Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at June 30, 2018
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 1 229,753,501.34 327,477,701.36
Settlement funds
Loans to other banks
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable 2 30,493,288.75 32,477,463.59
Accounts receivable 3 882,369,626.89 780,089,607.41
Advances paid 4 206,155,009.33 53,821,937.79
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Interest receivable
Dividend receivable
Other receivables 5 42,136,776.14 29,325,423.73
Reverse-REPO financial assets
Inventories 6 348,787,164.38 489,898,057.36
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets 7 22,084,720.05 45,282,892.44
Total current assets 1,761,780,086.88 1,758,373,083.68
Non-current assets:
Loans and advances paid
Available-for-sale financial assets 8 741,953.00 741,953.00
Held-to-maturity investments
Long-term receivable
Long-term equity investments 9 187,187,732.13 186,977,506.23
Investment property 10 12,436,912.05 12,802,485.28
Fixed assets 11 111,442,156.95 119,741,921.78
Construction in progress 12 3,940,454.72 2,163,267.89
Construction materials
Fixed assets disposal
Productive biological assets
Oil & gas assets
Intangible assets 13 30,543,370.00 30,736,816.88
Development expenditures
Goodwill
Long-term prepayments 14 2,584,659.96 2,795,194.76
Deferred tax assets
Other non-current assets
Total non-current assets 348,877,238.81 355,959,145.82
Total assets 2,110,657,325.69 2,114,332,229.50
1
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at June 30, 2018 (continued)
Liabilities & Equity Note No. Closing balance Opening balance
Current liabilities:
Short-term borrowings 15 447,510,000.00 387,550,000.00
Central bank loans
Absorbing deposit and interbank deposit
Loans from other banks
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 16 86,064,736.10 20,161,687.14
Accounts payable 17 709,927,684.11 806,672,174.17
Advances received 18 305,508,384.02 317,197,824.66
Proceeds from sale of repurchase financial assets
Handling fee and commission payable
Employee benefits payable 19 19,956,577.66 21,033,311.73
Taxes and rates payable 20 10,581,322.26 18,883,017.18
Interest payable 21 460,593.19 531,667.36
Dividend payable 22 1,692,213.38 1,692,213.38
Other payables 23 55,733,308.84 60,803,921.89
Reinsurance accounts payable
Insurance policy reserve
Deposit for agency security transaction
Deposit for agency security underwriting
Liabilities classified as held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,637,434,819.56 1,634,525,817.51
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term employee benefits payable
Special payables
Provisions
Deferred income 24 4,867,153.00 8,664,102.90
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 4,867,153.00 8,664,102.90
Total liabilities 1,642,301,972.56 1,643,189,920.41
Equity:
Share capital 25 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 26 185,374,533.85 185,374,533.85
Less: Treasury shares
Other comprehensive income 27 -4,251,665.75 -4,129,619.45
Special reserve
Surplus reserve 28 589,559.77 589,559.77
General risk reserve
Undistributed profit 29 -57,007,697.24 -46,585,991.64
Total equity attributable to the parent company 339,704,730.64 350,248,482.53
Non-controlling interest 128,650,622.50 120,893,826.56
Total equity 468,355,353.13 471,142,309.09
Total liabilities & equity 2,110,657,325.69 2,114,332,229.50
2
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at June 30, 2018
(Expressed in Renminbi Yuan)
Note Closing balance Opening balance
Assets
No.
Current assets:
Cash and bank balances 131,149,266.49 124,709,891.97
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable 9,420,178.00 9,184,642.99
Accounts receivable 1 438,085,618.02 425,563,836.97
Advances paid 182,617,525.35 22,368,455.10
Interest receivable
Dividend receivable
Other receivables 2 247,983,945.47 41,195,020.22
Inventories 203,410,015.28 349,450,010.57
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets 14,360,717.44 38,624,058.06
Total current assets 1,227,027,266.05 1,011,095,915.88
Non-current assets:
Available-for-sale financial assets 741,953.00 741,953.00
Held-to-maturity investments
Long-term receivable
Long-term equity investments 3 356,024,381.33 355,814,155.43
Investment property
Fixed assets 52,104,507.77 56,349,626.12
Construction in progress 3,213,787.88 1,830,131.25
Construction materials
Fixed assets disposal
Productive biological assets
Oil & gas assets
Intangible assets 12,788,775.67 12,676,942.23
Development expenditures
Goodwill
Long-term prepayments 2,415,655.96 2,580,098.76
Deferred tax assets
Other non-current assets
Total non-current assets 427,289,061.61 429,992,906.79
Total assets 1,654,316,327.66 1,441,088,822.67
3
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at June 30, 2018 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance Opening balance
No.
Current liabilities:
Short-term borrowings 336,000,000.00 309,000,000.00
Financial liabilities at fair value
through profit or loss
Derivative financial liabilities
Notes payable 86,064,736.10 19,161,687.14
Accounts payable 335,068,651.52 387,637,755.76
Advances received 284,002,513.52 290,793,176.69
Employee benefits payable 8,538,543.97 7,816,724.35
Taxes and rates payable 2,668,681.57 4,595,540.32
Interest payable 396,333.33 396,333.33
Dividend payable
Other payables 417,182,955.06 213,668,065.12
Liabilities classified as held-for-sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 1,469,922,415.07 1,233,069,282.71
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term employee benefits payable
Special payables
Provisions
Deferred income 1,770,926.90
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 1,770,926.90
Total liabilities 1,469,922,415.07 1,234,840,209.61
Equity:
Share capital 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 172,417,299.81 172,417,299.81
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 589,559.76 589,559.76
Undistributed profit -203,612,946.98 -181,758,246.51
Total equity 184,393,912.59 206,248,613.06
Total liabilities & equity 1,654,316,327.66 1,441,088,822.67
4
Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended June 30, 2018
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 1 966,850,604.95 1,012,396,407.39
Including: operating revenue 1 966,850,604.95 1,012,396,407.39
Interest proceeds
Premium earned
Revenue from handling charges and commission
II. Total operating cost 2 1,006,737,060.12 1,021,785,412.19
Including: Operating cost 2 824,358,695.32 854,596,490.18
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes & surcharge for operations 3 5,664,250.54 4,727,442.61
Selling expenses 4 79,696,183.64 79,331,110.14
Administrative expenses 5 83,788,682.07 72,960,165.72
Financial expense 6 10,198,465.39 8,701,588.82
Assets impairment loss 7 3,030,783.16 1,468,614.72
Add: Gains on changes in fair value (or less: losses)
Investment income (or less: losses) 8 407,793.10 -618,093.05
Including: Investment income from associates and joint ventures 407,793.10 -618,093.05
Gains on asset disposal (or less: losses) 9 30,156,818.80 -663,364.82
Gains on foreign exchange (or less: losses)
Other income 10 5,799,343.86 2,784,809.60
III. Operating profit (or less: losses) -3,522,499.41 -7,885,653.07
Add: Non-operating revenue 11 2,825,854.15 2,739,810.93
Including: Gains on disposal of non-current assets
Less: Non-operating expenditures 12 308,586.00 236,523.22
Including: Losses on disposal of fixed assets
IV. Profit before tax (or less: total loss) -1,005,231.26 -5,382,365.36
Less: Income tax 14 1,646,117.70 3,203,411.84
V. Net profit (or less: net loss) -2,651,348.96 -8,585,777.20
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) -2,651,348.96 -8,585,777.20
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less: net loss) -10,421,705.60 -13,246,723.63
2. Non-controlling interest (or less: net loss) 7,770,356.64 4,660,946.43
VI. Other comprehensive income after tax 15 -135,607.00 -164,503.71
Items attributable to the owners of the parent company -122,046.30 -148,053.34
(I) Not reclassified subsequently to profit or loss
1.Changes in re-measurement on the net defined benefit liability/asset
2. Items attributable to investees under equity method that will not
(II) To be reclassified subsequently to profit or loss -122,046.30 -148,053.34
1. Items attributable to investees under equity method that may be
reclassified to profit or loss in fair value of available-for-sale financial
3. Profit or loss from reclassification of held-to-maturity investments as
4. Profit or loss onfinancial assets
5. Translation reserve -122,046.30 -148,053.34
6. Others
Items attributable to non-controlling shareholders -13,560.70 -16,450.37
VII. Total comprehensive income -2,786,955.96 -8,750,280.91
Items attributable to the owners of the parent company -10,543,751.90 -13,394,776.97
Items attributable to non-controlling shareholders 7,756,795.94 4,644,496.06
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) -0.05 -0.06
(II) Diluted EPS (yuan per share) -0.05 -0.06
5
Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended June 30, 2018
(Expressed in Renminbi Yuan)
Current period Preceding period
Items Note No.
cumulative comparative
I. Operating revenue 1 497,806,967.24 492,270,145.47
Less: Operating cost 1 461,016,015.39 440,095,821.25
Taxes & surcharge for operations 2,188,404.36 1,953,988.13
Selling expenses 33,623,765.06 33,154,285.12
Administrative expenses 32,847,514.97 29,286,433.07
Financial expense 10,288,228.05 8,503,408.00
Assets impairment loss 1,674,589.82 1,566,147.48
Add: Gain on changes in fair value (or less: losses)
Investment income (or less: losses) 2 407,793.10 -655,221.71
Including: investment income from associates and
407,793.10 -655,221.71
joint ventures
Gains on asset disposal (or less: losses) 18,909,015.41
Other income 876,429.06 44,991.45
II. Operating profit (or less: losses) -23,638,312.84 -22,900,167.84
Add: Non-operating revenue 1,994,545.83 760,110.35
Including: Gains on disposal of non-current assets
Less: Non-operating expenditures 210,933.46 216,150.19
Including: Losses on disposal of non-current assets
III. Profit before tax (or less: total loss) -21,854,700.47 -22,356,207.68
Less: Income tax
IV. Net profit (or less: net loss) -21,854,700.47 -22,356,207.68
(I) Net profit from continuing operations (or less: net loss) -21,854,700.47 -22,356,207.68
(II) Net profit from discontinued operations (or less: net
loss)
V. Other comprehensive income after tax
(I) Not reclassified subsequently to profit or loss
1. Changes in re-measurement on the net defined
benefit liability/asset
2. Items attributable to investees under equity method
that will not reclassified to profit or loss
(II) To be reclassified subsequently to profit or loss
1. Items attributable to investees under equity method
that may be reclassified to profit or loss
2. Profit or loss from changes in fair value of
available-for-sale financial assets
3. Profit or loss from reclassification of
held-to-maturity investments as available-for-sale
financial assets
4. Profit or loss on cash flow hedging
5. Translation reserve
6. Others
VI. Total comprehensive income -21,854,700.47 -22,356,207.68
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) -0.10 -0.10
(II) Diluted EPS (yuan per share) -0.10 -0.10
6
Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended June 30, 2018
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 823,226,257.29 1,425,486,893.70
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial institutions
Cash receipts from original insurance contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and investment
Net increase from disposal of financial assets at fair value through profit or loss
Cash receipts from interest, handling charges and commission
Net increase of loans from others
Net increase of repurchase
Receipts of tax refund 3,751,204.59 2,787,151.76
Other cash receipts related to operating activities 1 37,651,747.79 89,760,092.99
Subtotal of cash inflows from operating activities 864,629,209.67 1,518,034,138.45
Cash payments for goods purchased and services received 795,841,324.87 1,349,795,208.94
Net increase of loans and advances to clients
Net increase of central bank deposit and interbank deposit
Cash payments for insurance indemnities of original insurance contracts
Cash payments for interest, handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 134,614,701.29 135,086,143.63
Cash payments for taxes and rates 43,357,641.42 50,137,010.08
Other cash payments related to operating activities 2 116,090,771.02 119,180,369.61
Subtotal of cash outflows from operating activities 1,089,904,438.60 1,654,198,732.26
Net cash flows from operating activities -225,275,228.93 -136,164,593.81
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 197,567.20
Net cash receipts from the disposal of fixed assets, intangible assets and other 30,244,870.00 29,417.47
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 30,442,437.20 29,417.47
Cash payments for the acquisition of fixed assets, intangible assets and other 7,937,241.37 4,378,311.80
long-term assets
Cash payments for investments
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities 20,000,000.00
Subtotal of cash outflows from investing activities 7,937,241.37 24,378,311.80
Net cash flows from investing activities 22,505,195.83 -24,348,894.33
III. Cash flows from financing activities:
Cash receipts from absorbing investments 2,169,200.00
Including: Cash received by subsidiaries from non-controlling shareholders as 2,169,200.00
investments
Cash receipts from borrowings 266,510,000.00 232,350,000.00
Cash receipts from issuing of bonds
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 268,679,200.00 232,350,000.00
Cash payments for the repayment of borrowings 206,550,000.00 337,500,000.00
Cash payments for distribution of dividends or profits and for interest expenses 13,087,901.03 9,694,078.68
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit 2,169,200.00
Other cash payments related to financing activities
Subtotal of cash outflows from financing activities 219,637,901.03 347,194,078.68
Net cash flows from financing activities 49,041,298.97 -114,844,078.68
IV. Effect of foreign exchange rate changes on cash & cash equivalents -92,357.05 -23,235.89
V. Net increase in cash and cash equivalents -153,821,091.18 -275,380,802.71
Add: Opening balance of cash and cash equivalents 311,056,919.17 484,683,980.96
VI. Closing balance of cash and cash equivalents 157,235,827.99 209,303,178.25
7
Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended June 30, 2018
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 348,436,329.15 847,352,874.13
Receipts of tax refund 226,972.07 47,333.61
Other cash receipts related to operating activities 68,779,821.99 114,587,795.86
Subtotal of cash inflows from operating activities 417,443,123.21 961,988,003.60
Cash payments for goods purchased and services received 372,154,435.27 843,778,952.58
Cash paid to and on behalf of employees 53,879,491.46 58,743,976.97
Cash payments for taxes and rates 11,331,804.57 16,423,861.43
Other cash payments related to operating activities 60,181,711.77 23,342,375.76
Subtotal of cash outflows from operating activities 497,547,443.07 942,289,166.74
Net cash flows from operating activities -80,104,319.86 19,698,836.86
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 197,567.20
Net cash receipts from the disposal of fixed assets, intangible 18,187,870.00
assets and other long-term assets
Net cash receipts from the disposal of subsidiaries & other
business units
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 18,385,437.20
Cash payments for the acquisition of fixed assets, intangible assets 6,483,699.11 3,322,596.02
and other long-term assets
Cash payments for investments
Net cash payments for the acquisition of subsidiaries & other
business units
Other cash payments related to investing activities
Subtotal of cash outflows from investing activities 6,483,699.11 3,322,596.02
Net cash flows from investing activities 11,901,738.09 -3,322,596.02
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 192,000,000.00 170,850,000.00
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 192,000,000.00 170,850,000.00
Cash payments for the repayment of borrowings 165,000,000.00 266,000,000.00
Cash payments for distribution of dividends or profits and for 9,668,959.87 9,341,661.54
interest expenses
Other cash payments related to financing activities
Subtotal of cash outflows from financing activities 174,668,959.87 275,341,661.54
Net cash flows from financing activities 17,331,040.13 -104,491,661.54
IV. Effect of foreign exchange rate changes on cash and cash
-100,956.62
equivalents
V. Net increase in cash and cash equivalents -50,871,541.64 -88,216,377.32
Add: Opening balance of cash and cash equivalents 109,752,099.29 164,090,964.56
VI. Closing balance of cash and cash equivalents 58,880,557.65 75,874,587.24
8
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended June 30, 2018
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling
Special Surplus Total equity
Share capital Preferred Perpetual Others Capital reserve treasury comprehensive risk Undistributed profit interest
reserve reserve
shares bonds shares income reserve
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.77 -44,605,902.63 120,893,826.56 473,122,398.10
Add: Cumulative changes of accounting policies
Error correction of prior period -1,980,089.01 -1,980,089.01
Business combination under common control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.77 -46,585,991.64 120,893,826.56 471,142,309.09
III. Current period increase (or less: decrease) -122,046.30 -10,421,705.60 7,756,795.94 -2,786,955.96
(I) Total comprehensive income -122,046.30 -10,421,705.60 7,756,795.94 -2,786,955.96
(II) Capital contributed or withdrawn by owners 2,169,200.00 2,169,200.00
1. Capital contributed by owners 2,169,200.00 2,169,200.00
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution -2,169,200.00 -2,169,200.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -2,169,200.00 -2,169,200.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -4,251,665.75 589,559.77 -57,007,697.24 128,650,622.50 468,355,353.13
9
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended June 30, 2018 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Less: Other General Non-controlling
Special Surplus Undistributed Total equity
Share capital Preferred Perpetual Others Capital reserve treasury comprehensive risk interest
reserve reserve profit
shares bonds shares income reserve
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,634,605.50 589,559.76 -56,491,072.91 112,578,132.06 452,416,547.26
Add: Cumulative changes of accounting policies
Error correction of prior period 922,223.51 681,444.01 1,603,667.52
Business combination under common control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -4,634,605.50 589,559.76 -55,568,849.40 113,259,576.07 454,020,214.78
III. Current period increase (or less: decrease) -148,053.34 -13,246,723.63 4,644,496.06 -8,750,280.91
(I) Total comprehensive income -148,053.34 -13,246,723.63 4,644,496.06 -8,750,280.91
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -4,782,658.84 589,559.76 -68,815,573.03 117,904,072.13 445,269,933.87
10
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended June 30, 2018
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments
Items Other
Less: treasury Special Undistributed
Share capital Preferred Perpetual Others Capital reserve comprehensive Surplus reserve Total equity
shares reserve profit
shares bonds income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -179,778,157.50 208,228,702.07
Add: Cumulative changes of accounting policies
Error correction of prior period -1,980,089.01 -1,980,089.01
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -181,758,246.51 206,248,613.06
III. Current period increase (or less: decrease) -21,854,700.47 -21,854,700.47
(I) Total comprehensive income -21,854,700.47 -21,854,700.47
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
1. Appropriation of surplus reserve
2. Appropriation of profit to owners
3. Others
(IV) Internal carry-over within equity
1.Transfer of capital reserve to capital
2.Transfer of surplus reserve to capital
3.Surplus reserve to cover losses
4.Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 172,417,299.81 589,559.76 -203,612,946.98 184,393,912.59
11
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended June 30, 2018 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments
Items Less: Other
Special
Share capital Preferred Perpetual Others Capital reserve treasury comprehensive Surplus reserve Undistributed profit Total equity
reserve
shares bonds shares income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -188,427,625.86 199,579,233.71
Add: Cumulative changes of accounting policies
Error correction of prior period -1,122,108.50 -1,122,108.50
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -189,549,734.36 198,457,125.21
III. Current period increase (or less: decrease) -22,356,207.68 -22,356,207.68
(I) Total comprehensive income -22,356,207.68 -22,356,207.68
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
1. Appropriation of surplus reserve
2. Appropriation of profit to owners
3. Others
(IV) Internal carry-over within equity
1.Transfer of capital reserve to capital
2.Transfer of surplus reserve to capital
3.Surplus reserve to cover losses
4.Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 172,417,299.81 589,559.76 -211,905,942.04 176,100,917.53
[Li Linzhen] [Cao Xurong] [Gao Wen]
[Legal representative] [Officer in charge of accounting] [Head of accounting department]
(Signature and stamp) (Signature and stamp) (Signature and stamp)
12
Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
Semi-annual Report 2018
Monetary unit: RMB Yuan
I. Company profile
Nanjing Putian Telecommunications Co., Ltd. (the “Company”), whose predecessor is 邮电部南
京通信设备厂 (Nanjing Telecommunication Facility Factory*), was established as a limited
liability company (by shares) through financing under the approval of National Economic
Institutional Reform Commission with document of approval numbered TGS [1997] 28 dated
March 21, 1997. The Company is headquartered in Nanjing City, Jiangsu Province. Currently it
holds a business license with unified social credit code of 91320000134878054G, with registered
capital of 215,000,000.00 yuan, total share of 215,000,000.00 shares, with par value of 1 yuan per
share. Among them, 115,000,000 shares are state-owned legal person shares, and 100,000,000
shares are B shares. The Company was listed on the Shenzhen Stock Exchange on May 22, 1997
and its stocks has been suspended on May 11, 2017 when receiving the decision of the Shenzhen
stock exchange to suspend the listing of the shares of Nanjing Putian Telecommunications Co.,
LTD. (Shenzhen Certificate No. 294, 2017)
The Company belongs to telecommunication equipment manufacture industry and is mainly
engaged in R&D, production, and sale of data, wire and wireless telecommunication equipment,
distribution and allocation of layout of telecommunication product, multimedia computer, digital
television, vehicle electronics and conference video system. The main services rendered by the
Company include installation and maintenance equipment, communication information network
and computer information system projects design, and systems integration and related consultancy
service.
