2012 Annual Report - ZTE

ANNUAL REPORT 2012Notes to Financial Statements(Prepared under Hong Kong Financial Reporting Standards)31 December 20126. PROFIT/(LOSS) BEFORE TAXThe Group’s profit/(loss) before tax is arrived at after charging/(crediting):2012 2011Notes RMB’000 RMB’000Cost of goods and services 45,255,672 52,185,748Depreciation 15 1,042,966 1,026,399Amortisation of land lease payments 17 17,233 16,983Amortisation of intangible assetsother than deferred development costs 18 125,690 85,657Research and development costs:Deferred development costs amortised 18 363,040 259,130Current year expenditure 9,350,518 8,951,729Less: Deferred development costs (884,364) (718,236)8,829,194 8,492,623Fair value losses, net*:Derivative instruments — transactionsnot qualifying as hedges 30 49,456 77,860Equity investments held for trading 42,261 10,815Investment properties 15,679 —Impairment of trade receivables* 26 330,484 576,537Provision for warranties 39 303,007 516,152Write-down of inventories to net realisable value** 134,007 370,150Impairment of property, plant and equipment 15 2,559 —Minimum lease payments under operating leaseson land and buildings 622,478 509,877Contingent rental income in respect of operating leases 50(a) (159,055) (89,219)Auditors’ remuneration 6,985 7,292Staff costs (including directors’, chief executives’ andsupervisors’ remuneration in note 8):Wages, salaries, bonuses, allowances and welfare 11,653,643 11,465,702Equity-settled share option expense 6,722 41,821Retirement benefit scheme contributions:Defined benefit pension scheme 37 6,314 6,352Defined contribution pension schemes 750,667 730,09612,417,346 12,243,971Foreign exchange loss* 136,113 836,993Loss on disposal of items of property,plant and equipment* 19,446 30,629Gain on disposal of Nationz Technologies Inc. — (866,503)(Gain)/loss on disposal of subsidiaries 46 (1,194,242) 18,801Gain on deemed disposal of interest in an associate (61,223) —Fair value losses of assumed liabilities in a previousdisposal of a subsidiary 67,295 —Other (2,616) —Gain on disposal of available-for-sale investments — (5,931)* The fair value losses, impairment of trade receivables, foreign exchange loss, loss on disposal of items of property, plant andequipment and loss/(gain) on disposal of subsidiaries are included in “Other expenses” on the face of the consolidated statementof comprehensive income.** Write-down of inventories to net realisable value are included in “Cost of sales” on the face of the consolidated statement ofcomprehensive income.365