2007年報 ANNUAL REPORT 2007 ANNUAL REPORT 年報 2007
Contents
Corporate Profile 2 Corporate Information 3 Financial Highlights 4 Chairman’s Statement 6 Management Discussion and Analysis 10 Corporate Governance Report 16 Directors and Senior Management 21 Report of the Directors 23 Independent Auditors’ Report 33 Consolidated Income Statement 34 Consolidated Balance Sheet 35 Consolidated Summary Statement of Changes in Equity 37 Consolidated Cash Flow Statement 38 Balance Sheet 40 Notes to Financial Statements 41 Corporate Profile
China Wireless Technologies Limited (the “Company”) was incorporated in the Cayman Islands as an exempted company with limited liability on 11 June 2002. The shares of the Company (the “Shares”) were listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 9 December 2004 (Stock Code: 2369).
Yulong Computer Telecommunications Scientific (Shenzhen) Co., Ltd. (“Shenzhen Yulong”) is an indirect wholly- owned subsidiary of the Company. It was founded by Mr. Guo Deying (the Company’s Chairman, Executive Director and CEO) in April 1993.
Shenzhen Yulong is a leading developer and provider of integrated solutions for smartphone sets, mobile data platform system, and value-added business operations in the People’s Republic of China (the “PRC”). The company mainly provides its products for enterprises, governmental departments and telecommunications operators in Mainland China.
In the last decade, capitalizing on the development of wireless telecommunications technological know-how in wireless telecommunications across multiple wireless telecommunications network standards including paging, GSM, CDMA1X, TD-SCDMA and PHS network, the Company and its subsidiaries (the “Group”) have developed a number of various proprietary technologies and patents such as operating systems, radio frequency, protocols and wireless data decomposed transmission technology. The Group has developed advanced research and development capabilities in mobile communications and gradually becomes a leader of high-end dual-mode smartphone in the global telecommunications market. The Group is currently focused on two product series, namely, smartphone (for China network operators and other industry users) and other products (like telecommunications network coverage system).
As a leading wireless data solutions developer in the China mobile telecommunications market, the Group has also succeeded in breaking the global telecommunications market. The Group strives to further develop in the global telecommunications markets and has established strong and strategic cooperation relationships with certain global telecommunications operators.
The Group is committed to make every single individual to have the privilege to enjoy the extravagant experience of using integrated terminal of wireless data solutions. To achieve this goal, the Group is striving to realize its clients’ dream by providing personalized products and services based on its own operating systems and other application software. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
Corporate Information
Registered Office Auditors and Reporting Cricket Square Accountants Hutchins Drive Ernst & Young P.O. Box 2681 Certified Public Accountants Grand Cayman KY1-1111 Legal Advisers to the Company Cayman Islands as to Hong Kong Law DLA Piper Hong Kong Head Office and Principal Place of Business in the PRC Legal Advisers to the Company No. 2 Flat as to Cayman Islands Law Coolpad Cyber Park Conyers Dill & Pearman Mengxi Boulevard Northern Part of Science & Technology Park Principal Share Registrar and Nanshan District Transfer Office Shenzhen Butterfield Bank (Cayman) Limited Butterfield House, Principal Place of Business 68 Fort Street in Hong kong P.O. Box 705 Room 1902 George Town, Mass Mutual Tower Grand Cayman 38 Gloucester Road Cayman Islands Wanchai Hong Kong Hong Kong Branch Share Registrar and Transfer Office Website Address Computershare Hong Kong Investor Services Limited www.chinawireless.cn Shops 1712–16 www.irasia.com/listco/hk/chinawireless 17th Floor Hopewell Centre Company Secretary and 183 Queen’s Road East Qualified Accountant Hong Kong Mr. JIANG Chao, ACCA Principal BankerS Audit Committee Bank of Communications Co., Ltd. Mr. CHAN King Chung (Chairperson) DBS Bank (Hong Kong) Ltd. Dr. HUANG Dazhan CITIC Ka Wah Bank Ltd. Mr. XIE Weixin Oversea-Chinese Banking Corporation Ltd. Mr. YANG Xianzu Stock Code Authorised Representatives 2369 Mr. GUO Deying Mr. JIANG Chao China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
Financial Highlights
The financial data below are extracted from the Group’s audited financial statements prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance. Any discussion and analysis should be read in conjunction with the Group’s financial statements audited by Ernst & Young and the accompanying notes as set out in this annual report.
Condensed Consolidated Income Statements
(In thousands of Hong Kong Dollars, H.K.GAAP) Year ended 31 December 2007 2006 2005 2004 2003
Continuing operations revenue 1,277,663 640,855 353,995 245,545 151,808
Profit before tax 167,520 53,684 60,318 51,195 39,966 Tax — — (9,442) (7,528) (3,103)
Profit for the year 167,520 53,684 50,876 43,667 36,863
Net profit attributable to shareholders 167,520 53,684 50,876 43,667 36,863
Condensed Consolidated Balance Sheets
(In thousands of Hong Kong Dollars) Year ended 31 December 2007 2006 2005 2004 2003
Non-current assets 432,000 168,586 64,468 39,485 30,660 Current assets 812,149 854,087 527,554 341,813 175,478 Non-current liabilities 91,083 102,939 2,035 1,191 – Current liabilities 491,716 488,070 276,291 165,097 111,016 Net assets 661,350 431,664 313,696 215,010 95,122
Annual revenue (in thousands of HK Dollars) China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
China Wireless Technologies Limited — ANNUAL REPORT 2007 Chairman’s Statement
The Group recorded outstanding performance in 2007. Total revenue of the Group in 2007 increased by 99.4% to HK$1,277.7 million from HK$640.9 million in 2006. Chairman’s Statement
Dear Shareholders: The Group’s net profit for the year ended 31 December 2007 was HK$167.5 million, representing a significant On behalf of the board (the “Board”) of directors (the year-on-year increase of 212.0%. The net profit margin “Directors”) of the Company, I am pleased to present in 2007 rose to 13.1% from 8.4% in 2006. the annual report of the Group for the financial year ended 31 December 2007. I would like to express my Basic and diluted earnings per share for the year ended sincere gratitude for your concern and support for the 31 December 2007 were HK$8.33 cents and HK$7.98 Company. cents, respectively.
REVIEW OF THE PERFORMANCE OF Dividends THE GROUP FOR THE YEAR END 31 The Directors do not recommend the payment of DECEMBER 2007 any final dividend for the year. The Group intends to capitalize the profit on R&D of new technologies and Operating Results the fixed assets. The Group recorded outstanding performance in 2007. Total revenue of the Group in 2007 increased by 99.4% Business Review to HK$1,277.7 million from HK$640.9 million in 2006. The revenue and profit of the Group in 2007 reached The increase was mainly attributable to the growth a significant increase respectively, because the Group in revenue from the Group’s dual-mode smartphone broadened its product lines and its customers’ base business. during the year. The Group has launched twelve dual- model smartphones in 2007. Most notably, the Group launched three GSM-GSM dual-mode smartphones and China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
Chairman’s Statement
supplied them to a China’s GSM network operator since system based on Windows CE in the world. The Group July 2007, and the Group has developed co-operation has also been cooperating with Qualcomm in the relations with China’s biggest network operator since chipset field. The Group invested in a broad range of then. advertising and marketing initiatives to strengthen the “Coolpad” brand recognition, maintaining its high and As an enterprise which places strong emphasis on good reputation in China’s smartphone market. the R&D for products and innovations, the Group has established an outstanding R&D team and has became The Group expanded its after-sales team considerably one of the strongest smartphone developers in Mainland and committed to offering the best after-sales service China. The Group has restructured its R&D department for Coolpad users. The Group has established Coolpad to establish an ID center in June 2007, in order to after-sales service shops in all municipal cities, as well improve its products design and R&D capabilities. as most secondary cities in Mainland China. And the At the early stage of China 3G commercialization, Group launched various training programs for operators’ the Group obtained satisfactory results in TD-SCDMA salesman to enhance their skills to well support the network trials through close collaboration with China customers after-sales service. telecommunications operators. In addition, the Group received a China 3G Access License from the Ministry The Group has strove to develop its value-added of Information Industry of the People’s Republic of China business during the last year. The Group has provided (MII). Subsequently, the Group launched Coolpad 6260 many value-added services for Coolpad users, such as as its first TDSCDMA-GSM dual-mode smartphone in games downloading, GPS, online TV, Video, securities the PRC. trading, wireless data backup and resolving and others. The Group believes all these will pave the way for the The Group cooperated closely with a number of well- Group’s long-term development. known global technologies companies, like Microsoft, Qualcomm, Datang and TI. The Group now has been one of the biggest developers specializing in operating China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
Chairman’s Statement
The Group put a strong emphasis on sound financial The Group strives to further cooperate with telecom management and on the enhancement of general operators to broaden its client base and work closely operation efficiency. Especially, the audit department with other well-known enterprises to enhance its R&D of the Company helped the Group improve its financial capabilities. The Group will participate in more domestic audit to strengthen the financial regulation and the and global telecommunications exhibitions and improve financial risks management of the Group. its media exposure by placing more advertisement in newspapers, aviation magazine and other outdoor All in all, the Board and the management (the media. “Management”) of the Group have done a great deal of hard work to improve the Company’s key competitive The Group strives to penetrate the overseas markets by advantages to consolidate its leading position in the field cooperating with foreign telecommunications operators of wireless technologies. in respect of its own Coolpad brand. In addition, the Group will improve its customer services in the coming PROSPECTS OF THE GROUP FOR year. And in line with its existing policies, the Group 2008 will put strong emphasis on the human resource deployment. The Group’s focus in 2008 is as follows: The Board and the Management are looking forward to The Group will endeavor to capitalize on R&D the future and are confident in the Group’s development development to expand its China’s high-end dual-mode and prosperity, although the Group still faces challenges smartphone market share through delivering additional from its competitors and uncertainties of China telecom high quality and differentiated smartphones. The Group operators’ restructuring in 2008. We will adhere to plans to launch six CDMA-GSM dual-mode models, four the philosophy of hard working to achieve excellence GSM-GSM dual-mode models and another two CDMA through the Group’s operations and deliver sound single-mode smartphones. Being one of the most results to the shareholders and the society. important TDSCDMA-GSM dual-mode smartphone developers, the Group plans to develop two to three TDSCDMA-GSM dual-mode models in 2008. The Group believes that the TDSCDMA-GSM devices will get a larger share in the China’s TD dual-mode smartphones market, and it will further broaden the Group’s source of revenue in 2008. Guo Deying The Group will further improve its R&D platform and Chairman Executive Director and CEO solutions. Through the integrated and standards-based HongKong, April 14, 2008 development platform, the Group will make the Coolpad terminals and wireless data solutions compatible with more third-party applications. In order to broaden its source of revenue, the Group will take new ventures to develop the “Coolpadtone” data service and other wireless data solutions. The Group will also expand its product portfolio to support for emerging network
technologies, such as WiMax, WCDMA, CDMA2000, Limited — ANNUAL REPORT 2007 China Wireless Technologies etc.
Management Discussion and Analysis
In terms of revenue mix, revenue from smart- phones segment accounted for 99% of the Group’s turnover in 2007, as compared with 98% in 2006. Management Discussion and Analysis
Revenue analyzed by product segments
The following table sets out the revenue and the corresponding percentage of the total revenue attributable to the major product segments of the group for the periods indicated.
2007 2006 Revenue Percentage of Revenue Percentage of Product segment HK$ in millions total revenue HK$ in millions total revenue
Smartphones CDMA/GSM dual-mode smartphones 1,039.4 81% 526.5 82% GSM/GSM dual-mode Smartphones 143.1 11% — — CDMA single-mode smartphones 83.3 7% 104.2 16% Subtotal 1,265.8 99% 630.7 98%
Other products 11.9 1% 10.2 2%
Total 1,277.7 100% 640.9 100%
For the year ended 31 December 2007, the Group’s revenue increased by 99.4% to HK$1,277.7 million, as compared with HK$640.9 million in 2006. The increase was mainly attributable to the growth in revenue from the dual-mode smartphones, as CDMA-GSM dual-mode smartphones segment and GSM-GSM dual-mode smartphones segment. The revenue from the CDMA single-mode smartphones segment decreased by 20% to HK$83.3 million in 2007, as compared with HK$104.2 million in 2006. The Group endeavored to market an increasingly wide variety of high-end new innovative smartphones for different users during the last year, the Group began to market GSM- GSM dual-mode smartphones to GSM Network distributors and overseas operators and clients. These activities further strengthened the Group’s products’ diversification and client base in the smartphone segment.
Gross profit
Despite the fierce competition, the gross profit margin of the Group increased by 3.4% to 40.8% in 2007, as compared with 37.4% in 2006. The Group’s gross profit rose to HK$521.3 million in 2007 from HK$240.0 million in 2006. The increase is attributable to the Group’s strength in developing dual-mode smartphones and its effective cost control.
2007 2006 Product segment Gross profit Gross profit Gross profit Gross profit HK$ in millions margin HK$ in millions margin
Smartphones CDMA-GSM dual-mode smartphones 450.2 43.3% 189.2 35.9% GSM-GSM dual-mode Smartphones 48.8 34.1% — — CDMA Single-mode smartphones 20.4 24.5% 45.4 43.6% Other products 1.9 16.0% 5.4 52.9%
Total 521.3 40.8% 240.0 37.4% China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
11 Management Discussion and Analysis
Gross profit margin of the Group’s CDMA-GSM dual- Selling and distribution costs mode smartphones segment rose to 43.3% in 2007 from 35.9% in 2006, mainly due to its scale efficiency and The Group’s selling and distribution costs in 2007 the growing Coolpad brand awareness. While the gross amounted to HK$213.5 million, representing a 147.2% profit of the CDMA Single-mode smartphones segment increase as compared with HK$86.4 million in 2006. in 2007 dropped to 24.5% from 43.6% in 2006, and Selling and distribution costs accounted for 16.7% of the gross profit of other products segment decreased the total revenue in 2007, as compared with 13.5% significantly, these decreases were due to the Group’s in 2006. It was due to that the Group diverted more change in strategic focus to research and development resource to promotional and advertising activities in of the high-end dual-mode smartphones in 2007. order to extend distribution network and enhance the Besides, in the GSM-GSM dual-mode smartphones “Coolpad” brand awareness and reputation. segment, it realized a good result in the second half year, with a gross profit of 34.1%. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
12 Management Discussion and Analysis
Administrative expenses Net Profit
The Group’s administrative expenses in 2007 amounted For the year ended 31 December 2007, the Group to HK$192.5 million, representing a 80.2% increase from recorded a net profit of HK$167.5 million, representing HK$106.8 million in 2006, while administrative expenses a significant year-on-year increase of 212.0% over 2006. accounted for 15.1% of the total revenue in 2007, as The net profit margin in 2007 rose to 13.1% from 8.4% compared with 16.7% of the total revenue of the Group in 2006. The increases were due to (i) the Group’s in 2006. The decrease of administrative expenses as a broadened revenue source resulting from its diversified percentage of the total revenue was mainly attributed to dual-mode smartphones marketed to different networks the Group’s improved administrative efficiency. during the reporting period; and (ii) the Group’s improved scale efficiency in cost and expenses management. Income tax expenses Business Review The Group’s income tax expense in 2007 was nil. In accordance with the Income Tax Law of the PRC for The number of new innovative products of the Group Foreign Investment Enterprise and Foreign Enterprises increased dramatically during the reporting period. and as approved by relevant tax authorities, Shenzhen During the year ended 31 December 2007, the Group Yulong, (an indirect wholly-owned subsidiary of the offered four series twelve dual-model smartphones Company operating in Mainland China which is qualified and other enterprise program products. Most notably, as a high-technology enterprise and operates in since July 2007 the Group launched three GSM- Shenzhen) was exempted from corporate income tax GSM dual-mode smartphones for China GSM network of the PRC for the two years starting from the first distributor’s customized smartphones, which has laid profitable year of operations and was entitled to a 50% solid foundations for further collaborations with China’s relief from the corporate income tax of the PRC for the GSM network operators. The Group’s CDMA-GSM dual- following six years. The first profitable year of operations mode smartphones maintained a strong market share of Shenzhen Yulong was 1996. An income tax rate of in the CDMA market in Mainland China. 15% was applied for the year ended 31 December 2006. No provision for taxation has been made as The Group has established an outstanding R&D team Shenzhen Yulong suffered a loss for the year. Coolpad and became one of the strongest smartphone developers Software Tech (Shenzhen) Co., Ltd. (“Shenzhen Coolpad in China. In order to improve its R&D abilities, the Group Software”) was established in the PRC as a limited restructured its R&D department by establishing an liability company on 7 March 2006 and commenced ID center with more senior designers and chartered operation in September 2006. Shenzhen Coolpad engineers. The Group endeavors to make its ID center Software also enjoyed exemption from corporation the best ID center among telecommunications companies income tax for the two years starting from the first in China. In addition, the Group received the approval profitable year of operation and was entitled to a 50% for trial network access license in December 2007, then relief from the corporate income tax of the PRC for the its Coolpad 6260 was introduced to the market as the following three years. Since the tax holiday of Shenzhen first TDCDMA-GSM dual-mode smartphone in the PRC. Coolpad Software commenced in 2006, no provision As a result, the Group’s focus on the development and for income tax was needed in current year. Dongguan innovation of technologies has been its key competitive Yulong Computer Telecommunications Scientific Co., advantage. Ltd. (“Dongguan Yulong”) was established in the PRC The Group has built high brand awareness for Coolpad. as a limited liability company on 3 November 2006. The Group invested in a broad range of marketing There were no operations for Dongguan Yulong as at initiatives to strengthen the “Coolpad” brand recognition. 31 December 2007, and Xi’an Coolpad Software Tech The Group established Coolpad after-sales service Co., Ltd. (“Xi’an Coolpad Software”) was established on Limited — ANNUAL REPORT 2007 China Wireless Technologies shops in all municipal cities and most secondary cities in 2 November 2007, which also had no operations as at Mainland China. Besides, the Group launched numerous 31 December 2007.
13 Management Discussion and Analysis
training programs for telecommunication operators’ As at 31 December 2007, the Group had a current ratio sales force to enhance their after-sales service skills. of 1.7 (based on current assets over current liability) The Group believes the improved quality of after-sales (2006: 1.7). services is an important competitive advantage for the Group. BUSINESS OUTLOOK
The Group cooperated closely with a number of As looking forward to the future, the Group is confident various well-known global technologies companies, like in its development and prosperity from the opportunities Microsoft, Qualcomm, Datang and TI. The Group is brought by the steady growth of the telecommunications one of the biggest developers specializing in operating industry in Mainland China combined with the unveiling system based on Windows CE in the world. The of the 3G business, although the Group in the short run Group has also been cooperating with Qualcomm faces challenges from its competitors and uncertainties in the production of chipset. After several years of in China telecom operators’ restructuring in 2008. cooperation, Qualcomm entrusted the Group to develop The Group plans to make further development in and improve its up-to-date CDMA chipset. The Group our strategies of products differentiation, R&D, human also strove to develop its value-added business. The resource deployment and pursue growth through market Group established a “Coolpadtone” program whereby expansion, product quality and after-sales service it provides games downloading, data resolving, GPS, improvement, brand name enhancement, etc. Video, online TV, Wireless data back-up and other value- The Group’s focus in 2008 is as follows: added data services to its end-users. All these set the Group’s long-term development on solid ground. The Group will endeavor to capitalize on R&D development to expand its China’s high-end dual-mode smartphone The Group put a strong emphasis on sound financial market share through delivering additional high quality management and improved the efficiency of fund and differentiated smartphones and wireless solutions. operation. The audit department of the Company helped The Group plans to launch six CDMA-GSM dual- the Group improve the subsidiaries’ financial audit so mode models, four GSM-GSM dual-mode models and as to strengthen the financial regulation and reduce the another two CDMA single mode smartphones. Being financial management risks of the Group. one of the most important TDSCDMA-GSM dual-mode Bonus Shares smartphone developers, the Group plans to develop two to three TDSMCA-GSM dual-mode models in Mainland The first time bonus shares were issued on the basis of China. The Group believes that the TDSCDMA-GSM one bonus share for every one ordinary share at a par devices will get a larger share in the China’s TDSCDMA value of HK$0.01 each to shareholders whose appeared smartphones market, and it will further broaden the names appeared on the register of members on 22 Group’s source of revenue in 2008. May 2007 and the second bonus shares were issued on the basis of one bonus share for every one ordinary The Group will further improve its R&D platform and share at a par value of HK$0.01 each to shareholders solutions. Through the integrated and standards-based whose names appeared on the register of members on development platform, the Group will make the Coolpad 8 October 2007. terminals and wireless data solutions compatible with more third-party applications. In order to broaden its Liquidity and financial resources source of revenue, the Group will take new ventures to develop the “Coolpadtone” data service and other As at 31 December 2007, the Group had a gearing wireless data solutions. The Group will also expand ratio of 47% (based on debt over total assets) (2006: its product portfolio to support for emerging network 58%). technologies, such as WiMax, WCDMA, CDMA2000, China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies etc.
14 Management Discussion and Analysis
The Group strives to further cooperate with EMPLOYEES AND REMUNERATION telecommunications operators to broaden its client base, POLICY and work closely with other well-known enterprises to enhance its R&D capabilities. The Group will participate During the year, the staff cost amounted to HK$147.3 in more domestic and global telecommunications million. The remuneration of the Group’s employees is exhibitions and improve its media exposure by placing commensurate with their responsibilities and the market more advertisement in newspapers, aviation magazine levels, with discretionary bonuses and training given on and other outdoor media. a merit basis.
The Group strives to penetrate into the oversea SIGNIFICANT INVESTMENTS markets by cooperating with foreign telecommunications operators in respect of its own Coolpad brand. There were no significant investments held by the Group as at 31 December 2007. Pledge of assets MATERIAL ACQUISITIONS AND As at 31 December 2007, approximately HK$9.7 million DISPOSAL DURING THE YEAR of the Group’s bank deposits was pledged to secure notes payable and about HK$19.5 million of the There were no material acquisitions and disposal of Company’s bank deposits was pledged to secure a the Company and its subsidiaries as at 31 December letter of credit. The Group’s leasehold land with a 2007. net book value of approximately HK$12.2 million was pledged to secure a long term bank loan with the current portion amounting to HK$27.8 million (2006: Nil) and the non-current portion amounting to HK$79.1 million (2006: HK$99.5 million) granted to the Group. FOREIGN EXCHANGE EXPOSURE
During the reporting period, the Group’s expenses, assets and liabilities were mainly denominated in Renminbi (“RMB”). Taking into account the Group’s operation and capital needs, the Directors considered that the Group did not have any significant foreign exchange exposure. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
15 Corporate Governance Report
APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES
The Board is committed to enhancing the Group’s corporate governance standards by improving corporate transparency through effective channels of information disclosure.
The Board believes that good corporate governance is beneficial for maintaining close and trust relationships with its employees, business partners, shareholders and investors.
The Company has applied the principles of the Code Provisions under the Code on Corporate Governance Practices (the ‘‘Code’’) contained in Appendix 14 of the Rules Governing the Listing of Securities (the “Listing Rules”) on the Stock Exchange throughout the year ended 31 December 2007, save for the deviation discussed below. The following sections set out the principles in the Code as they have been applied by the Company, including any deviations therefrom, for the year under review.
BOARD OF DIRECTORS
It is the duty of the Board to establish the Company’s strategic direction, set the Company’s objectives and plan in accordance therewith, and provide leadership and ensure availability of resources in the attainment of such objectives. The Board endeavors to manage the Company in a responsible and effective manner, and strives to ensure that each of the Directors carries out his/her duty in good faith and in compliance with the memorandum and articles of association of the Company (the “Articles of Association”), the applicable laws and regulations, and acts in the best interests of the Company and its shareholders at all times.
The Board and the Management have clearly defined responsibilities under various internal control and checks-and- balance mechanisms. The Board has delegated certain responsibilities to the Management, including implementation of decisions of the Board and organization and direction of the day-to-day operation and management of the Company in accordance with the management strategies and plans approved by the Board; preparation and monitoring of annual business plans and operating budget; and control, supervision and monitoring of capital, technical and human resources. The Board will review these arrangements on a periodic basis to ensure that they remain appropriate to the needs of the Group.