The financial statements have been deliberated and approved for issue by the 13th meeting of the
7th session of the Board of Directors dated August 24, 2018.
The Company has brought 11 subsidiaries including 南京南方电讯有限公司 (Nanjing South
Telecommunications Company Limited*), 南京普天天纪楼宇智能有限公司 (Nanjing Putian
Telege Intelligent Building Ltd.*) and 南 京 曼 奈 柯 斯 电 器 有 限 公 司 (Nanjing Mennekes
Electrics Co., Ltd.*) etc. into the consolidated scope. Please refer to notes to changes in the
consolidated scope and interest in other entities for details.
II. Preparation basis of the financial statements
*
The English names are for identification purpose only.
13
(I) Preparation basis
The financial statements have been prepared on the basis of going concern.
(II) Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s
ability to continue as a going concern within the 12 months after the balance sheet date.
III. Significant accounting policies and estimates
Important note:
The Company has set up accounting policies and estimates on transactions or events such as
provision for bad debts of receivables, depreciation of fixed assets, amortization of intangible
assets, and revenue recognition, etc. based on the Company’s actual production and operation
features.
(I) Statement of compliance
The financial statements have been prepared in accordance with the requirements of China
Accounting Standards for Business Enterprises (CASBEs), and present truly and completely the
financial position, results of operations and cash flows of the Company.
(II) Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian
calendar.
(III) Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is
classified as current if it is expected to be realized or due within 12 months.
(IV) Functional currency
The Company’s functional currency is Renminbi (RMB) Yuan.
(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the
combined party included in the consolidated financial statements of the ultimate controlling party
at the combination date. Difference between carrying amount of the equity of the combined party
included in the consolidated financial statements of the ultimate controlling party and that of the
combination consideration or total par value of shares issued is adjusted to capital reserve, if the
balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the
acquiree at the acquisition date, the excess is recognized as goodwill; otherwise, the fair value of
14
identifiable assets, liabilities and contingent liabilities, and the measurement of the combination
cost are reviewed, then the difference is recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into its consolidation scope. The
consolidated financial statements are compiled by the parent company according to “CASBE 33 -
Consolidated Financial Statements”, based on relevant information and the financial statements of
the parent company and its subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes in relation to its interest
in a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for
payment. Cash equivalents refer to short-term, highly liquid investments that can be readily
converted to cash and that are subject to an insignificant risk of changes in value.
(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange
rate at the transaction date at initial recognition. At the balance sheet date, monetary items
denominated in foreign currency are translated at the spot exchange rate at the balance sheet date
with difference, except for those arising from the principal and interest of exclusive borrowings
eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are
translated at the spot exchange rate at the transaction date, with its RMB amount unchanged;
non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at
the date when the fair value was determined, with difference included in profit or loss or other
comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the
balance sheet date; the equity items, other than undistributed profit, are translated at the spot rate
15
at the transaction date; the revenues and expenses in the income statement are translated into RMB
at the spot exchange rate at the transaction date. The difference arising from foreign currency
translation is included in other comprehensive income.
(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following four categories when initially recognized:
financial assets at fair value through profit or loss (including held-for-trading financial assets and
financial assets designated at initial recognition as at fair value through profit or loss),
held-to-maturity investments, loans and receivables, and available-for-sale financial assets.
Financial liabilities are classified into the following two categories when initially recognized:
financial liabilities at fair value through profit or loss (including held-for-trading financial
liabilities and financial liabilities designated at initial recognition as at fair value through profit or
loss), and other financial liabilities.
2. Recognition criteria, measurement method and derecognition condition of financial assets and
financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset
or financial liability. The financial assets and financial liabilities initially recognized by the
Company are measured at fair value; for the financial assets and liabilities at fair value through
profit or loss, the transaction expenses thereof are directly included in profit or loss; for other
categories of financial assets and financial liabilities, the transaction expenses thereof are included
into the initially recognized amount.
The Company measures its financial assets at fair value subsequent to initial recognition, and does
not deduct the transaction expenses that may occur when it disposes of the said financial asset in
the future. However, those under the following circumstances are excluded: (1) the
held-to-maturity investments, loans and receivables are measured at amortized costs using
effective interest method; (2) the equity instrument investments for which there is no quotation in
the active market and whose fair value cannot be measured reliably, and the derivative financial
assets which are connected with the said equity instrument and must be settled by the delivery of
the said equity instrument are measured at their costs.
The Company measures its financial liabilities at the amortized costs using effective interest
method, with the exception of those under the following circumstances: (1) for the financial
liabilities at fair value through profit or loss, they are measured at fair value, and none of the
transaction expenses may be deducted, which may occur when the financial liabilities are settled
in the future; (2) for the derivative financial liabilities, which are connected to the equity
instrument for which there is no quotation in the active market and whose fair value cannot be
reliably measured, and which must be settled by the delivery of the equity instrument, they are
16
measured at their costs; (3) for the financial guarantee contracts which are not designated as a
financial liability at fair value through profit or loss, and for the commitments to grant loans which
are not designated as at fair value through profit or loss and which will enjoy an interest rate lower
than that of the market, they are measured subsequent to initial recognition at the higher of the
following two items 1) The amount as determined according to “CASBE13 - Contingencies”; 2)
the surplus after accumulative amortization as determined according to “CASBE14 - Revenues”.
The gains or losses arising from changes in fair value of financial assets or financial liabilities, if
not related to hedging, are measured with the following methods: (1) Gains or losses, arising from
the changes in fair value of financial asset or liability at its fair value through profit or loss, is
included in gains or losses on changes in fair value; interests or cash dividends gained during the
asset-holding period are recognized as investment income; when disposing of the assets,
investment income is recognized at the difference between the actual amount received and the
initial recorded amount, at the same time, gains or losses on changes in fair value are adjusted
accordingly. (2) For available-for-sale financial asset, changes in fair value are recorded as other
comprehensive income during the holding period, interests measured at effective interest method
are recorded as investment income; cash dividends from available-for-sale equity instrument
investment are recognized as investment income at the date of dividend declaration; when
disposing of the assets, investment income is recognized at the difference between the actual
amount received and the book value deducting the accumulative amount of changes in fair value
originally included in other comprehensive.
Financial assets are derecognized when the contractual rights for collecting the cash flow of the
said financial assets expire or substantially all risks and rewards related to the said financial assets
have been transferred. Only when the underlying present obligations of a financial liability are
relieved totally or partly may the financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the
ownership of the financial asset to the transferee, it derecognizes the financial asset. If it retained
substantially all of the risks and rewards related to the ownership of the financial asset, it
continues recognizing the financial asset, and the consideration received is recognized as a
financial liability. Where the Company does not transfer or retain substantially all of the risks and
rewards related to the ownership of a financial asset, it is dealt with according to the
circumstances as follows respectively: (1) if the Company gives up its control over the financial
asset, it derecognizes the financial asset; (2) if the Company does not give up its control over the
financial asset, according to the extent of its continuing involvement in the transferred financial
asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference
between the amounts of the following two items are included in profit or loss: (1) the book value
17
of the transferred financial asset; (2) the sum of consideration received from the transfer, and the
accumulative amount of the changes of the fair value originally included in equity. If the transfer
of financial asset partially satisfies the conditions to derecognition, the entire book value of the
transferred financial asset is, between the portion which is derecognized and the portion which is
not, apportioned according to their respective relative fair value, and the difference between the
amounts of the following two items are included into profit or loss: (1) the book value of the
portion which is derecognized; (2) the sum of consideration of the portion which is derecognized,
and the portion of the accumulative amount of the changes in the fair value originally included in
equity which is corresponding to the portion which is derecognized.
4. Fair value determination method of financial assets and liabilities
The Company use valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value. The inputs to valuation techniques used to
measure fair value are arranged in the following hierarchy and used accordingly:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for
similar assets or liabilities in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; inputs other than quoted prices that are observable for the
asset or liability, for example, interest rates and yield curves observable at commonly quoted
intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest
rate that is not observable and cannot be corroborated by observable market data at commonly
quoted intervals, historical volatility, future cash flows to be paid to fulfill the disposal obligation
assumed in business combination, and financial forecast developed using the Company’s own data,
etc.
5. Impairment test and provision for impairment loss of financial assets
(1) An impairment test is carried out at the balance sheet date on the financial assets other than
those at fair value through profit or loss, and provisions for impairment loss should be made if
there is objective evidence indicating impairment loss.
(2) For held-to-maturity investments, borrowings, and receivables, an impairment test is made on
an individual basis on financial assets of individually significant amount; with regard to the
financial assets of individually insignificant amount, they may be included in a portfolio of
financial assets with similar credit risk features so as to carry out an impairment-related test;
where, upon the impairment test on an individual basis, the financial asset (including those
financial assets of individually significant amount and of individually insignificant amount) is not
18
impaired, it is included in a portfolio of financial assets with similar credit risk features so as to
conduct further impairment test. Where a financial asset is impaired, the carrying amount of the
said financial asset is written down to the present value of the predicted future cash flow.
(3) Available-for-sale financial assets
1) Objective evidence indicating that available-for-sale debt instrument investments may be
impaired includes:
a. significant financial difficulties in the debtor;
b. breach of contract by the debtor, such as principal or interest past due or default;
c. concessions made to debtors with financial difficulties considering economic and legal factors;
d. it is highly probable that the debtor is going to dissolve or going through other terms of
financial restructuring;
e. owing to significant financial difficulties occurred to the debtor, the debt instrument is
discontinued to trade in active market; or
f. Other circumstances indicating that available-for-sale debt instrument may be impaired.
2) Evidence indicating that available-for-sale equity instrument investment may be impaired
includes the fair value of equity instrument investment is suffered from significant or
non-temporary decline and the technical, market, economic, or legal environment in which the
investee operates has significant adverse changes under which the Company may not be able to
recover its investment cost.
The Company performs review on available-for-sale equity instrument investment on an
individual basis at the balance sheet date. For equity instrument investment at fair value, if the
balance sheet date fair value is 50% or above lower than the cost, or the balance sheet date fair
value has been lower than the cost for a consecutive of 12 months or longer, it is determined that
such equity instrument investment is impaired; if the balance sheet date fair value is 20% or above
but not exceeding 50% lower than the cost, or the balance sheet date fair value has been lower
than the cost for a consecutive of 6 months or longer but not exceeding 12 months, the Company
may take other factors such as price volatility into consideration in determining whether such
equity instrument investment is impaired. For equity instrument investment at cost, the Company
considers whether the technical, market, economic, or legal environment in which the investee
operates has significant adverse changes to determine whether such equity instrument is impaired.
When an available-for-sale financial asset at fair value is impaired, the cumulative loss arising
from decline in fair value that has been recognized directly in other comprehensive income is
reclassified to impairment loss. If, after an impairment loss has been recognized on
available-for-sale debt instrument investment, there is objective evidence of a recovery in value of
19
the financial asset which can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss is reversed through profit or loss.
Subsequent fair value increase in available-for-sale debt instrument investment whose impairment
loss has been recognized is directly recognized in other comprehensive income.
When an available-for-sale equity instrument at cost is impaired, impairment loss on such equity
instrument investment is recognized at any excess of its carrying amount over the present value of
future cash flows, and such impairment loss is not reversed upon recognition.
(XI) Receivables
1. Receivables of individually significant amount and with provision made on an individual basis
Judgment basis or amount criteria of Receivables amounting to more than 10 million yuan
individually significant amount
Provision method for receivables of Provisions are made on the difference between the
individually significant amount and lower of present value of future cash flow and their
with provision made on an individual carrying amount based on impairment testing on an
basis individual basis.
2. Receivables with provision made on a collective basis using portfolios with similar credit risk
features
(1) Specific portfolios and provision method
Provision method of provision being made on collective basis using portfolios with similar
credit risk features:
Portfolio 1 Grouped with related party balances within the consolidation
scope
Portfolio 2 Grouped with age
Portfolios and provision method
Provisions are made on the difference between the lower of
Portfolio 1 present value of future cash flow and their carrying amount
based on impairment testing on an individual basis.
Portfolio 2 Age analysis method
(2) Age analysis method
Ages Proportion of provision for Proportion of provision for
accounts receivable (%) other receivables (%)
Within 1 year (inclusive, the 0.00 0.00
same hereinafter)
1-2 years 0.00 0.00
2-3 years 10.00 10.00
3-4 years 30.00 30.00
4-5 years 40.00 40.00
5-6 years 80.00 80.00
Over 6 years 100.00 100.00
3. Receivables of individually insignificant amount but with provision made on an individual basis
Reasons for provision made on an Impairment test on an individual basis with objective
20
individual basis evidence indicating that the receivable is impaired
Provision method Provision method made on an individual basis
For other receivables such as notes receivable, interest receivable and long-term receivable, etc.,
provision for bad debts is made at the difference between the present value of future cash flow and
the carrying amount.
