch (being 30% of the share options granted) will be vested
+on the first trading day after 48 months from the grant date
+10 years from the grant date
+Vesting period
+Note: In light of the fact that CMCC and CMHK (Group) directly or indirectly control one-third or more of the voting rights in the shareholders'
+meetings of CMHK (BVI), in accordance with the SFO, the interests of CMHK (BVI) are deemed to be, and have therefore been included in, the
+interests of CMCC and CMHK (Group).
+Apart from the foregoing, as at 31 December 2021, no other person (other than a director or the chief executive of
+the Company) had any interests or short positions in the shares and underlying shares of the Company as recorded
+in the register required to be kept under section 336 of the SFO, or as otherwise notified to the Company and the
+Hong Kong Stock Exchange.
+CONNECTED TRANSACTIONS
+The auditors of the Company were engaged to report on the Group's Continuing Connected Transactions in
+accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other
+Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 (Revised)
+"Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the Hong
+Kong Institute of Certified Public Accountants. The auditors have issued their unqualified letter containing their
+findings and conclusions in respect of the Continuing Connected Transactions in accordance with Rule 14A.56 of the
+Hong Kong Listing Rules. The auditors' letter has confirmed that nothing has come to their attention that cause them
+to believe that the Continuing Connected Transactions:
+(A)
+have not been approved by the Board;
+(B)
+(C)
+were not, in all material respects, in accordance with the pricing policies of the Group as stated in this annual
+report;
+were not entered into, in all material respects, in accordance with the relevant agreements governing the
+Continuing Connected Transactions; and
+(D) have exceeded their respective annual caps for the financial year ended 31 December 2021 set out in the
+previous announcements of the Company.
+A copy of the auditors' letter in relation to the Continuing Connected Transactions has been provided by the
+Company to the Hong Kong Stock Exchange.
+(iii) according to the agreements governing such transactions on terms that are fair and reasonable and in the
+interests of the shareholders of the Company as a whole.
+In respect of the Continuing Connected Transactions, the Company has complied with the disclosure requirements
+under the Hong Kong Listing Rules in force from time to time, and has followed the policies and guidelines as laid
+down in the guidance letter HKEX-GL73-14 issued by the Hong Kong Stock Exchange when determining the price
+and terms of the transactions conducted during the year ended 31 December 2021.
+OF
+"DIRECTORS
+PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
+During the year ended 31 December 2021, neither the Company nor any of its subsidiaries purchased, sold or
+redeemed any of the Company's listed securities.
+FINANCIAL SUMMARY
+A summary of the results and of the statements of the assets and liabilities of the Group for the last five financial
+years is set out on pages 164 to 166 of this annual report.
+EMOLUMENT POLICY
+In order to continue to maintain the sustainable development of the Group's competitiveness, the Group has
+always emphasized the importance of recruiting, incentivizing, developing and retaining its employees, paid close
+attention to the external competitiveness, internal fairness of its remuneration structure and the cost-effectiveness
+of remuneration and emphasized the importance of the correlation between remuneration management and
+performance management. For the year ended 31 December 2021, employees' remuneration comprised a basic
+salary and a performance-based bonus.
+EMPLOYEE RETIREMENT BENEFITS
+78 China Mobile Limited
+31 December 2021
+on normal commercial terms or better; and
+in the ordinary and usual course of its business;
+Continuing Connected Transactions
+Details of the continuing connected transactions are set out in note 40 to the consolidated financial statements.
