##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934,
or
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934, or
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
 Date of event requiring this shell company report
 Commission file number 001-14564
 APT SATELLITE HOLDINGS LIMITED
  APT
SATELLITE HOLDINGS LIMITED
 
 Bermuda
 (Jurisdiction of Incorporation or Organization)
 22
Dai Kwai Street, Tai Po Industrial Estate, Tai Po, New Territories,
Hong Kong
    
      YES o
    
    NO þ
  YES o
    
    NO þ
  YES þ
    
    NO o
  YES þ
    
    NO o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-accelerated filer þ
  o
 þ
 o
  Item 17 o
    
    Item 18 o
  YES o
    
    NO þ




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##### Table of Contents



PageGLOSSARY OF CERTAIN TERMS
    
    iiiSpecial Note on Our Financial Information and Certain Statistical Information Presented in This Annual Report
    
    
    1Item 1. Identity of Directors, Senior Management, and Advisers
    
    
    2Item 2. Offer Statistics and Expected Timetable
    
    
    2Item 3. Key Information
    
    
    2Selected Consolidated Financial Information
    
    
    2Risk Factors
    
    
    4Item 4. Information on the Company
    
    
    12History and Development of the Company
    
    
    12Business Overview
    
    
    12Industry and Market Overview
    
    
    14Broadcasting and Telecommunications Markets in Asia
    
    
    15Customers and Services
    
    
    16Operation of the Apstar System
    
    
    19Competition
    
    
    26Regulation
    
    
    27Organizational Structure
    
    
    30Property, Plant and Equipment
    
    
    30Item 4A. Unresolved Staff Comments
    
    
    30Item 5. Operating and Financial Review and Prospects
    
    
    30Overview
    
    
    31Application of Critical Accounting Matters
    
    
    33Contractual Obligations and Commercial Commitments
    
    
    35Off-Balance Sheet Arrangements
    
    
    36Results of Operations
    
    
    36Liquidity and Capital Resources
    
    
    39Forward Looking Statements
    
    
    40Other
    
    
    41Item 6. Directors, Senior Management and Employees
    
    
    42Compensation
    
    
    47Board Practices
    
    
    51Service Agreements
    
    
    51Employees
    
    
    53Share Option Schemes
    
    
    53Share Ownership
    
    
    54Item 7. Major Shareholders and Related Party Transactions
    
    
    54Major Shareholders
    
    
    54Related Party Transactions
    
    
    56Item 8. Financial Information
    
    
    58Item 9. The Offer and Listing
    
    
    59Item 10. Additional Information
    
    
    60Exchange Controls and Other Limitations Affecting Security Holders
    
    
    65Taxation
    
    
    66Item 11. Quantitative and Qualitative Disclosures about Market Risk
    
    
    71Interest Rate Risk
    
    
    71
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PageExchange Rate Sensitivity
    
    
    71Limitations
    
    
    72Item 12. Description of Securities Other Than Equity Securities
    
    
    72Item 13. Defaults, Dividend Arrearages, and Delinquencies
    
    
    72Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    72Item 15. Controls and Procedures
    
    
    72Item 16A. Audit Committee Financial Expert
    
    
    73Item 16B. Code of Ethics
    
    
    73Item 16C. Principal Accountant Fees and Services
    
    
    73Item 16D. Exemption from the Listing Standards for Audit Committees
    
    
    73Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    73Item 16F. Change in Registrants Certifying Accountant
    
    
    74Item 16G. Corporate Governance
    
    
    74Item 17. Financial Statements
    
    
    74Item 18. Financial Statements
    
    
    74Item 19. Exhibits
    
    
    74Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.3
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##### Table of Contents



GLOSSARY OF CERTAIN TERMS
  ADS
    
    An American Depositary Share representing ownership of eight shares of the Companys Ordinary
Shares, evidenced by American Depositary Receipts.analog
    
    A method of storing, processing or transmitting information through a continuously varied (rather
than pulsed) signal.APCN2
    
    Asia Pacific Cable Network 2, a submarine cable project under a consortium of telecommunication
companies. The project provides additional telecom capacity for designated Asian cities.APSTAR System
    
    The Companys current and future satellites, including APSTAR I, APSTAR IA, APSTAR IIR, APSTAR V,
APSTAR VI , and any other satellites to be launched by the Company in the future.APT/APT HK
    
    APT Satellite Company Limited, a company incorporated in the HKSAR and a wholly-owned indirect
subsidiary of the Company.APT BVI
    
    APT Satellite Investment Company Limited, a company incorporated in the British Virgin Islands
with limited liability and a wholly-owned subsidiary of the Company.APT Group
    
    The Company and its subsidiaries and affiliates.APT International
    
    APT Satellite International Company Limited, a company incorporated in the British Virgin Islands
with limited liability and a shareholder of the Company.APTs Leases
    
    The Lease Agreement as supplemented and modified by the Cancelled Agreement for Lease, the Deed
of Cancellation, the Second Supplemental Agreement, the Fifth Modification of Lease and the Fifth
Modification Proposal.APT Telecom
    
    APT Satellite Telecommunications Limited, a jointly controlled entity of the Company which was
incorporated in the HKSAR.APT Telecom Lease
    
    The agreement for lease dated March 12, 2001 made between APT Telecom and Science and Technology
Parks Corporation in respect of the Remaining Portion of Section E of Tai Po Town Lot No. 13 and
Extension Thereto, Hong Kong, as modified by the Modification of Agreement for Lease and
Modification of Proposal Form.APT TS
    
    APT Telecom Services Limited, a company incorporated in the HKSAR and a wholly-owned subsidiary
of APT.bandwidth
    
    A range of frequencies occupied by a modulated carrier or the range of frequencies which can be
transmitted through a communications system. Bandwidth is one measure of the information
carrying capacity of a transponder. The wider the bandwidth, the more information can be
transmitted.Bank loan
    
    On December 16, 2002, APT Satellite Company Limited entered into a secured term facility of
US$240 million. It was amended by a Deed of Amendment and Restatement on October 27, 2004 and a
Second Deed of Amendment and Restatement on May 18, 2005.Basic Law
    
    The Basic Law of the Hong Kong Special Administrative Region (HKSAR) of the Peoples Republic of
China, effective as of July 1, 1997, is the constitutional document for the HKSAR.beam
    
    The directed electromagnetic rays emanating from a spacecraft or ground station. With respect to
satellites, it typically refers to aggregates of these rays such as a China (coverage) beam or
global (coverage) beam.
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Cancelled Agreement for Lease
    
    The agreement for lease dated June 19, 2000 made between APT and the Science and Technology Parks
Corporation in respect of the original Remaining Portion of Section E of Tai Po Town Lot No. 13
and Extensions Thereto.C2C
    
    C2C Pte. Ltd., a cable network provider under a consortium of telecommunication companies led by
Singapore Telecommunications Ltd.CCTV
    
    China Central Television, a PRC state-owned enterprise under the supervision and control of the
SARFT.CITV
    
    China International Television Corporation, a PRC state-owned enterprise under the supervision
and control of the SARFT.CLTC
    
    China Satellite Launch and Tracking Control General, a PRC state-owned enterprise subject to the
supervision and control of the Defense Commission.C-band
    
    In satellite communications (FSS) used to refer to downlink frequencies between 3.4 GHz and 4.2
GHz and uplink frequencies between 5.85 GHz and 7.075 GHz. It is often referred to as 4/6 GHz.cellular
    
    Domestic public cellular radio telecommunications service. Cellular systems are based on
multiple base stations, or ''cells, that permit efficient frequency reuse and on software that
permits the system to band mobile calls from cell to cell as subscribers move through the
cellular service area.China Aerospace
    
    China Aerospace Science & Technology Corporation (formerly China Aerospace Corporation or the PRC
Ministry of Aerospace Industry), a PRC state-owned enterprise engaged in the research, design,
testing and manufacturing of launch vehicles and satellites.ChinaSat
    
    China Telecommunications Broadcast Satellite Corporation, a PRC state-owned enterprise under the
supervision of the SASACDBS
    
    Direct broadcast satellite, a satellite capable of transmitting direct-to-home television
programming.dBW
    
    Decibel relative to one watt, a measure of a satellites power (e.g., 50 dBW is 10 times more
powerful than 40 dBW).Deed of Cancellation
    
    The deed of cancellation and surrender dated March 12, 2001 in respect of cancellation of the
Cancelled Agreement for Lease made between APT and Science and Technology Parks Corporation.digital
    
    Referring to a method of storing, processing, or transmitting information through a pulsed
(rather than continuously varied) signal.downlink
    
    The receiving portion of a satellite circuit extending from the satellite to the earth.Director(s)
    
    Director(s) of the Company, including all executive director(s), all non-executive director(s)
and independent non-executive directors.earth station
    
    The antennae, receivers, transmitters and other equipment needed on the ground to transmit and
receive satellite communications signals.EBITDA
    
    Net income before taking into account: (i) interest expenses; tax; any share of the profit of any
associated company or undertaking, except for dividends received in cash by any member of the
Company; any share of the non-cash loss of any investment company of other associated company or
undertakings; and extraordinary and exceptional items; and (ii) without double-counting, after
adding back all amounts provided for as depreciation, amortization, impairment assets value or
other provision not involving an outflow of cash.EIRP
    
    Equivalent isotropic radiated power, the product of the power supplied to the antenna and the
antenna gain in a given direction relative to an isotropic antenna (absolute or isotropic gain).
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Eligible Employee(s)
    
    Employee(s) (whether full time or part time employee(s), including any executive director but not
any non-executive director) of the Company or its subsidiaries.Eligible Grantee(s)
    
    Persons who are eligible to accept the offer of the grant of an Option in accordance with the
Scheme 2001 or Scheme 2002, as the context requires.FCL
    
    Fixed Carrier Licence issued by OFTA for the provision of Facility-based External
Telecommunication Services.Fifth Modification of Lease
    
    The fifth modification of agreement for lease dated May 31, 2002 made between APT and Science and
Technology Parks Corporation in respect of modification of purpose of the lease contained in the
Lease Agreement.Fifth Modification Proposal
    
    The fifth modification to proposal form dated May 31, 2002 made between APT and Science and
Technology Parks Corporation in respect of modification of purpose in the proposal form in
relation to the Lease Agreement.footprint
    
    The geographic area covered by a satellites downlink or uplink beams, the outer edge of which is
generally defined as that area where the quality of communication degrades below an acceptable
commercial level due to the spacecraft antenna pattern, power of the signal or curvature of the
earth.4th G
    
    an abbreviation for Fourth-Generation Communications System, is a term used to
describe the next step in wireless communications. A 4G system will be able to provide a
comprehensive IP solution where voice, data and streamed multimedia can be given to users on
an Anytime, Anywhere basis, and at higher data rates than previous generations.frequency
    
    Number of repetitions in a given time. Typically it refers to the rate of variation per second
of the carrier wave or modulating signal. Communications satellite RF signals are typically in
the GHz frequency range. See C-band and Ku-band.FTNS/Fixed Carrier Licence
    
    Fixed telecommunications network services, presently known as Fixed Carrier Licence.GEO
    
    Geostationary orbit.geostationary orbit
    
    A geosynchronous orbit in which the orbital inclination and eccentricity of a satellite are zero
such that the satellite appears to hover over a fixed position on the earths equator.Global Offering
    
    The Companys initial world-wide public offering of Ordinary Shares and American Depositary
Shares, each representing eight shares of the Companys Ordinary Shares dated December 13, 1996.HDTV
    
    High definition television.HKSAR
    
    Hong Kong Special Administrative Region of the PRC.IAS
    
    International Accounting Standards.IASB
    
    International Accounting Standards Board.IFRS
    
    International Financial Reporting Standards.Interpretations
    
    Interpretations issued by the International Accounting Standards Board.ISDN
    
    Integrated services data network.ITU or International 
Telecommunication Union
    
    The International Telecommunication Union, the telecommunications agency of
the United Nations, established to provide standardized communications procedures and practices,
including frequency allocation and radio regulations, on a world-wide basis.
  -v-




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##### Table of Contents



Joint Declaration
    
    The Joint Declaration of the Government of the United Kingdom and the Government of the PRC on
the Question of Hong Kong with Annexes signed on 19 December 1984.Ku-band
    
    In satellite communications (FSS), it is used to refer to downlink frequencies between 10.7 GHz
and 12.75 GHz and uplink frequencies between 13.75 GHz and 14.8 GHz. Often it is referred to as
11/14 or 12/14 GHz.Lease Agreements
    
    The agreement for lease dated February 26, 1993, made between APT and the Science and Technology
Parks Corporation in respect of Subsection 1 of Section E of Tai Po Town Lot No. 13 and Extension
Thereto, Hong Kong on which APTs satellite control center is developed.LEO
    
    Low-earth orbit of up to 1,500 miles above the earth.Master Registry
    
    The Master International Frequency Register of the ITU, which lists frequency assignments of
orbital slots upon notification.MEO
    
    Mid-earth orbit of up to 18,000 miles above the earth.megahertz (MHz)
    
    A measure of frequency, 1 million cycles per second.microwave
    
    Radio frequency carrier waves with wavelengths of less than one meter- frequencies above 300 MHz.MII
    
    formerly the Ministry of Information Industry of the PRC.mobile satellite services
    
    Services transmitted via satellites to provide mobile telephone, paging, messaging, facsimile,
data, and position location services directly to users.OFTA
    
    The Office of the Telecommunications Authority of Hong Kong or, where the context requires, the
Telecommunications Authority of Hong Kong.operational life
    
    The time for which a satellite is capable of operating in its allotted position. The expected
end of a satellites in-orbit operational life is mainly based on the period during which the
satellites on-board fuel permits proper station-keeping maneuvers for the satellite.Option(s)
    
    Options granted to the Eligible Grantees under the Scheme 2001 or to the Participants under the
Scheme 2002, as the context requires.paging
    
    A service designed to deliver a message to a person whose location is unknown; messages may be
received via an alphanumeric or character display or small speaker.Participant(s)
    
    Any person belonging to any of the following classes of persons: (a) any Eligible Employee; and
(b) any non-executive directors (including independent non-executive directors) of the Company or
any of its Subsidiaries, in accordance with the Scheme 2002.PRC
    
    The Peoples Republic of China.PSTN
    
    Public switched telephone networks which comprise the network infrastructure necessary for
providing basic telephone services.radio frequency
    
    A frequency that is higher than the audio frequencies but below the infrared frequencies, usually
above 20 KHz.Radio Regulations
    
    Radio Regulations of the ITU.Radio Regulatory Department
    
    Radio Regulatory Department of the MII.Radiocommunication Bureau
    
    Radiocommunication Bureau of the ITU.
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SARFT
    
    China State Administration of Radio Film and Television, a government office responsible for the
management of the provision of Radio, Film and Television in the PRC.SASAC
    
    State-owned Assets Supervision and Administration Commission of the State Council of the PRC.Satellite Control Center
    
    The earth station of the APT Group for the TT&C of APSTAR Systems and the provision of
broadcasting transmission and telecommunication services. It is located in Tai Po, New
Territories, Hong Kong.Science and Technology
Parks Corporation
    
    Hong Kong Science and Technology Parks Corporation (formerly known as Hong Kong Industrial
Science and Technology Parks Corporation), the lessor of certain Lease Agreements with the
Company.scrambled programming
    
    Programming signals which require a decoder for purposes of viewing.Second Supplemental Agreement
    
    The second supplemental agreement for lease and grant of second extension area dated March 12,
2001 made between APT and the Science and Technology Parks Corporation in respect of Subsection 3
of Section E of Tai Po Town Lot No. 13 and Extensions Thereto.signal
    
    A physical, time-dependent energy value used for the purpose of conveying information through a
transmission line.switch
    
    A device that opens or closes circuits or selects the paths or circuits to be used for
transmission of information; switching is the process of interconnecting circuits to form a
transmission path between users.teledensity
    
    Telephone access lines per 100 persons.telemetry
    
    Radio transmission of coded or analog data from a satellite to a ground station.telephony
    
    Science of construction and operation of telephones and telephonic systems.transponder
    
    A microwave repeater which provides a discrete path to receive communications signals, translate
and amplify such signals and retransmit them to earth or another satellite.TT&C
    
    Telemetry, tracking and command.TT&C Station
    
    Telemetry, tracking and command station, a land-based facility that monitors and controls the
positioning, altitude and status of a satellite in orbit.uplink
    
    In satellite communications, the signal from the earth station to the space station (satellite).VSAT
    
    Very small aperture terminal.WiMax
    
    The Worldwide Interoperability for Microwave Access, is a telecommunications technology aimed at
providing wireless data over long distances in a variety of ways, from point-to-point links to
full mobile cellular type access.
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Special Note on Our Financial Information and
Certain Statistical Information Presented in This Annual Report
    -1-




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##### Table of Contents



PART I
 
 Item 1. Identity of Directors, Senior Management, and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 Selected Consolidated Financial Information
   -2-




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Consolidated Statement of Operations Data:
 (in millions, except per share data)
    
    2006
    
    
    2007
    
    
    2008
    
    
    2008HK$
    
    
    HK$
    
    
    HK$
    
    
    US$Turnover
    
    
    427.0
    
    
    
    451.6
    
    
    
    403.7
    
    
    
    51.8Gross profit
    
    
    88.7
    
    
    
    136.8
    
    
    
    126.1
    
    
    
    16.2Gain on disposal of property, plant and equipment
    
    
    17.6
    
    
    
    0.2
    
    
    
    51.6
    
    
    
    6.6Impairment loss recognized in respect of
property, plant and equipment
    
    
    
    
    
    
    (0.1
    )
    
    
    (8.4
    )
    
    
    (1.1
    )Profit/(loss) from operations
    
    
    37.5
    
    
    
    81.4
    
    
    
    101.7
    
    
    
    13.0Finance costs
    
    
    (64.1
    )
    
    
    (55.3
    )
    
    
    (24.8
    )
    
    
    (3.2
    )Gain on disposal of a subsidiary
    
    
    
    
    
    
    
    
    
    
    3.2
    
    
    
    0.4Gain on disposal of a jointly controlled entity
    
    
    
    
    
    
    
    
    
    
    9.6
    
    
    
    1.2Profit/(loss) before taxation
    
    
    (24.5
    )
    
    
    25.2
    
    
    
    92.1
    
    
    
    11.8Profit/(loss) for the year
    
    
    (80.6
    )
    
    
    4.7
    
    
    
    49.5
    
    
    
    6.3Attributable to:Equity shareholders of the Company
    
    
    (79.5
    )
    
    
    5.6
    
    
    
    49.6
    
    
    
    6.4Minority interests
    
    
    (1.1
    )
    
    
    (0.9
    )
    
    
    (0.1
    )
    
    
    (0.1
    )Basic earnings/(loss) per share (1)
    
    
    (0.19
    )
    
    
    0.01
    
    
    
    0.12
    
    
    
    0.2Basic earnings/(loss) per ADS (1)
    
    
    (1.52
    )
    
    
    0.11
    
    
    
    0.94
    
    
    
    0.12Diluted earnings/(loss) per share (1)
    
    
    (0.19
    )
    
    
    0.01
    
    
    
    0.12
    
    
    
    0.2Diluted earnings/(loss) per ADS (1)
    
    
    (1.52
    )
    
    
    0.11
    
    
    
    0.94
    
    
    
    0.12Weighted average number of shares outstanding(1)
 Basic (in millions)
    
    
    413.3
    
    
    
    413.3
    
    
    
    413.3
    
    
    
    413.3Weighted average number of shares outstanding(1)
 Diluted (in millions)
    
    
    413.3
    
    
    
    413.3
    
    
    
    413.3
    
    
    
    413.3Dividend per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Consolidated Balance Sheet Data:
 (in millions)Working capital (2)
    
    
    206.8
    
    
    
    114.1
    
    
    
    132.4
    
    
    
    17.0Property, plant and equipment, net
    
    
    2,721.6
    
    
    
    2,508.3
    
    
    
    2,183.5
    
    
    
    279.9Total assets
    
    
    3,407.6
    
    
    
    3,135.6
    
    
    
    2,546.3
    
    
    
    326.4Non-current liabilities
    
    
    1,080.0
    
    
    
    755.9
    
    
    
    319.4
    
    
    
    40.9Total liabilities
    
    
    1,425.3
    
    
    
    1,146.9
    
    
    
    505.7
    
    
    
    64.8Total shareholders equity
    
    
    1,980.4
    
    
    
    1,987.8
    
    
    
    2,040.6
    
    
    
    261.6
 (1)
    
    Per share and per ADS data is derived from the weighted average number of shares outstanding
during the applicable period. Diluted earnings per share was the same as the basic earnings
per share as there were no dilutive potential ordinary share in existence for three fiscal
years ended December 31, 2008.(2)
    
    Current assets minus current liabilities.  -3-




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2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008Average (1)
    
    
    7.7891
    
    
    
    7.7774
    
    
    
    7.7684
    
    
    
    7.8020
    
    
    
    7.7862High
    
    
    7.8010
    
    
    
    7.8000
    
    
    
    7.7933
    
    
    
    7.8299
    
    
    
    7.8152Low
    
    
    7.7632
    
    
    
    7.7519
    
    
    
    7.7509
    
    
    
    7.7501
    
    
    
    7.7498End of Period
    
    
    7.7723
    
    
    
    7.7545
    
    
    
    7.7778
    
    
    
    7.7994
    
    
    
    7.7502
 
 (1)
    
    The rate of exchange means the noon buying rate in New York City for cable transfer in
foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.
The average rate means the average of the exchange rates on the last day of each month during
the period.  November 2008
    
    
    December 2008
    
    
    January 2009
    
    
    February 2009
    
    
    March 2009
    
    
    April 2009High
    
    
    7.7551
    
    
    
    7.7522
    
    
    
    7.7600
    
    
    
    7.7557
    
    
    
    7.7592
    
    
    
    7.7504Low
    
    
    7.7498
    
    
    
    7.7499
    
    
    
    7.7502
    
    
    
    7.7518
    
    
    
    7.7500
    
    
    
    7.7500
  
 Risk Factors
 Prior to making an investment decision, prospective investors should carefully consider all of
the information set forth in this annual report, including the following risk factors. If any of
the following risks actually occur, the Companys business, financial condition and operating
results could be adversely affected. As a result, the trading price of the Companys ordinary
shares and ADSs could decline and all or part of a prospective investors investment could be lost.
 Technical Risks of satellite systems
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Risk of Satellite Defects or Failure
  Limited Life of Satellites
  TT&C Systems and Earth Station
  Risk of Interruption or harmful interference of APSTAR V
  Changes in Technology and Industry
  Regulatory Risks
 Regulatory Regime for Satellite Operations
   -5-




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Priority for Orbital Slots
     -6-




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Possible Disputes Relating to Orbital Slots
      Regulatory Constraints on End-users
  th
 Export Restrictions
   -7-




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1 2 1 2 1 2
  Business Risks
 Insurance
   -8-




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Competitive Nature of the Industry
    -9-




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Additional Financing Requirements
     Dependence on Key Customers
  Interference
  Political and Economic Risks
   -10-




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The Outbreak of Infectious Diseases
  Catastrophic Events
   -11-




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Item 4. Information on the Company
 
 History and Development of the Company
 st
 
 Business Overview
   Business segments:
    
    2006
    
    
    2007
    
    
    2008Revenue from external customers:Provision of satellite transponder capacity and related services
    
    
    363.1
    
    
    
    395.0
    
    
    
    385.4Provision of satellite-based broadcasting and
telecommunications services
    
    
    63.8
    
    
    
    56.5
    
    
    
    18.2Service income
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Total
    
    
    427.0
    
    
    
    451.6
    
    
    
    403.7
 Provision of satellite transponder capacity and related services
    -12-




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Satellite-based Broadcasting and Telecommunications Services
      -13-




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Industry and Market Overview
 Satellites
         -14-




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Broadcasting and Telecommunications Markets in Asia
 Increased Distribution of Television Programming
   Liberalization of the Television and Telecommunications Industries
   Continuing Technological Advancements
  High-powered Satellites.
  -15-




---



##### Table of Contents



Digital Communications.
 Compressed Digital Video.
  Increased Spending on Telecommunications Projects
  Growth of Information Services Markets
  
