2012 Annual Report - ZTE

ANNUAL REPORT 2012(3) Progress of the event since the publication of the announcement of asset disposal and the impact on theoperating results for and financial conditions of the reporting periodThe two parties to the transaction have been working on the settlement of and related payments for the equityinterests in accordance with the “Equity Transfer Agreement on the Transfer of 68% Equity Interests in ShenzhenZTE Special Equipment Company Limited” and the investment gains of approximately RMB440 million wasrecognised by the Company during the year.3. Disposal of 81% interests in Changfei by the Company and subscription to shares and convertiblebonds of China All Access by ZTE HK(1) Disposal of assetsUnit: RMB in ten thousandsCounterpartyAssetsdisposed ofDate ofexecution ofagreementTransactionpriceNet profitcontributionsto theCompany bythe assetsfrom thebeginning ofthe period tothe date ofdisposalGain/loss fromdisposalNet profitcontributionsof the assetdisposal to thelisted companyas a percentageof total profitPricingprinciple forasset disposalWhether aconnectedtransactionRelationshipwith thecounterparty(asapplicable toconnectedtransactions)Whethertitles toassetinvolvedhave beentransferredin fullWhethercreditors’rightsand debtshave beentransferredin fullDomesticannouncementdate andindexCCBIGuangdong AllAccess30% equityinterests inChangfei51% equityinterests inChangfei16 November201248,00081,6002,878.064,892.7028,067.9947,715.59—14.15%—24.06%Priced at10.5 times ofthe auditedconsolidatednet profit ofChangfei for2011NoNoN/AN/AYesYesYesYes17 November2012AnnouncementNo. 201253“Announcementof Matterspertaining toInvestment”Note 1:The connected transaction mentioned above is defined under the Shenzhen Listing Rules and other domestic securities regulatoryprovisions.Note 2:Information set out under “Whether titles to asset involved have been transferred in full” and “Whether creditors’ rights and debtshave been transferred in full” represented status as at the date of this report.(2) Statement relating to the disposal of assets and the subscription of shares in and convertible bonds ofChina All Access by ZTE HKTo meet the requirements of the Company’s strategic development and to facilitate the development of theCompany’s principal business, the Company entered into the “Equity Transfer Agreement for the Transfer of 30%Equity Interests in Shenzhen Changfei Investment Company Limited” and “Equity Transfer Agreement for theTransfer of 51% Equity Interests in Shenzhen Changfei Investment Company Limited”with CCBI and GuangdongAll Access, respectively, on 16 November 2012, pursuant to which the Company disposed of 30% equity interestsand 51% equity interests to CCBI and Guangdong All Access, respectively. On the same date, ZTE HK, a whollyownedsubsidiary of the Company, entered into the “Agreement for the Subscription of Shares in and ConvertibleBonds of CHINA ALL ACCESS (HOLDINGS) LIMITED” with China All Access, pursuant to which ZTE HK willsubscribe to 112,000,000 shares in China All Access (at a subscription price of approximately HK$1.8/share) andconvertible bonds of China All Access with a nominal principal amount of HK$201.5 million and an annual interestrate of 10% for a term of 2 years.69