BOARD COMPOSITION
The Board currently comprises eight Directors, two of whom are executive Directors, two are non-executive Directors and four are independent non-executive Directors (“INEDs”). The composition of the Board is set out as follows:
Executive Directors Mr. Guo Deying (the chairman of the Board and CEO) Mr. Jiang Chao
Non-Executive Directors Ms.Yang Xiao China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies Mr. Ma Dehui
16 Corporate Governance Report
INEDs Dr. Huang Dazhan Mr. Xie Weixin Mr. Chan King Chung Mr. Yang Xianzu
The biographies of the Directors are set out in the section headed “Directors and Senior Management” on pages 21 to 22 of this annual report.
To the best of the Company’s knowledge, there is no financial or family relationship among the Board members except that Ms. Yang Xiao, a non-executive Director, is the spouse of Mr. Guo Deying, an executive Director, the chairman of the Board and the chief executive officer. In addition, Ms. Ma Dehui, a non-executive Director, is the mother of Ms. Yang Xiao thus the mother-in-law of Mr. Guo Deying.
The Company has arranged for appropriate liability insurance to indemnify its Directors for their liabilities arising out of corporate affairs. The insurance coverage is reviewed annually.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Code Provision A.2.1 of the Code stipulates that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual. Currently, Mr. Guo Deying is the chairman of the Board and the chief executive officer of the Company. The Board considers that this structure will not impair the balance of power and authority between the Board and the Management and believes that this structure enables the Group to make and implement decision promptly and efficiently.
INDEPENDENT NON-EXECUTIVE DIRECTORS
The INEDs have the same duties of care, skill and fiduciary duties as the executive Directors. They are expressly identified as such in all corporate communications that disclose the names of the Directors. The INEDs have expertise in respective areas of accounting, business management and possess in-depth industry knowledge. With their professional knowledge and experience, the INEDs have advised the Company on its operation and management; participated in the Audit Committee meetings and Remuneration Committee meetings of the Company. The INEDs have contributed to provide checks and balance to protect the interests of the Company and its shareholders as a whole, and to promote the development of the Company.
The Company has received an annual confirmation of independence from each of the INEDs pursuant to Rule 3.13 of the Listing Rules and on this basis, considers that all INEDs to be independent as at the date of this report.
Under Code Provision A.4.1 of the Code, non-executive Directors should be appointed for specific terms, subject to re-election. Currently, all INEDs are appointed for a period of one year subject to renewal and retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
17 Corporate Governance Report
BOARD OPERATION
During the year ended 31 December 2007, the Board held six meetings. Attendance of individual Directors at the Board meetings in 2007 is as follows:
Name of director Number of meetings attended
Executive Directors Mr.Guo Deying 6/6 Mr. Jiang Chao 6/6
Non-executive Directors Ms. Yang Xiao 6/6 Ms. Ma Dehui 6/6
Independent Non-executive Directors Mr. Chan King Chung 6/6 Dr. Huang Dazhan 5/6 Mr. Yang Xianzu 6/6 Mr. Xie Weixin 5/6
REMUNERATION COMMITTEE
The written terms of reference of the Remuneration Committee are in compliance with the Code. The primary duties of the Remuneration Committee include (without limitation):
(a) To make recommendations to the Board on policies and structure for remuneration of Directors and senior management and on the establishment of a formal and transparent procedure for developing policy on such remuneration; and
(b) To determine the remuneration packages for executive Directors and senior management and to make recommendations to the Board on the remuneration of non-executive Directors.
The Remuneration Committee is made up of all of the INEDs, namely, Mr. Chan King Chung (Chairman), Dr. Huang Dazhan, Mr. Yang Xianzu and Mr. Xie Weixin.
The Remuneration Committee had two meeting in 2007 which were attended by all the members of the Remuneration Committee, which was consulted by Mr. Guo Deying, the chairman of the Company, to review the remuneration packages of Directors and senior management of the Group and share option scheme.
No Directors took part in any discussion about his or her own remuneration. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
18 Corporate Governance Report
PROVISION OF INFORMATION TO DIRECTORS
To assist the Directors in the discharge of their respective duties, the Company will provide every newly appointed Director with a comprehensive induction program on the first occasion of his appointment, in which the newly appointed Director will be provided with information on the Company’s organisation and business, including the membership, duties and responsibilities of the Board, the various Board committees and the Management; corporate governance practices and procedures; and the latest financial information of the Company. Such information shall be supplemented with visits to the Company’s key plant sites and meetings with key members of the Management.
Throughout their tenure, the Directors will be provided with updates on the business of the Company, latest developments of the Listing Rules and other applicable legal and regulatory requirements, corporate social responsibility matters and other changes affecting the Company from time to time.
SECURITIES TRANSACTIONS BY DIRECTORS
The Company has adopted a code of conduct for securities transactions and dealings (the ‘‘Code of Conduct’’) based on the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules (the “Model Code”). The terms of the Code of Conduct are no less exacting than the standards in the Model Code, and the Code of Conduct applies to all relevant persons as defined in the Model Code, including all the Directors, all other employees of the Company, and directors and employees of a subsidiary or holding company of the Company who, because of such office or employment, are likely to be in possession of unpublished price sensitive information in relation to the Company or its securities. Specific enquiry has been made of all the Directors who have confirmed in writing their compliance with the required standards set out in the Code of Conduct during the year under review.
AUDIT COMMITTEE
The Audit Committee, comprising all four INEDs, namely, Mr. Chan King Chung (Chairman), Mr. Yang Xianzu, Dr. Huang Dazhan and Mr. Xie Weixin, has reviewed the accounting principles and practices adopted by the Company and has discussed the auditing, internal control and financial reporting matters.
In 2007, the Audit Committee held three meetings. The attendance record of each member of the Audit Committee is set out below:
Name Number of meetings attended
Mr. Chan King Chung (Chairman) 3/3 Dr. Huang Dazhan 2/3 Mr. Yang Xianzu 3/3 Mr. Xie Weixin 2/3
The Audit Committee has carefully reviewed and discussed the Company’s half-yearly and annual results for the
year under review and system of internal control and has made recommendations for improvement. The Audit Limited — ANNUAL REPORT 2007 China Wireless Technologies Committee has carried out and discharged its duties set out in Code.
19 Corporate Governance Report
ACCOUNTABILITY AND INTERNAL CONTROL
The Directors acknowledged their responsibility for all information and representations contained in the financial statement of the Company. The Directors have reviewed and considered that the financial statements of the Company have been prepared in conformity with the generally accepted accounting standards in Hong Kong, and reflected amounts that are based on the best estimates and reasonable, informed and prudent judgment of the Board and the Management with an appropriate consideration to materiality.
The Board has reviewed and is satisfied with the effectiveness of the Group’s internal control system and believe that, such system is sufficient in providing reasonable assurances that the Group’s assets are safeguarded against loss from unauthorized use or disposition, transactions are properly authorized and proper accounting records are maintained. Such system is designed to provide reasonable, but not absolute, assurance against material misstatement or loss, and to manage rather than eliminate risks of failure in the Group’s operational system.
NOMINATION OF DIRECTORS
Directors are responsible for making recommendations to the Board for consideration and approval on nominations, appointment of Directors and Board succession, with a view to appointing to the Board individuals with the relevant experience and capabilities to maintain and improve the competitiveness of the Company. The Board formulates the policy, reviews the size, structure and composition of the Board, and assesses the independence of the INEDs in accordance with the criteria prescribed under the Listing Rules and the Code.
EXTERNAL AUDITORS
Ernst & Young has been appointed as the External Auditors of the Company for the year under review. An amount of HK$2.05 million (equivalent to RMB2 million) (2006: HK$1.68 million) was charged by Ernst & Young for its audit services provided to the Group. The responsibilities of the external auditors with respect to financial reporting are set out in the section headed ‘‘Independent Auditors’ Report’’ on page 33 of this report.
COMMUNICATION WITH SHAREHOLDERS
The Company recognizes the importance of good communications with its shareholders and investors. The Company provides information relating to the Company and its business in its annual and half-yearly reports and also disseminates such information electronically through its website at www.chinawireless.cn and the website of the Stock Exchange. The Company’s annual general meeting is a valuable forum for the Board to communicate directly with the shareholders. All shareholders of the Company are given a minimum of 21 days’ notice of the date and venue of such annual general meeting. The Company supports the Code’s principle to encourage shareholders’ participation.
Specific enquiries and suggestions by shareholders can be sent in writing to the Board or the Company Secretary at the Company’s registered address or by e-mail to the Company’s mail address at [email protected]. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
20 Directors and Senior Management
DIRECTORS
Executive Directors Mr. GUO Deying, aged 43, is an executive Director, the chairman and chief executive officer of the Group. He is responsible for the Group’s overall management and strategic development. Mr. Guo has been the chairman, the legal representative and the general manager of the Group since its establishment in 1993. Mr. Guo has about 15 years of experience in the wireless communication industry. Mr. Guo was certified as an engineer by Shenzhen City Engineering Technical Central Examination Board (深圳市工程技術中評委) in December 1991. He received a master’s degree in engineering from Shanghai Jiao Tong University (上海交通大學). Mr. Guo was appointed as a guest professor by Xidian University (西安電子科技大學) for its computer network and information security department in November 2003. In October 2004, Mr. Guo was accredited as Outstanding Entrepreneur of Private-owned Technology Companies in the PRC (中國優秀民營科技企業家) by China National Industrial and Commercial Association (中華全國工商業聯合會) and China Private-owned Technology Industrialists Association (中國民營科技實業家協會).
Mr. JIANG Chao, aged 37, is an executive Director, the chief financial officer, vice president of the Group, and the qualified accountant and company secretary of the Company. Mr. Jiang is responsible primarily for the finance and administrative functions of the Group. He is an associate member of the Association of Chartered Certified Accountants and a certified public accountant in the PRC. Mr. Jiang joined the Group in June 2002. Mr. Jiang has about 15 years of experience in accounting and finance. Prior to joining the Group, he had worked for the State Audit Bureau. Mr. Jiang had also worked for Qiaoxing Electronic Company Limited (僑興電子有限公司, NASDAQ: XING) and Shenzhen Zhong Xing Xin Telecom Equipment Company Limited (深圳市中興新通訊設備有限公 司, 763), where he was responsible for financial and accounting functions. Mr. Jiang obtained a bachelor’s degree in economics from SUN YAT-SEN University (中山大學) in 1991.
Non-executive Directors Ms. MA Dehui, aged 77, is a non-executive Director. Ms. Ma joined the Group in August 2003. She was an associate professor of the faculty of computer science and technology department in South Western University for Nationalities (西南民族大學). Ms. Ma is the mother of Ms. Yang Xiao, a non-executive Director.
Ms. YANG Xiao, aged 39, is a non-executive Director. Ms. Yang joined the Group in August 2001. She graduated with a diploma from 深圳大學 (Shenzhen University). During 1992 to 1995, Ms. Yang worked in Shenzhen Transport Bureau (深圳市運輸局). Ms. Yang is the spouse of Mr. Guo.
Ms. Ma and Ms. Yang do not hold any management role in the Company.
Independent non-executive Directors Dr. HUANG Dazhan, aged 50, is an independent non-executive Director and joined the Group in November 2004. Dr. Huang obtained his doctorate degree from The Victoria University of Manchester, England, the United Kingdom in 1993. Dr. Huang now serves as the Deputy General Management of China Merchant Shekou Industrial Zone Co., Ltd..
Mr. XIE Weixin, aged 66, is an independent non-executive Director and joined the Group in November 2004. Mr. Xie graduated from the Department of Electronics Engineering of Xian University of Electronics Technology in 1965. Mr. Xie is currently a professor of electrical engineering and the chancellor of Shenzhen University.
Mr. CHAN King Chung, aged 46, is an independent non-executive Director and joined the Group in November 2004. He obtained a bachelor’s degree in business administration and accountancy from the Chinese University of Hong Kong in 1987 and City University of Hong Kong in 1993, respectively. Mr. Chan also obtained a master’s degree in business administration and accountancy from Murdoch University in 2000 and Charles Sturt University in 1994, respectively. He is a member of the Hong Kong Institute of Certified Public Accountants and a fellow China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies member of The Hong Kong Institute of Company Secretaries and a fellow member of The Hong Kong Institute of
21 Directors and Senior Management
Directors. With 11 years of experience in corporate governance, management and financial controlling, Mr. Chan is currently the company secretary of Shenzhen High-Tech Holdings Limited (the shares of which are listed on the Main Board of the Stock Exchange, stock code: 106).
Mr. YANG Xianzu, aged 68, is an independent non-executive Director and joined the Group in May 2006. He graduated from the Department of Telephone and Telegraph at the Wuhan College of Posts and Telecommunications in 1965 and served as the Deputy Director General of the Post and Telecommunications Bureau of Hubei Province and the Director General of the Post and Telecommunications Administration of Henan Province. From 1990 to 1999, Mr. Yang served as the Vice Minister of the Ministry of Posts and Telecommunications and later as Vice Minister of the Ministry of Information Industry. He was the chairman and chief executive officer of China Unicom Limited (the shares of which are listed on the Main Board of the Stock Exchange, stock code: 762) from 2000 to 2003. He is currently an independent non-executive director of Dongfeng Motor Group Company Limited (the shares of which are listed on the Main Board of the Stock Exchange, stock code: 489). Mr. Yang has over 35 years of experience in the telecommunications industry in China. Mr. Yang has extensive knowledge on telecommunications operations and control. SENIOR MANAGEMENT
Mr. LI Wang, aged 36, is a deputy general manager of the Group and is responsible for the Group’s sales and marketing functions. He joined the Group in March 2001. He has 10 years of experience in the information technology industry. Before joining the Group, he worked for Hua Wei Technology Company Limited (華為技術有 限公司). He obtained a master’s degree in business administration from Dalian University of Technology (大連理工 大學) in 1997.
Mr. DONG Yongquan, aged 45, is a deputy general manager of the Group and is responsible for the R&D of hardware development. Prior to joining the Group in July 1997, he worked for Shenzhen Winhap Communications Inc. (深圳雲海股份有限公司), which is mainly engaged in the R&D of smartphones. He has over 11 years of experience in developing wireless data communication products. Mr. Dong graduated from the faculty of wireless communication of Changchun Institute of Post and Telecommunications (長春郵電學院) in 1987. He was awarded Shenzhen Municipal Young Technologist Prize — Bank of China Group Award (深圳市青年科技專家中銀集團獎) in 2000. Mr. Dong was appointed as a guest professor by Xidian University in November 2003.
Mr. LI Liuqun, aged 45, is a deputy general manager of the Group and is responsible for logistic, purchasing and production functions. Mr. Li also acts as the general manager of the mobile industry department. He has about 21 years of experience in the wireless telecommunication industry. Prior to joining the Group in December 2000, he worked for State 760 Factory (國營第七六零廠). He obtained a bachelor’s degree in engineering from Xi’an University of Electronics Technology (西北電訊工程學院) in 1985.
Mr. LI Bin, aged 38, is a deputy general manager of the Group and is responsible for the research and development of software and testing. Mr. Li has more than 10 years of experience in software development and testing. He joined the Group in June 1996. Prior to joining the Group, Mr. Li worked in China Sanjiang Aviation Industry Group Company (中國三江航天工業集團有限公司). He obtained a bachelor’s degree in computer science and software engineering from Huazhong University of Science and Technology (華中理工大學) in 1992.
Mr. Zhang Hanwu, aged 45, is a deputy general manager of the Group and is responsible for the human resources and administration functions. Mr. Zhang has 19 years of specialized experience in human resources and administration in various industries. Prior to joining the Group in 2006, he worked in fast-consuming goods industry, communications system equipment manufacture industry and communications terminal equipment manufacture industry. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies Ms. FU Qun, aged 33, is an assistant general manager of the Group. Ms. Fu is responsible for the internal management of the Group and secretarial duties of the Board. She joined the Group in July 1998. She obtained a bachelor’s degree in accounting from Jiangxi University of Finance and Economics (江西財經大學) in 1998.
22 Report of the Directors
The Directors of the Company are pleased to present their report and the audited financial statements of the Group for the year ended 31 December 2007.
PRINCIPAL ACTIVITIES
The Group is a wireless solution and equipment provider in Mainland China. The principal activity of the Company is investment holding. Details of the principal activities of the subsidiaries are set out in note 17 to the financial statements. There were no significant changes in the nature of the Group’s principal activities during the year.
RESULTS AND DIVIDENdS
The Group’s profit for the year ended 31 December 2007 and the state of affairs of the Company and the Group at that date are set out in the financial statements on pages 12 to 87.
An interim dividend of HK$0.005 per ordinary share was paid on the date of 29 October 2007. The Group has not proposed a final dividend for the year ended 31 December 2007.
Bonus shares
During the reporting period, the first time bonus shares were issued on the basis of one bonus share for every one ordinary share at a par value of HK$0.01 each to shareholders whose names appear on the register of members on 22 May 2007 and the second bonus shares were issued on the basis of one bonus share for every one ordinary share at a par value of HK$0.01 each to shareholders whose names appear on the register of members on 8 October 2007. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
23 Report of the Directors
SUMMARY FINANCIAL INFORMATION
The following is a published summary of the consolidated/combined financial results and of the consolidated/ combined assets and liabilities of the Group for the last five financial years, prepared on the basis set out in note 2.1 to the financial statements.
Year ended 31 December 2007* 2006* 2005* 2004* 2003** HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
RESULTS Revenue 1,277,663 640,855 353,995 245,545 151,808
Profit before tax 167,520 53,684 60,318 51,195 39,966 Tax — — (9,442) (7,528) (3,103)
Profit for the year 167,520 53,684 50,876 43,667 36,863
Attributable to: Equity holders of the Company 167,520 53,684 50,876 43,667 36,863
2007* 2006* 2005* 2004* 2003** HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
ASSETS AND LIABILITIES Non-current assets 432,000 168,586 64,468 39,485 30,660
Current assets 812,149 854,087 527,554 341,813 175,478
Non-current liabilities 91,083 102,939 2,035 1,191 —
Current liabilities 491,716 488,070 276,291 165,097 111,016
Net assets 661,350 431,664 313,696 215,010 95,122
* Extracted from the published audited financial statements
** Extracted from the published prospectus of the Company dated 30 November 2004 China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
24 Report of the Directors
PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES
Details of movements in the property, plant and equipment, and investment properties of the Group during the year are set out in notes 13 and 14 to the financial statements, respectively.
SHARE CAPITAL AND SHARE OPTIONS
Details of movements in the Company’s share capital and share options during the year are set out in notes 32 and 33, respectively, to the financial statements.
PRE-EMPTIVE RIGHTS
There are no provisions for pre-emptive rights under the Company’s existing articles of association (the “Articles”) or the laws of the Cayman Islands, being the jurisdiction in which the Company was incorporated, which would oblige the Company to offer new shares on a pro rata basis to existing shareholders.
PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
Neither the Company, nor any of its subsidiaries, purchased, redeemed or sold any of the Company’s listed securities during the year and up to the date of this report.
RESERVES
Details of movements in the reserves of the Company and the Group during the year are set out in note 34 to the financial statements and in the consolidated summary statement of changes in equity.
DISTRIBUTABLE RESERVES
As at 31 December 2007, the Company’s reserves available for distribution, calculated in accordance with the Companies Law (2001 Second Revision) of the Cayman Islands, amounted to HK$211,470,000. The Company has not proposed a final dividend for the year. The distributable reserves include the Company’s share premium account and contributed surplus, amounting to HK$239,750,000 as at 31 December 2007, which may be distributed provided that immediately following the date on which such reserves are proposed to be distributed, the Company will be in a position to pay off its debts as and when they fall due in the ordinary course of business.
MAJOR CUSTOMERS AND SUPPLIERS
In the year under review, sales to the Group’s five largest customers accounted for approximately 95% of the total sales for the year and sales to the largest customer included therein amounted to 75%. Purchases from the Group’s five largest suppliers accounted for approximately 42% of the total purchases for the year, and purchase from the Group’s largest supplier accounted for approximately 24% of the total purchases for the year.
None of the directors or any shareholders (which, to the best knowledge of the directors, own more than 5%
of the Company’s issued share capital) had any beneficial interest in the Group’s five largest customers and/or Limited — ANNUAL REPORT 2007 China Wireless Technologies suppliers.
25 Report of the Directors
DIreCTORS
The directors of the Company during the year and up to the date of this report were:
Executive directors: Mr. Guo Deying (Chairman and Chief Executive Officer) Mr. Jiang Chao
Non-executive directors: Ms. Yang Xiao Ms. Ma Dehui
Independent non-executive directors: Dr. Huang Dazhan Mr. Xie Weixin Mr. Chan King Chung Mr. Yang Xianzu
Under the provisions of the Articles, all of the directors of the Company are subject to retirement by rotation and re-election.
In accordance with Article 87(1) of the Articles, Mr. Jiang Chao (Mr. Jiang), Ms. Yang Xiao (Ms. Yang) and Ms. Ma Dehui will retire and, being eligible, will offer themselves for re-election at the forthcoming AGM of the Company.
The Company has received from each of the independent non-executive directors an annual confirmation pursuant to Rule 3.13 of the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and the “Board” still considers each of the independent non-executive directors to be independent from the Company.
DIRECTORS’ AND SENIOR MANAGEMENT’S BIOGRApHIES
Biographical details of the directors and the senior management of the Group are set out on pages 21 to 22 of the annual report. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
26 Report of the Directors
DIRECTORS’ SERVICE CONTRACTS
Each of the executive Directors has entered into a service agreement with the Company dated 14 April 2008 for a term of three years commencing from 21 November 2007 with retrospective effect.
Each of the non-executive Directors has entered into a service agreement with the Company dated 14 April 2008 for a term of three years commencing from 21 November 2007 with retrospective effect.
Except for Mr. Yang Xianzu, who has entered into a service agreement with the Company dated 26 May 2007 for a initial term of one year commencing from 26 May 2007, the remaining independent non-executive Directors have entered into service agreements dated 14 April 2008 with the Company for a term of one year commencing from 21 November 2007 with retrospective effect.
None of the directors has entered into a service contract with the Company which is not determinable by the Company within one year without payment of compensation, other than statutory compensation.
DIRECTORS’ REMUNERATION
The directors’ fees are subject to shareholders’ approval at general meetings. Other emoluments are determined by the Company’s Board with reference to directors’ duties, responsibilities and performance and the results of the Group.
DIRECTORS’ INTERESTS IN CONTRACTS
Save as disclosed in notes 23 and 38 to the financial statements, no director had a material interest, either directly or indirectly, in any contract of significance to the business of the Group to which the Company or any of its subsidiaries was a party during or at the end of the year. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
27 Report of the Directors
Directors’ and chief executive’s interests and short positions in shares, underlying shares and debentures
At 31 December 2007, the interests and short positions of the directors, the chief executive or their associates in the share capital, underlying shares and debentures of the Company or its associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”)), as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”), were as follows:
Long positions in shares of the Company:
Number of shares held, capacity and nature of interest Percentage of Directly Through Through Founder of a the Company’s beneficially spouse or controlled Beneficiary of discretionary issued share Name of director Notes owned minor children corporation a trust trust Total capital
Mr. Guo Deying 1 & 2 — 831,171,248 28,096,000 — 831,171,248 859,267,248 42.48
Ms. Yang Xiao 1 & 2 — 831,171,248 28,096,000 — 831,171,248 859,267,248 42.48
Mr. Jiang Chao 3 1,456,000 — — 28,096,000 — 29,552,000 1.46
Long positions in shares of an associated corporation:
Number of shares held, capacity and nature of interest Percentage of issued Name of the Through spouse or Founder of a share capital of the Name of director Note associated corporation minor children discretionary trust associated corporation
Mr. Guo Deying 1 Data Dreamland Holding Limited 1,000 1,000 100
Ms. Yang Xiao 1 Data Dreamland Holding Limited 1,000 1,000 100
Notes:
1. The entire issued share capital of Data Dreamland Holding Limited (“Data Dreamland”) is held by Barrie Bay Limited (“Barrie Bay”), which is acting as the trustee of the Barrie Bay Unit Trust. The Barrie Bay Unit Trust is a unit trust of which 9,999 units are held by HSBC International Trustee Limited (“HSBC Trustee”) acting as the trustee of the Barrie Bay Unit Trust and the remaining one unit is held by Ms. Yang Hua. The Barrie Bay Unit Trust is a discretionary trust set up by Mr. Guo Deying (“Mr. Guo”), an executive director, and his spouse, Ms. Yang Xiao (“Ms. Yang”), a non-executive director, the beneficiary objects of which include the minor children of Mr. Guo and Ms. Yang. Each of Mr. Guo and Ms. Yang is taken to be interested in the 831,171,248 shares held by Data Dreamland as each of them is a settlor of the Barrie Bay Unit Trust and by virtue of the interests of their minor children under the Barrie Bay Unit Trust. The long positions in the Company’s share of each of Mr. Guo and Ms. Yang under the column “Through spouse or minor children” and the column “Founder of a discretionary trust” in the table headed “Long positions in shares of the Company” above refers to the same 831,171,248 shares.
