210993 ZTC Cover  28/11/07  17:37  Page 1 ZTC Telecommunications Plc is a public limited company whose shares are
traded on AIM. The Group designs, assembles and markets mobile phone
handsets under the “ZTC” brand name in China. The operations are based in
Shenzhen.
Page Contents
2 Directors and Advisers
3 Operational Highlights
4 Chairman’s Statement
6 Chief Executive Officer’s Statement
8 Directors’ Biographies
9 Directors’ Report
16 Corporate Governance Statement
18 Report of the Remuneration Committee
22 Statement of Directors’ Responsibilities
23 Report of the Independent Auditors
25 Consolidated Income Statement
26 Consolidated Statement of Changes in Equity
27 Consolidated Balance Sheet
28 Company Balance Sheet
29 Consolidated Cash Flow Statement
30 Notes to the Financial Statements
49 Notice of Annual General Meeting
1 Directors and Advisers
Directors: Frank Lewis Non-Executive Chairman
Dr Yi Xie Non-Executive Director
Chaohui (aka Charles) Huang Chief Executive Officer
Mark Syropoulo Finance Director
Michael Liu Executive Director
Company Secretary: Jeremy Gorman
Registered Office: 56 Queen Anne Street
London W1G 8LA
Registered in England: Company number – 03928553
Nominated Advisor and Blue Oar Securities Plc
Nominated Broker: 30 Old Broad Street
London EC2N 1HT
Solicitors to the Company Pritchard Englefield
(English Law): 14 New Street
London EC2M 4HE
Solicitors to the Company Boss & Young
(Chinese Law): 11th Floor China Merchants Tower
161 Lujiazui East Road
Shanghai 200120
People’s Republic of China
Accountants: Whale Rock Limited
53 Friern Mount Drive
Whetstone
London N20 9DJ
Registered Auditors: BDO Stoy Hayward LLP
Connaught House
Alexandra Terrace
Guildford
Surrey GU1 3DA
Registrars: Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
2 Operational Highlights – year ended 30 June 2007
Cash shell to operator Cassian Investments Plc (“Cassian”), an unlisted cash shell transformed into an
operating company by acquiring via a reverse acquisition Praise Ease Limited (“Praise
Ease”), the holding company of China based Shenzhen Zhong Tian Communication
Equipments Company Ltd. (“Zhong Tian”). Change of name of Cassian to ZTC
Telecommunications Plc (“ZTC Plc”)
London listing Admission to AIM market with a strong management team and an experienced board
on 21 March 2007
Highlights Zhong Tian is a fast growing mobile phone company based in China
Revenue increased 63% to £22.2m (2006: £13.6m)
Profit before tax increased 10.9% to £2.02m (2006: £1.82m). Excluding admission
and merger costs, profit before tax was £2.29m, an increase of 26.2%
Substantial increase in sales of ZTC branded handsets – up 111% to 512,600 units
China now has over 500 million mobile phone subscribers
Since January 2007, average monthly increase in new mobile users in China is 6.9
million and rising – September 2007 saw 7.6 million new subscribers
Established reputation for speed to market and quality, innovative handsets: large 2.8”
screens, dual SIM card functionality, 68-day standby time battery life and dual
cameras
Business trading in line with management expectations since year end
Revenue
2006 £13.6m
2007 £22.2m
Growth 63%
Handset Sales
2006 242,400
2007 512,600
Growth 111%
New Model Releases
2006 16
2007 24
Growth 50%
3 Chairman’s Statement
Introduction
I have great pleasure in announcing ZTC Plc’s first financial report as an AIM quoted company, following our successful
listing on 21 March 2007. The year to 30 June 2007 saw significant progress for the Company and its Chinese operations
(together the “Group”). The Group has continued to grow at an impressive pace and, following our admission to trading on
AIM, we have the balance sheet strength and status associated with a London Stock Exchange listing to improve on this
performance in 2008. The Group comprises ZTC Telecommunications Plc (“ZTC Plc”), Praise Ease Ltd (“Praise Ease”), its
100% owned Hong Kong based subsidiary, and Shenzhen Zhong Tian Communication Equipments Company Ltd (“Zhong
Tian”), its Shenzhen based operating subsidiary which is 100 per cent. owned by Praise Ease.
Praise Ease came to AIM via a reverse acquisition of Cassian Investments plc (“Cassian”). On 13 February 2007 Praise
Ease, was acquired by Cassian for an initial consideration of 70 million ordinary shares of 10p each (“Ordinary Shares”),
issued at 20p per Ordinary Share. On admission, the Company had 93,682,516 ordinary shares of 10p each in issue, and
approximately £4m in cash before expenses related to the listing.
The acquisition agreement also provided for the issue of up to 15 million Ordinary Shares by way of deferred consideration
to the previous shareholders of Praise Ease, subject to Zhong Tian achieving a post tax profit in excess of RMB 35 million
in the 12 month period to 30 June 2007. I am pleased to advise that the business has achieved the agreed level of
profitability for the period, and therefore it is anticipated that an additional 15 million Ordinary Shares will be issued to the
vendors prior to 31 December 2007. 
Acquisition accounting
The consolidated results for the Group incorporate the financial statements of ZTC Plc, Praise Ease and Zhong Tian for the
financial year ended 30 June 2007. Under IFRS, comparative figures for the year ended 30 June 2006 have also been
included which relate to Praise Ease and Zhong Tian. Due to the relative size of Praise Ease and Cassian, the acquisition
was required to be accounted for under the “Reverse Acquisition” method.
Results for 2007
The Group’s turnover increased 63% to £22.16m in the 12 month period to 30 June 2007 (2006: £13.57m). Profit before
taxation for the year ended 30 June 2007 increased 10.9% to £2.02m (2006: £1.82m), and is stated after charges for non-
recurring costs associated with the reverse acquisition and admission to AIM, which amounted to £280,000. Without these
one off costs, the Group has shown an increase in profit before taxation over the previous year of 26.2%.
Operations
The Group shipped 512,600 ZTC branded handsets during the reporting period, an increase of 111% over the previous
year. Overall, the year’s performance was very encouraging and is a credit to the hard work of the management and staff,
as well as proving the technical excellence of our innovative mobile handsets. The Board made a conscious decision during
the period to improve the Group’s infrastructure in order to meet demand for increased production. The result of this
implementation is an overall increase in running costs, but the necessary expansion of the infrastructure will position us well
for the future.
Strategy
ZTC’s handsets are aimed primarily at the estimated 800 million Chinese nationals who reside in the lesser developed north,
central and western regions of China. The Group’s strategy is focused on producing handsets that are “Fashionable,
Economical and Practical” and which are retailed at the lower to mid price range. The success of this strategy to date
means the Group can now look to expand its offering by focusing on the following areas:
● investing in the ZTC brand to increase consumer awareness; 
● continuing to invest in new handsets and the improvement of existing models; 
4 ● establishing additional and improved distribution and sales outlets. In particular the Group will focus on securing
agreements with the major service providers such as China Mobile, in its targeted areas which could result in more
rapid market penetration;
● doubling our production capacity in the medium term by adding a further four assembly lines to meet future sales
growth;
● exploiting the cost advantages that ZTC may obtain to develop overseas markets with similar characteristics to
China, such as Indonesia, India, and Africa. 
Recent Developments
In October 2007 at the highly regarded China Hi-Tech Fair in Shenzhen, the Group displayed its newest products and
launched its latest catalogues to both domestic and overseas industry targets, including phones with dual SIM cards, stock
market functions (such as share dealing and stock quotes), ultra-long standby batteries and dual multi-megapixel cameras. 
ZTC achieved both ‘Excellent Product’ and ‘Excellent Show’ awards at the China Hi-Tech Fair which were granted by the
China Hi-Tech Commission. These awards have provided encouragement to the Group in its strategy to help exploit
opportunities within the rapidly expanding Chinese and international telecommunications markets, as well as generating
significant interest in its products. 
Employees
The Board would like to extend their personal thanks to all employees of the Group in both the UK and China for their
enthusiasm, hard work and commitment. In particular, the Board would like to thank the Chief Executive Officer, Charles
Huang, for his continued excellent contribution to the development of the Group. 
Dividend
The Board will not be recommending the payment of a dividend this year. 
Outlook
Since the year end we have continued to successfully upgrade existing handsets and bring new models to the market,
bringing the total number of new handsets launched in the current financial year to five. The Group has upgraded its
financial reporting procedures and systems, and will maintain its rigorous approach to corporate governance practices as
it continues to grow. We are now seeing solid growth in our business which is trading in line with our expectations. Given
a combination of positive local market conditions and continued acceptance of recent product launches, the Board remains
optimistic for the trading year ahead.
With a clear strategy in place and a strong team to drive the business forward, the Board believes that we have the
ambition, commitment and technical ability to take ZTC to the next stage of its development. I look forward to reporting on
progress at the half year.
Frank Lewis
Chairman
28 November 2007
5 Chief Executive Officer’s Statement
During the year we have made considerable progress towards our goal of becoming a leading designer, assembler and
marketer of mobile handsets in China (“PRC”). The new funding gained from the reverse acquisition has allowed ZTC to
accelerate its development of new models, the lifeblood of the business, and to implement systems that will enable the
Group to manage strong future growth.
Financial Performance
The Group’s net sales increased 63% to £22.16m (2006: £13.57m). ZTC branded mobile phones shipped increased 111%
to 512,600 (2006: 242,400) units, whilst OEM handsets produced under contract fell, in accordance with strategy, 84.7%
to 62,500 (2006: 406,900) units. 
Gross margins were 21.5%, an increase of 13.5% over the previous year. This increase was primarily driven by our ability
to rapidly introduce unique products to market, commanding higher initial margins and a relatively long shelf life, assisted
by upgrades which have sustained attractive margins. The forward purchases of certain strategic components have also
contributed to controlling production costs. 
Total administrative and general expenses increased to £1.431m (2006: £312,000) which includes non-recurring costs in
respect to the reverse acquisition and admission to trading on AIM amounting to £280,000 (2006: nil). Excluding these
costs, expenses were £1.15m. The increase in these costs is primarily attributable to two factors. Firstly the increase in
overhead relating to the listed parent company, and secondly, an increase in personnel reflecting a substantial increase in
sales and new models.
Profit before tax increased 10.9% to £2.02m (2006: £1.82m). Excluding the acquisition and admission costs, profit before
tax was £2.29m, an increase of 26.2% over 2006. Whilst Group profits increased, earnings per share decreased to 2.4p
basic and 2.3p diluted, compared to 4.2p basic and 4.2p diluted in the previous financial year. This decrease in earnings
per share is a result of the increased number of shares in issue following the reverse acquisition.
Taxation paid increased to £128,000 (2006: £2,000). This is attributable to the fact that the operating subsidiary, which is
based in the Special Economic Zone of Shenzhen, commenced payment of tax at a rate of 7.5% from 1 January 2007.
The Company receives a favourable taxation policy being located in Shenzhen, which is a Special Economic Zone.
Following this initial tax rate concession, the Company expects the tax rate of the Company’s operating subsidiary to
increase to 15% in 2010. 
Operating cash outflow for the year ended 30 June 2007 was £1.40m (2006: inflow of £1.47m) and total combined cash
and other liquid assets were £7.63m (2006: £4.10m). As at 30 June 2007, our net debt to equity ratio (gearing) was 0.29.
Cash at bank or in hand at the period end was £2.49m.
Operating Highlights
During the year under review ZTC introduced 24 new models compared to 16 in the previous period. These models
typically catered for the middle to lower end of the market with a focus on the lesser developed markets of China including
the second to fourth tier cities and rural areas.
Utilising its local knowledge and ability to bring new products rapidly to market, the Group has successfully capitalised on
a number of new consumer trends. Importantly, to diversify product portfolio risk, ZTC was able to develop a number of
successful models catering for differentiated markets.
Successfully launched handsets include:
● December 2006: ZT2688 – One of the first large screen (2.8”) models to be launched in the PRC. Initial specifications
included a camera, MP3 and MP4 players, touch screen functionality and ability to play games. This model was an
excellent performer achieving high margins. Since its introduction additional features such as Bluetooth, dual SIM
cards and ultra-long standby battery life have allowed this model to continue to have robust sales beyond the financial
year end. 
6 ● February 2007: ZT3328 – One of the first models including two SIM cards to be introduced in China. Every province
in the PRC has a separate China Mobile subsidiary resulting in significant roaming charges beyond provincial
boundaries. The dual SIM card model has effectively reduced roaming charges which has proved popular with the
ever cost conscious Chinese consumer.
● March 2007: ZT8810 – Packed with functionality such as touch display, MP3, MP4, camera (including PC camera)
and a flip light, targeted at the low end of the price market it has appealed to the youth market.
● June 2007: ZT3158 – Dual SIM card facility but with more sophisticated design and more expensive finish targeting
higher income markets than the ZT3328, which caters to much broader population.