 Customers and Services
  Years Ended December 31,2006
    
    
    2007
    
    
    2008Broadcasting
    
    
    33.4
    %
    
    
    37.0
    %
    
    
    42.7
    %Telecommunications
    
    
    61.7
    %
    
    
    58.5
    %
    
    
    52.3
    %Other service
    
    
    4.9
    %
    
    
    4.5
    %
    
    
    5.0
    %
  -16-




---



##### Table of Contents



Broadcasting Customers
   Television Programming Distribution.
    Customer
    
    ProgrammingChina Central Television (CCTV)
    
    10 channels, such as CCTV-1, 2, 5China Education Television (CETV)
    
    3 CETV TV channels, and Educational
distance learning programs and
digital broadcasting businessesChina Broadcasting Film Television
Satellite Co., Ltd. (CBSAT)
    
    Television in provinces of the PRC,
including Chong Qing, Yunnan,
Sichuan and Hunan, totaling around
10 provinces and around 44
channels
  -17-




---



##### Table of Contents



Backhaul Services.
 Ad Hoc/Occasional Services.
 Telecommunications Customers
  Private Networks.
   Carrier services.
 Other Service Customers
    -18-




---



##### Table of Contents



Transponder Utilization Agreements
  Sales and Marketing
  
 Operation of the APSTAR System
    -19-




---



##### Table of Contents



SUMMARY OF SATELLITE DATA
 APSTAR I
    
    
    APSTAR 1A
    
    
    APSTAR IIR
    
    
    APSTAR V
    
    
    APSTAR VIRegion covered
    
    North and Southeast Asia
    
    North and Southeast Asia
    
    Europe, Asia, Middle East, Africa
    
    Most of Asia, Australia, New Zealand, Pacific region, Hawaii
    
    Most of Asia, Australia, New Zealand, Pacific region, HawaiiStatus
    
    Operational (inclined mode)
    
    Operational (inclined mode)
    
    Operational
    
    Operational
    
    OperationalModel
    
    HS 376
    
    HS 376
    
    FS 1300
    

    FS1300


    
    SB4100C1Manufacturers
    
    Hughes
    
    Hughes
    
    SS/Loral
    
    SS/Loral
    
    AlcatelTranspondersKu-band
    
    
    
    
    

    

    

    16

    

    16*

    

    12C-band
    
    
    24
    
    

24

    

28

    

    38*

    

    38Expected end of operational life
    
    not applicable**
    
    not applicable**
    

    2012

    

    2019

    

    2021
 *
    
    As at August 13, 2004, APT has taken up 25 C-band and 12 Ku-band transponders of APSTAR V.
Four C-band and two Ku-band were released to Telesat Satellite LP, the successor of Loral
Orion, on September 28, 2006 and August 18, 2008.**
    
    The design life of both APSTAR I and APSTAR IA had been over since 2004 and 2006.  -20-




---



##### Table of Contents



APSTAR Satellites
 APSTAR I
    APSTAR IA
    APSTAR IIR
    -21-




---



##### Table of Contents



APSTAR V
   1 2 1 2
    -22-




---



##### Table of Contents



APSTAR VI (formerly APSTAR VB)
   Existing Orbital Slots
     -23-




---



##### Table of Contents



Future Satellites
 APSTAR VIB
   Insurance
  In-orbit Insurance.
 Third-Party Liability Insurance.
 Satellite and Ground Operation Facility
   -24-




---



##### Table of Contents



Customer Technical Qualifications and Support
   Additional Orbital Slots
   -25-




---



##### Table of Contents



Competition
     International Satellites
  Regional Satellites
   -26-




---



##### Table of Contents



Optical Fiber Systems
  
 Regulation
    -27-




---



##### Table of Contents



International Telecommunication Union
     Export Regulation
   -28-




---



##### Table of Contents



Hong Kong Regulation
     Overseas National Telecommunications Authorities
    -29-




---



##### Table of Contents



Organizational Structure
   
 Property, Plant and Equipment
    
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
   -30-




---



##### Table of Contents



Overview
    
    
    providing transponder capacity to broadcast customers for the distribution of
programming to television audiences in the PRC and Asia Pacific region;
 
    
    providing telecommunications networks for data and voice communications; and
 
    
    providing satellite television uplink and downlink service through the APSTAR System.
     -31-




---



##### Table of Contents



2006
    
    
    2007
    
    
    2008Statement of Operations Data:Turnover
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Cost of services
    
    
    79.2
    %
    
    
    69.7
    %
    
    
    68.8
    %Administrative expenses
    
    
    20.9
    %
    
    
    18.1
    %
    
    
    21.0
    %Total costs and expenses
    
    
    100.1
    %
    
    
    87.8
    %
    
    
    89.8
    %(0.1
    %)
    
    
    12.2
    %
    
    
    10.2
    %Profit/(Loss) before taxation
    
    
    (5.7
    %)
    
    
    5.6
    %
    
    
    22.8
    %Profit/(Loss) for the year
    
    
    (18.9
    %)
    
    
    1.0
    %
    
    
    12.3
    %
  2006
    
    
    2007
    
    
    2008Amount
    
    
    % of
    
    
    Amount
    
    
    % of
    
    
    Amount
    
    
    % of(HK$ in
    
    
    Total
    
    
    (HK$ in
    
    
    Total
    
    
    (HK$ in
    
    
    Totalmillions)
    
    
    Revenues
    
    
    millions)
    
    
    Revenues
    
    
    millions)
    
    
    RevenuesThe Peoples
Republic of China:Hong Kong
    
    
    60.3
    
    
    
    14.1
    %
    
    
    65.1
    
    
    
    14.4
    %
    
    
    54.3
    
    
    
    13.5
    %Other regions
    
    
    207.4
    
    
    
    48.6
    %
    
    
    170.7
    
    
    
    37.8
    %
    
    
    165.2
    
    
    
    40.9
    %Singapore
    
    
    49.8
    
    
    
    11.7
    %
    
    
    61.5
    
    
    
    13.6
    %
    
    
    54.0
    
    
    
    13.4
    %USA
    
    
    0.4
    
    
    
    0.1
    %
    
    
    0.4
    
    
    
    0.1
    %
    
    
    
    
    
    
    0
    %Indonesia
    
    
    50.4
    
    
    
    11.8
    %
    
    
    90.5
    
    
    
    20.1
    %
    
    
    77.2
    
    
    
    19.1
    %Others
    
    
    58.7
    
    
    
    13.7
    %
    
    
    63.4
    
    
    
    14.0
    %
    
    
    53.0
    
    
    
    13.1
    %427.0
    
    
    
    100
    %
    
    
    451.6
    
    
    
    100
    %
    
    
    403.7
    
    
    
    100
    %
  -32-




---



##### Table of Contents



Application of Critical Accounting Policies
  Depreciation
  Trade receivables and other receivables
     -33-




---



##### Table of Contents



Impairment of property, plant and equipment
     Contingencies and provisions
     Change in accounting policies
   -34-




---



##### Table of Contents



Commitments and Contingencies
   
 Contractual Obligations:
 Payments due by periodLess than
    
    
    13
    
    
    45
    
    
    AfterTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    

5 yearsPurchase obligations of
the Company (1)
    
    
    1.5
    
    
    
    1.5
    
    
    
    
    
    
    
    
    
    
    
    Operating leases (2)
    
    
    0.4
    
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    
    1.9
    
    
    
    1.9
    
    
    
    
    
    
    
    
    
    
    
    
 Other Commercial Commitments:
 Amount of commitment expiration per periodTotalamounts
    
    
    Less than
    
    
    1  3
    
    
    4  5
    
    
    Aftercommitted
    
    
    1 year
    
    
    years
    
    
    years
    
    

5 yearsDeposit received
    
    
    23.1
    
    
    
    
    
    
    
    23.1
    
    
    
    
    
    
    
    Rental received in advance
    
    
    40.6
    
    
    
    40.6
    
    
    
    
    
    
    
    
    
    
    
    Deferred income
    
    
    209.4
    
    
    
    
    
    
    
    30.6
    
    
    
    23.6
    
    
    
    155.2Total commercial
commitments
    
    
    273.1
    
    
    
    40.6
    
    
    
    53.7
    
    
    
    23.6
    
    
    
    155.2
 (1)
    
    This line item represents various purchase commitments entered into with the
Companys suppliers due to the long lead times required before the satellites become
operational.(2)
    
    This line item represents future minimum payments under operating leases with
remaining terms of one year or more.   -35-




---



##### Table of Contents



Off-Balance Sheet Arrangements
  
 Results of Operations
 Year Ended December 31, 2008 Compared to Year Ended December 31, 200 7
 Total Turnover.
 Cost of Services.
 Gross Profit.
 Other Net Income.
 Administrative Expenses.
  -36-




---



##### Table of Contents



Impairment Loss Recognized for Property, Plant and Equipment.
 Finance Costs.
 Share of Results of Jointly Controlled Entities.
 Gain on disposal of a subsidiary.
 Gain on disposal of a jointly controlled entity.
 Income Tax.
 Profit for the year.
  -37-




---



##### Table of Contents



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
 Total Turnover.
 Cost of Services.
 Gross Profit.
 Other Net Income.
 Administrative Expenses.
 Impairment Loss Recognized for Property, Plant and Equipment.
 Finance Costs.
  -38-




---



##### Table of Contents



Share of Results of Jointly Controlled Entities.
 Income Tax.
  Profit/(Loss) for the year.
 
 Liquidity and Capital Resources
 Sources of Cash and Credit Available
  Capital Expenditures
    Contractual Obligations and Other Commercial Commitments
   -39-




---



##### Table of Contents



Cash Flow Items
 Net Cash Provided by Operating Activities
  Net Cash Generated from Investing Activities
  Net Cash Used in Financing Activities
  Financing
  
 Forward Looking Statements
    -40-




---



##### Table of Contents



Other
 Exchange Rates
  Inflation
  Taxation
    -41-




---



##### Table of Contents



Item 6. Directors, Senior Management and Employees
   Date FirstElected orName
    
    Age
    
    Position
    
    AppointedExecutive DirectorsCheng Guangren
    
    
    46
    
    
    Director and President
    
    
    2008Tong Xudong
    
    
    45
    
    
    Director and Vice President
    
    
2004Qi Liang
    
    
    47
    
    
    Director and Vice President
    
    
2008Non-executive DirectorsRui Xiaowu
    
    
    50
    
    
    Chairman
    
    
2006Lim Toon
    
    
    66
    
    
    Director
    
    
1993Yin Yen-liang
    
    
    58
    
    
    Director
    
    
2003Wu Zhen Mu
    
    
    63
    
    
    Director
    
    
1998Yong Foo Chong
    
    
    42
    
    
    Director
    
    
2007Tseng Ta-mon
    
    
    51
    
    
    Alternate Director to Yin Yen-liang
    
    
2003Independent Non-executive
directorsHuan Guocang
    
    
    59
    
    
    Director
    
    
2002Lui King Man
    
    
    54
    
    
    Director
    
    
2004Lam Sek Kong
    
    
    49
    
    
    Director
    
    
2007Cui Liguo
    
    
    39
    
    
    Director
    
    
2007Executive OfficersLo Kin Hang, Brian
    
    
    52
    
    
    Vice President & Company Secretary
    
    
2002/1996Chen Xun
    
    
    38
    
    
    Vice President
    
    
2004Yang Qing
    
    
    45
    
    
    Vice President
    
    
2004Yu Yong
    
    
    48
    
    
    Vice President (appointed April 7, 2009)
    
    
2009
  -42-




---



##### Table of Contents



Executive Directors
 Mr. CHENG Guangren
 Mr. TONG Xudong
 Mr. QI Liang
  -43-




---



##### Table of Contents



Non-Executive Directors
 Mr. RUI Xiaowu
 Mr. LIM Toon
 Dr. YIN Yen-liang
 Mr. WU Zhen Mu
  -44-




---



##### Table of Contents



Mr. YONG Foo Chong
 Mr. TSENG Ta-mon
 Independent Non-Executive Directors
 Dr. HUAN Guocang
  -45-




---



##### Table of Contents



Dr. LUI King Man
 Dr. LAM Sek Kong
 Mr. CUI Liguo
 Senior Management
 Dr. LO Kin Hang, Brian
 Mr. CHEN Xun
  -46-




---



##### Table of Contents



Mr. YANG Qing
 Mr. YU Yong
 
 Compensation
   -47-




---



##### Table of Contents



PerformanceSalaries,
    
    
    Retirement
    
    
    relatedDirectors
    
    
    allowances and
    
    
    scheme
    
    
    incentive
    
    
    2007fees
    
    
    benefits in kind
    
    
    contributions
    
    
    payment
    
    
    TotalHK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$Executive directorsNi Yifeng
    
    
    50
    
    
    
    2,840
    
    
    
    165
    
    
    
    78
    
    
    
    3,133Tong Xudong
    
    
    50
    
    
    
    2,331
    
    
    
    145
    
    
    
    68
    
    
    
    2,594Non-executive directorsRui Xiaowu (note a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Zhao Liqiang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Lim Toon
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yoo Foo Chong
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Ho Siaw Hong
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Yin Yen-liang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Wu Zhen Mu
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Tseng Ta-mon (note b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Independent
non-executive
directorsHuan Guocang
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lui King Man
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Yuen Pak Yiu, Philip
    
    
    99
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99Lam Sek Kong
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Cui Liguo
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1011,051
    
    
    
    5,171
    
    
    
    310
    
    
    
    146
    
    
    
    6,678
  -48-




---



##### Table of Contents



PerformanceSalaries,
    
    
    Retirement
    
    
    relatedDirectors
    
    
    allowances and
    
    
    scheme
    
    
    incentive
    
    
    Termination
    
    
    2008fees
    
    
    benefits in kind
    
    
    contributions
    
    
    payments
    
    
    benefits
    
    
    TotalHK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$Executive directorsCheng Guangren (note c)
    
    
    27
    
    
    
    1,494
    
    
    
    87
    
    
    
    289
    
    
    
    
    
    
    
    1,897Tong Xudong (note c)
    
    
    50
    
    
    
    2,360
    
    
    
    151
    
    
    
    470
    
    
    
    
    
    
    
    3,031Qi Liang (note c)
    
    
    27
    
    
    
    1,071
    
    
    
    73
    
    
    
    201
    
    
    
    
    
    
    
    1,372Ni Yifeng
    
    
    23
    
    
    
    1,813
    
    
    
    97
    
    
    
    210
    
    
    
    579
    
    
    
    2,722Non-executive directorsRui Xiaowu (note a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Zhao Liqiang
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23Lim Toon
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yong Foo Chong
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yin Yen-liang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Wu Zhen Mu
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Tseng Ta-mon (note b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Independent
non-executive
directorsHuan Guocang
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lui King Man
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lam Sek Kong
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Cui Liguo
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2001,150
    
    
    
    6,738
    
    
    
    408
    
    
    
    1,170
    
    
    
    579
    
    
    
    10,045
  Notes:(a)
    
    Mr. Rui Xiaowu, a non-executive director, has waived his directors fees
for 2008 and 2007.(b)
    
    Mr. Tseng Ta-mon was an alternate director. Alternate directors are not entitled to
receive any directors fees.(c)
    
    The amounts represented the actual amount paid or receivable by respective
directors for the year. In addition to the amounts disclosed above, directors and key
management are entitled to a performance related incentive payment of HK$2,980,000. The
allocation of the said incentive payment has yet to be determined.  -49-




---



##### Table of Contents



Individuals with highest emoluments(in HK$ thousand)
  2007
    
    
    2008Salaries and other emoluments
    
    
    4,839
    
    
    
    3,014Performance related incentive payments
    
    
    192
    
    
    
    628Retirement benefits contributions
    
    
    330
    
    
    
    206Termination benefits
    
    
    
    
    
    
    9325,361
    
    
    
    4,780
  Number of individuals2007
    
    
    2008$Nil to $1,000
    
    
    
    
    
    
    $1,500 to $2,000
    
    
    1
    
    
    
    $2,001 to $2,500
    
    
    2
    
    
    
    23
    
    
    
    2
 Key management personnel remuneration(in HK$ thousand)
  2007
    
    
    2008Short-term employee benefits
    
    
    11,057
    
    
    
    12,902Performance related incentive payment
    
    
    367
    
    
    
    5,259Other long-term benefits
    
    
    706
    
    
    
    756Termination benefits
    
    
    
    
    
    
    1,51112,130
    
    
    
    20,428
   -50-




---



##### Table of Contents



Board Practices
 Term of office
   
 Service Agreements
     Audit Committee, Nomination Committee and Remuneration Committee
   -51-




---



##### Table of Contents




    
    to be primarily responsible for making recommendation to the Board of Directors
on the appointment, reappointment and removal of the external auditor, and to approve
the remuneration and terms of engagement of the external auditor;
    
    to monitor integrity of and review significant financial reporting judgments of
the half-year and annual financial statements;
    
    to discuss problems and reservations arising from the interim and final audits;
    
    to consider the major findings and internal investigations and managements
response;
    
    to review the Companys statement on financial controls, internal control system
including the adequacy of resources, qualifications and experience of staff of the
Companys accounting and financial reporting function, and their training programmes and
budget, and risk management systems (where one is included in the annual report) prior
to endorsement by the Board of Directors;
    
    to review and monitor the external auditors independence and objectivity and
effectiveness of the audit process in accordance with applicable standard, as well as
the nature and scope of other professional services provided to the Company by the
external auditor;
    
    to review APT Groups financial and accounting policies and practices;
    
    to review periodically Company policy statements to determine their adherence to
the Companys codes of conduct;
    
    to investigate any matter brought to its attention within the scope of its
duties, and to retain outside legal counsel or other professional advice for this
purpose if, in its judgment, that is appropriate; and
    
    to consider other topics, as determined by the Board of Directors.
   
    
    to review the structure, size and composition of the Board of Directors;
    
    to identify individuals suitably qualified to become directors;
    
    to assess the independence of Independent Non-executive directors;
    
    to make recommendations to the Board of Directors on matters relating to the
appointment or re-appointments of directors and succession planning for directors in
particular the Chairman and the President;
    
    to establish the nomination procedures; and
    
    to submit a work report to the Board of Directors yearly.
  -52-




---



##### Table of Contents




    
    to make recommendations to the Board on policy and structure for all remuneration
of directors and senior management and on the establishment of a formal procedure for
developing remuneration policy;
    
    to determine the specific remuneration packages of all directors and senior
management, including benefits in kind, pension rights and compensation payments;
    
    to review and approve the performance-based remuneration by reference to
corporate goals and objectives resolved by the Board of Directors;
    
    to review and approve the compensation payable to directors and senior management;
    
    to review and approve compensation arrangements relating to dismissal or removal of directors;
    
    to ensure that no director or any of his/her associates is involved in deciding his own remuneration;
    
    to formulate and review regularly the policy for the remuneration of directors,
assessing directors performance and approving the terms of directors service
contracts; and
    
    to submit a work report to the Board of Directors yearly.
 
 Employees
   
 Share Option Schemes
    Options grantedEmployees in
    
    on June 19, 2001aggregate
    
    and remain
    
    
    Options
    
    
    
    
    
    
    Options remain(including
    
    outstanding as at
    
    
    movement during
    
    
    Options exercised
    
    
    outstanding as atmanagement)
    
    January 1, 2008
    
    
    the year
    
    
    during the year
    
    
    December 31, 2008Employees under
employment
contracts
    
    
    3,370,000
    
    
    
    (80,000
    )
    
    
    
    
    
    
    3,290,000
  -53-




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##### Table of Contents



Share Ownership
  Lo Kin Hang, Brian
    
    (Vice President & Company Secretary)
    
    
    5,000Chen Xun
    
    (Vice President)
    
    
    6,000
    *
 *
    
    The capacity in which Chen Xun held 6,000 shares of the Company was as a trustee.
He has discretion to vote these shares at the Companys general meetings.  Lo Kin Hang, Brian
    
    (Vice President & Company Secretary)
    
    
    800,000Chen Xun
    
    (Vice President)
    
    
    260,000Yang Qing
    
    (Vice President)
    
    
    130,000
  
 Item 7. Major Shareholders and Related Party Transactions
 
 Major Shareholders
   -54-




---



##### Table of Contents



Identity of Person
    
    Number of
    
    
    Percent ofor Groups
    
    Shares
    
    
    Class (1)China Telecommunications Broadcast
Satellite Corporation (2) (3)
    
    
    67,200,000
    
    
    
    16.26
    %China Aerospace Science & Technology
Corporation (2) (4)
    
    
    36,600,000
    
    
    
    8.86
    %CASIL Satellite Holdings Limited (2)
(5)
    
    
    45,000,000
    
    
    
    10.89
    %SingaSat PTE Ltd. (2) (6)
    
    
    84,000,000
    
    
    
    20.33
    %Kwang Hua Development and Investment
Limited (2) (7)
    
    
    30,600,000
    
    
    
    7.40
    %Sinolike Investments Limited (5)
    
    
    16,800,000
    
    
    
    4.07
    %APT Satellite International Company
Limited (2)
    
    
    214,200,000
    
    
    
    51.83
    %All Directors and Officers as a Group (17
persons)
    
    
    11,000
    
    
    
    
    *
 
 *
    
    Less than 1%(1)
    
    As of March 31, 2009, the total number of issued Ordinary Shares is 413,265,000.(2)
    
    The Principal Shareholders collectively hold in aggregate underlying ownership interests of
51.83% indirectly through APT Satellite International Company Limited (APT International),
which holds 214,200,000 Ordinary Shares. The interest of each Principal Shareholder in APT
International as of March 31, 2009 is: ChinaSat
    
    200 shares
    
    
    28.57
    %China Aerospace Science & Technology Corporation
    
    100 shares
    
    
    14.28
    %CASIL Satellite Holdings Ltd.
    
    100 shares
    
    
    14.28
    %SingaSat Pte. Ltd.
    
    200 shares
    
    
    28.57
    %Kwang Hua Development and Investment Ltd.
    
