Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
SEMI-ANNUAL REPORT 2019
August 2019
1
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred
to as the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Wang Wenkui, principal of the Company, Cao Xurong, person in charger of
accounting works and Cao Xurong, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Semi-Annual
Report 2019 is authentic, accurate and complete.
All directors attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the
Semi-Annual Report, they do not constitute a substantial commitment for
investors. Investors are advised to exercise caution of investment risks.
Investors’ attention is requested to see the risk factors that the Company may be
faced in its future development which has been analyzed in the “Section IV
Discussion and Analysis of Operation” in this report.
The Company has no plans of cash dividend distributed, no bonus shares and
has no share converted from capital reserve either.
2
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Contents
Section I. Important Notice, Contents and Paraphrase ............................................................................................................................2
Section II. Company Profile and Main Financial Indexes .......................................................................................................................5
Section III. Summary of Company Business ...........................................................................................................................................8
Section IV. Discussion and Analysis of Operation................................................................................................................................. 11
Section V. Important Events ..................................................................................................................................................................21
Section VI. Changes in Shares and Particulars about Shareholders .......................................................................................................36
Section VII. Preferred Stock ..................................................................................................................................................................40
Section VIII. Directors, Supervisors and Senior Executives ..................................................................................................................41
Section IX. Corporation Bonds..............................................................................................................................................................42
Section X. Financial Report...................................................................................................................................................................43
Section XI. Documents Available for Reference .................................................................................................................................130
3
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Paraphrase
Items Refers to Contents
CSRC Refers to China Securities Regulatory Commission
SZ Stock Exchange Refers to Shenzhen Stock Exchange
The Company, Company, Nanjing Putian Refers to Nanjing Putian Telecommunications Co., Ltd.
Nanjing Southern Telecom Co., Ltd. (controlling subsidiary of the
Southern Telecom, Southern Company Refers to
Company)
Nanjing Putian Telege Intelligent Building Co., Ltd. (controlling
Telege Company Refers to
subsidiary of the Company)
Nanjing Putian Datang Information Electronic Co., Ltd. (controlling
Putian Datang, Datang Company Refers to
subsidiary of the Company)
4
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section II. Company Profile and Main Financial Indexes
I. Company profile
Short form of the stock NJ TEL B Stock code 200468
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
南京普天通信股份有限公司
Chinese) (if applicable)
Short form of the Company
南京普天
(in Chinese)
Foreign name of the Company
Nanjing Putian Telecommunications Co., Ltd.
(if applicable)
Legal representative Wang Wenkui
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Jing Xiao Hong
No. 1 Putian Road, Qinhuai District No. 1 Putian Road, Qinhuai District
Contact address
Nanjing, Jiangsu Province Nanjing, Jiangsu Province
Tel. 86-25-58962308 86-25-58962072
Fax. 86-25-52409954 86-25-52409954
E-mail lijing@postel.com.cn xiaohong@postel.com.cn
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2018.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
5
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2018.
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √ No
Increase/decrease in this
Current period Same period of last year
report y-o-y
Operating revenue (RMB) 757,197,371.80 966,850,604.95 -21.68%
Net profit attributable to shareholders of
-57,528,524.88 -10,421,705.60 -452.01%
the listed Company (RMB)
Net profit attributable to shareholders of
the listed Company after deducting -58,860,555.61 -43,592,615.47 -35.02%
non-recurring gains and losses (RMB)
Net cash flow arising from operating
-164,096,730.74 -225,275,228.93 27.16%
activities (RMB)
Basic earnings per share (RMB/Share) -0.27 -0.05 -440.00%
Diluted earnings per share (RMB/Share) -0.27 -0.05 -440.00%
Weighted average ROE -17.62% -3.02% -14.60%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end
Total assets (RMB) 1,820,695,784.46 2,120,744,292.41 -14.15%
Net assets attributable to shareholder of
297,696,312.16 355,289,728.24 -16.21%
listed Company (RMB)
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
6
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the
98,454.13
write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
3,756,342.00
national standards, which are closely relevant to enterprise’s
business)
Enterprise restructuring costs, such as the cost of resettlement of
-1,291,442.00
employees, integration costs, etc.