Each of Mr. Guo and Ms. Yang is taken to be interested in the entire issued share capital of Data Dreamland as each of them is a settlor of the Barrie Bay Unit Trust and by virtue of the interests of their minor children under the Barrie Bay Unit Trust. The long positions in shares of Data Dreamland of each of Mr. Guo and Ms. Yang in the column “Through spouse or minor children” and the column “Founder of a discretionary trust” under the table headed “Long positions in shares of an associated corporation” above refers to the same 1,000 shares.
2. Mr. Guo was interested in the 28,096,000 shares held by Wintech Consultants Limited as he was interested in the entire issued share
China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies capital of Wintech Consultants Limited. As the spouse of Mr. Guo, Ms. Yang is taken to be interested in the 28,096,000 shares held by Mr. Guo through Wintech Consultants Limited.
3. Mr. Jiang, an executive director, was interested in the 28,096,000 shares held by Wintech Consultants Limited as he was one of the discretionary objects under the China Wireless Employee Benefit Trust, a discretionary trust established for the benefit of the employees of the Group. In addition, Mr. Jiang was interested in 1,456,000 shares as a beneficial owner. 28 Report of the Directors
Substantial shareholders’ and other persons’ interests and short positions in shares and underlying shares and debentures
As at 31 December 2007, the following interests and short positions of 5% or more in the issued share capital and share options of the Company were recorded in the register of interests required to be kept by the Company pursuant to Section 336 of the SFO:
Long positions in shares of the Company:
Percentage of Number of the Company’s shares in which Total number issued share Name Notes interested Nature of interest of shares capital
Data Dreamland Holding Limited 1 831,171,248 Beneficial owner 831,171,248 41.09 (“Data Dreamland”)
Barrie Bay Limited 2 831,171,248 Interest of controlled 831,171,248 41.09 (“Barrie Bay”) corporation
HSBC International Trustee Limited 2 831,171,248 Trustee 831,171,248 41.09 (“HSBC Trustee”)
Notes:
1. The entire issued share capital of Data Dreamland is held by Barrie Bay. Barrie Bay is acting as the trustee of the Barrie Bay Unit Trust. The Barrie Bay Unit Trust is a unit trust of which 9,999 units are held by HSBC Trustee, which is acting as the trustee of the Barrie Bay Unit Trust and the remaining one unit is held by Ms. Yang Hua. The Barrie Bay Unit Trust is a discretionary trust set up by Mr. Guo and Ms. Yang and the discretionary objects of which include the minor children of Mr. Guo and Ms. Yang.
2. The 831,171,248 shares were held by Data Dreamland, the entire share capital of which is held by Barrie Bay, which is acting as the trustee of the Barrie Bay Unit Trust and the entire issued share capital of which is held by HSBC Trustee.
Save as disclosed above, as at 31 December 2007, so far as the directors are aware, there are no other persons, other than the directors and chief executive of the Company, who had interests or short positions in the shares, underlying shares or debentures of the Company which would be required to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO and are required to be recorded in the register required to be kept pursuant to Section 336 of the SFO.
DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES
Save as disclosed in the section “Directors’ and chief executive’s interests and short positions in shares, underlying shares and debentures” above, at no time during the year were rights to acquire benefits by means of the acquisition of shares in or debentures of the Company granted to any directors or their respective spouses or minor children, or were any such rights exercised by them; or was the Company, or any of its subsidiaries a party to any arrangement to enable the directors to acquire such rights in any other body corporate. Limited — ANNUAL REPORT 2007 China Wireless Technologies
29 Report of the Directors
SHARE OPTION SCHEME
The Company operates a share option scheme (the “Share Option Scheme”) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations. Further details of the Share Option Scheme are disclosed in note 33 to the financial statements.
The following table discloses movements in the Company’s share options outstanding during the year:
Number of share options Original Adjusted exercise exercise Exercised Adjusted upon Number of Exercised Adjusted upon Number of Exercised Date of Exercise price before price after At before completion of options after before Grant completion of options after after the Expired Forfeited At 31 grant of period of completion of completion of Name or category of 1 January the first the first the first the second during the second the second second during during December share share bonus issue bonus issue participant 2007 bonus issue bonus issue bonus issue bonus issue the year bonus issue bonus issue bonus issue the year the year 2007 options* options in 2007** in 2007** HK$ per share HK$ per share
Employees In aggregate — granted on 7–06–05 to 6 June 2005 16,000,000 — 16,000,000 32,000,000 — — 32,000,000 64,000,000 — — — 64,000,000 6–06–05 6–06–08 0.7 0.175 In aggregate — granted on 28–06–05 to 20 June 2005 5,440,000 (2,544,000) 2,896,000 5,792,000 (840,000) — 4,952,000 9,904,000 — — — 9,904,000 20–06–05 27–06–09 0.87 0.2175 In aggregate — granted on 27–07–06 to 27 July 2006 13,552,000 (3,088,000) 10,464,000 20,928,000 (2,060,000) — 18,868,000 37,736,000 (24,000) — — 37,712,000 27–07–06 26–07–10 1.846 0.4615 In aggregate — granted on 27–07–07 to 27 July 2006 1,200,000 — 1,200,000 2,400,000 (192,000) — 2,208,000 4,416,000 — — — 4,416,000 27–07–06 26–07–11 1.846 0.4615 In aggregate — granted on 18-09-08 to 18 September 2007 — — — — — 13,756,000 13,756,000 27,512,000 — — — 27,512,000 18–09–07 17–09–12 2.83 1.415 In aggregate — granted on 18–09–10 to 18 September 2007 — — — — — 1,920,000 1,920,000 3,840,000 — — — 3,840,000 18-09-07 17–09–14 2.83 1.415
Subtotal 36,192,000 (5,632,000) 30,560,000 61,120,000 (3,092,000) 15,676,000 73,704,000 147,408,000 (24,000) — — 147,384,000 18–09–10 to Business consultants — — — — — 4,000,000 4,000,000 8,000,000 — — — 8,000,000 18–09–07 17–09–14 2.83 1.415
Total 36,192,000 (5,632,000) 30,560,000 61,120,000 (3,092,000) 19,676,000 77,704,000 155,408,000 (24,000) — — 155,384,000
Notes to the reconciliation of share options outstanding during the year:
* The vesting period of the share options is from the date of grant until the commencement of the exercise period.
** The exercise price of a share option is the amount that the employee is required to pay to obtain each share under the option. China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
30 Report of the Directors
SHARE OPTION SCHEME (continued)
The fair value of the Group’s share options was calculated by an external professionally qualified valuer, LCH (Asia-Pacific) Surveyors Limited, at HK$26,938,135 using the binomial option pricing model as at the date of grant of the options:
Number of share options Number of granted share options adjusted upon Theoretical granted on completion of value of 18 September the second share Grantee 2007 bonus issue options
Employees in aggregate HK$ 19,676,000 39,352,000 26,938,135
The binomial option pricing model is a generally accepted method of valuing options, using certain key determinants to calculate the theoretical value of share options. The significant assumptions used in the calculation of the values of the share options included the risk-free interest rate, expected life of options, expected volatility and expected dividend. The measurement dates used in the valuation calculations were the dates on which the options were granted. For details of the assumptions, please refer to note 33 to the financial statements.
The value of share options calculated using the binomial option pricing model is subject to certain fundamental limitations, due to the subjective nature of and uncertainty relating to a number of assumptions of the expected future performance input to the model, and certain inherent limitations of the model itself.
The value of an option varies with different variables determined by certain subjective assumptions. Any change to the variables used may materially affect the estimation of the fair value of an option.
AUDIT COMMITTEE
The audit committee (“Audit Committee”) of the Company comprising the four independent non-executive Director has reviewed the accounting principles and practices adopted by the Company and has discussed auditing, internal control and financial reporting matters. The Audit Committee has reviewed the Group’s audited financial statements for the year ended 31 December 2007.
DIRECTORS’ INTEREST IN A COMPETING BUSINESS
None of the directors or the substantial shareholders of the Company and their respective associates (as defined in the Listing Rules) had any interest in a business which competes or may compete with the business of the Group.
MATERIAL LEGAL PROCEEDINGS China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies
During the year, the Company was not involved in any material litigation or arbitration and no material litigation or claim was pending or threatened or made against the Company as far as the Board was aware of.
31 Report of the Directors
SUFFICIENCY OF PUBLIC FLOAT
Based on information that is publicly available to the Company and within the knowledge of the directors, as at the date of this report, the percentage of shares of the Company in public hands is in compliance with the prescribed level of the minimum public float as set out in Rule 8.08 of the Listing Rules.
FOREIGN EXCHANGE EXPOSURE
During the reporting period, the Group’s expenses, assets and liabilities were mainly denominated in Renminbi. Taking into account of the Group’s operations and capital needs, the directors considered that the Group did not have any significant foreign exchange exposure.
EMPLOYEES AND REMUNERATION POLICY
During the year, the staff cost amounted to HK$147,265,000 (see note 5) to the financial statements. The remuneration of the Group’s employees is commensurate with their responsibilities and the market levels, with discretionary bonuses and training given on a merit basis.
SIGNIFICANT INVESTMENTS
There were no significant investments held by the Group as at 31 December 2007.
MATERIAL ACQUISITIONS AND DISPOSAL DURING THE YEAR
There were no material acquisitions and disposal of the Company and its subsidiaries as at 31 December 2007.
EVENTS AFTER THE BALANCE SHEET DATE
Details of the significant event after the balance sheet date of the Group are set out in note 41 to the financial statements.
AUDITORs
Ernst & Young retire and a resolution for their reappointment as auditors of the Company will be proposed at the forthcoming AGM.
On behalf of the Board
Guo Deying Chairman China Wireless Technologies Limited — ANNUAL REPORT 2007 China Wireless Technologies Hong Kong, 14 April 2008
32 4 pi 2008 April 14 Kong Hong Accountants Public Certified Young & Ernst Ordinance. Companies Kong Hong disclosure accordance the in the with of ended accordance in then requirements prepared year properly the been have for the and of flows Standards and cash Reporting Company and Financial the profit Kong of Group’sHong with the affairs of of and state 2007 the of December view 31 fair at and as true Group a give statements financial the opinion, our In O audit our for basis a provide to appropriate and sufficient is opinion. obtained have we evidence statements. audit the financial that the believe of We presentation overall the evaluating made as estimates well accounting as of directors, reasonableness the the by and includes used also policies audit An accounting control. of not internal entity’s appropriateness but the the of circumstances, evaluating effectiveness the the in on appropriate opinion an are expressing that of procedures purpose the audit for design to order in risk statements those presentation financial fair making and the In true and error.of the or preparation entity’s the fraud of to in to relevant control due assessment internal disclosures whether the consider auditors statements, the and including assessments, financial amounts the judgement, of the auditors’ misstatement the about material on of risks evidence depend the selected audit procedures obtain The to statements. procedures financial performing material involves from audit free are An statements financial the whether to and as plan and assurance misstatement. requirements reasonable ethical obtain with to comply audit we that the require perform Institute standards Kong Those Hong the by Accountants. issued Public Auditing on Certified Standards of Kong Hong with accordance liability in audit accept our or conducted towards We report. responsibility this assume of not contents do the made We is for purpose. report person other Our other no audit. any for our to on and body, based a statements as financial you, these to on solely opinion an express to is responsibility Our that estimates A accounting making and due policies; whether circumstances. accounting the misstatement, in appropriate material reasonable from applying are free and preparation are the selecting that to error; statements or relevant financial fraud control of to presentation internal fair Kong maintaining and true and Hong the the implementing and by these designing, Ordinance. issued of Companies includes Kong Hong Standards presentation the responsibility of fair Reporting requirements This and disclosure the Financial and true Kong Accountants the Public Hong and Certified of with Institute preparation accordance the in for responsible statements are financial Company the of directors The D notes. significant of explanatory summary a other and and ended, then policies year the accounting for statement of flow cash statement balance summary consolidated company the consolidated and and the equity in statement, consolidated changes income the consolidated the comprise and which 2007, December 33–108, 31 at pages as on sheets out set “Group”) (the and “Company”) subsidiaries (the Limited its Technologies Wireless China of statements financial consolidated the audited have We Independent Auditors’ Report uditors irectors pinion
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statements 33 China Wireless Technologies Limited — ANNUAL REPORT 2007 34 China Wireless Technologies Limited — ANNUAL REPORT 2007 DI RE EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY ORDINARY TO ATTRIBUTABLE SHARE PER EARNINGS final Proposed Interim the and dividend 2006 final proposed the between Difference YEAR THE FOR PROFIT Tax TAX BEFORE PROFIT associate an of profit of Share costs Finance expenses Other expenses Administrative costs distribution and Selling income Other profit Gross sales of Cost 2007 December 31 ended Year Consolidated Income Statement V V iue (06 restated) (2006 Diluted restated) (2006 Basic COMPANY THE OF HOLDERS EQUITY paid dividend actual IDENDS ENUE Notes 12 11 9 5 6 4 4 .8 cents 7.98 cents 8.33 1,277,663 HK$’000 (192,481 (213,548 (756,350 167,520 521,313 167,520 (11,585 64,499 10,284 10,115 2007 (709 169 31 — — ) ) ) ) ) .3 cents 2.63 cents 2.70 (106,830 (400,859 HK$’000 239,996 640,855 (86,372 53,684 17,336 19,939 14,957 53,684 (9,455 4,982 2006 (991 — — — ) ) ) ) ) OA AST LS CRET LIABILITIES CURRENT LESS ASSETS TOTAL ASSETS CURRENT NET liabilities current Total payable Tax associate an to Due director a to Due company related a to Due borrowings other and bank Interest-bearing accruals and payables Other payable Bills payables Trade LIABILITIES CURRENT assets current Total equivalents cash and Cash deposits time Pledged directors from Due receivables other and deposits Prepayments, receivable Bills receivables Trade Inventories ASSETS CURRENT assets non-current Total associate an in Interest assets Intangible payments lease land Prepaid properties Investment equipment and plant Property, ASSETS NON-CURRENT 2007 December 31 Consolidated Balance Sheet Notes 21 20 19 18 16 15 14 13 25 23 24 30 29 28 27 26 26 23 22 HK$’000 168,692 288,686 432,000 345,680 752,433 320,433 491,716 187,601 157,355 812,149 194,131 40,080 36,665 12,155 28,917 15,064 36,431 87,879 91,222 29,204 8,583 7,386 2007 134 — — continued/... HK$’000 168,047 248,306 168,586 134,934 534,603 366,017 488,070 137,451 189,096 854,087 308,891 22,055 11,597 14,344 85,963 61,089 83,439 44,813 2006 110 591 17 — — — — 35 China Wireless Technologies Limited — ANNUAL REPORT 2007 36 China Wireless Technologies Limited — ANNUAL REPORT 2007 Director Deying Guo equity Total dividend final Proposed Reserves capital Company the Issued of holders equity to attributable Equity EQUITY assets Net liabilities non-current Total liabilities tax Deferred borrowings other and bank Interest-bearing LIABILITIES NON-CURRENT 2007 December 31 Consolidated Balance Sheet (continued) Director Chao Jiang Notes 11 34 32 31 30 HK$’000 641,120 661,350 661,350 20,230 91,083 11,992 79,091 2007 — HK$’000 411,721 431,664 102,939 431,664 14,957 99,532 4,986 3,407 2006 aac a 3 December 31 at Balance realignment Exchange account premium share to reserve option share from Transfer arrangements option share Equity-settled expenses issue Share reserve option share from account premium share to Transfer premium share including shares, of Issue paid Dividends year the for Profit reserve revaluation on tax Deferred buildings of revaluation on Surplus January 1 at Balance EQUITY TOTAL 2007 December 31 ended Year Consolidated Summary Statement of Changes in Equity 2 34 32, 34 32, Notes 32 34 34 34 34 34 34 HK$’000 167,520 431,664 661,350 (25,241 10,369 39,865 38,500 (8,334 (3,012 7,007 3,012 2007 — ) ) ) HK$’000 313,696 431,664 (14,946 56,268 53,684 13,955 (1,300 (1,859 (2,768 8,339 4,736 1,859 2006 ) ) ) ) 37 China Wireless Technologies Limited — ANNUAL REPORT 2007 38 China Wireless Technologies Limited — ANNUAL REPORT 2007 AH LW FO OEAIG ACTI OPERATING FROM FLOWS CASH e cs ifo/otlw fo oeaig activities operating from inflow/(outflow) cash Net paid Tax operations in) from/(used generated Cash directors to due amounts company in related Decrease a to due amount an in Increase/(decrease) accruals and payables other in Increase/(decrease) payable bills in Decrease payables trade in Increase directors from due amounts in (Increase)/decrease and deposits prepayments, in (Increase)/decrease receivable bills in Increase receivables trade in (Increase)/decrease inventories in Increase for: Adjustments tax before Profit 2007 December 31 ended Year Consolidated Cash Flow Statement te receivables other expense option share Equity-settled receivables trade equipment for and plant Provision property, of items of disposal on Loss payments lease land prepaid of Recognition costs development product of Amortisation licences and patents of Amortisation Depreciation associate an of profit of Share costs Finance income interest Bank V ITIES
Notes 5 5 5 5 5 5 5 6 4 HK$’000 167,520 220,757 221,707 135,162 213,069 (43,415 (52,048 (37,312 (20,446 10,438 11,585 20,722 (1,773 7,007 5,367 3,224 9,433 5,636 2007 (950 (170 (110 298 619 (31 1 ) ) ) ) ) ) ) ) ) continued/... (168,809 (162,449 (115,472 (183,707 HK$’000 (60,532 53,684 84,461 33,826 84,905 (1,811 (6,360 (5,397 4,736 2,337 3,234 7,242 4,830 9,455 2006 (147 (390 943 255 — — 4 ) ) ) ) ) ) ) ) ) ) AH LW FO FNNIG ACTI FINANCING FROM FLOWS CASH IN FROM FLOWS CASH ah n cs equivalents cash and Cash AND CASH OF BALANCES OF ANALYSIS net changes, rate exchange foreign of year Effect of beginning at equivalents cash and Cash AND CASH IN INCREASE/(DECREASE) NET activities financing from inflow cash Net paid Dividends paid associate Interest an to due amount an in Increase loans bank of Repayment loans bank New expenses issue Share shares ordinary of issue from Proceeds activities investing from outflow cash Net deposits time pledged in Decrease associate an in Investment payments lease land prepaid to Additions licences and patents to Additions costs development product to Additions equipment and plant property, of Purchases received interest Bank activities operating from inflow/(outflow) cash Net 2007 December 31 ended Year Consolidated Cash Flow Statement (continued) AH N CS EQUI CASH AND CASH AH EQUI CASH AH EQUI CASH V V ALENTS ALENTS V V LNS T N O YEAR OF END AT ALENTS SIG ACTI ESTING V V ITIES ITIES
Notes 15 16 16 13 26 34 32 4 HK$’000 (219,296 (202,113 (351,060 220,757 364,934 (11,415 (14,598 (25,241 (11,585 15,609 91,222 91,222 91,222 11,519 83,439 10,369 (8,552 (3,736 (5,197 1,773 7,386 2007 — — ) ) ) ) ) ) ) ) ) ) (106,374 (168,809 (172,191 HK$’000 109,606 233,236 376,328 (12,130 (93,830 (41,947 (14,946 83,439 83,439 83,439 15,780 56,268 (6,489 (9,455 (2,768 4,264 1,811 2006 — — — ) ) ) ) ) ) ) ) ) ) 39 China Wireless Technologies Limited — ANNUAL REPORT 2007 40 China Wireless Technologies Limited — ANNUAL REPORT 2007 Director Deying Guo equity Total dividend final Proposed Reserves capital Issued EQUITY assets Net ASSETS CURRENT NET liabilities current Total director a to Due borrowings other and bank Interest-bearing accruals and payables Other payable Bills LIABILITIES CURRENT assets current Total equivalents cash and Cash deposits time Pledged receivables other and Deposits subsidiaries from Due ASSETS CURRENT assets non-current Total assets Intangible subsidiaries in Interests ASSETS NON-CURRENT 2007 December 31 Balance Sheet Director Chao Jiang Notes 26 26 22 17 16 17 11 34 32 23 30 29 28 HK$’000 197,254 162,983 242,701 222,471 242,701 194,209 19,244 15,001 48,492 44,991 20,230 3,501 3,045 2,750 2007 295 26 — — — HK$’000 180,975 173,709 218,358 198,415 218,358 168,310 50,048 44,991 14,957 12,665 2,255 5,000 5,057 4,986 1,390 6,069 5,121 2006 85 11
2.2 2.1 1. 2007 December 31 Notes to Financial Statements
KIRC-n 10 HK(IFRIC)-Int 9 HK(IFRIC)-Int 8 HK(IFRIC)-Int Amendment 1 HKAS 7 HKFRS effect material additional no had and statements. has policies financial interpretations these and accounting on standards revised revised and and new new these to of adoption rise the giving disclosures, cases, certain in for Except financial year’s current statements. the for time first the for HKFRSs revised and new following the adopted has Group The STANDARDS RE AND NEW OF IMPACT that date the eliminated until are Group the consolidated within be balances to consolidation. and on continue transactions and intercompany significant control, All obtains ceases. control Group such the which on acquisition, of date date the from the consolidated being are subsidiaries of results The 2007. December for 31 ended subsidiaries its year and the Company the of statements financial the include statements financial consolidated The consolidation of Basis otherwise when except thousand nearest the presented to are rounded statements are values financial indicated. all These and value. (“HK$”) fair dollars at Kong measured Hong in been properties have investment which for except buildings, convention, certain cost and Companies historical Kong the Hong under the prepared of been have requirements They disclosure Ordinance. the and Kong Hong in accounting accepted Accountants, generally Public Certified principles of Institute Kong Standards Hong the Accounting by Kong issued Hong Interpretations) Standards, and (“HKASs”) Reporting Financial Kong Hong all include (which Standards Reporting (“HKFRSs”) Financial Kong Hong with accordance in prepared been have statements financial These PREPARATION OF BASIS is British Group the the in of incorporated company was holding which ultimate “B Dreamland”), (the the (“Data and Limited company Holding holding Dreamland the Data directors, the of wireless opinion the the for sales. In and equipment production and smartphone on solutions focused Group wireless The China. providing Mainland in in market involved was telecommunication Group the year, the During Islands. The Cayman Cayman Grand 2681, Islands. KY1-1111, P.O.Box Drive, Cayman Hutchins the Square, in Cricket at located is incorporated Company the company of office liability registered limited a is Limited Technologies Wireless China INFORMATION CORPORATE V I”). nei Fnnil eotn ad Impairment and Reporting Financial Interim Derivatives Embedded of Reassessment 2 HKFRS of Scope Disclosures Capital Disclosures Instruments: Financial V ISED HONG KONG FINANCIAL REPORTING REPORTING FINANCIAL KONG HONG ISED V irgin Islands Islands irgin 41 China Wireless Technologies Limited — ANNUAL REPORT 2007 42 China Wireless Technologies Limited — ANNUAL REPORT 2007
2.2 1 eebr 2007 December 31 Notes to Financial Statements
(a) RE AND NEW OF IMPACT h picpl fet o aotn tee e ad eie HFS ae s follows: as are HKFRSs revised and new these adopting of effects principal The (CONTINUED) STANDARDS (e) (d) (c) (b)
a n ipc o te iaca psto o rsls f prtos f h Group. the of operations of results or has position interpretation the financial the assets, on such of impact no respect the in had As reversed reversed. previously subsequently not losses is impairment cost no at had carried Group instrument asset equity financial an a or either sale in for impairment investment available an an as of that respect classified requires in period which interim 2007, previous January a in 1 of recognised as loss interpretation this adopted has Group The statements. financial these on effect separation that no had requiring contract has derivative the interpretation to embedded the no change contract, has a host Group the is the from there As first if flows. Group cash only the the that reassessment modifies date with the significantly contract, is the derivative to a as party for a be accounted becomes to and required is contract host derivative the embedded an from whether separated assess to date the that requires interpretation This no had has interpretation statements. the financial scheme, these option on share effect Company’s employees the and with directors to accordance in instruments Group equity the issued of only has granted Company are instruments the Group equity As the the instruments of incurred. by value fair liabilities incurred equity the or are than which less be instruments) to for appears equity Group’swhich received, and the consideration, of a services for value or a cannot on goods Group (based the the liabilities which of or in granted all arrangement or any some to applied specially be identify to 2 HKFRS requires interpretation This statements. financial the to 40 note in disclosures shown new These are capital. managing for statements processes and financial policies the of objectives, Group’s users the enable evaluate to that disclosures make to Group the requires amendment This comparative Group, the of appropriate. While operations where of statements. included/revised results been or financial has position the information financial the the throughout on effect included evaluate no are been to has disclosures there those from statements new arising risks The financial of extent the instruments. and nature of financial the and users instruments financial enable Group’s the of that significance disclosures requires standard This KR 7 iaca Isrmns Disclosures Instruments: Financial 7 HKFRS K IRC-n 1 Itrm iaca Rprig n Impairment and Reporting Financial Interim 10 (IFRIC)-Int HK Derivatives Embedded of Reassessment 9 (IFRIC)-Int HK 2 HKFRS of Scope 8 HK(IFRIC)-Int Disclosures Capital — Statements Financial of Presentation 1 HKAS to Amendment V ISED HONG KONG FINANCIAL REPORTING REPORTING FINANCIAL KONG HONG ISED 2.3 2007 December 31 Notes to Financial Statements
