2012 Annual Report - ZTE

ANNUAL REPORT 2012Notes to Financial Statements(Prepared under Hong Kong Financial Reporting Standards)31 December 201255. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)Credit risk (continued)Since the Group trades only with recognised and creditworthy third parties, there is no requirement forcollateral. Concentrations of credit risk are managed by analysis, by counterparty, by geographical region andby industry sector. There are no significant concentrations of credit risk within the Group as the customerbases of the Group’s trade receivables are widely dispersed in different sectors and industries.Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables aredisclosed in note 26 to the financial statements.Liquidity riskThe Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considersthe maturity of both its financial instruments and financial assets (e.g., trade receivables) and projected cashflows from operations.The Group’s objective is to maintain a balance between continuity of funding and flexibility through the useof bank loans and other interest-bearing loans. In addition, banking facilities have been put in place forcontingency purposes. Except for the non-current portion of interest-bearing bank borrowings, all borrowingsof the Group mature in less than one year.The maturity profile of the Group’s financial liabilities as at the end of the reporting period, based on thecontractual undiscounted payments, is as follows:2012 GroupOndemandWithin1 year 1–2 years 2–3 yearsOver3 Years TotalRMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000Interest-bearing bankborrowings — 18,684,521 13,290 919,466 193,458 19,810,735Trade and bills payables 18,115,877 11,478,102 — — — 29,593,979Bank advances on factoredtrade receivables/bankadvances on factored longtermtrade receivables — 4,211,344 1,594,306 966,975 1,754,183 8,526,808Other payables 7,483,733 104,356 — — — 7,588,089Bonds cum warrants — 4,018,134 — — — 4,018,134Bonds payable — 252,000 252,000 6,252,000 — 6,756,000Factoring costs payable — — 89,624 75,752 260,440 425,816Derivative financial instruments — — 5,471 4,062 1,320 10,853Financial guarantee contract 68,868 — — — — 68,86825,668,478 38,748,457 1,954,691 8,218,255 2,209,401 76,799,282429