Our People and Systems
The average number of people employed in the Group was 422 in 2007 compared to 283 in the previous year. All full time
employees are located in the PRC. The Group’s production facilities are credited with ISO9001 (2000 edition) and we
ensure that our staff are trained to meet the requirements of this standard and the technical demands of our equipment.
During the year ZTC has also invested capital and significant effort to upgrade the financial reporting procedures and
systems, which has been accompanied by significant staff training and education. These systems will provide a stable
platform to better manage the rapid growth of the Group.
Market
ZTC’s primary focus continues to be China’s domestic market. The overall mobile penetration rate was at 39.9% at the end
of the third quarter 2007 and substantially lower in the rural and less developed areas of China. The PRC now has more
than 500 million mobile phone subscribers and has witnessed an average monthly increase of 7 million new users since
the start of 2007, presenting an excellent market opportunity for ZTC.
The country is not only the largest mobile handset market worldwide but is home to approximately 50% of the global
handset production with Shenzhen a major centre. This brings to ZTC the possible exposure to benefits of scale and
centralisation of component production, design expertise and talent.
Given the current strong growth in demand for handsets both in China and the worldwide emerging markets, major
potential market opportunities are available for innovative developers in the mobile phone sector over the next few years.
We are currently evaluating a number of export opportunities primarily in emerging market countries in the Middle East,
Asia and Africa.
Outlook
At this point in time we believe the PRC will continue to experience relatively strong economic growth over the balance of
this financial year. We also anticipate that the handset market should continue to enjoy robust sales throughout the same
period.
Going forward, our strategy will continue to focus on new product development with the view to developing a balanced
portfolio, a necessity to diversifying product risk. We will also continue to concentrate on existing and new markets by
developing our marketing channels both through national and regional distributors in China with the latter focusing on the
second to fourth tier cities and rural markets. 
We look forward to demonstrating continued growth and building shareholder value in 2007/2008.
Charles Huang
Chief Executive Officer
28 November 2007
7 Directors’ Biographies
Frank Lewis, Non-executive Chairman (Aged 61)
Mr Lewis has over 25 years’ experience in both listed and private companies. He has held a number of board positions as
Chairman and non-executive director both in the UK and abroad with growing, midmarket companies. He is currently a
non-executive director of a number of AIM-listed companies including Polymer Logistics N.V., a provider of ‘one-touch’
logistics solutions, Zeehan Zinc Limited, a zinc mine in Tasmania, and Formjet plc, a distributor of computer software. He
is a fellow of the Institute of Chartered Accountants in England and Wales and a member of the South African Institute of
Chartered Accountants. Mr Lewis is Chairman of the audit and remuneration committees.
Chaohui (aka Charles) Huang, Chief Executive Officer (Aged 40)
Mr Huang has over 20 years’ experience in the telecom and communications business in China. He was engaged in military
communications during his service in the Army from 1983 to 1987, and thereafter was engaged in a family business
involved in the distribution of telephone handsets and terminal products. In 1995 he joined TELSDA Group, a manufacturer
of mobile handsets, as vice president. Mr Huang founded Shenzhen Zhong Tian Communication Equipments Co. Ltd
(“Zhong Tian”) in 2003. Mr Huang is Chief Executive Officer and is responsible for the overall growth and development of
the Group.
Dr Yi Xie, Non-executive Director (Aged 50)
Dr Xie graduated from the Beijing University of Posts and Telecommunications where he obtained a Doctorate Degree. He
has over 20 years’ research and development experience in the information technology industry. He has specialised in
Optical Communication and Communication Protocols. Dr Xie is the vice-president of the China Academy of
Telecommunication Research Institution, a subsidiary of the Ministry of Information Industry of China. He is also the
chairman of TC9 of the China Communications Standards Association and the chairman of the China Testing Forum for
Telecommunication Terminals. Dr Xie is a member of the audit and remuneration committees.
Mark Syropoulo BSc Hons, Finance Director (Aged 55)
Mr Syropoulo has had thirty years’ experience in stock broking, finance or executive positions primarily in the resources
sector in Africa, Australia, USA, UK and Asia. From 1987 to 1993 he was managing director of London listed Anglo Pacific
Resources Plc which was an associate company of Anglovaal Ltd. Mr Syropoulo has had ten years experience investing
in Chinese publicly quoted equities and was a non-executive director of AIM listed Caledon Resources Plc, a China focused
gold explorer from 2005 to December 2006. He has completed Mandarin studies through the University of California,
Berkeley, and at the Beijing Language and Cultural University.
Mr Syropoulo is employed part-time as Finance Director and is primarily responsible for the financial management of the
Group including reporting, planning processes and budgetary and forecast cycles. He is also responsible for statutory and
audit compliance.
Michael Liu, Executive Director (Aged 45)
Mr Liu has over 20 years’ experience in general management, investment and finance, marketing and sales, and project
management in North America and China. From 1993 to 2001, he was general manager for the China operations of CNT
Group, a TSX main board listed firm. Mr Liu has been a director of TSXV listed Pacific Imperial Mines Ltd since 2004 and
a director of TSXV listed International Barytex Resources Ltd since March 2006. He has an MBA from the University of
British Columbia. Mr Liu is employed part-time as an Executive Director and is primarily responsible for identifying and
developing international market opportunities for the Group.
8 Directors’ Report
The Directors present their report on the affairs of the Company and the Group, together with the audited financial
statements, for the year ended 30 June 2007.
Principal activities
During the period from 1 July 2006 to 21 March 2007 the Company was a cash shell, seeking to identify a suitable
acquisition with the intention of obtaining admission of the Company’s shares to a regulated market.
On 21 March 2007, following the acquisition of the whole of the issued share capital of Praise Ease Limited (“Praise Ease”),
the Company was admitted to the Alternative Investment Market (“AIM”) of the London Stock Exchange. Praise Ease is the
holding company of Shenzhen Zhong Tian Communication Equipments Co. Ltd (“Zhong Tian”) which is incorporated in
China and which designs, assembles and markets mobile phone handsets under the ZTC brand name in China. Zhong
Tian is located in the Longgang District of Shenzhen, China, and is the principal operating company in the Group.
The name of the Company was changed from Cassian Investments Plc to ZTC Telecommunications Plc on 14 March 2007.
Business review and future developments
This is the first business review prepared by the Company following the UK’s adoption of the European Union’s Accounts
Modernisation Directive. The purpose of the review is to show how the Company assesses and manages risk and
uncertainty and adopts appropriate policies and targets. Further details of the Group’s business and expected future
developments are also set out in the Chairman’s Statement on pages 4 and 5 and in the Chief Executive Officer’s Statement
on pages 6 and 7.
Key Performance Indicators
The key performance indicators for the Group are as follows:
2007 2006
Financial
Sales (£m) 22.16 13.57
Operating cashflow (£m) (1.40) 1.47
Earnings per share (p) 2.4 4.2
Non-Financial
Number of handsets produced 512,600 242,400
Number of new models 24 16
Principal risks and uncertainties
Risk is inherent in all business. Set out below are certain risk factors which could have an impact on the Group’s long term
performance. The factors discussed below should not be regarded as a complete and comprehensive statement of all
potential risks and uncertainties facing the Group.
Competition
The market for telecommunications equipment generally in China is very competitive. The principal competitive factors are
as follows: function and design, brand name recognition, distribution, performance cost ratio, short lead time in product
development and product quality. The Group is currently competing with both foreign and local companies including Nokia,
Motorola, Samsung, Haier, Ningbo Bird, Lenovo, Amoi and Konka.
9 Models and component supply
The Group’s performance is dependent on its ability to introduce new models consistently which successfully anticipate
market trends. In addition, as all components are outsourced, performance is also reliant on the continued ability to
purchase these items both for current and future models. The Group mitigates these risks by a strong focus on market
research and testing and having at least two suppliers for critical components.
Economic, Political and Social Considerations
China has been undergoing a series of political reforms since 1978. Such reforms have in the past resulted in significant
economic growth over the past twenty years. Growth has tended to be uneven between sectors and geographically. The
Chinese government has from time to time implemented selected measures to moderate economic growth. The Group’s
operating and financial performance may be adversely affected by changes in the rate of taxation, imposition of additional
currency conversion restrictions and state policies affecting the regulation of the mobile phone industry. In addition the
Group’s performance may be affected by local and international economic cycles and risks affecting consumer behaviour
which are beyond the Group’s control.
Loss of Licence
Under the law in China, the minimum required registered capital for a mobile phone handset manufacturer is RMB 200
million (£13,089,862). The paid-in capital of Zhong Tian as at 30 June 2007 was RMB 30,348,000 (£1,986,256).
Zhong Tian is at risk of having its business licence withdrawn by the relevant authority, and its certificate of approval
invalidated if it does not increase its paid-in capital to the required minimum of RMB 200 million (£13,089,862) by 31
December 2009 or fails to obtain a permit for extension of its capital contribution time limit from the competent authority.
The Directors believe that the required contribution can be made by 31 December 2009 from funding available to the
Company (including the capitalisation of any profits), both from the calendar year 2005 and subsequent years. Application
for the capitalisation of profits for the calendar years 2005 and 2006 will be made before the end of 2007. The capitalisation
of any profits may however have an effect on the Company’s ability to pay dividends in the short term.
Tenure of Land and Buildings
Zhong Tian has four long term leases for 8,000 square metres of land on which it operates for industrial purposes. The
usage and ownership of land in China can be a complex matter with the potential for conflict between laws prevailing at
the national and provincial levels which could give rise to uncertainty concerning tenure or nature of use. To minimise this
risk, the Company has undertaken satisfactory legal due diligence in respect of this matter.
Credit Risk
Unutilised cash balances are maintained on either deposit or current account with major international banks.
The Group is potentially exposed to credit risk from credit sales to customers.
Dependence on Key Personnel
The Group depends upon the expertise and continued service of certain key executives and other personnel, and in
particular the Chief Executive Officer, Charles Huang.
Going concern
The Directors are confident that sufficient funding is in place to enable the Group to continue to meet its present obligations
as they fall due. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
10 Results and dividend
The results of the Group for the year ended 30 June 2007 are set out on page 25. The results for the year are shown after
non-recurring costs relating to Admission to AIM, and to the period prior to Admission, amounting to £280,000.
The Directors do not recommend the payment of a dividend for the year.
Directors
The following Directors, who held office at 1 July 2006, resigned as Directors on 21 March 2007:
Oliver Vaughan
Edward Vandyk
Alan Pereira
The present Directors of the Company, who were appointed on 21 March 2007, are as follows:
Frank Lewis
Chaohui (aka Charles) Huang
Mark Syropoulo
Michael Liu
Dr Yi Xie
In accordance with the Articles of Association, all the present Directors will retire and, being eligible, offer themselves for
re-election at the forthcoming Annual General Meeting. Biographical details of these Directors are set out on page 8 and
details of their remuneration are set out on pages 18 to 21.
Directors’ interests
The beneficial interests of the present Directors and their families at 30 June 2007 in the ordinary share capital of the
Company were as follows:
30 June 2007 30 June 2006*
Ordinary Share Ordinary Share
shares options shares options
F Lewis – 100,000 – 100,000
C Huang 66,500,000 500,000 66,500,000 500,000
M Syropoulo 350,000 500,000 350,000 500,000
M Liu 2,800,000 500,000 2,800,000 500,000
Dr Y Xie – 100,000 – 100,000
*or date of appointment, if later
Of the 66,500,000 ordinary shares beneficially owned by Mr Huang, 56,000,000 are registered in the name of Tomorrow’s
Focus Limited and 10,500,000 are registered in the name of Pan-Europe Capital Limited.
The ordinary shares beneficially owned by Mr Syropoulo and Mr Liu are registered in the name of Higher Performance Team
Limited.
The Directors have undertaken that they will not dispose of any interest in the ordinary shares held by them for a period of
twelve months from the date of Admission of the Company’s shares to AIM on 21 March 2007 save in certain limited
circumstances and, for the following twelve months, will only dispose of their interests in the Company through Blue Oar
Securities Plc, the Company’s Nominated Adviser and Nominated Stockbroker.
11 Share options
Granted
At 1 July 21 March Exercised/ At 30 June Exercise Exercisable
2006 2007 Lapsed 2007 Price From To
F Lewis – 100,000 – 100,000 20p 21.03.08 20.03.17
C Huang – 500,000 – 500,000 20p 21.03.08 20.03.17
M Syropoulo – 500,000 – 500,000 20p 21.03.08 20.03.17
M Liu – 500,000 – 500,000 20p 21.03.08 20.03.17
Dr Y Xie – 100,000 – 100,000 20p 21.03.08 20.03.17
The share options may be exercised in three equal successive annual instalments commencing on and/or after the first
anniversary of the date of grant.
No performance conditions have been imposed on any of the above share options and no consideration was payable for
their award.
