2012 Annual Report - ZTE

ZTE CORPORATIONNotes to Financial Statements(Prepared under Hong Kong Financial Reporting Standards)31 December 20125. REVENUE, OTHER INCOME AND GAINSRevenue, which is also the Group’s turnover, represents the net invoiced value of goods sold, after allowancesfor returns and trade discounts; an appropriate proportion of contract revenue of construction contracts andthe value of services rendered during the year. All significant intra-group transactions have been eliminatedon consolidation.An analysis of revenue, other income and gains is as follows:2012 2011Notes RMB’000 RMB’000RevenueTelecommunications system contracts 55,214,707 55,651,957Sale of goods 25,838,804 26,933,508Sale of services 3,165,847 3,668,99184,219,358 86,254,456Other incomeVAT refunds and other tax subsidies # 2,512,075 1,910,186Dividend income 13,070 11,061Bank and other interest income 149,409 283,618Others ## 569,178 458,5253,243,732 2,663,390GainsGain on investment in Nationz Technologies Inc — 866,503Gain on disposal of financial assets available for sale — 5,931Gain on disposal of derivative financial instruments 6,908 128,550Gain on disposal of subsidiaries 46 1,194,242 —Gain on deemed disposal of interest in an associate 61,223 —Others 2,616 —1,264,989 1,000,9844,508,721 3,664,374#Refund of VAT on software products represents the refund upon payment of VAT according to the portion of any effective VATrate in excess of 3% in respect of software product sales of the Group, pursuant to the principles of the State Council documententitled “Certain Policies to Encourage the Development of Software Enterprise and the IC Industry” and the approval reply of thestate taxation authorities.##Others mainly represent gains on government grants, contract penalty income and other miscellaneous incomes.364