+For the financial year ended 31 December 2021, the following continuing connected transactions (the "Continuing
+Connected Transactions") have not exceeded their respective annual caps:
+(1)
+the total value of right-of-use assets recognized by the Group pursuant to the lease of properties from CMCC
+and its subsidiaries did not exceed RMB3,800 million and the aggregate property management charges paid
+by the Group to CMCC were below 0.1% of each of the applicable percentage ratios set out in Rule 14.07 of
+the Hong Kong Listing Rules. The amount of revenue from comprehensive support services received by the
+Group from CMCC was below 0.1% of each of the applicable percentage ratios set out in Rule 14.07 of the
+Hong Kong Listing Rules. The charges payable in respect of properties leased are determined with reference
+to any one of the following benchmarks: (i) the value determined by independent intermediaries; (ii) applicable
+market rates or charges which are publicly published; or (iii) rates charged by the lessor or its subsidiaries to
+independent third parties, whilst the charges payable in respect of properties which CMCC or its subsidiaries
+lease from third parties and sub-let to the Group are determined according to the actual rent payable by CMCC
+or its subsidiaries to such third parties together with the amount of any tax payable;
+76 China Mobile Limited
+REPORT OF
+"DIRECTORS
+(2) leasing fees paid by the Group for the leasing of telecommunications network operation assets by the Group
+from CMCC did not exceed RMB6,500 million. The leasing fees are determined with reference to the prevailing
+market rates. In determining the market rates for the leasing fees, the Group has taken into account the
+charges payable by the Group and CMCC to independent third parties (including other industry players) as well
+as the charges receivable by the Group and CMCC from independent third parties (including other industry
+players). The leasing fees payable by the Group to CMCC were not more than the leasing fees charged to
+independent third parties for same kinds of network operation assets. The aggregate amount of leasing fees
+received by the Group from CMCC was below 0.1% of each of the applicable percentage ratios set out in Rule
+14.07 of the Hong Kong Listing Rules; and
+(!!)
+(3)
+The transactions referred to in paragraph (1) above were entered into pursuant to the 2020-2022 property leasing and
+management services agreement dated 2 January 2020 between the Company and CMCC (the "2020-2022 Property
+Leasing Agreement"). The Company announced the entering into and the terms of the 2020-2022 Property Leasing
+Agreement on 2 January 2020. The 2020-2022 Property Leasing Agreement has a term of three years commencing
+on 1 January 2020.
+The transactions referred to in paragraph (2) above were entered into pursuant to the 2021 telecommunications
+network operation assets leasing agreement between the Company and CMCC dated 8 January 2021 (the
+"2021 Telecommunications Network Operation Assets Leasing Agreement"). The entering into of the 2021
+Telecommunication Network Operation Assets Leasing Agreement was announced by the Company on 8 January
+2021. The 2021 Telecommunications Network Operation Assets Leasing Agreement has a term of one year
+commencing on 1 January 2021.
+The transactions referred to in paragraph (3) above were entered into pursuant to the 2021 Telecommunication
+Facilities Construction Services Extension Letter dated 8 January 2021 that renewed the 2020 telecommunication
+facilities construction services agreement between the Company and CMCC dated 2 January 2020 (the "2020
+Telecommunication Facilities Construction Services Agreement"). The entering into of the 2021 Telecommunication
+Facilities Construction Services Extension Letter was announced by the Company on 8 January 2021. The renewed
+2020 Telecommunication Facilities Construction Services Agreement has a term of one year commencing on 1
+January 2021.
+Annual Report 2021 77
+REPORT OF
+DIRECTORS
+CMCC is the ultimate controlling shareholder of the Company and therefore, a connected person of the Company.
+Accordingly, all the transactions referred to in paragraphs (1) to (3) above constitute continuing connected
+transactions for the Company under the Hong Kong Listing Rules.
+In the opinion of the independent non-executive directors, the Continuing Connected Transactions were entered into
+by the Group:
+(i)
+services charges received by the Group for the provision of telecommunication facilities construction
+services by the Group to CMCC and its subsidiaries did not exceed RMB2,000 million. The provision of
+telecommunication facilities construction services by the Group to CMCC and its subsidiaries in respect of
+individual projects are subject to public tender process and the pricing for the telecommunication facilities
+construction services are primarily based on market rates as determined through the public tender process and
+the relevant standards laid down in applicable regulations in the PRC. For individual projects where the public
+tender process is not applicable, the selection criteria and price determination mechanism are similar to that
+applied in a public tender process.
+- Outstanding as at
+- Lapsed and cancelled during
+the year
+(2,605,826)
+to the members of China Mobile Limited
+(incorporated in Hong Kong with limited liability)
+Independent auditor's report
+KPMG
+Annual Report 2021 79
+INDEPENDENT AUDITOR'S REPORT
+Hong Kong, 23 March 2022
+Chairman
+Yang Jie
+By order of the Board
+OPINION
+Please also refer to the sections headed "Chairman's Statement", "Business Review", "Financial Review" and
+"Human Resources Development" in this annual report (which form part of this Report of Directors).