Other non-operating income and expenditure except for the
56,538.47
aforementioned items
Less: impact on income tax 305,760.82
Impact on minority shareholders’ equity (post-tax) 982,101.05
Total 1,332,030.73 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
7
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section III. Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with the disclosure requirement of the special industry?
No
The Company is a state-controlled communications equipment manufacturing Company, of which the main
business is R&D, production and sales of information communication equipment. The products of the company and
its subsidiaries cover optical communication networks, wireless communication networks, data applications, and
industrial electrical and other fields, the main products are optical communication network connection equipment,
private network communication products, multimedia communication equipment, integrated wiring, building
intelligent products, etc., customers include domestic telecom operators, tower companies and industry customers in
the government, finance, electric power, medical and other fields, and the products cover all provinces and cities in
the country and are exported to foreign countries.
At present, the business of the company’s headquarters includes optical wiring network and communication
supporting overall solutions (ODN overall solution, optical network intelligent solution, energy-saving data center
solution), private network communication products. The optical wiring network and communication supporting
overall solution are mainly used for domestic communication network construction, radio and television network
transformation, high-speed rail communication construction, urban subway construction, etc., and have made
breakthroughs in the e-commerce industry. The private network communication products mainly produce and
process ad-hoc network communication equipment according to customer requirements for establishing small and
medium-sized dedicated communication networks.
The business of main subsidiaries includes multimedia communication and application solutions, building
intelligent integrated solutions, industrial intelligent power distribution systems, solar street light control systems,
etc., among them, the main business of the subsidiary Nanjing Southern Telecom Co., Ltd. is to offer remote
collaborative application solutions for large and medium-sized industry customers in governments, finance,
medical, education and other fields, and the main products are video conferencing products. The subsidiary Nanjing
Putian Telege Intelligent Building Co., Ltd. mainly provides medium- and high-end integrated wiring and
intelligent application solutions for customers. The subsidiary Nanjing Mennekes Electric Appliances Co., Ltd.
provides industrial intelligent power distribution products for various industrial sites such as rail transit, airports,
ports, etc. The subsidiary Nanjing Putian Datang Information Electronics Co., Ltd. mainly provides solar street
lamp controllers and IOT street lamp monitoring systems. .
The company has market networks covering all parts of the country, and its main customers include domestic
telecom operators and customers in various industries. The company mainly obtains business opportunities by
participating in project bidding, designs schemes according to the project requirements, produces or purchases the
equipment required by the customer, and takes responsible for the installation and debugging, and realizes the profit
after deducting the cost from the contract price. The company’s operating results are mainly affected by factors such
8
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
as capital expenditures, informatization investment and bidding results, fluctuations in raw material prices and
changes in other costs of telecom operators and industry customers.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major changes in the period
Fixed assets No major changes in the period
Intangible assets No major changes in the period
Construction in progress have 17.27 million Yuan at end of the period with 7.8 million
Construction in progress Yuan increased over that of year-begin, mainly due to the investment for construction of
R&D center of the subsidiary Putian Datang
Monetary funds have 136.57 million Yuan at end of the period with 125.37 million Yuan
Monetary funds decreased over that of year-begin, mainly because the money paid for purchase increased
during the reporting period
Advance payment have 29.92 million Yuan at end of the period with 158.93 million Yuan
Advance payment decreased over that of year-begin, mainly because the advance payment is charged upon
receipt of purchase invoice from supplier in advance during the reporting period
Other current assets have 17.58 million Yuan at end of the period with 40.8 million Yuan
Other current assets increased over that of year-begin, mainly because the pending deduct VAT on purchase
at period-end increased over that of year-beginning
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with the disclosure requirement of the special industry?
No
As a subsidiary of the national large-scale enterprise Putian Group, the company adheres to the “product + solution
+ service” strategy, and continuously accelerates the product innovation, industrial structure adjustment and
transformation and upgrading. After years of efforts, it has gradually transformed from a communication
manufacturer to an information communication integrated solution service provider. The company’s business
belongs to the key development and support area of the country, and has a large market demand and development
space. The company has a complete industrial chain structure, and good research and development capabilities,
production capacity, and marketing capabilities, and has established a good brand strength and influence in the
industry market and operator market. The company is market-oriented, adheres to independent innovation, and
9
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
constantly improves the technical level of its products. Further enhance the industrial competitiveness to ensure the
sustainable development of the Company.