The market price of the Company’s ordinary shares at 30 June 2007 was 16.75p, and the range during the year, on a
consolidated basis, was 16.00p to 19.75p.
Related party transactions
Details of related party transactions are given in Note 29 to the financial statements.
Financial Instruments and Treasury policy
Details of the use of financial instruments by the Company and its subsidiaries are contained in Note 18 of the financial
statements.
The Group’s multi-national operations could expose it to certain financial risks.
The most significant risk occurs upon translation of the foreign operation’s results into sterling upon consolidation. Almost
100% of foreign revenues and the bulk of operating costs are incurred in the local currency, the RMB. Group companies
therefore do not engage in foreign exchange risk hedges.
Prudent liquidity risk management in the context of the Group implies maintaining sufficient cash balances or marketable
securities in the necessary currencies to be able to pay creditors as and when they fall due. The bulk of the Group’s
balances are held in RMB, sterling and HK dollars.
Funds surplus to monthly requirements are normally kept on interest bearing financial instruments. Cash balances are
deposited with banks carrying high credit ratings in their respective country jurisdictions.
Creditor payment policy
The Company’s policy is to agree payment terms with all suppliers when establishing the terms of each business
transaction and to abide by the agreed terms of payment. Trade creditors of the Company at 30 June 2007 were equivalent
to 9 days purchases based on the average daily amount invoiced by the suppliers during the year ended on that date.
12 Substantial shareholdings
At 21 November 2007 the Directors had been notified or were otherwise aware of the following holdings of 3% or more of
the Company’s issued share capital:
Number of Percentage of
ordinary issued ordinary
shares share capital
Tomorrow’s Focus Limited 56,000,000 59.78%
Pan-Europe Capital Limited 10,500,000 11.21%
Albany Capital Limited 5,428,008 5.79%
Higher Performance Team Limited 3,500,000 3.74%
As noted above, Mr Huang is beneficially interested in the shares which are registered in the names of Tomorrow’s Focus
Limited and Pan-Europe Capital Limited, and Mr Syropoulo and Mr Liu are beneficially interested in 350,000 and 2,800,000
of the ordinary shares, respectively, which are registered in the name of Higher Performance Team Limited.
Share capital
On 29 January 2007, 9,410,155 ordinary shares of 1p each were issued following the exercise of warrants and further
subscription rights.
On 14 February 2007, the Company called the balance of 1.5p outstanding on each of the A shares and subsequently
each fully-paid A share was converted into one ordinary share of 1p and one deferred share of 1p.
At an Extraordinary General Meeting held on 14 March 2007 shareholders approved inter alia resolutions:
● to consolidate the existing ordinary shares of 1p into ordinary shares of 10p each on a one-for ten basis;
● to approve the acquisition of Praise Ease for an initial consideration of 70,000,000 ordinary shares of 10p each,
credited as fully paid at 20p per share, thereby valuing such consideration at £14,000,000;
● to cancel the deferred shares; and
● to approve the second tranche of the consideration for the acquisition of Praise Ease, based upon the audited results
of Zhong Tian in the period of 12 months ending 30 June 2007. This deferred consideration of a maximum of
15,000,000 additional ordinary shares of 10p in the Company is issuable conditional on the audited post tax profits
of Zhong Tian for the year ended 30 June 2007 exceeding RMB35m.
Further details of the changes in share capital during the year are set out in Note 19 to the financial statements.
Employees
The commitment and ability of our employees are key factors in achieving the Group’s objectives. We seek to give equal
opportunities in employment and ensure that all employees receive fair treatment irrespective of sex, religion, ethnic origin
or disability including those who become disabled during their employment. The Group supports and aids employee
welfare as well as personal and career development.
Our communications aim is to increase the understanding of the business through regular employee briefings at all levels.
Charitable and political donations
The Company made no charitable or political donations in the financial year (2006: Nil).
International Financial Reporting Standards
The financial statements have been prepared in accordance with applicable International Financial Reporting Standards as
endorsed by the European Union.
13 Events after the Balance Sheet date
As referred to above, the contingent consideration of 15,000,000 additional ordinary shares of 10p in the Company are
issuable in relation to the acquisition of Praise Ease. The Board anticipates that these additional shares will be allotted prior
to 31 December 2007.
Subsequent to the balance sheet date, by a member’s resolution passed on 24 October 2007, the authorised share capital
of the Company’s subsidiary undertaking, Praise Ease Limited, was increased from HK$10,000 divided into 10,000 shares
of HK$1 each to HK$7,162,860 by the creation of an additional 7,152,860 shares of HK$1 each ranking pari passu in all
respects with the existing shares in the share capital of the company. By a Directors’ resolution passed on the same date,
7,152,860 shares of HK$1 each were allotted to ZTC Telecommunications Plc at par and the consideration was satisfied
by the book debts due to a Director, Mr Huang Chaohui, as agreed by him.
Disclosure of information to auditors
So far as each Director at the date of approval of this report is aware, there is no relevant audit information of which the
Company’s auditors are unaware and each Director has taken all steps that he ought to have taken to make himself aware
of any relevant audit information and to establish that the auditors are aware of that information.
Auditors
BDO Stoy Hayward LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint
them will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The resolutions to be proposed at the forthcoming Annual General Meeting are set out in the formal notice of the meeting,
as set out on pages 49 to 52.
The following resolutions constitute Special Business:
Resolution number 9 is proposed as an Ordinary Resolution to provide the Directors with authority to issue ordinary
shares up to an aggregate nominal value of £3,922,308, representing 41.87% of the Company’s present issued share
capital, such authority to terminate on the date falling fifteen months after the passing of this resolution or the date of the
next Annual General Meeting of the Company, whichever is the earlier. The Directors have no present intention of exercising
this authority except for the issue of £1,500,000 nominal of ordinary shares as deferred consideration for the acquisition of
Praise Ease Limited.
Resolution number 10 is proposed as a Special Resolution to seek authority for the Directors to allot equity securities for
cash up to a nominal value of £1,175,000 representing 12.54% of the Company’s present issued share capital otherwise
than on a pre-emptive basis. The Companies Act 1985 (“the Act”) requires that, unless shareholders resolve otherwise, any
shares to be allotted for cash must be offered to existing shareholders pro-rata to their existing shareholdings. The Act
permits this requirement to be modified and the purpose of the resolution is to provide the Directors with the authority to
issue ordinary shares for cash, as if such provisions did not apply, when the Board considers it to be in the best interests
of shareholders, such authority to terminate on the date falling fifteen months after the passing of this resolution or the date
of the next Annual General Meeting of the Company, whichever is the earlier. The Board has no present intention of issuing
shares under this authority or of seeking to use such authority.
Resolution number 11 is proposed as a Special Resolution to seek authority for the Company to purchase its own shares
in the market, up to a total of 14,000,000 ordinary shares of 10p each, having an aggregate nominal value of £1,400,000,
which is equivalent to approximately 14.94% of the Company’s current issued ordinary share capital. The authority
contained in this resolution will be valid for up to fifteen months after the passing of this resolution or until the date of the
next Annual General Meeting of the Company, whichever is the earlier. The Board has no immediate intention of exercising
the proposed authority when it becomes effective and intends to exercise this power only when the effect of such
purchases will be to increase earnings per ordinary share and that such purchases will be in the best interests of
shareholders.
14 Recommendation
The Board considers that the resolutions to be proposed at the Annual General Meeting are in the best interests of the
Company and it is their unanimous recommendation that shareholders support these proposals as the Board intends to
do so in respect of their own holdings.
By order of the Board
J P Gorman FCA
Company Secretary
28 November 2007
15 Corporate Governance Statement
The Directors recognise the value of the principles of good governance, as set out in the Combined Code and the
guidelines published by the Quoted Companies Alliance, and aim to comply with such corporate governance practice so
far as is practicable and appropriate for a public company of its size and nature of a Company quoted on AIM.
Frank Lewis, the Non-executive Chairman, is a member of the Audit Committee. While this does not meet the requirements
of the Combined Code on the basis that a company chairman is not regarded as independent, the Board considers that
he is an appropriate person to be a member of this committee, as he meets the Combined Code’s requirement that one
committee member should have recent and relevant financial experience.
Frank Lewis and Dr Yi Xie, a Non-executive Director, have been granted share options. The Board recognises that the
holding of share options by Non-executive Directors is not consistent with the recommendations of the Combined Code.
However, the Board considers that both Mr Lewis and Dr Xie are independent in character and judgment and that there
are no relationships or circumstances (including financial dependence on their relationships with the Company) which are
likely to affect, or could appear to affect, their judgment as a Non-executive Director.
The Company has adopted a model code for Directors’ dealings in securities of the Company which is appropriate for a
Company quoted on AIM. The Directors will comply with Rule 21 of the AIM Rules relating to Directors’ dealings and will
take all reasonable steps to ensure compliance by the Company’s “applicable employees” (as defined in the AIM Rules).
Board of Directors
The Board currently comprises three Executive and two Non-executive Directors. The Non-executive Directors are
independent of management and free from any business or other relationship which could materially interfere with the
exercise of their independent judgment.
The Board meets on average at least every two months and is responsible, inter alia, for setting and monitoring group
strategy, reviewing trading performance, ensuring adequate funding, examining development opportunities, formulating
policy on key issues and reporting to shareholders. Decisions concerning the direction and control of the business are
made by a majority of the Board and a formal schedule of matters specifically reserved for the decision of the Board is in
place.
The Board is responsible for establishing and maintaining the Group’s system of internal financial controls. Internal financial
control systems are designed to meet the particular needs of the Group and the risks to which it is exposed, and by its
very nature can only provide reasonable, but not absolute, assurance against material misstatement or loss.
An agreed procedure exists for Directors in the furtherance of their duties to take independent professional advice. Newly
appointed Directors are made aware of their responsibilities through the Company Secretary.
Board appointments
The appointment of Directors is overseen by the full Board. There is no formal nominations committee, the appointment of
new Directors being considered by the full Board.
Audit Committee
The Audit Committee was constituted on 21 March 2007 and is chaired by Frank Lewis and includes Dr Yi Xie. Meetings
are expected to be held on average twice a year and may also be attended, by invitation, by the Executive Directors.
The committee provides a forum for reporting by the Group’s external auditors. It is also responsible for reviewing a number
of other matters, including half-year and annual results before their submission to the Board and for monitoring the controls
that are in force to ensure the integrity of information reported to shareholders. The committee also advises the Board on
the appointment of external auditors and on their remuneration for both audit and non-audit work, and will review the
nature, scope and results of the audit with the external auditors.
16 Remuneration Committee
The Remuneration Committee was constituted on 21 March 2007 and is chaired by Frank Lewis and includes Dr Yi Xie.
Meetings are expected to be held on average twice a year. The committee is responsible for making recommendations to
the Board, within agreed terms of reference, on the Company’s framework of executive remuneration and its cost. The
Remuneration Committee determines the contract terms, remuneration and other benefits for the Executive Directors,
including performance related bonus schemes and compensation payments.
The Board determines compensation for Non-executive Directors.
Internal financial control and reporting
The Directors are responsible for establishing and maintaining the Group’s system of internal controls and as such have
put in place a framework of controls to ensure that the ongoing financial performance is measured in a timely and correct
manner and that risks are identified as early as is practicably possible. There is a comprehensive budgeting system and
monthly management accounts are prepared which compare actual results against both the budget and the previous year.
They are reviewed and approved by the Board, and revised forecasts are prepared on a regular basis.
Operational control, compliance and risk management
The Group operates procedures for identifying and considering significant business risks. These involve risk consideration
at operational reviews which will be undertaken by the Audit Committee. A summary of the principal risk factors is set out
on pages 9 and 10.
Relations with shareholders
The Company reports to shareholders twice a year. The Company dispatches the notice of its Annual General Meeting,
together with a description of the items of special business, at least 21 clear days before the meeting. Each substantially
separate issue is the subject of a separate resolution and all shareholders have the opportunity to put questions to the
Board at the Annual General Meeting. The chairman of the Audit and Remuneration Committees normally attend the Annual
General Meeting and will answer questions which may be relevant to their work. The Chairman advises the meeting of the
details of proxy votes cast on each of the individual resolutions after they have been voted on in the meeting.
The Chairman and the Non-executive Director intend to maintain a good and continuing understanding of the objectives
and views of the shareholders.
17 Report of the Remuneration Committee
Statement of compliance
This report does not constitute a Directors’ Remuneration Report in accordance with the Directors’ Remuneration Report
Regulations 2002 which do not apply to the Company as it is not fully listed.
The Company has applied the principles relating to Directors’ remuneration as described below.
Remuneration Committee
Since 21 March 2007 the Remuneration Committee has comprised Frank Lewis as chairman of the committee and Dr Yi
Xie. The Remuneration Committee has formal terms of reference.
At the invitation of the committee chairman, Executive Directors may attend the proceedings.
