2012 Annual Report - ZTE

ZTE CORPORATIONMaterial Mattersthe Administration of Third-party Guarantees”, in which the approval process of third-party guarantees tobe made by the Company and its subsidiaries is specifically provided to regulate third-party guarantees ofthe Company and effectively control risks arising therefrom.(5) The Independent Non-executive Directors of the Company have reviewed the “Notice regarding Certain Issueson the Regulation of Financial Transactions Between Listed Companies and Connected Parties and Third-partyGuarantees Made by Listed Companies” (Zheng Jian Fa (2003) No. 56), the “Notice regarding the Regulationof Third-party Guarantees made by Listed Companies’ (Zheng Jian Fa [2005] No. 120) and the Articles ofAssociation, and are of the opinion that the decision making procedures for third-party guarantees of theCompany during 2012 are in compliance with the Articles of Association and relevant regulations mentionedabove, and there has been no infringement on the interests of the Company and its shareholders.4. Performance of material contracts entered into during or prior to the yearDuring the year, the Company and Qualcomm Incorporated (“Qualcomm”), a U.S. company, entered into the“Framework Agreement of Chipset Procurement for Calendar Years 2012–2015,” pursuant to which the Companyproposed procurements from Qualcomm with an aggregate value of no less than USD4 billion in calendar years2012–2015. During the year, the Company and Broadcom Corporation (“Broadcom”), a U.S. company, enteredinto the “Framework Agreement of Chipset Procurement for Calendar Years 2012–2014,” pursuant to which theCompany proposed procurements from Broadcom with an aggregate value of no less than USD1 billion in calendaryears 2012–2014. For details please refer to the “Announcement of the Board of Directors” published by theCompany on 20 February 2012.Details of material contracts entered into during the year and material contracts entered into prior to and subsistingduring the year are set out as follows:No.Contents of material contracts1 Framework agreement and business contractsthereunder between the Company andEthiopian Telecommunications Corporation2 GSM Phase II project contract between theCompany and Ethiopian TelecommunicationsCorporation3 Network Supply Agreement and ManagedService Agreement between the Companyand its subsidiary ZTE Corporation SouthAfrica (PTY) Limited on the one hand andCell C (PTY) LTD., a South African mobiletelecommunications operator, and itscontrolling shareholder OGER TELECOM(SOUTH AFRICA) (PTY) Limited, on the other4 Framework Agreement of ChipsetProcurement for Calendar Years 2012–2015between the Company and Qualcomm5 Framework Agreement of ChipsetProcurement for Calendar Years 2012–2014between the Company and BroadcomPricingprincipleBy reference tomarket pricesBy reference tomarket pricesBy reference tomarket pricesBy reference tomarket pricesBy reference tomarket pricesTransactionpricesBusinesscontracts underthe frameworkagreementamounted toUSD200 millionWhether aconnectedtransactionNoUSD478 million NoUSD378 million NoNot less thanUSD4 billionNot less thanUSD1 billionNoNoPerformancestatus as atthe end ofthe reportingperiodUnder normalprogressUnder normalprogressUnder normalprogressUnder normalprogressUnder normalprogress92