The company’s leading products have strong market competitiveness in the industry. The company has a mature
market network nationwide, has good product promotion and marketing capabilities, has long-term good
cooperative relations with operators, has rich varieties in wiring products, and has won many awards in the wiring
industry. The subsidiary Southern Telecom has rich professional experience in the video conferencing field, in
recent years, it has increased independent innovation, and its proportion of independent product management has
gradually increased, and its sustainable development capability has further improved. The subsidiary Telege
Building has stable and good channel resources in integrated wiring products, pays attention to independent
innovation, and has won the top ten brands of integrated wiring for consecutive years. The subsidiary Nanman
Electric’s industrial intelligent power distribution products have a high market share in the rail transit market
segment with high product professionalism and strong competitiveness. The subsidiary Putian Datang’s solar
street lamp controller ranks first in the industry market. The company is accelerating the transformation and
upgrading from “manufacturing” to “intelligent manufacturing” to comprehensively enhance the industrial
competitiveness.
10
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section IV. Discussion and Analysis of Operation
1. Introduction
During the reporting period, the company focused on four major tasks of reducing expenditure, opening source,
innovation and assessment, continuously consolidated the company's operating base, carried out the establishment
of new system and the management improvement, and strive to enhance the company's development quality and
core competitiveness. In the first half of the year, the company realized operating income of 757,200,000 yuan,
and the net profit attributable to shareholders of listed companies was -57.53 million yuan. The period expenses
were basically the same as that of the same period of last year. The net operating cash flow decreased by 61.18
million yuan compared with the same period of last year. The overall development of the company was in a stable
state.
In terms of industrial development, during the reporting period, the company used existing resources to operate
and concentrate on strengthening and deepening the leading industries to cultivate and enhance the company's
future core competitiveness.
The first was to give full play to the advantages of its own technology, industry and customers, and strengthen the
foundation to stabilize the development of main business. Six types of wiring products of the company, such as
outdoor all-in-one cabinets and non-metal assembled cabinets, participated in the selection of the iron towers and
were selected for the next round of competition in many provinces. The company's intelligent optical main
distribution frame, optical splitter and other products successfully entered the next round of competition and
completed the pilot work of the optical cable network intelligent detection and management project in the Basic
Network Center of the PLA Support Force and the People's Government of Haidian District of Beijing. The data
room won the bid for the Langfang Unicom Data Center project and the Nanjing Telecom Data Center Tencent
project, etc. Telege Company completed the construction of key projects of China Electronics Technology Group
Corporation, won the bid for the Nanjing Municipal Government project, and served in the venue construction of
the Beijing Winter Olympic Games, and participated in the preparation of seven industry standards such as “Data
Center 400G Network Cabling Technology White Paper”. Nanfang Company’s video products achieved new
breakthroughs in insurance, medical and other industries, and were short-listed as equipment suppliers by the
State Administration of Taxation, and won the bid for the equipment suppliers of the Agricultural Bank of China.
Nanman Company continued to deepen the field of rail transit and successfully signed projects such as Shenzhen
Metro, Beijing Metro and Jinan Metro.
The second was to adhere to market orientation, closely integrate customer needs, continuously strengthen
technological innovation, focus on independent research and development, and strive to achieve technological
innovation in key applications. In the first half of the year, the wiring products echelon battery cabinets and
outdoor cabinets were used for the expansion of iron tower 5G base stations in Wuxi and Xuzhou, and the optical
cross, fiber jumper, cable rack and light trough won the bid for the 5G pilot collection projects of China Unicom
11
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(Shanghai Branch). The “self-supporting outdoor cable pressure-resistant fixture” completed the company’s
acceptance and formed an order in Hainan Mobile Company. The cabling products launched high-performance
flame-retardant 3A cables, and eight cabling systems passed the test of the Ministry of Industry and Information
Technology. The video conferencing products completed the development of the basic software functions of the
dual-stream box, and completed the construction and preliminary trial of the demo cloud platform and conference
management system and test cloud platform. The low-voltage electrical products completed the production design
and debugging tasks of the environmental control cabinet and were applied to the main line of the subway for the
first time. The smart city product optoelectronic all-in-one box and the intelligent manhole cover based on
NB-IoT have been steadily advanced according to the development plan formulated at the beginning of the year.