+LIST OF DIRECTORS OF SUBSIDIARIES
+A resolution will be proposed at the forthcoming annual general meeting for the re-appointment of KPMG and KPMG
+Huazhen LLP as the auditors of the Group.
+AUDITORS
+As at the date of this annual report and based on the information that is publicly available to the Company and to the
+knowledge of the directors of the Company, the Company has maintained the public float prescribed under the Hong
+Kong Listing Rules.
+Annual Report 2021 71
+REPORT OF
+DIRECTORS
+PERMITTED INDEMNITY PROVISION
+Pursuant to Article 175 of the Company's Articles of Association, every director or other officer of the Company shall
+be indemnified out of the assets of the Company against all liabilities (to the extent permitted by the Hong Kong
+Companies Ordinance) sustained or incurred by such director or officer in or about the execution of his office or
+otherwise in relation thereto. In addition, the Company has purchased directors and officers' liabilities insurance on
+behalf of its directors and officers.
+A list of directors of the Group's subsidiaries is set out on the Company's website.
+DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND
+DEBENTURES
+We have audited the consolidated financial statements of China Mobile Limited ("the Company") and its subsidiaries
+("the Group") set out on pages 84 to 163, which comprise the consolidated balance sheet as at 31 December 2021,
+the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
+consolidated statement of cash flows for the year then ended and notes to the consolidated financial statements,
+including a summary of significant accounting policies.
+BASIS FOR OPINION
+recalculating the balances of accounts receivable and
+advances from customers at period end with the use of
+computer assisted audit techniques using data extracted
+from the billing systems and reconciling the results to the
+Group's financial records; and
+reconciling selected revenue records in the Group's
+accounting system to external cash collection records;
+selecting bills issued to customers, on a sample basis, and
+comparing to the services subscribed by the customers,
+the corresponding accounts receivable details, and, where
+appropriate, collection records in the billing systems;
+selecting service packages, on a sample basis, comparing
+services offering in the selected packages and the package
+prices with the relevant settings in the billing systems;
+assessing the appropriateness of the accounting policies
+adopted in revenue recognition for different revenue
+streams by inspecting the main terms and conditions in
+selected contracts;
+the completeness and accuracy of bill generation and
+the end-to-end reconciliation controls from the billing
+systems to the accounting system;
+the general IT controls for the billing systems,
+including access to program controls, program change
+controls, program development controls and computer
+operation controls;
+assessing, with the assistance of our IT specialists, the
+design, implementation and operating effectiveness of
+management's key internal controls over:
+Our audit procedures to assess the recognition of revenue
+included the following:
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position
+of the Group as at 31 December 2021 and of its consolidated financial performance and its consolidated cash
+flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSS") issued by
+the International Accounting Standards Board ("IASB") and Hong Kong Financial Reporting Standards ("HKFRSS")
+issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and have been properly prepared in
+compliance with the Hong Kong Companies Ordinance.
+How the matter was addressed in our audit
+The accuracy of revenue recorded in the
+consolidated financial statements is an inherent
+industry risk because the billing systems of
+telecommunications companies are complex
+which process large volumes of data with a
+combination of different services provided and
+products sold.
+The Group's revenue is primarily generated from
+the provision of various telecommunications
+services and sales of telecommunication related
+products.
+The Key Audit Matter
+Refer to note 2(r) and note 4 of the consolidated financial statements.
+Revenue recognition
+Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
+consolidated financial statements of the current period. These matters were addressed in the context of our audit
+of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
+separate opinion on these matters.
+Independent Auditor's Report (Continued)
+80 China Mobile Limited
+We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAS") issued by the HKICPA.
+Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of
+the consolidated financial statements section of our report. We are independent of the Group in accordance with
+the HKICPA's Code of Ethics for Professional Accountants ("the Code") and we have fulfilled our other ethical
+responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
+appropriate to provide a basis for our opinion.
+We identified revenue recognition as a key
+audit matter because revenue is one of the
+key performance indicators of the Group and
+involves complex IT systems which give rise to
+an inherent risk that revenue transactions may
+be incorrectly recorded using manual journals
+outside the billing systems or recorded in the
+incorrect period.
+PUBLIC FLOAT
+Details of the directors' holding of ordinary shares of the Company as at 31 December 2021 are as follows:
+Long Positions in the Shares and Underlying Shares of the Company
+Moses CHENG Mo Chi
+REPORT OF
+DIRECTORS
+Application or Acceptance Fee
+No fee shall be payable by a scheme participant on the application for or acceptance of the grant of share options.