None of the committee members has any personal financial interests (other than as shareholders) or conflicts of interest
arising from cross-directorships. The committee has access to professional advice from inside and outside the Company.
The Remuneration Committee is responsible, inter alia, for determining the remuneration of the Executive Directors, and
the grant of share options. No external remuneration advisers were appointed during the year.
Policy on Executive Directors’ remuneration
Remuneration packages are designed to motivate and retain Executive Directors to ensure the continued development of
the Company and to reward them for enhancing value to shareholders. The main elements of the remuneration package
for Executive Directors are basic salary or fees, benefits, and share option incentives.
Directors’ remuneration
The remuneration of the Directors for the year ended 30 June 2007 is shown below:
2007 2006
££
Aggregate emoluments of Executive Directors 129,725 21,750
Pension contributions ––
Payments to Non-executive Directors 50,021 11,750
––––––––––– –––––––––––
Total Directors’ remuneration 179,746 33,500
––––––––––– –––––––––––
––––––––––– –––––––––––
18 The elements of remuneration received by each Director in respect of the year ended 30 June 2007 were as follows:
Performance
Fees and Other Related Total Total
salaries Benefits Pension Bonus 2007 2006
££££££
Executive Directors
C Huang (i) 24,999 – – – 24,999 –
M Syropoulo (i) 15,000 – – – 15,000 –
M Liu (i) 15,000 – – – 15,000 –
E Vandyk (ii) 37,226 – – – 37,226 10,000
A Pereira (ii) 37,500 – – – 37,500 11,750
Non-executive Directors
F Lewis (i) 12,795 – – – 12,795 –
Dr Yi Xie (i) 2,500 – – – 2,500 –
O Vaughan (ii) 34,726 – – – 34,726 11,750
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
179,746 – – – 179,746 33,500
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
(i) Appointed 21 March 2007
(ii) Resigned 21 March 2007
Share incentives
The Directors believe that attracting, motivating and retaining employees of appropriate calibre is vital to the continued
success of the Group. The continued incentivisation of key employees is very important, as their skills and experience, and
their supplier and customer relationships are vital to the continued success of the Group. The ZTC Telecommunications Plc
Unapproved Share Option Plan (the “Option Plan”) has been put in place in order to incentivise and remunerate key
employees and senior management, including the Directors, as the Board of the Company considers appropriate.
The exercise of a share option may be conditional upon the achievement of objective performance criteria determined by
the Board of the Company.
Outstanding options granted to Directors over the Company’s ordinary shares of 10p are:
Granted on Outstanding
21 March on 30 June Exercise
2007 2007 price Exercisable
F Lewis 100,000 100,000 20p 21.03.08 20.03.17
C Huang 500,000 500,000 20p 21.03.08 20.03.17
M Syropoulo 500,000 500,000 20p 21.03.08 20.03.17
M Liu 500,000 500,000 20p 21.03.08 20.03.17
Dr Y Xie 100,000 100,000 20p 21.03.08 20.03.17
The options may be exercised in three equal successive annual instalments commencing on and/or after the first
anniversary of the date of grant.
No performance conditions have been imposed on any of the above share options and no consideration was payable for
their award.
The market price of the Company’s ordinary shares at 30 June 2007 was 16.75p, and the range during the year, on a
consolidated basis, was 16.00p to 19.75p.
19 Current terms of appointment
The terms of appointment currently in place for Directors are as follows:
Other
Salary Pension benefits
or fees contribution p.a Notice
Directors per annum % £ Date of contract period
Executive
C Huang 100,000 – – 13 February 2007 12 months
M Syropoulo 60,000 – – 13 February 2007 6 months
M Liu 60,000 – – 13 February 2007 6 months
Non-executive
F Lewis 30,000 – – 13 February 2007 3 months
Dr Y Xie 10,000 – – 13 February 2007 3 months
Outside appointments
Executive Directors who are not full-time are permitted to accept appointments outside the Company and to retain
payments from those sources.
Executive Directors’ service contracts
A service agreement dated 13 February 2007 took effect on the date of the Company’s admission to AIM on 21 March
2007 between (1) the Company and (2) Charles Huang pursuant to which Mr. Huang is employed full-time as the Chief
Executive Officer of the Company. The service agreement is terminable by either party on 12 months’ written notice and
Mr. Huang’s salary is £100,000 per annum. Mr. Huang is not entitled to any other benefits, save that he is eligible to acquire
shares in the Company in accordance with the Option Plan and the Company will provide access to a stakeholder pension
scheme.
A service agreement dated 13 February 2007 took effect on the date of the Company’s admission to AIM on 21 March
2007 between (1) the Company and (2) Mark Syropoulo pursuant to which Mr. Syropoulo is employed part-time as the
Finance Director of the Company. The service agreement is terminable by either party on 6 months’ written notice and Mr.
Syropoulo’s salary is £60,000 per annum. Mr. Syropoulo is not entitled to any other benefits, save that he is eligible to
acquire shares in the Company in accordance with the Option Plan and the Company will provide access to a stakeholder
pension scheme.
A service agreement dated 13 February 2007 took effect on the date of the Company’s admission to AIM on 21 March
2007 between (1) the Company and (2) Michael Liu pursuant to which Mr Liu is employed part-time as the International
Development Director of the Company. The service agreement is terminable by either party on 6 months’ written notice
and Mr. Liu’s salary is £60,000 per annum. Mr. Liu is not entitled to any other benefits, save that he is eligible to acquire
shares in the Company in accordance with the Option Plan and the Company will provide access to a stakeholder pension
scheme.
Directors’ pension arrangements
Under their service contracts Mr. Huang, Mr. Syropoulo and Mr. Liu have access to a stakeholder pension scheme.
No contributions have been made in respect of any such scheme in the year ended 30 June 2007.
20 Non-executive Directors
The remuneration of Non-executive Directors is determined by the Board, and is based upon fees paid to Non-executive
Directors of similar companies.
Non-executive Directors are appointed under letters of appointment setting out specific periods of notice, and do not have
a contract of service, nor are they eligible for any pension arrangements.
Details of Directors’ remuneration
This report should be read in conjunction with note 9b to the financial statements which constitutes part of this report.
Details of Directors’ interests in ordinary shares, share options and warrants are set out in the Directors’ Report.
By order of the Board
Frank Lewis
Remuneration Committee Chairman
28 November 2007
21 Statement of Directors’ Responsibilities
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company, for safeguarding the assets of the Company, for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for the preparation of a Directors’ Report which complies with
the requirements of the Companies Act 1985.
The Directors are responsible for preparing the annual report and the financial statements in accordance with the
Companies Act 1985. The Directors have chosen to prepare financial statements for the Group in accordance with
International Financial Reporting Standards as adopted by the European Union (IFRSs) and have chosen to prepare the
parent company accounts in accordance with UK Generally Accepted Accounting Practice.
Group Financial Statements
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group’s
financial position, financial performance and cash flows. This requires the faithful representation of the effects of
transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International Accounting Standards Board’s ‘Framework for the preparation and
presentation of financial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with
all applicable IFRSs. A fair presentation also requires the Directors to:
● consistently select and apply appropriate accounting policies;
● present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information; and
● provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users
to understand the impact of particular transactions, other events and conditions on the entity’s financial position and
financial performance.
Parent Company Financial Statements
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view
of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial
statements, the Directors are required to:
● select suitable accounting policies and apply them consistently;
● prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company
will continue in business;
● make judgments and estimates that are reasonable and prudent; and
● state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements.
Website
Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Group’s website is the responsibility of the Directors. The Directors’ responsibility also
extends to the ongoing integrity of the financial statements contained therein.
22 Report of the Independent Auditors
Independent auditor’s report to the shareholders of ZTC Telecommunications Plc
We have audited the group consolidated and parent company financial statements (the “financial statements”) of ZTC
Telecommunications plc for the year ended 30 June 2007 which comprise the consolidated income statement, the
consolidated and company balance sheets, the consolidated cash flow statement, the consolidated statement of changes
in equity and the related notes. These financial statements have been prepared under the accounting policies set out
therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and group financial statements in accordance with applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and for preparing the parent
company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice) are set out in the statement of directors’ responsibilities. Our
responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and have been properly
prepared in accordance with the Companies Act 1985 and whether the information given in the directors’ report is
consistent with those financial statements. We also report to you if, in our opinion, the company has not kept proper
accounting records, if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read other information contained in the annual report and consider whether it is consistent with the audited financial
statements. This other information comprises only the Directors and Advisers, Operational Highlights, the Chairman’s
Statement, the Chief Executive Officer’s Statement, Directors’ Biographies, the Directors’ Report, the Corporate
Governance Statement, the Report of the Remuneration Committee and the Statement of Directors’ Responsibilities. We
consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with
the financial statements. Our responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No
person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for
the purpose of the Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as
above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly
disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in
the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s and
company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial statements.
23 Opinion
In our opinion:
● the group consolidated financial statements give a true and fair view, in accordance with IFRSs as adopted by the
European Union, of the state of the group’s affairs as at 30 June 2007 and of its profit for the year then ended;
● the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally
Accepted Accounting Practice, of the state of the parent company’s affairs as at 30 June 2007;
● the financial statements have been properly prepared in accordance with the Companies Act 1985; and
● the information given in the directors’ report is consistent with the financial statements.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
Guildford
28 November 2007
24 Consolidated Income Statement
Note 2007 2006
£’000 £’000
Revenue 2 22,157 13,571
Cost of sales (17,384) (10,995)
––––––––––– –––––––––––
Gross profit 4,773 2,576
Other Operating Income 3 435 290
Exceptional IPO expenses (280) –
Other Administrative expenses (1,151) (312)
Total Administrative expenses (1,431) (312)
Distribution costs (1,368) (658)
Other operating expenses (373) (79)
––––––––––– –––––––––––
Operating profit 2,036 1,817
Finance income 4 19 1
Finance costs 5 (39) –
––––––––––– –––––––––––
Profit before tax 2,016 1,818
Tax 7 (128) (2)
––––––––––– –––––––––––
Profit for the financial year 1,888 1,816
––––––––––– –––––––––––
––––––––––– –––––––––––
Basic earnings per share 8 2.4p 4.2p
Diluted earnings per share 8 2.3p 4.2p
––––––––––– –––––––––––
––––––––––– –––––––––––
25
The notes on pages 30 to 48 form part of these financial statements Consolidated Statement of Changes in Equity
Reverse Share
Share acquisition premium General Merger Translation Retained Total
capital reserve reserve reserve reserve reserve earnings equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 July 2005 1 – – (4) 766 (42) (38) 683
Profit for the year –––––– 1,816 1,816
Transfer of profit 
to general reserve – – – 182 – – (182) –
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 1 July 2006 1 – – 178 766 (42) 1,596 2,499
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Foreign currency 
translation ––––– (54) – (54)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net expense 
recognised directly 
in equity ––––– (54) – (54)
Profit for the year –––––– 1,888 1,888
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total recognised 
income and 
expense for the 
year ––––– (54) 1,888 1,834
Transfer of profit 
to general reserve – – – 249 – – (249) –
Share premium 
recognised on 
reverse acquisition – – 151 –––– 151
Issue of share 
capital, (net of 
issue expenses) 9,367 – 6,226 ––––15,593
Acquisition of 
subsidiary – (12,583) ––––– (12,583)
Share based 
payment charge –––––– 260 260
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 30 June 2007 9,368 (12,583) 6,377 427 766 (96) 3,495 7,754
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
26
The notes on pages 30 to 48 form part of these financial statements Consolidated Balance Sheet
Note 2007 2006
£’000 £’000
Non-current assets
Property, plant and equipment 11 571 697
Deferred taxation 12 1 1
––––––––––– –––––––––––
Total non-current assets 572 698
––––––––––– –––––––––––
Current assets
Inventories 13 889 233
Trade and other receivables 14 10,898 3,365
Cash and cash equivalents 15 2,499 1,772
––––––––––– –––––––––––
Total current assets 14,286 5,370
––––––––––– –––––––––––
Total assets 14,858 6,068
––––––––––– –––––––––––
Current liabilities
Trade and other payables 16 (6,213) (2,551)
Current tax liabilities (891) (355)
––––––––––– –––––––––––
Total current liabilities (7,104) (2,906)
––––––––––– –––––––––––
Non-current liabilities
Other 17 – (663)
––––––––––– –––––––––––
Total non-current liabilities – (663)
––––––––––– –––––––––––
Total liabilities (7,104) (3,569)
––––––––––– –––––––––––
Net assets 7,754 2,499
––––––––––– –––––––––––
––––––––––– –––––––––––
Equity
Share capital 19 9,368 1
Reverse acquisition reserve 20 (12,583) –
Share premium reserve 21 6,377 –
General reserve 24 427 178
Merger reserve 25 766 766
Translation reserve 22 (96) (42)
Retained earnings 26 3,495 1,596
––––––––––– –––––––––––
Total equity 7,754 2,499
––––––––––– –––––––––––
––––––––––– –––––––––––
These financial statements were approved by the Board of Directors and authorised for issue on 28 November 2007.