(XII) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work
in process in the process of production, and materials or suppliers etc. to be consumed in the
production process or in the rendering of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value;
provisions for inventory write-down are made on the excess of its cost over the net realizable
value. The net realizable value of inventories held for sale is determined based on the amount of
the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in
the ordinary course of business; the net realizable value of materials to be processed is determined
based on the amount of the estimated selling price less the estimated costs of completion, selling
expenses and relevant taxes and surcharges in the ordinary course of business; at the balance sheet
date, when only part of the same item of inventories have agreed price, their net realizable value is
determined separately and is compared with their costs to set the provision for inventory
write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XIII) Assets classified as held-for-sale
Non-current assets (excluding financial assets) are accounted for as held-for-sale when the
following conditions are all met: a. the component must be available for immediate sale in its
present condition subject only to terms that are usual and customary for sales of such component;
b. the Company has made a decision on the disposal of the component; c. the Company has signed
21
an irrevocable transfer agreement with the transferee; and d. the transfer is expected to be
completed within one year.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous consent of the parties sharing
control. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party
is that it makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equity
securities, on the date of combination, it regards the share of the carrying amount of the equity of
the combined party included the consolidated financial statements of the ultimate controlling party
as the initial cost of the investment. The difference between the initial cost of the long-term equity
investment and the carrying value of the combination consideration paid or the par value of shares
issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, any excess is
adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common
control achieved in stages, the Company determines whether it is a “bundled transaction”.If it is a
“bundled transaction”, stages as a whole are considered as one transaction in accounting treatment.
If it is not a “bundled transaction”, investment cost is initially recognized at the share of the
carrying amount of net assets of the combined party included the consolidated financial statements
of the ultimate controlling party. The difference between the acquisition-date investment cost of
long-term equity investments and the carrying amount of the previously held long-term equity
investments plus the carrying amount of the consideration paid for the newly acquired equity is
adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is
adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at
the acquisition-date fair value of considerations paid.
When long-term equity investments are obtained through business combination not under
common control achieved in stages, the Company determined whether they are stand-alone
financial statements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the
carrying amount of the previously held long-term equity investments plus the carrying amount of
the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a
22
“bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one
transaction in accounting treatment. If it is not a “bundled transaction”, the carrying value of the
acquirer’s previously held equity interest in the acquire is re-measured at the acquisition-date fair
value, and the difference between the fair value and the carrying amount is recognized in
investment income; when the acquirer’s previously held equity interest in the acquire involves
other comprehensive income under equity method, the related other comprehensive income is
reclassified as income for the acquisition period, excluding other comprehensive income arising
from changes in net liabilities or assets from re-measurement of defined benefit plan of the
acquiree.
(3) Long-term equity investment obtained through ways other than business combination: the
initial cost of a long-term equity investment obtained by making payment in cash is the purchase
cost which is actually paid; that obtained on the basis of issuing equity securities is the fair value
of the equity securities issued; that obtained through debt restructuring is determined according to
“CASBE12 - Debt Restructuring”; and that obtained through non-cash assets exchange is
determined according to “CASBE7 - Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investment with control relationship, it is accounted for with cost method;
for long-term equity investment with joint control or significant influence relationship, it is
accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained
thereof is recognized in profit or loss. If the disposal does not result in the Company’s loss of
significant influence or joint control, the remained equity is accounted for with equity method;
however, if the disposal results in the Company’s loss of control, joint control, or significant
influence, the remained equity is reclassified as available-for-sale financial assets, and accounted
for according to CASBE 22 –Financial Instruments: Recognition and Measurement.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the
Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the
proportionate share of net assets in the disposed subsidiary from acquisition date or combination
date to the disposal date is adjusted to capital reserve (capital premium), if the balance of capital
reserve is insufficient to offset, any excess is adjusted to retained earnings.
When the Company loses control, the remained equity is re-measured at the loss-of-control-date
fair value. The aggregated value of disposal consideration and the fair value of the remained
23
equity, less the share of net assets in the disposed subsidiary held before the disposal from the
acquisition date or combination date to the disposal date is recognized in investment income in the
period when the Company loses control over such subsidiary, and meanwhile goodwill is offset
correspondingly. Other comprehensive income related to equity investments in former subsidiary
is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s
loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in
loss of control in accounting treatment. Before the Company loses control, the difference between
the disposal consideration at each stage and the proportionate share of net assets in the disposed
subsidiary is recognized as other comprehensive income at the consolidated financial statements
and reclassified as profit or loss in the period when the Company loses control over such
subsidiary.
(XV) Investment property
1. Investment property includes land use right of rent-out property and of property held for capital
appreciation and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent
measurement is made using the cost model, the depreciation or amortization method is the same as
that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production or supply of goods or services, for
rental to others, or for administrative purposes, and expected to be used during more than one
accounting year. Fixed assets are recognized if, and only if, it is probable that future economic
benefits associated with the assets will flow to the Company and the cost of the assets can be
measured reliably.
2. Depreciation method of different categories of fixed assets
Estimated Annual
Categories Depreciation method Useful life residual value depreciation
(years)
proportion (%) rate (%)
Buildings and structures Straight-line method 15-35 3.00 2.77-6.47
Machinery Straight-line method 10-15 3.00 6.47-9.70
Transport facilities Straight-line method 6-8 3.00 12.13-16.17
Electronic equipment Straight-line method 4-11 3.00 2.2-24.25
Office equipment and others Straight-line method 4-11 3.00 2.2-24.25
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic
24
benefits associated with the item will flow to the Company, and the cost of the item can be
measured reliably. Construction in progress is measured at the actual cost incurred to reach its
designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches its
designed usable conditions. When the construction completion cost reaches final estimating and
auditing of the construction in progress was not finished while it reaching the designed usable
conditions, it is transferred to fixed assets using estimated value first, and then adjusted
accordingly when the actual cost is settled, but the accumulated depreciation is not to be adjusted
retrospectively.
(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition
and construction or production of assets eligible for capitalization, it is capitalized and included in
the costs of relevant assets; other borrowing costs are recognized as expenses on the basis of the
actual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless they following requirements are all met: 1) the
asset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3)
the acquisition and construction or production activities which are necessary to prepare the asset
for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a
qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months,
the capitalization of the borrowing costs is suspended; the borrowing costs incurred during such
period are recognized as expenses, and are included in profit or loss, till the acquisition and
construction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or
production is ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for
capitalization, the to-be-capitalized amount of interests is determined in light of the actual interest
expenses incurred (including amortization of premium or discount based on effective interest
method) of the special borrowings at the present period minus the income of interests earned on
the unused borrowings as a deposit in the bank or as a temporary investment; where a general
borrowing is used for the acquisition and construction or production of assets eligible for
capitalization, the Company calculates and determines the to-be-capitalized amount of interests on
the general borrowing by multiplying the weighted average asset disbursement of the part of the
25
accumulative asset disbursements minus the general borrowing by the capitalization rate of the
general borrowing used.
(XIX) Intangible assets
1. Intangible asset includes land use right, patent right and non-patented technology etc. The initial
measurement of intangible asset is based its cost.
2. For intangible assets with finite useful lives, its amortization amount is amortized within its
useful lives systematically and reasonably, if it is unable to determine the expected realization
pattern reliably, intangible assets are amortized by the straight-line method with details as follows:
Items Amortization period (years)
Software 3-10
Patent right and non-patented technology 5-10
Land use right 40-50
3. Expenditures on the research phase of an internal project are recognized as profit or loss when it
is incurred. An intangible asset arising from the development phase of an internal project is
recognized if the Company can demonstrate all of the following: (1) the technical feasibility of
completing the intangible asset so that it will be available for use or sale; (2) its intention to
complete the intangible asset and use or sell it; (3) how the intangible asset will generate probable
future economic benefits. Among other things, the Company can demonstrate the existence of a
market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset; (4) the availability of adequate technical,
financial and other resources to complete the development and to use or sell the intangible asset;
and (5) its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
(XX) Impairment of part of non-current assets
For non-current assets such as long-term equity investments, investment property at cost model,
fixed assets, construction in progress, intangible assets with finite useful life, etc., if at the balance
sheet date there is indication of impairment, the recoverable amount is estimated. For goodwill
recognized in business combination and intangible assets with indefinite useful life, no matter
whether there is indication of impairment, impairment test is performed annually. Impairment test
on goodwill is performed on related group of assets or a portfolio of groups of assets.
When the recoverable amount of such non-current assets is lower than their carrying amount, the
difference is recognized as assets impairment loss through profit or loss.
(XXI) Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over
one year (excluding one year). They are recorded with actual cost, and evenly amortized within its
beneficiary period or stipulated period. If items of long-term prepayments fail to be beneficial to
26
the following accounting periods, residual values of such items are included in profit or loss.
(XXII) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service,
short-term employee benefits actually incurred as liabilities, with a corresponding charge to profit
or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or
defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the
contribution payable to a defined contribution plan as a liability, with a corresponding charge to
profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following
steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible
actuarial assumptions to estimate related demographic variables and financial variables, measure
the obligations under the defined benefit plan, and determine the periods to which the obligations
are attributed. The Company discounts obligations under the defined benefit plan using the
discount rate to determine the present value of the defined benefit plan obligations and the current
service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by
deducting the present value of the defined benefit plan obligation from the fair value of defined
benefit plan assets as a net defined benefit plan liability or net defined benefit plan asset. When a
defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the
lower of the surplus in the defined benefit plan and the asset ceiling;
3) At the end of reporting period, the Company recognizes the following components of employee
benefits cost arising from defined benefit plan: a. service cost; b. net interest on the net defined
benefit plan liability (asset); and c. Changes as a result of re-measurement of the net defined
benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant
asset. Item c is recognized in other comprehensive income and is not to be reclassified
subsequently to profit or loss. However, the Company may transfer those amounts recognized in
other comprehensive income within equity.
4. Termination benefits
27
Termination benefits provided to employees are recognized as an employee benefit liability for
termination benefits, with a corresponding charge to profit or loss at the earlier of the following
dates: a. when the Company cannot unilaterally withdraw the offer of termination benefits because
of an employment termination plan or a curtailment proposal; or b. when the Company recognizes
cost or expenses related to a restructuring that involves the payment of termination benefits.
5. Other long-term employee benefits
When other long-term employee benefits provided by the Company to the employees satisfied the
conditions for classifying as a defined contribution plan, those benefits are accounted for in
accordance with the requirements relating to defined contribution plan. The Company recognizes
and measures the net liability or net asset of other long-term employee benefits in accordance with
the requirements relation to defined benefit plan. At the end of the reporting period, the Company
recognizes the components of cost of employee benefits arising from other long-term employee
benefits as the followings: a. service cost; b. net interest on the net liability or net assets of other
long-term employee benefits; and c. changes as a result of re-measurement of the net liability or
net assets of other long-term employee benefits. As a practical expedient, the net total of the
aforesaid amounts are recognized in profit or loss or included in the cost of a relevant asset.
(XXIII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies
such as providing guarantee for other parties, litigation, products quality guarantee, onerous
contract, etc., may cause the outflow of the economic benefit and such obligations can be reliably
measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in
fulfilling the present obligations, and its carrying amount is reviewed at the balance sheet date.
(XXIV) Revenue
1. Revenue recognition principles
(1) Sale of goods
Revenue from sale of goods is recognized if, and only if, the following conditions are all satisfied:
a) significant risks and rewards of ownership of the goods is transferred to the buyer; b) the
Company retains neither continuing managerial involvement of ownership nor effective control
over the goods sold; c) the amount of revenue can be measured reliably; d) it is probable that the
economic benefits of the transaction will flow to the Company; and e) the costs of the transaction
incurred and to be incurred can be measured reliably.
(2) Rendering of services
When the outcome of the transaction can be estimated reliably (the amount of revenue can be
measured reliably, it is probable that the economic benefits will flow to the Company, the
percentage of completion of the transaction can be determined reliably, and the costs of the
28
transaction incurred and to be incurred can be measured reliably), revenue from rendering of
services is recognized using the percentage of completion method, and the stage of completion is
determined at the proportion of costs incurred to the estimated total costs. When the outcome of
the transaction cannot be estimated reliably at the balance sheet date, revenue is recognized based
on the amount of the costs incurred and the costs incurred are charged off at the same amount
when the costs incurred are expected to be recoverable; and no revenue is recognized and the costs
incurred are charged off as an expense of the period when the costs incurred are not expected to be
recovered.
(3) Revenue arising from use by others of assets
Revenue arising from use by others of assets is recognized if, and only if, it is probable that
economic benefits associated with the transaction will flow to the Company and the amount of the
revenue can be measured reliably. Interest income is recognized based on the length of time for
which the Company’s cash is used by others and the effective interest rate; and royalties are
recognized according to the period and method of charging as specified in relevant contract or
agreement.
2. Revenue recognition method adopted by the Company
The Company’s main product is the telecommunication product. Revenue is recognized if, and
only if, the following conditions are all met: the Company has delivered goods to the purchaser
based on contractual agreements; customers have accepted goods and settled the payment; goods
payment has been collected or the Company has obtained receipts invoices and it is probable that
economic benefits associated with the transaction will flow to the Company; and the costs of the
transaction incurred and to be incurred can be measured reliably.
(XXV) Government grants
1. Government grants related to assets
Government grants related to assets are government grants, with which the Company purchase,
construct or otherwise acquire non-current assets. They are recognized as deferred income, and
amortized on a straight-line method over the useful lives of the relevant assets, and included in
profit or loss. However, those measured at notional amount is directly included into profit or loss.
2. Government grants related to income
Government grants related to income are government grants other than those related to assets.
Government grants related to income if used for compensating the related future expenses or
losses of the Company are recognized as deferred income and are included in profit or loss during
the period when the relevant expenses are recognized; if used for compensating the related
expenses or losses incurred to the Company are directly included in profit or loss.
(XXVI) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the
29
difference between the carrying amount and tax base of assets and liabilities (and the difference of
the carrying amount and tax base of items not recognized as assets and liabilities but with their tax
base being able to be determined according to tax laws) and in accordance with the tax rate
applicable to the period during which the assets are expected to be recovered or the liabilities are
expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is
most likely to obtain and which can be deducted from the deductible temporary difference. At the
balance sheet date, if there is any exact evidence that it is probable that future taxable profits will
be available against which deductible temporary differences can be utilized, the deferred tax assets
unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying
amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Such
reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable
income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income
through profit or loss, excluding those arising from the following circumstances: (a) business
combination; and (b) the transactions or items directly recognized in equity.
(XXVII) Operating leases
When the Company is the lessee, lease payments are recognized as cost or profit or loss with
straight-line method over the lease term. Initial expenses are recognized directly into profit or loss.
Contingent rents are charged as profit or loss in the periods in which they are incurred.
When the Company is the lessor, lease income is recognized as profit or loss with straight-line
method over the lease term. Initial expenses, other than those with material amount and eligible
for capitalization which are recognized as profit or loss by installments, are recognized directly as
profit or loss. Contingent rents are charged into profit or loss in the periods in which they are
incurred.
(XXVIII) Segment reporting
Reportable segments are identified based on operating segments which are determined based on
the structure of the Company’s internal organization, management requirements and internal
reporting system. An operating segment is a component of the Company that:
(1) engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance are regularly reviewed by Management to make decisions about
resource to be allocated to the segment and assess its performance; and
(3) for which financial information regarding financial position, financial performance and cash
30
flows is available.
(XXIX)Changes in accounting policies
(1) The Company has adopted “CASBE 42 - Non-current Assets and Disposal Groups Held for
Sale and Discontinued Operations” promulgated by Ministry of Finance of PRC since May 28,
2017, and has adopted “CASBE 16 - Government Grants” revised by Ministry of Finance of PRC
since June 12, 2017. The change is applicable to prospective application method.
(2) The Company prepared the financial statements for the year ended December 31, 2017 in
accordance with “Notice of the Ministry of Finance on Revising and Issuing Financial Statement
Templates for General Enterprises” (numbered Cai Kuai [2017] 30), and gains and losses on
disposal of non-current assets and gains and losses on trading of non-cash assets which originally
presented under the items “Non-operating revenue” and “Non-operating expenditures” were
presented under the item “Gains on asset disposal”. As this change is applicable to retrospective
application method, non-operating revenue and non-operating expenditures of semi-annual of
2017 are respectively decreased by 29,788.25 yuan and 693,153.07 yuan, while gains on asset
disposal is increased by -663,364.82 yuan.