    100 shares
    
    
    14.28
    %
 (3)
    
    China Telecommunications Broadcast Satellite Corporation (ChinaSat) is a PRC state-owned
enterprise under the supervision of the MII. ChinaSat is the satellite operation arm of the
MII. ChinaSat directly owns 6,000,000 Shares and indirectly owns, through its shareholdings
in APT International, 61,200,000 Shares.(4)
    
    China Aerospace Science & Technology Corporation (China Aerospace), formerly China
Aerospace Corporation or the PRC Ministry of Aerospace Industry, is a PRC state-owned
enterprise. China Aerospace is engaged in the research, design, testing and manufacturing of
launch vehicles and satellites. China Aerospace also supervises and controls China Great Wall
Industry Corporation, which is responsible for the sale to foreign customers of commercial
launch services effected by Long March launch vehicles. China Aerospace directly owns
6,000,000 Shares and indirectly owns, through its shareholdings in APT International,
30,600,000 Shares.(5)
    
    Chia Tai International Telecommunication Company Limited (Chia Tai) was wholly-owned by
Telecom Holding Company Limited (Telecom Holding), which managed the investment in the
Company of Telecom Asia Corporation Public Company Limited (TelecomAsia), a publicly listed
company in Thailand. Telecom Holding disposed of its Chai Tai holdings in the Company to
Sinolike Investments Limited (Sinolike) through a share transaction agreement on October 16,
1997. Chia Tai was renamed as CASIL Satellite Holdings Limited (CASIL Satellite) on May 6,
1998. Sinolike is a wholly owned subsidiary of China Aerospace International Holdings Limited
(CASIL), which is a conglomerate listed in Hong Kong and is an approximately 44.47% owned
subsidiary of China Aerospace. CASIL Satellite directly owns 14,400,000 Shares and indirectly
owns, through its shareholdings in APT International, 30,600,000 Shares. Sinolike also
directly owns 16,800,000 Shares.(6)
    
    SingaSat PTE Ltd. (SingaSat) is wholly-owned by Singapore Telecommunications Limited
(SingTel). SingTel is a telecommunications operating company and a holding company for
around 170 subsidiaries which provide a wide range of domestic, international and mobile
telecommunications as well as postal services. SingTel is a publicly listed company in
Singapore. SingaSat directly owns 22,800,000 Shares and indirectly owns, through its
shareholdings in APT International, 61,200,000 Shares.(7)
    
    Kwang Hua Development and Investment Limited (Kwang Hua) is a Hong Kong incorporated
venture capital company owned jointly by the Ruentex Group, one of the largest Taiwanese
conglomerates, and China Development, a prominent financial and investment company in Taiwan.
China Development is also an affiliate of the Ruentex Group. Kwang Hua indirectly owns,
through its shareholdings in APT International, 30,600,000 Shares.  -55-




---



##### Table of Contents



Related Party Transactions
 ChinaSat and SingTel
     -56-




---



##### Table of Contents



Years ended December 31,Note
    
    
    2006
    
    
    2007
    
    
    2008HK$
    
    
    HK$
    
    
    HK$Income from provision of satellite
transponder capacity to certain
shareholders and its subsidiary of the
Company
    
    
    (i
    )
    
    
    16,309
    
    
    
    11,975
    
    
    
    11,432Income from provision of satellite
transponder capacity, provision of
satellite-based telecommunications services
and service income to a holding company
and its subsidiaries of a shareholder of the
Company
    
    
    (i
    )
    
    
    36,068
    
    
    
    32,630
    
    
    
    40,745Management fee income from a jointly
controlled entity
    
    
    (ii
    )
    
    
    480
    
    
    
    580
    
    
    
    363Management fee expenses to a
subsidiary of a shareholder of the holding
company
    
    
    (iii
    )

    
    
    
    
    
    
    (472
    )
    
    
    (1,216
    )
 Notes :(i)
    
    The terms and conditions of these transponder capacity utilization agreements are
similar to those contracted with other customers of APT Group.(ii)
    
    Management fee income arose from a reimbursement of cost of service provided to a
jointly controlled entity under the agreement.(iii)
    
    Management fee expenses incurred for cost for services rendered to a subsidiary
of the Company.  -57-




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##### Table of Contents



Amounts due from
    
    
    Amounts due from
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rentals received inimmediate holding
    
    
    a jointly controlled
    
    
    
    
    
    
    
    
    
    
    Payables and
    
    
    advance andcompany
    
    
    entity
    
    
    Trade receivables
    
    
    accrued charges
    
    
    deferred income2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$
    
    
    HK$Immediate holding company
    
    
    101
    
    
    
    155
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jointly controlled entities
    
    
    
    
    
    
    
    
    
    
    75,369
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Certain shareholders and
its subsidiary
of the Company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,628
    
    
    
    41
    
    
    
    219
    
    
    
    1,266
    
    
    
    2,540
    
    
    
    190Holding company and
its subsidiaries of a
shareholder of the Company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,468
    
    
    
    2,518
    
    
    
    15
    
    
    
    
    
    
    
    197,692
    
    
    
    178,177
 
 Item 8. Financial Information
 Consolidated Financial Statements
  Legal Proceedings
  Policy on Dividend Distributions
  Significant Changes.
   -58-




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##### Table of Contents



Item 9. The Offer and Listing
  High
    
    
    Low(HK$)
    
    
    (HK$)2004
    
    
    2.83
    
    
    
    1.302005
    
    
    1.60
    
    
    
    1.102006
    
    
    2.10
    
    
    
    1.182007Quarter ended March 31
    
    
    2.60
    
    
    
    1.35Quarter ended June 30
    
    
    2.30
    
    
    
    1.75Quarter ended September 30
    
    
    2.20
    
    
    
    1.40Quarter ended December 31
    
    
    3.58
    
    
    
    1.702008Quarter ended March 31
    
    
    2.15
    
    
    
    1.30Quarter ended June 30
    
    
    1.77
    
    
    
    1.27Quarter ended September 30
    
    
    2.35
    
    
    
    0.73Quarter ended December 31
    
    
    0.90
    
    
    
    0.48December
    
    
    0.73
    
    
    
    0.482009January
    
    
    0.64
    
    
    
    0.53February
    
    
    0.98
    
    
    
    0.56March
    
    
    1.00
    
    
    
    0.70April
    
    
    1.40
    
    
    
    0.81May 1  May 15
    
    
    1.24
    
    
    
    1.07
 Significant trading suspension
   -59-




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##### Table of Contents



High
    
    
    Low(US$)
    
    
    (US$)2004
    
    
    3.50
    
    
    
    1.322005
    
    
    1.61
    
    
    
    1.122006
    
    
    2.10
    
    
    
    1.202007Quarter ended March 31
    
    
    2.60
    
    
    
    1.36Quarter ended June 30
    
    
    2.20
    
    
    
    1.75Quarter ended September 30
    
    
    3.20
    
    
    
    1.38Quarter ended December 31
    
    
    4.95
    
    
    
    1.802008Quarter ended March 31
    
    
    2.25
    
    
    
    1.25Quarter ended June 30
    
    
    1.70
    
    
    
    1.23Quarter ended September 30*
    
    
    1.44
    
    
    
    0.71Quarter ended December 31
    
    
    N/A
    
    
    
    N/ADecember
    
    
    N/A
    
    
    
    N/A2009January
    
    
    N/A
    
    
    
    N/AFebruary
    
    
    N/A
    
    
    
    N/AMarch
    
    
    N/A
    
    
    
    N/AApril
    
    
    N/A
    
    
    
    N/AMay
    
    
    N/A
    
    
    
    N/A
 *
    
    up to the date of delisting August 7, 2008. 
 Item 10. Additional Information
 Memorandum of Association and Bye-laws
  Incorporation and Registration Number
   -60-




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##### Table of Contents



Objects and Purposes
  1)
    
    to act and to perform all the functions of a holding company in all its
branches and to co-ordinate the policy and administration of any subsidiary company or
companies wherever incorporated or carrying on business or of any group of companies of
which the Company or any subsidiary company is a member or which are in any manner
controlled directly or indirectly by the Company;2)
    
    to act as an investment company and for that purpose to acquire and hold upon
any terms and, either in the name of the Company or that of any nominee, shares, stock,
debentures, debenture stock, annuities, notes, mortgages, bonds, obligations and
securities, foreign exchange, foreign currency deposits and commodities, issued or
guaranteed by any company wherever incorporated or carrying on business, or by any
government, sovereign, ruler, commissioners, public body or authority, supreme,
municipal, local or otherwise, by original subscription, tender, purchase, exchange,
underwriting, participation in syndicates or in any other manner and whether or not
fully paid up, and to make payments thereon as called up or in advance of calls or
otherwise and to subscribe for the same, whether conditionally or absolutely, and to
hold the same with a view to investment, but with the power to vary any investments,
and to exercise and enforce all rights and powers conferred by or incident to the
ownership thereof, and to invest and deal with the moneys of the Company not
immediately required upon such securities and in such manner as may be from time to
time determined;3)
    
    as set out in paragraphs (b) to (n) and (p) to (u) inclusive of the Second
Schedule to The Companies Act 1981.
 Directors
  (i)
    
    any contract or arrangement for the giving by the Company or any of its
subsidiaries of any security or indemnity to the Director or his associate(s) in
respect of money lent by him or any of his associates or obligations incurred or
undertaken by him or any of them at the request of or for the benefit of the Company or
any of its subsidiaries;(ii)
    
    any contract or arrangement for the giving by the Company or any of its
subsidiaries of any security or indemnity to a third party in respect of a debt or
obligation of the Company or any of its subsidiaries for which the Director or his
associate(s) has/have himself/themselves assumed responsibility in whole or in part
whether alone or jointly under a guarantee or indemnity or by the giving of security;(iii)
    
    any contract or arrangement by a Director or his associate(s) to subscribe for
 shares or debentures or other securities of the Company or any of its subsidiaries to
be issued pursuant to any offer or invitation to the members or debenture holders or to
the public which does not provide the Director or his associate(s) any privilege not
accorded to any other members or debenture holders or to the public;(iv)
    
    any contract, arrangement or proposal concerning an offer of the shares or
debentures or other securities of or by the Company or any other company which the
Company may promote or be
interested in for subscription or purchase where the Director or his associate(s)
is/are or is/are to be interested as a participant in the underwriting or
sub-underwriting of the offer;(v)
    
    any contract or arrangement in which the Director or his associate(s) is/are
interested in the same manner as other holders of shares or debentures or other
securities of the Company by virtue only of his/their interest in shares or debentures
or other securities of the Company;
  -61-




---



##### Table of Contents



(vi)
    
    any contract, arrangement or proposal concerning any company in which the
Director or his associate(s) is/are interested only, whether directly or indirectly,
as an officer or executive or a shareholder or in which the Director and any of his
associate(s) are not in aggregate beneficially interested in five (5) per cent or more
of the issued shares or of the voting rights of any class of shares of such company (or
of any third company through which his interest or that of any of his associates is
derived);(vii)
    
    any proposal or arrangement for the benefit of employees of the Company or its
subsidiaries including the adoption, modification or operation of a pension fund or
retirement, death or disability benefit scheme which relates both to directors, his
associates and employees of the Company or of any of its subsidiaries and does not give
the Director, or his associate(s), as such any privilege or advantage not accorded
generally to the class of persons to whom such scheme or fund relates; or(viii)
    
    any proposal concerning the adoption, modification or operation of any share scheme
involving the issue or grant of options over shares or other securities by the Company
to, or for the benefit of the employees of the Company or its subsidiaries under which
the Director or his associate(s) may benefit.
       -62-




---



##### Table of Contents



Shareholders Rights
        -63-




---



##### Table of Contents



Actions Necessary to Change Shareholders Rights
  (a)
    
    the necessary quorum (other than at an adjourned meeting) shall be at least two
persons holding or representing by proxy or authorized representative not less than
one-third in nominal value of the issued shares of that class and at any adjourned
meeting of such holders, two holders present in person or by proxy (whatever the number
of shares held by them) shall be a quorum;(b)
    
    every holder of shares of the class shall be entitled on a poll to one vote for
every such share held by him/her; and(c)
    
    any holder of shares of the class present in person or by proxy or authorized
representative may demand a poll.
  General Meetings of Shareholders
   Limitation on Foreign Ownership
   -64-




---



##### Table of Contents



Change in Control
  (a)
    
    the instrument of transfer is lodged at the Registration Office or such other
place in Bermuda at which the Register is kept in accordance with the Companies Act or
the Registration Office (as the case may be) accompanied by the relevant share
certificate(s) and such other evidence as the Board may reasonably require to show the
right of the transferor to make the transfer; and(b)
    
    if applicable, the instrument of transfer is duly and properly stamped.
 Ownership Threshold Disclosure
  Significant Differences in Applicable Law
  Changes in Capital
  Material Contracts
   
 Exchange Controls and Other Limitations Affecting Security Holders
    -65-




---



##### Table of Contents



Taxation
  Bermuda Taxation
   -66-




---



##### Table of Contents



Hong Kong Taxation
 Tax on Dividends
  Profits Tax
  United States Federal Income Taxation
      -67-




---



##### Table of Contents



The Company
   Taxation of Investor-United States Holders
   Ownership of ADSs and Shares
  Taxation of Dividends
   -68-




---



##### Table of Contents



Taxation of Dispositions of Shares or ADSs
   Passive Foreign Investment Company Rules
    -69-




---



##### Table of Contents



-70-




---



##### Table of Contents



Taxation of Investors-Non-United States Holders
  United States Backup Withholding Tax and Information Reporting
     
 Item 11. Quantitative and Qualitative Disclosures about Market Risk
  
 Interest Rate Risk
  
 Exchange Rate Sensitivity
     -71-




---



##### Table of Contents



Limitations
  
 Item 12. Description of Securities Other Than Equity Securities
  PART II
 
 Item 13. Defaults, Dividend Arrearages, and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure Controls and Procedures.
 Managements Annual Report on Internal Control Over Financial Reporting.
   Changes in Internal Control Over Financial Reporting.
  -72-




---



##### Table of Contents



Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
  Years ended December 31,(in US$ thousands)
    
    2007
    
    
    2008Audit fees
    
    
    158
    
    
    
    151Audit-related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total
    
    
    158
    
    
    
    151
   
 Item 16D. Exemption from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
   -73-




---



##### Table of Contents



Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
 Exhibit No.
    
    Description of Exhibit1.1
    
    
    Memorandum of Association and By-laws of the Company (incorporated by reference to the
Company Registration Statement, as filed with the Commission on December 9, 1996, Registration
Number 333-6044).1.2
    
    
    The amended Memorandum of Association and Bye-Laws of the Company (incorporated by reference
to the Companys 20-F filed with the Commission on June 29, 2004).4.1
    
    
    Satellite Procurement Agreement by and between APT Satellite Company Limited, a wholly owned
subsidiary of the Company, and Contractor, an independent third party not associated with the
Directors, chief executive officer and major shareholders of the Company or any of its
subsidiaries, dated January 8, 2001 (incorporated by reference to the Companys 6-K filed with
the Commission on January 9, 2001).4.2
    
    
    Launch Agreement by and between APT Satellite Company Limited, a wholly owned subsidiary of
the Company, and the Launch Contractor, a subsidiary of China Aerospace Science & Technology
Corporation, dated January 8, 2001 (incorporated by reference to the Companys 6-K filed with
the Commission on January 9, 2001).4.3
    
    
    Satellite Procurement Agreement by and between APT Satellite Company Limited, a wholly owned
subsidiary of the Company, and Contractor, an independent third party not associated with the
Directors, chief executive officer and major shareholders of the Company or any of its
subsidiaries, dated December 11, 2001 (incorporated by reference to the Companys 6-K filed
with the Commission on December 18, 2001).4.4
    
    
    Term Sheet executed by and between APT Satellite Company Limited, a wholly owned subsidiary
of the Company, Contractor and Loral Orion, Inc., both of which are independent third party
not associated with the Directors, chief executive officer and major shareholders of the
Company or any of its subsidiaries, dated September 20, 2002 (incorporated by reference to the
Companys 6-K filed with the Commission on September 30, 2002).4.5
    
    
    Transponder Utilization Agreement by and between APT Satellite Company Limited, a wholly
owned subsidiary of the Company, and Lessee, a connected person under the rules governing the
listing of securities on The Stock Exchange of Hong Kong Limited, dated April 11,
2003 (incorporated by reference to the Companys 6-K filed with the Commission on
April 16, 2003).4.6
    
    
    Change of Auditors of the Company KPMG with effect from July 15, 2003 (incorporated by
reference to the Companys 6-K filed with the Commission on July 17, 2003).
  -74-




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit4.7
    
    
    Satellite Procurement Amendment Agreement by and between APT Satellite Company Limited, a
wholly owned subsidiary of the Company, and the Contractor, a party independent of the
Director, chief executive officer and substantial shareholder of the Company and its
subsidiaries and their respective associates, dated August 26, 2003. The Satellite
Transponder Agreement and Satellite Agreement by and between APT Satellite Company Limited, a
wholly owned subsidiary of the Company, and the lessor, a party independent of the Director,
chief executive officer and substantial shareholder of the Company and its subsidiaries and
their respective associates, dated August 26, 2003 (incorporated by reference to the
Companys 6-K filed with the Commission on September 2, 2003).4.8
    
    
    Various on-going transactions in their ordinary course of business had entered into between
the APT Group of the Company and APT Telecom, a non-wholly owned subsidiary of the Company,
and the contracting party, a connected person under the rules governing the listing of
securities on The Stock Exchange of Hong Kong Limited, as announced August 28, 2003
(incorporated by reference to the Companys 6-K filed with the Commission on September 2,
2003).4.9
    
    
    Master Agreement by and between APT Satellite Telecommunications Limited, a non-wholly owned
subsidiary of the Company, Skywork Corporation, a wholly owned subsidiary of the Company, APT
Telecom Services Limited, a wholly owned subsidiary of the Company, and a connected person
under the rules governing the listing of securities on The Stock Exchange of Hong Kong
Limited, dated September 10, 2003 whereby the business of APT Satellite Telecommunications
Limited was being reorganized (incorporated by reference to the Companys 6-K filed with the
Commission on September 15, 2003).4.10
    
    
    The Agreement and the Amended Launch Agreement by and between APT Satellite Company Limited,
a wholly owned subsidiary of the Company, and the Contractor of APSTAR V, dated November 16,
2003 (incorporated by reference to the Companys 6-K filed with the Commission on September
17, 2003).4.11
    
    
    An utilization agreement for the remaining life of APSTAR I by and between APT Satellite
Company Limited, a wholly owned subsidiary of the Company, and the customer, dated October 22,
2004 (incorporated by reference to the Companys 6-K filed with the Commission on October 29,
2004).4.12
    
    
    An agreement by and between APT Satellite Company Limited, a wholly owned subsidiary of the
Company, and the grantor and contractor of APSTAR VIB dated November 10, 2004 (incorporated by
reference to the Companys 6-K filed with the Commission on November 15, 2004).4.13
    
    
    Two Master Agreements by and between the Company and Singapore Telecommunications Limited;
and the Company and C2C Pte Limited dated December 1, 2004 (incorporated by reference to the
Companys 6-K filed with the Commission on December 3, 2004).4.14
    
    
    The sum insured in respect of the launch of APSTAR VI by and between APT Satellite Company
Limited, a wholly owned subsidiary of the Company, and the joint insurance brokers announced
on March 15, 2005 (incorporated by reference to the Companys 6-K filed with the Commission on
March 16, 2005).4.15
    
    
    The arrangement of sum insured in respect of the in-orbit insurance of APSTAR V by and
between APT Satellite Company Limited, a wholly owned subsidiary of the Company, and the
insurance broker dated August 4, 2005 (incorporated by reference to the Companys 6-K filed
with the Commission on August 5, 2005).
  -75-




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibit4.16
    
    
    Settlement Proposal in respect of the tax assessment on the gain of the transfer of
transponders of APSTAR IIR submitted with the Inland Revenue Department of Hong Kong on August
28, 2006 by APT Satellite Company Limited, a wholly owned subsidiary of the Company, and the
response received from the department (incorporated by reference to the Companys 6-K filed
with the Commission on September 25, 2006).4.17
    
    
    The Supplemental Agreement by and between the Company and Singapore Telecommunications
Limited dated December 28, 2006 whereby extending the term of the Master Agreement as filed to
the Companys 6-K on December 3, 2004 (incorporated by reference to the Companys 6-K filed
with the Commission on December 29, 2006).4.18
    
    
    The Option Agreement by and among shareholders of APT Satellite Telecommunication Limited
(the Licensor, a jointly controlled entity owned as to 55% indirectly by the Company), the
Licensor and NTT Com Asia Limited (the Licensee) dated October 2, 2007 whereby granting the
Licensee a call option to purchase the entire equity interests in the Licensor with option
expiry date on December 31, 2008 and a right of first refusal in respect of any offer to
purchase equity interests in the Licensor during the period from January 1, 2009 to December
31, 2010. On the same date, the License Agreement and the Renewal Supplement by and between
the Licensor and Licensee whereby licensing certain premises of the Licensor to the Licensee
for a term of three years beginning October 1, 2007 and renewing the License Agreement subject
to certain conditions (incorporated by reference to the Companys 6-K filed with the
Commission on October 3, 2007).8.1
    
    
    List of subsidiaries of the Company and the jurisdictions under which each does business
(contained in Note 18 to the Consolidated Financial Statements filed herein under Item 18).11
    
    
    Code of Ethics (incorporated by reference to Exhibit 11.1 on the Form 20-F for the year ended
December 31, 2006).12.1
    *
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.12.2
    *
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.13.1
    **
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.13.2
    **
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.15.1
    
    
    Charter of Nomination Committee (incorporated by reference to Exhibit 14.2 on the Form 20-F
for the year ended December 31, 2004).15.2
    
    
    Charter of Remuneration Committee (incorporated by reference to Exhibit 14.3 on the Form 20-F
for the year ended December 31, 2004).15.3
    *
    
    Amended Charter of Audit Committee (as amended on 25 June 2004, on 11 April 2005 and 7 April
2009).
 
 *
    
    Filed herewith.**
    
    Furnished herewith.  -76-




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##### Table of Contents



SIGNATURES
  APT SATELLITE HOLDINGS LIMITED
 /s/
Cheng GuangrenCheng GuangrenExecutive Director and President
   -77-




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##### Table of Contents



APT SATELLITE HOLDINGS LIMITED AND SUBSIDIARIES
 
  1 of 68




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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm
    
    
    3Consolidated Statement of Operations
for the year ended December 31, 2008
    
    
    4Consolidated Balance Sheet at December 31, 2008
    
    
    5 & 6Consolidated Statement of Changes in Equity
for the year ended December 31, 2008
    
    
    7Consolidated Cash Flow Statement
for the year ended December 31, 2008
    
    
    8 & 9Notes to the Consolidated Financial Statements
    
    
    10
- 68
  2 of 68




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    KPMG
 
  3 of 68




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##### Table of Contents



Consolidated Statement of Operations  For the year ended December 31, 2008  (Expressed in Hong Kong dollars)
 Note
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Turnover
    
    3 & 14
    
    
    403,672
    
    
    
    451,626
    
    
    
    426.988Cost of services
    
    
    
    
    (277,581
    )
    
    
    (314,792
    )
    
    
    (338,259
    )Gross profit
    
    
    
    
    126,091
    
    
    
    136,834
    
    
    
    88,729Other net income
    
    4
    
    
    68,871
    
    
    
    26,334
    
    
    
    37,542Administrative expenses
    
    
    
    
    (84,838
    )
    
    
    (81,896
    )
    
    
    (88,957
    )Valuation (losses)/gains on investment properties
    
    17
    
    
    (12
    )
    
    
    226
    
    
    
    156Impairment loss recognised in respect of
property, plant and equipment
    
    15
    (a)
    
    (8,397
    )
    
    
    (98
    )
    
    
    Profit from operations
    
    
    
    
    101,715
    
    
    
    81,400
    
    
    
    37,470Finance costs
    
    5
    (a)
    
    (24,844
    )
    
    
    (55,345
    )
    
    
    (64,140
    )Share of results of jointly controlled entities
    
    19
    
    
    2,397
    
    
    
    (894
    )
    
    
    2,182Gain on disposal of a subsidiary
    
    9
    
    
    3,193
    
    
    
    
    
    
    
    Gain on disposal of a jointly controlled entity
    
    10
    
    
    9,590
    
    
    
    
    
    
    
    Profit/(Loss) before taxation
    
    5
    
    
    92,051
    
    
    
    25,161
    
    
    
    (24,488
    )Income tax
    
    6
    (a)
    
    (42,551
    )
    
    
    (20,445
    )
    
    
    (56,128
    )Profit/(Loss) for the year
    
    
    
    
    49,500
    
    
    
    4,716
    
    
    
    (80,616
    )Attributable to:Equity shareholders of the Company
    
    11
    
    
    49,587
    
    
    
    5,581
    
    
    
    (79,480
    )Minority interests
    
    
    
    
    (87
    )
    
    
    (865
    )
    
    
    (1,136
    )Profit/(Loss) for the year
    
    
    
    
    49,500
    
    
    
    4,716
    
    
    
    (80,616
    )Earnings/(Loss) per share
    
    13 Basic
    
    
    
    12 cents
    
    
    1 cents
    
    
    (19 cents
    ) Diluted
    
    
    
    12 cents
    
    
    1 cents
    
    
    (19 cents
    )
   4 of 68




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Consolidated Balance Sheet at December 31, 2008
 (Expressed in Hong Kong dollars)
 Note
    
    2008
    
    
    2007$000
    
    
    $000Non-current assetsProperty, plant and equipment
    
    15
    (a)
    
    2,183,468
    
    
    
    2,508,321Interest in leasehold land held for own use
under an operating lease
    
    16
    
    
    14,444
    
    
    
    14,820Investment properties
    
    17
    
    
    5,159
    
    
    
    5,171Interest in jointly controlled entities
    
    19
    
    
    
    
    
    
    3,529Amount due from a jointly controlled entity
    
    19
    
    
    
    
    
    
    69,839Club memberships
    
    
    
    
    5,537
    
    
    
    5,537Prepaid expenses
    
    20
    
    
    19,023
    
    
    
    14,137Deferred tax assets
    
    28
    (b)
    
    
    
    
    
    9,1742,227,631
    
    
    
    2,630,528Current assetsTrade receivables, net
    
    21
    
    
    67,143
    
    
    
    80,409Deposits, prepayments and other receivables
    
    20
    
    
    26,728
    
    
    
    23,240Amount due from immediate holding company
    
    
    