Signed on behalf of the Board of Directors
Director Director
F Lewis M Syropoulo
27
The notes on pages 30 to 48 form part of these financial statements Company Balance Sheet
Note 2007 2006
£’000 £’000
Fixed assets
Investments 10 15,987 –
––––––––––– –––––––––––
Total Fixed assets 15,987 –
––––––––––– –––––––––––
Current assets
Trade and other receivables 14 1,853 53
Cash at bank and in hand 15 1,525 1,137
––––––––––– –––––––––––
Total current assets 3,378 1,190
––––––––––– –––––––––––
Current liabilities
Amounts due in less than one year 16 (435) (34)
––––––––––– –––––––––––
Total current liabilities (435) (34)
––––––––––– –––––––––––
Net current assets 2,943 1,156
––––––––––– –––––––––––
Net Assets 18,930 1,156
––––––––––– –––––––––––
––––––––––– –––––––––––
Represented by:
Share capital 19 9,368 1,265
Shares to be issued 19 1,987 –
Share premium reserve 21 6,377 151
Undistributable reserve 25 2,019 –
Retained profit and loss reserve (821) (260)
––––––––––– –––––––––––
18,930 1,156
––––––––––– –––––––––––
––––––––––– –––––––––––
These financial statements were approved by the Board of Directors and authorised for issue on 28 November 2007.
Signed on behalf of the Board of Directors
Director Director
F Lewis M Syropoulo
28
The notes on pages 30 to 48 form part of these financial statements Consolidated Cash Flow Statement
Note 2007 2006
£’000 £’000
Cash (used in)/generated from operations
Net cash outflow from operations 27 (1,399) 1,464
Interest paid –1
Tax paid ––
––––––––––– –––––––––––
Net cash (outflows)/inflows from operating activities (1,399) 1,465
––––––––––– –––––––––––
Investing activities
Interest received 19 –
Purchase of property, plant and equipment (23) (118)
Acquisition of parent through reverse acquisition, net cash used (226) –
––––––––––– –––––––––––
Net cash used in investing activities (230) (118)
––––––––––– –––––––––––
Financing activities
Issue of shares prior to acquisition 763 461
Issue of share capital 1,605 –
Interest paid (39) –
––––––––––– –––––––––––
Net increase in cash from financing activities 2,329 461
––––––––––– –––––––––––
Net increase/(decrease) in cash and cash equivalents 700 1,808
Cash and cash equivalents at beginning of year 1,772 14
Exchange gains/(losses) on cash and cash equivalents 27 (50)
––––––––––– –––––––––––
Cash and cash equivalents at end of year 15 2,499 1,772
––––––––––– –––––––––––
––––––––––– –––––––––––
29
The notes on pages 30 to 48 form part of these financial statements Notes to the Financial Statements
1. ACCOUNTING POLICIES
Basis of accounting
The Group financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) and interpretations adopted by the European Union and as applied in accordance with the provisions of the
Companies Act 1985. Therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.
The financial statements have been prepared under the historical cost convention. The principal accounting policies
adopted are set out below.
Standards issued but not yet effective
At the date of authorisation of these financial statements the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet effective:
IFRS 8 Operating Segments (effective for periods beginning on or after 1 January 2009)
IFRIC 11 IFRS 2 – Group and Treasury Share Transactions (effective for periods beginning on or after 1 March
2007)
IFRIC 12 Service Concession Arrangements (effective for periods beginning on or after 1 January 2008)
IFRIC 13 Customer Loyalty Programmes (effective for periods beginning on or after 1 July 2008)
IFRIC 14 IAS 19 – The limit on a Defined Benefit Asset Minimum Funding Requirements and their interaction
(effective for periods beginning on or after 1 January 2008)
IAS 1 Amendment – Capital disclosures (effective for periods beginning on or after 1 January 2007)
IAS 23 Amendment – Borrowing costs (effective for periods beginning on or after 1 January 2009)
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group when the relevant standards and interpretations come into
effect. The Directors do not anticipate the early adoption of any of the above standards.
30 Basis of consolidation
The consolidated financial statements incorporate the financial statements of ZTC Telecommunications Plc and all its
subsidiaries made up to 30 June each year.
Control is achieved where the Company has the power to govern the financial and operational policies of an entity
so as to gain benefit from its activities.
The Company’s controlling interest in its indirectly held, wholly owned subsidiary, Shenzhen Zhong Tian
Communication Equipments Co. Limited was acquired through a transaction under common control, as defined in
IFRS 3, Business Combinations. The Directors note that transactions under common control are outside the scope
of IFRS 3 and that there is no guidance elsewhere in IFRS covering such transactions.
IAS contain guidance where a transaction falls outside the scope of IFRS. This guidance is covered in Paragraphs
10-12 of IAS 8, Accounting policies, Changes in Accounting Estimates and Errors. This requires, inter alia, that where
IFRS does not contain guidance on a particular issue, the Directors may also consider the most recent
pronouncements of other standard setting bodies that use a similar conceptual framework to develop accounting
standards. In this regard it is noted that the United States Financial Accounting Standards Board (FASB) has issued
an accounting standard covering Business Combinations (FAS 141), that is similar in a number of respects to IFRS 3.
Further there is currently a major project being run jointly by the IASB and the FASB to converge IFRS and US GAAP .
In contrast to IFRS 3, FAS 141 does include, as an appendix, limited accounting guidance for transactions under
common control, which as with IFRS 3, are outside the scope of that accounting standard. The guidance contained
in FAS 141 indicates that a form of accounting that is similar to pooling of interests accounting, which was previously
set out in Accounting Principles Board (APB) opinion 16, may be used when accounting for transactions under
common control.
Having considered the requirements of IAS 8 and the guidance included within FAS 141, it is considered appropriate
to use a form of accounting which is similar to pooling of interests when dealing with the transaction in which the
Group acquired its controlling interest in Shenzhen Zhong Tian Communication Equipments Co. Ltd.
The Company has taken advantage of the exemption under section 230 of the Companies Act 1985 and has not
presented its income statement in these financial statements. The Group profit for the year includes a loss after tax
of £436,794 (2006: Nil due to the principles involved in reverse acquisition accounting) which is dealt with in the
accounts of the Company.
Reverse acquisition accounting
The acquisition of Praise Ease Limited by ZTC Telecommunications Plc on 21 March 2007 has been accounted for
under the principles of reverse acquisition accounting. Although the consolidated financial statements have been
prepared in the name of the legal parent, ZTC Telecommunications Plc, they are in substance a continuation of the
consolidated financial statements of the legal subsidiary, Praise Ease Limited. The following accounting treatment has
been applied in respect of the reverse acquisition:
The assets and liabilities of the legal subsidiary, Praise Ease Limited are recognised and measured in the consolidated
financial statements at the pre-combination carrying amounts, without restatement to fair value;
The retained earnings and other equity balances recognised in the consolidated financial statements reflect the
retained earnings and other equity balances of Praise Ease Limited immediately before the business combination and
the results of the period from 1 July 2006 to the date of the business combination are those of Praise Ease Limited.
However, the equity structure appearing in the consolidated financial statements reflects the equity structure of the
legal parent, ZTC Telecommunications Plc, including the equity instruments issued in order to effect the business
combination; and
Comparative numbers presented in the financial statements are the consolidated numbers of Praise Ease Limited for
the year ended 30 June 2006.
31 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts received
or receivable for goods provided in the normal course of business, net of discounts and sales related taxes.
Sales of goods and services are recognised when goods are delivered and title has passed.
Group property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and are depreciated over their
estimated useful lives on the following annual bases:
Leasehold improvements 4.5% (straight line)
Office equipment 33.3% (straight line)
Motor vehicles 18% (straight line)
Machinery 18% (straight line)
Fixtures, fittings and equipment 18% (straight line)
Operating profit
Operating profit is stated before finance income and finance costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, deposits held at call with banks and other short-term highly
liquid investments with original maturities of three months or less.
Borrowings
All borrowing costs are recognised in the income statement in the period in which they are incurred.
Trade receivables
Trade receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised
in profit and loss when there is objective evidence that the asset is impaired.
Trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost using the
effective interest rate method.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average method. Net realisable value
represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing,
selling and distribution.
32 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Finance leases are capitalised at the lease commencement at the lower of the fair value of the asset and the present
value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so
as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance
charges, are included in current and non-current borrowings. The finance charges are charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant
lease.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in
the income statement because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realised based on tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary economic
environment in which it operates, (its functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each Group company are expressed in pounds sterling, which is the functional
currency of the company and the presentational currency for the consolidated financial statements.
Transactions in currencies other than sterling are initially recorded at the rates of exchange prevailing on the dates of
the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates
prevailing on the balance sheet date. Profits and losses arising on retranslation are included in the income statement.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated into sterling at exchange
rates prevailing on the balance sheet date. Exchange differences arising, if any, are classified as equity and transferred
to the Group’s translation reserve. Such translation differences are recognised as income or expenses in the period
in which the operation is disposed of. Income and expense items are translated at the average exchange rates for
the period.
33 Share Based Payment
The Group has applied the requirements of IFRS 2 Share based payment. The Group issues equity settled share
based payments to certain employees. Equity settled share based payments are measured at fair value at the date
of the grant. The fair value determined at the grant date of the equity settled share based payments is expensed on
a straight line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and
adjusted for the effect of non-market based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects on non-transferability, exercise restrictions and behavioural
considerations.
2. BUSINESS AND GEOGRAPHICAL SEGMENTS
The Group currently operates in only one geographical market, China. This is the basis on which the Group records
its primary segment information. Unallocated operating expenses, assets and liabilities, relate to the general
management, financing and administration of the Group.
China Unallocated Total
2007 2006 2007 2006 2007 2006
£’000 £’000 £’000 £’000 £’000 £’000
Revenue 22,157 13,571 – – 22,157 13,571
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Segment result 1,838 1,527 (237) – 1,601 1,527
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
Other operating income 435 290
Finance income 19 1
Finance costs (39) –
––––––––––– –––––––––––
Profit before tax 2,016 1,818
Tax (128) (2)
––––––––––– –––––––––––
Profit for the financial year 1,888 1,816
––––––––––– –––––––––––
––––––––––– –––––––––––
Other information
Capital expenditure 23 118 – – 23 118
Depreciation 142 135 – – 142 135
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Balance sheet
Segment assets 13,314 6,067 5,344 – 18,658 6,067
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
Deferred tax asset 11
––––––––––– –––––––––––
Total assets 18,659 6,068
––––––––––– –––––––––––
––––––––––– –––––––––––
Segment liabilities (6,104) (3,214) (109) – (6,213) (3,214)
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
Current tax liabilities (891) (355)
Deferred tax liabilities ––
––––––––––– –––––––––––
Total liabilities (7,104) (3,569)
––––––––––– –––––––––––
––––––––––– –––––––––––
34 35
3. OTHER OPERATING INCOME
2007 2006
£’000 £’000
Sales of components 343 21
Processing 74 263
Provision of value added services 17 5
Other 11
––––––––––– –––––––––––
435 290
––––––––––– –––––––––––
––––––––––– –––––––––––
4. FINANCE INCOME
2007 2006
£’000 £’000
Bank interest receivable 19 1
––––––––––– –––––––––––
––––––––––– –––––––––––
5. FINANCE COSTS
2007 2006
£’000 £’000
Interest on bank overdrafts and loans 39 –
––––––––––– –––––––––––
Total borrowing costs 39 –
––––––––––– –––––––––––
––––––––––– –––––––––––
6. PROFIT FOR THE FINANCIAL YEAR
2007 2006
£’000 £’000
Profit for the financial year is arrived at after charging:
Depreciation on owned assets 142 134
Auditors’ remuneration for audit services 43 6
Write down of inventories recognised as an expense 5 20
Operating lease payments 97 72
––––––––––– –––––––––––
––––––––––– –––––––––––
Amounts payable to BDO Stoy Hayward LLP and its related entities, in respect of both audit and non-audit services
are set out below:
2007 2006
£’000 £’000
Fees payable to the auditors for the audit of the Company’s annual accounts 43 6
––––––––––– –––––––––––
Fees payable to the auditors for other services:
The audit of the Company’s subsidiaries 30 6
Other taxation services 54
Corporate finance transactions 185 –
Other services 13 –
––––––––––– –––––––––––
233 10
––––––––––– –––––––––––
––––––––––– –––––––––––
The fees disclosed in 2007 represent the Directors’ estimate of the fees payable for the audit for the year ended
30 June 2007. 7. TAX
2007 2006
£’000 £’000
Current tax
Corporation tax ––
Tax on overseas subsidiaries 127 –
Adjustment in respect of prior years – –
––––––––––– –––––––––––
Total current tax 127 –
Deferred tax 12
Adjustment in respect of prior years – –
––––––––––– –––––––––––
Total tax charge 128 2
––––––––––– –––––––––––
––––––––––– –––––––––––
The charge for the year can be reconciled to the profit per the income statement as follows:
2007 2006
£’000 £’000
Profit before tax 2,016 1,818
Tax at the UK corporation tax rate of 30% 605 545
––––––––––– –––––––––––
––––––––––– –––––––––––
Factors affecting charge for the year
Tax losses carried forward 288 –
Disallowable expenditure (149) –
Overseas tax exemption and concessions (265) (275)
Allowance for lower overseas taxation rates (400) (273)
Other adjustments 49 5
––––––––––– –––––––––––
Group tax charge 128 2
––––––––––– –––––––––––
––––––––––– –––––––––––
The Company and its subsidiary undertakings are subject to taxation on the following bases and at the following
rates;
ZTC Telecommunications Plc
The Company is subject to the United Kingdom corporation tax regime
Praise Ease Limited
The company is subject to the corporation tax regime in Hong Kong. As the company made a loss during the year,
no taxation is payable.
