MIRA INFORM REPORT

Report Date :

30.09.2014

IDENTIFICATION DETAILS

Name :	NEW WORLD TELECOMMUNICATIONS LTD.
Registered Office :	17/F., Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon
Country :	Hong Kong
Date of Incorporation :	14.01.1992
Com. Reg. No.:	15229049
Legal Form :	Private Limited Company
Line of Business :	Subject is engaged in Telecommunication Services.
No of Employees :	Over 55,000 [As at 30.06.2013]

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Exist

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Hong Kong	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

HONG KONG - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 12% of total system deposits in Hong Kong by the end of 2013. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies.

Source : CIA

Company Name & address

NEW WORLD TELECOMMUNICATIONS LTD.

ADDRESS: 17/F., Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon, Hong Kong.

PHONE: 852-2138 2138

FAX: 852-2133 2133, 2133 2137

E-MAIL: nwtcs@newworldtel.com

corporatesales@newworldtel.com

MANAGEMENT

Managing Director: Dr. Wai Fung Man, Norman

SUMMARY

Incorporated on: 14th January, 1992.

Organization: Private Limited Company.

Capital: Nominal: HK$10,000,000.00

Issued: HK$10,000,000.00

Business Category: Telecommunication Service Provider.

Group Revenues: HK$46,779.9 million (Year ended 30-06-2013)

Group Employees: Over 55,000. (As at 30-06-2013)

Main Dealing Banker: The Hong Kong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Good.

Name

NEW WORLD TELECOMMUNICATIONS LTD.

ADDRESS

Registered Office:-

30/F., New World Tower, 16-18 Queen’s Road Central, Hong Kong.

Head Office:-

17/F., Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon, Hong Kong.

Other Offices:-

China (Beijing, Guangzhou & Shenzhen), Taiwan, Singapore, UK (London) and USA (Los Angeles & Reston).

Holding Company:-

Concord Ideas Ltd., British Virgin Islands.

Ultimate Holding Company:-

New World Development Co. Ltd., Hong Kong.

Subsidiary:-

New World iMedia Solutions Ltd., Hong Kong.

Associated Companies:-

New World Nominee Ltd., Hong Kong.

New World Paging Ltd., Hong Kong.

New World Telephone Holdings Ltd., Hong Kong.

Shenzhen New World Xianglong Network Technology Co. Ltd., China.

Shenzhen New World Xianglong Technology Development Co. Ltd., China.

New World Development Group of Companies

BUSINESS REGISTRATION NUMBER

15229049

COMPANY FILE NUMBER

0340298

MANAGEMENT

Group Managing Director: Dr. Cheng Kar Shun, Henry

Chief Executive Officer & Managing Director: Dr. Wai Fung Man, Norman

CAPITAL

Nominal Share Capital: HK$10,000,000.00 (Divided into 9,999,998 Ordinary shares and 2 Non-voting Deferred shares of HK$1.00 each)

Issued Share Capital: HK$10,000,000.00

SHAREHOLDERS

(As per registry dated 14-01-2014)

Name		No. of shares
		Ordinary	Non-voting Deferred
Concord Ideas Ltd. Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands.		9,999,998	-
New World Telephone Holdings Ltd., Hong Kong.		-	1
New World Nominee Ltd., Hong Kong.		-	1
		––––––––	––
	Total:	9,999,998 =======	2 =

DIRECTORS

(As per registry dated 14-01-2014)

Name (Nationality)	Address
CHENG Kar Shun (Chinese)	12 Repulse Bay Road, Hong Kong.
TO Hin Tsun, Gerald	Flat C3, Springfield Garden, 5-9 Shouson Hill Road West, Hong Kong.
WAI Fung Man	Flat B, 26/F., Block 2, Parc Palais, King’s Park, 18 Wylie Road, Kowloon, Hong Kong.
AU Tak Cheong	Flat 2505, 25/F., Block N, Kornhill, Hong Kong.

SECRETARY

AU Tak Cheong (As per registry dated 14-01-2014)

HISTORY

The subject was incorporated on 14th January, 1992 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Rowenty Power Ltd., name changed to New World Telephone Ltd. on 26th March, 1992; and further to the present style on 13th December, 2002

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities & Lines: Telecommunication Services.

Group Employees: Over 55,000. (As at 30-06-2013)

Business Territories: Hong Kong, China, Taiwan, Singapore, etc.

Group Revenues: HK$35,620.1 million (Year ended 30-06-2012)

HK$46,779.9 million (Year ended 30-06-2013)

HK$27,180.2 million (6 months ended 31-12-2013)

Terms/Services: COD or as per contracted.