    
    155
    
    
    
    101Amount due from a jointly controlled entity
    
    19
    
    
    
    
    
    
    5,530Other financial assets
    
    22
    
    
    102,277
    
    
    
    Pledged bank deposits
    
    33
    
    
    808
    
    
    
    83,749Cash and cash equivalents
    
    23
    
    
    121,541
    
    
    
    312,025318,652
    
    
    
    505,054Current liabilitiesPayables and accrued charges
    
    24
    
    
    41,335
    
    
    
    38,727Rentals received in advance
    
    
    
    
    40,608
    
    
    
    33,679Loan from a minority shareholder
    
    
    
    
    6,088
    
    
    
    7,488Secured bank borrowings due within one year
    
    25
    
    
    
    
    
    
    217,961Current taxation
    
    28
    (a)
    
    98,242
    
    
    
    93,087186,273
    
    
    
    390,942Net current assets
    
    
    
    
    132,379
    
    
    
    114,112Total assets less current liabilities carried
forward
    
    
    
    
    2,360,010
    
    
    
    2,744,640
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Consolidated Balance Sheet at December 31, 2008 (Continued)
 (Expressed in Hong Kong dollars)
 Note
    
    2008
    
    
    2007$000
    
    
    $000Total assets less current liabilities
brought forward
    
    
    
    
    2,360,010
    
    
    
    2,744,640Non-current liabilitiesSecured bank borrowings due after one year
    
    25
    
    
    
    
    
    
    462,374Deposits received
    
    26
    
    
    23,093
    
    
    
    19,624Deferred income
    
    27
    
    
    209,370
    
    
    
    207,787Deferred tax liabilities
    
    28
    (b)
    
    86,982
    
    
    
    66,164319,445
    
    
    
    755,949Net assets
    
    
    
    
    2,040,565
    
    
    
    1,988,691Capital and reservesShare capital
    
    29
    
    
    41,327
    
    
    
    41,327Share premium
    
    
    
    
    1,287,536
    
    
    
    1,287,536Contributed surplus
    
    31
    
    
    511,000
    
    
    
    511,000Capital reserve
    
    31
    
    
    9,330
    
    
    
    9,557Revaluation reserve
    
    31
    
    
    368
    
    
    
    368Exchange reserve
    
    31
    
    
    7,212
    
    
    
    4,007Other reserves
    
    31
    
    
    123
    
    
    
    115Accumulated profits
    
    31
    
    
    183,669
    
    
    
    133,8552,040,565
    
    
    
    1,987,765Minority interests
    
    
    
    
    
    
    
    
    926Total equity
    
    
    
    
    2,040,565
    
    
    
    1,988,691
  Cheng Guangren
    
    Qi LiangDIRECTOR
    
    DIRECTOR
   6 of 68




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Consolidated Statement of changes in equity
For the year ended December 31, 2008  (Expressed in Hong Kong dollars)
 Attributable to equity shareholders of the CompanyShare
    
    
    Share
    
    
    Contributed
    
    
    Capital
    
    
    Revaluation
    
    
    Exchange
    
    
    Other
    
    
    Accumulated
    
    
    
    
    
    
    Minority
    
    
    Totalcapital
    
    
    premium
    
    
    surplus
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserves
    
    
    profits
    
    
    Total
    
    
    interests
    
    
    equity$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000At January 1, 2006
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    11,996
    
    
    
    
    
    
    
    1,347
    
    
    
    104
    
    
    
    205,315
    
    
    
    2,058,625
    
    
    
    2,927
    
    
    
    2,061,552Exchange differences
on translation of
financial statements
of overseas
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,292
    
    
    
    5
    
    
    
    
    
    
    
    1,297
    
    
    
    
    
    
    
    1,297Cancellation of
share options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,382
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,382
    
    
    
    
    
    
    
    
    
    
    
    Net loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (79,480
    )
    
    
    (79,480
    )
    
    
    (1,136
    )
    
    
    (80,616
    )Balance at December
31, 2006
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    9,614
    
    
    
    
    
    
    
    2,639
    
    
    
    109
    
    
    
    128,217
    
    
    
    1,980,442
    
    
    
    1,791
    
    
    
    1,982,233At January 1, 2007
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    9,614
    
    
    
    
    
    
    
    2,639
    
    
    
    109
    
    
    
    128,217
    
    
    
    1,980,442
    
    
    
    1,791
    
    
    
    1,982,233Exchange differences
on translation of
financial statements
of overseas
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,368
    
    
    
    6
    
    
    
    
    
    
    
    1,374
    
    
    
    
    
    
    
    1,374Revaluation surplus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    368
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    368
    
    
    
    
    
    
    
    368Cancellation of
share options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    Net profit/(loss)
loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,581
    
    
    
    5,581
    
    
    
    (865
    )
    
    
    4,716Balance at December
31, 2007
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    9,557
    
    
    
    368
    
    
    
    4,007
    
    
    
    115
    
    
    
    133,855
    
    
    
    1,987,765
    
    
    
    926
    
    
    
    1,988,691At January 1, 2008
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    9,557
    
    
    
    368
    
    
    
    4,007
    
    
    
    115
    
    
    
    133,855
    
    
    
    1,987,765
    
    
    
    926
    
    
    
    1,988,691Exchange differences
on translation of
financial statements
of overseas
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,205
    
    
    
    8
    
    
    
    
    
    
    
    3,213
    
    
    
    
    
    
    
    3,213Reversal of minority
interest arising
from disposal of a
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (839
    )
    
    
    (839
    )Cancellation of
share options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (227
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    
    
    
    
    
    
    
    
    Net profit/(loss)
for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,587
    
    
    
    49,587
    
    
    
    (87
    )
    
    
    49,500Balance at December
31, 2008
    
    
    41,327
    
    
    
    1,287,536
    
    
    
    511,000
    
    
    
    9,330
    
    
    
    368
    
    
    
    7,212
    
    
    
    123
    
    
    
    183,669
    
    
    
    2,040,565
    
    
    
    
    
    
    
    2,040,565
   7 of 68




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Consolidated Cash Flow Statement
For the year ended December 31, 2008  (Expressed in Hong Kong dollars)
 Note
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Operating activitiesProfit/(Loss) before taxation
    
    
    
    
    92,051
    
    
    
    25,161
    
    
    
    (24,488
    )Adjustments for:Depreciation
    
    
    
    
    214,470
    
    
    
    222,461
    
    
    
    231,347Amortisation of leasehold land held for own use
    
    
    
    
    376
    
    
    
    375
    
    
    
    375Impairment loss recognised in respect of property,
plant and equipment
    
    
    
    
    8,397
    
    
    
    98
    
    
    
    Interest income
    
    
    
    
    (11,433
    )
    
    
    (22,181
    )
    
    
    (17,559
    )Gain on disposal of property, plant and equipment
    
    
    
    
    (51,595
    )
    
    
    (261
    )
    
    
    (17,630
    )Finance costs
    
    
    
    
    24,844
    
    
    
    55,345
    
    
    
    64,140Net valuation losses/(gains) on investment properties
    
    
    
    
    12
    
    
    
    (226
    )
    
    
    (156
    )Share of results of jointly controlled entities
    
    
    
    
    (2,397
    )
    
    
    894
    
    
    
    (2,182
    )Impairment loss for trade and other receivables
    
    
    
    
    5,637
    
    
    
    80
    
    
    
    8,347Gain on disposal of a subsidiary
    
    
    
    
    (3,193
    )
    
    
    
    
    
    
    Gain on disposal of jointly controlled entity
    
    
    
    
    (9,590
    )
    
    
    
    
    
    
    Decrease/(Increase) in trade receivables, net
    
    
    
    
    7,468
    
    
    
    (227
    )
    
    
    (38,622
    )(Increase)/Decrease in prepaid expenses
    
    
    
    
    (4,886
    )
    
    
    11,070
    
    
    
    7,020Increase in amount due from immediate holding company
    
    
    
    
    (54
    )
    
    
    (19
    )
    
    
    (82
    )(Increase)/Decrease in deposits, prepayments and other
receivables
    
    
    
    
    (4,499
    )
    
    
    14,992
    
    
    
    (2,302
    )Increase/(Decrease) in payables and accrued charges
    
    
    
    
    5,937
    
    
    
    (4,188
    )
    
    
    4,787Increase/(Decrease) in rentals received in advance
    
    
    
    
    8,316
    
    
    
    (476
    )
    
    
    2,741Decrease/(Increase) in amounts due from a jointly
controlled entity
    
    
    
    
    5,530
    
    
    
    (89
    )
    
    
    5,090Increase/(Decrease) in deferred income
    
    
    
    
    13,283
    
    
    
    (14,354
    )
    
    
    (16,870
    )Increase/(Decrease) in deposits received
    
    
    
    
    3,469
    
    
    
    (795
    )
    
    
    4,433Cash generated from operations
    
    
    
    
    302,143
    
    
    
    287,660
    
    
    
    208,358Hong Kong profits tax refunded
    
    
    
    
    
    
    
    
    
    
    
    
    21,672Overseas tax paid
    
    
    
    
    (7,404
    )
    
    
    (18,616
    )
    
    
    (15,129
    )Net cash generated from operating activities
    
    
    
    
    294,739
    
    
    
    269,044
    
    
    
    214,901
  8 of 68




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Consolidated Cash Flow Statement
For the year ended December 31, 2008 (Continued)  (Expressed in Hong Kong dollars)
 Note
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Investing activitiesPurchases of property, plant and equipment
    
    
    
    
    (5,528
    )
    
    
    (11,426
    )
    
    
    (7,098
    )Proceeds from disposal of property, plant and
equipment
    
    
    
    
    141,559
    
    
    
    295
    
    
    
    70,898Repayments from/(Advances to) jointly controlled
entities
    
    
    
    
    69,839
    
    
    
    (245
    )
    
    
    (7,518
    )Interest received
    
    
    
    
    12,157
    
    
    
    22,431
    
    
    
    16,896Decrease/(Increase) in pledged bank deposits
    
    
    
    
    82,942
    
    
    
    5,441
    
    
    
    (20,491
    )Proceeds from disposal of a subsidiary
    
    9
    
    
    4,796
    
    
    
    
    
    
    
    Proceeds from disposal of a jointly controlled entity
    
    10
    
    
    16,572
    
    
    
    
    
    
    
    Repayment to a minority shareholder
    
    
    
    
    (1,000
    )
    
    
    
    
    
    
    Purchases of other financial assets
    
    
    
    
    (102,277
    )
    
    
    
    
    
    
    Net cash generated from investing activities
    
    
    
    
    219,060
    
    
    
    16,496
    
    
    
    52,687Financing activitiesInterest paid
    
    
    
    
    (23,649
    )
    
    
    (64,243
    )
    
    
    (63,514
    )Repayment of bank borrowings
    
    
    
    
    (683,056
    )
    
    
    (253,013
    )
    
    
    (191,226
    )Net cash used in financing activities
    
    
    
    
    (706,705
    )
    
    
    (317,256
    )
    
    
    (254,740
    )Net decrease in cash and cash equivalents
    
    
    
    
    (192,906
    )
    
    
    (31,716
    )
    
    
    (12,848
    )Cash and cash equivalents at January 1
    
    
    
    
    312,025
    
    
    
    341,325
    
    
    
    326,440Effect of foreign exchange rates changes
    
    
    
    
    2,422
    
    
    
    2,416
    
    
    
    2,037Cash and cash equivalents at December 31
    
    
    
    
    121,541
    
    
    
    312,025
    
    
    
    341,325
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Notes on the financial statements
 (Expressed in Hong Kong dollars unless otherwise indicated)
 1
    
    SIGNIFICANT ACCOUNTING POLICIES
 (a)
    
    Statement of compliance
  (b)
    
    Basis of preparation of the financial statements
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(b)
    
    Basis of preparation of the financial statements (Continued)The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which 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 IFRS that have significant effect
on the financial statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 40.(c)
    
    Subsidiaries and minority interestSubsidiaries are entities controlled by the Group. Control exists when the Group has
the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. In assessing control, potential voting rights that
presently are exercisable are taken into account.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 unrealised profits arising from
intra-group transactions are eliminated in full in preparing the consolidated
financial statements. Unrealised losses resulting from intra-group transactions are
eliminated in the same way as unrealised gains but only to the extent that there is no
evidence of impairment.Minority interests represent the portion of the net assets of subsidiaries
attributable to interests that are not owned by the Company, whether directly or
indirectly through subsidiaries, 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. Minority interests are presented in the
consolidated balance sheet within equity, separately from equity attributable to the
equity shareholders of the Company. Minority interests in the results of the Group
are presented on the face of the consolidated statement of operations as an allocation
of the total profit or loss for the year between minority interests and the equity
shareholders of the Company.Where losses applicable to the minority exceed the minoritys interest in the equity
of a subsidiary, the excess, and any further losses applicable to the minority, are
charged against the Groups interest except to the extent that the minority has a
binding obligation to, and is able to, make additional investment to cover the losses.
If the subsidiary subsequently reports profits, the Groups interest is allocated all
such profits until the minoritys share of losses previously absorbed by the Group has
been recovered.Loan from holder of minority interests is presented as financial liabilities in the
consolidated balance sheet in accordance with note 1(l).In the Companys balance sheet, an investment in a subsidiary is stated at cost less
any impairment losses (see note 1(i)).
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(d)
    
    Jointly controlled entitiesA jointly controlled entity is an entity which operates under a contractual
arrangement between the Group and other parties, where the contractual arrangement
establishes that the Group and one or more of the other parties share joint control
over the economic activity of the entity.An investment in a jointly controlled entity is accounted for in the consolidated
financial statements under the equity method and is initially recorded at cost and
adjusted thereafter for the post acquisition change in the Groups share of the
jointly controlled entitys net assets, unless it is classified as held for sale (or
included in a disposal group that is classified as held for sale). The consolidated
statement of operations includes the Groups share of the post-acquisition post-tax
results of the jointly controlled entities for the year, including any impairment loss
on goodwill relating to the investment in jointly controlled entities recognised for
the year (see note 1(e) and (i)).When the Groups share of losses exceeds its interest in the jointly controlled
entity, 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 jointly controlled entity. For this
purpose, the Groups interest in the jointly controlled entity 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 jointly
controlled entity.Unrealised profits and losses resulting from transactions between the Group and its
jointly controlled entities are eliminated to the extent of the Groups interest in
the jointly controlled entity, except where unrealised losses provide evidence of an
impairment of the asset transferred, in which case they are recognised immediately in
the statement of operations.(e)
    
    GoodwillGoodwill represents the excess of the cost of a business combination or an investment
in a jointly controlled entity over the Groups interest in the net fair value of the
acquirees identifiable assets, liabilities and contingent liabilities.Goodwill is stated at cost less accumulated impairment losses. Goodwill is allocated
to cash-generating units and is tested annually for impairment (see note 1(i)). In
respect of jointly controlled entities, the carrying amount of goodwill is included in
the carrying amount of the interest in the jointly controlled entity.Any excess of the Groups interest in the net fair value of the acquirees
identifiable assets, liabilities and contingent liabilities over the cost of a
business combination or an investment in a jointly controlled entity is recognised
immediately in the statement of operations.On disposal of a cash generating unit, or a jointly controlled entity during the year,
any attributable amount of purchased goodwill is included in the calculation of the
profit or loss on disposal.(f)
    
    Investment propertyInvestment properties are land and/or buildings which are owned or held under a
leasehold interest (see note 1(h)) to earn rental income and/or for capital
appreciation. These include land held for a currently undetermined future use.Investment properties are stated in the balance sheet at fair value. Any gain or loss
arising from a change in fair value or from the retirement or disposal of an
investment property is recognised in the statement of operations. Rental income from
investment properties is accounted for as described in note 1(r)(iv).
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(f)
    
    Investment property (Continued)When the Group holds a property interest under an operating lease to earn rental
income and/or for capital appreciation, the interest is classified and accounted for
as an investment property on a property-by-property basis. Any such property interest
which has been classified as an investment property is accounted for as if it were
held under a finance lease (see note 1(h)), and the same accounting policies are
applied to that interest as are applied to other investment properties leased under
finance leases. Lease payments are accounted for as described in note 1(h).Where other land and buildings are reclassified to investment properties, the
cumulative increase in fair value of investment properties at the date of
reclassification is included in the revaluation reserve, and will be transferred to
retained profits upon the retirement and disposal of the relevant properties.(g)
    
    Other property, plant and equipmentThe following items of property, plant and equipment are stated in the balance sheet
at cost less accumulated depreciation and impairment losses (see note 1(i)):
 
    
    buildings held for own use which are situated on leasehold land,
where the fair value of the building could be measured separately from the fair
value of the leasehold land at the inception of the lease (see note 1(h)); and
    
    other items of plant and equipment.
 Subsequent cost reimbursements are included as reductions to the assets carrying
amount, as appropriate, only when it is probable that future economic benefits
associated with the cost reimbursements will flow to the Group and can be measured
reliably.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 recognised in the statement of operations on
the date of retirement or disposal. Any related revaluation surplus is transferred
from the revaluation reserve to retained profits.Depreciation is calculated to write off the cost or valuation 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 situated on leasehold land are depreciated over the shorter
of the unexpired term of lease and their estimated useful lives, being no more
than 50 years after the date of completion.
    
    Leasehold improvement
    
    Over the lease term
    
    Furniture and equipment, motor vehicles, and computer equipment
    
    5 years
    
    Communication satellite equipment
    
    5 to 15 years
    
    Communication station
    
    5 years
    
    Communication satellites
    
    9 to 15 years
 Where parts of an item of property, plant and equipment have different useful lives,
the cost or valuation of the item is allocated on a reasonable basis between the parts
and each part is depreciated separately. Both the useful life of an asset and its
residual value, if any, are reviewed annually.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(h)
    
    Leased assetsAn 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 on an evaluation of the substance of the
arrangement and is regardless of whether the arrangement takes the legal form of a
lease.
 (i)
    
    Classification of assets leased to the GroupAssets 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, with the
following exceptions:
 
    
    property held under operating leases that would otherwise
meet the definition of an investment property is classified as an investment
property on a property-by-property basis and, if classified as investment
property, is accounted for as if held under a finance lease (see note 1(f));
and
    
    land held for own use under an operating lease, the fair
value of which cannot be measured separately from the fair value of a
building situated thereon at the inception of the lease, is accounted for as
being held under a finance lease, unless the building is also clearly held
under an operating lease. For these purposes, the inception of the lease is
the time that the lease was first entered into by the Group, or taken over
from the previous lessee.
 (ii)
    
    Assets acquired under finance leasesWhere 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 are included in fixed assets and the
corresponding liabilities, net of finance charges, are recorded as obligations
under finance leases. Depreciation is provided at rates which write off the cost
of the assets in equal annual amounts, to residual values, over the term of the
relevant lease or, where it is likely the Group will obtain ownership of the
asset, the life of the asset, as set out in note 1(g). Impairment losses are
accounted for in accordance with the accounting policy as set out in note 1(i).
Finance charges implicit in the lease payments are charged to the statement of
operations 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 the statement of
operations in the accounting period in which they are incurred.(iii)
    
    Operating lease chargesWhere the Group has the use of assets under operating leases, payments made under
the leases are charged to the statement of operations 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 recognised in the statement of
operations as an integral part of the aggregate net lease payments made.
Contingent rentals are charged to the statement of operations in the accounting
period in which they are incurred.The cost of acquiring land held under an operating lease is amortised on a
straight-line basis over the period of the lease term except where the property is
classified as an investment property (see note 1(f)).
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(i)
    
    Impairment of assets
 (i)
    
    Impairment of investments in equity securities and other receivablesInvestments in equity securities (other than investments in subsidiaries and
associates) and other current receivables that are stated at cost 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 debtor;
    
    a breach of contract, such as a default or delinquency in interest or principal payments;
    
    it becoming probable that the debtor will enter bankruptcy or other
financial reorganization;
    
    significant changes in the technological, market, economic or legal
environment that have an adverse effect on the debtor; and
    
    a significant or prolonged decline in the fair value of an investment in an
equity instrument below its cost.
 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 recognised, 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 recognised in prior
years.Impairment losses are written off against the corresponding assets directly, except
for impairment losses recognised 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 recognised in profit or loss.(ii)
    
    Impairment of other assetsInternal and external sources of information are reviewed at each balance sheet date
to identify indications that the following assets may be impaired or, except in the
case of goodwill, an impairment loss previously recognised no longer exists or may
have decreased:
 
    
    property, plant and equipment;
    
    construction in progress;
    
    pre-paid interests in leasehold land classified as being held under an
operating lease;
    
    investments in subsidiaries, associates and a jointly-controlled entity; and
    
    goodwill.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(i)
    
    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.
 (i)
    
    Calculation of recoverable amount
 The recoverable amount of an asset is the greater of its net selling price 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 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).
 (ii)
    
    Recognition of impairment losses
 An impairment loss is recognised in profit or loss whenever the carrying amount of
an asset, or the cash-generating unit to which it belongs, exceeds its recoverable
amount. Impairment losses recognised 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 to sell, or value in use, if determinable.
 (iii)
    
    Reversals of impairment losses
 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.A reversal of an impairment loss is limited to the assets carrying amount that
would have been determined had no impairment loss been recognised in prior years.
Reversals of impairment losses are credited to profit or loss in the year in which
the reversals are recognised.(iii)
    
    Interim financial reporting and impairmentUnder the Listing Rules, the Group is required to prepare an interim financial
report in compliance with IAS34, Interim financial reporting, in respect of the
first six months of the financial year. At the end of the interim period, the Group
applies the same impairment testing, recognition, and reversal criteria as it would
at the end of the financial year (see notes 1(i)(i) and (ii)).Impairment losses recognised in an interim period in respect of goodwill and
unquoted equity securities carried at cost are not reversed in a subsequent period.
This is the case even if no losses, or a smaller loss, would have been recognised
had the impairment been assessed only at the end of the financial year to which the
interim period relates. No impairment losses were recognised in respect of goodwill
and unquoted equity securities carried at cost during the interim period.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(j)
    
    Trade and other receivablesTrade and other receivables are initially recognised at fair value and thereafter
stated at amortised cost less impairment losses for bad and doubtful debts, except
where the receivables are interest-free loans made to related parties without any
fixed repayment terms. In such cases, the receivables are stated at cost less
impairment losses for bad and doubtful debts. 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.(k)
    
    Other investments in debts and equity securitiesThe Groups policies for investments in debts and equity securities, other than
investments in subsidiaries, associates and jointly controlled entities, are as follows:Investments in debt and equity securities are initially stated at cost, which is their
transition price unless fair value can be more reliably estimated using valuation
techniques whose variables include only data from observable markets. Cost includes
attributable transaction costs, except where indicated otherwise below.Investments are recognised/derecognised on the date the group commits to
purchase/see the investments or they expire.(l)
    
    Interest-bearing borrowingsInterest-bearing borrowings are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, interest-bearing borrowings are
stated at amortised cost with any difference between the amount initially recognised
and redemption value being recognised in the statement of operations over the period
of the borrowings, together with any interest and fees payable, using the effective
interest method.(m)
    
    Trade and other payablesTrade and other payables are initially recognised at fair value and thereafter stated
at amortised cost unless the effect of discounting would be immaterial, in which case
they are stated at cost.(n)
    
    Cash and cash equivalentsCash and cash equivalents comprise cash at bank and on hand, demand deposits with
banks and other financial institutions, 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. Bank overdrafts that are repayable on demand and form an integral part of
the Groups cash management are also included as a component of cash and cash
equivalents for the purpose of the consolidated cash flow statement.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(o)
    
    Employee benefits
 (i)
    
    Salaries, annual bonuses, paid annual leave, leave passage and the
cost to the Group of non-monetary benefits are accrued in the year in which the
associated services are rendered by employees of the Group. Where payment or
settlement is deferred and the effect would be material, these amounts are stated
at their present values.Contributions to Mandatory Provident Funds as required under the Hong Kong
Mandatory Provident Fund Schemes Ordinance, are recognised as an expense in the
statement of operations as incurred.The employees of the Group participate in retirement plans managed by respective
local governments of the municipalities in which the Group operates in the
Peoples Republic of China (the PRC). The Groups contributions to the plan are
calculated based on fixed rates of the employees salary costs and charged to the
statement of operations when incurred. The Group has no other obligation for the
payment of retirement and other post-retirement benefits of staff other than the
contributions described above.(ii)
    