Shenzhen Zhong Tian Communication Equipments Co. Ltd
According to the relevant Chinese tax rules and regulations, the standard Enterprise Income Tax (.EIT.) rate is 33%.
The company is located in Shenzhen, a special economic zone, which makes it eligible to enjoy a favorable income
tax rate of 15%. In 2005, the company became a wholly foreign invested company and was entitled to another
income tax preference policy of “2 years exemption and 3 years 50% discount from the first profit making year”. The
company was therefore exempted totally from income tax for the statutory financial years 2005 and 2006.
Current tax expenses of the company for the financial years 2006 and 2007 represent Chinese EIT calculated at the
standard income tax rate or approved income tax rate on the assessable income.
Details of deferred tax assets are included in note 12.
36 8. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the following data:
2007 2006
£’000 £’000
Earnings
Earnings for the purpose of basic and diluted earnings per share 1,888 1,816
––––––––––– –––––––––––
––––––––––– –––––––––––
Number of shares
Weighted average number of ordinary shares for the purpose of basic ’000 ’000
earnings per share 77,937 42,875
Effect of dilutive potential ordinary shares:
Share options 4,192 –
––––––––––– –––––––––––
Weighted average number of ordinary shares for the purpose of diluted 
earnings per share 82,129 42,875
––––––––––– –––––––––––
––––––––––– –––––––––––
The denominators for the purposes of calculating both basic and diluted earnings per share in 2006 have been
adjusted for the share division that took place in 2007.
9a. STAFF COSTS
The average monthly number of employees, (including Executive Directors) during the year was:
Group Company
2007 2006 2007 2006
Number Number Number Number
Manufacturing 285 198 – –
Sales 39 31 – –
Administration 98 54 3 3
––––––––––– ––––––––––– ––––––––––– –––––––––––
422 283 3 3
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
The costs incurred in respect of these employees were:
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Wages and salaries 539 186 177 34
Share based payments (see note 23) 71 – 71 –
Social security costs 86 15 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
696 201 248 34
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
37 9b. DIRECTORS’ REMUNERATION
The following amounts were paid to the Directors during the year
2007 2006
£’000 £’000
Short term employee benefits
Directors’ emoluments 180 34
Share based payments 49 –
––––––––––– –––––––––––
––––––––––– –––––––––––
The highest paid Director received remuneration of £37,500 (2006: £11,750). Further details of Directors’
remuneration are set out in the Report of the Remuneration Committee on pages 18 to 21.
10. INVESTMENTS
Investment in 
subsidiary
undertakings
£’000
Company
At 1 July 2006 –
Additions 15,987
–––––––––––
At 30 June 2007 15,987
–––––––––––
–––––––––––
The cost of the investment in the subsidiary undertaking comprises £14m satisfied by the issue of 70,000,000 new
ordinary shares of 10p each at 20p per share and contingent consideration of £1,987,000 satisfied by 15,000,000
ordinary shares of 10p recognised at their fair value of 13.25p per share.
The Company owns 100% of the following undertakings:
Name of undertaking Place of Incorporation % ownership Principal activity
Praise Ease Limited Hong Kong 100% Holding company
Shenzhen Zhong Tian 
Communication Equipments Co. Ltd China 100%* Design, distribution and
assembly of mobile phones
*This company is owned indirectly by ZTC Telecommunications Plc
38 11. PROPERTY, PLANT AND EQUIPMENT
Fixtures, 
LeaseholdOffice Motor fittings and 
Improvements equipment Machinery vehicles equipment Total
Group £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 July 2005 – – 680 – 30 710
Additions 9 – – 105 4 118
Disposals ––––––
Exchange difference – – 5 – – 5
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 1 July 2006 9 – 685 105 34 833
Additions – 17 7 8 8 40
Disposals ––––––
Exchange difference – – (24) (4) (1) (29)
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 30 June 2007 9 17 668 109 41 844
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Depreciation
At 1 July 2005 –––– 1 1
Additions 1 – 124 5 5 135
Disposals ––––––
Exchange difference ––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 1 July 2006 1 – 124 5 6 136
Charge for the year 2 – 121 12 8 143
Disposals ––––––
Exchange difference – – (5) (1) – (6)
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 30 June 2007 3 – 240 16 14 273
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Net book value
At 30 June 2005 – – 680 – 29 709
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 30 June 2006 8 – 561 100 28 697
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
At 30 June 2007 6 17 428 93 27 571
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
12. DEFERRED TAX ASSETS
Provisions Total
£’000 £’000
1July 2005 33
Charge to income (2) (2)
––––––––––– –––––––––––
1 July 2006 11
Charge to income ––
––––––––––– –––––––––––
30 June 2007 11
––––––––––– –––––––––––
––––––––––– –––––––––––
The deferred tax assets are recoverable against future taxable profits.
39 13. INVENTORIES
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Raw materials 463 138 – –
Work in progress – 51 – –
Finished goods 426 44 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
889 233 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
14. TRADE AND OTHER RECEIVABLES
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Due within one year:
Amounts receivable for the sale of goods 4,273 2,300 – –
Other receivables 853 29 1,837 –
Prepayments and accrued income 5,772 1,036 16 53
––––––––––– ––––––––––– ––––––––––– –––––––––––
10,898 3,365 1,853 53
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
15. CASH AND CASH EQUIVALENTS
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Cash and cash equivalents per balance sheet 2,499 1,772 1,525 1,137
––––––––––– ––––––––––– ––––––––––– –––––––––––
Cash and cash equivalents per cash flow statement 2,499 1,772 1,525 1,137
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
All of the Group’s cash and cash equivalents at 30 June 2007 are at floating interest rates.
All of the Group’s cash and cash equivalents at 30 June 2007 are in sterling except for £5,297 held in $HK and
£968,796 held in Chinese RMB. In 2006, £8,000 was held in $HK and the remainder in Chinese RMB. There were
no amounts held in sterling.
The Directors consider that the carrying amount of cash and cash equivalents approximates their fair value.
40 16. TRADE AND OTHER PAYABLES
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Trade payables 2,637 1,094 – 6
Income tax payable 127 – – –
Other payables 292 208 – 19
Accruals and deferred income 1,469 784 109 9
Amounts owed to related parties 1,688 465 – –
Due to Group undertakings – – 326 –
––––––––––– ––––––––––– ––––––––––– –––––––––––
6,213 2,551 435 34
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 137 days (2006: 96 days).
The Directors consider that the carrying of trade and other payables approximates to their fair value.
Included in amounts owed to related parties is an amount owed to a Director of £760,943. Further information on
this balance can be found in note 29.
17. NON CURRENT LIABILITIES
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Amounts owed to related parties – 663 – –
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
18. FINANCIAL RISK
The Group is exposed to the following risks – foreign currency risk, credit risk and liquidity risk. The policy for
managing these risks is outlined below;
Foreign currency risk
Foreign currency risk arises on sales to overseas markets (by the Group’s subsidiary undertaking, Shenzhen Zhong
Tian Communication Equipments Co. Limited), namely Hong Kong, the transactions being denominated in $HK.
Sales to these markets however are minimal hence the risk is not considered to be significant.
Foreign currency risk also arises in relation to the consolidation process, as the Group’s main trading entity is based
in China and presents its accounts in Chinese RMB.
Liquidity risk
The Group maintains good relationships with its banks and its cash requirements are anticipated via the budgetary
process.
41 42
Credit risk
The Group is mainly exposed to credit risk from credit sales. It is the Group’s policy, implemented by management,
to assess the credit risk of the new customers before entering contracts. The Group closely monitors the creditability
of its existing customers and will require an advance payment if necessary. The Group will terminate business with
customers with a poor credit history. Management considers the above measures to be sufficient to control the credit
risk exposure.
The Group has a significant concentration of credit risk with exposure spread over a few national distributors who
account for a material proportion of sales.
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet)
comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less. The
Group holds all cash and cash equivalents at banks and other credit institutions with high credit ratings.
The Group does not enter into complex derivatives to manage credit risk.
19. SHARE CAPITAL
2007 2006
Group £’000 £’000
Authorised:
179,808,500 ordinary shares of 10p each 17,981 –
Nil ordinary shares of HK$1 each, (2006: 10,000) – 1
––––––––––– –––––––––––
17,981 1
––––––––––– –––––––––––
––––––––––– –––––––––––
Allotted, called up and fully paid:
93,682,516 ordinary shares of 10p each 9,368 –
Nil ordinary shares of HK$1 each, (2006: 10,000) – 1
––––––––––– –––––––––––
9,368 1
––––––––––– –––––––––––
––––––––––– –––––––––––
Comparative numbers for share capital presented in the financial statements are the consolidated numbers of Praise
Ease Limited for the year ended 30 June 2006.
2007 2006
Company £’000 £’000
Authorised:
179,808,500 ordinary shares of 10p each 17,981 –
Nil ordinary shares of 1p each, (2006: 298,085,000) – 2,981
Nil ‘A’ ordinary shares of 2p each, (2006: 201,915,000) – 4,038
––––––––––– –––––––––––
17,981 7,019
––––––––––– –––––––––––
––––––––––– –––––––––––
Allotted, called up and fully paid:
93,682,516 ordinary shares of 10p each 9,368 –
Nil ordinary shares of 1p each, (2006: 25,500,000) – 255
Nil ‘A’ ordinary shares of 2p each, (2006: 201,915,000) – 1,010
––––––––––– –––––––––––
9,368 1,265
––––––––––– –––––––––––
––––––––––– –––––––––––
On 29 January 2007, 9,410,155 ordinary shares of 1p each were issued at par as part of a non-employee warrant
proposal.
On 19 March 2007, the unpaid element of the ‘A’ ordinary shares was paid up, resulting in an increase in the nominal
value of share capital of £3,028,725. On 20 March 2007, each ‘A’ ordinary share of 2p was subdivided and converted into:
– One ordinary share of 1p ranking pari passu in all respects and forming part of one uniform class with the fully
paid 1p ordinary shares then in issue; and
– One deferred share, the rights attaching to the deferred shares being as follows;
a. no dividend or other distribution shall be paid or made in respect of the Deferred shares;
b. the holders of deferred shares shall not be entitled to receive notice of, or attend or vote at, any general
meeting of the Company;
c. on a return of capital whether on a winding-up or otherwise the holders of the deferred shares shall be
entitled to receive only the amount credited as paid up on each share but only after the holder of each
Ordinary share shall have received the amount paid up or credited as paid up on such a share together
with the payment of £1,000,000 per share but the holder of the deferred shares shall not be entitled to
participate further; and
d. the creation of the deferred shares by conversion as aforesaid, shall be deemed to confer irrevocable
authority on the Company at any time thereafter to appoint any person to execute on behalf of the holders
of such shares a transfer and/or an agreement to transfer the same, without making any payment to the
holders thereof, to such persons as the Company may determine and to acquire the same in accordance
with the provisions of the Companies Acts without making any payment to the holders thereof and
pending such transfer and/or cancellation to retain the certificates (if any) thereof.
On the same day the entirety of the deferred shares were cancelled.
On 20 March 2007 the 236,825,155 ordinary shares of 1p each in existence were converted into 23,682,516 ordinary
shares of 10p each.
On 21 March 2007, the Company issued 70,000,000 ordinary shares of 10p each at 20p per share, thus giving rise
to a premium on the issue of £7,000,000. On the same date the Company was admitted to the AIM market.
Share Options
A total of 2,160,000 options over the ordinary share capital of the Company was granted to a number of employees
on 21 March 2007. All options are exercisable at the market value at the date of grant, being 20p per ordinary share
and are exercisable between 1 and 10 years from the date of grant.