IV. Taxes
(I) Main taxes and tax rates
Taxes Tax bases Tax rates
Value-added tax (VAT) The taxable revenue from sales of goods or 17%、16%、6%
rendering of services
For housing property levied on the basis of
price, housing property tax is levied at the
rate of 1.2% of the balance after deducting
Housing property tax 30% of the cost; for housing property 1.2%,12%
levied on the basis of rent, housing
property tax is levied at the rate of 12% of
rent revenue.
Urban maintenance and Turnover tax payable 7%
construction tax
Education surcharge Turnover tax payable 3%
Local education surcharge Turnover tax payable 2%
Enterprise income tax Taxable income 15%,16.5%,25%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Nanjing Mennekes Electric Appliances Co., Ltd 15%
Nanjing Putian Telege Intelligent Building Ltd. 15%
31
Taxpayers Income tax rate
南京普天长乐通信设备有限公司 15%
(Nanjing Putian Changle Telecommunications Equipment Co., Ltd.*)
南京普天大唐信息电子有限公司 15%
(Nanjing Putian Datang Information Electronic Co., Ltd.*)
南京普天网络有限公司 15%
(Nanjing Putian Network Co., Ltd.*)
普天通信(香港)股份有限公司 16.5%
(Putian Telecommunications (H.K.) Co., Ltd.*)
Taxpayers other than the above-mentioned 25%
The subsidiary, Putian Telecommunications (H.K.) Co., Ltd., was established in Hong Kong on
December 1, 2000, and is subject to the enterprise income tax at a rate of 16.5%, according to
relevant rules in Hong Kong.
(II) Tax preferential policies
The subsidiary, Nanjing Putian Telege Intelligent Building Ltd., obtained high-tech enterprise
certificate in December 7, 2017, valid for 3 years. The certificate number is GR201732002774. As
a result, it is subject to the enterprise income tax at a rate of 15% for 2017 to 2019.
The subsidiary, Nanjing Mennekes Electric Appliances Co., Ltd obtained high-tech enterprise
certificate in October 20, 2016, valid for 3 years. The certificate number is GR201632000065. As
a result, it is subject to the enterprise income tax at a rate of 15% for 2017 to 2019.
The subsidiary, Nanjing Putian Changle Telecommunications Equipment Co., Ltd., obtained
high-tech enterprise certificate in October 10, 2015, valid for 3 years. The certificate number is
GR201532001302. As a result, it is subject to the enterprise income tax at a rate of 15% for 2015
to 2017.
The subsidiary, Nanjing Putian Network Co., Ltd., obtained high-tech enterprise certificate in
December 7, 2017, valid for 3 years. The certificate number is GF201732003495. As a result, it is
subject to the enterprise income tax at a rate of 15% for 2017 to 2019.
The subsidiary, Nanjing Putian Datang Information Electronic Co., Ltd., obtained high-tech
enterprise certificate in August 24, 2015, valid for 3 years. The certificate number is
GF201532000188. As a result, it is subject to the enterprise income tax at a rate of 15% for 2015
to 2017.
The subsidiary, Nanjing Telecommunication Equipment Factory - the Seventh Branch*), is a
social welfare enterprise. Accordance to the provisions of Guo Shui Fa [2007] No.067, it enjoys
the preferential tax policy of VAT refund upon collection and plus deduction of wages paid to the
disabled employees.
The subsidiaries, Nanjing Putian Datang Information Electronic Co., Ltd. and Nanjing Putian
*
The English names are for identification purpose only.
32
Telecommunication Technology Co., Ltd.*), were certified as software enterprises, and some of the
software products produced by Nanjing South Telecommunications Company Limited and
Nanjing Putian Network Co., Ltd. are entitled to enjoy the preferential tax policy of 3% VAT
refund upon collection in accordance with the provisions of Cai Shui [2011] No.100.
V. Notes to items of consolidated financial statements
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 4,218.51 5,458.17
Cash in bank 157,231,609.48 311,051,461.00
Other cash and bank balances 72,517,673.35 16,420,782.19
Total 229,753,501.34 327,477,701.36
(2) Other remarks
Other cash and bank balances include deposit for acceptance and deposit for L/G, which are with
use restrictions.
2. Notes receivable
(1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
bad debts amount bad debts amount
Bank 29,943,288.75 29,943,288.75 20,715,749.22 20,715,749.22
acceptance
Trade 550,000.00 550,000.00 11,761,714.37 11,761,714.37
acceptance
Total 30,493,288.75 30,493,288.75 32,477,463.59 32,477,463.59
(2) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet
derecognized
Bank acceptance 1,640,625.03 1,093,750.02
Trade acceptance 546,875.01
Subtotal 2,187,500.04 1,093,750.02
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit
level, there is very little possibility of failure in recoverability when it is due. Based on this fact,
the Company derecognized the endorsed or discounted bank acceptance. However, if any bank
acceptance is not recoverable when it is due, the Company still holds joint liability on such
acceptance, according to the China Commercial Instrument Law.
33
In the current period, trade acceptance is endorsed for goods payment. As it relates to many
endorsements and the drawer is always in good commercial credit level, it is with low default risk
and thus derecognized.
3. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 921,138,806.63 98.72 38,769,179.74 4.21 882,369,626.89
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 921,138,806.63 98.72 38,769,179.74 4.21 882,369,626.89
Receivable of individually
insignificant amount but 11,921,451.05 1.28 11,921,451.05 100.00
with provision made on an
individual basis
Total 933,060,257.68 100.00 50,690,630.79 5.43 882,369,626.89
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 815,282,308.11 98.56 35,192,700.70 4.32 780,089,607.41
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 815,282,308.11 98.56 35,192,700.70 4.32 780,089,607.41
Receivable of individually
insignificant amount but 11,901,554.08 1.44 11,901,554.08 100.00
with provision made on an
individual basis
Total 827,183,862.19 100.00 47,094,254.78 5.69 780,089,607.41
2) In portfolios, accounts receivable with provision made on a collective basis with age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
34
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 638,568,099.60
1-2 years 187,811,924.60
2-3 years 36,740,459.85 3,679,648.39 10.00
3-4 years 20,510,586.37 6,153,175.93 30.00
4-5 years 9,466,123.63 3,786,449.46 40.00
5-6 years 14,458,535.09 11,566,828.47 80.00
Over 6 years 13,583,077.49 13,583,077.49 100.00
Subtotal 921,138,806.63 38,769,179.74 4.21
(2) Provisions made, collected or reversed in current period
1) Provision for bad debts made in current period totaled 3,534,469.53 yuan, and provision
increased due to fluctuations in exchange totaled 61,906.48 yuan.
(2) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Book balance total balance of Provision for
accounts bad debts
receivable (%)
中国联合网络通信有限公司河南省分公司
(China United Network Communications Group 48,118,986.00 5.16
Co., Ltd., Henan Branch*)
北京融通致远科技有限责任公司
(Beijing Rongtong Zhiyuan Science and Technology 32,406,347.08 3.47
Co., Ltd. )
普天信息技术有限公司 16,964,697.28 1.82
(Petevio information technology Co., Ltd. )
中国铁塔股份有限公司鹤岗市分公司
(Hegang branch of China Tower Limited by Share 15,714,957.42 1.68
Ltd(China Tower))
中国普天信息产业股份有限公司 13,819,926.92 1.48
(China Potevio Information Industry Inc.)
Subtotal 127,024,914.70 13.61
4. Advances paid
(1) Age analysis
1) Details
Closing balance
Ages
Book balance % to total Provision for Carrying amount
bad debts
Within 1 year 184,879,585.79 89.68% 184,879,585.79
1-2 years 9,038,065.59 4.38% 9,038,065.59
2-3 years 4,346,007.03 2.11% 4,346,007.03
Over 3 years 7,891,350.92 3.83% 7,891,350.92
Total 206,155,009.33 100.00% 206,155,009.33
35
(Continued)
Opening balance
Ages
Book balance % to total Provision for Carrying amount
bad debts
Within 1 year 36,704,841.98 68.20 36,704,841.98
1-2 years 11,206,192.14 20.82 11,206,192.14
2-3 years 1,456,310.44 2.70 1,456,310.44
Over 3 years 4,454,593.23 8.28 4,454,593.23
Total 53,821,937.79 100.00 53,821,937.79
2) Reasons for unsettlement on advances paid with age over one year and significant amount
Debtors Closing balance Reasons for unsettlement
江苏中厦劳务有限公司南京分公司
940,000.00 The contract hasn’t been
(Nanjing branch of Jiangsu Zhongxia Labor Service fulfilled
Co., Ltd.*)
北京光宇文庆科技有限公司 729,330.00 The contract hasn’t been
(Beijing guangyu wenqing technology co. LTD.*) fulfilled
江苏天泽智能科技有限公司
481,771.60 The contract hasn’t been
(Jiangsu Tianze Intelligent and Technology Co., fulfilled
Ltd.*)
南京艾尔特光电有限公司 439,507.50 The contract hasn’t been
(Nanjing aite photoelectric co. LTD.*) fulfilled
The contract hasn’t been
普天和平科技有限公司 436,294.00
(Putian peace technology co. LTD) fulfilled
Subtotal 3,026,903.10
(2) Details of the top 5 debtors with largest balances
Debtors Book balance Proportion to the total
balance of advances paid (%)
上海星地通通信科技有限公司
(Shanghai xingditong communication technology 108,765,000.00 52.76%
co. LTD*)
舜天国际集团江苏机械进出口公司
(Jiangsu Machinery Import and Export Corporation 39,676,000.00 19.25%
of Shuntian International Group*)
上海擎天电子科技有限公司
(Shanghai optimus electronics technology co. 4,215,050.00 2.04%
LTD.*)
上海瀛联信息科技股份有限公司
(Shanghai yinglian information technology co. 2,282,800.00 1.11%
LTD.*)
南京斯尔特科技有限公司 1,519,459.31 0.74%
(Nanjing sierte technology co. LTD. *)
Subtotal 156,458,309.31 75.89%
5. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories
Book balance Provision for bad debts Carrying amount
36
Amount % to total Amount Provision
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 38.44 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 46,295,617.70 61.56 4,158,841.56 8.98 42,136,776.14
using portfolios with similar
credit risk features
Including: Portfolio 1
Portfolio 2 46,295,617.70 61.56 4,158,841.56 8.98 42,136,776.14
Receivable of individually
insignificant amount but
with provision made on an
individual basis
Total 75,207,740.41 100.00 33,070,964.27 43.97 42,136,776.14
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 45.97 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 33,987,705.89 54.03 4,662,282.16 13.72 29,325,423.73
using portfolios with similar
credit risk features
Including: Portfolio 1
Portfolio 2 33,987,705.89 54.03 4,662,282.16 13.72 29,325,423.73
Receivable of individually
insignificant amount but
with provision made on an
individual basis
Total 62,899,828.60 100.00 33,574,404.87 53.38 29,325,423.73
2) Other receivables of individually significant amount and with provision made on an individual
basis
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
北京立康普通信设备有限公司 With long age
(Beijing Likangpu Communications 28,912,122.71 28,912,122.71 100.00 and hard to
*
Equipment Co., Ltd. ) recover
Subtotal 28,912,122.71 28,912,122.71 100.00
3) In portfolios, other receivables with provision made on a collective basis with age analysis
method
Ages Closing balance
* The English name is for identification purpose only.
37
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 29,810,982.32
1-2 years 8,530,117.55
2-3 years 2,400,123.20 240,012.32 10.00
3-4 years 1,361,898.00 407,669.40 30.00
4-5 years 1,018,458.70 406,583.48 40.00
5-6 years 347,307.85 277,846.28 80.00
Over 6 years 2,826,730.08 2,826,730.08 100.00
Subtotal 46,295,617.70 4,158,841.56 8.98
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled -503,686.37 yuan, and provision
increased due to fluctuations in exchange totaled 245.77 yuan.
(3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Petty cash for business traveling 3,024,173.05 2,856,176.36
Deposits 17,573,250.56 21,876,987.95
Temporary advance payment receivable 42,906,197.19 27,377,794.22
Others 11,704,119.61 10,788,870.07
Total 75,207,740.41 62,899,828.60
(4) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Book balance Ages total balance of Provision for
receivables other receivables bad debts
(%)
Beijing Likangpu Temporary
Communications advance payment 28,912,122.71 Over 6 years 38.44 28,912,122.71
Equipment Co., Ltd. receivable
Temporary
China putian information 1,000,000.00 1.33
advance payment 40,000.00
industry co. LTD
receivable
Temporary
Putian information advance
835,252.00 1-3 years 1.11
technology co. LTD payment
receivable
Jiangsu tianye
engineering consulting 800,000.00 Within 1 year 1.06
Deposits
real estate appraisal co.
LTD bid bond
Temporary
Nanjing Putian
advance 738,706.63 1-6 years 0.98
Communication
payment
Industry Co., Ltd.
receivable
Subtotal 32,286,081.34 46.56 28,952,122.71
6. Inventories
(1) Details
38
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
write-down write-down
Raw materials 51,622,472.32 2,938,752.56 48,683,719.76 32,589,471.27 2,938,752.56 29,650,718.71
Work in process 90,757,012.61 90,757,012.61 9,304,009.61 9,304,009.61
Goods on hand 111,240,428.46 3,087,176.10 108,153,252.36 310,378,245.32 3,087,176.10 307,291,069.22
Merchandise shipped 103,952,498.53 7,751,357.94 96,201,140.59 147,425,970.58 7,758,200.35 139,667,770.23
Materials in 5,796,731.05 804,691.99 4,992,039.06 4,789,181.58 804,691.99 3,984,489.59
consignors
Total 363,369,142.97 14,581,978.59 348,787,164.38 504,486,878.36 14,588,821.00 489,898,057.36
(2) Provision for inventory write-down
1) Details
Increase Decrease
Items Opening balance Closing balance
ProvisionOthers Reversal or Others
written-off
Raw materials 2,938,752.56 2,938,752.56
Goods on hand 3,087,176.10 3,087,176.10
Goods dispatched 7,758,200.35 6,842.41 7,751,357.94
Materials on consignment for 804,691.99 804,691.99
further processing
Subtotal 14,588,821.00 6,842.41 14,581,978.59
2) Determination basis of net realizable value and reasons for the reversal or written-off of
provision for inventory write-down
Please refer to XII for determination basis of net realizable value. Reversal of provision for
inventory write-down due to the sale of raw materials in the current period, which is with
provision for inventory write-down made in prior period, totaled 6,842.41 yuan.
7. Other current assets
Items Closing balance Opening balance
Input VAT to be credited 21,971,751.01 45,282,892.44
Advance payment of income tax 112,969.04
Total 22,084,720.05 45,282,892.44
8. Available-for-sale financial assets
(1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
Available-for-sale
equity instrument
Including: at cost 2,596,863.00 1,854,910.00 741,953.00 2,596,863.00 1,854,910.00 741,953.00
Total 2,596,863.00 1,854,910.00 741,953.00 2,596,863.00 1,854,910.00 741,953.00
(2) Available-for-sale financial assets at cost
39
Book balance
Investees
Opening Increase Decrease Closing
balance balance
南京雨花电镀厂 420,915.00 420,915.00
*
(Nanjing Yuhua Electroplating Factory )
杭州鸿雁电器有限公司 321,038.00 321,038.00
(Hangzhou Honyar Electrical Co., Ltd.*)
北京立康普通信设备有限公司
Beijing Likangpu Communications 1,854,910.00 1,854,910.00
Equipment Co., Ltd. [Note]
Subtotal 2,596,863.00 2,596,863.00
(Continue)
Provision for impairment Holding Cash dividend
Investees proportion in in current
Opening Increase Decrease Closing
balance balance investees (%) period
Nanjing Yuhua 10.00
Electroplating Factory
Hangzhou Honyar 2.26
Electrical Co., Ltd.
Beijing Likangpu
Communications 1,854,910.00 1,854,910.00 51.00
Equipment Co., Ltd.
Subtotal 1,854,910.00 1,854,910.00
Note: Up to the end of 2007, Beijing Likangpu Communications Equipment Co., Ltd. was
significantly insolvent and was shut down with no operations since 2008. In October 2007, Beijing
Administration for Industry and Commerce issued the decision on treatment of cancellation of
license and required it to carry out liquidation under laws and regulations. Pursuant to “CASBE 33
- Consolidated Financial Statements”, Beijing Likangpu Communications Equipment Co., Ltd.
shall no longer be brought into consolidation scope since 2008 and such event has been reported to
China Potevio Information Industry Inc. and State-owned Assets Supervision and Administration
Commission of the State Council.
9. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
Investments in 173,806,943.51 173,806,943.51 173,681,413.39 173,681,413.39
associates
Investments in 13,380,788.62 13,380,788.62 13,296,092.84 13,296,092.84
joint ventures
Total 187,187,732.13 187,187,732.13 186,977,506.23 186,977,506.23
(2) Details
Increase/decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
* The English names are for identification purpose only.
40
Increase/decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
Joint ventures
南京普住光网络有限公司
(SEI-Nanjing Potevio Optical 13,296,092.84 84,695.78
*
Network Co., Ltd. )
Subtotal 13,296,092.84 84,695.78
Associates
南京普天天纪线缆有限公司
(Nanjing Potevio Telege Cable Co., 3,040,101.44
Ltd.*)
普天高新科技产业有限公司 170,641,311.95 323,097.32
(Potevio Hi-tech Industry Co., Ltd.*)
Subtotal 173,681,413.39 323,097.32
Total 186,977,506.23 407,793.10
(Continued)
Increase/decrease
Closing
Investees Cash Closing balance balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Joint ventures 13,380,788.62
SEI-Nanjing Potevio 13,380,788.62
Optical Network Co., Ltd.
Subtotal
Associates
Nanjing Potevio Telege 3,040,101.44
Cable Co., Ltd.
Potevio Hi-tech Industry 197,567.20 170,766,842.07
Co., Ltd.
Subtotal 197,567.20 173,806,943.51
Total 197,567.20 187,187,732.13
10. Investment property
Items Buildings and Land use right Total
structures
Cost
Opening balance 23,851,020.30 3,642,147.87 27,493,168.17
Increase
Decrease
1) Transferred into fixed assets
Closing balance 23,851,020.30 3,642,147.87 27,493,168.17
Accumulated depreciation and
amortization
Opening balance 11,083,691.02 1,764,573.87 12,848,264.89
Increase 322,337.59 43,235.64 365,573.23
* The English names are for identification purpose only.
41
Items Buildings and Land use right Total
structures
1) Accrual or amortization 322,337.59 43,235.64 365,573.23
Decrease
1) Transferred into fixed assets
Closing balance 11,406,028.61 1,807,809.51 13,213,838.12
Provision for impairment
Opening balance 1,842,418.00 1,842,418.00
Increase
Decrease
Closing balance 1,842,418.00 1,842,418.00
Carrying amount
Closing balance 10,602,573.69 1,834,338.36 12,436,912.05
Opening balance 10,924,911.28 1,877,574.00 12,802,485.28
11. Fixed assets
(1) Details
Office
Items Buildings and Machinery Transport Electronic Total
equipment
structures equipment facilities equipment
and others
Cost
Opening balance 154,660,368.48 58,096,595.23 13,247,627.08 6,659,225.73 50,842,510.16 283,506,326.68
Increase 138,474.74 185,022.83 618,809.35 115,157.85 404,413.92 1,461,878.69
1) Acquisition 138,474.74 185,022.83 618,809.35 115,157.85 404,413.92 1,461,878.69
Decrease 13,881,674.82 702,332.25 375,030.95 92,396.60 12,994,545.98 28,045,980.60
1) Disposal/scrap 13,881,674.82 702,332.25 375,030.95 92,396.60 12,994,545.98 28,045,980.60
Closing balance 140,917,168.40 57,579,285.81 13,491,405.48 6,681,986.98 38,252,378.10 256,922,224.77
Accumulated
depreciation
Opening balance 53,189,862.57 47,038,059.99 12,073,510.18 5,875,572.02 44,637,453.40 162,814,458.16
Increase 1,932,394.12 741,070.76 270,726.77 687,602.63 1,441,730.46 5,073,524.74
1) Accrual 1,932,394.12 741,070.76 270,726.77 687,602.63 1,441,730.46 5,073,524.74
Decrease 9,632,361.23 687,733.20 363,780.02 89,587.67 12,584,399.70 23,357,861.82
1) Disposal/scrap 9,632,361.23 687,733.20 363,780.02 89,587.67 12,584,399.70 23,357,861.82
Closing balance 45,489,895.46 47,091,397.55 11,980,456.93 6,473,586.98 33,494,784.16 144,530,121.08
Provision for
impairment
Opening balance 539,124.00 10,863.02 103,112.78 296,846.94 949,946.74
Increase
Decrease
1) Disposal/scrap
Closing balance 539,124.00 10,863.02 103,112.78 296,846.94 949,946.74
Carrying amount
Closing balance 94,888,148.94 10,477,025.24 1,510,948.55 105,287.22 4,460,747.00 111,442,156.95
Opening balance 100,931,381.91 11,047,672.22 1,174,116.90 680,540.93 5,908,209.82 119,741,921.78
42
(2) Fixed assets temporarily idle
Items Cost Accumulated Provision for Carrying Note
depreciation impairment amount
Machinery 218,700.00 202,437.65 16,262.35
equipment
Transport facilities 225,000.00 218,250.00 6,750.00
Electronic 19,100.00 18,527.00 573.00
equipment
Office equipment 630,241.55 314,868.89 296,846.94 18,525.72
and others
Subtotal 1,093,041.55 754,083.54 296,846.94 42,111.07
(3) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Buildings and structures 4,917,169.73 Not applicable for allocated land
Buildings and structures 32,472,530.91 Under procedure
Subtotal 37,389,700.64
12. Construction in progress
(1) Details
Closing balance Opening balance
Projects Provision Book Provision
Book Carrying Carrying
for for
balance amount balance amount
impairment impairment
Nanjing putian science
and technology pioneer
park intelligent park 3,213,787.88 3,213,787.88 1,830,131.25 1,830,131.25
construction related
building intelligent
equipment.
Reconstruction of 726,666.84 726,666.84 333,136.64 333,136.64
distribution building
Total 3,940,454.72 3,940,454.72 2,163,267.89 2,163,267.89
(2) Changes in significant projects
Projects Budgets Increase Transferred to Other Closing
Opening balance
fixed assets decrease balance
Yuhua Scientific 6,100,437.50 1,830,131.25 1,383,656.63 3,213,787.88
Innovation Industry Park
Reconstruction of 600,000.00 333,136.64 393,530.20 726,666.84
distribution building
Subtotal 6,700,437.50 2,163,267.89 1,777,186.83 3,940,454.72
(Continued)
Accumulated Amount of
Accumulated Completion Annual
Projects amount of borrowing cost Fund
investment to percentage capitalization
borrowing cost capitalization in source
budget (%) rate (%)
capitalization current period
Yuhua Scientific
50.00 50.00 Self-owned
Innovation
fund
Industry Park
Reconstruction
121.11 90.00 Self-owned
of distribution
fund
building
Subtotal
43
13. Intangible assets
Items Software Land use right Patent right Non-patent Total
technology
Cost
Opening balance 10,889,840.33 34,760,072.04 607,500.00 4,560,000.00 50,817,412.37
Increase 499,306.89 499,306.89
1) Acquisition 499,306.89 499,306.89
Decrease
Closing balance 11,389,147.22 34,760,072.04 607,500.00 4,560,000.00 51,316,719.26
Accumulated
amortization
Opening balance 8,858,384.46 6,054,711.03 607,500.00 4,560,000.00 20,080,595.49
Increase 428,272.54 264,481.23 692,753.77
1) Accrual 428,272.54 264,481.23 692,753.77
Decrease
Closing balance 9,286,657.00 6,319,192.26 607,500.00 4,560,000.00 20,773,349.26
Carrying amount
Closing balance 2,102,490.22 28,440,879.78 30,543,370.00
Opening balance 2,031,455.87 28,705,361.01 30,736,816.88
14. Long-term prepayments
Items Opening balance Increase Amortization Other decreases Closing balance
Reconstruction of 503,316.01 82,920.00 635,492.01
canteen
Reconstruction of 1,181,112.19 129,109.88 836,906.31
office building
Factory building 1,070,715.95 89,226.33 981,489.62
decoration
Others 1,110,766.56 106,499.20 1,086,493.74 130,772.02
Total 2,795,194.76 1,177,215.15 1,387,749.95 2,584,659.96
15. Short-term borrowings
Items Closing balance Opening balance
Pledged borrowings 205,500,000.00 164,000,000.00
Mortgaged borrowings 77,010,000.00 78,550,000.00
Secured borrowings 165,000,000.00 145,000,000.00
Total 447,510,000.00 387,550,000.00
In the current period, the Company entrusted the parent company to apply for loans from Bank of
Beijing, which is the pledged borrowings amounting to 201,000,000.00 yuan. The Company
pledged its holding equities to the parent company, which include equity of Nanjing putian tianji
building intelligence co. LTD amounting to 4.80 million yuan, Nanjing South Telecommunications
Co amounting to 33.17 million yuan, equity of Nanjing Putian Changle Telecommunications
Equipment Co., Ltd. amounting to 5.07 million yuan, equity of Nanjing Putian Wangzhi
44
Electronic Co., Ltd.* amounting to 60.43 million yuan, equity of Nanjing Putian Network Co., Ltd.
amounting to 7.80 million yuan. The Company has registered the equity pledge at Nanjing
Jiangning Market Supervision Administration.
16. Notes payable
Items Closing balance Opening balance
Trade acceptance 14,064,736.10 20,161,687.14
Bank acceptance 72,000,000.00
Total 86,064,736.10 20,161,687.14
17. Accounts payable
(1) Details
Items Closing balance Opening balance
Purchase of materials 696,758,127.47 790,597,232.04
Project payment 11,045,846.61 16,074,942.13
Others 2,123,710.03
Total 709,927,684.11 806,672,174.17
(2) Significant accounts payable with age over one year
Items Closing balance Reasons for unsettlement
POLYCOM communications technology 24,274,339.32 Settlement is not completed
(Beijing) co. LTD
Jiangsu machinery import and export 24,210,574.66 Settlement is not completed
corporation of sainty international group
SEI-Nanjing Potevio Optical Network Co., 19,328,017.84 Settlement is not completed
Ltd.
Jiangsu zhongbo communication co. LTD 16,484,933.94 Settlement is not completed
China Potevio Information Industry Inc. 16,314,294.20 Settlement is not completed
Subtotal 100,612,159.96
18. Advances received
(1) Details
Items Closing balance Opening balance
Payment for goods 305,508,384.02 317,197,824.66
Total 305,508,384.02 317,197,824.66
(2) Significant advances received with age over one year
Items Closing balance Reasons for unsettlement
* The English names are for identification purpose only.
45
Items Closing balance Reasons for unsettlement
China Potevio Information Industry Inc. 3,740,144.73 The contract hasn’t been fulfilled
Jiangxi communication technology co. 376,719.00 The contract hasn’t been fulfilled
LTD
China national materials international 213,000.00 The contract hasn’t been fulfilled
engineering co. LTD
Shanghai ruinian industrial co. LTD 195,000.00 The contract hasn’t been fulfilled
Beijing guotong network technology 131,190.00 The contract hasn’t been fulfilled
co. LTD
Subtotal 4,656,053.73
19. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 21,033,311.73 118,861,399.72 119,938,133.79 19,956,577.66
Post-employment benefits - 13,618,000.60 13,618,000.60
defined benefit plan
Termination benefits 3,003,720.00 3,003,720.00
Total 21,033,311.73 135,483,120.32 136,559,854.39 19,956,577.66
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance 11,712,169.62 98,522,105.50 99,584,083.50 10,650,191.62
and subsidy
Employee welfare fund 5,109,601.88 5,102,584.11 7,017.77
Social insurance 7,687,877.99 7,687,877.99
premium
Including: Medicare 6,902,431.27 6,902,431.27
premium
Occupational injuries 385,578.42 385,578.42
premium
Maternity premium 399,868.30 399,868.30
Housing provident fund 119,044.35 5,254,849.48 5,221,752.60 152,141.23
Trade union fund and 9,202,097.76 1,890,282.38 1,945,153.10 9,147,227.04
employee education fund
Others 396,682.49 396,682.49
Subtotal 21,033,311.73 118,861,399.72 119,938,133.79 19,956,577.66
(3) Details of defined benefit plan
Items Opening balance Increase Decrease Closing balance
Basic endowment 12,244,477.13 12,244,477.13
insurance premium
Unemployment 520,354.18 520,354.18
insurance premium
Company annuity 853,169.29 853,169.29
payment
46
Items Opening balance Increase Decrease Closing balance
Subtotal 13,618,000.60 13,618,000.60
20. Taxes and rates payable
Items Closing balance Opening balance
VAT 3,687,351.15 10,280,548.54
Enterprise income tax 4,616,390.06 6,499,756.88
Individual income tax 200,837.20 237,453.57
Urban maintenance and 706,126.57 864,522.72
construction tax
Housing property tax 316,941.07 275,272.72
Land use tax 48,004.38 81,754.17
Education surcharge 998,475.94 414,831.06
Local education surcharge 199,707.94
Other taxes 7,195.89 29,169.58
Total 10,581,322.26 18,883,017.18
21. Interest payable
Items Closing balance Opening balance
Short-term borrowings interest 460,593.19 531,667.36
Total 460,593.19 531,667.36
22. Dividend payable
(1) Details
Items Closing balance Opening balance
Dividend of ordinary shares 1,692,213.38 1,692,213.38
Total 1,692,213.38 1,692,213.38
(2) Significant dividend payable with age over one year
Items Closing balance Reasons for being
unpaid
宁波峰诗恩塑胶有限公司 253,832.01 Temporarily unable
(Ningbo Fengshien Plastic Co., Ltd.*) to pay
余姚市国昌电器公司 423,053.34 Temporarily unable
(Yuyao Guochang Electric Co., Ltd.*) to pay
南京涌新电器配套有限公司 253,832.01 Temporarily unable
(Nanjing Yongxin Electric Appliance Co., Ltd. *) to pay
靖江市华胜通信器材有限公司
84,610.67 Temporarily unable
(Jingjiang Huasheng Communications Equipment
to pay
Co., Ltd.*)
* The English names are for identification purpose only.
47
Items Closing balance Reasons for being
unpaid
江都市亚特电力通讯塑料制品有限公司
423,053.34 Temporarily unable
(Jiangdu City Yate Power Telecommunication Plastic
to pay
Product Co., Ltd.*)
镇江市盛唐光电器件有限公司
253,832.01 Temporarily unable
(Zhenjiang Shengtang Photoelectricty Equipment
to pay
Co., Ltd.*)
Subtotal 1,692,213.38
23. Other payables
Items Closing balance Opening balance
Deposits 5,115,134.63 7,451,700.88
Temporary receipts payable 29,544,979.74 27,480,668.40
Unsettled installation cost 11,981,308.02 12,669,525.02
Operating expenses 943,123.21 6,466,718.07
Others 8,148,763.24 6,735,309.52
Total 55,733,308.84 60,803,921.89
24. Deferred income
(1) Details
Items Opening Increase Decrease Closing Reasons for
balance balance balance
Subsidy for
Government 8,664,102.90 3,796,949.90 4,867,153.00 Zombie
grants
enterprises
Total 8,664,102.90 3,796,949.90 4,867,153.00
(2) Details of government grants
Included in
Items Opening Increase Related to
non-operating revenue Closing balance
balance assets/income
in current period
Subsidy for high-end
talent project from
Science and 770,926.90 770,926.90 Related to
Technology Bureau of income
Qinhuai District,
Nanjing
Subsidy for technical
development plans 1,000,000.00 1,000,000.00 Related to
and technical funding income
targets
Subsidy for Zombie 6,893,176.00 2,026,023.00 Related to
enterprises income
Subtotal 8,664,102.90 3,796,949.90
Note: The condition of government subsidies carried in profit and loss of current period are
showed in the explanations of notes to items of consolidated financial statements as detailed.