    Share based paymentsThe fair value of share options granted to employees is recognised 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 share options is spread over
the vesting period, taking into account the probability that the options will
vest.During the vesting period, the number of share options that is expected to vest is
reviewed. Any adjustment to the cumulative fair value recognised in prior years is
charged/credited to the statement of operations 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
recognised as an expense is adjusted to reflect the actual number of share options
that vest (with a corresponding adjustment to the capital reserve) except where
forfeiture is only due to not achieving vesting conditions that relate to the
market price of the Companys shares. The equity amount is recognised in the
capital reserve until either the option is exercised (when it is transferred to
the share premium account) or the option expires (when it is released directly to
retained profits).(iii)
    
    Termination benefitsTermination benefits are recognised when, and only when, the Group demonstrably
commits itself to terminate employment or to provide benefits as a result of
voluntary redundancy by having a detailed formal plan which is without realistic
possibility of withdrawal.
 (p)
    
    Income taxIncome 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 recognised in the statement of operations except to the extent that they relate
to items recognised directly in equity, in which case they are recognised in equity.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.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(p)
    
    Income tax (continued)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.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 utilised, are recognised. 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 utilised.The limited exceptions to recognition of deferred tax assets and liabilities are
those temporary differences arising from goodwill not deductible for tax purposes,
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 to the extent that, in the case
of taxable 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.The amount of deferred tax recognised is measured based on the expected manner of
realisation 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 carrying amount of a deferred tax asset is reviewed at each balance sheet date
and is reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow the related tax benefit to be utilised. Any such
reduction is reversed to the extent that it becomes probable that sufficient taxable
profit will be available.Additional income taxes that arise from the distribution of dividends are recognised
when the liability to pay the related dividends is recognised.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, and only if, the Company or the Group has the legally enforceable right to set
off current tax assets against current tax liabilities and the following additional
conditions are met:
 
    
    in the case of current tax assets and liabilities, the Company or the
Group intends either to settle on a net basis, or to realise the asset and settle
the liability simultaneously; or
    
    in the case of deferred tax assets and liabilities, if they relate to
income taxes levied by the same taxation authority on either:
    
    the same taxable entity; or
    
    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 realise the current tax assets and settle the current tax
liabilities on a net basis or realise and settle simultaneously.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(q)
    
    Provisions and contingent liabilitiesProvisions are recognised for liabilities of uncertain timing or amount when the
Company or 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 a reliable estimate can be made. Where the time value of money is
material, provisions are stated at the present value of the expenditures expected to
settle the obligation.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.(r)
    
    Revenue recognitionProvided 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 recognised in
the statement of operations as follows:
 (i)
    
    Transponder utilisation income and related servicesIncome from provision of satellite transponder capacity and related services is
recognised in the statement of operations in equal instalments over the accounting
periods covered by the contract term, except where an alternative basis is more
representative of the pattern of benefits to be derived from the satellite
transponder capacity utilised.(ii)
    
    Service incomeService income in respect of provision of satellite-based broadcasting and
telecommunications services and other service is recognised when services are
provided.(iii)
    
    Interest incomeInterest income is recognised as if accrued using the effective interest method.(iv)
    
    Rental income from operating leasesRental income receivable under operating leases is recognised in the statement of
operations in equal instalments over the periods covered by the lease term, except
where an alternative basis is more representative of the pattern of benefits to be
derived from the use of the leased asset. Lease incentives granted are recognised
in the statement of operations as an integral part of the aggregate net lease
payments receivable. Contingent rentals are recognised as income in the accounting
period in which they are earned.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(s)
    
    Translation of foreign currenciesForeign currency transactions during the year are translated at the foreign exchange
rates ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at the foreign exchange rates ruling at the balance
sheet date. Exchange gains and losses are recognised in the statement of operations,
except those arising from foreign currency borrowings used to hedge a net investment
in a foreign operation which are recognised directly in equity.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 functional currency of the Groups main operations is the United States dollar
which is translated into Hong Kong dollar for reporting of the financial statements.
As the Hong Kong dollar is pegged to the United States dollar, the impact of foreign
currency exchange fluctuations is insignificant to the Group.The results of foreign operations are translated into Hong Kong dollars at the
exchange rates approximating the foreign exchange rates ruling at the dates of the
transactions. Balance sheet items are translated into Hong Kong dollars at the foreign
exchange rates ruling at the balance sheet date. The resulting exchange differences
are recognised directly in a separate component of equity.On disposal of a foreign operation, the cumulative amount of the exchange differences
recognised in equity which relate to that foreign operation is included in the
calculation of the profit and loss on disposal.(t)
    
    Borrowing costsBorrowing costs are expensed in the statement of operations in the period in which
they are incurred, except to the extent that they are capitalised as being directly
attributable to the acquisition or construction of an asset which necessarily takes a
substantial period of time to get ready for its intended use or sale.The capitalisation of borrowing costs as part of the cost of a qualifying asset
commences when expenditures for the asset are 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. Capitalisation of borrowing costs is suspended or ceases
when substantially all the activities necessary to prepare the qualifying asset for
its intended use or sale are interrupted or complete.
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1
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(u)
    
    Related partiesFor the purposes of these financial statements, a party is considered to be related to
the Group if:
 (i)
    
    the party has the ability, directly or indirectly through one or more
intermediaries, to control the Group or exercise significant influence over the
Group in making financial and operating policy decisions, or has joint control
over the Group;(ii)
    
    the Group and the party are subject to common control;(iii)
    
    the party is an associate of the Group or a joint venture in which
the Group is a venturer;(iv)
    
    the party is a member of key management personnel of the Group or the
Groups parent, or a close family member of such an individual, or is an entity
under the control, joint control or significant influence of such individuals;(v)
    
    the party is a close family member of a party referred to in (i) or is
an entity under the control, joint control or significant influence of such
individuals; or(vi)
    
    the party is a post-employment benefit plan which is for the benefit
of employees of the Group or of any entity that is a related party of the Group.
 Close family members of an individual are those family members who may be expected to
influence, or be influenced by, that individual in their dealings with the entity.(v)
    
    Segment reportingA segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment), or in providing products or
services within a particular economic environment (geographical segment), which is
subject to risks and rewards that are different from those of other segments.In accordance with the Groups internal financial reporting system, the Group has
chosen business segment information as the primary reporting format and geographical
segment information as the secondary reporting format for the purposes of these
financial statements.Segment revenue, expenses, results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis
to that segment. Segment assets of the Group include trade receivables and property,
plant and equipment. Segment revenue, expenses, assets, and liabilities are determined
before intra-group balances and intra-group transactions are eliminated as part of the
consolidation process, except to the extent that such intra-group balances and
transactions are between Group entities within a single segment. Inter-segment pricing
is based on terms similar to those available to other external parties.Segment capital expenditure is the total cost incurred during the period to acquire
segment assets (both tangible and intangible) that are expected to be used for more
than one period.Unallocated items mainly comprise financial and corporate assets, tax balances,
corporate and financing expenses.
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2
    
    CHANGES IN ACCOUNTING POLICIESThe IASB has issued a number of new Interpretations and an amendment to IFRSs that are first
effective for the current accounting period commencing January 1, 2008 or available for early
adoption.These developments have had no material impact on the Groups financial statements as either
they were consistent with accounting policies already adopted by the Group or they were not
relevant to the Groups operations.The Group has not applied any new standard or interpretation that is not yet effective for the
current accounting period (see note 41).3
    
    TURNOVERThe principal activities of the Group are the maintenance, operation, and provision of
satellite transponder capacity and related services and satellite-based broadcasting and
telecommunications services and other services.Turnover represents income received and receivable from provision of satellite transponder
capacity and related services, satellite-based broadcasting and telecommunications services
and other service. The amount of each category of revenue recognised in turnover during the
year is as follows:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Income from provision of
satellite transponder
capacity and related
services
    
    
    385,391
    
    
    
    395,032
    
    
    
    363,074Income from provision of
satellite-based broadcasting
and telecommunications
services
    
    
    18,153
    
    
    
    56,453
    
    
    
    63,817Service income
    
    
    128
    
    
    
    141
    
    
    
    97403,672
    
    
    
    451,626
    
    
    
    426,988
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4
    
    OTHER NET INCOME
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Other net income primarily includes the following:Interest income
    
    
    11,433
    
    
    
    22,181
    
    
    
    17,559Rental income in respect of properties
    
    
    549
    
    
    
    592
    
    
    
    536Gain on disposal of property, plant and equipment
(note 15(c))
    
    
    51,595
    
    
    
    261
    
    
    
    17,630
 5
    
    PROFIT BEFORE TAXATIONProfit before taxation is arrived at after charging/(crediting):
 (a)
    
    Finance costs
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Interest on bank borrowings wholly repayable within five years
    
    
    22,033
    
    
    
    52,254
    
    
    
    60,525Other borrowing costs
    
    
    2,811
    
    
    
    3,091
    
    
    
    3,61524,844
    
    
    
    55,345
    
    
    
    64,140
 (b)
    
    Staff costs
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Staff costs (including directors emoluments)Pension contributions
    
    
    2,185
    
    
    
    2,767
    
    
    
    2,399Less: Forfeited contributions
    
    
    
    
    
    
    
    
    
    
    (8
    )Net pension contributions
    
    
    2,185
    
    
    
    2,767
    
    
    
    2,391Salaries, wages and other benefits
    
    
    47,247
    
    
    
    47,222
    
    
    
    44,36349,432
    
    
    
    49,989
    
    
    
    46,754
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5
    
    PROFIT BEFORE TAXATION (CONTINUED)Profit before taxation is arrived at after charging/(crediting): (continued)
 (c)
    
    Other items
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Auditors remuneration- audit services
    
    
    1,165
    
    
    
    1,266
    
    
    
    1,246- other services
    
    
    10
    
    
    
    10
    
    
    
    10Depreciation
    
    
    214,470
    
    
    
    222,461
    
    
    
    231,347Amortisation on leasehold land held for own use
    
    
    376
    
    
    
    375
    
    
    
    375Foreign currency exchange gain
    
    
    (687
    )
    
    
    (2,251
    )
    
    
    (302
    )Operating lease charges: minimum lease payments- land and buildings and equipment
    
    
    546
    
    
    
    961
    
    
    
    1,021- satellite transponder capacity
    
    
    4,533
    
    
    
    4,830
    
    
    
    7,461Impairment loss on trade and other receivables
    
    
    5,637
    
    
    
    80
    
    
    
    8,347Impairment loss on property, plant and
equipment (note 15(a))
    
    
    8,397
    
    
    
    98
    
    
    
    
 6
    
    INCOME TAX IN THE CONSOLIDATED STATEMENT OF OPERATIONS
 (a)
    
    Taxation in the consolidated statement of operations represents:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Current tax  Hong Kong Profits TaxOverprovision in respect of prior years
    
    
    
    
    
    
    
    
    
    
    (21,771
    )Current tax  OverseasTax for the year
    
    
    12,560
    
    
    
    18,623
    
    
    
    19,122Deferred tax  Hong KongOrigination of temporary differences
    
    
    33,248
    
    
    
    1,822
    
    
    
    58,777Effect on deferred tax balances
resulting from a change in tax
rate
    
    
    (3,257
    )
    
    
    
    
    
    
    29,991
    
    
    
    1,822
    
    
    
    58,77742,551
    
    
    
    20,445
    
    
    
    56,128
 Taxation is charged at the appropriate current rates of taxation ruling in the
relevant countries.The provision for Hong Kong Profits Tax was calculated at 16.5% (2007: 17.5%; 2006:
17.5%) of the estimated assessable profits for the year. Overseas tax includes the
withholding tax paid or payable in respect of Groups income from provision of
satellite transponder capacity to the customers which are located outside Hong Kong.
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6
    
    INCOME TAX IN THE CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
 (a)
    
    Taxation in the consolidated statement of operations represents: (continued)In February 2008, the Hong Kong Government announced a decrease in the Profits Tax
rate from 17.5% to 16.5% applicable to the Groups operations in Hong Kong as from the
year ended December 31, 2008. This decrease is taken into account in the preparation of
the Groups 2008 financial statements. Accordingly, the provision for Hong Kong Profits
Tax for 2008 is calculated at 16.5% (2007: 17.5%) of the estimated assessable profits
for the year and the opening balance of deferred tax has been re-estimated accordingly.In prior years, a subsidiary of the Company was in dispute with Hong Kongs Inland
Revenue Department (the IRD) in relation to the transfer of the entire business of
APSTAR IIR and substantially all of the satellite transponders of APSTAR IIR. Having
considered the advice from its independent tax advisor, management believed that it
would be in the best interest of the Company that the dispute be settled as soon as
practicable to avoid further incurrence of time, effort and professional cost. In
2006, the subsidiary of the Company submitted a settlement proposal to the IRD, via
its tax advisor with a view to compromising on the tax assessment dispute. In
September 2006, the IRD accepted the proposal of treating sale proceeds from the
disposal of APSTAR IIR of $2,114,758,000 as taxable income arising over the remaining
life of APSTAR IIR until the tax assessment year of 2012/2013. In addition, the IRD
accepted the Company continuing to claim the deduction of statutory depreciation
allowances in respect of APSTAR IIR and other expenditures related to the transaction
to offset such taxable income.With the proposal accepted by the IRD, the tax dispute in respect of the years of
assessment of 1999/2000 and 2000/2001 is settled. The net assessable profit for
1999/2000 of the subsidiary was revised to zero and the profits tax previously paid of
$21,589,259 were refunded. In addition, as the subsidiary was in a tax loss position
in 2000/2001, 2001/2002 and 2002/2003, the Tax Reserve Certificate in the amount of
$78,385,377 previously paid, with interest from the date of purchase in March 2006
until the date of the IRD accepting the proposal was redeemed and the provisional tax
paid for 2002/2003 of $82,868 was refunded.As a result of the proposal being accepted by the IRD, a deferred tax asset of
$123,239,000 has been recognised based on the total cumulative tax losses carried
forward and the depreciation allowances in respect of APSTAR IIR to be deducted in the
future. Furthermore, a deferred tax liability of $166,063,000 has been recognised for
the related deferred lease income to be taxed in the future.
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6
    
    INCOME TAX IN THE CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
 (b)
    
    Reconciliation between tax expense and accounting profit at applicable tax rates:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Profit before taxation
    
    
    92,051
    
    
    
    25,161
    
    
    
    (24,488
    )Notional tax on profit before tax, calculated
at the rates applicable to losses in the
countries concerned
    
    
    14,985
    
    
    
    4,056
    
    
    
    4,710Overseas withholding tax
    
    
    12,560
    
    
    
    18,623
    
    
    
    19,122Tax effect of non-deductible expenses
    
    
    4,310
    
    
    
    2,287
    
    
    
    2,967Tax effect of non-taxable revenue
    
    
    (13,401
    )
    
    
    (4,629
    )
    
    
    (3,834
    )Tax effect of unused tax losses not recognised
    
    
    13,170
    
    
    
    1,463
    
    
    
    1,767Tax effect of prior years unrecognised
deferred tax utilised this year
    
    
    (166
    )
    
    
    (1,355
    )
    
    
    (2,008
    )Effect on deferred tax balances at January 1,
resulting from a change in tax rate
    
    
    (3,257
    )
    
    
    
    
    
    
    Others (note)
    
    
    14,350
    
    
    
    
    
    
    
    42,824Actual tax expenses
    
    
    42,551
    
    
    
    20,445
    
    
    
    56,128
 Note:
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7
    
    DIRECTORS REMUNERATIONDirectors remuneration disclosed pursuant to section 161 of the Hong Kong Companies Ordinance
is as follows:
 Salaries,
    
    
    
    
    
    
    Performanceallowances and
    
    
    Retirement
    
    
    relatedDirectors
    
    
    benefits
    
    
    scheme
    
    
    incentive
    
    
    Termination
    
    
    2008fees
    
    
    in kind
    
    
    contributions
    
    
    payments
    
    
    benefits
    
    
    Total$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Executive directorsCheng Gruangren (note c)
    
    
    27
    
    
    
    1,494
    
    
    
    87
    
    
    
    289
    
    
    
    
    
    
    
    1,897Tong Xudong (note c)
    
    
    50
    
    
    
    2,360
    
    
    
    151
    
    
    
    470
    
    
    
    
    
    
    
    3,031Qi Liang (note c)
    
    
    27
    
    
    
    1,071
    
    
    
    73
    
    
    
    201
    
    
    
    
    
    
    
    1,372Ni Yifeng
    
    
    23
    
    
    
    1,813
    
    
    
    97
    
    
    
    210
    
    
    
    579
    
    
    
    2,722Non-executive directorsRui Xiaowu (note a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Zhao Liqiang
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23Lim Toon
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yong Foo Chong
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yin Yen-liang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Wu Zhen Mu
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Tseng Ta-mon (note b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Independent
non-executive directorsHuan Guocang
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lui King Man
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lam Sek Kong
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Cui Liguo
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2001,150
    
    
    
    6,738
    
    
    
    408
    
    
    
    1,170
    
    
    
    579
    
    
    
    10,045
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7
    
    DIRECTORS REMUNERATION (CONTINUED)
 Salaries,
    
    
    
    
    
    
    Performanceallowances and
    
    
    Retirement
    
    
    relatedDirectors
    
    
    benefits
    
    
    scheme
    
    
    incentive
    
    
    2007fees
    
    
    in kind
    
    
    contributions
    
    
    payments
    
    
    Total$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Executive directorsNi Yifeng
    
    
    50
    
    
    
    2,840
    
    
    
    165
    
    
    
    78
    
    
    
    3,133Tong Xudong
    
    
    50
    
    
    
    2,331
    
    
    
    145
    
    
    
    68
    
    
    
    2,594Non-executive directorsRui Xiaowu (note a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Zhao Liqiang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Lim Toon
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Yong Foo Chong
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Ho Siaw Hong
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Yin Yen-liang
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Wu Zhen Mu
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Tseng Ta-mon (note b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Independent
non-executive
directorsHuan Guocang
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Lui King Man
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Yuen Pak Yiu, Philip
    
    
    99
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99Lam Sek Kong
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Cui Liguo
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1011,051
    
    
    
    5,171
    
    
    
    310
    
    
    
    146
    
    
    
    6,678
  Notes:
 (a)
    
    Mr. Rui Xiaowu, a non-executive director, has waived his directors fees for 2008 and
2007.(b)
    
    Mr. Tseng Ta-mon was an alternate director. Alternate directors are not entitled to
receive any directors fees.(c)
    
    The amounts represented the actual amount paid or receivable by respective directors
for the year. In addition to the amounts disclosed above, directors and key management are
entitled to a performance related incentive payment of $2,980,000. The allocation of the
said incentive payment has yet to be determined. 
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8
    
    INDIVIDUALS WITH HIGHEST EMOLUMENTSOf the five highest paid individuals of the Group, there are three directors (2007: two;
2006: two) whose remuneration is disclosed in note 7. The aggregate of emoluments in respect
of the other two (2007: three; 2006: three) individuals are as follows:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Salaries and other emoluments
    
    
    3,014
    
    
    
    4,839
    
    
    
    4,541Performance related incentive payments
    
    
    628
    
    
    
    192
    
    
    
    154Retirement benefits contributions
    
    
    206
    
    
    
    330
    
    
    
    303Termination benefits
    
    
    932
    
    
    
    
    
    
    
    4,780
    
    
    
    5,361
    
    
    
    4,998
 The emoluments of the two (2007: three; 2006: three) individuals with the highest emoluments
are within the following bands:
 Number of individuals2008
    
    
    2007
    
    
    2006$Nil to $1,000,000
    
    
    
    
    
    
    
    
    
    
    $1,000,001 to $1,500,000
    
    
    
    
    
    
    1
    
    
    
    1$2,000,001 to $2,500,000
    
    
    2
    
    
    
    2
    
    
    
    22
    
    
    
    3
    
    
    
    3
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9
    
    GAIN ON DISPOSAL OF A SUBSIDIARYPursuant to a disposal agreement dated April 2, 2008, CTIA VSAT Network Limited (CTIA), a
subsidiary of the Company, disposed of its entire equity interest in Beijing Asia Pacific East
Communication Network Limited (BAPECN) to an independent third party at a total consideration
of RMB4,800,000 (approximately $5,328,000). Beijing Zhong Guang Xian Da Data Broadcast
Technology Co Limited, a jointly controlled entity of the Company, in which BAPECN has 35%
equity, was also disposed of as part of the sale.Net assets disposed of:
 2008$000Property, plant and equipment
    
    
    8,160Trade receivables
    
    
    161Deposits, prepayment and other receivables
    
    
    287Cash and bank balances
    
    
    532Payables and accrued charges
    
    
    (3,767
    )Rentals received in advance
    
    
    (1,388
    )Loan from a shareholder
    
    
    (990
    )2,995Minority interest
    
    
    (839
    )Other reserves and exchange reserves
    
    
    (1,011
    )Waive on loan from CTIA
    
    
    990Gain on disposal of a subsidiary
    
    
    3,193Consideration
    
    
    5,328
 An analysis of the net inflow of cash and cash equivalents in respect of the disposal of a
subsidiary is as follows:
 2008$000Consideration
    
    
    5,328Cash and bank balance disposed of
    
    
    (532
    )Net cash inflow from disposal of a subsidiary
    
    
    4,796
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10
    
    GAIN ON DISPOSAL OF A JOINTLY CONTROLLED ENTITYPursuant to a disposal agreement dated October 3, 2008, the Group disposed of its entire equity
interest in a jointly controlled entity, APT Satellite Telecommunications Limited (APT
Telecom), to an independent third party at a consideration of $88,550,000.Net assets (representing the Groups portion) disposed of:
 2008$000Property, plant and equipment
    
    
    78,100Trade receivables
    
    
    61Deposits, prepayment and other receivables
    
    
    1,172Payables and accrued charges
    
    
    (6,268
    )Loan from a shareholder
    
    
    (67,139
    )5,926Disposal cost
    
    
    1,056Gain on disposal of jointly controlled entity
    
    
    9,590Net consideration
    
    
    16,572Consideration
    
    
    88,550Receipt from other receivables
    
    
    1,457Repayment to shareholder
    
    
    (73,435
    )Net cash inflow from disposal of a jointly controlled entity
    
    
    16,572
 11
    
    PROFIT ATTRIBUTABLE TO SHAREHOLDERSThe consolidated profit attributable to shareholders includes a loss of $3,731,000 (2007:
$884,000; 2006: $12,000) which has been dealt with in the financial statements of the Company.12
    
    DIVIDENDDividends payable to equity shareholders of the company attributable for the year
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Final dividend
    
    
    
    
    
    
    
    
    
    
    
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13
    
    EARNINGS/(LOSS) PER SHARE
 (a)
    
    Basic earnings per shareThe calculation of basic earnings/(loss) per share is based on the profit/(loss)
attributable to shareholders of $49,587,000 (2007: $5,581,000; 2006: 79,480,000) and the
weighted average of 413,265,000 ordinary shares (2007: 413,265,000 shares; 2006:
413,265,000 shares) in issue during the year ended December 31, 2008.(b)
    
    Diluted earnings/(loss) per shareDiluted earnings/(loss) per share is the same as the basic earnings/(loss) per share as
there were no dilutive potential ordinary shares in existence during the years 2008,
2007 and 2006.
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14
    
    SEGMENTAL REPORTINGSegment information is presented in respect of the Groups business and geographical
segments. Business information is chosen as the primary reporting format because this is
more relevant to the Groups internal financial reporting.Inter-segment pricing is based on terms similar to those available to external third
parties.Business segmentsThe Group comprises two main business segments, namely provision of satellite transponder
capacity and related services and provision of satellite-based broadcasting and
telecommunications services.
 Provision ofProvision of satellite
    
    
    satellite-basedtransponder capacity and
    
    
    broadcasting and
    
    
    Inter-segmentrelated services
    
    
    telecommunications services
    
    
    elimination
    
    
    Consolidated2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Turnover from
external customers
    
    
    385,391
    
    
    
    395,032
    
    
    
    363,074
    
    
    
    18,153
    
    
    
    56,453
    
    
    
    63,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    403,544
    
    
    