Employee Warrants
A total of 3,125,000 employee warrants over the ordinary share capital of the Company were issued on 2 February
2007, following the cancellation of 31,250,000 warrants and 6,250,000 subscription rights previously held by a
number of employees. These employee warrants were exercisable immediately and at any time up until 31 March
2010. All employee warrants are exercisable at the market value at the date of grant, being 20p per ordinary share.
Warrants held by non-employees
At 30 June 2006 there were outstanding 50,443,750 warrants and 6,750,000 further subscription rights held by non-
employees.
At the date of Admission, 21 March 2007, following partial acceptance of the non-employee warrant proposal sent
to the non-employee warrant holders on 19 December 2006 and the consolidation of the Company’s ordinary shares
in March 2007, there remained outstanding 891,250 warrants to acquire ordinary shares of 10p at a conversion price
of 20p per ordinary share.
43 These warrants will lapse on 29 November 2007, and no value has been recognised in these accounts in respect of
them.
As at 30 June 2007, the Company had a total of 6,176,250 outstanding options and warrants, all exercisable at 20p
per ordinary share.
Shares to be issued
Contingent consideration of up to 15 million ordinary shares is due to be paid dependent upon the post tax profits
of Zhong Tian for the year ended 30 June 2007. The company achieved the agreed level of profitability and as a result
an amount of £1,987,000 has been included in equity as “shares to be issued”, being 15 million shares at their fair
value of 13.25p per share.
20. REVERSE ACQUISITION RESERVE
As outlined in note 1, Accounting Policies, the acquisition during the year of Praise Ease Limited has been accounted
for under the principles of reverse acquisition accounting. The accounting treatment which has been applied in
respect of this acquisition is also outlined in note 1.
21. SHARE PREMIUM RESERVE
Group Company
2007 2006 2007 2006
£’000 £’000 £’000 £’000
At 1 July 2006 – – 151 –
Share premium recognised on reverse acquisition 151 – – –
Issue of share capital 7,000 – 7,000 151
Expenses connected to issue of share capital (774) – (774) –
––––––––––– ––––––––––– ––––––––––– –––––––––––
At 30 June 2007 6,377 – 6,377 151
––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– –––––––––––
22. TRANSLATION RESERVE
2007 2006
£’000 £’000
Group
1 July 2006 (42) –
Exchange differences on translation of overseas operations (54) (42)
––––––––––– –––––––––––
30 June 2007 (96) (42)
––––––––––– –––––––––––
––––––––––– –––––––––––
44 23. SHARE BASED PAYMENTS
As outlined in Note 19, the Group granted share options and issued warrants during the year. Details of share options
and warrants outstanding are as follows.
A total of 81,693,750 employee and non-employee warrants and 13,000,000 further subscription rights were
outstanding at 30 June 2006. Following the acceptance of proposals made to the warrantholders, 72,781,250
warrants and all 13,000,000 further subscription rights were cancelled and 9,410,155 new ordinary shares and
31,250,000 new warrants were issued. 
Following the consolidation of the Company’s ordinary shares, the balance of 40,162,500 warrants outstanding was
converted into 4,016,250 warrants to subscribe for ordinary shares of 10p at 20p per share. Of these 4,016,250
warrants, 891,250 warrants lapse on 29 November 2007, and no amount has been recognised in the accounts for
the year ended 30 June 2007 in respect of these. 
Number Weighted 
of share average 
options and exercise 
warrants price £
Outstanding at end of year 6,176,250 0.20
––––––––––– –––––––––––
––––––––––– –––––––––––
Exercisable at end of year 4,016,250 0.20
––––––––––– –––––––––––
––––––––––– –––––––––––
A share based payment charge has been calculated using the Black-Scholes model to calculate the fair value of the
share options and warrants. The inputs into the Black Scholes model are as follows;
2007
Weighted average share price 20p
Weighted average exercise price 20p
Expected volatility 33.4%
Expected life 6 years
Risk free rate 5.5%
Expected dividends 0%
–––––––––––
–––––––––––
The expected volatility percentage was calculated by reference to the share price of the Company over a twenty four
week period from the listing of the Company to the end of August and the share price of a close competitor company
for a two year period up until August 2007. The expected life used in the model has been adjusted based on
management’s best estimate, for the effects of non transferability, exercise restrictions and behavioural
considerations.
The weighted average remaining contractual life of the options and warrants outstanding at 30 June 2007 was 5
years 9 months.
The Group recognised total expenses related to equity settled share based payment transactions in the form of
options and warrants of £260,390 (2006: £Nil). Of this total, £70,759 related to employees including Executive
Directors, (2006: £Nil). The remaining amount relates to the fair value of share options issued as consideration in the
acquisition by the Group’s subsidiary undertaking, Praise Ease Limited of Shenzhen Zhong Tian Communication
Equipments Co. Ltd.
24. GENERAL RESERVE
In accordance with the “Law of China on Joint Ventures Using Chinese and Foreign Investment”, 10% of the retained
earnings has been transferred as ZTC’s general reserve fund, after offsetting accumulated losses from prior years,
and before profit distributions to the investors. After the annual tax review for CY2007, the general reserve will be
adjusted according to the accumulated profits determined by the tax bureau.
45 25. OTHER RESERVES
Undistributable reserve
This reserve has arisen in the Company financial statements as a result of the cancellation of the Company’s deferred
shares as outlined in note 19.
Merger reserve
This reserve arose as a result of the acquisition by the Group’s subsidiary undertaking, Praise Ease Limited of
Shenzhen Zhong Tian Communication Equipments Co. Ltd, which was acquired through a transaction under
common control and accounted for using the pooling of interests method.
26. RETAINED EARNINGS
2007 2006
£’000 £’000
Group
1 July 2006 1,596 (38)
Profit for the year 1,888 1,816
Share based payment charge 260 –
Transfer to general reserve (249) (182)
––––––––––– –––––––––––
30 June 2007 3,495 1,596
––––––––––– –––––––––––
––––––––––– –––––––––––
27. NOTES TO THE CASH FLOW STATEMENT
2007 2006
£’000 £’000
Profit for the financial year 1,888 1,816
Adjustments for:
Depreciation of property, plant and equipment 143 135
Share based payment expense 260 –
Exceptional IPO expense 280 –
Finance income (19) (1)
Finance costs 39 –
Tax 128 2
––––––––––– –––––––––––
Operating profit before changes in working capital 2,719 1,952
Changes in working capital:
Increase in inventories (656) (101)
Increase in trade and other receivables (7,533) (1,864)
Increase in trade and other payables 4,071 1,477
––––––––––– –––––––––––
Net cash (outflow) / inflow from operations (1,399) 1,464
––––––––––– –––––––––––
––––––––––– –––––––––––
46 28. OPERATING LEASE ARRANGEMENTS
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-
cancellable operating leases, which fall due as follows:
2007 2006
£’000 £’000
Within one year 84 83
In the second to fifth years 133 279
After five years 47 168
––––––––––– –––––––––––
264 530
––––––––––– –––––––––––
––––––––––– –––––––––––
29. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
The remuneration of the Directors, who are the key management personnel of the Group, is set out below.
2007 2006
£’000 £’000
Directors’ emoluments 180 34
Share based payment 49 –
––––––––––– –––––––––––
––––––––––– –––––––––––
Further information about the remuneration of individual directors is provided in the Report of the Remuneration
Committee.
During the year, the Group entered into the following transactions with related parties;
Related party Type of Transaction amount Balance owed/(owing)
relationship transaction Year ended 30 June 2007 30 June 2007
££
Relative of the CEO Rental expense 65,630 –
Charles Huang (CEO) Interest 38,613 –
Charles Huang (CEO) Funding – (758,402)
Relative of the CEO Funding – (164,588)
At 30 June 2007 there is also a further amount owed to Charles Huang of £760,943. Further details regarding this
balance can be found in note 30 to these financial statements.
Employee Warrants
As referred to in Note 19, a total of 3,125,000 employee warrants over the ordinary share capital of the Company
were issued on 2 February 2007, following the cancellation of certain warrants and further subscription rights
previously held by a number of employees. These employee warrants were exercisable immediately and at any time
up until 31 March 2010. All employee warrants are exercisable at the market value at the date of issue, being 20p
per ordinary share.
Of these employee warrants, 2,875,000 were issued to Directors as follows: O J Vaughan: 1,406,250; E Vandyk:
1,406,250; A D Pereira: 62,500.
47 48
30. EVENTS OCCURING AFTER THE BALANCE SHEET DATE
Subsequent to the balance sheet date, by a member’s resolution passed on 24 October 2007, the authorised share
capital of the Company’s subsidiary undertaking, Praise Ease Limited, was increased from HK$10,000 divided into
10,000 shares of HK$1 each to HK$7,162,860 by the creation of an additional 7,152,860 shares of HK$1 each
ranking pari passu in all respects with the existing shares in the share capital of the company. By a directors’
resolution passed on the same date, 7,152,860 shares of HK$1 each were allotted to ZTC Telecommunications Plc
at par and the consideration was satisfied by the book debts due to a director, Mr Charles Huang, as agreed by him.
31. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION AND
UNCERTAINTY
Critical judgements in applying the Group’s accounting policies and key sources of
estimation and uncertainty
Provisions
In the process of applying the Group’s accounting policies, which are described in note 1 above, judgement was
applied by the Directors in estimating the provision for doubtful trade and receivables and obsolete stock.
Share based payment
Management have made numerous judgements regarding the calculation of the share based payment expense in
the accounts, including, the expected volatility of the Company’s shares, the share price to be used in the calculation
and the most appropriate risk free rate to use. In making these judgements, management considered the share price
volatility of a number of the Company’s competitors and current interest rates. The actual figures used in the
calculation are shown in note 23.
No other material judgements have been made by management that could have a significant effect on the amounts
recognised in the financial statements.
32. EXPLANATION OF TRANSITION TO IFRS
This is the first year end that the Group has presented its financial statements under IFRS. The last financial
statements under UK GAAP were for the year ended 30 June 2006 and the date of transition to IFRS was therefore
1 July 2005.
The adoption of IFRS had no impact on either the equity or results of the Group or Company for 2007. The only
changes resulting from the transition to IFRS are of a presentational nature.
33. ACQUISITION OF SUBSIDIARY
On 21 March 2007 the Group acquired 100% of the issued share capital of Praise Ease Limited for an initial
consideration of £14 million satisfied by the issue of 70,000,000 new ordinary shares of 10p each at 20p per share
and contingent consideration of a maximum of 15,000,000 additional ordinary shares of 10p, based upon the post-
tax profits of Zhong Tian for the year ended 30 June 2007.
In the consolidated Group accounts the transaction has been accounted for as a reverse acquisition in accordance
with IFRS 3 Appendix B. The legal subsidiary is identified as the acquirer, and the fair value of the consideration given
is £3.96m. The legal parent is identified as the subsidiary. The fair value of the assets acquired is £3.96m. Therefore
no goodwill has arisen. Notice of Annual General Meeting
NOTICE is hereby given that the ANNUAL GENERAL MEETING of the Company will be held at the offices of Pritchard
Englefield, 14 New Street, London EC2M 4HE on Thursday 17 January 2008 at 10.00 am for the purpose of considering
the following:
ORDINARY BUSINESS
1. To receive and adopt the Directors’ report and accounts for the year ended 30 June 2007, and the auditors’ report
on the accounts.
2. To elect Frank Lewis (Chairman, and Chairman of the Audit and Remuneration Committees) who retires pursuant to
Article 108 of the Company’s Articles of Association, as a Non-executive Director of the Company.
3. To elect Chaohui Huang (Chief Executive Officer) who retires pursuant to Article 108 of the Company’s Articles of
Association, as an Executive Director of the Company.
4. To elect Mark Syropoulo (Finance Director) who retires pursuant to Article 108 of the Company’s Articles of
Association, as an Executive Director of the Company.
5. To elect Michael Liu (Executive Director) who retires pursuant to Article 108 of the Company’s Articles of Association,
as an Executive Director of the Company.
6. To elect Dr Yi Xie (Non-executive Director and a member of the Audit and Remuneration Committees) who retires
pursuant to Article 108 of the Company’s Articles of Association, as a Non-executive Director of the Company.
7. To re-appoint BDO Stoy Hayward LLP as auditors of the Company.
8. To authorise the Directors to agree the remuneration of BDO Stoy Hayward LLP as auditors of the Company.
SPECIAL BUSINESS
As special business to consider and, if thought fit, to pass the following resolutions of which Resolution 9 will be
proposed as an ordinary resolution and Resolutions 10 and 11 will be proposed as special resolutions.
ORDINARY RESOLUTION
9. THAT the Directors be and they are generally and unconditionally authorised to exercise all or any of the powers of the
Company to allot relevant securities (within the meaning of Section 80 of the Companies Act 1985 (‘the Act’)) up to an
aggregate nominal amount of £3,922,308 for the period expiring 15 months after the date of passing this resolution
or at the conclusion of the next Annual General Meeting of the Company whichever first occurs (unless previously
renewed, varied or revoked by the Company in General Meeting) save that the Company may prior to such expiry
make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the
Directors may allot relevant securities pursuant to any such offer as if the authority conferred hereby had not expired.
