China Communications Services Corporation Limited Annual Report 2015
148
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
39. COMMITMENTS AND CONTINGENT LIABILITIES
(continued)
(b) Operating lease commitments
As at 31 December 2015, the Group’s total future minimum lease payments under non-cancellable operating leases
were payable as follows:
2015
2014
RMB’000
RMB’000
Within 1 year
308,106
304,985
After 1 year but within 5 years
352,620
370,586
After 5 years
122,061
111,339
782,787
786,910
The Group leases a number of properties under operating leases. The leases typically run for period of 1 year to 20
years, with an option to renew the lease when all terms are renegotiated. None of the leases includes contingent
rentals.
(c) Contingent liabilities
As at 31 December 2015, the Group had no material contingent liabilities and no material financial guarantees
issued.
40. FINANCIAL RISK MANAGEMENT AND FAIR VALUES
Exposure to credit, interest rate, liquidity and currency risks arises in the normal course of the Group’s business. The Group
is also exposed to equity price risk arising from its equity investments in other entities and movements in its own equity
share price.
The Group’s exposure to these risks and the financial risk management policies and practices used by the group to manage
these risks are described below.
(a) Credit risk
The Group’s credit risk is primarily attributable to trade and other receivables. Management has a credit policy in
place and the exposure to credit risks is monitored on an ongoing basis. Normally, the Group does not obtain
collateral from customers.
The Group’s major customers are CTC Group and CM Group. The Group has a certain concentration of credit risk as
the Group’s major customers accounted for 69 % of the total accounts and bills receivable as at 31 December 2015
(2014: 66%). The Group has no significant credit risk with any of these customers since they are large State-owned
companies in the telecommunications industry.
The credit risk on cash at banks and restricted bank deposits is limited because the counterparties are banks with
high credit rankings, mainly the four large state-owned banks.