GOVERNMENT CONTRACT AWARDED SINCE 1990:

Date	GN No.	Particulars	Amount
29-10-2004	GN7004	Provision of communication line services	HK$180,000

MEMBERSHIP: The Hong Kong General Chamber of Commerce, Hong Kong. [Membership No. HKN0185]

FINANCIAL INFORMATION

Nominal Share Capital: HK$10,000,000.00 (Divided into 9,999,998 Ordinary shares and 2 Non-voting Deferred shares of HK$1.00 each)

Issued Share Capital: HK$10,000,000.00

Alternation of Capital:-

14-01-1992	paid up	HK$ 2.00
31-01-2002	paid up	HK$ 9,999,998.00
		––––––––––––––––
Total:	paid up	HK$ 10,000,000.00 ==============

Group Profit Attributable to Shareholders:-

HK$10,139.0 million (Year ended 30-06-2012)

HK$14,148.7 million (Year ended 30-06-2013)

HK$ 4,529.2 million (6 months ended 31-12-2013)

Profit or Loss: Group traded at a profitable angle.

Condition: Keeping in an active manner.

Facilities: Making active use of general banking facilities.

Payment: So far so good.

Commercial Morality: Satisfactory.

Bankers:-

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Hang Seng Bank Ltd., Hong Kong.

Deutsche Bank AG, Hong Kong Branch.

Standing: Very Good.

GENERAL

New World Telecommunications Ltd. [NWT/subject] is a wholly-owned subsidiary of Concord Ideas Ltd. which is a BVI-registered firm. Its ultimate holding company New World Development Co. Ltd. [NWD] is a public listed company in Hong Kong.

NWD is a property developer. Its shares have been listed on The Stock Exchange of Hong Kong Ltd. bearing stock code 0017 since 23rd November, 1972. NWD is an investment holding company of the New World Development Group. The Group is principally engaged in property development and investment, contracting, provision of services (including property and facility management, transport and other services), infrastructure operations (including the operation of roads, power plants, water treatment, waste management plants, container handling, logistics and warehousing services), hotel and restaurant operations, department store operations, telecommunication services, and telecommunications, media, technology and strategic businesses.

Incorporated in January 1992, the subject is one of the members of the New World Development Group. As a pioneering telecom service provider in Hong Kong, the subject is dedicated to offering international voice and innovative data services for its customers in Hong Kong and overseas.

The subject’s wholly-owned subsidiary New World iMedia Solutions Ltd. [NW iMedia] provides one-stop, comprehensive online advertising solutions, including search marketing, online display advertising, electronic direct mail and online creative development, helping customers bring their promotional messages to the right target audience over the internet.

Alternative communication solutions through mobile application are continuously affecting the traditional wholesale IDD business. In order to offset the downturn in Wholesale IDD business, the subject continues to explore business opportunities with Tier 2 carriers from Europe and Middle East regions. New cables, Asia Submarine-cable Express (ASE) system and Southeast Asia Japan Cable (SJC) system, were already landed in 2013 and NWT is able to provide to the international carriers with data connectivity between cable stations and their city point of presences and other required locations in Hong Kong.

Regarding the Cloud Computing business, the subject adopts multi-vendor approach for the new cloud platform expansion using world-class global vendors, in order to increase the overall competitiveness and customer coverage. NWT has added new values to its cloud solution with more advanced security services for further protection to the customers, such as Global Traffic Management, Two-Factor Authentication and SSL-VPN solution for enhanced security control. New Cloud Mail service was launched in March 2013 to strengthen the Cloud application offerings the needs of SME and Corporate sectors. Besides, Global Load Balancing feature was also launched in Cloud Platform.

In response to the growth of market demand, NWT will expand its Internet Data Centre with an additional floor area of over 20,000 sq ft to provide additional racks. The first phase of additional 106 racks has been successfully launched in March 2013.

In FY2013, NWD recorded consolidated revenues of HK$46,779.9 million, and profit attributable to shareholders of the Company amounted to HK$14,148.7 million, up 31.3% and 39.5% year-on-year respectively. The Group’s underlying profits amounted to HK$6,327.3 million, representing 26.1% year-on-year growth. Total segment results (including share of results of jointly controlled entities and associated companies) amounted to HK$16,484.8 million, up 24.5% year-on-year.

In FY2013, telecommunications business segment of the Group recorded a profit of HK$239.5 million, up 34.9% year-on-year. The significant growth was mainly driven by the strong performance of CSLNWM that added 425,000 new customers, bringing the total customer to 3.9 million in FY2013.

For the first half of FY2014, NWD recorded consolidated revenues of HK$27,180.2 million. As the increase in changes in fair value of investment properties during the period under review decreased by HK$5,210.5 million year-on-year to HK$440.2 million, the profit attributable to shareholders of the NWD for the first half of FY2014 amounted to HK$4,529.2 million, representing a decrease of 54.6% as compared with same period last year. However, if stripping out the changes in fair value of investment properties and net other gains, the Group’s underlying profit amounted to HK$4,207.5 million, representing an increase of 3%.