References in this resolution to the Act, or to sections of the Act, shall, where the context requires and where
appropriate, include references to the Companies Act 2006 and any corresponding or similar sections of that Act, it
being the intention that, to the extent permitted by law, the authority contained in this resolution shall continue in full
force and effect notwithstanding any repeal of the Act or any relevant part or section thereof.
49 SPECIAL RESOLUTIONS
10. THAT, subject to and conditional upon the passing of Resolution 9 above, the Directors be and they are hereby
authorised and empowered pursuant to section 95 of the Act to allot equity securities (within the meaning of Section
94(2) of the Act) for cash pursuant to the authority conferred by Resolution 9 above as if Section 89(1) of the Act did
not apply to such allotment, provided that this power shall expire 15 months after the date of passing of this resolution
or at the conclusion of the next Annual General Meeting of the Company whichever first occurs except that the
Company may prior to such expiry make an offer or agreement which would or might require equity securities to be
allotted after such expiry and the Directors may allot equity securities after such expiry in pursuance of such offer or
agreement as if the power conferred by this resolution has not expired and shall be limited to:
(a) the allotment of equity securities in connection with rights issues or similar issues in favour of holders of ordinary
shares where the equity securities respectively attributable to the interests of the holders of ordinary shares are
proportionate (as nearly as may be) to the respective number of ordinary shares held by them subject to such
exclusions and other arrangements as the Directors may deem necessary or expedient in relation to the
fractional entitlements or legal or practical problems arising under the laws of, or the requirements of any
regulatory body or stock exchange in, any overseas territory or otherwise howsoever; and
(b) the allotment (otherwise than pursuant to subparagraph (a) above) of equity securities and/or the sale of transfer
of shares held by the Company in treasury up to an aggregate amount of £ 1,175,000.
This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section 94(3A)
of the Act as if in the first paragraph of this resolution the words ‘pursuant to the authority conferred by Resolution 9
above’ were omitted.
References in this resolution to the Act, or to sections of the Act, shall, where the context requires and where
appropriate, include references to the Companies Act 2006 and any corresponding or similar sections of that Act, it
being the intention that, to the extent permitted by law, the authority contained in this resolution shall continue in full
force and effect notwithstanding any repeal of the Act or any relevant part or section thereof.
11. THAT the Company be and is hereby generally and unconditionally authorised, in accordance with section 166 of the
Companies Act 1985 (the ‘Act’), to make market purchases (within the meaning of section 163 of the Act) of ordinary
shares of 10 pence each in the capital of the Company on such terms and in such manner as the Directors may from
time to time determine provided that:
(a) the maximum number of ordinary shares authorised to be purchased is 14,000,000;
(b) the minimum price which may be paid for an ordinary share is 10 pence (exclusive of expenses and advance
corporation tax (if any) payable by the Company);
(c) the maximum price which may be paid for an ordinary share is an amount equal to 105% of the average of the
middle market quotations for an ordinary share derived from the AIM Appendix of the Daily Official List for the
five business days immediately preceding the day on which the ordinary share is purchased (exclusive of
expenses and advance corporation tax (if any) payable by the Company); and
(d) the authority conferred shall expire at the conclusion of the next Annual General Meeting of the Company
except that the Company may before such expiry make a contract to purchase its own shares which will or
may be completed or executed wholly or partly after such expiry.
References in this resolution to the Act, or to sections of the Act, shall, where the context requires and where
appropriate, include references to the Companies Act 2006 and any corresponding or similar sections of that Act, it
being the intention that, to the extent permitted by law, the authority contained in this resolution shall continue in full
force and effect notwithstanding any repeal of the Act or any relevant part or section thereof.
By order of the Board
J P Gorman FCA
Company Secretary
REGISTERED OFFICE
56 Queen Anne Street
London W1G 8LA
28 November 2007
50 NOTES
1. Any member of the Company entitled to attend and vote at the Annual General Meeting may appoint one or more proxies to
exercise all or any of his or her rights to attend and to speak and vote at a meeting of the Company. A proxy need not be a member
of the Company. To be valid, a form of proxy, and any power of attorney under which it is signed, must be lodged with the
Company’s registrars at Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, no later than 48 hours
before the time of the Annual General Meeting. A form of proxy is enclosed. The completion and return of a form of proxy will not
preclude a member from attending and voting at the meeting in person.
2. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only those persons whose names are entered on the
register of members of the Company at the close of business on 15 January 2008 or, in the event that the meeting is adjourned, in
the register of members 48 hours before the time of any adjourned meeting, shall be entitled to attend the meeting and to vote in
respect of the number of shares registered in their name at that time. Changes to the register of members after that time shall be
disregarded in determining the right of any person to attend and/or vote at that meeting.
3. Copies of Directors’ service contracts or letters of appointment are available for inspection at the registered office of the Company
during normal business hours on each weekday (public holidays excluded) and at the place of the Annual General Meeting for 15
minutes prior to and during the meeting.
4. If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of those proxies are cast
and the voting rights in respect of those discretionary proxies, when added to the interests in the Company’s securities already held
by the Chairman, result in the Chairman holding such number of voting rights that he has a notifiable obligation under the Disclosure
and Transparency Rules, the Chairman will make the necessary notifications to the Company and the Financial Services Authority.
As a result, any member holding 3% or more of the voting rights in the Company who grants the Chairman a discretionary proxy in
respect of some or all of those voting rights and so would otherwise have a notification obligation under the Disclosure and
Transparency Rules, need not make a separate notification to the Company and the Financial Services Authority.
51 EXPLANATION OF RESOLUTIONS 9, 10 AND 11
Resolution 9 – authority to allot shares
Under the Companies Act 1985, the Directors of a company may only allot unissued shares if authorised to do so by the
shareholders in general meeting. Resolution 9 renews the Directors’ existing authority by authorising the Directors to allot
shares up to an aggregate nominal amount of £3,922,308. The authority will expire on whichever is the earlier of the date
of the next Annual General Meeting of the Company or the date falling 15 months after the passing of the resolution. This
represents 39,223,080 ordinary shares of 10 pence each in the capital of the Company and is equivalent to approximately
one third of the Company’s current issued ordinary share capital as enlarged by the allotment of ordinary shares following
the satisfaction of all of the Company’s outstanding contractual commitments to allot shares, the exercise of all outstanding
employee share options and employee and external warrants and options.
Resolution 10 – limited authority to allot shares for cash
The Directors may only allot shares for cash otherwise than on a non-preemptive basis to existing shareholders in the
Company if authorised to do so by the shareholders in general meeting.
This resolution renews power for the Directors to allot shares for cash and/or sell or transfer shares held by the Company
in treasury without first offering them to existing members up to an aggregate nominal amount of £1,175,000. This sum
represents 11,750,000 Ordinary Shares, being equivalent to approximately 12.54% of the Company’s current issued
ordinary share capital as enlarged by the allotment of ordinary shares following the satisfaction of all of the Company’s
outstanding contractual commitments to allot shares, the exercise of all outstanding employee share options and employee
and external warrants and options. The Directors will use such authority in the circumstances where it is in the best interests
of the Company to issue small amounts of shares other than to existing shareholders.
The resolution also enables the Directors to modify the strict requirements for a rights issue in circumstances where they
consider it necessary or expedient.
The authority will expire on whichever is the earlier of the date of the next Annual General Meeting of the Company or the
date following 15 months after the passing of the resolution.
Resolution 11 – purchase of the Company’s own shares
This resolution gives authority from shareholders for the Company to purchase up to 14,000,000 ordinary shares, an
aggregate nominal amount of £1,400,000, which is equivalent to approximately 14.94% of the Company’s current issued
ordinary share capital. The authority will expire at the end of the next Annual General Meeting and the resolution specifies
the maximum and minimum prices at which the ordinary shares may be bought. Other investment opportunities,
appropriate gearing levels and the overall financial position of the Company will be taken into account before deciding upon
this course of action. Any ordinary shares purchased in this way will be held by the Company in treasury and may then be
sold for cash, transferred to an employee share scheme or cancelled. The Board has no immediate intention of exercising
the proposed authority when it becomes effective, but believes that the ability of the Company to buy its own ordinary
shares when, in the Board’s opinion, market prices do not reflect the Company’s worth, will be in the best interests of the
Company and its shareholders. The Directors intend to exercise this power only when they believe the effect of such
purchases will increase earnings per ordinary share.
52 Form of Proxy for use at the Annual General Meeting
of the holders of Ordinary Shares of ZTC Telecommunications plc
to be held on 17 January 2008 at 10.00 a.m.
I/We ....................................................................................................................................................................
(Full Name in Block Capitals)
being (a) registered holder(s) of ordinary shares of 10p (“Ordinary Shares”) in the capital of the Company, hereby
appoint the duly appointed Chairman of the Meeting or (see note 1)
...........................................................................................................................................................................
as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the
Company to be held at the ofﬁces of Pritchard Engleﬁeld, 14 New Street, London EC2M 4HE on 17 January
2008 at 10.00 a.m. and at any adjournment thereof. In the event of a poll being directed or demanded, I/we
desire my/our vote(s) to be cast as shown below on the Resolutions set out in the Notice of Annual General
Meeting.
Please indicate with a tick in the appropriate spaces provide below how you wish your votes on the Resolutions
to be cast.
If you sign this Form of Proxy and return it without any speciﬁc direction as to how you wish your votes to be
cast, the proxy may vote as he thinks ﬁt or abstain from voting in respect of the Resolutions and also on any
other business (including amendments to the Resolutions) which may properly come before the meeting.
ORDINARY RESOLUTIONS FOR AGAINST WITHHELD
1. To receive and adopt the Directors’ Report and Accounts.
2. To elect F Lewis as a Director. 
3. To elect C Huang as a Director.
4. To elect M Syropoulo as a Director. 
5. To elect M Liu as a Director.
6. To elect Dr Yi Xie as a Director.
7. To re-appoint the auditors.
8. To authorise the Directors to agree the auditors’ remuneration.
9. To authorise the Directors to allot shares generally.
SPECIAL RESOLUTIONS
10. To approve a limited disapplication of pre-emption rights.
11. To authorise the Directors to purchase ordinary shares.
Signed this................................................................day of........................................................................2008
Signature...................................................................Name ................................................................................
Address...............................................................................................................................................................
Notes
1. A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies. If a proxy other than the Chairman is desired, strike out “the duly
appointed Chairman of the Meeting or” and insert the name or names preferred and initial the alteration. A proxy need not be a share¬holder of the Company.
2. To be valid this Form of Proxy (and the power of attorney or other authority, if any under which it is signed or a notarially certiﬁed or ofﬁce copy thereof) must reach Capita
Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU at least 48 hours before the appointed time of the Meeting or any adjournment thereof.
3. In the case of a corporation, this Form of Proxy must be executed under its common seal or signed on its behalf by an ofﬁcer or attorney duly authorised. In the case of an
individual, this Form of Proxy must be signed by the appointor or his or her attorney duly authorised.
4. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy will be accepted to the exclusion of the votes of any other joint holders
and for this purpose seniority will be determined by the order in which the names stand in the Register of Members.
5. Completion and return of this Form of Proxy will not preclude shareholders from attending and voting in person if they decide to do so. Attendance at the meeting by any
shareholder, who has previously completed and returned a Form of Proxy, shall result in an automatic termination of the relevant Form of Proxy.
6. Any alterations made to this Form of Proxy must be initialled.
7. Any vote which is ‘withheld’ is not a vote in law and will therefore not be counted in the calculation of the proportion of the votes for or against a Resolution.
8. Shareholders must be entered on the Company’s Register of Members at 6.00 p.m. on 15 January 2008 to be entitled to vote at the Meeting. Such Shareholders may only
cast votes in respect of Ordinary Shares held at that time.
9.. If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of those proxies are cast and the voting rights in respect of those
discretionary proxies, when added to the interests in the Company’s securities already held by the Chairman, result in the Chairman holding such number of voting rights
that he has a notiﬁable obligation under the Disclosure and Transparency Rules, the Chairman will make the necessary notiﬁcations to the Company and the Financial Services
Authority.  As a result, any member holding 3% or more of the voting rights in the Company who grants the Chairman a discretionary proxy in respect of some or all of those
voting rights and so would otherwise have a notiﬁcation obligation under the Disclosure and Transparency Rules, need not make a separate notiﬁcation to the Company and
the Financial Services Authority.
ZTC Telecommunications plc
✃ Business Reply
Licence Number
MB122
First Fold
Third Fold and Tuck in
Second Fold
Capita Registrars(Proxies)
PO Box 25
Beckenham
Kent BR3 4BR 210993 ZTC Cover  28/11/07  17:37  Page 1