occurs, and future reported results. It must be applied prospectively and will affect future acquisitions and and acquisitions future acquisition affect an will that and interests. period prospectively minority the applied with in be transactions must results It reported results. the reported future recognised, and goodwill combinations occurs, of business for amount accounting the the in impact changes will of that number a introduce to revised been has 3 HKFRS payments. share-based not not for does has accounting therefore, Group its and, on The attached implications cancellation. conditions significant a expect as non-vesting with for schemes accounted payment control be the must share-based within into this is that entered counterparty, condition the of non-vesting a entity meet the to failure either a of that of case result the In the as granted. vest instruments which not equity does the conditions, of award value the non-vesting fair the are determine to conditions an account other into includes taken Any that be to services. condition have a provide to to condition” requirement “vesting implicit of or definition explicit the restrict to or amended been measurement has HKFRS2 recognition, the HKFRSs. change other by not required events does other It and transactions income. specific owner of comprehensive of disclosure of presentation the and affects for It equity guidelines application. in content statements, changes their financial for of requirements presentation minimum the and for structure requirements their overall out sets (Revised) 1 HKAS 5 4 3 2 1 14 HK(IFRIC)-Int 13 HK(IFRIC)-Int 12 HK(IFRIC)-Int 11 HK(IFRIC)-Int (Revised) 27 HKAS (Revised) 23 HKAS 8 HKFRS (Revised) 3 HKFRS HKFRS2 to Amendments (Revised) yet 1 not HKAS are but issued been have statements. that HKFRSs, financial these revised in and new effective, following the applied not has Group The STANDARDS REPORTING EFFECTI YET NOT BUT ISSUED OF IMPACT
fetv fr nul eid bgnig n r fe 1 uy 2009 July 1 after or on beginning periods 2008 annual for January 1 Effective after or on beginning periods 2008 annual for July 1 Effective after or on beginning periods 2007 annual for March 1 Effective after or on beginning periods 2009 annual for January 1 Effective after or on beginning periods annual for Effective HKAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Funding Minimum Asset, Benefit Defined a on Limit The — 19 HKAS Programmes Loyalty Customer Arrangements Concession Service Transactions Share Treasury and Group — 2 HKFRS Statements Financial Separate and Consolidated Costs Borrowing Segments Operating Combination Business Payment Share-based Statements Financial of Presentation eurmn ad hi Interaction their and Requirement 1 1 1 5 V 3 E HONG KONG FINANCIAL FINANCIAL KONG HONG E 4 1 4 5 2 43 China Wireless Technologies Limited — ANNUAL REPORT 2007 44 China Wireless Technologies Limited — ANNUAL REPORT 2007 2.3 2007 December 31 Notes to Financial Statements
MAT F SUD U NT E EFFECTI YET NOT BUT ISSUED OF IMPACT accounted for as a separate component of the sales transaction. The consideration received in the sales sales the amount in The sale. received the of components consideration other the The and credits award transaction. loyalty the sales between the are allocated is of transaction transaction sales component a of separate part a as as customers for to granted accounted credits award loyalty that requires 13 impact HK(IFRIC)-Int financial any have to unlikely As is services. interpretation public the of Group. the supply arrangements, on the such for no and/or has from services currently arising Group public the the for provide rights contract to the a used grants and entity infrastructure sector obligations of public the a or construction for government a account which by to addresses arrangements HKFRSs also concession existing 12 service apply HK(IFRIC)-Int shall arrangements. operator contractual the an of how terms the on and/or asset based financial asset, a as intangible services an construction the for exchange recognise in to receivable or arrangements received concession consideration service the public-to-private under operator an requires 12 HK(IFRIC)-Int financial any have to unlikely also is the interpretation 11 within Group. the the entities on transactions, HK(IFRIC)-Int more impact such or no needed. has two currently instruments involving Group the transactions equity As payment Group. the share-based equity provide for Group’s accounting instruments shareholders the the the the acquires addresses to Group or the rights if party, even granted scheme, another is equity-settled from an as employee for an accounted be whereby to instruments, arrangements requires 11 HK(IFRIC)-Int interests. future the minority affect by with will and incurred transactions prospectively and losses applied be for must acquisitions It subsidiary. accounting a of the control of changes loss the standard as raise well give as amended it subsidiary the will nor accounted Furthermore, goodwill, be loss. on to impact or no subsidiary gain have a a will to of change a interest such Therefore, ownership the transaction. in equity an change as for a require to revised been has HKAS27 to directly unlikely is Group. are standard the revised on costs the impact standard, financial such revised any the have when of requirements costs policy the current with Group’s the borrowing aligns As costs asset. of borrowing qualifying a for of capitalisation production or require construction acquisition, to the to revised attributable been has the from 23 revenue HKAS and operates, Group the which in areas customers. geographical major Group’s the services segments, and products the the about by information of provided assessing and disclosure the segments requires the also to standard resources The allocating performance. of for their purposes available the is for that maker entity the decision of operating components chief the the about information on based segments, operation its about 14 HKAS replace will which 8, HKFRS (CONTINUED) STANDARDS REPORTING allocated to the loyalty award credits is determined by reference to their fair value and is deferred until the the until deferred extinguished. is and otherwise is value fair liability their the to or reference redeemed by are awards determined is credits award loyalty the to allocated Segment Reporting Segment , specifies how an entity should report information information report should entity an how specifies , V E HONG KONG FINANCIAL FINANCIAL KONG HONG E
2.4 2.3 2007 December 31 Notes to Financial Statements
and receivable. The Company’s interest in an associate is treated as a non-current asset and stated at cost cost at stated and losses. asset non-current impairment a any as less treated is associate an in interest received Company’s dividends The of extent receivable. the and to statement income Company’s the in included is associate an of result The transferred. except asset the associates, of the impairment in an interest of Group’s evidence the between of provide extent losses transactions the unrealised to from where statements eliminated resulting are income losses associates consolidated its and and the gains Group in the Unrealised included the respectively. is of reserves, share associate Group’s consolidated an The of and of losses. share reserves impairment Group’s any and the less at results sheet accounting, of post-acquisition balance method consolidated equity the the in under stated assets is net associate an in interest Group’s The to position a in is it which over and rights voting influence. equity long significant the a of exercise has 20% Group than the less which not in entity, generally of jointly-controlled a interest of term subsidiary a being not entity, an is associate An losses. associate An impairment any less cost at stated are subsidiaries in interests Company’s The receivable. and received dividends of extent the to statement income Company’s the in included are subsidiaries of results The indirectly, or directly activities. its controls, from Company benefits the obtain policies to operating as so and financial whose entity an is subsidiary A POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY impact financial any have to unlikely are Group. therefore the and on Group 13 the to HK(IFRIC)-Int applicable scheme, not benefit are 14 defined and HK(IFRIC)-Int credits and award loyalty customer no has currently Group the As exists. recognised requirement be funding can that minimum a scheme when benefit particular, defined in a asset, to an relation as in contributions future in reduction a 19 or HKAS refund under limit the assess to how addresses 14 HK(IFRIC)-Int (CONTINUED) STANDARDS REPORTING EFFECTI YET NOT BUT ISSUED OF IMPACT Subsidiaries V E HONG KONG FINANCIAL FINANCIAL KONG HONG E Employee Benefits Employee , on the amount of a of amount the on , 45 China Wireless Technologies Limited — ANNUAL REPORT 2007 46 China Wireless Technologies Limited — ANNUAL REPORT 2007 2.4 2007 December 31 Notes to Financial Statements
(g) (f) (e) (d) (c) (b) UMR O SGIIAT CONIG OIIS (CONTINUED) POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY aiaie a a adtoa cs o ta ast r s replacement. a as or asset is that expenditure of the cost reliably, measured additional of be an item can as an item of the capitalised of use cost the the from where obtained and be to equipment, and expected plant benefits property, economic has future expenditure the the in that increase demonstrated an in clearly in be statement can resulted it income where the have situations to In charged incurred. equipment is normally it and which is in plant period maintenance, property, the and of repairs as items such after operation, incurred into put Expenditure been use. intended equipment condition its and working its for plant to asset property, location the of bringing and of item costs an attributable of directly cost any and The price 5. purchase its HKFRS comprises with accordance is in equipment for depreciated not is and it accounted sale, less for is plant held as and property, valuation classified group of or disposal a of item part cost is it an when or at sale When for held stated as losses. classified are impairment progress, any in and construction depreciation than accumulated other equipment, and plant Property, (a) if: Group the to related be to considered is party A eae parties Related rpry pat n eupet n depreciation and equipment and plant Property,
niy ht s rltd at o te Group. the of party related a is that entity in to referred individual any indirectly, or directly or with, (e); or resides (d) entity such in power voting significant (d); or (a) in to referred individual any of family the of member close a company; is holding party its the or Group the of personnel management key the of member a is party the entity; jointly-controlled a is party the associate; an is party the Group; the over control joint has (iii) or influence Group; significant the it gives over that Group the in interest an has (ii) Group; the with, control common under the party is a post-employment benefit plan for the benefit of the employees of the Group, or of any any of or Group, the of employees the of benefit the for plan benefit post-employment a is party the which for or by influenced significantly or controlled jointly controlled, is that entity an is party the the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is is or by, controlled is controls, (i) intermediaries, more or one through indirectly or directly party, the 2.4 2007 December 31 Notes to Financial Statements
reclassified to the appropriate category of property, plant and equipment or investment properties when when properties investment or equipment and use. is plant for progress property, ready in and of completed Construction category construction. appropriate of the period to the during capitalised reclassified and funds construction borrowed of related costs on direct the costs comprises borrowing Cost any less depreciated. cost not at is stated and is which losses, construction, impairment under plant and buildings represents progress in Construction the and proceeds sales net the asset. between relevant difference the the of income is the amount in derecognised carrying is recognised asset retirement or the disposal year on the loss in or gain statement Any disposal. or use its from benefits expected economic are future no when or disposal upon derecognised is equipment and plant property, of item An each at appropriate, if adjusted date. and sheet reviewed, are balance method depreciation the and lives separately. useful depreciated values, is Residual part each and parts the of among valuation basis or cost reasonable the a lives, on useful allocated different is have item equipment that and plant property, of item an of parts Where vehicles Motor equipment office and fixtures Furniture, improvements Leasehold for Buildings used rates annual principal The life. useful follows: as estimated are its purpose over this value residual property, its of item to each of equipment valuation and or cost plant the off write to basis straight-line the on calculated is Depreciation reserves. in movement a as profits retained On previous to the charged. of transferred respect in previously is realised subsequent deficit reserve valuations the revaluation Any the on of of portion statement. extent deficit, relevant the the income a asset, to the revalued a cover statement of to disposal income to charged the is insufficient to credited deficit is is the reserve surplus of this revaluation excess of the total basis, the with asset If dealt individual are reserve. an equipment revaluation and plant the property, in of values movements the as in Changes amount. carrying its from materially ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY V (continued) depreciation and equipment and plant Property, aluations are performed frequently enough to ensure that the fair value of a revalued asset does not differ differ not does asset revalued a of value fair the that ensure to enough frequently performed are aluations 20% 20% 20% 5% continued ) 47 China Wireless Technologies Limited — ANNUAL REPORT 2007 48 China Wireless Technologies Limited — ANNUAL REPORT 2007
2.4 2007 December 31 Notes to Financial Statements
eerh n dvlpet costs development and Research licences and Patents assets Intangible ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY expenditure during the development. Product development expenditure which does not meet these criteria criteria these meet not does incurred. when which expensed expenditure is future development Product generate the will reliably development. asset measure the to the ability during how the and expenditure asset, project the the complete sell to or resources of use availability to the ability benefits, its economic use and for complete available be to will it intention that its so asset sale, Group or intangible the the when completing of only deferred feasibility and technical the capitalised is demonstrate can products new develop to projects on incurred Expenditure incurred. as statement income the to charged are costs research All years. five to two of lives useful estimated straight- the their on over amortised are basis and line losses impairment less cost at stated are licences and patents Purchased date. sheet balance each at least at reviewed are method life amortisation useful the finite an and a is period with with there asset amortisation assets whenever The intangible an impaired. Intangible impairment for be for may indefinite. assessed asset or and intangible life finite the that economic either useful indication be the to over assessed amortised are are lives assets finite intangible of lives useful The policy the with accordance in above. carrying revaluation the depreciation” a and between as equipment date for and the plant accounted at “Property, is under difference property stated the any of and value use, fair in the change and of amount date the to up equipment and the depreciation” plant property, “Property, and under investment stated policy an the with becomes accordance in property property such owner-occupied for an accounts Group as Group the by occupied property a If income the in recognised disposal. are or property retirement the investment of an year of the in disposal or statement retirement the on losses or gains Any income arise. the they in which included are in property year the investment an in of statement values fair the in changes from arising losses or market Gains reflects which value, fair transaction at date. including stated sheet cost, is balance at the property at initially investment conditions measured for recognition, is or initial property purposes; to Such administrative Subsequent for business. costs. or of appreciation, services course or capital ordinary goods for of the and/or supply in income or sale rental production the earn in to use held for than buildings rather in interest is property investment An rm h dt we te rdcs r pt no omril production. the commercial using into put amortised are are products the and when date commencing losses years, the five from impairment exceeding not products any underlying the of less lives commercial cost the over basis at straight-line stated are costs development Product netet property Investment continued )
2.4 2007 December 31 Notes to Financial Statements
n h srih-ie ai oe te es terms. lease the recognised over subsequently and basis cost at straight-line stated the on initially are leases operating under payments lease land Prepaid straight-line the the is on Group terms. statement the income lease the Where the to over terms. charged basis are lease under leases the Group operating over the are the basis under leases payable by straight-line rentals operating the lessee, the leased on under assets are statement receivable income lessor, lessor rentals the and the the to assets, is with credited non-current remain Group in the assets included are of Where leases ownership leases. operating of operating risks as and for rewards accounted the all substantially terms. where income lease Leases the the over to charge charged of are rate leases periodic such constant of a costs provide terms finance to lease as The the so assets. of statement the shorter of the lives over useful depreciated estimated and the equipment, and and plant property, in financing. included and are purchase leases the reflect to obligation, the element, with interest together the recorded and excluding payments lease minimum the of value present than asset the leased other at the of Group, cost capitalised the is the lease, to finance a of assets inception the of At leases. ownership finance as of for accounted risks are title, and legal rewards the all substantially transfer that Leases accounted Leases is asset. loss revalued that impairment for the policy of accounting reversal the relevant the case with unless which arises in accordance it in amount, A which for in revalued years. period a the prior at in in carried statement is asset income asset the the (net the to for credited determined is recognised been loss been have impairment loss would such of that impairment reversal amount no had carrying of the amount than depreciation/amortisation) recoverable higher any the of amount determine an to to used not estimates previously goodwill but the in than asset, the that change other that a exists, asset been indication an has indication of any there such loss if If is only impairment reversed decreased. recognised there is have previously whether A may estimated. or to is exist as amount longer recoverable date no may reporting losses each impairment at recognised made is assessment An relevant the with accordance in for asset. carried accounted is revalued is that asset loss for the policy impairment unless the accounting asset case impaired which the in of amount, function revalued risks a the arises the at it with which and in consistent period money the categories in of a statement expense value income using those the time to in value the charged is present of loss their impairment assessments An to asset. market the discounted to current specific are reflects flows that cash amount. rate future recoverable its discount estimated exceeds pre-tax the asset use, an in of amount value carrying assessing the In if only recognised is loss impairment belongs. An asset the which to the unit case which cash-generating generate in the not assets, for of does groups determined asset or is the assets amount other unless its from recoverable asset, and those of use individual independent an in largely for are value that unit’s determined inflows is cash cash-generating and or sell, asset’s to costs the less of value higher fair the is amount recoverable estimated. is (other asset’s amount required An recoverable is asset’s the asset assets), an for non-current and testing properties impairment investment annual inventories, than when or exists, impairment of indication an Where ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY maret f o-iaca ast ohr hn goodwill than other assets non-financial of Impairment
Assets held under capitalised finance finance capitalised under held Assets continued ) 49 China Wireless Technologies Limited — ANNUAL REPORT 2007 50 China Wireless Technologies Limited — ANNUAL REPORT 2007
2.4 2007 December 31 Notes to Financial Statements
Provisions borrowings and loans Interest-bearing equivalents cash and Cash Inventories ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY When the effect of discounting is material, the amount recognised for a provision is the present value at the the at value present the is provision a for recognised amount the material, is discounting of effect the When obligation. the of provided amount obligation, the the of settle made to be past required can a be estimate of will result reliable resources a a of as that outflow arisen future a has that constructive) probable or is it (legal and obligation event present a when recognised is provision A is expense interest related statement. effect The income the cost. the at in unless stated cost” are method “finance they rate within case recognised interest which in effective and immaterial, the be costs would using transaction discounting cost, attributable of amortised directly less at value measured fair the subsequently at are stated initially are borrowings and loans All banks, at and use. hand to as on cash restricted not comprise are equivalents which cash deposits, and term cash including sheets, balance the of purpose the For of maturity short form a and have demand management. on and cash Group’s repayable the value, are of which in part overdrafts integral changes bank an of less acquired, risk when months insignificant six an within on to generally known cash subject into comprise are convertible readily cash, are equivalents that of cash investments and amounts liquid highly cash term short statement, and flow deposits, demand cash and hand consolidated the of purpose the For disposal. and completion to incurred be prices to selling direct expected estimated costs on materials, based estimated direct is weighted any value comprises less the realisable goods, Net on overheads. finished of determined and proportion is progress appropriate Cost in an and work value. labour of realisable case net the in and and, cost basis of average lower the at stated are Inventories process. and amortisation loans the the through when as well statement as income impaired, interest the or in effective derecognised the recognised are of are receivables part losses and integral an Gains are costs. that transaction fees and includes rate and acquisition on account into premium taking or calculated discount is cost any Amortised the impairment. using for cost allowance amortised any at less method carried interest subsequently effective are fair transaction receivables at and attributable loans directly measured loss, measurement, are or initial profit they After through initially, costs. value fair at recognised not are investments of assets case the not financial in are plus, such that value, When payments market. determinable or active fixed an with in assets quoted financial non-derivative are receivables and Loans in the discounted present value amount arising from the passage of time is included in “finance costs” in in costs” “finance in included is time of passage the statement. from income arising the increase The amount obligation. value the present settle to discounted required the be to in expected expenditures future the of date sheet balance on ad receivables and Loans continued )
2.4 2007 December 31 Notes to Financial Statements
• • which the deductible temporary differences, and the carryforward of unused tax credits and unused tax tax • unused and credits tax unused against of available except: carryforward be utilised, will the be profit tax can and taxable losses unused differences, that of probable temporary is carryforward it deductible that the differences, extent which the temporary to losses, deductible tax all unused for and credits recognised are assets tax Deferred • except: differences, temporary taxable all for recognised are purposes. liabilities reporting tax financial Deferred for amounts date carrying sheet their balance and the liabilities at and differences assets of temporary bases all tax on the method, between liability the using provided, is tax Deferred to expected authorities. amount taxation the at the to measured paid are or periods from prior recovered and be current the for equity. liabilities in and directly assets in tax period or Current different a statement or same income the the in in recognised are recognised that is items tax to relates Income it tax. if equity deferred and current comprises tax Income tax Income on as based values present recognised their are to discounted products returns, and certain repairs of on appropriate. level the Group of the experience past by and volume granted sales warranties product for Provisions ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY rvsos (continued) Provisions
in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax tax deferred subsidiaries, in investments with associated differences temporary deductible of respect in timing the where subsidiaries, in investments with associated differences temporary taxable of respect in accounting the neither and affects loss; transaction, or the profit of taxable time nor the profit at and, combination business a not is that in the foreseeable future and taxable profit will be available against which the temporary differences differences temporary the which against available be utilised. will be reverse profit can will taxable differences and temporary future the that foreseeable probable the is it in that extent the to recognised only are assets and loss; or profit taxable time nor the profit at and, accounting the combination neither business a affects not is transaction, that the of transaction a in liability or asset an of recognition temporary the that probable future. is it foreseeable and the in controlled reverse be not can will differences differences temporary the of reversal the of where the deferred tax asset relating to the deductible temporary differences arises from the initial initial the from arises differences temporary deductible the to relating asset tax deferred the where transaction a in liability or asset an of recognition initial the from arises liability tax deferred the where continued ) 51 China Wireless Technologies Limited — ANNUAL REPORT 2007 52 China Wireless Technologies Limited — ANNUAL REPORT 2007
2.4 2007 December 31 Notes to Financial Statements