In the first half year of FY 2014 NWT continued to explore business opportunities with Tier 2 carriers from Europe and Middle East regions. New cables, Asia Submarine-cable Express (ASE) system and Southeast Asia Japan Cable (SJC) system, were already landed in 2013 and NWT is able to provide to the international carriers with data connectivity between cable stations and their city point of presences and other required locations in Hong Kong. In response to the growth of market demand, NWT will expand its Internet Data Centre with an additional floor area of over 20,000 sq ft to provide additional racks in phases in 2013 and 2014. The second phase of additional 227 racks is expected to launch in the first half of 2014.

NWT is fully supported by the New World Development Group.

On the whole, consider the subject good for normal business engagements.

REMARKS

Brief personal history of the principal directors:-

Dr. CHENG Kar Shun, Henry, BA, MBA, DBA(Hon), LLD(Hon), GBS, aged 66, appointed as Director in October 1972, Executive Director in 1973 and became Managing Director from 1989. Dr. Cheng is the Chairman and Managing Director of New World China Land Ltd., the Chairman of NWS Holdings Ltd., the Chairman and Non-executive Director of New World Department Store China Ltd., the Chairman of International Entertainment Corporation, an Independent Non-executive Director of HKR International Ltd., and a Non-executive Director of Lifestyle International Holdings Ltd., all of them are listed public companies in Hong Kong. He was the Chairman of Taifook Securities Group Ltd. (a listed public company in Hong Kong) up to his resignation on 13th January, 2010. Dr. Cheng is also the Managing Director of New World Hotels (Holdings) Ltd. and a Director of certain subsidiaries of the Group. He is a Director of Cheng Yu Tung Family (Holdings) Ltd., Centennial Success Ltd. and Chow Tai Fook Enterprises Ltd., all of them are substantial shareholders of NWD. Dr. Cheng is the Chairman of the Advisory Council for The Better Hong Kong Foundation and a Standing Committee Member of the Eleventh Chinese People’s Political Consultative Conference of The People’s Republic of China. In 2001, Dr. Cheng was awarded the Gold Bauhinia Star by the Government of the Hong Kong Special Administrative Region.

Dr. WAI Fung Man, Norman has been Managing Director of the subject since November 2007 and serves as its Chief Executive Officer. Dr. Wai serves as Managing Director of New a-IKOR Ltd. He served as Chief Executive Officer of New World Mobility Ltd. from July 2004 to February 2007 and its President. Prior to joining New World Mobility Ltd., Dr. Wai had worked for various telecommunications companies in North America, Europe and Asia, being responsible for the design, construction and operation of various wireless networks. He has over 30 years of experience in the telecommunications industry. He was a Senior Executive of various telecommunications companies in Europe, Canada and Hong Kong. He was appointed as Executive Director of New World TMT Ltd. in January 2003. He serves as Board Director of CSL-New World Mobility Group. He served as an Executive Director of New World Mobility Ltd. from July 2004 to February 2007. Dr. Wai holds a Doctoral degree in Electronic Engineering, specializing in digital mobile data communications. He is a Chartered Engineer and a Fellow of The Institution of Engineering and Technology, UK. He graduated from the University of Manchester Institute of Science and Technology in England.

Court case:-

Action Date	Case No.	Plaintiff	Defendant	Cause	Amount
June 1995	-	Cinphil Systems of Hong Kong Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.]	Amount due	HK$1,500,000
Feb. 1999	-	Hong Kong Telecom International Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.]	Amount due	HK$375,000,000
May 1999	-	City Telecom (Hong Kong) Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.]	Amount due	HK$12,578,685
Sept. 1999	-	Hong Kong Telecom Enterprises Ltd. and Datacom Services Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.] and other	Injunction	Not stated
Mar. 2000	H2279	Anderson & Lemble Asia Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.]	Amount due	HK$308,250
Aug. 2001	H3444	Shine Empire Ltd.	New World Telephone Ltd. [Now known as New World Telecommunications Ltd.] and others	Landlords and Tenants (Possession)	Not stated
Jan. 2003	H6	Reach Networks Hong Kong Ltd. [Formerly known as Hong Kong Telecom International Ltd., Cable & Wireless HKT International Ltd. and PCCW-HKT International Ltd.]	New World Telecommunications Ltd. [Formerly known as New World Telephone Ltd.]	Damages	Not stated
Mar. 2004	H622	3Togo.com Ltd.	New World Telecommunications Ltd.	Injunction	Not stated
Aug. 2006	H1688	Pacific Long Distance Telephone Corporation Ltd.	New World Telecommunications Ltd.	Declaration & Order	Not stated

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.43
UK Pound	1	Rs.99.73
Euro	1	Rs.77.93

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	TPT

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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