25. Share capital
Items Opening balance Movements Closing balance
48
Reserve
Issue of Bonus Others Subtotal
transferred to
new shares shares
shares
Total shares 215,000,000.00 215,000,000.00
26. Capital reserve
Items Opening balance Increase Decrease Closing balance
Share/capital premium 139,592,332.04 139,592,332.04
Other capital reserve 45,782,201.81 45,782,201.81
Total 185,374,533.85 185,374,533.85
27. Other comprehensive income (OCI)
Current period cumulative
Current period Less: OCI
Items Opening balance Less: Attributable to Attributable to Closing balance
cumulative carried forward
income parent non-controlling
before income transferred to
tax company interest
tax profit or loss
Items not to be reclassified
subsequently to profit or loss
Items to be reclassified -4,129,619.45 -135,607.00 -122,046.30 -135,607.70 -4,251,665.75
subsequently to profit or loss
Including: Translation -4,129,619.45 -135,607.00 -122,046.30 -135,607.70 -4,251,665.75
reserve
Total -4,129,619.45 -135,607.00 -122,046.30 -135,607.70 -4,251,665.75
28. Surplus reserve
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 589,559.77 589,559.77
Total 589,559.77 589,559.77
29. Undistributed profit
(1) Details
Current period Preceding period
Items
cumulative comparative
Balance before adjustment at the end of -44,605,902.63 -56,491,072.91
preceding period
Add: Increase due to adjustment (or less: -1,980,089.01 922,223.51
decrease)
Opening balance after adjustment -46,585,991.64 -55,568,849.40
Add: Net profit attributable to owners of the -10,421,705.60 8,982,857.76
parent company
Closing balance -57,007,697.24 -46,585,991.64
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
Items Current period cumulative Preceding period comparative
49
Income Cost Income Cost
Revenue from main 934,501,599.83 796,224,938.08 988,549,333.34 835,871,803.11
operations
Revenue from other 32,349,005.12 28,133,757.24 23,847,074.05 18,724,687.07
operations
Total 966,850,604.95 824,358,695.32 1,012,396,407.39 854,596,490.18
2. Taxes and surcharge for operations
Items Current period cumulative Preceding period comparative
Business tax 70,020.78
Urban maintenance and 2,182,407.41 1,887,542.83
construction tax
Education surcharge 2,054,225.98 1,333,649.74
Stamp duty [Note] 254,742.19 304,729.73
Housing property tax [Note] 749,055.08 743,011.81
Land use tax [Note] 320,919.70 307,838.40
Vehicle and vessel use tax 360.00
[Note]
Others 102,900.18 80,289.32
Total 5,664,250.54 4,727,442.61
Note: Pursuant to Provisions on Accounting Treatment of Value-Added Tax (numbered Cai Kuai
[2016] 22) and Interpretation about Provisions on Accounting Treatment of Value-Added Tax that
issued by Ministry of Finance, amounts of housing property tax, vehicle and vessel use tax, land
use tax and stamp duty for the period from May to December are listed in “taxes and surcharge for
operations”, while those for the period prior to May 2016 are listed in “administrative expenses”.
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 40,217,290.65 40,410,988.01
Business entertainment 12,549,783.07 12,506,326.83
Travelling expenses 7,876,538.22 8,527,473.91
Transport fees and transport 7,900,716.87 6,244,626.75
damages
Office expenses 2,593,640.68 2,418,013.33
Conference expenses 720,798.25 766,886.71
Sales service charges 1,658,518.68 1,324,029.54
Promotion expenses 1,002,873.79 624,200.69
Equipment maintain fees 345,262.15 433,299.53
Others 4,830,761.28 6,075,264.84
Total 79,696,183.64 79,331,110.14
50
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 29,511,436.71 26,652,034.10
Technology and development
36,398,106.80 33,592,736.42
fees
Lease expenses 1,477,494.62 251,056.88
Depreciation and amortization 2,348,170.20 2,921,316.55
Office expenses 1,987,484.94 1,788,657.50
Travelling expense 1,732,042.57 777,036.64
Business entertainment 1,351,907.52 1,589,428.71
Consulting, intermediary and 3,131,873.17 1,174,061.81
legal fees
Taxes
Others 5,850,165.54 4,213,837.11
Total 83,788,682.07 72,960,165.72
Note: Showed in the explanation of notes to items for taxes and surcharge for operations.
5. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenditures 11,625,553.62 9,671,043.19
Less: Interest income 1,692,017.07 1,235,408.10
Losses on foreign exchange 18,771.62 101,222.11
Less: Gains from foreign 409.83 21,259.35
exchange
Handling charges 246,567.05 185,990.97
Total 10,198,465.39 8,701,588.82
6. Assets impairment loss
Items Current period cumulative Preceding period comparative
Bad debts 3,030,783.16 1,400,299.64
Inventory write-down 68,315.08
Total 3,030,783.16 1,468,614.72
7. Investment income
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments 407,793.10 -618,093.05
under equity method
Total 407,793.10 -618,093.05
8. Gains on disposal of assets
51
The amount included
Current period Preceding period in the current
Items
cumulative comparative non-recurring profit
and loss.
Gains on disposal of 30,156,818.80 -663,364.82 30,156,818.80
non-current assets
Total 30,156,818.80 -663,364.82 30,156,818.80
9. Other income
Amount included
Items Current period Preceding period
in non-recurring
cumulative comparative
profit or loss
Refund of VAT 2,945,620.86 2,784,809.60
Subsidy for Zombie enterprises 2,026,023.00
Science and technology award by 647,200.00
Nanjing qinhuai district
Provincial award for enterprise
research and development costs by 158,700.00
Yuhua district government
Science and technology R&D 21,800.00
expenditure award
Total 5,799,343.86 2,784,809.60
Note: The amounts carried in current period are showed in the explanations of notes to items of
consolidated financial statements as detailed.
10. Non-operating revenue
Amount included in
Items Current period Preceding period
non-recurring profit
cumulative comparative
or loss
Gains on debt restructuring 225,371.60 301,606.55 225,371.60
Government grants 2,375,370.56 2,368,873.77 2,375,370.56
Others 225,111.99 69,330.61 225,111.99
Total 2,825,854.15 2,739,810.93 2,825,854.15
(2) Government grants
Related to
Items Current period Preceding period
cumulative comparative assets/income
Cooperative R&D of Intelligent
Rail Transit Monitoring System 1,000,000.00 Related to income
Based on Optical Fiber Integrated
Sensor Network
Subsidy for Nanjing municipal 770,926.90 443,149.84 Related to income
high-end talent project
Nanjing Jiangning District Finance
Bureau Nanjing Famous Brand 100,000.00 Related to income
Award
52
Related to
Items Current period Preceding period
cumulative comparative assets/income
Annual research and development
expenses provincial financial 330,300.00 Related to income
incentives
Subsidy income 174,143.66 213,064.93 Related to income
Subsidy for disposal of zombie 1,662,659.00 Related to income
enterprises
High-tech enterprise subsidy 50,000.00 Related to income
Subtotal 2,375,370.56 2,368,873.77
11. Non-operating expenditures
Amount included in
Items Current period Preceding period
non-recurring profit
cumulative comparative
or loss
Donation expenditures 97,000.00 2,000.00 97,000.00
Fines expenditures 135,029.97 1,725.22 135,029.97
Penalty 187,832.09
Others 76,556.03 44,965.91 76,556.03
Total 308,586.00 236,523.22 308,586.00
12. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax expenses 1,646,117.70 3,203,411.84
Deferred income tax expenses
Total 1,646,117.70 3,203,411.84
(2) Reconciliation of accounting profit to income tax expenses
Items Current period cumulative Preceding period comparative
Profit before tax -1,005,231.26 -5,382,365.36
Income tax expenses based on
statutory tax rate applicable to the -251,307.82 -1,345,591.34
parent company
Effect of different tax rate applicable -874,737.23 -409,465.39
to subsidiaries
Effect of prior income tax 67,935.55 192,009.22
reconciliation
Effect of non-taxable income -101,948.28 -163,805.43
Effect of non-deductible costs, 1,826,473.01 1,628,506.99
expenses and losses
Effect of deducible temporary
differences or deductible losses not -2,407,065.64 -155,618.48
recognized as deferred income tax
assets
53
Items Current period cumulative Preceding period comparative
Effect of deductible temporary
difference or the deductible loss of 7,620,079.35 5,733,731.90
deferred income tax assets in the
current period
Adjustment of valuation 92,031.50 92,031.50
appreciation
Deduction of R&D expenditures -4,233,311.26 -2,368,387.13
Income tax expenses 1,646,117.70 3,203,411.84
13. Other comprehensive income, net of income tax
Please refer to notes to items of the consolidated balance sheet - other comprehensive income for
details.
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
Items Current period cumulative Preceding period comparative
Government grants 4,377,764.52 9,360,520.93
Interest income 1,692,017.07 1,235,408.10
Temporary receipts and recovery of 29,756,412.58 76,751,381.14
temporary payment
Others 1,825,553.62 2,412,782.82
Total 37,651,747.79 89,760,092.99
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Temporary payment and repayment 62,678,023.35 63,705,426.62
of temporary receipts
Out of pocket expense 52,338,653.48 55,240,035.72
Others 1,074,094.19 234,907.27
Total 116,090,771.02 119,180,369.61
3. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Supplement information Current period Preceding period
cumulative comparative
(1) Reconciliation of net profit to cash flow from
operating activities:
Net profit -2,651,348.96 -8,585,777.20
Add: Provision for assets impairment loss 3,030,783.16 1,468,614.72
Depreciation of fixed assets, oil and gas assets, 5,073,524.74 5,484,695.90
productive biological assets
Amortization of intangible assets 692,753.77 601,621.91
54
Supplement information Current period Preceding period
cumulative comparative
Amortization of long-term prepayments 1,387,749.95 297,974.87
Loss on disposal of fixed assets, intangible -30,156,818.80 632,574.75
assets and other non-current assets (Less: gains)
Fixed assets retirement loss (Less: gains) 30,790.07
Losses on changes in fair value (Less: gains)
Financial expenses (Less: gains) 11,625,553.62 9,751,005.95
Investments losses (Less: gains) -407,793.10 618,093.05
Decrease of deferred tax assets (Less: increase)
Increase of deferred tax liabilities (Less:
decrease)
Decrease in inventories (Less: increase) 141,110,892.98 95,981,248.40
Decrease in operating receivables (Less: -263,703,522.06 -579,098,066.73
increase)
Increase of operating payables (Less: decrease) -91,277,004.23 336,652,630.50
Others
Net cash flow from operating activities -225,275,228.93 -136,164,593.81
(2) Significant investing and financing activities not
related to cash receipts and payments:
Conversion of debt into share capital
Convertible bonds due within one year
Fixed assets rented in under finance leases
(3) Net changes in cash and cash equivalents:
Cash at the end of the period 157,235,827.99 209,573,910.36
Less: Cash at the beginning of the period 311,056,919.17 484,954,713.07
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the
period
Net increase of cash and cash equivalents -153,821,091.18 -275,380,802.71
(2) Cash and cash equivalents
Items Closing balance Opening balance
1) Cash 157,235,827.99 311,056,919.17
Including: Cash on hand 4,218.51 5,458.17
Cash in bank on demand for payment 157,231,609.48 311,051,461.00
Other cash and bank balances on demand
for payment
2) Cash equivalents
Including: Bond investments maturing within three
months
3) Cash and cash equivalents at the end of the period 157,235,827.99 311,051,461.00
Including: Cash and cash equivalents of parent
55
company or subsidiaries with use restrictions
(3) Remarks on supplement information to the cash flow statement
Cash and cash equivalents with use restrictions are deposit for acceptance and deposit for L/G, of
which closing balance amounts totaled 72,517,673.35 yuan and opening balance amounts totaled
16,420,782.19 yuan.
(IV) Others
1. Assets with title or use right restrictions
Items Closing carrying amount Reasons for restrictions
Cash and bank balances 72,517,673.35 Deposit for acceptance and
deposit for L/G
Fixed assets 70,069,098.63 Providing mortgaged
guarantee for borrowings
Intangible assets 5,968,997.52 Providing mortgaged
guarantee for borrowings
Investment property 6,110,879.51 Providing mortgaged
guarantee for borrowings
Total 154,666,649.01
Note: We remind users of financial statements that, apart from the above assets with title or use
right restrictions, The Company pledged its holding equities to the parent company, which include
equity of Nanjing putian tianji building intelligence co. LTD amounting to 4.80 million yuan,
Nanjing South Telecommunications Co amounting to 33.17 million yuan, equity of Nanjing Putian
Changle Telecommunications Equipment Co., Ltd. amounting to 5.07 million yuan, equity of
Nanjing Putian Wangzhi Electronic Co., Ltd. amounting to 60.43 million yuan, equity of
Nanjing Putian Network Co., Ltd. amounting to 7.80 million yuan. The Company has registered
the equity pledge at Nanjing Jiangning Market Supervision Administration. Those equities are
with use restrictions before released.
2. Monetary items in foreign currencies
Items Closing balance in Exchange rate RMB equivalent
foreign currencies
Cash and bank balances
Including: USD 782,842.85 6.6166 5,798,690.73
EUR 522.27 7.6515 4,874.87
HKD 641,509.93 0.8431 641,509.93
GBP 208.79 8.6551 2,192.86
3. Government grants
1. Details
(1) Government grants related to income and used to compensate future relevant costs, expenses
or losses
Opening Closing
Amounts Amounts carried
Items balance of balance of Remarks
Increase carried forward
deferred deferred
forward presented under
income income
Nanjing qinhuai district 770,926.90 770,926.90 Non-operating
56
science and technology revenue
bureau high-end talent
team project funds
subsidy
Government subsidies
on technical Non-operating
development plans and 1,000,000.00 1,000,000.00
revenue
technical funding
targets.
Zombie enterprise 6,893,176.00 2,026,023.00 4,867,153.00 Other income
financial aid.
Subtotal 8,664,102.90 3,796,949.90 4,867,153.00
(2) Government grants related to income and used to compensate incurred relevant costs, expenses
or losses
Items Amounts Presented under Remarks
value-added tax refund 2,945,620.86 Other income
Science and technology award by 647,200.00 Other income
Nanjing qinhuai district
Provincial award for enterprise
research and development costs by 158,700.00 Other income
Yuhua district government
Science and technology R&D 21,800.00 Other income
expenditure award
Nanjing Jiangning District Finance 100,000.00 Non-operating revenue
Bureau Nanjing Famous Brand Award
Subsidy income 174,143.66 Non-operating revenue
Annual research and development
expenses provincial financial 330,300.00 Non-operating revenue
incentives
Subtotal 4,377,764.52
2. The amount of government subsidy included in the current profit and loss is included in the
current period is 8,174,714.42 yuan.
VI. Interest in other entities
(I) Interest in significant subsidiaries
1. Significant subsidiaries
(1) Basis information
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
Nanjing South
Nanjing Nanjing Manufacture 96.99 1.38 Set up
Telecommunications
City City
Company Limited
Nanjing Mennekes Nanjing Nanjing Manufacture 75.00 Set up
Electrics Co., Ltd. City City
Nanjing Putian Telege Nanjing Nanjing Manufacture 45.767 Set up
Intelligent Building Ltd. City City
Nanjing Putian Changle
Nanjing Nanjing Manufacture 50.70 Set up
Telecommunications
City City
Equipment Co., Ltd.
Nanjing Putian Datang Nanjing Nanjing Manufacture 40.00 Set up
57
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
Information Electronic City City
Co., Ltd.
(2) Other remarks
1) Remarks on inconsistency between holding proportion owned and voting rights proportion
owned in subsidiaries
The Company holds 40% equity of Nanjing Putian Datang Information Electronic Co., Ltd. The
Company signed the agreement with 严耀明 (Yan Yaoming), a shareholder of Nanjing Putian
Datang Information Electronic Co., Ltd., to exercise his 21% right to vote. The agreement is valid
during the period of the existence of Nanjing Putian Datang Information Electronic Co., Ltd. The
Company has 61% of the voting right during the existence period of Nanjing Putian Datang
Information Electronic Co., Ltd.
2) Basis for the control of an investee while holding its half or less than half voting rights, and the
non-control of an investee while holding its more than half voting rights
The Company holds 45.767% of voting rights in Nanjing Putian Telege Intelligent Building Ltd.,
the other voting rights are decentralized. The Company has over half member of the Board of
Directors, and it not only controls this company but also has a privileged variable return by taking
part in Nanjing Putian Telege Intelligent Building Ltd’s related activity. The Company has the
ability to impact the amount of return and control over Nanjing Putian Telege Intelligent Building
Ltd.
2. Significant not wholly-owned subsidiaries
(1) Details
Holding Profit or loss Dividend Closing
Subsidiaries proportion of attributable to declared to balance of
non-controlling non-controlling non-controlling non-controlling
shareholders shareholders shareholders shareholders
Nanjing South
Telecommunications 1.63% 85,452.96 1,906,515.15
Company Limited
Nanjing Mennekes 25.00% -313,203.34 24,368,040.13
Electrics Co., Ltd.
Nanjing Putian Telege 54.233% 4,264,516.05 2,169,200.00 69,287,303.52
Intelligent Building Ltd.
Nanjing Putian Changle
Telecommunications 49.30% -1,474,270.38 13,839,755.01
Equipment Co., Ltd.
Nanjing Putian Datang
Information Electronic 60.00% 1,813,970.12 18,548,741.08
Co., Ltd.
3. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
58
Closing balance
Subsidiaries
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
Nanjing South
Telecommunications 289,176,667.91 13,867,668.85 303,044,336.76 186,080,216.89 186,080,216.89
Company Limited
Nanjing Mennekes 184,495,806.34 25,450,252.47 209,946,058.81 117,469,511.61 117,469,511.61
Electrics Co., Ltd.