    451,485
    
    
    
    426,891Inter-segment
turnover
    
    
    11,115
    
    
    
    14,028
    
    
    
    19,193
    
    
    
    1,357
    
    
    
    1,260
    
    
    
    1,128
    
    
    
    (12,472
    )
    
    
    (15,288
    )
    
    
    (20,321
    )
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    396,506
    
    
    
    409,060
    
    
    
    382,267
    
    
    
    19,510
    
    
    
    57,713
    
    
    
    64,945
    
    
    
    (12,472
    )
    
    
    (15,288
    )
    
    
    (20,321
    )
    
    
    403,544
    
    
    
    451,485
    
    
    
    426,891Service income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128
    
    
    
    141
    
    
    
    97403,672
    
    
    
    451,626
    
    
    
    426,988Segment result
    
    
    120,833
    
    
    
    126,873
    
    
    
    71,809
    
    
    
    (8,904
    )
    
    
    9,644
    
    
    
    8,481
    
    
    
    
    
    
    
    (2
    )
    
    
    (5
    )
    
    
    111,929
    
    
    
    136,515
    
    
    
    80,285Service income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128
    
    
    
    141
    
    
    
    97Unallocated other
net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,859
    
    
    
    26,560
    
    
    
    37,698Unallocated
administrative
expenses- staff costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,990
    )
    
    
    (47,792
    )
    
    
    (44,940
    )- office expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,211
    )
    
    
    (34,024
    )
    
    
    (35,670
    )Profit from
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,715
    
    
    
    81,400
    
    
    
    37,470Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,844
    )
    
    
    (55,345
    )
    
    
    (64,140
    )Share of results of
jointly controlled
entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,397
    
    
    
    (894
    )
    
    
    2,182Gain on disposal of
a subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,193
    
    
    
    
    
    
    
    Gain on disposal of
a jointly
controlled entity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,590
    
    
    
    
    
    
    
    Profit/(Loss)
before taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,051
    
    
    
    25,161
    
    
    
    (24,488
    )Income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42,551
    )
    
    
    (20,445
    )
    
    
    (56,128
    )Profit/(Loss) for
the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,500
    
    
    
    4,716
    
    
    
    (80,616
    )
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14
    
    SEGMENTAL REPORTING (CONTINUED)Business segments (Continued)
 Provision of satellite
    
    
    Provision of
satellite-basedtransponder capacity and
    
    
    broadcasting and
    
    
    Inter-segmentrelated services
    
    
    telecommunications services
    
    
    elimination
    
    
    Consolidated2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Depreciation for
the year
    
    
    212,011
    
    
    
    216,557
    
    
    
    224,501
    
    
    
    2,459
    
    
    
    5,904
    
    
    
    6,846Impairment loss for
the year
    
    
    1,739
    
    
    
    
    
    
    
    
    
    
    
    6,658
    
    
    
    98
    
    
    
    Significant
non-cash expenses
(other than
depreciation)
    
    
    657
    
    
    
    25
    
    
    
    7,886
    
    
    
    4,980
    
    
    
    55
    
    
    
    460
 Provision of satellite
    
    
    Provision ofsatellite-basedtransponder capacity and
    
    
    broadcasting and
    
    
    Inter-segmentrelated services
    
    
    telecommunications services
    
    
    elimination
    
    
    Consolidated2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Segment assets
    
    
    2,186,865
    
    
    
    2,629,907
    
    
    
    2,858,518
    
    
    
    8,154
    
    
    
    36,272
    
    
    
    50,768
    
    
    
    (35,465
    )
    
    
    (41,872
    )
    
    
    (51,922
    )
    
    
    2,159,554
    
    
    
    2,624,307
    
    
    
    2,857,364Investment in and
amounts due from
jointly controlled
entities
    
    
    
    
    
    
    78,898
    
    
    
    79,458
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,898
    
    
    
    79,458Unallocated assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386,729
    
    
    
    432,377
    
    
    
    470,740Total assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,546,283
    
    
    
    3,135,582
    
    
    
    3,407,562Segment liabilities
    
    
    350,007
    
    
    
    330,908
    
    
    
    344,165
    
    
    
    60,997
    
    
    
    76,449
    
    
    
    90,362
    
    
    
    (35,465
    )
    
    
    (41,872
    )
    
    
    (51,922
    )
    
    
    375,539
    
    
    
    365,485
    
    
    
    382,605Unallocated
liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130,179
    
    
    
    781,406
    
    
    
    1,042,724Total liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    505,718
    
    
    
    1,146,891
    
    
    
    1,425,329Capital expenditure
incurred during the
year
    
    
    7,098
    
    
    
    9,343
    
    
    
    3,506
    
    
    
    359
    
    
    
    1,340
    
    
    
    2,728
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14
    
    SEGMENTAL REPORTING (CONTINUED)Geographical segmentsThe Groups operating assets consist primarily of its satellites which are used, or are
intended for use, for transmission to multiple countries but not located within a specific
geographical area. Accordingly, no segment analysis of the carrying amount of segment assets
by location of assets is presented.In presenting information on the basis of geographical segments, segment revenue, segment
assets and capital expenditure is based on the geographical location of customers.
 Hong Kong
    
    
    Other regions in the PRC
    
    
    Singapore
    
    
    Indonesia
    
    
    Others
    
    
    Unallocated2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Turnover from
external customers
    
    
    54,292
    
    
    
    65,065
    
    
    
    60,340
    
    
    
    165,162
    
    
    
    170,758
    
    
    
    207,389
    
    
    
    53,976
    
    
    
    61,486
    
    
    
    49,821
    
    
    
    77,235
    
    
    
    90,505
    
    
    
    50,420
    
    
    
    53,007
    
    
    
    63,812
    
    
    
    59,018
    
    
    
    
    
    
    
    
    
    
    
    Segment assets
    
    
    10,892
    
    
    
    6,794
    
    
    
    15,302
    
    
    
    19,548
    
    
    
    39,070
    
    
    
    41,254
    
    
    
    7,731
    
    
    
    3,894
    
    
    
    1,930
    
    
    
    25,105
    
    
    
    16,499
    
    
    
    14,132
    
    
    
    3,867
    
    
    
    14,152
    
    
    
    7,643
    
    
    
    2,479,140
    
    
    
    3,055,173
    
    
    
    3,327,301Capital expenditure
incurred during the
year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    558
    
    
    
    369
    
    
    
    844
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,899
    
    
    
    10,314
    
    
    
    5,390
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##### Table of Contents



15
    
    PROPERTY, PLANT AND EQUIPMENT(a)
 Furniture andLand
    
    
    
    
    
    
    equipment, motor
    
    
    Communicationand
    
    
    Leasehold
    
    
    vehicles, and
    
    
    satellite
    
    
    Communication
    
    
    Communication
    
    
    Constructionbuildings
    
    
    improvements
    
    
    computer equipment
    
    
    equipment
    
    
    station
    
    
    satellites
    
    
    in progress
    
    
    Total$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Cost:At January 1, 2007
    
    
    102,233
    
    
    
    8,154
    
    
    
    45,612
    
    
    
    163,500
    
    
    
    14,483
    
    
    
    4,966,051
    
    
    
    1,360
    
    
    
    5,301,393Exchange adjustments
    
    
    
    
    
    
    71
    
    
    
    177
    
    
    
    699
    
    
    
    924
    
    
    
    
    
    
    
    87
    
    
    
    1,958Additions
    
    
    
    
    
    
    4,792
    
    
    
    903
    
    
    
    2,925
    
    
    
    8
    
    
    
    
    
    
    
    2,055
    
    
    
    10,683Disposals
    
    
    
    
    
    
    
    
    
    
    (2,270
    )
    
    
    (31,090
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    (33,368
    )Transfer
    
    
    (3,222
    )
    
    
    
    
    
    
    
    
    
    
    (277
    )
    
    
    1,101
    
    
    
    
    
    
    
    (824
    )
    
    
    (3,222
    )At December 31, 2007
    
    
    99,011
    
    
    
    13,017
    
    
    
    44,422
    
    
    
    135,757
    
    
    
    16,516
    
    
    
    4,966,051
    
    
    
    2,670
    
    
    
    5,277,444At January 1, 2008
    
    
    99,011
    
    
    
    13,017
    
    
    
    44,422
    
    
    
    135,757
    
    
    
    16,516
    
    
    
    4,966,051
    
    
    
    2,670
    
    
    
    5,277,444Exchange adjustments
    
    
    
    
    
    
    51
    
    
    
    151
    
    
    
    492
    
    
    
    715
    
    
    
    
    
    
    
    38
    
    
    
    1,447Additions
    
    
    
    
    
    
    75
    
    
    
    1,000
    
    
    
    754
    
    
    
    25
    
    
    
    
    
    
    
    5,603
    
    
    
    7,457Disposals
    
    
    (582
    )
    
    
    (1,105
    )
    
    
    (1,913
    )
    
    
    (11,597
    )
    
    
    (17,256
    )
    
    
    (125,179
    )
    
    
    (882
    )
    
    
    (158,514
    )Effect of cost
adjustment (Note ii)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,700
    )
    
    
    (28
    )
    
    
    (11,728
    )Transfer
    
    
    
    
    
    
    93
    
    
    
    286
    
    
    
    493
    
    
    
    
    
    
    
    
    
    
    
    (872
    )
    
    
    At December 31, 2008
    
    
    98,429
    
    
    
    12,131
    
    
    
    43,946
    
    
    
    125,899
    
    
    
    
    
    
    
    4,829,172
    
    
    
    6,529
    
    
    
    5,116,106Accumulated depreciation:At January 1, 2007
    
    
    19,364
    
    
    
    4,727
    
    
    
    40,968
    
    
    
    111,782
    
    
    
    8,709
    
    
    
    2,394,261
    
    
    
    
    
    
    
    2,579,811Exchange adjustments
    
    
    
    
    
    
    68
    
    
    
    125
    
    
    
    479
    
    
    
    556
    
    
    
    
    
    
    
    
    
    
    
    1,228Charge for the year
    
    
    2,031
    
    
    
    496
    
    
    
    1,849
    
    
    
    12,078
    
    
    
    2,442
    
    
    
    203,565
    
    
    
    
    
    
    
    222,461Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98Transfer
    
    
    (1,141
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,141
    )Written back on disposal
    
    
    
    
    
    
    
    
    
    
    (2,244
    )
    
    
    (31,090
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,334
    )At December 31, 2007
    
    
    20,254
    
    
    
    5,291
    
    
    
    40,698
    
    
    
    93,347
    
    
    
    11,707
    
    
    
    2,597,826
    
    
    
    
    
    
    
    2,769,123At January 1, 2008
    
    
    20,254
    
    
    
    5,291
    
    
    
    40,698
    
    
    
    93,347
    
    
    
    11,707
    
    
    
    2,597,826
    
    
    
    
    
    
    
    2,769,123Exchange adjustments
    
    
    
    
    
    
    51
    
    
    
    92
    
    
    
    388
    
    
    
    507
    
    
    
    
    
    
    
    
    
    
    
    1,038Charge for the year
    
    
    2,018
    
    
    
    459
    
    
    
    1,270
    
    
    
    10,864
    
    
    
    475
    
    
    
    199,384
    
    
    
    
    
    
    
    214,470Impairment loss (Note i)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,657
    
    
    
    
    
    
    
    1,740
    
    
    
    
    
    
    
    8,397Written back on disposal
    
    
    (582
    )
    
    
    (1,105
    )
    
    
    (1,598
    )
    
    
    (9,180
    )
    
    
    (12,689
    )
    
    
    (35,236
    )
    
    
    
    
    
    
    (60,390
    )At December 31, 2008
    
    
    21,690
    
    
    
    4,696
    
    
    
    40,462
    
    
    
    102,076
    
    
    
    
    
    
    
    2,763,714
    
    
    
    
    
    
    
    2,932,638Net book value:At December 31, 2008
    
    
    76,739
    
    
    
    7,435
    
    
    
    3,484
    
    
    
    23,823
    
    
    
    
    
    
    
    2,065,458
    
    
    
    6,529
    
    
    
    2,183,468At December 31, 2007
    
    
    78,757
    
    
    
    7,726
    
    
    
    3,724
    
    
    
    42,410
    
    
    
    4,809
    
    
    
    2,368,225
    
    
    
    2,670
    
    
    
    2,508,321
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15
    
    PROPERTY, PLANT AND EQUIPMENT (CONTINUED)(a)
    
    Note (i) Impairment lossDuring 2008, the Group conducted a review of the Groups property, plant and equipment and
determined that certain assets were impaired as the recoverable amount of these assets is
estimated to be less than their carrying amount. Accordingly, an impairment loss of
$8,397,000 (2007: $98,000; 2006: nil) in respect of a communication satellite, APSTAR IA,
and TV uplink and broadcasting equipment has been recognised and charged to statement of
operations. It was concluded that no further impairment is required.Note (ii) Effect of cost adjustmentAccording to an agreement signed with Thales Alenia Space France (Thales) on December 8,
2001, the Group is entitled to a payment in the amount of US$1,500,000 (approximately
$11,700,000) upon successful delivery of a satellite by Thales to its own customers with
technical designs that are identical to APSTAR VI satellite. During the year, $11,700,000
was recognised from Thales in respect of delivery of a satellite with the same technical
design of APSTAR VI, and treated as a reduction to the cost of property, plant and equipment
  communication satellites.(b)
    
    The analysis of net book value of land and buildings held by the Group is as follows:
 Land and buildings2008
    
    
    2007$000
    
    

$000Medium-term leases outside Hong Kong
    
    
    
    
    
    
    Medium-term leases in Hong Kong
    
    
    76,739
    
    
    
    78,75776,739
    
    
    
    78,757
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15
    
    PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
 (c)
    
    Fixed assets under finance leases
 (i)
    
    The fair value of the buildings held for own use, which are situated on
leasehold land as disclosed above cannot be measured separately from the fair value
of the leasehold land at the inception of the lease, and therefore is accounted for
as being held under a finance lease.(ii)
    
    In August 2004, the in-orbit tests of APSTAR V with 54 transponders were
completed and APSTAR V was put into service on August 13, 2004. Based on the
arrangements entered into by the Group and the vendor, Loral Orion, Inc (Loral
Orion), the Group assumed the risks and rewards of 37 transponders (APT
Transponders) for the entire operational life of APSTAR V under finance leases,
while the risks and rewards relating to the other 17 transponders remained with
Loral Orion. As at December 31, 2008, the net book value of communication
satellites held under finance leases in connection with APSTAR V amounted to
$670,814,000 (2007: $834,448,000).Pursuant to the various amended agreements with Loral Orion, Loral Orion has options
to take up 4 APT Transponders from the fourth year and another 4 APT Transponders
from the fifth year after completion of in-orbit tests of APSTAR V, for their
remaining operational lives at a total consideration of $282,865,000. On September
29, 2006 and August 18, 2008, Telesat Satellite LP (Telesat, the successor of
Loral Orion) partially exercised its right to take up 2 and 4 APT Transponders ahead
of schedule, at a total consideration of $70,716,000 and $141,433,000 respectively.
As a result, a gain of $17,503,000 and $51,490,000 arising from disposal of the 2
and 4 APT Transponders was recognised in 2006 and 2008 respectively. The
consideration in relation to the remaining 2 APT Transponders to be taken up by
Telesat is $70,716,000. The remaining APT transponders subject to this arrangement
had a net book value of $43,278,000 at December 31, 2008 (2007: $143,048,000).
 (d)
    
    In-orbit insurance of satellitesAs of December 31, 2008, the Group did not have full in-orbit insurance coverage for its
satellites. The in-orbit satellites had a net book value in aggregate of $2,065,458,000
(2007: $2,368,225,000) as of December 31, 2008.
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16
    
    INTEREST IN LEASEHOLD LAND HELD FOR OWN USE UNDER AN OPERATING LEASE
 $000Cost:At January 1, 2007, December 31, 2007 and December 31, 2008
    
    
    18,678Accumulated depreciation:At January 1, 2007
    
    
    3,483Charge for the year
    
    
    375At December 31, 2007
    
    
    3,858At January 1, 2008Charge for the year
    
    
    376At December 31, 2008
    
    
    4,234Net book value:At December 31, 2008
    
    
    14,444At December 31, 2007
    
    
    14,820
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17
    
    INVESTMENT PROPERTIESThe investment properties were revalued at December 31, 2008 at $5,159,000 (2007:
$5,171,000) by Savills Valuation and Professional Services Limited, an independent
professional property appraiser, on an open market value basis by reference to net rental
income allowing for reversionary income potential. The valuation loss of $12,000 (2007:
$226,000 gain; 2006: $156,000 gain) has been recognised in the statement of operations
during the year.The investment properties, which are situated in the PRC under medium-term leases, are
rented out under operating leases and the rental income earned from the investment
properties during the year was $254,000 (2007: $297,000; 2006: $254,000).
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18
    
    INTEREST IN, LOANS TO AND AMOUNTS DUE FROM SUBSIDIARIESParticulars of subsidiariesThe 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.All of these are controlled subsidiaries as defined under note 1(c) and have been
consolidated into the Group financial statements.
 Proportion of ownership interestPlace of
    
    
    Particulars of issued and
    
    
    Groupsincorporation and
    
    
    paid up capital and debt
    
    
    effective
    
    
    held by the
    
    
    held byName of Company
    
    operation*
    
    
    securities
    
    
    interest
    
    
    Company
    
    
    subsidiary
    
    
    Principal activitiesAPT
Satellite Investment Company Limited
    
    British Virgin Islands
    
    

    US$1,400
    
    
    
    100
    %
    
    
    100
    %
    
    
    
    
    
    Investment holdingAcme Star Investment Limited
    
    Hong Kong
    
    HK$2

    
    

    
    100
    %
    
    
    
    
    
    
    100
    %
    
    InactiveAPT Satellite Company Limited
    
    Hong Kong
    
    
    Ordinary Class A HK$100;

    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision of satelliteNon-voting Deferred Class
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    transponder capacityB HK$542,500,000APT Satellite Enterprise Limited
    
    Cayman Islands
    
    

    US$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision of satellitetransponder capacityAPT Satellite Global Company Limited
    
        Cayman Islands
    
    

    US$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Investment holdingAPT Satellite Link Limited
    
    Cayman Islands
    
    

    US$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision of satellitetransponder capacityAPT Satellite Telewell Limited
    
    Hong Kong
    
    
    HK$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    InactiveAPT Satellite TV Development Limited
    
    Hong Kong
    
    
    HK$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision of satellitetelevision uplink anddownlink servicesAPT Satellite Vision Limited
    
    Hong Kong
    
    
    HK$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Satellite leasingAPT Telecom Services Limited
    
    Hong Kong
    
    
    HK$2
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision oftelecommunicationservicesHaslett Investments Limited
    
    British Virgin Islands
    
    

    US$1
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    InactiveSkywork Corporation
    
    British Virgin Islands
    
    

    US$1
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Investment holdingThe 138 Leasing Partnership
    
    Hong Kong
    
    
    Partners capital HK$329,128,857
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    InactiveYing Fai Realty (China) Limited
    
    Hong Kong/PRC
    
    
    HK$20
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Property holding(CHINESE CHARACTERS)
    
    Wholly-owned foreign
    
    
    Registered capital HK$5,000,000
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Provision of satellite(CHINESE CHARACTERS)
(APT Communication Technology
Development (Shenzhen) Co., Ltd.)
    
    enterprises, PRC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    transponder capacityCTIA VSAT Network Limited
    
        Hong Kong
    
    
    HK$5,000,000
    
    
    
    60
    %
    
    
    
    
    
    
    60
    %
    
    InvestmentMiddle East Ventures Limited
    
    British Virgin Islands
    
    

    US$1
    
    
    
    100
    %
    
    
    
    
    
    
    100
    %
    
    Investment holding
 *
    
    The place of operations is the place of incorporation/establishment unless otherwise
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19
    
    INTEREST IN JOINTLY CONTROLLED ENTITIES AND AMOUNT DUE FROM A JOINTLY CONTROLLED ENTITY
 2008
    
    
    2007$000
    
    
    $000Share of net assets
    
    
    
    
    
    
    3,529
 Details of the jointly controlled entities of the Group during the year are set out below:
 Place of
    
    
    
    
    
    
    Proportion of ownership interestForm of
    
    
    incorporation
    
    
    Particulars of
    
    
    Groups
    
    
    held by
    
    
    held bybusiness
    
    
    and
    
    
    issued and paid up
    
    
    effective
    
    
    the
    
    
    the
    
    
    PrincipalName of joint venture
    
    structure
    
    
    operation
    
    
    capital
    
    
    interest
    
    
    Company
    
    
    subsidiary
    
    
    activityAPT Satellite Telecommunications Limited (APT Telecom)
    
    Incorporated
    
    
    Hong Kong
    
    
    HK$153,791,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property holding(CHINESE CHARACTERS)(CHINESE CHARACTERS)
(Beijing Zhong Guang Xian Da Data Broadcast Technology Co. Limited) (Zhong Guang Xian Da)
    
    Joint venture, Incorporated
    
    
    PRC
    
    
    Registered capital RMB11,000,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Provision of data transmission services
 APT Telecom is considered as a jointly controlled entity as the Group and the other
shareholder of APT Telecom both have the right to appoint an equal number of directors to
the board of directors. The Group disposed of its interest in APT Telecom during the year
(see note 10).Zhong Guang Xian Da is considered as a jointly controlled entity as the Group and the other
shareholders of Zhong Guang Xian Da exercise joint control over it pursuant to a
shareholders resolution. The Group disposed of its interest in Zhong Guang Xian Da during
the year (see note 9).
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19
    
    INTEREST IN JOINTLY CONTROLLED ENTITIES AND AMOUNT DUE FROM A JOINTLY CONTROLLED ENTITY
(CONTINUED)In 2007, the amounts due from a jointly controlled entity were unsecured and interest-free.
They were fully settled during the year.
 2008
    
    
    2007$000
    
    

$000Within one year or on demand
    
    
    
    
    
    
    4,950After one year but within five years
    
    
    
    
    
    
    2,700
    
    
    
    7,650
 Summary financial information on jointly controlled entities  Groups effective interest:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Non-current assets
    
    
    
    
    
    
    76,670
    
    
    
    75,350Current assets
    
    
    
    
    
    
    2,011
    
    
    
    969Non-current liabilities
    
    
    
    
    
    
    (68,624
    )
    
    
    (66,894
    )Current liabilities
    
    
    
    
    
    
    (6,528
    )
    
    
    (5,002
    )Net assets
    
    
    
    
    
    
    3,529
    
    
    
    4,423Income
    
    
    4,706
    
    
    
    938
    
    
    
    3,553Expenses
    
    
    (2,309
    )
    
    
    (1,832
    )
    
    
    (1,371
    )Profit/(Loss) for the year
    
    
    2,397
    
    
    
    (894
    )
    
    
    2,182
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20
    
    PREPAID EXPENSES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLESPrepaid expenses represent the advance payment of license fee for the right to use certain
designated transmission frequencies. Part of the prepaid expenses which fall due within one
year are included as part of deposits, prepayments and other receivables.
 2008
    
    
    2007$000
    
    

$000Balance at December 31
    
    
    29,104
    
    
    
    25,057Less: current portion (included in deposits,
prepayments and other receivables under
current assets)
    
    
    (10,081
    )
    
    
    (10,920
    )Non-current portion
    
    
    19,023
    
    
    
    14,137
 21
    
    TRADE RECEIVABLES, NET
 2008
    
    
    2007$000
    
    

$000Due from third parties
    
    
    64,584
    
    
    
    74,313Due from shareholders of the Company
    
    
    41
    
    
    
    2,628Due from holding company and its subsidiaries of a shareholder
of the Company
    
    
    2,518
    
    
    
    3,46867,143
    
    
    
    80,409
 The trade receivables are expected to be recovered within one year.
 (a)
    
    Ageing analysisThe Group allows a credit period of 30 days to its trade customers. The following is an
ageing analysis of trade receivables (net of allowance for doubtful debts) at the
balance sheet date:
 2008
    
    
    2007$000
    
    

$0000  30 days
    
    
    57,087
    
    
    
    53,92331  60 days
    
    
    2,920
    
    
    
    8,27661  90 days
    
    
    2,532
    
    
    