Datang Company further stabilized and expanded the development of its own product, solar street lamp
controllers, and actively explored how to add Internet of Things functions in products, and the lithium-ion 30-watt
controllers and rubber matrix dual-channel boost controllers have reached design goals. New products of mains
power internet of things, such as electric smart power supply, mains power single lamp controller, and smart
cruise terminal products, have been mass-produced.
In terms of basic management, the company actively carried out the establishment of rules and regulations,
improved internal control and management processes, strengthened legal and financial front-end work, and
strengthened operational risk control capabilities, increased internal restructuring efforts, promoted stagnant work,
strive to improve labor efficiency, and consolidated the basic management.
II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of Operation”
Y-o-y changes of main financial data
In RMB
Current period Same period of last year Y-o-y increase/decrease Reasons for changes
Operating revenue 757,197,371.80 966,850,604.95 -21.68%
Operating costs 633,095,768.07 824,358,695.32 -23.20%
Sales expenses 78,513,462.05 79,696,183.64 -1.48%
Administration expenses 47,259,575.67 47,390,575.27 -0.28%
The interest and expenses
on financing increased on
Finance expenses 15,823,806.65 10,198,465.39 55.16%
a y-o-y basis in the
period
Income tax expenses 2,066,779.65 1,646,117.70 25.55%
R & D revenue 35,909,040.49 36,398,106.80 -1.34%
Net cash flow arising
-164,096,730.74 -225,275,228.93 27.16%
from operating activities
12
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
The net cash collected by
disposal of fixed assets,
Net cash flow arising
intangible assets and
from investment -5,724,565.30 22,505,195.83 -125.44%
other long-term assets are
activities
declined from a year
earlier
Net cash flow arising
46,654,376.14 49,041,298.97 -4.87%
from financing activities
Net increase of cash and
-123,166,919.90 -153,821,091.18 19.88%
cash equivalent
Profit from joint stock
Investment income -442,230.16 407,793.10 -208.44% enterprise declined on a
y-o-y basis
There is no material
Assets disposal income 98,840.67 30,156,818.80 -99.67% assets disposed in the
period
The government subsidy
reckoned into
Non operating income 1,312,115.17 2,825,854.15 -53.57% non-operating income in
the period declined on a
y-o-y basis
Operation profit -52,902,524.60 -3,522,499.41 -1,401.85% Decreased in the period,
mainly because: 1.
Total profit -51,829,061.47 -1,005,231.26 -5,055.93%
affected by the reduction
Net profit -53,895,841.12 -2,651,348.96 -1,932.77%
of customer demand and
fierce price competition,
sales revenue decreased
on a y-o-y basis, and the
Company’s fixed costs
Net profit attributable to
were relatively high in
the owner of the parent -57,528,524.88 -10,421,705.60 -452.01%
the adjustment of
Company
industrial structure; and
2. non-recurring earnings
decreased from a year
earlier.