(iv) (v) (ii) (vi) (iii) eeu recognition Revenue subsidies and grants Government ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY (i) the when bases: and Group following the the to on flow reliably, will measured benefits be economic can the revenue that probable is it when recognised is Revenue charge. depreciation reduced a of way by statement income carrying the the from to deducted released is and value asset fair the the of asset, an amount to intended is relates it over subsidy which or income costs grant the as to the basis Where recognised systematic is compensate. a to it on subsidy item, or expense grant the an match to will to relates necessary conditions periods subsidy attaching the or all grant and the received When be will where with. value subsidies complied or fair be grants their the at that recognised assurance are reasonable authorities is there government the from subsidies and grants Government the and entity taxable same the to relate taxes deferred the authority. and taxation current same off liabilities set tax to exists current right enforceable against legally assets a if tax offset are liabilities tax deferred and assets tax Deferred date. period sheet the enacted balance to been the have apply that at laws) to tax enacted (and expected rates substantively tax are on or based that settled, is rates liability tax the or the realised is at asset the measured when are liabilities and assets tax utilised. profit Deferred be taxable to asset sufficient tax that deferred probable the of is part it or that all allow extent to the available to the be of recognised will part are at or and reassessed all are date assets allow sheet tax to the deferred balance available to unrecognised each be reduced previously will Conversely, and profit utilised. date be taxable to sheet sufficient asset tax that balance deferred probable each longer at no reviewed is is it that assets extent tax deferred of amount carrying The noe a (continued) tax Income
interest income, on an accrual basis using the effective interest method by applying the rate that that rate the applying by method interest effective the using basis accrual an on income, interest terms; lease the over basis proportion time a on income, rental government grants and subsidies, when there is a reasonable assurance that the grants and subsidies subsidies and grants the that assurance reasonable a is there when subsidies, and grants government to instrument financial asset; the financial of the life of expected amount the carrying net through the receipts cash future estimated the discounts sold; goods the usually over degree control the effective to nor involvement ownership, managerial with neither associated maintains Group the that provided buyer, the to iied noe we te hrhles rgt o eev pyet a be established. been has payment receive to right shareholders’ the when income, Dividend and with; complied be will conditions attaching all and received be will services; such of completion upon sold, goods with associated services of rendering the from from the sales of goods, when the significant risks and rewards of ownership have been transferred transferred been have ownership of rewards and risks significant the when goods, of sales the from continued ) 2.4 2007 December 31 Notes to Financial Statements
ple HFS ol t eut-ete aad gatd fe 7 oebr 02 ht a nt etd y 1 by 2005. vested January not 1 had after that or on 2002 granted November those 7 to after and granted 2005 has and awards January awards equity-settled equity-settled to of only respect 2 in 2 HKFRS HKFRS applied of provisions of transitional the computation adopted has the Group in The dilution share additional as reflected is share. options per earnings outstanding of effect dilutive The as is award, it original that the of date the modification paragraph. a on were previous award they the if in replacement as award described treated a new are as a awards new if designated and cancellation, However, is cancelled of and immediately. the date award, granted, recognised the cancelled is on the award vested for the had for substituted it is if recognised as yet treated not is expense it any cancelled, and is award equity-settled an Where as employee the to beneficial modification. otherwise of increases is date or which the at arrangement, modification, measured payment any share-based for the recognised of is value expense fair an the total if the addition, as In recognised is modified. expense been an not minimum a had as terms modified, are award equity-settled an of terms is the Where vesting satisfied. where are conditions awards market performance for the other not all except or that whether provided of vest, irrespective satisfied, ultimately is vesting as condition not treated are do which condition, that market a awards upon for conditional recognised is expense No period. that the of in end movement and the beginning represents the period at a as for recognised will statement expense that income cumulative the instruments to equity credit of or number charge the The of vest. estimate which best ultimately to Group’s extent the the and reflects expired date has vesting period the vesting until the date sheet balance each at transactions equity-settled for the recognised which expense on cumulative The date date”). the “vesting (the on award the to ending entitled fully fulfilled, become are employees relevant conditions over service equity, and/or in increase performance the corresponding which a in with period the together recognised, is transactions equity-settled of cost The price the applicable. if to linked conditions”), conditions (“market than Company other the of conditions, shares the performance equity-settled of any valuer valuing of In 33. qualified taken note is in professionally account given are no external the which an of transactions, at details by value further determined model, fair is pricing the option value to binomial fair a reference The using by granted. are measured they is which employees at with date transactions equity-settled of cost The Group the transactions”). of (“equity-settled services render Employees instruments employees equity to operations. for whereby Group’s rewards transactions, consideration as payment the and share-based of of incentives form success the providing in the of remuneration to receive purpose the contribute for who scheme participants option eligible share a operates Company The ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY hr-ae pyet transactions payment Share-based benefits Employee continued ) 53 China Wireless Technologies Limited — ANNUAL REPORT 2007 54 China Wireless Technologies Limited — ANNUAL REPORT 2007
2.4 2007 December 31 Notes to Financial Statements
Dividends costs Borrowing ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY iied ae eonsd meitl a a iblt we te ae rpsd n declared. and interim proposed are Consequently, they dividends. when interim liability a declare as to immediately and authority recognised memorandum are the Company’s dividends directors the the grant because association declared, of and articles proposed simultaneously are dividends Interim general a in recognised shareholders are they the declared, by liability. and a shareholders approved as the by been within approved have profits been have they retained dividends until of these When sheet, allocation meeting. balance separate the a of as section classified equity are the directors the by proposed dividends Final the year the from of deducted statement income is the in incurred. assets are recognised they are qualifying which costs in on borrowing other temporary expenditure All the their on capitalised. costs earned pending borrowing income borrowings Investment sale. specific are or of sale, use or the intended investment when use their ceases for costs intended borrowing ready their such of for substantially are capitalisation ready The assets get assets. to those of time cost the of of part period as i.e., assets, capitalised substantial a qualifying of take production necessarily or that construction assets acquisition, the to attributable directly costs Borrowing rules the with accordance The in scheme. payable scheme. become pension pension they central as central the the statement to of income costs subsidiaries the payroll The to their charged government. of are municipal percentage contributions local certain the a by contribute operated to scheme required are pension required are central China, a Mainland in in operate Tech participate which to Software subsidiaries Group’s Coolpad (“Shenzhen the Xi’an Software), and Ltd. Coolpad Yulong”) (“Xi’an Yulong Ltd. Co., (“Dongguan Co., Dongguan Ltd. Software”), Co., (Shenzhen) Coolpad Scientific (“Shenzhen Scientific Telecommunications Ltd. Computer Co., Telecommunications (Shenzhen) Tech Computer Software Coolpad Yulong Yulong”), of employees The establishment. their of dates retirement any the in since participated scheme not have benefits (“DTI”) Inc. Tech Digital and (“YII”) Inc. Infotech Yulong Company, The eieet eei scheme benefit Retirement (continued) benefits Employee continued )
3. 2.4 2007 December 31 Notes to Financial Statements
dutet o h cryn aons f h ast ad iblte afce i te future. the in affected material liabilities a and require assets could the of that amounts outcomes carrying in the result However, to could date. adjustment reporting estimates the and estimate at assumptions assets, judgements these and about make expenses of to uncertainty amounts management reported the requires affect that statements assumption financial and Group’s the of preparation The ESTIMATE ACCOUNTING SIGNIFICANT segment presented. geographical been no has Therefore, PRC. analysis the business in customers located no from are assets Group’s derived Therefore, the was of 90% revenue over terminals. Group’s and the PRC the the of wireless in to 90% of over Also, contribution sale presented. and and been revenue has production Group’s analysis the the segment from of 90% derived over were year, profit the operating During from different segments. are other that rewards the and of risks to those subject is segment Each segment). geographical (a economic environment particular type a within particular services or a products providing providing in or in segment), either business (a engaged services is or products that of Group the of component distinguishable a is segment A Reporting Segment the cash at dollars recurring year. Kong the Frequently Hong for into rate flows. translated exchange cash are average the year the weighted of throughout dates arise the which at subsidiaries ruling into overseas of rate translated flows are exchange subsidiaries the of at flows cash dollars the Kong statement, Hong flow cash consolidated the of purpose the For the in included are dollars differences Kong exchange Hong reserve. resulting into The fluctuation year. translated exchange the are exchange for rate statements at exchange income Company average their the weighted and, of the date at currency sheet presentation balance the the into at ruling assets translated the rate are date, sheet entities balance these the at of As RMB. liabilities is and China Mainland in subsidiaries of currency determined. functional was The value fair the when date the at rates exchange the the using foreign a in using translated value fair are translated at measured are currency items currency Non-monetary foreign transactions. a initial in the of cost dates the at historical rates Non- of exchange statement. terms income in the measured to are taken are that differences items All currency monetary date. functional sheet the balance at the at retranslated ruling are exchange currency of currencies transactions. rates the foreign Foreign of in dates currency. denominated the at liabilities functional ruling and that rates assets currency using Monetary functional measured the using are recorded entity initially are included each and items transactions of and functional currency Company’s statements functional the financial own is its the determines which in Group dollars, the in Kong entity Hong Each currency. in presentation presented are statements financial These ( POLICIES ACCOUNTING SIGNIFICANT OF SUMMARY oeg currencies Foreign continued ) 55 China Wireless Technologies Limited — ANNUAL REPORT 2007 56 China Wireless Technologies Limited — ANNUAL REPORT 2007
3. 2007 December 31 Notes to Financial Statements
eeomn costs Development uncertainty Estimation properties owner-occupied and properties investment between Classification lessor as Group — commitments lease Operating f aiaie pout eeomn css a H$03900 20: K84500 (oe 16). (note HK$8,405,000) (2006: be HK$20,399,000 to was costs rates development discount amount product carrying the assets, of capitalised estimate the of best the of 2007, December 31 At generation benefits. of cash period expected future the and applied expected the regarding assumptions make management requires to development capitalised be and to amounts research the for Determining statements. policy financial the to accounting 2.4 note the in costs with accordance in capitalised are costs Development assets of amounts carrying below. the discussed to is year, adjustment financial material next a the balance within the causing at of liabilities risk and uncertainty significant estimation a of has sources that key date, other and sheet future the concerning assumption key The property. investment an as qualify significant so not are does services property ancillary a whether that determine to basis property individual an on made is or Judgement services investment or an goods of is supply property or production the the separately, in use purposes. sold for accounts administrative be held Group for is not the portion could lease), insignificant an portions finance if a only the property under If separately separately. out portions leased these the If (or for purposes. separately administrative for sold or be services or could goods of portions supply or production the in use for portion another held and is appreciation that capital for or rentals earn to held is that portion a comprise properties Some of independently largely Group. flows the cash by generates held assets property appreciation a other capital the whether for or considers rentals Group earn the to criteria held Therefore, developed property both. has a or is and property property, Investment investment judgement. an that as making qualifies in property a whether determines Group The are which properties these of ownership of rewards leases. and operation risks on out significant leased the has all Group The retains portfolio. it property that investment its determined on leases property commercial into entered has Group The in recognised amounts the on effect significant most statements: the financial has the which estimation, judgement, involving following those the made from has apart management policies, accounting Group’s the applying of process the In ( ESTIMATE ACCOUNTING SIGNIFICANT Judgement continued ) 4. 2007 December 31 Notes to Financial Statements
* income Sundry subsidies* and grants Government income interest Bank income Other terminals wireless and solutions system wireless of Sale Revenue follows: as is income other and revenue of analysis An transactions consolidation. intra-group on significant eliminated All tax. been have value-added and tax sales of net for and allowances discounts after trade and goods, of returns value invoiced net the represents turnover, Group’s the also is which Revenue, RE
V NE N OHR INCOME OTHER AND ENUE ueu o upr te ru i is eerh n dvlpet activities. development and research its in Group the support to bureau The amount mainly represented a value-added tax (“ tax value-added a represented mainly amount The V AT”) refund from a tax bureau and government grants received from a finance finance a from received grants government and bureau tax a from refund AT”) 1,277,663 1,342,162 HK$’000 64,499 60,870 1,773 1,856 2007 HK$’000 640,855 658,191 17,336 14,426 1,811 1,099 2006 57 China Wireless Technologies Limited — ANNUAL REPORT 2007 58 China Wireless Technologies Limited — ANNUAL REPORT 2007 6. 5. 2007 December 31 Notes to Financial Statements
neet on: Interest COSTS FINANCE * income interest Bank net differences, exchange Foreign provision warranty Product costs staff Total senior and directors’ (including costs Staff remuneration Auditors’ and plant property, of items of disposal on Loss receivables trade for Provision rental lease Operating costs: development and Research payments lease land prepaid of Recognition licences* and patents of Amortisation Depreciation sold inventories of Cost charging/(crediting): after at arrived is tax before profit Group’s The TAX BEFORE PROFIT
ak on wol rpybe ihn n year one within repayable wholly loans Bank expense option share Equity-settled contributions scheme Pension expenses welfare Staff wages and Salaries 7)): (note emoluments executives’ equipment expenditure year Current amortised* costs development Product es Itrs capitalised Interest Less: payable years Bills five within repayable wholly loans Bank h fc o te osldtd noe statement. income consolidated the of face the The amortisation of patents and licences and product development costs for the year is included in “Administrative expenses” on on expenses” “Administrative in included is year the for costs development product and licences and patents of amortisation The
Notes 16 15 16 13 HK$’000 HK$’000 756,350 147,265 122,522 11,585 25,127 21,903 10,438 24,961 13,392 (7,085 (1,773 2,416 7,085 9,169 3,224 9,433 7,007 4,344 2,052 5,367 4,472 2007 2007 298 172 Group 1 ) ) HK$’000 HK$’000 400,859 12,180 70,496 60,962 (1,811 9,455 3,364 6,056 8,946 3,234 7,242 4,830 3,961 4,736 3,062 1,736 1,637 2,337 1,616 2006 2006 943 255 35 78 — ) 7. 2007 December 31 Notes to Financial Statements
directors: executive of emoluments Other Fees Hong the of 161 Section and follows: as Rules is Listing Ordinance, the to Companies Kong pursuant disclosed year, the for remuneration Directors’ REMUNERATION DIRECTORS’ (a) (b) aais alwne ad eeis n kind in benefits and allowances Salaries, eso shm contributions scheme Pension
r Hag Dazhan Huang Dr. Weixin Xie Mr. follows: as were year the during directors non-executive independent Group’s the to paid fees The directors: Non-executive directors: Executive 2007 year the during directors non-executive Nil). independent (2006: the to payable emoluments other no were There Xianzu Yang Mr. Chung King Chan Mr.
needn nneeuie directors non-executive Independent xctv drcos n nneeuie directors non-executive and directors Executive s Yn Xiao Yang Ms. s M Dehui Ma Ms. Deying Guo Mr. r Jag Chao Jiang Mr. and benefits benefits and allowances allowances Salaries, Salaries, HK$’000 n kind in 2,462 1,230 616 616 — contributions HK$’000 HK$’000 HK$’000 Pension Pension scheme scheme 2,805 2,468 2,462 2007 2007 337 337 117 100 120 Group — — — 6 6 1 5 remuneration HK$’000 HK$’000 HK$’000 1,520 1,183 1,178 2,468 1,230 Total 2006 2006 337 337 117 100 120 617 621 — — 5 59 China Wireless Technologies Limited — ANNUAL REPORT 2007 60 China Wireless Technologies Limited — ANNUAL REPORT 2007 8. 7. 2007 December 31 Notes to Financial Statements
The fair value of such options, which has been recognised to the income statement over the vesting period, period, vesting the over statement income statements. the to financial the recognised to been has 34 which note to in options, such disclosures of nil the value in fair The included of are which of band details further Group, the the to services his of within respect in employee paid highest fell non-director, a to granted were options share year, employees the During paid highest and non-director both HK$1,000,000. of remuneration The contributions scheme Pension benefits option share Employee kind in benefits and allowances Salaries, two) (2006: two remaining the follows: of as are remuneration whose year the the of for of details employees Details paid directors, above. highest three) and 7 (2006: non-director note three in included out year set are the during remuneration employees paid highest five The FI ( REMUNERATION DIRECTORS’ er s nldd n h aoe o-ietr hget ad mlye’ eueain disclosures. remuneration employees’ current the paid for highest statements non-director, financial above the the in in included included amount is the year and grant of date the at as determined was V HGET AD EMPLOYEES PAID HIGHEST E There was no arrangement under which a director waived or agreed to waive any remuneration during during remuneration any waive to year. agreed the or waived director a which under arrangement no was There directors: Non-executive directors: Executive 2006
s M Dehui Ma Ms. Deying Guo Mr. s Yn Xiao Yang Ms. r Jag Chao Jiang Mr. continued ) and benefits benefits and allowances allowances HK$’000 Salaries, Salaries, n kind in 1,178 263 166 749 — contributions HK$’000 HK$’000 Pension Pension scheme scheme 2007 830 204 616 Group 10 — — — 5 5 remuneration HK$’000 HK$’000 1,183 2006 Total 263 171 749 467 150 312 — 5 9. 2007 December 31 Notes to Financial Statements
in 2006 and the current year was the second profitable year, no provision for income tax was needed in in needed was tax income for provision no year, profitable second year. the current commenced the was Software year Coolpad tax current Shenzhen income of the holiday corporate and tax the 2006 the from in Since relief years. 50% three a following to the entitled for was PRC the and of operations of year profitable first the from starting years two the for 2006. tax income September corporation from in exemption an operations enjoyed also commenced Software Coolpad and Shenzhen 2006 March 7 on up set was Software Coolpad Shenzhen Shenzhen as made year. been the has for taxation loss for 15% a of provision suffered No rate Yulong 2007. tax December income 31 An following ended 1996. the year was for the Yulong for PRC Shenzhen applied the of was of operations tax of income year corporate profitable the first The from year years. relief six profitable 50% a first the to from entitled starting was years and two the operations for of PRC the of tax income corporate the from Company exempted was the Shenzhen, in of operates and enterprise subsidiary Enterprises high-technology a as wholly-owned qualified is Foreign a which China, Yulong, and Mainland in Shenzhen operating Enterprises authorities, Investment tax Foreign relevant by for approved PRC as the and of Law Tax Income the to According Nil) 2006: Nil, (2007: rate effective Group’s the at charge Tax exemption/relief Tax recognised not losses Tax associate an to 15%) attributable 2006: 15%, Profit (2007: rate tax applicable the at Tax tax before Profit effective the at country expense tax the the for to rate follows: domiciled as are statutory is subsidiaries the rate, its tax using of tax majority the before and profit Company to the which applicable in expense tax the of reconciliation A year the for charge tax Total Group: existing on based operates, Group the which in thereof. country respect any in the practices in generate and not prevailing been interpretations did have tax legislation, elsewhere Group of assessable the rates profits as the on Taxes Nil) at year. the (2006: calculated during made Kong been Hong in has arising tax profits profits assessable Kong Hong for provision No TAX
urn ya provision: year Current og Kong Hong anad China Mainland HK$’000 HK$’000 167,520 (40,600 15,477 25,128 2007 2007 — — — — (5 ) ) HK$’000 HK$’000 (12,702 53,684 4,649 8,053 2006 2006 — — — — — ) 61 China Wireless Technologies Limited — ANNUAL REPORT 2007 62 China Wireless Technologies Limited — ANNUAL REPORT 2007 12. 11. 10. 9. 2007 December 31 Notes to Financial Statements
EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF OF HOLDERS EQUITY ORDINARY TO ATTRIBUTABLE SHARE PER EARNINGS DI COMPANY THE OF HOLDERS EQUITY TO ATTRIBUTABLE PROFIT/(LOSS) The calculation of diluted earnings per share amount is based on the profit for the year attributable to ordinary ordinary to attributable year the for profit the on based is amount share per earnings diluted of calculation The the during issue in shares ordinary of number average weighted the year. and Company, ordinary to the attributable of year the holders for profit the equity on based is amount share per earnings basic of calculation The COMPANY THE (a) dividend final Proposed Interim and dividend 2006 final proposed the between Difference financial the in 34). with (note dealt been Company has the which of HK$744,000) statements of loss a 2007 (2006: December 31 HK$32,208,000 ended of year profit the a for includes Company the of holders equity to attributable profit consolidated The Xi’an by conducted operations no 2007. were December There 31 2007. at as November Software 2 on Coolpad up set was Software Coolpad Xi’an Dongguan by conducted operations no were 2007. There December 2006. 31 at November as 3 Yulong on up set was Yulong Dongguan ( TAX h dee eecs o cneso o al h dltv ptnil riay hrs no riay shares. ordinary into shares ordinary potential dilutive on the consideration all no of at conversion issued or been have exercise calculation to share deemed assumed per the shares earnings ordinary basic of the number in average used as weighted year, is the the and calculation during the issue in in used shares shares ordinary ordinary of of number number the average weighted The Company. the of holders equity
Nl 20: K007 (ettd) e odnr share ordinary per (restated)) HK$0.0075 (2006: Nil — ordinary per (restated)) HK$0.0025 (2006: HK$0.005 — V share paid dividend actual the IDENDS h nme o sae eiil fr iied amn icesd rslig n dfeec i dvdns ad n 2007. in paid dividends in difference a in resulting increased, payment dividend for eligible shares of number the Certain share options were exercised during the period between the dividend proposal and the actual dividend payment. Accordingly, Accordingly, payment. dividend actual the and proposal dividend the between period the during exercised were options share Certain continued ) Notes (a) HK$’000 10,284 10,115 2007 169 — HK$’000 19,939 14,957 4,982 2006 — 12. 2007 December 31 Notes to Financial Statements
ubr f hr fr h ya 20 ws ettd o elc te su o bns shares. bonus of issue the reflect The to year. restated the was during 2006 2007 year to October the each 8 for on HK$0.01 share of members of value of number par register a the at on share appeared ordinary one names every whose for par shareholders share a bonus at one of share basis 2007 ordinary May the 22 one on on members then every of and register for the on share appeared names bonus whose one shareholders to of each HK$0.01 basis of value the on shares bonus granted Group The shares: ordinary options of Share number average weighted — dilution of Effect year the during issue in shares ordinary of number average Weighted Shares the in used Company the of holders equity ordinary to attributable Profit Earnings on: based are share per earnings diluted and basic of calculations The OF ( HOLDERS COMPANY EQUITY THE ORDINARY TO ATTRIBUTABLE SHARE PER EARNINGS sd n h bsc anns e sae calculation share per earnings basic the in used calculation share per earnings diluted and basic continued ) 2,100,414,876 2,011,069,545 89,345,331 ubr f shares of Number HK$’000 167,520 2007 2007 2,038,181,345 1,989,798,926 48,382,419 (Restated) HK$’000 53,684 2006 2006 63 China Wireless Technologies Limited — ANNUAL REPORT 2007 64 China Wireless Technologies Limited — ANNUAL REPORT 2007 13. 2007 December 31 Notes to Financial Statements
RPRY PAT N EQUIPMENT AND PLANT PROPERTY, valuation: or cost of Analysis value: book Net depreciation: Accumulated valuation: or Cost 2007 December 31
