2012 Annual Report - ZTE

ANNUAL REPORT 20125. Updates on the Disposal of 51% equity interests in CCT by the CompanyOn 21 October 2011(Beijing time), the Company sold its 51% equity interests in CCT to Pan CommunicationInvestments and Atlas International Investments (both of which are wholly-owned subsidiaries of France Telecom)and the transfer of equity ownership was completed on the same date. On 27 December 2012, the Companyentered the “Amendments and Supplemental Agreement to the Equity Transfer Agreement” with the aforesaidtwo companies, pursuant to which, the final transaction price of Equity Transfer at USD1 million was agreed byboth parties. For details please refer to the relevant section headed “Material Matters” in the 2011 Annual Reportof the Company and “Announcement Updates on the Disposal of 51% Equity Interests in Congo Chine TelecomS.A.R.L.” dated 28 December 2012.(V)PROGRESS OF THE PHASE I SHARE INCENTIVE SCHEME OF THE COMPANY DURING THE YEARThe Phase I Share Incentive Scheme of the Company was under normal implementation during the year.At the Thirty-seventh Meeting of the Fifth Session of the Board of Directors of the Company held on 6 December2012, the “Resolution on the Third Unlocking of Subject Shares under the Second Award of the Phase I ShareIncentive Scheme” was considered and passed, which confirmed that the conditions for the Third Unlocking ofthe Subject Shares under the Second Award of the Company had been fulfilled and that 735 Scheme Participantsunder the Second Award had satisfied conditions for the Third Unlocking of Subject Shares under the Phase IShare Incentive Scheme, and proposed to unlock a total of 6,589,151 shares. For details, please refer to the“Announcement of Resolutions of the Thirty-seventh Meeting of the Fifth Session of the Board of Directors”published by the Company on 6 December 2012.On 20 December 2012, the Company received a “Confirmation Letter of Shares Change Registration” issued byChina Securities Depository & Clearing Corporation Limited, Shenzhen Branch. The Third Unlocking of the SubjectShares in the Second Award under the Phase I Share Incentive Scheme was completed, with a total of 6,589,151Subject Shares being unlocked, accounting for 0.19% of the total share capital of the Company. The date of listingand circulation of Subject Shares subsequent to the release of restrictions was 24 December 2012. For details,please refer to the “Announcement of the Completion of the Third Unlocking of Subject Shares under the SecondAward of the Phase I Share Incentive Scheme” published by the Company on 20 December 2012.The impact of the Phase I Share Incentive Scheme of the Company on the Company’s operating results andfinancial conditions is discussed in further detail in Note VII to the financial statements prepared under PRC ASBEs.(VI)INFORMATION ON THE BONDS CUM WARRANTS ISSUED BY THE COMPANY1. Overview of the Bonds cum Warrants of the CompanyThe Company issued 40,000,000 bonds cum warrants (“Bonds cum Warrants”) amounting to RMB4 billion in totalon 30 January 2008. The bonds have a nominal value of RMB100 each and a total issue amount of RMB4 billion.A coupon interest rate of 0.8% per annum applies to the issue of the Bonds cum Warrants, accruable from theissue date (30 January 2008).Four interest payments, each with an aggregate amount of RMB32,000,000, were made in respect of the bondson 2 February 2009, 1 February 2010, 31 January 2011 and 30 January 2012 respectively. The bonds maturedon 30 January 2013 and the total amount of principal and interest paid was RMB4,032,000,000.71