+As a formality, a scheme participant shall pay HK$1.00 as nominal consideration for acceptance of the grant of share
+options.
+Lapse and Cancellation of Share Options
+If any of certain events (including but not limited to a failure in performing his/her duties effectively or a serious
+breach or dereliction of his/her duties) occurs in relation to a scheme participant, his/her share options will
+automatically lapse, and the Board shall cease granting new share options, cancel share options which are not yet
+exercised by him/her, and recover any gains obtained by him/her from the exercise of the share options.
+Details of Share Options During the Year Ended 31 December 2021
+During the year ended 31 December 2021, the Company has not granted any share options under the Scheme.
+Details of options under the Scheme during the year ended 31 December 2021 are set forth as follows:
+Annual Report 2021 73
+Grantees
+underlying share options granted:
+- Outstanding as at
+Employees and staff members of the Company
+304,702,702
+1 January 2021
+- Granted during the year
+0
+- Exercised during the year
+0
+Number of ordinary shares
+Director
+Represents approximately 9.58% of the total share capital of the Company as at the date of this report (being 23 March 2022).
+The maximum number of ordinary shares to be issued upon the exercise of the share options granted under the
+Scheme (and any other schemes) shall not in aggregate exceed 2,047,548,289 shares*, being 10% of the total share
+capital of the Company as at the date of approval of the Scheme.
+Capacity
+Beneficial owner
+Ordinary
+shares held
+300,000
+Percentage
+of the total
+number of
+issued shares*
+0.00%
+*
+The calculation is based on the total number of issued ordinary shares of the Company (i.e. 20,475,482,897 ordinary shares) as at 31 December
+2021, and rounded off to two decimal places.
+Apart from those disclosed herein, as at 31 December 2021, none of the directors nor the chief executive of the
+Company had any interests or short positions in any of the shares, underlying shares or debentures of the Company
+or any of its associated corporations (within the meaning of Part XV of the SFO) that is recorded in the register
+required to be kept under section 352 of the SFO or otherwise notified to the Company and the Hong Kong Stock
+Exchange pursuant to the Model Code.
+72 China Mobile Limited
+OF
+"DIRECTORS
+Unless approved at a general meeting, the ordinary shares issued and to be issued upon the exercise of the share
+options granted to any individual scheme participant (including exercised or outstanding share options) during the
+effective period of the Scheme shall not exceed 1% of the total share capital of the Company.
+DIRECTORS', CHIEF EXECUTIVE'S AND EMPLOYEES' RIGHTS TO ACQUIRE SHARES
+Share Option Scheme of the Company
+Pursuant to a resolution passed at the annual general meeting of the Company held on 20 May 2020, a share option
+scheme of the Company (the "Scheme") was adopted. For details of the Scheme, please refer to the following
+paragraphs and also the Company's circular dated 14 April 2020 in relation to "Proposed Adoption of Share Option
+Scheme".
+Purposes
+The Scheme aims at (1) further improving the governance structure of the Company, and establishing and improving
+the balance of interests mechanism between employees and shareholders, investors and the Company; (2)
+establishing a benefit sharing and risk sharing mechanism among shareholders, the Company and employees to
+enhance the Company's performance and long-term stable development; and (3) effectively attracting, motivating
+and retaining the core backbone employees of the Company to support the Company's strategic transformation and
+long-term development.
+Scope of Scheme Participants
+Scheme participants are in principle limited to directors (excluding independent non-executive directors) and senior
+management of the Company, and backbone management, technical and business personnel who have a direct
+impact on the Company's operating performance and sustainable development. The assessment results of the
+scheme participants shall meet or exceed the relevant standards for performance appraisal of the Company.
+Effective Period
+The Scheme will be effective for a term of 10 years commencing from 20 May 2020, unless terminated in advance
+under relevant requirements of the Scheme.
+Maximum Quantity of Grant
+Save as disclosed below, at no time during the year ended 31 December 2021 was the Company, any of its holding
+companies or subsidiaries, or any of its holding companies' subsidiaries a party to any arrangement to enable the
+directors or chief executive of the Company or any of their spouses or children under eighteen years of age to
+acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
+KEY AUDIT MATTERS