    4,03291  120 days
    
    
    2,379
    
    
    
    3,001Over 120 days
    
    
    2,225
    
    
    
    11,17767,143
    
    
    
    80,409
 The Groups credit policy is set out in note 32(a).
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21
    
    TRADE RECEIVABLES, NET (CONTINUED)
 (b)
    
    Impairment of trade receivablesImpairment losses in respect of trade receivables are 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 trade receivables directly (see note
1(j)).The movement in the allowance for doubtful debts during the year, including both
specific and collective loss components, is as follows:
 2008
    
    
    2007
    
    
    2006$000
    
    

$000
    
    

$000At January 1
    
    
    13,532
    
    
    
    18,382
    
    
    
    10,291Impairment loss recognised
    
    
    5,824
    
    
    
    80
    
    
    
    7,946Uncollectible amounts written off
    
    
    (187
    )
    
    
    (5,229
    )
    
    
    Reversal as a result of disposal of a subsidiary
    
    
    (5,302
    )
    
    
    
    
    
    
    Exchange difference
    
    
    
    
    
    
    299
    
    
    
    145At December 31
    
    
    13,867
    
    
    
    13,532
    
    
    
    18,382
 At December 31, 2008, the Groups trade receivables of $13,867,000 (2007: $13,532,000)
were individually determined to be impaired. The individually impaired receivables
related to customers that were in financial difficulties and management assessed that
only a portion of the receivables is expected to be recovered. Consequently, specific
allowances for doubtful debts of $5,824,000 (2007: $80,000) were recognised. The Group
does not hold any collateral over these balances.
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21
    
    TRADE RECEIVABLES, NET (CONTINUED)
 (c)
    
    Trade receivables that are not impairedThe ageing analysis of trade receivables that are neither individually nor collectively
considered to be impaired are as follows:
 2008
    
    
    2007$000
    
    

$000Less than 1 month past due
    
    
    57,087
    
    
    
    53,9231 to 3 months past due
    
    
    5,452
    
    
    
    12,308More than 3 months past due
    
    
    4,604
    
    
    
    14,178At December 31
    
    
    67,143
    
    
    
    80,409
 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.
 22
    
    OTHER FINANCIAL ASSETS
 2008
    
    
    2007$000
    
    

$000Financial assets at fair value through profit and loss
- unlisted financial assets in the PRC
    
    
    102,277
    
    
    
    
 Other financial assets are unquoted, interest bearing debt securities with an effective interest
rate of 1.45%, and with maturity dates in January 2009. The amounts have been fully settled at
respective maturity dates. As at December 31, 2008, no other financial assets are individually
determined to be past due or impaired.
 23
    
    CASH AND CASH EQUIVALENTS
 2008
    
    
    2007$000
    
    

$000Deposits with banks and other financial institutions
    
    
    114,046
    
    
    
    302,784Cash at bank and on hand
    
    
    7,495
    
    
    
    9,241Cash and cash equivalents in the balance sheet and
cash flow statement
    
    
    121,541
    
    
    
    312,025
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24
    
    PAYABLES AND ACCRUED CHARGESThe ageing analysis of accounts payable and accrued charges as of the balance sheet date is as
follows:
 2008
    
    
    2007$000
    
    

$0000  3 months
    
    
    5,979
    
    
    
    9,0724  6 months
    
    
    
    
    
    
    7  9 months
    
    
    
    
    
    
    9  12 months
    
    
    
    
    
    
    5,979
    
    
    
    9,072Accrued expenses
    
    
    35,356
    
    
    
    29,655At December 31
    
    
    41,335
    
    
    
    38,727
 25
    
    SECURED BANK BORROWINGS
 2008
    
    
    2007$000
    
    

$000Bank loans
    
    
    
    
    
    
    680,335Less: Amount due within one year included under current liabilities
    
    
    
    
    
    
    (217,961
    )Amount due after one year
    
    
    
    
    
    
    462,374The bank borrowings are repayable as follows:Within one year or on demand
    
    
    
    
    
    
    217,961After one year but within five years
    
    
    
    
    
    
    462,374
    
    
    
    680,335
 The secured bank borrowings are subject to the fulfillment of covenants relating to certain of
the Groups balance sheet ratios, as are commonly found in lending arrangements with financial
institutions (see note 29(b)(ii)). If the Group were to breach the covenants the drawn down
facilities would become payable on demand. The Group regularly monitors its compliance with
these covenants. Further details of the Groups management of liquidity risk are set out in note
32(b). As at December 31, 2007, none of the covenants relating to drawn down facilities had been
breached. The Group has fully repaid the borrowings during the year.
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26
    
    DEPOSITS RECEIVEDThe amount represents deposits received in respect of provision of satellite transponder
capacity service, satellite-based broadcasting and telecommunications services and other
services.27
    
    DEFERRED INCOMEDeferred income represents unrecognised revenue received in respect of income for provision
of transponder utilisation service and related services for future periods. Deferred income
is recognised in the statement of operations according to revenue recognition policy of
transponder utilisation income and related services as mentioned in
note 1(r)(i).28
    
    INCOME TAX IN THE BALANCE SHEET
 (a)
    
    Current taxation in the balance sheet represents:
 2008
    
    
    2007$000
    
    
    $000Overseas tax payable
    
    
    7,254
    
    
    
    7,224Balance of overseas tax provision relating to prior years
    
    
    90,988
    
    
    
    85,86398,242
    
    
    
    93,087
 (b)
    
    Deferred tax assets and liabilities recognisedThe components of deferred tax (assets)/liabilities recognised in the consolidated balance
sheet and the movements during the year are as follows:
 Depreciationallowances in
    
    
    
    
    
    
    
    
    
    
    Otherexcess of related
    
    
    
    
    
    
    Deferred
    
    
    temporaryDeferred tax arising from:
    
    depreciation
    
    
    Losses
    
    
    lease income
    
    
    differences
    
    
    Total$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000At January 1, 2007
    
    
    373,375
    
    
    
    (483,728
    )
    
    
    166,063
    
    
    
    (542
    )
    
    
    55,168Charged/(credited) to
consolidated statement of
operations
    
    
    (9,152
    )
    
    
    38,835
    
    
    
    (27,652
    )
    
    
    (209
    )
    
    
    1,822At December 31, 2007
    
    
    364,223
    
    
    
    (444,893
    )
    
    
    138,411
    
    
    
    (751
    )
    
    
    56,990At January 1, 2008
    
    
    364,223
    
    
    
    (444,893
    )
    
    
    138,411
    
    
    
    (751
    )
    
    
    56,990Effect on deferred tax
balances resulting from a
change in tax rate
    
    
    (20,813
    )
    
    
    25,422
    
    
    
    (7,909
    )
    
    
    43
    
    
    
    (3,257
    )Charged/(credited) to
consolidated statement of
operations
    
    
    (37,991
    )
    
    
    98,033
    
    
    
    (26,143
    )
    
    
    (650
    )
    
    
    33,249At December 31, 2008
    
    
    305,419
    
    
    
    (321,438
    )
    
    
    104,359
    
    
    
    (1,358
    )
    
    
    86,982
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28
    
    INCOME TAX IN THE BALANCE SHEET (CONTINUED)
 (b)
    
    Deferred tax assets and liabilities recognised (continued)
 2008
    
    
    2007$000
    
    
    $000Net deferred tax assets recognised in the consolidated balance sheet
    
    
    
    
    
    
    (9,174
    )Net deferred tax liabilities recognised in the consolidated balance sheet
    
    
    86,982
    
    
    
    66,16486,982
    
    
    
    56,990
 (b)
    
    Deferred tax assets not recognisedThe Group has not recognised deferred tax assets in respect of tax losses of $64,180,000
(2007: $131,302,000) and other deductible temporary differences of $905,000 (2007:
$36,221,000) as the realisation of the assets was considered less than probable. The
decrease in deferred tax assets not recognised was primarily attributable to disposals of a
subsidiary, BAPECN, and a jointly controlled entity, APT Telecom, during the year. The tax
losses do not expire under current tax legislation.
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29
    
    SHARE CAPITAL
 (a)
    
    Authorised and issued share capital
 Issued andNumber of
    
    
    fully paidshares
    
    
    share capital000
    
    
    $000Ordinary shares of $0.10 eachAt December 31, 2007 and December 31, 2008
    
    
    413,265
    
    
    
    41,327
 The Companys authorised share capital is 1,000,000,000 shares of $0.10 each. There were no
changes in the Companys authorised or issued share capital during either year.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.(b)
    
    Capital managementThe Groups primary objectives when managing capital are to safeguard the Groups ability to
continue as a going concern, so that it can continue to provide returns for shareholders, by
pricing products and services commensurately with the level of risk and by securing access
to finance at a reasonable cost.The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.Consistent with industry practice, the Group monitors its capital structure on the basis of
a net debt-to-adjusted capital ratio. For this purpose the Group defines net debt as total
debt (which includes interest-bearing loans and borrowings and trade and other payables)
less cash and cash equivalents and pledged deposits.
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29
    
    SHARE CAPITAL (CONTINUED)
 (b)
    
    Capital management (Continued)During 2008, the Groups strategy, which was unchanged from 2007, was to maintain the net
debt-to-adjusted capital ratio at a percentage that is below 50%. In order to maintain or
adjust the ratio, the Group may adjust the amount of dividends paid to shareholders, issue
new shares, return capital to shareholders, raise new debt financing or sell assets to
reduce debt.The net debt-to-adjusted capital ratio at December 31, 2008 and 2007 was as follows:
 2008
    
    
    2007$000
    
    
    $000Current Liabilities:Payables and accrued charges
    
    
    41,335
    
    
    
    38,727Loan from a minority shareholder
    
    
    6,088
    
    
    
    7,488Secured bank borrowings due within one year
    
    
    
    
    
    
    217,96147,423
    
    
    
    264,176Non-current liabilities:Secured bank borrowings due after one year
    
    
    
    
    
    
    462,374Total debt
    
    
    47,423
    
    
    
    726,550Less: Cash and cash equivalents
    
    
    (121,541
    )
    
    
    (312,025
    )Pledged bank deposits
    
    
    (808
    )
    
    
    (83,749
    )Net debt
    
    
    (74,926
    )
    
    
    330,776Total equity
    
    
    2,040,565
    
    
    
    1,988,691Adjusted capital
    
    
    2,040,565
    
    
    
    1,988,691Net debt-to-adjusted capital ratio
    
    
    N/A
    
    
    
    17%
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29
    
    SHARE CAPITAL (CONTINUED)
 (b)
    
    Capital management (Continued)In December 2002, the Group entered into a US$240 million secured term loan facility (the
Loan Facility), which was secured by the assignment of the construction, launching and
related equipment contracts relating to APSTAR V and APSTAR VI under construction and their
related insurance claim proceeds, assignment of all present and future utilisation
agreements of the transponders of satellites under construction, first fixed charge over
certain bank accounts which would hold receipts of the transponder income and the
termination payments under construction, launching and related equipment contracts. In
October 2004, the Group entered into a Deed of Amendment and Restatement to amend certain
terms of the Loan Facility for the purpose of adjusting for the cancellation of the
unutilised portion relating to APSTAR V satellite and APSTAR VI backup satellite.
Accordingly, the maximum aggregate amount under the Loan Facility was reduced to US$165
million and certain financial covenants were amended. In May 2005, the Group entered into a
Second Deed of Amendment and Restatement. The second amendment extended the availability
period of drawing under the facility with respect to APSTAR VI to June 30, 2005 and amended
the financial covenants. The Group has fully repaid all amounts borrowed under the Loan
Facility during the year.This Loan Facility agreement contained the following covenants:
 (i)
    
    Restricted DistributionsThe Loan Facility provides that the Group may make annual dividend payments only when
Projected EBITDA plus free cash less capital expenditure for that year is less than (i)
130% of project debt service (as defined in the Loan Facility) of that year before the
release of certain pledged assets and (ii) 180% of Project Debt Service after the
release of certain pledged assets.(ii)
    
    Financial CovenantsThe Loan Facility provides that certain earnings and cash flow ratios of APT Satellite
Company Limited (APT) and the Group must be measured over various periods during its
term. APT and the Group undertakes to ensure that (i) it maintains its aggregate
consolidated net worth at not less than US$200 million, (ii) the aggregate of
consolidated total liabilities shall not exceed 120% of consolidated net worth, (iii)
consolidated EBITDA shall not be less than US$25 million, (other than for the year ended
December 31, 2006, where it will not be less than US$20 million), (iv) the ratio of the
aggregate outstanding principal under each tranche to the value of the satellite
financed by such tranche shall not exceed 50% and (v) after the release of certain
pledged assets, borrowers EBITDA shall be at least 180% of debt service.(iii)
    
    Block Account/Withdrawal ConditionsUnder the Loan Facility, (i) insurance proceeds obtained as a result of total or
material partial loss relating to APSTAR V and APSTAR VI and (ii) Termination sum of
related construction contracts must be deposited in a designated account. The
withdrawal of deposited amounts in such accounts may only occur in accordance with
provision contained in the Loan Facility.(iv)
    
    OthersThe Loan Facility includes covenants customary for agreements of this type, including
restrictions on APT and the Companys ability to incur indebtedness, certain ownership
restrictions, restrictions on affiliated transactions, covenants with respect of
compliance with laws, maintenance of licenses and permits required for the Groups
business and a requirement that all future transponder utilisation agreements be entered
into on an arms-length basis. Among others, APT should notify the lender if its
ultimate holding company, APT Satellite International Company Limited, directly owns
less than 50.01% of the voting rights in the Group.
 For the years presented, the Group complied with all the above covenants. As at December
31, 2008, the Group is not subject to externally imposed capital requirements.
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30
    
    SHARE OPTIONSAt the annual general meeting on May 22, 2001, the Company adopted a share option scheme
(Scheme 2001) and granted options to its employees on June 19, 2001. On May 22, 2002, the
Company adopted a new share option scheme (Scheme 2002) at its 2002 annual general
meeting. Thereafter, no further options can be granted under the Scheme 2001. The options
granted on June 19, 2001 shall continue to be valid until their expiry.The total number of shares which may be issued upon exercise of all options to be granted
under Scheme 2001 and Scheme 2002 shall not in aggregate exceed 10% of the total number of
 shares of the Company in issue on the adoption date of the Scheme 2002 (i.e. 412,720,000
shares). As at the date of this report, 413,265,000 shares of the Company were in issue.Under Scheme 2002, the total number of shares to be issued upon exercise of the options
granted to each eligible person (including both exercised and outstanding options) in any
12-month period shall not exceed 1% of the total number of shares in issue. The exercise
price (subscription price) shall be such price as determined by the Board of Directors in
its absolute discretion at the time of the making of the offer but in any case the exercise
price shall not be lower than the highest of (i) the closing price of the shares as stated
in The Stock Exchange of Hong Kong Limiteds (the Exchanges) daily quotations sheet on
the date of the offer of grant, which must be a trading day; (ii) the average closing price
of the shares as stated in the Exchanges daily quotations sheets for the five trading days
immediately preceding the date of the offer of grant; and (iii) the nominal value of a
share.During the year, no options were granted under the Scheme 2002.Under the Scheme 2001, the maximum entitlement of each eligible person was that the total
number of shares issued or issuable under all options granted to such eligible person
(including both exercised and outstanding options) upon such grant being made shall not
exceed 25% of the total number of the shares for the time being issued and issuable under
the Scheme 2001. In addition, the subscription price was determined by the Board of
Directors on a case-by-case basis and would not be less than the nominal value of the shares
nor at a discount of more than 20% below the average closing price of the shares as stated
in the Exchanges daily quotation sheets on the five dealing days immediately preceding the
date on which the invitation to apply for an option under Scheme 2001.Movements in share optionsThe particulars of the share options granted under the Scheme 2001 outstanding during the
year are as follows:
 2008
    
    
    2007Number
    
    
    NumberAt January 1
    
    
    3,370,000
    
    
    
    3,390,000Cancelled during the year
    
    
    (80,000
    )
    
    
    (20,000
    )At December 31
    
    
    3,290,000
    
    
    
    3,370,000Options vested at December 31
    
    
    3,290,000
    
    
    
    3,370,000
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30
    
    SHARE OPTIONS (CONTINUED)The above granted options have an exercise price of $2.765 per share and are exercisable
within the period from May 22, 2003 to May 21, 2011.Fair value of share options and assumptionsThe fair value of services received in return for share options granted are measured by
reference to the fair value of share options granted. The estimated fair value of the
services received is measured based on a binomial lattice model. The contractual life of the
option is used as an input into this model. Expectations of early exercise are incorporated
into the binomial lattice model. No share options were granted in 2008.31
    
    RESERVESThe contributed surplus of the Group arose as a result of the Group reorganisation in 1996
and represented the excess of the par value of the shares of the subsidiaries which the
Company acquired over the par value of the Companys shares issued in consideration thereof.The contributed surplus of the Company also arose as a result of the Group reorganisation in
1996 and represented the excess of the value of the subsidiaries acquired over the par value
of the Companys shares issued for their acquisition. Under the Companies Act 1981 of
Bermuda (as amended), the Company may make distributions to its shareholders out of the
contributed surplus under certain circumstances.Capital reserve comprises the fair value of the actual or estimated number of unexercised
share options granted to employees of the Company recognised in accordance with accounting
policy adopted for share based payments in note 1(o)(ii).Revaluation reserve has been set up and is dealt with in accordance with the accounting
policy adopted in note 1(f).The exchange reserve comprises all foreign exchange differences arising from the translation
of the financial statements of foreign operations. The reserve is dealt with is accordance
with accounting policy adopted in note 1(s).Other reserves represent the Enterprise Expansion Fund and General Reserve Fund set aside by
a subsidiary in accordance with the relevant laws and regulations of the PRC, which are not
available for distribution.At December 31, 2008, the Companys reserves available for distribution amounted to
$610,251,000 (2007: $613,755,000) as computed in accordance with the Companies Act 1981 of
Bermuda (as amended).
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32
    
    FINANCIAL INSTRUMENTSExposure to credit, liquidity, interest rate and currency risks arises in the normal course
of the Groups business. These risks are limited by the Groups financial management
policies and practices described below.
 (a)
    
    Credit riskThe Groups credit risk is primarily attributable to trade and other receivables, other
financial assets and cash investments. The maximum exposure to credit risk is
presented by the carrying amount of those financial assets. Management has a credit
policy in place and the exposures to these credit risks are monitored on an ongoing
basis.In respect of trade and other receivables, periodic credit evaluations are performed of
customers financial condition. The Group generally does not require collateral because
it usually receives trade deposits which represent a quarter of utilisation fees payable
to the Group. The transponder utilisation agreements are subject to termination by the
Group if utilisation payments are not made on a timely basis.At the balance sheet date, the Group has a certain concentration of credit risk as 20%
(2007: 15%) and 72% (2007: 53%) of the total trade receivables were due from the Groups
largest customer and the five largest customers respectively within the satellite
transponder business segment.The credit risk on liquid funds and other financial assets is limited because the
majority of counter parties are financial institutions with high credit ratings assigned
by international credit-rating agencies and state-controlled financial institutions with
good reputation. The Groups management does not expect any losses from non-performance
by these counter parties.(b)
    
    Liquidity riskIndividual operating entities within the Group are responsible for their own cash
management, including the short term investment of cash surpluses and the raising of
loans to cover expected cash demands, subject to approval by the parent companys board.
The Groups policy is to regularly monitor current and expected liquidity requirements
and its compliance with lending covenants, to ensure that it maintains sufficient
reserves of cash and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
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32
    
    FINANCIAL INSTRUMENTS (CONTINUED)
 (b)
    
    Liquidity risk (Continued)
 The following table details the remaining contractual maturities at the balance sheet
date of the Groups non-derivative financial liabilities and derivative financial
liabilities, which are based on contractual undiscounted cash flows (including interest
payments computed using contractual rates or, if floating, based on rates current at the
balance sheet date) and the earliest date the Group can be required to pay:
 2008Totalcontractual
    
    
    Within 1
    
    
    More than 1
    
    
    More than 2Carrying
    
    
    undiscounted
    
    
    year or on
    
    
    year but less
    
    
    year but less
    
    
    More than 5amount
    
    
    cash flow
    
    
    demand
    
    
    than 2 years
    
    
    than 5 years
    
    
    years$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Payables and
accrued charges
    
    
    41,335
    
    
    
    (42,221
    )
    
    
    (42,156
    )
    
    
    (65
    )
    
    
    
    
    
    
    Loan from a
minority
shareholder
    
    
    6,088
    
    
    
    (6,088
    )
    
    
    (6,088
    )
    
    
    
    
    
    
    
    
    
    
    47,423
    
    
    
    (48,309
    )
    
    
    (48,244
    )
    
    
    (65
    )
    
    
    
    
    
    
    
 2007Totalcontractual
    
    
    Within 1
    
    
    More than 1
    
    
    More than 2Carrying
    
    
    undiscounted
    
    
    year or on
    
    
    year but less
    
    
    year but less
    
    
    More than 5amount
    
    
    cash flow
    
    
    demand
    
    
    than 2 years
    
    
    than 5 years
    
    
    years$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Payables and
accrued charges
    
    
    38,727
    
    
    
    (45,388
    )
    
    
    (45,131
    )
    
    
    (233
    )
    
    
    (24
    )
    
    
    Loan from a
minority
shareholder
    
    
    7,488
    
    
    
    (7,488
    )
    
    
    (7,488
    )
    
    
    
    
    
    
    
    
    
    
    Secured bank
borrowings
    
    
    680,335
    
    
    
    (763,331
    )
    
    
    (259,666
    )
    
    
    (284,113
    )
    
    
    (219,552
    )
    
    
    726,550
    
    
    
    (816,207
    )
    
    
    (312,285
    )
    
    
    (284,346
    )
    
    
    (219,576
    )
    
    
    
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32
    
    FINANCIAL INSTRUMENTS (CONTINUED)
 (c)
    
    Interest rate riskThe Group is subject to interest rate risk due to fluctuation in interest rates. As of
December 31, 2007, the Groups outstanding bank loans consisted of variable interest
rate loans only. During the year, all existing bank loans were repaid in full. From
time to time, the Group may enter into interest rate swap agreements designed to
mitigate exposure to interest rate risks, although the Group did not consider it
necessary to do so in 2008. Upward fluctuations in interest rates increase the cost of
new bank loans and the interest cost of outstanding bank loans. As a result, a
significant increase in interest rates could have a material adverse effect on the
financial position of the Group.
 (i)
    
    Interest rate profile
 2008
    
    
    2007Effective
    
    
    
    
    
    
    Effectiveinterest
    
    
    
    
    
    
    interestrate
    
    
    
    
    
    
    rate%
    
    
    $000
    
    
    %
    
    
    $000Variable rate borrowings:Secured bank borrowings
    
    
    
    
    
    
    
    
    
    
    6.13
    
    
    
    680,335
 (ii)
    
    Sensitivity analysisAt December 31, 2008, it is estimated that a general increase of one percentage
point in interest rates would decrease the Groups profit after taxation and total
equity by nil (2007: $5,613,000) so far as the effect on interest-bearing financial
instruments is concerned.On the whole, interest rate risk of the Group is expected to be low due to high
volume of cash and cash equivalents and extinguishment of external borrowings as at
December 31, 2008. The Group consistently monitors the current and potential
fluctuation of interest rates to monitor the interest rate risk on a reasonable
level.
 (d)
    
    Foreign currency riskThe Groups reporting currency is the Hong Kong Dollar. The Groups revenues, premiums
for satellite insurance coverage and debt service and substantially all capital
expenditures were denominated in United States Dollars. The Groups remaining expenses
were primarily denominated in Hong Kong Dollars. The Group does not hedge its exposure
to foreign exchange risk. Gains and losses resulting from the effects of changes in
the United States Dollar to the Hong Kong Dollar exchange rate are recorded in the
consolidated statement of operations.
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32
    
    FINANCIAL INSTRUMENTS (CONTINUED)
 (d)
    
    Foreign currency risk (Continued)The Group does not utilise derivative financial instruments to hedge its foreign
currency rate risks.In respect of other trade receivables and payables and cash and cash equivalents
held in currencies other than the functional currency of the operations to which
they relate, the Group ensures that the net exposure is kept to an acceptable
level, by buying or selling foreign currencies at spot rates where necessary to
address short-term imbalances.
 (i)
    