Nanjing Putian
Telege Intelligent 241,441,984.86 39,438,367.83 280,880,352.69 157,121,564.64 157,121,564.64
Building Ltd.
Nanjing Putian
Changle 76,559,512.24 601,883.99 77,161,396.23 49,088,870.87 49,088,870.87
Telecommunications
Equipment Co., Ltd.
Nanjing Putian
Datang Information 35,337,300.26 10,040,345.08 45,377,645.34 20,180,838.56 20,180,838.56
Electronic Co., Ltd.
(Continued)
Opening balance
Subsidiaries
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
Nanjing South
Telecommunications 309,537,813.81 13,592,176.13 323,129,989.94 211,408,383.03 211,408,383.03
Company Limited
Nanjing Mennekes 176,169,023.07 25,854,512.91 202,023,535.98 108,294,175.42 108,294,175.42
Electrics Co., Ltd.
Nanjing Putian
Telege Intelligent 256,432,695.75 39,896,214.78 296,328,910.53 180,433,445.64 180,433,445.64
Building Ltd.
Nanjing Putian
Changle 74,309,078.75 636,133.14 74,945,211.89 43,882,280.07 43,882,280.07
Telecommunications
Equipment Co., Ltd.
Nanjing Putian
Datang Information 30,926,444.05 10,451,600.76 41,378,044.81 19,204,521.56 19,204,521.56
Electronic Co., Ltd.
(2) Profit or loss and cash flows
Current period cumulative
Subsidiaries Total Cash flows from
Operating Net profit comprehensive operating
revenue
income activities
Nanjing South
Telecommunications 189,137,568.77 5,242,512.96 5,242,512.96 -42,705,054.89
Company Limited
Nanjing Mennekes 76,791,799.01 -1,252,813.36 -1,252,813.36 -10,824,370.82
Electrics Co., Ltd.
Nanjing Putian Telege 175,165,797.66 7,863,323.16 7,863,323.16 -63,303,867.53
Intelligent Building Ltd.
Nanjing Putian Changle
Telecommunications 10,520,409.96 -2,990,406.46 -2,990,406.46 -375,539.90
Equipment Co., Ltd.
Nanjing Putian Datang
Information Electronic 25,909,924.77 3,023,283.53 3,023,283.53 -4,119,607.34
Co., Ltd.
(Continued)
Subsidiaries Preceding period comparative
59
Total Cash flows from
Operating Net profit comprehensive operating
revenue
income activities
Nanjing South
Telecommunications 243,730,139.55 7,650,094.68 7,650,094.68 -84,539,271.37
Company Limited
Nanjing Mennekes
71,301,568.30 2,326,478.84 2,326,478.84 -20,466,738.78
Electrics Co., Ltd.
Nanjing Putian Telege
163,937,091.78 6,401,329.59 6,401,329.59 -39,074,056.70
Intelligent Building Ltd.
Nanjing Putian Changle
Telecommunications 28,820,122.05 -182.92 -182.92 -407,928.66
Equipment Co., Ltd.
Nanjing Putian Datang
Information Electronic 20,982,232.12 1,964,874.04 1,964,874.04 -4,741,851.24
Co., Ltd.
(II) Interest in joint venture or associates
1. Significant joint ventures or associates
Main Holding
Joint ventures or Place of Business nature proportion (%) Accounting
operating
associates registration Direct Indirect treatment
place
Optical
SEI-Nanjing Potevio
Nanjing Nanjing communication 50.00 Equity
Optical Network Co.,
City City products production method
Ltd.
and sale
Industrial park
Potevio Hi-tech Nanjing Nanjing 49.64 Equity
venue rental
Industry Co., Ltd. City City method
management etc.
2. Main financial information of significant joint ventures
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
SEI-Nanjing Potevio Optical Network Co., Ltd.
Current assets 33,268,327.90 34,428,867.14
Including: Cash and cash 2,836,164.95 1,005,127.42
equivalents
Non-current assets 924,878.95 1,090,709.60
Total assets 34,193,206.85 35,519,576.74
Current liabilities 7,436,554.79 8,927,391.06
Non-current liabilities
Total liabilities 7,436,554.79 8,927,391.06
Non-controlling interest
Equity attributable to owners of 26,756,652.06 26,592,185.68
parent company
Proportionate share in net assets 13,378,326.03 13,296,092.84
Adjustments
Goodwill
Unrealized profit in internal
60
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
SEI-Nanjing Potevio Optical Network Co., Ltd.
trading
Others
Carrying amount of investments 13,378,326.03 13,296,092.84
in joint ventures
Fair value of equity investments
in joint ventures in association
with quoted price
Operating revenue 12,270,863.27 8,226,323.40
Financial expenses -16,611.71 -272,455.78
Income tax expenses
Net profit 164,466.39 -447,755.41
Net profit of discontinued
operations
Other comprehensive income
Total comprehensive income 164,466.39 -447,755.41
Dividend from joint ventures
received in current period
3. Main financial information of significant associates
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
Current assets 155,481,529.29 190,785,584.52
Non-current assets 192,677,112.23 160,501,673.73
Total assets 348,158,641.52 351,287,258.25
Current liabilities 4,147,967.56 7,529,465.27
Non-current liabilities
Total liabilities 4,147,967.56 7,529,465.27
Non-controlling interest
Equity attributable to owners of 344,010,673.96 343,757,792.98
parent company
Proportionate share in net assets 170,766,842.03 170,641,311.95
Adjustments
Goodwill
Unrealized profit in internal
trading
Others
Carrying amount of investments 170,766,842.03 170,641,311.95
in associates
Fair value of equity investments
in associates in association with
quoted price
61
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
Operating revenue 12,964,410.68 5,850,644.65
Net profit 650,880.98 -868,944.43
Net profit of discontinued
operations
Other comprehensive income
Total comprehensive income 650,880.98 -868,944.43
Dividend from associates 197,567.20
received in current period
4. Aggregated financial information of insignificant joint ventures and associates
Items Closing balance/current Opening balance/preceding
period cumulative period comparative
Associates
Total carrying amount of investments 3,040,101.44 3,040,101.44
Proportionate shares in the following
items
Net profit 75,194.64 82,508.92
Other comprehensive income
Total comprehensive income 75,194.64 82,508.92
VII. Risks related to financial instruments
The Company aims to seek the appropriate balance between the risks and benefits from its use of
financial instruments and to mitigate the adverse effects that the risks of financial instruments
have on the Company’s financial performance. Based on such objectives, the Company’s risk
management policies are established to identify and analyze the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits.
The Company has exposure to the following risks from its use of financial instruments, which
mainly include: credit risk, liquidity risk, and market risk. Management have deliberated and
approved policies concerning such risks, and details are:
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation.
The Company’s credit risk is primarily attributable to bank balances and receivables. In order to
control such risks, the Company has taken the following measures:
1. Bank balances
The Company deposits its bank balances in financial institutions with relatively high credit levels,
hence, its credit risk is relatively low.
2. Receivables
62
The Company performs credit assessment on customers who uses credit settlement on a regular
basis. The Company selects credible and well-reputed customers based on credit assessment
result, and conducts ongoing monitoring on receivables, to avoid significant risks in bad debts.
As the Company’s credit risks fall into several business partners and customers, as of June 30, 2018,
13.16% (December 31, 2017: 11.25%) of the total accounts receivable was due from the five
largest customers of the Company. The Company has no significant central credit risk.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting
obligations associated with cash or other financial assets settlement, which is possibly attributable
to failure in selling financial assets at fair value on a timely basis, or failure in collecting liabilities
from counterparts of contracts, or early redemption of debts, or failure in achieving estimated cash
flows.
In order to control such risk, the Company utilized financing tools such as notes settlement and
bank borrowings, etc. to optimizing financing structures, and finally maintains a balance between
financing sustainability and flexibility. The Company has obtained credit limit from several
commercial banks to meet working capital requirements and expenditures.
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value of financial
instruments or future cash flows due to changes in market price.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value of financial
instruments or future cash flows due to changes in market interest. The Company’s interest risk
relates mainly to borrowings with floating interest rate.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in exchange rate. The Company is mainly
operated in mainland China, with a small amount of imports and exports, and its main activities
are denominated in RMB, hence, the Company bears insignificant market risk arising from foreign
exchange changes.
Please refer to notes to foreign currency monetary items for details in foreign currency financial
assets and liabilities at the end of the period.
VIII. Related party relationships and transactions
(I) Related party relationships
1. Details of parent company
(1) Parent company
63
Registered Holding Voting right
Parent company Business
Place of registration capital proportion over proportion over
nature
(in million) the Company the Company
No.2 Shangdi 2 Road,
China Potevio
Zhongguan Village Information 1,903,05 53.49% 53.49%
Information
Economy Zone, Haidian industry
Industry Inc
District, Beijing
The Company’s ultimate controlling party is 中国普天信息产业集团公司 (China POTEVIO
Corporation Limited *).
2. The details of the company's important subsidiaries are illustrated in the notes to the financial
statements in other subjects.
3. Joint ventures and associates of the Company
Please refer to notes to interest in other entities for details on the Company’s significant joint
ventures and associates. Details of other joint ventures or associates carrying out related party
transactions with the Company in current period or in preceding period but with balance in current
period are as follows:
Joint ventures or associates Relationships with the Company
Potevio Hi-tech Industry Co., Ltd. Associates
Nanjing Potevio Telege Cable Co., Ltd. Associates
SEI-Nanjing Potevio Optical Network Co., Ltd. Joint ventures
4. Other related parties of the Company
Related parties Relationships with the Company
南京普天鸿雁电器科技有限公司 An affiliated company of the ultimate
(Nanjing Honyar Electrical Technology Co., Ltd.*) controlling party
南京普天鸿雁电器有限公司 An affiliated company of the ultimate
(Nanjing Honyar Electrical Co., Ltd.*) controlling party
上海普天邮通科技股份有限公司
An affiliated company of the ultimate
(Shanghai Potevio Post and Telecommunications
controlling party
Technology Co., Ltd.*)
北京普天太力通信科技有限公司
An affiliated company of the ultimate
(Beijing Potevio Taili Communications Technology Co.,
controlling party
Ltd.*)
杭州鸿雁东贝光电科技有限公司
An affiliated company of the ultimate
(Hangzhou Honyar Dongbei Photoelectric Technology controlling party
Co., Ltd.*)
上海普天网络技术有限公司 An affiliated company of the ultimate
(Shanghai Potevio Network Technology Co., Ltd.*) controlling party
普天通信有限责任公司 An affiliated company of the ultimate
(POTEVIO Telecommunications Co., Ltd.*) controlling party
普天信息技术有限公司 An affiliated company of the ultimate
(Potevio Information Technology Co., Ltd.*) controlling party
北京立康普通信设备有限公司
An affiliated company of the
Beijing Picom Telecommunications Equipment Co.,
Company
Ltd.
*
The English names are for identification purpose only.
64
Related parties Relationships with the Company
曼奈柯斯工业电气（中国）有限公司 Non-controlling shareholder of the
Mennekes Electric Industrial Co., Ltd. (China) Company’s subsidiary
普天和平科技有限公司 An affiliated company of the ultimate
(Potevio Heping Technology Co., Ltd.*) controlling party
杭州鸿雁电器有限公司 An affiliated company of the ultimate
Hangzhou Honyar Electrical Co., Ltd. controlling party
普天国际贸易有限公司 An affiliated company of the
(Potevio International Trading Co., Ltd.*) ultimate controlling party
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving services
(1) Purchase of goods and receiving of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
SEI-Nanjing Potevio Optical Telecommunication 4,402,431.79
Network Co., Ltd. products
Nanjing Potevio Telege Cable Telecommunication 10,287,304.27
Co., Ltd. products
Nanjing Honyar Electrical Telecommunication 85,492.00 211,020.46
Technology Co., Ltd. products
Potevio Telecommunications Telecommunication 597,863.25
Co., Ltd. products
Mennekes Electric Industrial Telecommunication 2,470,678.34
Co., Ltd. (China) products
(2) Sale of goods and rendering of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Potevio Information Telecommunication 12,975,234.34 1,088,405.13
Technology Co., Ltd. products
China Potevio Information Telecommunication 238,683,644.38 11,588,384.12
Industry Inc products
Beijing Potevio Taili
Telecommunication 6,423.67
Communications Technology
products
Co., Ltd.
Potevio Heping Technology Telecommunication 30,769.23
Co., Ltd. products
Potevio Hi-tech Industry Co., Telecommunication 107,750.15
Ltd. products
Shanghai Potevio Post and
Telecommunication 156,975.39
Telecommunications
products
Technology Co., Ltd.
SEI-Nanjing Potevio Optical Telecommunication 382,000.66
Network Co., Ltd. products
Potevio International Trading Telecommunication 449,050.85
Co., Ltd. products
2. Related party leases
(1) The Company as the lessor
Lessees Types of asset Lease income for Lease income for the
leased current period preceding period
SEI-Nanjing Potevio Optical Buildings and 318,215.64 490,015.58
65
Lessees Types of asset Lease income for Lease income for the
leased current period preceding period
Network Co., Ltd. structures
(2) The Company as the lessee
Lease expenses Property
Lease expenses Property
Lessors Types of asset for the services for the
for current services for
leased preceding preceding
period current period
period period
Potevio Hi-tech Buildings and 372,669.04 781,500.33 797,626.96 253,277.91
Industry Co., Ltd. structures
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
Whether
Guarantors Amount Commence- Maturity the
guaranteed ment date date guarantee
is mature
China Potevio Information Industry Inc 30,000,000.00 2017/11/30 2018/11/30 No
China Potevio Information Industry Inc 10,000,000.00 2018/1/27 2018/9/28 No
China Potevio Information Industry Inc 30,000,000.00 2018/2/1 2018/9/28 No
China Potevio Information Industry Inc 30,000,000.00 2018/3/9 2019/3/9 No
4. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 514,805.62 631,665.00
5. Interest expenditures
In the current period, the Company paid to China Potevio Information Industry Inc a total of
4,253,778.75 yuan as interest expenditures.
(III) Balance due to or from related parties
1. Balance due from related parties
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Notes China Putian Information 3,402,240.00
receivable Industry Co., Ltd.
Notes Putian International Trade 3,987,403.60
receivable Co., Ltd.
Subtotal 7,389,643.60
Accounts China Potevio 629,899.32
receivable Information Industry Inc
Accounts China Putian Information 9,910,887.04 629,319.50 13,315,921.88 557,462.59
receivable Industry Co., Ltd.
Accounts Potevio Information 14,963,664.18 20,991,047.20
receivable Technology Co., Ltd.
Shanghai Potevio
Accounts 536,319.70 319,337.76 536,319.70 83,060.00
Network Technology Co.,
receivable
Ltd.
Shanghai Potevio Post
Accounts 8,755,534.00 7,004,427.20 8,755,534.00 7,004,427.20
and Telecommunications
receivable
Technology Co., Ltd.
66
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Accounts Potevio Hi-tech Industry 14,455.30
receivable Co., Ltd.
Accounts Potevio Heping 333,706.00 333,706.00
receivable Technology Co., Ltd.
Subtotal 35,130,010.24 7,953,084.46 43,946,984.08 7,644,949.79
Advances Potevio Heping 436,294.00
paid Technology Co., Ltd.
Subtotal 436,294.00
Other China Putian Information 1,000,000.00 40,000.00 1,020,000.00 2,000.00
receivables Industry Co., Ltd.
Beijing Picom
Other 28,912,122.71 28,912,122.71 28,912,122.71 28,912,122.71
Telecommunications
receivables
Equipment Co., Ltd.
Other Potevio Hi-tech Industry 255,238.96 255,238.96
receivables Co., Ltd.
Subtotal 30,167,361.67 28,952,122.71 30,187,361.67 28,914,122.71
2. Balance due to related parties
Items Related parties Closing balance Opening balance
Accounts payable SEI-Nanjing Potevio Optical 22,584,894.54
Network Co., Ltd.
Accounts payable China Potevio Information 19,466,652.30 19,466,652.30
Industry Inc
Accounts payable Nanjing Honyar Electrical 242,595.99 266,805.30
Technology Co., Ltd.
Accounts payable Shanghai Potevio Network 11,685.00 11,685.00
Technology Co., Ltd.
Accounts payable Nanjing Putian Hongyan 58,932.10
Electrical Technology Co., Ltd.
Accounts payable Mennekes Electric Industrial Co., 3,149,290.03
Ltd. (China)
Accounts payable Potevio Information Technology 845,976.50
Co., Ltd.
Subtotal 19,779,865.39 46,325,303.67
Advances received China Potevio Information 262,227,894.73 282,208,394.21
Industry Inc
Advances received Nanjing Honyar Electrical 82,000.00
Technology Co., Ltd.