Group Transfers xhne realignment Exchange Disposal year the during provided Depreciation realignment Exchange Disposal Additions t cost At 2007 December 31 At 2007 January 1 At 2007 January 1 At t 1 eebr 2007 December 31 At rt-ak f revaluation of Write-back properties investment to Transfers 2007 December 31 At revaluation of Write-back Transfers to investment properties properties investment to Transfers upu o rvlain nt 34) (note revaluation on Surplus t valuation At 2006 December 31 At nt 14) (note 14) (note
Buildings HK$’000 121,054 169,136 167,560 168,419 169,136 (21,078 37,329 36,728 31,095 (2,020 (2,020 3,022 2,756 1,576 (931 717 601 45 — — — ) ) ) ) improvements Leasehold Leasehold HK$’000 2,219 2,808 2,808 2,182 2,273 2,808 425 535 495 164 37 — — — — — — — — — 3 fie equipment office fixtures and and fixtures Furniture, Furniture, HK$’000 25,255 26,824 51,974 51,974 17,810 36,102 15,872 51,974 (2,309 6,664 9,014 1,980 (471 224 665 — — — — — — ) ) vehicles HK$’000 Motor Motor 3,986 1,149 5,426 5,426 1,133 2,108 3,318 2,853 5,426 211 257 295 — — — — — — — (3 (4 ) ) Construction Construction n progress in (121,278 HK$’000 175,284 136,778 136,778 136,778 136,778 77,081 77,081 5,691 — — — — — — — — — — — — ) HK$’000 147,439 202,113 366,122 167,560 198,562 134,934 345,680 366,122 (21,078 20,442 10,438 12,505 10,886 31,095 (2,020 (2,313 (2,020 Total (474 (931 924 — ) ) ) ) ) ) 13. 2007 December 31 Notes to Financial Statements
valuation: or cost of Analysis value: book Net depreciation: Accumulated valuation: or Cost 2006 December 31 ( EQUIPMENT AND PLANT PROPERTY, ru (continued) Group t valuation At cost At 2005 December 31 At 2006 December 31 At 2006 December 31 At realignment Exchange Disposal revaluation of Write-back the during provided Depreciation 2006 January 1 At 2006 December 31 At realignment Exchange Disposal revaluation of Write-back 34) (note revaluation on Surplus Additions 2006 January 1 At year Buildings HK$’000 30,235 36,728 37,329 31,021 37,329 35,861 (1,675 (1,463 (1,675 1,468 1,810 1,107 8,339 (348 601 786 28 — ) ) ) ) improvements Leasehold Leasehold HK$’000 2,219 2,219 2,219 2,182 2,219 37 37 — — — — — — — — — — — continued fie equipment office fixtures and and fixtures Furniture, Furniture, HK$’000 14,130 18,942 26,824 26,824 17,810 11,216 26,824 (6,922 (5,434 7,726 9,014 2,832 674 400 — — — — ) ) ) vehicles HK$’000 Motor Motor 3,763 3,986 3,986 1,134 1,133 2,853 2,629 3,986 (310 133 400 151 (20 93 — — — — ) ) Construction Construction n progress in HK$’000 77,081 77,081 77,081 77,081 77,081 — — — — — — — — — — — — — HK$’000 147,439 111,578 134,934 147,439 93,830 53,726 35,861 39,095 12,505 14,631 (8,695 (1,675 (5,802 (1,675 1,914 8,339 4,830 Total 521 ) ) ) ) 65 China Wireless Technologies Limited — ANNUAL REPORT 2007 66 China Wireless Technologies Limited — ANNUAL REPORT 2007 14. 13. 2007 December 31 Notes to Financial Statements
arig mut t 1 eebr 2007 December 31 at amount Carrying 34) (note properties owner-occupied from transfer the with related surplus Revaluation 13) (note properties owner-occupied from Transfer 2007 January 1 at amount Carrying IN ( EQUIPMENT AND PLANT PROPERTY, The furniture, fixtures and office equipment and motor vehicles were stated at cost less accumulated accumulated less cost at stated were vehicles motor and equipment office depreciation. and fixtures furniture, The 2007. December 31 at as HK$865,000 of value book net historical a with Taoyuan PRC, in located is Group the of dormitory accumulated The HK$117,405,000. less approximately cost at at statements stated financial the been in Park included been Information have would Coolpad they the depreciation, at buildings office Group’s the Had reserve revaluation asset fixed the to credited been carrying has 34). then basis, (note the asset over individual amount an on revalued buildings, the the of of excess value the represented which HK$23,047,000, HK$143,647,000. of at valuers, surplus A qualified professionally of firm independent an 2007 Park, Limited, December Leung 31 Tie Information on basis Debenham use by Coolpad existing in market, open an located on revalued buildings were year, Two this completed Park. were which Information Coolpad the constructed Shenzhen newly District, and Nanshan accumulated (North), Park Industrial Hi-Tech the less at located land of piece cost a acquired Group The at HK$5,952,000 stated approximately at been statements Park financial the Cyber in Tian’an HK$13,148,000). included (2006: been the have at would they buildings depreciation, office Group’s the 34). Had (note reserve an on revaluation asset buildings, fixed the the of to value credited carrying been then has the basis, over asset amount individual revalued HK$3,775,000), the (2006: of excess HK$8,048,000 31 the of on represented surplus basis which A at use valuers, HK$16,233,000). existing qualified 2006: professionally market, December of (31 firm open an independent HK$23,913,000 an on Limited, Leung revalued Tie were Debenham by self-used, 2007 are December which units, three other The 14). (note of firm HK$19,628,000) (2006: independent an HK$28,917,000 Limited, at Leung open valuers, Tie an qualified on Debenham by revalued professionally 2007 were December units 31 Four These on total. 2007. basis in of use end units existing the seven market, at have properties Shenzhen investment Park, to Cyber transferred Tian’an were in units located Group the of buildings office The V SMN PROPERTIES ESTMENT V illage, Longzhu Avenue, Nansan District, Shenzhen, the the Shenzhen, District, Nansan Avenue, Longzhu illage, continued ) HK$’000 28,917 20,147 Group 8,770 — 15. 14. 2007 December 31 Notes to Financial Statements
granted to the Group. For the details of the Group’s interest-bearing bank borrowings, please refer to note note to refer please borrowings, statements. bank financial interest-bearing the HK$99,532,000) Group’s to the (2006: 30 of details HK$79,091,000 the to For Group. amounting the portion to granted non-current the HK$ to and amounting portion Nil) current the (2006: with loan 27,789,000 bank term long a secure to pledged was land China. leasehold Mainland The in situated is and lease term long a under held is land leasehold The portion Non-current receivables other and deposits prepayments, in included portion Current December 31 at amount Carrying realignment Exchange year the during Recognised year the during Additions January 1 at amount Carrying PAYMENTS LEASE LAND statements. PREPAID financial the to 35 note in included are details Further leases. parties operating third to under leased are properties individual investment an The reserve. buildings on revaluation 2007, the the to of December credited been in has value basis, properties asset carrying then owners-occupied from the over transferred being amount properties revalued the the upon of equipment” excess and the plant “Property, represented in and recorded 2006, was in which HK$4,564,000), basis. (2006: use HK$8,770,000 existing of market, open surplus an A on HK$28,917,000 at valuer, qualified professionally of term an firm Limited, Leung independent Tie medium Debenham by 2007 under December 31 on revalued held were properties are investment Group’s The and China Mainland in situated are leases. properties investment Group’s The IN V SMN POETE ( PROPERTIES ESTMENT continued ) HK$’000 12,155 12,453 11,875 2007 (298 (298 876 Group — ) ) HK$’000 11,597 11,875 12,130 2006 (278 (255 — — ) ) 67 China Wireless Technologies Limited — ANNUAL REPORT 2007 68 China Wireless Technologies Limited — ANNUAL REPORT 2007
16. 2007 December 31 Notes to Financial Statements
NAGBE ASSETS INTANGIBLE amortisation: Accumulated Cost: 2006 December 31 value: book Net amortisation: Accumulated Cost: 2007 December 31 value: book Net Group Group
rvdd uig h year the during Provided realignment Exchange xhne realignment Exchange Additions t 1 eebr 2007 December 31 At t 1 eebr 2007 December 31 At t Jnay 2006 January 1 At 2006 January 1 At 2007 December 31 At 2007 January 1 At realignment Exchange Additions 2007 January 1 At t 1 eebr 2006 December 31 At realignment Exchange year the during Provided t 1 eebr 2006 December 31 At 2006 December 31 At development development development development HK$’000 HK$’000 Product Product Product Product 32,067 14,598 16,268 20,399 11,668 16,268 15,708 costs 1,201 3,224 7,863 8,405 7,863 3,234 4,470 costs 581 159 560 — Patents and and Patents Patents and and Patents HK$’000 licences HK$’000 licences 37,020 11,415 24,380 16,266 20,754 10,730 13,650 10,730 24,380 17,543 1,225 9,433 7,242 3,408 6,489 591 348 80 HK$’000 HK$’000 69,087 26,013 40,648 36,665 32,422 12,657 18,593 22,055 18,593 10,476 40,648 33,251 2,426 1,172 7,878 6,489 Total Total 239 908 17. 16. 2007 December 31 Notes to Financial Statements
NEET I SUBSIDIARIES IN INTERESTS value: book Net amortisation: Accumulated Cost: 2007 December 31 ( ASSETS INTANGIBLE K137900 ae neue, neetfe ad eaal o dmn o wti oe year. one (2006: within or HK$162,983,000 demand of on repayable assets and current interest-free Company’s unsecured, the are in HK$173,709,000) included subsidiaries from due amounts values. The fair their to approximate subsidiaries in shares unlisted the of values carrying The cost at shares, Unlisted
Company t 1 eebr 2007 December 31 At t 1 eebr 2007 December 31 At 2007 January 1 At 2007 January 1 At rvdd uig h year the during Provided Additions t 1 eebr 2006 December 31 At 2007 December 31 At continued ) HK$’000 44,991 2007 Company Patents and and Patents HK$’000 licences HK$’000 44,991 2,723 7,780 7,780 5,057 3,501 4,279 1,556 2006 — 69 China Wireless Technologies Limited — ANNUAL REPORT 2007 70 China Wireless Technologies Limited — ANNUAL REPORT 2007 17. 2007 December 31 Notes to Financial Statements
NEET I SBIIRE ( SUBSIDIARIES IN INTERESTS * Tech Software Coolpad Xi’an Computer Yulong Dongguan Tech Software Coolpad Computer Yulong Inc. Tech Digital Inc. Infotech Yulong Company follows: as are subsidiaries the of Particulars **
o, Ltd.** Co., Ltd.** Co., Scientific Telecommunications Ltd.* Co., (Shenzhen) Ltd.* Co., (Shenzhen) Scientific Telecommunications hnhn uog n Seze Copd otae r rgsee a a hlyfrinond nepie udr R law. PRC under enterprises wholly-foreign-owned a as registered are Software Coolpad Shenzhen and Yulong Shenzhen ogun uog n X’n ola Sfwr ae eitrd s c-prtv jit etr udr R law. PRC under venture joint co-operative a as registered are Software Coolpad Xi’an and Yulong Dongguan PRC/Mainland PRC/Mainland PRC/Mainland PRC/Mainland PRC/Mainland operations and registration incorporation/ of Place B B V V I/Mainland I/Mainland I/Mainland China China China China China China registered share share registered RMB240,600,000 RMB240,600,000 RMB120,000,000 RMB403,000,000 continued RMB40,000,000 RMB30,700,616 riay US$10 Ordinary HK$10,000,000 Nominal value value Nominal of issued and and issued of RMB8,000,000 RMB8,000,000 fully paid-up/ paid-up/ fully Paid-up and and Paid-up US$50,000 Registered Registered Registered Registered Registered Ordinary Ordinary Paid-up Paid-up Paid-up Paid-up Paid-up capital
Percentage of equity equity of Percentage ) attributable to the the to attributable Direct Company 100 100 — — — — Indirect 100 100 100 100 — — Developing, manufacturing manufacturing Developing, holding Investment holding Investment activities Principal Research, development and and development Research, development Research, development Research equipment, handheld handheld equipment, wireless operating and eae technologies related telecommunications of sale platform service telecommunications on technologies related and terminals communications handheld of design and technologies multimedia and computer telecommunications, mobile of sale and system business data mobile and terminals communications 19. 18. 2007 December 31 Notes to Financial Statements
The above investment in an associate is indirectly held by the Company through a wholly-owned wholly-owned a associate: Group’s the of through information financial Company summarised the the illustrates table by following The held indirectly is associate an in subsidiary. investment above The Tendbloom Shenzhen iihd goods Finished progress in Work materials Raw IN Profit Revenues Liabilities Assets Company follows: as are associate the of Particulars value. fair its to approximate associate an in interest the of value carrying The cost at shares, Unlisted ASSOCIATE AN IN INTERESTS V o, Ltd. Co., Technology Information ENTORIES PRC/Mainland PRC/Mainland operations and registration incorporation/ of Place China registered share share registered RMB32,000,000 fully paid-up/ paid-up/ fully Paid-up and and Paid-up Issued and and Issued registered registered capital Percentage of equity equity of Percentage attributable to the the to attributable Direct Company — Indirect 25 rnia activities Principal Research, development and and development Research, HK$’000 HK$’000 288,686 135,989 eae technologies related telecommunications of sale 92,103 60,594 8,583 2007 2007 Group Group HK$’000 HK$’000 HK$’000 248,306 147,035 35,357 21,288 79,983 (1,026 1,539 2006 2007 2006 124 — ) 71 China Wireless Technologies Limited — ANNUAL REPORT 2007 72 China Wireless Technologies Limited — ANNUAL REPORT 2007 20. 2007 December 31 Notes to Financial Statements
h mvmns n rvso fr maret f rd rcials r a follows: as are receivables trade of impairment for provision in movements The values. fair their to approximate receivables trade of amounts carrying The Provision Less: years 2 than More years 2 to 1 months 12 to 7 months 6 to 4 months 3 Within RD RECEI TRADE (2006: HK$9,081,000). The Group does not hold any collateral or other credit enhancements over these these over enhancements HK$11,087,000 credit other of or amount collateral any carrying hold a not with does impaired Group individually HK$9,039,000) The for (2006: HK$9,081,000). provision a (2006: is HK$11,087,000 receivables of trade of receivables impairment trade for provision above the in Included 5) (note recognised losses Impairment January 1 At as is date, invoice the on based date, sheet balance the at as follows: receivables trade the of analysis aged An Trade management. senior by regularly non-interest-bearing. reviewed are are control receivables balances credit a Overdue has risk. and repayment credit receivables good minimise outstanding and to its relationship over department control business strict term maintain long to with seeks Group customers The for history. months six to four longer a to of extended term be may and credit months three generally is period credit The required. normally payment is where advance in customers, new for except credit, on mainly are customers its with terms trading Group’s The balances. V ABLES HK$’000 HK$’000 168,692 179,779 167,740 (11,087 11,087 9,081 2,006 5,367 5,720 2007 2007 141 811 Group Group ) HK$’000 HK$’000 168,047 173,767 154,148 (5,720 2,411 6,670 1,739 8,799 5,720 2,337 3,383 2006 2006 ) 21. 20. 2007 December 31 Notes to Financial Statements
Receivables that were neither past due nor impaired relate to a customer for whom there was no recent recent no was there whom for customer a to relate default. impaired of nor history due past neither were that Receivables impaired nor due past Neither follows: as is impaired be to considered not are that receivable bills the of analysis aged The months 3 Within as is date, issue the on based date, sheet balance the at as receivable bills follows: the of analysis aged An RECEI BILLS balances. does these Group over The enhancements recoverable. credit fully other considered or still collateral are a any been hold balances not not the has the and there of as quality are balances credit these Company in of the change respect of in significant directors necessary is the have impairment experience, for that past provision customers no on that independent Based opinion of Group. number the a with to record relate track impaired good a not but due past were that Receivables there whom for customers default. of of number large history a recent to no relate was impaired nor due past neither were that Receivables due past months 3 than More impaired nor due past Neither follows: as is impaired be to considered not are that receivables trade the of analysis aged The RECEI TRADE V V ABLE BE ( ABLES continued ) HK$’000 HK$’000 40,080 40,080 2007 2007 Group Group HK$’000 HK$’000 2006 2006 — — HK$’000 HK$’000 HK$’000 168,692 167,740 2007 2007 2007 Company Company 952 Group — — HK$’000 HK$’000 HK$’000 164,686 154,148 10,538 2006 2006 2006 — — 73 China Wireless Technologies Limited — ANNUAL REPORT 2007 74 China Wireless Technologies Limited — ANNUAL REPORT 2007
23. 22. 2007 December 31 Notes to Financial Statements
mut de rm directors from due Amounts Group DIRECTORS FROM/TO DUE AMOUNTS RECEI OTHER AND DEPOSITS PREPAYMENTS, r Jag Chao Jiang Mr. Deying Guo Mr. Kong Hong the of 161B Section to follows: pursuant as disclosed are Ordinance, directors, Companies from/to due amounts the of Particulars default. of history recent no was there whom for parties third and suppliers number diversified large a to of relate impaired nor due past neither were that receivables other and deposits Prepayments, impaired nor due past Neither raw impaired be to follows: of considered as not is are that purchase receivables other and the deposits prepayments, the of for analysis aged The suppliers to prepayments represented mainly materials. prepayments of balance The receivables Subsidy receivables other and Deposits Prepayments Total Xiao Yang Ms. 1 eebr 2007 December 31 HK$’000 HK$’000 194,131 144,009 194,131 46,982 3,140 HK$’000 2007 2007 Group Group 134 32 55 47 Maximum amount amount Maximum V HK$’000 HK$’000 308,891 243,512 308,891 ABLES 65,379 2006 2006 uig 2007 during outstanding outstanding — HK$’000 161 512 911 HK$’000 HK$’000
2007 2007 Company Company 26 26 26 — — Jnay 2007 January 1 HK$’000 HK$’000 HK$’000 2006 2006 591 591 11 11 11 — — — —
24. 23. 2007 December 31 Notes to Financial Statements
u t a eae cmay a fly ete i Mrh 2007. March in settled fully was company related a to amount The due repayment. of terms fixed no had payable and charge interest-free rental unsecured, a was which represented facilities, mainly warehouse 2006 for December 31 at as company related a to due balance The COMPANY RELATED A TO DUE The 2008. trips. March in business settled for fully directors and to interest-free granted unsecured, advances were amounts represented mainly directors from due amounts The Deying Guo Mr. Xiao Yang Ms. DIRECTORS FROM/TO DUE AMOUNTS mut de o director a to due Amounts Company mut de o director a to due Amounts (continued) Group 1 eebr 2007 December 31 1 eebr 2007 December 31 HK$’000 HK$’000 — — Maximum amount amount Maximum Maximum amount amount Maximum uig 2007 during outstanding outstanding uig 2007 during outstanding outstanding HK$’000 HK$’000 1,390 —
Jnay 2007 January 1 Jnay 2007 January 1 HK$’000 HK$’000 1,390 17 75 China Wireless Technologies Limited — ANNUAL REPORT 2007 76 China Wireless Technologies Limited — ANNUAL REPORT 2007 26. 25. 2007 December 31 Notes to Financial Statements
mut o te ah n cs euvlns n te lde dpst apoiae o hi fi values. fair their to approximate carrying deposits The pledged cash rates. the immediate and deposit time the equivalents term cash on and short cash depending respective the the months of at amounts three interest and earn and day Group, one deposits the time of between term of requirements Short rates. periods deposit varying bank daily for on made based are rates floating at interest earns banks at Cash foreign for business. RMB exchange exchange foreign to conduct to permitted is authorised Group banks the through Settlement, currencies Regulations, of Exchange Foreign Administration of and Payment Regulations and Control Sale currencies, Exchange other Foreign into China’s (“RMB”) convertible Mainland freely Renminbi not in under is however, denominated RMB Group HK$120,874,000). the of (2006: equivalents HK$60,831,000 to cash and amounted cash the 2007, December 31 at As equivalents cash and Cash deposits: time Pledged Less: deposits Time balances bank and Cash AH N CS EQUI CASH AND CASH ASSOCIATE AN TO DUE h aon de o n soit ws ul stld n ac 2008. March in settled fully demand. was on associate repayable an and to interest-free due unsecured, amount nature, The in non-trade is associate an to due balance The lde fr etr o credit of letters for Pledged payable bills for Pledged V LNS N PEGD DEPOSITS PLEDGED AND ALENTS HK$’000 120,426 (29,204 (19,543 34,336 86,090 91,222 (9,661 2007 Group ) ) ) HK$’000 128,252 (44,813 (39,813 44,813 83,439 83,439 (5,000 2006 ) ) ) HK$’000 (15,001 (15,001 34,245 20,134 14,111 19,244 2007 Company — ) ) HK$’000 (5,000 (5,000 7,255 5,000 2,255 2,255 2006 — ) ) 29. 28. 27. 2007 December 31 Notes to Financial Statements
te pybe ad cras r nnitrs-ern ad ae n vrg tr o tre months. three of term average an have and non-interest-bearing are accruals and payables Other Accruals payables Other ACCRUALS AND PAYABLES OTHER months 6 to 4 months 3 Within as is date, issue the on based date, sheet balance the at as payable bills the follows: of analysis aged An PAYABLE BILLS terms. 30-day on settled normally are and non-interest-bearing are payables trade The year 1 than More months 12 to 7 months 6 to 4 months 3 Within as is date, invoice the on based date, sheet balance the at as payables follows: trade the of analysis aged An PAYABLES TRADE Notes (a) HK$’000 HK$’000 157,355 137,170 36,431 36,431 20,185 2007 2007 Group Group — HK$’000 HK$’000 189,096 179,757 85,963 39,813 46,150 9,339 2006 2006 HK$’000 HK$’000 HK$’000 87,879 73,406 9,388 4,156 2007 2007 2007 Company Company 929 295 295 Group — — — — HK$’000 HK$’000 HK$’000 61,089 56,788 1,680 2,069 5,121 5,121 2006 2006 2006 552 85 85 — — 77 China Wireless Technologies Limited — ANNUAL REPORT 2007 78 China Wireless Technologies Limited — ANNUAL REPORT 2007 30. 29. 2007 December 31 Notes to Financial Statements
NEETBAIG AK N OHR BORROWINGS OTHER AND BANK INTEREST-BEARING ( ACCRUALS AND PAYABLES OTHER ak on secured — loan Bank Non-current year one within repayable wholly unsecured borrowing, — Other year one within repayable wholly secured loans, — Bank year one within repayable wholly loans, Bank Current (a) ak on wol rpybe ihn n ya — secured — year one within repayable wholly loan, Bank Current
volumes and past experience of the level of repairs and returns. The estimation basis is reviewed on on reviewed is appropriate. basis where estimation revised The and basis returns. and ongoing sales an repairs on of based level the estimated of is experience warranties the past for and provision volumes the of amount products The faulty which replaced. under or products, repaired its are on customers its to warranties one-year provides Group The 2007 December 31 At realignment Exchange year the during utilised Amounts provision Additional 2007 January 1 At h mvmns n rdc wrat poiin r a follows: as are provision warranty product in movements The continued Notes (d)-(g) (a)-(c) Note (c) (h) (i) ) HK$’000 HK$’000 266,692 187,601 112,224 71,102 79,091 2,750 4,275 2007 2007 Company Group HK$’000 HK$’000 HK$’000 236,983 137,451 (18,938 24,961 Group 71,663 65,788 99,532 6,069 7,064 1,041 2006 2006 — — ) 30. 2007 December 31 Notes to Financial Statements
(i) (h) (g) (f) (e) (d) (c) (b) The directors estimate that the fair values of the Group’s borrowings by discounting their future cash flows flows amounts. cash carrying future their their to discounting approximate by rate borrowings market Group’s the the at of values fair the that estimate directors The (a) borrowings. following the represented 2007 December 31 at as loans bank The Notes: ( BORROWINGS OTHER AND BANK INTEREST-BEARING
The Group’s bank loan of HK$10,688,000 (equivalent to RMB10,000,000) which is guaranteed by the Company, bears interest at at interest bears Company, the by guaranteed is which RMB10,000,000) to (equivalent HK$10,688,000 of loan bank Group’s The year. one within repayable need is businesses loan medium Such and borrowers. small other when or guarantor banks a from as support acts which financial guaranteed Centre is Guarantee which 7.29%, Business of Medium rate and interest Small annual an Shenzhen at by RMB20,000,000) to (equivalent HK$21,376,000 of loan months. bank Group’s six The within repayable is and 6.03% of rate Guo Mr. annual an directors, Group’s at the interest by bears guaranteed Chao, is Jiang Mr. which and RMB20,000,000), Deying to (equivalent HK$21,376,000 of loan bank Group’s The year. interest one bears repayable Company, is the and by 6.57% to guaranteed 6.12% is of from which ranging deposits rates RMB55,000,000), annual to at time (equivalent pledged HK$58,784,000 of by days. loans 120 bank within secured Group’s The repayable is is and 6.56% which of rate annual USD$353,000), at interest to bears facility, (equivalent credit of letter HK$2,750,000 a under of HK$3,000,000 loan days. bank 120 within Company’s repayable is The and 7.47% to 7.39% from ranging rates annual at interest bears facility, credit of letter a HK$3,555,000 of under deposits time pledged by secured is which US$5,195,000), to (equivalent HK$40,563,000 of loan bank Group’s The at 15). (note interest year. bears one 2007, within December repayable 31 is at and as 6.9% HK$12,155,000 of rate approximately of annual an value book net a with land leasehold Group’s the by eid wl b ajse bsd n h bnhak neet ae eemnd y h Pol’ Bn o China. of Bank People’s repayment the above by the determined during rate loan interest bank benchmark term the long on the based of adjusted rate be interest will The December periods 31 2011. on due December 31 RMB24,000,000 on 2009, due December 31 RMB22,000,000 on portion and due current 2010 the RMB28,000,000 in 2008, date (included December 31 repayable RMB26,000,000 on first i.e., due the loan) instalments, before bank four 6.48% the in of of and repayable rate is 2007 interest loan bank annual December Such an 31 to 2008. at December subject as 31 is is Group HK$12,155,000 which The 15). approximately (note which of rate value 74,000,000), floating book a RMB at net to interest a (equivalent bears with land HK$79,091,000 to leasehold Group’s amounting the loan by bank secured term is long a of portion non-current Group’s The year. one within repayable is and project 858 Coolpad Group’s for support Bureau Technology finance and High a Science as District Shenzhen Futian by Shenzhen by guaranteed released is was loan and Such free Limited. interest Co., is Guarantee which Investment Technology RMB4,000,000) to (equivalent HK$4,275,000 of loan bank Group’s The months. six within repayable is and 6.48% of rate annual an The Group’s current portion of a long term bank loan amounting to HK$27,789,000 (equivalent to RMB26,000,000), which is secured secured is which RMB26,000,000), to (equivalent HK$27,789,000 to amounting loan bank term long a of portion current Group’s The continued ) 79 China Wireless Technologies Limited — ANNUAL REPORT 2007 80 China Wireless Technologies Limited — ANNUAL REPORT 2007 32. 31. 2007 December 31 Notes to Financial Statements