    Exposure to currency riskThe following table details the Groups exposure at the balance sheet date to
currency risk arising from forecast transactions or recognised assets or liabilities
denominated in a currency other than the functional currency of the entity to which
they relate.
 2008
    
    
    2007Renminbi
    
    
    Renminbi000
    
    
    000Trade receivables
    
    
    238
    
    
    
    14,672Deposits, prepayments and other receivables
    
    
    1,316
    
    
    
    1,413Other financial assets
    
    
    90,003
    
    
    
    Cash and cash equivalents
    
    
    28,082
    
    
    
    40,361Payables
    
    
    (2,245
    )
    
    
    (4,714
    )Overall net exposure
    
    
    117,394
    
    
    
    51,732
 (ii)
    
    Sensitivity analysisThe following table indicates the approximate change in the Groups profit after tax
(and retained profits) and other components of consolidated equity in response to
reasonably possible changes in the foreign exchange rates to which the Group has
significant exposure at the balance sheet date.
 2008
    
    
    2007Increase/Decrease
    
    
    Effect on profit
    
    
    Increase/Decrease
    
    
    Effect on profitin foreign exchange
    
    
    after tax and
    
    
    in foreign
    
    
    after tax andrates
    
    
    retained profits
    
    
    exchange rates
    
    
    retained profits%
    
    
    $000
    
    
    %
    
    
    $000Renminbi
    
    
    +/-5
    
    
    
    +/-6,670
    
    
    
    +/-5
    
    
    
    +/-2,752
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32
    
    FINANCIAL INSTRUMENTS (CONTINUED)
 (e)
    
    Fair valuesThe following financial assets and liabilities have their carrying amount
approximately equal to their fair value: trade receivables, deposits, prepayments
and other receivables, cash and cash equivalents, payables and accrued charges.
 (i)
    
    Finance lease liabilitiesThe fair value is estimated as the present value of future cash flows,
discounted at current market interest rates for similar financial instruments.(ii)
    
    Other financial assetsOther financial assets are carried at amounts not materially different from their
fair value as at December 31, 2008.
 33
    
    PLEDGE OF ASSETSThe Group has repaid borrowings under the Loan Facility during the year. The assets under
fixed charges were APSTAR V and APTSTAR VI satellites of nil in 2008 (2007: $2,317,238,000),
and bank deposits of nil (2007: $83,749,000). As at December 31, 2008, approximately
$808,000 is related to other pledges.At the balance sheet date, certain of the Groups banking facilities are secured by the
Groups land and buildings with a net book value of $4,422,000 (2007: $4,538,000).34
    
    CONTINGENT LIABILITIES
 (a)
    
    In the years before 1999, overseas withholding tax was not charged in respect of
the Groups transponder utilisation income derived from the overseas customers. From
1999, overseas withholding tax has been charged on certain transponder utilisation
income of the Group and full provision for such withholding tax for the years from 1999
onwards has been made in the financial statements. The Directors of the Company are of
the opinion that the new tax rules should take effect from 1999 onwards and,
accordingly, no provision for the withholding tax in respect of the years before 1999
is necessary. The Groups withholding tax in respect of 1998 and before, calculated at
the applicable rates based on the relevant income earned in those years, not provided
for in the financial statements amounted to approximately $75,864,000.(b)
    
    The Company has given guarantees to banks in respect of the secured term Loan
Facility granted to its subsidiary in previous years. The guarantees were terminated
due to repayment of borrowings under the Loan Facility in full during the year.
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35
    
    COMMITMENTSAt December 31, 2008, the Group had the following outstanding capital commitments not
provided for in the Groups financial statements:
 2008
    
    
    2007$000
    
    
    $000Contracted for
    
    
    534
    
    
    
    3,398Authorised but not contracted for
    
    
    965
    
    
    
    1,499
    
    
    
    3,398
 36
    
    LEASING ARRANGEMENTSThe Group as lesseeAt December 31, 2008, the Group had commitments for future minimum lease payments under
non-cancellable operating leases which fall due as follows:
 (i)
    
    Land and buildings:
 2008
    
    
    2007$000
    
    
    $000Within one year
    
    
    278
    
    
    
    592After one year but within five years
    
    
    25
    
    
    
    257303
    
    
    
    849
 Operating lease payments represent rental payable by the Group for its office
properties. Leases are negotiated for a period of one to three years and rentals are
fixed for the whole lease term.(ii)
    
    Satellite transponder capacity:
 2008
    
    
    2007$000
    
    
    $000Within one year
    
    
    48
    
    
    
    2,414After one year but within five years
    
    
    
    
    
    
    48
    
    
    
    2,414
 Operating lease payments represent rentals payable by the Group for the leasing of
satellite transponders for a period of one to three years and rentals are fixed for the
whole lease term.
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36
    
    LEASING ARRANGEMENTS (CONTINUED)The Group as lessorProperty rental income earned during the year was $549,000 (2007: $592,000; 2006: $536,000).
At the balance sheet date, certain properties with an aggregate carrying value of
$11,235,000 (2007: $11,407,000) were held for rental purposes and the Group had contracted
with tenants for the future minimum lease payments under non-cancellable operating leases
which fall due within one year amounting to $251,124 (2007: $442,563) and after one but
within five years amounting to nil (2007: $66,924). Depreciation charged for the year in
respect of these properties was $160,000 (2007: $160,000; 2006: $160,000).Service income earned relating to leasing of facilities equipment during the year was
$96,504 (2007: $440,170; 2006: $734,000). At the balance sheet date, the Group had
contracted with customers for the future minimum lease payments under non-cancellable
operating leases which fall due within one year amounting to $96,504 (2007: $96,504).The Company did not have any leasing arrangements at the balance sheet date.37
    
    RETIREMENT BENEFITS SCHEMESThe Group operates a Mandatory Provident Fund Scheme under the Hong Kong Mandatory Provident
Fund Schemes Ordinance for all qualifying employees in Hong Kong under the jurisdiction of
the Hong Kong Employment Ordinance. Under the 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 $20,000 and thereafter contributions are
voluntary. Contributions to the scheme vest immediately. The assets of the scheme are held
separately from those of the Group, in funds under the control of trustees.As stipulated by the regulations of the PRC, the subsidiaries in the PRC participate in
basic defined contribution pension plans organised by their respective Municipal Governments
under which they are governed. Employees in the PRC are entitled to retirement benefits
equal a fixed proportion of their salaries at their normal retirement age. The Group has no
other material obligation for payment of basic retirement benefits beyond the annual
contributions which are calculated at a rate on the salaries, bonuses and certain allowances
of employees.
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38
    
    MATERIAL RELATED PARTY TRANSACTIONS
 (a)
    
    During the year, the Group entered into the following transactions with related parties:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Income from provision of satellite transponder capacity and
provision of satellite-based telecommunication services to
certain shareholders and its subsidiary of the Company (note i)
    
    
    11,432
    
    
    
    11,975
    
    
    
    16,309Income from provision of satellite transponder capacity and
provision of satellite-based telecommunication services to a
holding company and its subsidiaries of a shareholder of the
Company (note i)
    
    
    40,745
    
    
    
    32,630
    
    
    
    36,068Management fee income from a jointly controlled entity (note ii)
    
    
    363
    
    
    
    580
    
    
    
    480Management fee expenses to a subsidiary of a shareholder of the
holding company (note iii)
    
    
    (1,216
    )
    
    
    (472
    )
    
    
    
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38
    
    MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)(b)
    
    At the balance sheet date, the Group had the following amounts included in the
consolidated balance sheet in respect of amounts owing by and to related parties:
 Amounts due from
    
    
    Amounts due from
    
    
    
    
    
    
    
    
    
    
    Payables and
    
    
    Rentals receivedimmediate holding
    
    
    a jointly controlled
    
    
    
    
    
    
    
    
    
    
    accrued
    
    
    in advance andcompany
    
    
    entity
    
    
    Trade receivables
    
    
    charges
    
    
    deferred income2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Immediate holding
company
    
    
    155
    
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jointly controlled
entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,369
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Certain
shareholders and
its subsidiary of
the Company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    2,628
    
    
    
    1,266
    
    
    
    219
    
    
    
    190
    
    
    
    2,540Holding company and
its subsidiaries of
a shareholder of
the Company (note
(i))
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,518
    
    
    
    3,468
    
    
    
    
    
    
    
    15
    
    
    
    178,177
    
    
    
    197,692
 Notes:(i)
    
    The terms and conditions of these transponder capacity utilisation
agreements are similar to those contracted with other customers of the Group.(ii)
    
    Management fee income arose from a reimbursement of cost of service provided to a jointly
controlled entity under the agreement.(iii)
    
    Management fee expenses incurred for services rendered to a subsidiary of
the Company.
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38
    
    MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)
 (c)
    
    Key management personnel remunerationRemuneration for key management personnel, including amounts paid to the Companys directors
as disclosed in note 7 and certain of the highest paid employees as disclosed in note 8, is
as follows:
 2008
    
    
    2007
    
    
    2006$000
    
    
    $000
    
    
    $000Short-term employee benefits
    
    
    12,902
    
    
    
    11,057
    
    
    
    10,591Performance related incentive payment
    
    
    5,259
    
    
    
    367
    
    
    
    Other long-term benefits
    
    
    756
    
    
    
    706
    
    
    
    687Termination benefits
    
    
    1,511
    
    
    
    
    
    
    
    20,428
    
    
    
    12,130
    
    
    
    11,278
 Total remuneration is included in staff costs (see note 5(b)).
 39
    
    ULTIMATE CONTROLLING PARTYThe Directors consider the controlling party of the Group December 31, 2008 to be APT
Satellite International Company Limited, which is incorporated in the British Virgin
Islands. This entity does not produce financial statements available for public use.40
    
    ACCOUNTING ESTIMATES AND JUDGEMENTS
 (a)
    
    Key sources of estimation uncertaintyThe financial statements are based on the selection and application of significant
accounting policies, which require management to make significant estimates and
assumptions that affect the reported amount of assets and liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities at the date of the
financial statements. Actual results may differ from these estimates under different
assumptions or conditions.(b)
    
    Critical accounting judgement in applying the Groups accounting policiesThe following are some of the more critical judgement areas in the application of the
Groups accounting policies that currently affect the Groups financial condition and
results of operations.
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40
    
    ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
 (b)
    
    Critical accounting judgement in applying the Groups accounting policies (Continued)
 (i)
    
    DepreciationDepreciation of communication satellites is provided for on the straight-line method
over the estimated useful life of the satellite, which is determined by engineering
analysis performed at the in-services date and re-evaluated periodically. A number
of factors affect the operational lives of satellites, including construction
quality, component durability, fuel usage, the launch vehicle used and the skill
with which the satellite is monitored and operated. As the telecommunication
industry is subject to rapid technological change and the Groups satellites have
been subjected to certain operational lives, the Group may be required to revise the
estimated useful lives of its satellites and communication equipment or to adjust
their carrying amounts periodically. Accordingly, the estimated useful lives of the
Groups satellites are reviewed using current engineering data. If a significant
change in the estimated useful lives of our satellites is identified, the Group
accounts for the effects of such change as depreciation expenses on a prospective
basis. Details of the depreciation of communication satellites are disclosed in
notes 1(g) and 15.(ii)
    
    Trade receivables and other receivablesThe management of the Group estimates the provision of bad and doubtful debts
required for the potential non-collectability of trade receivables and other
receivables at each balance sheet date based on the ageing of its customer accounts
and its historical write-off experience, net of recoveries. The Group performs
ongoing credit evaluations of its customers and adjusts credit limits based upon
payment history and the customers current credit worthiness. The Group does not
make a general provision on its trade receivables and other receivables, but
instead, makes a specific provision on its trade receivables and other receivables.
Hence, the Group continuously monitors collections and payments from customers and
maintains allowances for bad and doubtful accounts for estimated losses resulting
from the inability of its customers to make required payments. If the financial
condition of the customers of the Group were to deteriorate, actual write-offs would
be higher than estimated. For the year ended December 31, 2008, the Group had made
provisions for bad debts in the amount of $5,637,000 (2007: $80,000;
2006:$8,347,000).The Group periodically reviews the carrying amounts of provision for bad and
doubtful debts to determine whether there is any indication that the provision needs
to be written off. If the Group becomes aware of a situation where a customer is not
able to meet its financial obligations due to change of contact information by the
customer without notification or after seeking professional advice from lawyers or
debt collection agent that the probability of recovery is remote, the Group will
consider to write off the debt.
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40
    
    ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
 (b)
    
    Critical accounting judgement in applying the Groups accounting policies (Continued)
 (iii)
    
    Impairment of property, plant and equipmentThe Group periodically reviews internal or external resources to identify
indications that the assets may be impaired. If the recoverable amount of an asset
is estimated to be less than its carrying amount, the carrying amount of the asset
is reduced to its recoverable amount. In assessing the recoverable amount of these
assets, the Group is required to make assumptions regarding estimated future cash
flows and other factors to determine the net realisable value. If these estimates or
their related assumptions change in the future, the Group may be required to adjust
the impairment charges previously recorded.The Group applies the foregoing analysis in determining the timing of the impairment
test, the estimated useful lives of the individual assets, the discount rate, future
cash flows used to assess impairments and the fair value of impaired assets. It is
difficult to precisely estimate the price of the transponder capacities and related
satellite services and residual values because the market prices for our assets are
not readily available. The estimates of future cash flows are based on the terms of
existing transponder capacity and service agreements. The dynamic economic
environment in which the Group operates and the resulting assumptions used in
setting depreciable lives on assets and judgement relating to the utilisation rate
of the assets, price and amount of operating costs to estimate future cash flows
impact the outcome of all of these impairment tests. If these estimates or their
related assumptions change in the future, the Group may be required to record
impairment loss for these assets not previously recorded.The Group periodically reviews the carrying amounts of its property, plant and
equipment through reference to its use value and fair market value as assessed both
by the Group and by an independent professional property appraiser. If the use value
or fair market value of the property, plant and equipment are lower than their
carrying amount, the Group may be required to record additional impairment loss not
previously recognised. Details of the impairment loss of property, plant and
equipment are disclosed in note 15.(iv)
    
    Contingencies and provisionsContingencies, representing an obligation that are neither probable nor certain at
the date of the financial statements, or a probable obligation for which the cash
outflow is not probable, are not recorded.Provisions are recorded when, at the end of period, there is an obligation of the
Group to a third party which is probable or certain to create an outflow of
resources to the third party, without at least an equivalent return expected from
the third party. This obligation may be legal, regulatory or contractual in nature.To estimate the expenditure that the Group is likely to bear in order to settle an
obligation, the management of the Group takes into consideration all of the
available information at the closing date for its consolidated financial statements.
If no reliable estimate of the amount can be made, no provision is recorded. For
details, please refer to note 34 on contingent liabilities.
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41
    
    POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET
EFFECTIVE FOR THE ANNUAL ACCOUNTING PERIOD ENDED DECEMBER 31, 2008Up to the date of issue of these financial statements, the IASB have issued a number of
amendments, new standards and interpretations which are not yet effective for the year ended
December 31, 2008 and which have not been adopted in these financial statements.Management is in the process of making an assessment of what the impact of these amendments,
new standards and new interpretations is expected to be in the period of initial application.
So far it has conducted that the adoption of them is unlikely to have a significant impact on
the Groups results of operations and financial position.Of these developments, the following relate to matters that may be relevant to the Groups
operations and financial statements:
 Effective foraccounting periodsbeginning on or afterIAS 1 (Revised)
    
    Presentation of financial statements
    
    January 1, 2009IAS 23 (Revised)
    
    Borrowing costs
    
    January 1, 2009IFRS 8
    
    Operating segments
    
    January 1, 2009Amendment to IAS 27
    
    Consolidated and separate financial
statements  Cost of an investment
in a subsidiary, joint-controlled
entity or associate
    
    January 1, 2009Amendment to IFRS 2
    
    Share-based payment  Vesting
conditions and cancellations
    
    January 1, 2009Amendments to IFRS 7
    
    Financial instruments  Disclosures
    
    January 1, 2009IAS 27 (Revised)
    
    Consolidated and separate financial
statements
    
    July 1, 2009IFRS 3 (Revised)
    
    Business combinations
    
    July 1, 2009
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EXHIBIT INDEX
 Exhibit No.
    
    Description of Exhibit1.1
    
    
    Memorandum of Association and By-laws of the Company (incorporated by reference to the
Company Registration Statement, as filed with the Commission on December 9, 1996, Registration
Number 333-6044).1.2
    
    
    The amended Memorandum of Association and Bye-Laws of the Company (incorporated by reference
to the Companys 20-F filed with the Commission on June 29, 2004).4.1
    
    
    Satellite Procurement Agreement by and between APT Satellite Company Limited, a wholly owned
subsidiary of the Company, and Contractor, an independent third party not associated with the
Directors, chief executive officer and major shareholders of the Company or any of its
subsidiaries, dated January 8, 2001 (incorporated by reference to the Companys 6-K filed with
the Commission on January 9, 2001).4.2
    
    
    Launch Agreement by and between APT Satellite Company Limited, a wholly owned subsidiary of
the Company, and the Launch Contractor, a subsidiary of China Aerospace Science & Technology
Corporation, dated January 8, 2001 (incorporated by reference to the Companys 6-K filed with
the Commission on January 9, 2001).4.3
    
    
    Satellite Procurement Agreement by and between APT Satellite Company Limited, a wholly owned
subsidiary of the Company, and Contractor, an independent third party not associated with the
Directors, chief executive officer and major shareholders of the Company or any of its
subsidiaries, dated December 11, 2001 (incorporated by reference to the Companys 6-K filed
with the Commission on December 18, 2001).4.4
    
    
    Term Sheet executed by and between APT Satellite Company Limited, a wholly owned subsidiary
of the Company, Contractor and Loral Orion, Inc., both of which are independent third party
not associated with the Directors, chief executive officer and major shareholders of the
Company or any of its subsidiaries, dated September 20, 2002 (incorporated by reference to the
Companys 6-K filed with the Commission on September 30, 2002).4.5
    
    
    Transponder Utilization Agreement by and between APT Satellite Company Limited, a wholly
owned subsidiary of the Company, and Lessee, a connected person under the rules governing the
listing of securities on The Stock Exchange of Hong Kong Limited, dated April 11, 2003
(incorporated by reference to the Companys 6-K filed with the Commission on April 16, 2003).4.6
    
    
    Change of Auditors of the Company KPMG with effect from July 15, 2003 (incorporated by
reference to the Companys 6-K filed with the Commission on July 17, 2003).4.7
    
    
    Satellite Procurement Amendment Agreement by and between APT Satellite Company Limited, a
wholly owned subsidiary of the Company, and the Contractor, a party independent of the
Director, chief executive officer and substantial shareholder of the Company and its
subsidiaries and their respective associates, dated August 26, 2003. The Satellite
Transponder Agreement and Satellite Agreement by and between APT Satellite Company Limited, a
wholly owned subsidiary of the Company, and the lessor, a party independent of the Director,
chief executive officer and substantial shareholder of the Company and its subsidiaries and
their respective associates, dated August 26, 2003 (incorporated by reference to the
Companys 6-K filed with the Commission on September 2, 2003).4.8
    
    
    Various on-going transactions in their ordinary course of business had entered into between
the APT Group of the Company and APT Telecom, a non-wholly owned subsidiary of the Company,
and the contracting party, a connected person under the rules governing the listing of
securities on The Stock Exchange of Hong Kong Limited, as announced August 28, 2003
(incorporated by reference to the Companys 6-K filed with the Commission on September 2,
2003).




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Exhibit No.
    
    Description of Exhibit4.9
    
    
    Master Agreement by and between APT Satellite Telecommunications Limited, a non-wholly owned
subsidiary of the Company, Skywork Corporation, a wholly owned subsidiary of the Company, APT
Telecom Services Limited, a wholly owned subsidiary of the Company, and a connected person
under the rules governing the listing of securities on The Stock Exchange of Hong Kong
Limited, dated September 10, 2003 whereby the business of APT Satellite Telecommunications
Limited was being reorganized (incorporated by reference to the Companys 6-K filed with the
Commission on September 15, 2003).4.10
    
    
    The Agreement and the Amended Launch Agreement by and between APT Satellite Company Limited,
a wholly owned subsidiary of the Company, and the Contractor of APSTAR V, dated November 16,
2003 (incorporated by reference to the Companys 6-K filed with the Commission on September
17, 2003).4.11
    
    
    An utilization agreement for the remaining life of APSTAR I by and between APT Satellite
Company Limited, a wholly owned subsidiary of the Company, and the customer, dated October 22,
2004 (incorporated by reference to the Companys 6-K filed with the Commission on October 29,
2004).4.12
    
    
    An agreement by and between APT Satellite Company Limited, a wholly owned subsidiary of the
Company, and the grantor and contractor of APSTAR VIB dated November 10, 2004 (incorporated by
reference to the Companys 6-K filed with the Commission on November 15, 2004).4.13
    
    
    Two Master Agreements by and between the Company and Singapore Telecommunications Limited;
and the Company and C2C Pte Limited dated December 1, 2004 (incorporated by reference to the
Companys 6-K filed with the Commission on December 3, 2004).4.14
    
    
    The sum insured in respect of the launch of APSTAR VI by and between APT Satellite Company
Limited, a wholly owned subsidiary of the Company, and the joint insurance brokers announced
on March 15, 2005 (incorporated by reference to the Companys 6-K filed with the Commission on
March 16, 2005).4.15
    
    
    The arrangement of sum insured in respect of the in-orbit insurance of APSTAR V by and
between APT Satellite Company Limited, a wholly owned subsidiary of the Company, and the
insurance broker dated August 4, 2005 (incorporated by reference to the Companys 6-K filed
with the Commission on August 5, 2005).4.16
    
    
    Settlement Proposal in respect of the tax assessment on the gain of the transfer of
transponders of APSTAR IIR submitted with the Inland Revenue Department of Hong Kong on August
28, 2006 by APT Satellite Company Limited, a wholly owned subsidiary of the Company, and the
response received from the department (incorporated by reference to the Companys 6-K filed
with the Commission on September 25, 2006).4.17
    
    
    The Supplemental Agreement by and between the Company and Singapore Telecommunications
Limited dated December 28, 2006 whereby extending the term of the Master Agreement as filed to
the Companys 6-K on December 3, 2004 (incorporated by reference to the Companys 6-K filed
with the Commission on December 29, 2006).




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Exhibit No.
    
    Description of Exhibit4.18
    
    
    The Option Agreement by and among shareholders of APT Satellite Telecommunication Limited
(the Licensor, a jointly controlled entity owned as to 55% indirectly by the Company), the
Licensor and NTT Com Asia Limited (the Licensee) dated October 2, 2007 whereby granting the
Licensee a call option to purchase the entire equity interests in the Licensor with option
expiry date on December 31, 2008 and a right of first refusal in respect of any offer to
purchase equity interests in the Licensor during the period from
January 1, 2009 to December 31, 2010. On the same date, the License Agreement and
the Renewal Supplement by and between the Licensor and Licensee whereby licensing
certain premises of the Licensor to the Licensee for a term of three years
beginning October 1, 2007 and renewing the License Agreement subject to certain
conditions (incorporated by reference to the Companys 6-K filed with the
Commission on October 3, 2007).8.1
    
    
    List of subsidiaries of the Company and the jurisdictions under which each does business
(contained in Note 18 to the Consolidated Financial Statements filed herein under Item 18).11
    
    
    Code of Ethics (incorporated by reference to Exhibit 11.1 on the Form 20-F for the year ended
December 31, 2006).12.1
    *
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.12.2
    *
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.13.1
    **
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.13.2
    **
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.15.1
    
    
    Charter of Nomination Committee (incorporated by reference to Exhibit 14.2 on the Form 20-F
for the year ended December 31, 2004).15.2
    
    
    Charter of Remuneration Committee (incorporated by reference to Exhibit 14.3 on the Form 20-F
for the year ended December 31, 2004).15.3
    *
    
    Amended Charter of Audit Committee (as amended on 25 June 2004, on 11 April 2005 and 7 April
2009).
 
 *
    
    Filed herewith.**
    
    Furnished herewith.