2012 Annual Report - ZTE

ANNUAL REPORT 2012(4) Interest rate riskAs the size of the Group’s outstanding loans continued to grow, the total amount of interest payments owed bythe Group will vary as a direct result of any fluctuations in the loan interest rates and the interest rate policiesdetermined by the State and the profitability of the Group will in turn be affected.(5) Credit riskThe Group provides one-stop communications solutions to its customers. With the swift expansion of its business,the Group is serving a large customer base with differing credit status, and its business will inevitably be affectedby the varied credit profiles of these customers. The Group has stepped up with the building of its internationalcustomer credit rating and credit granting management system to mitigate the aforesaid impact.(IV)Other Matters in the Report of the Board of Directors1. Fixed assetsDetails of changes in fixed assets of the Company and the Group for the year are set out in Note 15 to thefinancial statements prepared in accordance with HKFRSs.2. Bank loans and other borrowingsDetails of bank loans and other borrowings of the Company and the Group as at 31 December 2012 are set outin Note 34 to the financial statements prepared in accordance with HKFRSs.3. ReservesDetails of the reserves and changes in the reserves of the Company and the Group for the year are set out inNote 43 to the financial statements prepared in accordance with HKFRSs.4. Pre-emptive rightsThere is no provision under the Company Law or the Articles of Association regarding pre-emptive rights thatrequires the Company to offer new shares to its existing shareholders on a pro-rata basis.5. Share capitalDetails of the share capital of the Company, together with the changes in the share capital and the reasonstherefor, are set out in Note 41 to the financial statements prepared in accordance with HKFRSs and the sectionheaded “Changes in shareholdings and information of shareholders (I) Changes in share capital during the year”in this report.6. Competing interestNone of the Directors has interest in any business which competes or is likely to compete, either directly orindirectly, with the businesses of the Group.51