Subtotal 262,227,894.73 282,290,394.21
Other payables SEI-Nanjing Potevio Optical 31,165.00
Network Co., Ltd.
Other payables China Potevio Information 11,040,000.00 18,260,000.00
Industry Inc
Subtotal 11,040,000.00 18,291,165.00
IX. Commitments and contingencies
None
X. Events after balance sheet day
67
None
XI. Other important matters
1. Correction of prior accounting errors
Retrospect method
Content Procedure Affected item（2014） Cumulative impact
Cash and bank balance -203,650.67
Inventories -1,504,511.81
This error was approved by the Undistributed profit -1,708,162.48
Corrections such 10th Board of Directors of the 7th Operating cost -4,492,344.24
as transportation
costs, cost errors, session of the company. In this Selling expenses 5,996,856.05
bank accounts
and statements issue, the retrospective restatement Financial expenses 52,008.66
not in compliance
with 2014-2017 method was used to correct the Net profit attributable to owners of
-1,556,520.47
error. the parent company
Net assets attributable to owners of
-1,708,162.48
the parent company
Content Procedure Affected item（2015） Cumulative impact
Cash and bank balance -212,029.27
Inventories 215,043.34
Tax and rates payable 258,002.82
Undistributed profit -448,490.87
Corrections such Operating cost -4,887,439.60
This error was approved by the
as transportation
10th Board of Directors of the Selling expenses 3,167,884.45
costs, cost errors,
7th session of the company. In
bank accounts
this issue, the retrospective
and statements Financial expenses 8,378.60
restatement method was used to
not in compliance
correct the error.
with 2014-2017
Income tax expenses 258,002.82
Net profit attributable to owners of
1,259,671.61
the parent company
Net assets attributable to owners of
-448,490.87
the parent company
68
Content Procedure Affected item（2016） Cumulative impact
Cash and bank balance -270,732.11
Inventories 2,782,991.64
Tax and rates payable 908,592.01
Undistributed profit 922,223.51
Corrections such Operating cost -6,106,245.98
This error was approved by the
as transportation
10th Board of Directors of the Selling expenses 3,538,297.68
costs, cost errors,
7th session of the company. In
bank accounts
this issue, the retrospective
and statements Financial expenses 58,702.84
restatement method was used to
not in compliance
correct the error.
with 2014-2017
Income tax expenses 650,589.19
Net profit attributable to owners of
1,370,714.38
the parent company
Net assets attributable to owners of
922,223.51
the parent company
Content Procedure Affected item（2017） Cumulative impact
Cash and bank balance -274,365.37
Inventories -1,705,723.64
Undistributed profit -1,980,089.01
Operating cost -3,964,698.85
Corrections such
This error was approved by the Selling expenses 8,453,414.13
as transportation
10th Board of Directors of the
costs, cost errors,
7th session of the company. In
bank accounts Financial expenses 3,633.26
this issue, the retrospective
and statements
restatement method was used to
not in compliance Income tax expenses -908,592.01
correct the error.
with 2014-2017
Net profit attributable to owners of
-2,902,312.52
the parent company
Net assets attributable to owners of
-1,980,089.01
the parent company
XII. Segment information
1. Identification basis for reportable segments
69
Reportable segments are identified based on operating segments which are determined based on
the structure of the Company’s internal organization, management requirements and internal
reporting system. The Company identified reportable segments based on products, which include
video conferencing products, generic cable products, electrical products, Special network
communication products, wiring products and other products. Assets and liabilities shared by different
segments are allocated pro rata among segments.
The Company identified reportable segments based on geographic information, revenue from
main operations and costs of main operations are allocated between segments based on locations
where sales realized, and assets and liabilities are allocated based on locations of operating
entities.
The Company identified reportable segments based on products, assets and liabilities of each
segment are the actual amount of its proportion in assets and liabilities, and revenue from main
operations and cost of main operations are those generated or incurred by each product segment.
2. Financial information of reportable segments
Products segment
Video Special network
Items Generic cable Electrical Wiring products Inter-segment Total
conferencing communication
products products offsetting
products products
Revenue from 188,928,044.96 173,351,077.26 73,588,442.32 237,230,769.20 278,378,982.33 -17,434,919.71 934,042,396.36
main operations
Cost of main 148,545,094.33 134,961,572.73 59,708,975.76 233,505,231.77 236,479,779.73 -17,334,805.39 795,865,848.93
operations
Total assets 303,044,336.76 278,053,400.07 209,946,058.81 284,889,590.93 1,640,437,949.12 -614,676,991.58 2,101,694,344.11
Total liabilities 187,873,205.71 157,121,564.64 117,469,511.61 260,093,247.01 1,386,829,694.18 -462,885,196.13 1,646,502,027.02
XIII. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 462,425,588.11 99.59 24,339,970.09 5.26 438,085,618.02
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 462,425,588.11 99.59 24,339,970.09 5.26 438,085,618.02
Receivable of individually 1,881,238.51 0.41 1,881,238.51 100.00
70
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
insignificant amount but
with provision made on an
individual basis
Total 464,306,826.62 100.00 26,221,208.60 5.65 438,085,618.02
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 447,892,760.42 99.58 22,328,923.45 4.99 425,563,836.97
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 447,892,760.42 99.58 22,328,923.45 4.99 425,563,836.97
Receivable of individually
insignificant amount but 1,881,238.51 0.42 1,881,238.51 100.00
with provision made on an
individual basis
Total 449,773,998.93 100.00 24,210,161.96 5.38 425,563,836.97
2) In portfolios, accounts receivable with provision made on a collective basis with age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 280,121,011.10
1-2 years 130,147,379.41
2-3 years 21,235,722.92 2,123,572.28 10.00
3-4 years 6,250,314.19 1,875,094.27 30.00
4-5 years 3,160,842.69 1,264,337.08 40.00
5-6 years 12,166,756.71 9,733,405.37 80.00
Over 6 years 9,343,561.09 9,343,561.09 100.00
Subtotal 462,425,588.11 24,339,970.09 5.26
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 2,011,046.64 yuan.
(3) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Book balance total balance of Provision for
accounts bad debts
receivable (%)
71
Proportion to the
Debtors Book balance total balance of Provision for
accounts bad debts
receivable (%)
中国联合网络通信有限公司河南省分公司
(China United Network Communications 32,406,347.08 6.98
Group Co., Ltd., Henan Branch*)
中国铁塔股份有限公司鹤岗市分公司 16,964,697.28 3.65
（China Tower Co. Ltd. , Hegang Branch*）
Potevio Information Technology Co., Ltd. 13,819,926.92 2.98
China Potevio Information Industry Inc. 11,804,926.45 2.54
中国电信股份有限公司陕西分公司
(China Telecommunications Corporation, 10,205,143.45 2.20
Shanxi Branch*)
Subtotal 85,201,041.18 18.35
2. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
28,912,122.71 10.17 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis
251,143,720.57 88.39 3,159,775.10 1.26 247,983,945.47
using portfolios with similar
credit risk features
Portfolio 1 224,403,521.34 78.97 224,403,521.34
Portfolio 2 26,740,199.23 9.42 3,159,775.10 11.82 23,580,424.13
Receivable of individually
insignificant amount but
4,097,886.33 1.44 4,097,886.33 100.00
with provision made on an
individual basis
Total 284,153,729.61 100.00 36,169,784.14 12.73 247,983,945.47
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 37.21 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 44,691,252.14 57.52 3,496,231.92 7.82 41,195,020.22
using portfolios with similar
credit risk features
* The English names are for identification purpose only.
72
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Portfolio 1 23,644,138.80 30.43 23,644,138.80
Portfolio 2 21,047,113.34 27.09 3,496,231.92 16.61 17,550,881.42
Receivable of individually
insignificant amount but 4,097,886.33 5.27 4,097,886.33 100
with provision made on an
individual basis
Total 77,701,261.18 100.00 36,506,240.96 46.98 41,195,020.22
2) Other receivables of individually significant amount and with provision made on an individual
basis
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
Beijing Likangpu With long age
Communications 28,912,122.71 28,912,122.71 100.00 and hard to
Equipment Co., Ltd. recover
Subtotal 28,912,122.71 28,912,122.71
3) In portfolios, other receivables with provision made on other method.
Closing balance
Portfolio
Book balance Provision for bad debts Provision proportion (%)
Related parties among
224,403,521.34
consolidation scope
Subtotal 224,403,521.34
4) In portfolios, other receivables with provision made on a collective basis with age analysis
method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 14,076,549.27
1-2 years 6,729,123.67
2-3 years 1,870,743.20 187,074.32 10.00
3-4 years 1,042,298.00 312,689.40 30.00
4-5 years 511,458.70 204,583.48 40.00
5-6 years 272,992.43 218,393.94 80.00
Over 6 years 2,237,033.96 2,237,033.96 100.00
Subtotal 26,740,199.23 3,159,775.10 11.82
5) Other receivables of individually not significant amount and with provision made on an
individual basis
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
73
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
With long age
Putian Telecommunications 4,097,886.33 4,097,886.33 100.00 and hard to
(H.K.) Co., Ltd.
recover
Subtotal 4,097,886.33 4,097,886.33
(2) Provisions made, collected or reversed in current period
Provisions for bad debts made in current period totaled -336,456.82 yuan.
(3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Petty cash for business traveling 867,221.19 1,210,331.33
Deposits 11,990,480.82 14,639,263.54
Temporary advance payment receivable 263,566,303.89 60,415,760.57
Others 7,729,723.71 1,435,905.74
Total 284,153,729.61 77,701,261.18
(4) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Book balance Ages total balance of Provision for
receivables other receivables bad debts
(%)
Beijing Likangpu Temporary
Communications advance payment 28,912,122.71 Over 6 years 10.17 28,912,122.71
Equipment Co., Ltd. receivable
China Putian Temporary
Information Industry advance payment 1,000,000.00 1-3 years 0.35 40,000.00
Co., Ltd. receivable
Temporary
Putian Information 835,252.00 Within 1 year 0.29
advance payment
Technology Co., Ltd.
receivable
Nanjing Putian Temporary
Communication advance payment 738,706.63 1-6 years 0.26 631,796.21
Technology Co., Ltd. receivable
Nanjing Construction
Industry Construction
Enterprise Migrant Deposits 400,000.00 1-2 years 0.14
Workers Security Fund
Management Office
Subtotal 31,886,081.34 11.21 29,583,918.92
3. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Investments in 173,787,270.64 1,910,520.00 171,876,750.64 173,787,270.64 1,910,520.00 171,876,750.64
subsidiaries
Investments in associates 184,147,630.69 184,147,630.69 183,937,404.79 183,937,404.79
and joint ventures
74
Total 357,934,901.33 1,910,520.00 356,024,381.33 357,724,675.43 1,910,520.00 355,814,155.43
(2) Investments in subsidiaries
Provision for Closing balance of
Investees Opening balance Increase Decrease Closing balance impairment made in provision for
current period impairment
Nanjing Mennekes Electrics Co., Ltd. 57,831,011.71 57,831,011.71
Nanjing Bada Communication 5,610,000.00 5,610,000.00
Equipment Co., Ltd.
Nanjing Putian Changle
Telecommunications Equipment Co., 2,610,457.00 2,610,457.00
Ltd.
Nanjing Putian Telecommunication 1,294,510.00 1,294,510.00
Technology Co., Ltd.
Nanjing Putian Information Technology 13,860,000.00 13,860,000.00
Co., Ltd.*
Nanjing Putian Telege Intelligent 3,320,003.45 3,320,003.45
Building Ltd.
Putian Telecommunications (H.K.) Co., 1,910,520.00 1,910,520.00 1,910,520.00
Ltd.
Nanjing Putian Network Co., Ltd. 7,741,140.41 7,741,140.41
Nanjing Putian Wangzhi Electronic Co., 40,997,683.00 40,997,683.00
Ltd.
Nanjing South Telecommunications 33,175,148.00 33,175,148.00
Company Limited
Nanjing Putian Datang Information 5,436,797.07 5,436,797.07
Electronic Co., Ltd.
Subtotal 173,787,270.64 173,787,270.64 1,910,520.00
(3) Investments in associates and joint ventures
Increase/decrease
Investees Opening balance Adjustment in
Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Joint ventures
SEI-Nanjing Potevio Optical 13,296,092.84 84,695.78
Network Co., Ltd.
Subtotal 13,296,092.84 84,695.78
Associates
Potevio Hi-tech Industry 170,641,311.95 323,097.32
Co., Ltd.
Subtotal 170,641,311.95 323,097.32
Total 183,937,404.79 407,793.10
(Continued)
Increase/decrease
Closing
Investees Cash Closing balance balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Joint ventures
SEI-Nanjing Potevio 13,380,788.62
Optical Network Co., Ltd.
Subtotal 13,380,788.62
Associates
Potevio Hi-tech Industry 197,567.20 170,766,842.07
75
Increase/decrease
Closing
Investees Cash Closing balance balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Co., Ltd.
Subtotal 197,567.20 170,766,842.07
Total 197,567.20 184,147,630.69
(II) Notes to items of the parent company income statement
1. Operating revenue/ Operating cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Revenue from 473,077,482.03 437,252,856.53 477,333,066.05 428,357,160.89
main operations
Revenue from 24,729,485.21 23,763,158.86 14,937,079.42 11,738,660.36
other operations
Total 497,806,967.24 461,016,015.39 492,270,145.47 440,095,821.25
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments 407,793.10 -655,221.71
under equity method
Total 407,793.10 -655,221.71
XIV. Other supplementary information
(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss of current period
Items Amount Remarks
Gains on disposal of non-current assets, including 30,156,818.80
written-off of provision for impairment
Government grant included in profit or loss (excluding
those closely related to operating activities, or regular 3,022,570.56
government grants)
Gains on debt restructuring 225,371.60
Other non-operating revenue or expenditures -83,474.01
Other profit or loss satisfying the definition of
non-recurring profit or loss
Subtotal 33,321,286.95
Less: enterprise income tax affected 114,123.01
Non-controlling interest affected (after tax) 36,254.07
Net non-recurring profit or loss attributable to 33,170,909.87
shareholders of the parent company
(II) RONA and EPS
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1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average
RONA (%) Basic EPS Diluted EPS
Net profit attributable to shareholders -3.02 -0.05 -0.05
of ordinary shares
Net profit attributable to shareholders
of ordinary shares after deducting -12.64 -0.20 -0.20
non-recurring profit or loss
2. Calculation process of weighted average RONA
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary A -10,421,705.60
shares
Non-recurring profit or loss B 33,170,909.87
Net profit attributable to shareholders of ordinary C=A-B -43,592,615.47
shares after deducting non-recurring profit or loss
Opening balance of net assets attributable to D 350,248,482.53
shareholders of ordinary shares
Net assets attributable to shareholders of ordinary
shares increased due to offering of new shares or E
conversion of debts into shares
Number of months counting from the next month
when the net assets were increased to the end of F 3.00
the reporting period
Net assets attributable to shareholders of ordinary
shares decreased due to share repurchase or cash G
dividends appropriation
Number of months counting from the next month
when the net assets were decreased to the end of H
the reporting period
Translation reserve -122,046.30
increased in current
period
Number of months 3.00
Others counting from the next
month when the net
assets were increased or
decreased to the end of
the reporting period
Number of months in the reporting period K 6.00
L= D+A×1/2
Weighted average net assets + 344,976,606.58
E×F/K-G×H/K±I×J/
K
Weighted average RONA M=A/L -3.02
Weighted average RONA after deducting N=C/L -12.64
non-recurring profit or loss
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
Items Symbols Current period
cumulative
77
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary A -10,421,705.60
shares
Non-recurring profit or loss B 33,170,909.87
Net profit attributable to shareholders of ordinary C=A-B -43,592,615.47
shares after deducting non-recurring profit or loss
Opening balance of total shares D 215,000,000.00
Number of shares increased due to conversion of
reserve to share capital or share dividend E
appropriation
Number of shares increased due to offering of new F
shares or conversion of debts into shares
Number of months counting from the next month
when the share was increased to the end of the G 3.00
reporting period
Number of shares decreased due to share H
repurchase
Number of months counting from the next month
when the share was decreased to the end of the I
reporting period
Number of shares decreased in the reporting period J
Number of months in the reporting period K 6.00
Weighted average of outstanding ordinary shares L=D+E+F×G/K-H×I/ 215,000,000.00
K-J
Basic EPS M=A/L -0.0485
Basic EPS after deducting non-recurring profit or N=C/L -0.2028
loss
(2) The calculation process of diluted EPS is the same with that of basic EPS.
Nanjing Putian Telecommunications Co., Ltd.
August 24, 2018
78