HR CAPITAL SHARE paid: fully and Issued Authorised: recognised. were assets tax deferred no offset to Therefore, profit credits. taxable tax future unused generating in the ability against management the that The has Yulong utilised. probable Shenzhen 2012. be is whether can sure it in credits not tax is that expired Group unused extent the the of be the which to against will credits available which be tax will unused year profit the taxable current for future the recognised be in should HK$85,460,000 assets tax of Deferred losses tax had Yulong Shenzhen 2007 December 31 At 34) (note differences year Exchange the during equity to debited tax Deferred 2006 January 1 At Group 2007 December 31 At 34) (note differences year Exchange the during equity to debited tax Deferred 2007 January 1 At Group EERD TAX DEFERRED h mvmns n eerd a laiiis uig h ya ae s follows: as are year the during liabilities tax deferred in movements The 2,022,976,000 (2006: 1,994,240,000 (restated)) ordinary shares of of shares ordinary (restated)) 1,994,240,000 (2006: 2,022,976,000 of shares ordinary (restated)) 4,000,000,000 (2006: 4,000,000,000 K00 each HK$0.01 each HK$0.01 HK$’000 20,230 40,000 2007 f buildings of buildings of Revaluation Revaluation Revaluation HK$’000 HK$’000 Restated HK$’000 11,992 19,942 40,000 8,334 3,407 3,407 1,300 2,035 2006 251 72 32. 2007 December 31 Notes to Financial Statements
(g) (f) (e) (d) (c) (b) (a) follows: as were capital share issued in movements the year, the During ( CAPITAL SHARE
HK$0.4615 per share, resulting in the issue of 24,000 shares for a total cash consideration, before before consideration, cash total a for shares 24,000 HK$11,076. of of of issue price expenses, the subscription in the at resulting exercised share, were per options HK$0.4615 share 24,000 to attached rights subscription The before consideration, cash total a for shares 840,000 HK$365,400. of of issue expenses, the of in price resulting subscription the share, at per exercised were HK$0.435 options share 840,000 to attached rights subscription The before consideration, cash total a for HK$2,078,596. shares of 2,252,000 expenses, of issue the in resulting of share, price per subscription the HK$0.923 at exercised were options share 2,252,000 to attached rights subscription The before consideration, cash total a for HK$5,700,448. shares of 3,088,000 expenses, of issue the in resulting of share, price per subscription the HK$1.846 at exercised were options share 3,088,000 to attached rights subscription The before consideration, cash total HK$2,213,280. a for of shares expenses, 2,544,000 of issue the in resulting share, per HK$0.87 of approved by the shareholders at the special general meeting of the Company held on 8 October October 8 on held Company the of meeting general special were the 2007. which at 2007, October 8 shareholders on the held issue by in share approved ordinary one for share bonus one of basis the on shareholders existing then the by held shares ordinary the for granted were 2007. shares bonus May 1,011,476,000 26 on held Company the of meeting general annual the at approved were shareholders which the 2007, May by 22 on issue in share ordinary one for share shareholders bonus one existing of then basis the the by on held shares ordinary the for granted were shares bonus 504,192,000 The subscription rights attached to 2,544,000 share options were exercised at the subscription price price subscription the at exercised were options share 2,544,000 to attached rights subscription The continued ) 81 China Wireless Technologies Limited — ANNUAL REPORT 2007 82 China Wireless Technologies Limited — ANNUAL REPORT 2007 32. 2007 December 31 Notes to Financial Statements
HR CPTL ( CAPITAL SHARE n oe 3 o h fnnil statements. financial included are the scheme to the 33 under note issued in options share the and scheme option share Company’s the of Details 2007 December 31 At issued shares Bonus options share from Transfer exercised options Share and 2006 December 31 At expenses issue Share issue New options share from Transfer exercised options Share 2006 January 1 At Company’s the in movements above follows: the as to is reference capital share with ordinary year issued the during transactions the of summary A reserve 2007 January 1 reserve continued
f ad (g) and (f) a t (e) to (a) Notes ) 2,022,976,000 1,515,668,000 449,000,000 498,560,000 Number of of Number 40,000,000 shares in in shares 9,560,000 8,748,000 issue — — — HK$’000 capital Issued Issued 20,230 15,157 share share 4,490 4,986 400 96 87 — — — nt 34) (note premium premium account account HK$’000 141,758 194,758 196,621 (15,157 48,400 10,282 Share Share (2,768 1,859 7,372 3,012
) ) HK$’000 146,248 214,988 201,607 48,800 10,369 (2,768 1,859 7,468 3,012 Total — ) 33. 2007 December 31 Notes to Financial Statements
of the Group at an exercise price of HK$2.83 (adjusted upon completion of the second bonus issue: issue: bonus second the of (i) below: completion detailed out upon set manner (adjusted the in HK$2.83 exercisable of are which price share, per exercise HK$1.415) an at Group the employees of certain to granted were shares 19,676,000 of subscription the for options 2007, September 18 On shares follows: 19,676,000 as of Scheme, aggregate Option an Share the of of subscription terms the the to for pursuant options granted Company the year, the During Company. the of shares the for of subscribe customers to or options suppliers granted be advisers, may consultants, Group) the employees, (including participants of classes certain 2004, November 21 on Company the by adopted Scheme”) Option “Share (the scheme option share the to Pursuant SCHEME OPTION SHARE
(d) (c) (b) (a) grantees: the of each by exercisable are options such each, as for options to subscribe for 1,500,000 shares held by three grantees of options for 500,000 shares shares 500,000 for options of grantees three by held shares 1,500,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling date grant; the the period of the including) acceptance of not during date (but time the from to any up at anniversary shares, anniversary 124,000 fourth last the the from for commencing subscribe to options fifth of the respect in on falling date the grant; the including) of not acceptance of (but date to the from up period anniversary the anniversary during time third any the at shares, from 124,000 further commencing the for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date the not from (but period to anniversary the up during time anniversary any second at the shares, from 124,000 further commencing the for fifth subscribe to the options of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 128,000 shares, at any time during the period period the during time any at shares, 128,000 first the for subscribe to options of respect in 83 China Wireless Technologies Limited — ANNUAL REPORT 2007 84 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE (ii) (iii)
(d) (c) (b) exercisable are options such grantee, one by held shares 1,000,000 for subscribe to options for as (d) (c) (b) (a) grantee: the by (a) grantees: the of each by exercisable are options such each, as for options to subscribe for 1,400,000 shares held by seven grantees of options for 200,000 shares shares 200,000 for options of grantees seven by held shares 1,400,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling date grant; the the period of the including) acceptance of not during date (but time the from to any up at anniversary shares, anniversary 248,000 fourth last the the from for commencing subscribe to options fifth of the respect in on falling date the grant; the including) of not acceptance of (but date to the from up period anniversary the anniversary during time third any the at shares, from 248,000 further commencing the for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date the not from (but period to anniversary the up during time anniversary any second at the shares, from 248,000 further commencing the for fifth subscribe to the options of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 48,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 48,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 52,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 256,000 shares, at any time during the period period the during time any at shares, 256,000 first the for subscribe to options of respect in period the during time any at shares, 52,000 first the for subscribe to options of respect in continued ) 33. 2007 December 31 Notes to Financial Statements
(iv) ( SCHEME OPTION SHARE (v)
(d) (c) (b) (d) (c) (b) (a) grantees: the of each by exercisable are options such each, (a) grantee: the by as for options to subscribe for 4,000,000 shares held by one grantee, such options are exercisable exercisable are options such grantee, one by held shares 4,000,000 for subscribe to options for as as for options to subscribe for 4,320,000 shares held by 90 grantees of options for 48,000 shares shares 48,000 for options of grantees 90 by held shares 4,320,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 12,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 12,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 12,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fifth the on falling date grant; the the of including) acceptance of not date period (but the the from to during up anniversary time any anniversary at fourth shares, the 1,000,000 from last the commencing for subscribe to options fifth of the respect in on falling date the grant; the including) of not acceptance of (but date to the from up anniversary anniversary third period the the during from time any at commencing shares, 1,000,000 further the for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date the not from (but to anniversary up anniversary period second the the during time from any at commencing shares, 1,000,000 further the fifth for subscribe the to options on of respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 12,000 shares, at any time during the period period the during time any at shares, 12,000 first the for subscribe to options of respect in period the during time any at shares, 1,000,000 first the for subscribe to options of respect in continued ) 85 China Wireless Technologies Limited — ANNUAL REPORT 2007 86 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE (vi) (vii)
(d) (c) (b) shares 300,000 for options of grantees four by held shares 1,200,000 for subscribe to options for as (d) (c) (b) (a) grantees: the of each by exercisable are options such each, (a) grantees: the of each by exercisable are options such each, as for options to subscribe for 3,936,000 shares held by 41 grantees of options for 96,000 shares shares 96,000 for options of grantees 41 by held shares 3,936,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 72,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 76,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 76,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 24,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 24,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 24,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 76,000 shares, at any time during the period period the during time any at shares, 76,000 first the for subscribe to options of respect in period the during time any at shares, 24,000 first the for subscribe to options of respect in continued ) 33. 2007 December 31 Notes to Financial Statements
(viii) ( SCHEME OPTION SHARE (ix)
as for options to subscribe for 248,000 shares held by one grantee, they are exercisable by the the by exercisable are they grantee, one by held shares 248,000 for subscribe to options for as (d) (c) (b) (d) (c) (b) (a) grantee: (a) grantee: as for options to subscribe for 152,000 shares held by one grantee, they are exercisable by the the by exercisable are they grantee, one by held shares 152,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 36,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 36,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 40,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 60,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 60,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 64,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 40,000 shares, at any time during the period period the during time any at shares, 40,000 first the for subscribe to options of respect in period the during time any at shares, 64,000 first the for subscribe to options of respect in continued ) 87 China Wireless Technologies Limited — ANNUAL REPORT 2007 88 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 1 eebr 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE share at 18 September 2007, being the date immediately before the date the options were granted, was was granted, were HK$1.415). issue: options per bonus the price second date the closing the of The before completion grant. upon immediately the (adjusted date of the HK$2.83 being acceptance 2007, upon September grantee 18 the at by share payable is HK$1 of consideration A (x) (xi)
(d) (c) (b) (d) (c) (b) (a) grantees: the of each by exercisable are options such each, (a) grantees: the of each by exercisable are options such each, as for options to subscribe for 1,728,000 shares held by nine grantees of options for 192,000 shares shares 192,000 for options of grantees nine by held shares 1,728,000 for subscribe to options for as as for options to subscribe for 192,000 shares held by two grantees of options for 96,000 shares shares 96,000 for options of grantees two by held shares 192,000 for subscribe to options for as
in respect of options to subscribe for the last 24,000 shares, at any time during the period period grant; the seventh the the of during on acceptance time falling of date any date the the at including) from not shares, anniversary (but to 24,000 up last anniversary the sixth the for from commencing subscribe to options of respect in seventh the grant; on the of falling date acceptance of the date period including) the the not from during (but anniversary time to up any at anniversary shares, fifth 24,000 the from further the commencing for subscribe to options of respect in grant; the of acceptance seventh the of on date period falling the the date from the during including) anniversary time not any (but to at up shares, anniversary 24,000 fourth the further from the commencing for subscribe to options of respect in grant; seventh the the of on acceptance falling of date date the the including) from not anniversary (but to up anniversary third the from commencing period grant; the seventh the the of during on acceptance time falling of date any date the the at including) from not shares, anniversary (but to 48,000 up last anniversary the sixth the for from commencing subscribe to options of respect in seventh the grant; on the of falling date acceptance of the date period including) the the not from during (but anniversary time to up any at anniversary shares, fifth 48,000 the from further the commencing for subscribe to options of respect in grant; the of acceptance seventh the of on date period falling the the date from the during including) anniversary time not any (but to at up shares, anniversary 48,000 fourth the further from the commencing for subscribe to options of respect in grant; seventh the the of on acceptance falling of date date the the including) from not anniversary (but to up anniversary third the from commencing in respect of options to subscribe for the first 24,000 shares, at any time during the period period the during time any at shares, 24,000 first the for subscribe to options of respect in period the during time any at shares, 48,000 first the for subscribe to options of respect in continued ) 33. 2007 December 31 Notes to Financial Statements
(i) detailed out set manner the of in exercisable employees are certain which below: to share, per granted HK$1.846 were of shares price exercise 14,752,000 an at of Group the subscription the for options 2006, July 27 On ( SCHEME OPTION SHARE (ii)
(d) (c) (b) (d) (c) (b) (a) in respect of options to subscribe for the first 500,000 shares, at any time during the period period the during time any at shares, 500,000 first the for subscribe to options of respect in (a) grantees: the of each by exercisable are options such each, (a) grantees: the of each by exercisable are options such each, as for options to subscribe for 4,000,000 shares held by two grantees of options for 2,000,000 shares shares 2,000,000 for options of grantees two by held shares 4,000,000 for subscribe to options for as as for options to subscribe for 1,488,000 shares held by three grantees of options for 496,000 shares shares 496,000 for options of grantees three by held shares 1,488,000 for subscribe to options for as
commencing from the third anniversary up to (but not including) the date falling on the fourth fourth the on grant; falling the date period of the the acceptance of including) during date not time the (but from any to at anniversary up shares, anniversary 124,000 third last the the from for commencing subscribe to options of respect in grant; the of fourth acceptance the on of falling date date the the from including) period anniversary not the (but during to time up any anniversary at second shares, the from 124,000 further commencing the for subscribe to options of respect in fourth the on falling grant; date the the of including) acceptance of not date (but the from to period up anniversary the during anniversary time first any at the shares, from 124,000 further commencing the for subscribe to options of respect in falling date the including) thereof; not (but anniversary to fourth up the grant on the of acceptance of date the from commencing fourth the on grant; falling the date period of the the acceptance of including) during date not time the (but from any to at anniversary up shares, anniversary 500,000 third last the the from for commencing subscribe to options of respect in grant; the of fourth acceptance the on of falling date date the the from including) period anniversary not the (but during to time up any anniversary at second shares, the from 500,000 further commencing the for subscribe to options of respect in fourth the on falling grant; date the the of including) acceptance of not date (but the from to period up anniversary the during anniversary time first any at the shares, from 500,000 further commencing the for subscribe to options of respect in falling date the including) thereof; not (but anniversary to fourth up the grant on the of acceptance of date the from commencing in respect of options to subscribe for the first 124,000 shares, at any time during the period period the during time any at shares, 124,000 first the for subscribe to options of respect in continued ) 89 China Wireless Technologies Limited — ANNUAL REPORT 2007 90 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 1 eebr 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE (iii) (iv)
as for options to subscribe for 2,496,000 shares held by 13 grantees of options for 192,000 shares shares 192,000 for options of grantees 13 by held shares 2,496,000 for subscribe to options for as (d) (c) (b) (h) (g) (f) (a) grantees: the of each by exercisable are options such each, (e) grantees: the of each by exercisable are options such each, as for options to subscribe for 4,608,000 shares held by 48 grantees of options for 96,000 shares shares 96,000 for options of grantees 48 by held shares 4,608,000 for subscribe to options for as
commencing from the third anniversary up to (but not including) the date falling on the fourth fourth the on period grant; falling the the date of during the acceptance time of including) any date not the at (but from to shares, anniversary up 24,000 anniversary last third the the for from commencing subscribe to options of respect in grant; the of fourth acceptance the on of falling date period date the the the from during including) anniversary not time (but any to at up shares, anniversary 24,000 second the further from the commencing for subscribe to options of respect in fourth the on falling grant; date the the of including) acceptance of not date period (but the the from to during up anniversary time any anniversary at first shares, the 24,000 from further the commencing for subscribe to options of respect in falling date the including) thereof; not (but anniversary to fourth up the grant on the of acceptance of date the from commencing fourth the on period grant; falling the the date of during the acceptance time of including) any date not the at (but from to shares, anniversary up 48,000 anniversary last third the the for from commencing subscribe to options of respect in grant; the of fourth acceptance the on of falling date date the the from including) anniversary not (but to up anniversary second the from commencing fourth the on falling grant; date the the of including) acceptance of not date (but the from to up anniversary anniversary first the from commencing falling date the including) thereof; not (but anniversary to fourth up the grant on the of acceptance of date the from commencing in respect of options to subscribe for the further 48,000 shares, at any time during the period period the during time any at shares, 48,000 further the for subscribe to options of respect in period the during time any at shares, 48,000 further the for subscribe to options of respect in in respect of options to subscribe for the first 24,000 shares, at any time during the period period the during time any at shares, 24,000 first the for subscribe to options of respect in period the during time any at shares, 48,000 first the for subscribe to options of respect in continued ) 33. 2007 December 31 Notes to Financial Statements
(v) ( SCHEME OPTION SHARE (vi)
(d) (c) (b) (d) (c) (b) (a) grantees: the of each by exercisable are options such each, (a) grantees: the of each by exercisable are options such as for options to subscribe for 960,000 shares held by 20 grantees of options for 48,000 shares each, each, shares 48,000 for options of grantees 20 by held shares 960,000 for subscribe to options for as as for options to subscribe for 768,000 shares held by four grantees of options for 192,000 shares shares 192,000 for options of grantees four by held shares 768,000 for subscribe to options for as
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 48,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 48,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 48,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fourth the on period grant; falling the the date of during the acceptance time of including) any date not the at (but from to shares, anniversary up 12,000 anniversary last third the the for from commencing subscribe to options of respect in grant; the of fourth acceptance the on of falling date period date the the the from during including) anniversary not time (but any to at up shares, anniversary 12,000 second the further from the commencing for subscribe to options of respect in fourth the on falling grant; date the the of including) acceptance of not date period (but the the from to during up anniversary time any anniversary at first shares, the 12,000 from further the commencing for subscribe to options of respect in falling date the including) thereof; not (but anniversary to fourth up the grant on the of acceptance of date the from commencing in respect of options to subscribe for the first 48,000 shares, at any time during the period period the during time any at shares, 48,000 first the for subscribe to options of respect in period the during time any at shares, 12,000 first the for subscribe to options of respect in continued ) 91 China Wireless Technologies Limited — ANNUAL REPORT 2007 92 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 1 eebr 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE t 6 uy 06 big h dt imdaey eoe h dt te pin wr gatd ws HK$1.83. was granted, were options the date the before immediately date the being share 2006, per price July closing 26 The at grant. the of acceptance upon grantee the by payable is HK$1 of consideration A (vii) (viii)
as for options to subscribe for 384,000 shares held by four grantees of options for 96,000 shares shares 96,000 for options of grantees four by held shares 384,000 for subscribe to options for as (d) (c) (b) the by exercisable are they grantee, one by held shares 48,000 for subscribe to options for as (d) (c) (b) (a) grantee: (a) grantees: the of each by exercisable are options such each,
commencing from the fourth anniversary up to (but not including) the date falling on the fifth fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 12,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 12,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 12,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing fifth the on falling period date grant; the the the of during including) acceptance time of not any date (but the at from to shares, up anniversary 24,000 anniversary last fourth the the for from commencing subscribe to options of fifth respect the in on falling date the grant; the including) of not acceptance of (but date period to the the from up during anniversary time anniversary any at third shares, the 24,000 from further the commencing for subscribe to options of respect in fifth the on grant; the falling of date acceptance the of including) date period the not the from (but during to anniversary time up any at anniversary shares, second 24,000 the from further the commencing for subscribe fifth to options the of on respect in falling date the grant; including) the of not acceptance (but of date to the up from anniversary anniversary first the from commencing in respect of options to subscribe for the first 12,000 shares, at any time during the period period the during time any at shares, 12,000 first the for subscribe to options of respect in period the during time any at shares, 24,000 first the for subscribe to options of respect in continued ) 33. 2007 December 31 Notes to Financial Statements
(c) (b) During the year 2005, the Company granted options for the subscription of an aggregate of 40,000,000 (a) 40,000,000 of follows: aggregate as an Scheme, of Option Share subscription the the of terms for the options to pursuant granted shares Company the 2005, year the During ( SCHEME OPTION SHARE
(i) in exercisable are which to share, per granted below: were HK$0.87 detailed of shares as price manner 10,000,000 exercise the an of at subscription Group the the of for employees subscribe certain to options 2005, June 20 on immediately date HK$0.70. the was being granted, 2005, were June options 3 upon the at date as grantee the share the per before by price payable is closing The HK$1 of grant. the consideration of A acceptance share. per HK$0.70 of price thereof anniversary exercise third an the on at falling date the including) not (but to up grant the of the from acceptance of commencing date period the during exercisable are which Group the of consultants certain and to granted employees were shares 20,000,000 of subscription the for subscribe to immediately options 2005, June 6 date on the being 2005, June HK$0.69; was 1 granted, at were share options per upon the date grantee price the the before closing by payable The is thereof grant. HK$1 of anniversary the second of consideration the A acceptance on share. per falling HK$0.70 date of the price of including) exercise date an not the at (but from to commencing up period grant the the during of exercisable acceptance are which Group the of consultants and on 2 June 2005, options for the subscription of 10,000,000 shares were granted to certain employees employees certain to granted were shares 10,000,000 of subscription the for options 2005, June 2 on
(d) (c) (b) (a) grantees: the of each by exercisable are options such each, shares as for options to subscribe for 1,000,000 shares held by two grantees of options for 500,000 500,000 for options of grantees two by held shares 1,000,000 for subscribe to options for as
h fut anvray rm h dt o acpac o te grant; the of the acceptance during of on date time falling the date any from the at including) anniversary not fourth shares, (but the to 124,000 up last anniversary third the the from for commencing subscribe period to options of respect in and grant; the of acceptance of falling date date the the from including) anniversary the not fourth (but during the to on time up any anniversary at second shares, the 124,000 from further commencing the period for subscribe to options of respect in grant; the of on acceptance falling of date date the the from including) not the anniversary (but during fourth to the time up any anniversary at first shares, the 124,000 from further commencing the period for subscribe to options of respect in date the including) thereof; not (but anniversary to fourth up the grant on the falling of acceptance of date the from commencing in respect of options to subscribe for the first 128,000 shares, at any time during the period period the during time any at shares, 128,000 first the for subscribe to options of respect in continued ) 93 China Wireless Technologies Limited — ANNUAL REPORT 2007 94 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE Exercised after the issue of second second of issue the after Exercised shares bonus second of Issue year the during Granted second of issue the before Exercised shares bonus first of Issue first of issue the before Exercised January 1 At year: the during Scheme Option Share the under outstanding were options HK$0.89. share was following granted, The were options the date the before immediately date the being share 2005, per price June closing 17 The at grant. the of acceptance upon grantee the by payable is HK$1 of consideration A t 1 December 31 At ou shares bonus shares bonus ou shares bonus (ii) (iii)
as for options to subscribe for 4,000,000 shares, exercisable during the period commencing commencing period the during exercisable shares, 4,000,000 for subscribe to options for as (d) (c) (b) from the date of acceptance of the grant up to (but not including) the date falling on the third third the on falling date the including) not (but to up thereof. grant the anniversary of acceptance of date the from (a) grantees: the of each by exercisable are options such each, shares as for options to subscribe for 5,000,000 shares held by 25 grantees of options for 200,000 200,000 for options of grantees 25 by held shares 5,000,000 for subscribe to options for as
commencing from the third anniversary up to (but not including) the date falling on the the on falling and date grant; the the of including) acceptance of not date (but the from to up anniversary fourth anniversary period the third during the time any from at shares, 48,000 commencing last the for subscribe to options of respect in and grant; the of acceptance falling of the date date during the the from time including) not any anniversary (but at fourth to the shares, up on 48,000 anniversary second further the the from for commencing period subscribe to options of respect in grant; the on of falling acceptance the date of the during date the including) time from not any (but anniversary at to fourth up shares, the anniversary 52,000 first further the the from for commencing period subscribe to options of respect in date the including) not thereof; (but to anniversary up fourth grant the the on of falling acceptance of date the from commencing in respect of options to subscribe for the first 52,000 shares, at any time during the period period the during time any at shares, 52,000 first the for subscribe to options of respect in continued xrie price exercise e share per Weighted Weighted average average 0.4615 0.569 1.415 0.790 1.405 1.193 HK$ ) 2007 — — Number of of Number 155,384 options (3,092) (5,632) 77,704 19,676 30,560 36,192 ‘000 (24) xrie price exercise e share per Weighted Weighted 0.29825 0.19525 0.18875 06 (Restated) 2006 average average 0.4615 HK$ — — — — Number of of Number 144,768 124,000 (38,240 options 59,008 ‘000 — — — — ) 33. 2007 December 31 Notes to Financial Statements
The fair value of the share options granted during the year was HK$26,938,135, of which the Group Group the which of HK$26,938,135, 2007. December was 31 ended year year the the during during HK$7,007,000 of granted expense options option share share a recognised the of value fair The * (Restated) 2006 date 2007 sheet balance that at as outstanding options share the follows: as of are periods exercise and prices exercise The was year the during exercised options share for exercise HK$0.195). of (2006: date HK$0.36 the at price share average weighted The ( SCHEME OPTION SHARE ubr f options of Number
ubr f options of Number opn’ sae capital. share Company’s The exercise price of the share options is subject to adjustment in case of rights or bonus issues, or other similar changes in the the in changes similar other or issues, bonus or rights of case in adjustment to subject is options share the of price exercise The 144,768 155,384 54,208 21,760 64,000 11,840 27,512 37,712 64,000 4,800 4,416 9,904 ‘000 ‘000 continued xrie price* Exercise xrie price* Exercise ) e share per e share per 0.4615 0.4615 0.2175 0.2175 0.4615 0.4615 0.175 0.175 1.415 1.415 HK$ HK$ 70–7 o 26–07–11 to 27–07–07 26–07–10 to 27–07–06 27–06–09 to 28–06–05 06–06–08 to 07–06–05 period Exercise 80–5 o 27–06–09 to 28–06–05 06–06–08 to 07–06–05 period Exercise 80–0 o 17–09–14 to 18–09–10 17–09–12 to 18–09–08 26–07–11 to 27–07–07 26–07–10 to 27–07–06 95 China Wireless Technologies Limited — ANNUAL REPORT 2007 96 China Wireless Technologies Limited — ANNUAL REPORT 2007 33. 2007 December 31 Notes to Financial Statements
HR OTO SHM ( SCHEME OPTION SHARE At the date of approval of these financial statements, the Company had 155,384,000 share options options share Company’s 155,384,000 the had of 7.68% Company date. approximately that the at represented as statements, issue which in Scheme, shares financial Option these Share the of under approval outstanding of date the At expenses). issue (before additional HK$86,925,000 of and premium Company of share the and structure of shares capital HK$1,553,840 ordinary of present capital additional the share 155,384,000 under of would, issue options the in share result remaining Company, the the of full in exercise Option Share The the under Scheme. outstanding options share 155,384,000 had Company the date, sheet balance the At statements. financial issue the to (before 32 HK$10,282,000 note of in premium shares detailed share ordinary further and as 8,748,000 HK$87,480 expenses), of of issue capital the share in new and resulted Company year the the of during exercised options share 8,748,000 value. fair The of measurement the into incorporated was granted options the of feature other No outcome. the actual of the be indicative necessarily not volatility necessarily also historical may not the which is that trends, and assumption future the of data reflects indicative historical is volatility the expected The on occur. may based that is patterns options exercise the of life expected The (HK$) price share average Weighted (year) options of life Expected (%) rate interest Risk-free (%) volatility Historical (%) volatility Expected (HK$) yield Dividend used: model the conditions to and inputs terms the the lists account table into following The taking granted. options, were the options of binomial the external grant the which of an upon using date by the HK$26,938,135 at calculated at as was model Limited, year pricing Surveyors the option during (Asia-Pacific) LCH granted valuer, options qualified share professionally equity-settled the of value fair The continued ) .9 t 4.123 to 3.898 0.015 to 0.005 t 6.5 to 3 1.415 65.85 65.85 2007 .05 o 0.005 to 0.0025 .3 o 4.51 to 4.33 t 4 to 2 0.195 56.94 56.94 2006 t 1 eebr 2007 December 31 At 2007 final Proposed the between Difference dividend 2007 Interim reserves Statutory realignment Exchange year the for Profit share Equity—settled on tax Deferred revaluation on Surplus issued shares Bonus share from Transfer shares of Issue 2006 December 31 At 2006 final Proposed dividend 2006 Interim reserves Statutory realignment Exchange year the for Profit share Equity—settled on tax Deferred revaluation on Surplus share from Transfer expenses issue Share shares of Issue 2006 January 1 At 34. 2007 December 31 Notes to Financial Statements dividend paid dividend actual the and dividend 2006 final proposed arrangements option reserve revaluation buildings of reserve options 2007 January 1 and dividend arrangements option reserve revaluation buildings of reserve options
RESER Group V ES 13&14 Notes 11 11 11 31 32 32 32 11 11 31 13 32 32 32 premium premium Nt (a)) (Note account HK$’000 196,621 141,758 194,758 (15,157 10,282 55,772 Share Share (2,768 3,012 1,859 — — — — — — — — — — — — — — — — — ) ) Contributed Contributed (Notes (a) (a) (Notes HK$’000 surplus n (b)) and 390 390 390 — — — — — — — — — — — — — — — — — — — — — — — Revaluation Revaluation reserves HK$’000 11,379 49,949 39,865 18,418 (8,334 (1,300 8,339 — — — — — — — — — — — — — — — — — — — ) ) Statutory Statutory Nt (c)) (Note HK$’000 reserve 41,822 35,333 2,976 6,489 3,513 — — — — — — — — — — — — — — — — — — — — — HK$’000 reserve 10,613 option option Share Share (1,859 (3,012 3,741 7,007 6,618 4,736 — — — — — — — — — — — — — — — — — — — ) ) fluctuation fluctuation Exchange Exchange HK$’000 reserve 56,928 38,500 18,428 13,955 4,473 — — — — — — — — — — — — — — — — — — — — — Retained Retained HK$’000 134,525 286,660 167,520 164,757 (10,115 (35,333 (14,957 profits 53,684 (4,982 (3,513 (169 — — — — — — — — — — — — — — — ) ) ) ) ) ) HK$’000 299,242 641,120 167,520 411,721 (10,115 (15,157 (14,957 55,772 38,500 39,865 10,282 13,955 53,684 (2,768 (8,334 (4,982 (1,300 8,339 7,007 4,736 Total (169 — — — — — ) ) ) ) ) ) ) ) 97 China Wireless Technologies Limited — ANNUAL REPORT 2007 98 China Wireless Technologies Limited — ANNUAL REPORT 2007 t 1 eebr 2007 December 31 At dividend 2007 final Proposed the between Difference dividend 2007 Interim realignment Exchange year the for Profit option share Equity-settled issued shares Bonus options share from Transfer shares of Issue and 2006 December 31 At dividend 2006 final Proposed dividend 2006 Interim realignment Exchange year the for Loss option share Equity-settled options share from Transfer expenses issue Share shares of Issue 2006 January 1 At 34. 1 eebr 2007 December 31 Notes to Financial Statements iied paid dividend actual the and dividend 2006 final proposed arrangements reserve 2007 January 1 arrangements reserve
RESER Company V S ( ES
continued Notes 10 33 32 32 11 11 10 32 32 32 11 11 11 ) Nt (a)) (Note premium premium account HK$’000 196,621 141,758 194,758 (15,157 10,282 55,772 Share Share (2,768 3,012 1,859 — — — — — — — — — — — ) ) Contributed Contributed HK$’000 surplus a, (b)) (a), (Notes (Notes 44,992 44,992 44,992 — — — — — — — — — — — — — — — — —
HK$’000 reserve 10,613 option option Share Share (3,012 (1,859 3,741 7,007 6,618 4,736 — — — — — — — — — — — — —
) ) fluctuation fluctuation Exchange Exchange HK$’000 reserve 388 388 388 — — — — — — — — — — — — — — — — — Accumulated Accumulated HK$’000 (29,521 (28,280 (10,115 (50,204 (14,957 32,208 losses (4,982 (169 (744 — — — — — — — — — — — ) ) ) ) ) ) ) ) HK$’000 161,358 222,471 198,415 (10,115 (15,157 (14,957 55,772 32,208 10,282 (4,982 (2,768 7,007 4,736 Total (169 (744 — — — — — ) ) ) ) ) ) ) 36. 35. 34. 2007 December 31 Notes to Financial Statements
(c) (b) PRTN LAE ARRANGEMENTS liabilities. LEASE contingent OPERATING significant any had Company the nor Group the neither date, sheet balance the At C (a) Notes: RESER (a)
ontingent
statutory reserve may be converted to increase paid-up capital, provided that the remaining balance after the capitalisation is not not is capitalisation the after balance capital. remaining registered the the that of the provided 25% of capital, than Part less paid-up capital. increase registered its to of converted 50% be reaches may reserve such reserve until statutory reserve statutory the to regulations, determined as tax, accounting after PRC profit its the of 10% under allocate to required is subsidiaries PRC the of each regulations, PRC the with accordance In exchange in issued shares Company’s the of value nominal therefore. the over of reorganisation assets Group net the to consolidated then pursuant the of acquired excess subsidiaries the the represents shares Company’s Company the the of of value surplus nominal contributed the capital The over therefore. paid-up 2003 exchange the July in 31 of issued on value reorganisation nominal Group the the of to pursuant of aggregate acquired the course subsidiaries between the ordinary difference of the the represents in Group the due of fall surplus they contributed The when and as debts its off pay to position a proposed in is be dividend business. will the which Company on date the the distributed, following be immediately that to provided Company, the of shareholders the to distributable n h scn t ffh er, inclusive years, fifth to second the In year one Within follows: as due falling tenants its with non-cancellable leases under receivables operating lease minimum future total had Group the 2007, December 31 at As adjustments rent periodic conditions. for market provide prevailing and then deposits the to security according pay to tenants the require also leases the generally of terms The years. three lease to two from operating ranging under terms for statements) negotiated leases with financial the arrangements, to 14 (note properties investment its leases Group The Under the Companies Law (2001 Second Revision) of the Cayman Islands, the share premium account and contributed surplus are are surplus contributed and account premium share the Islands, Cayman the of Revision) Second (2001 Law Companies the Under s lessor As V S ( ES continued
liabilities ) HK$’000 2,559 1,226 1,333 2007 HK$’000 2006 — — — 99 China Wireless Technologies Limited — ANNUAL REPORT 2007 100 China Wireless Technologies Limited — ANNUAL REPORT 2007 37. 36. 2007 December 31 Notes to Financial Statements
COMMITMENTS ( ARRANGEMENTS LEASE OPERATING s t h blne he dt, h Cmay a n sgiiat aia commitments. capital significant no had Company the date, sheet balance the at As expansion Plant injection Capital licences and Patents for: provided not but Contracted, following the had Group the date: above, sheet 36(b) balance note the in at detailed commitments capital commitments lease operating the to addition In (b)
n h scn t ffh er, inclusive years, fifth to second the In year one Within made be to follows: dates as sheet were balance Group the respective by the at committed leases payments lease operating minimum future non-cancellable total The under years. five to two from ranging lease terms lease operating for under premises arrangements building office and premises warehouse its of certain leases Group The s lessee As continued ) HK$’000 HK$’000 164,555 15,846 10,459 85,292 79,263 5,387 2007 2007 Group — HK$’000 HK$’000 223,147 120,000 14,329 11,060 36,979 66,168 3,269 2006 2006 38. 2007 December 31 Notes to Financial Statements
(b) (a) BALANCES AND TRANSACTIONS PARTY RELATED (c)
The Group’s bank loan of HK$21,376,000 (equivalent to RMB20,000,000) is guaranteed by the Group’s the by guaranteed is RMB20,000,000) to (equivalent HK$21,376,000 of loan bank Group’s The statements. financial the to 7 note in included are emoluments directors’ of details Further personnel management key to paid compensation Total benefits option share Employee contributions scheme Pension kind in benefits and allowances Salaries, company related a to expense Rental 2006: in party related a with transaction directors, Mr. Guo Deying and Mr. Jiang Chao, which bears interest at an annual rate of 6.03% and and 6.03% of rate annual an months. at six interest within bears repayable which is Chao, Jiang Mr. and Deying Guo Mr. directors, opnain f e mngmn pronl f h Group: the of personnel management key of Compensation In addition to the transactions detailed elsewhere in the financial statements, the Group had the following following the had Group the statements, financial the in elsewhere detailed transactions the to addition In urne gatd y directors by granted Guarantee HK$’000 HK$’000 4,126 5,432 1,269 2007 2007 37 — HK$’000 HK$’000 2,424 3,377 2006 2006 110 922 31 101 China Wireless Technologies Limited — ANNUAL REPORT 2007 102 China Wireless Technologies Limited — ANNUAL REPORT 2007
39. 2007 December 31 Notes to Financial Statements
2007 2007 CATEGORY BY INSTRUMENTS FINANCIAL u t a associate an to Due borrowings other and bank Interest-bearing accruals and payables Other payable Bills payables Trade equivalents cash and Cash deposits time Pledge receivables Other receivable Bills receivables Trade as are date sheet balance the at as instrument financial of follows: categories the of each of amounts carrying The iaca liabilities Financial iaca assets Financial Group
mrie cost amortised liabilities at at liabilities receivables on and Loans Financial Financial HK$’000 HK$’000 168,692 457,757 266,692 376,180 40,008 59,369 36,431 87,879 91,222 29,204 46,982 7,386
39. 2007 December 31 Notes to Financial Statements
neetbaig ak n ohr borrowings other and bank Interest-bearing accruals and payables Other payable Bills payables Trade equivalents cash and Cash deposits time Pledge receivables Other receivables Trade 2006 as are date sheet balance the at as instrument financial (continued) of follows: categories the of each of amounts carrying The ( CATEGORY BY INSTRUMENTS FINANCIAL iaca liabilities Financial iaca assets Financial Group
continued ) mrie cost amortised receivables liabilities at at liabilities Loans and and Loans HK$’000 HK$’000 Financial Financial 168,047 429,933 236,983 361,678 65,379 45,898 85,963 61,089 83,439 44,813 103 China Wireless Technologies Limited — ANNUAL REPORT 2007 104 China Wireless Technologies Limited — ANNUAL REPORT 2007
40. 39. 2007 December 31 Notes to Financial Statements
IACA RS MNGMN OBJECTI MANAGEMENT RISK FINANCIAL hl b undertaken. be shall instruments financial in trading no that Group’s policy the review, under year the throughout been, has and is, It trade Group’s and the receivables for operations. trade its as finance from such directly raise liabilities arise to and which is assets payables, financial instruments other financial various has these Group of The purpose operations. and main cash The borrowings, other deposits. and term bank short interest-bearing comprise instruments financial principal Group’s The borrowings other and bank Interest-bearing payable Bills equivalents cash and Cash deposits time Pledge subsidiaries from Due iaca assets Financial ( CATEGORY BY INSTRUMENTS FINANCIAL Company as are date sheet balance the at as instrument financial (continued) of follows: categories the of each of amounts carrying The iaca liabilities Financial V S N POLICIES AND ES continued ) liabilities at at liabilities receivables Loans and and Loans amortised amortised Financial Financial HK$’000 HK$’000 162,983 197,228 15,001 19,244 2,750 2,750 2007 2007 cost — receivables liabilities at at liabilities Loans and and Loans amortised amortised HK$’000 HK$’000 Financial Financial 173,709 180,964 11,190 6,069 5,121 5,000 2,255 2006 2006 cost
40. 2007 December 31 Notes to Financial Statements
The Group has no transactional currency exposure as all sales and purchases are denominated in RMB, RMB, in sale-generating the Group. denominated are the which are of Software, units purchases Coolpad and Shenzhen and sales Yulong Shenzhen all of as currency exposure functional the currency transactional no has Group The exposure. this hedge to not seek did not did rates Group be exchange the can the years, Since sheet prior rate. in balance exchange Group’s significantly HK$/RMB fluctuate the the in China, movements Mainland the by in significantly located affected are operations investment Group’s the As risk currency 2006. Foreign and 2007 both for Company the in obligation debt term long no was There such no was there Therefore, 2006. rate. for interest analysis fixed a sensitivity had 2006 in obligations debt term long Group’s the of All Dollar Kong Hong Dollar Kong Hong 2007 all with borrowings) rates, rate equity. Group’sfloating interest of the impact in and the (through change tax before possible profit Group’s the reasonably of constant, a held to variables other sensitivity the demonstrates table following The Group’s the of repayment 30. of long note terms Group’s in and the rates disclosed to interest are The primarily loans rate. relates interest rates floating a interest with market obligations in debt changes term of risk the to exposure Group’s The risk rate Interest are they and risks risk, these managing currency for foreign policies risk, agrees and rate below. reviews interest summarised Board are The risk. instruments liquidity financial and Group’s risk credit the from arising risks main The OBJECTI MANAGEMENT RISK FINANCIAL V S N PLCE ( POLICIES AND ES (decrease) in in (decrease) ai point basic Increase/ (1.16 1.16 % )
(decrease) in in (decrease) profit before before profit Increase/ HK$’000 (1,190 Group 1,190 continued tax ) (decrease) in in (decrease) Increase/ HK$’000 equity (1,190 1,190 ) ) 105 China Wireless Technologies Limited — ANNUAL REPORT 2007 106 China Wireless Technologies Limited — ANNUAL REPORT 2007
40. 1 eebr 2007 December 31 Notes to Financial Statements
Group risk Liquidity OBJECTI MANAGEMENT RISK FINANCIAL The maturity profile of the Group’s financial liabilities as at the balance sheet date, based on the contracted contracted the on based follows: date, as sheet was balance payments, the at undiscounted as liabilities financial Group’s the of profile maturity The cash projected and receivables) trade (e.g. operations. assets from financial flows and instruments financial its considers both tool This of tool. maturity planning the liquidity recurring a using funds of shortage a to risk its monitors Group The statements. receivables financial other the to and 22 trade and from 20 risk notes credit in to disclosed exposure Group’sare the of respect in data quantitative Further respectively. from customers, due were largest five receivables and trade Group’s customer the for of largest 95% Group’s requirement and the 86%) no (2006: is 91% as there risk credit certain has of parties, Group the date, third concentrations balance the At creditworthy customer. by managed and are risk credit of recognised Concentrations with collateral. only trades Group the Since amounts carrying the other to instruments. and equal these exposure equivalents of maximum cash a with and counterparty, cash the of comprise default which from arises assets, receivables financial other Group’s the of risk credit significant. The not is debts bad to exposure Group’s the and basis ongoing an on monitored balances are receivable addition, In procedures. verification credit to subject are terms credit on trade to wish who customers all that Group’s policy the is It parties. third creditworthy and recognised with only trades Group The u t a associate an to Due accruals and payables Other payable Bills payables Trade and bank Interest-bearing rdt risk Credit te borrowings other
HK$’000 demand 50,606 40,165 7,386 3,055 On On — — es than Less months 3 HK$’000 342,704 141,499 117,060 36,431 47,714 V — S N PLCE ( POLICIES AND ES
12 months 12 3 to less less to 3 HK$’000 76,278 70,541 5,737 than than — — — 2007
HK$’000 years 5 79,091 79,091 to 1 — — — —
continued HK$’000 years 5 over — — — — — —
HK$’000 548,679 150,291 266,692 36,431 87,879 7,386 Total )
40. 2007 December 31 Notes to Financial Statements
u t a director a to Due other and bank Interest-bearing accruals and payables Other payable Bills accruals and payables Other other and bank Interest-bearing director a to Due company related a to Due accruals and payables Other payable Bills payables Trade and bank Interest-bearing (Continued) Group contracted the (continued) on based follows: date, as sheet was balance payments, the at undiscounted as liabilities financial Group’s the of profile maturity The OBJECTI MANAGEMENT RISK FINANCIAL Company te borrowings other borrowings borrowings
HK$’000 demand HK$’000 HK$’000 demand demand 29,856 33,038 1,390 1,390 3,055 110 On On On On On On — — — — — — 17 — — Less than than Less months 3 Less than than Less months 3 Less than than Less months 3 HK$’000 HK$’000 HK$’000 334,503 181,379 11,275 46,150 31,233 75,741 6,069 5,121 3,045 2,750 V 295 85 — S N PLCE ( POLICIES AND ES — —
12 months 12 2 months 12 2 months 12 3 to less less to 3 HK$’000 3 to less less to 3 HK$’000 3 to less less to 3 HK$’000 106,185 39,813 61,710 4,662 than than than than than — — — — — — — — 2006 2007 — — — 2006
HK$’000 HK$’000 HK$’000 years 5 years 5 years 5 99,532 99,532 1 to to 1 1 to to 1 to 1 — — — — — — — — — — — —
continued HK$’000 HK$’000 HK$’000 years 5 years 5 years 5 over over over over over — — — — — — — — — — — — — —
HK$’000 HK$’000 HK$’000 236,983 573,258 189,096 12,665 85,963 61,089 1,390 6,069 5,121 3,045 2,750 Total Total Total 295 ) 110 85 17 107 China Wireless Technologies Limited — ANNUAL REPORT 2007 108 China Wireless Technologies Limited — ANNUAL REPORT 2007
40. 42. 41. 2007 December 31 Notes to Financial Statements
Group OBJECTI MANAGEMENT RISK FINANCIAL Capital represents equity attributable to equity holders of the Company. The gearing ratios as at the balance balance the follows: at as as ratios were gearing dates The Company. sheet the of equivalents. holders cash equity and to cash less attributable equity associate, an represents to Capital due director, a and to payables due company, other related payable, a bills to due payables, accruals, trade Net debt. borrowings, net other plus and capital bank the by interest-bearing divided debt includes net debt is which ratio, gearing a using capital monitors Group The the during processes 2006. or December 31 policies and to objectives, 2007 the December payment 31 in ended made dividend years were externally the any changes to adjust No subject not economic may is requirements. Group in capital The Group shares. imposed changes new the issue of or structure, light shareholders to capital in capital it, return the to shareholders, adjust adjustments or makes maintain and To structure conditions. capital its maximise manages and Group business The its support to order in continue ratios to capital ability Group’s healthy value. the maintain shareholder safeguard to to and is concern management going a capital as Group’s the of objective primary The APPRO E with an area of 109,469 square metres. The Group paid HK$47,990,000 on 26 March 2008 and the the and 2008 March 26 on HK$47,990,000 paid Group The metres. square Dongguan Lake, 109,469 Songshan North of of to Park area Centre Industrial the an Exchange in Land located with land Dongguan of piece the a with of right agreement use an the purchase signed Yulong Dongguan 2008, March 5 On ratio Gearing debt net and Capital Company the of holders equity to attributable Equity debt Net equivalents cash and Cash Less: associate an to Due director a to Due company related a to Due accruals and payables Other payable Bills payables Trades borrowings other and bank Interest-bearing The financial statements were approved and authorised for issue by the board of directors on 14 April April 14 on directors of board the by issue for authorised and 2008. approved were statements financial The progress. in is right use land of certificate the for application aia management Capital V ENT ENT V after L F H FNNIL STATEMENTS FINANCIAL THE OF AL H BLNE HE DATE SHEET BALANCE THE V S N PLCE ( POLICIES AND ES 1,125,871 HK$’000 661,350 464,521 157,355 266,692 (91,222 36,431 87,879 7,386 2007 41% continued — — ) HK$’000 921,483 431,664 489,819 189,096 236,983 (83,439 85,963 61,089 2006 53% 110 ) 17 — )