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Constitution of main business
In RMB
Operating Operating cost Gross profit ratio Increase or Increase or Increase or
13
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
revenue decrease of decrease of decrease of gross
operating revenue operating cost profit ratio over
over same period over same period same period of
of last year of last year last year
According to industries
Communication
688,407,325.44 579,364,853.50 15.84% -19.99% -21.30% 1.39%
industry
Electrical
59,996,386.53 47,656,142.16 20.57% -18.47% -20.19% 1.71%
industry
According to products
Video conference
160,888,196.84 123,774,773.25 23.07% -14.84% -16.68% 1.70%
products
Integrated wiring
171,197,491.27 126,510,910.63 26.10% -1.24% -6.26% 3.95%
products
Low-voltage
distribution 59,996,386.53 47,656,142.16 20.57% -18.47% -20.19% 1.71%
products
Private network
communication 186,594,827.60 183,479,607.25 1.67% -21.34% -21.42% 0.10%
products
Wiring products
189,089,692.12 164,962,444.76 12.76% -32.07% -30.24% -2.29%
and other
Interior offset -19,362,882.39 -19,362,882.39 0.00% -11.06% -11.70% -0.57%
According to region
Domestic 748,403,711.97 627,020,995.66 16.22% -19.86% -21.19% 1.42%
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of same period of last
End of current Period
year Ratio
Notes of major changes
Ratio in total Ratio in total changes
Amount Amount
assets assets
Monetary fund 136,567,071.2 7.50% 229,753,501.34 10.89% -3.39%
14
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
2
Account 959,336,259.4
52.69% 882,369,626.89 41.81% 10.88%
receivable 6
255,486,163.1
Inventory 14.03% 348,787,164.38 16.53% -2.50%
6
Investment
8,103,661.99 0.45% 12,436,912.05 0.59% -0.14%
property
Long-term equity 181,617,987.1
9.98% 187,187,732.13 8.87% 1.11%
investment 0
110,559,771.4
Fix assets 6.07% 111,442,156.95 5.28% 0.79%
6
Construction in
17,268,676.17 0.95% 3,940,454.72 0.19% 0.76%
process
464,183,401.0
Short-term loans 25.49% 447,510,000.00 21.20% 4.29%
5
Long-term loans 0.00% 0.00% 0.00%
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3. Assets rights restricted till end of the period
Assets with ownership or usage rights restricted:
Item Book value at period –end Restriction reason
Monetary fund 58,364,673.70 Note margin and guarantee margin
Account receivable 98,424,500.00 Secured borrowings
Fixed assets 63,341,997.31 Bank mortgage loan / financing lease
Intangible assets 7,178,053.74 Bank mortgage loan
Investment real estate 2,184,290.01 Bank mortgage loan
Total 229,493,514.76
In addition to the above assets with restricted ownership and right to use, the Company has pledged 40 percent
equity of the subsidiary Nanjing Potevio Telege Intelligent Building Ltd. on the price of RMB 4.8 million, 96.99
percent equity of the subsidiary Nanjing Nanfang Telecommunication Co., Ltd. on the price of RMB33.17
million,50.7 percent equity of the subsidiary Nanjing Potevio Changle Telecommunications Equipment Co., Ltd.
on the price of RMB 5.07 million, 67 percent equity of the subsidiary Nanjing Potevio Wangzhi Electronics Co.,
Ltd. on the price of RMB 60,427,300, 78 percent equity of the subsidiary Nanjing Potevio Network Co., Ltd. on
the price of RMB 7.8 million to the parent Company, used for the parent Company to consign Bank of Beijing to
pay off loans to the Company, and has respectively registered the equity pledge in the market supervision and
administration of Jiangning district, high and new technology industrial development zone, Yu Huatai district and
15
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Qinhua district. The equities of the above subsidiary companies are limited to use before pledge-release.
V. Investment
1. Overall situation
√ Applicable □ Not applicable
Investment in the same period of last year
Investment in the reporting (RMB) Changes
(RMB)
10,795,090.93 3,738,372.41 188.76%
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in Period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in Period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company has no sales of major assets in Period.
2. Sales of major equity
□ Applicable √ Not applicable
16
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
VII. Analysis of main Holding Company and stock-jointly companies
√ Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Main Register Operating Operating
Type Total assets Net Assets Net profit
name business capital revenue profit
Nanjing Multimedia
Southern communicati 34,205,147.8 299,600,674. 104,449,861. 161,078,673. 1,334,739.
Subsidiary on and 1,464,640.41
Telecom Co., application 3 81 21 03 76
Ltd. solutions
General
cabling,
Nanjing
development,
Putian Telege
production 20,000,000.0 250,663,780. 133,213,001. 172,230,459. 11,190,738
Intelligent Subsidiary 9,524,499.40
and sales of 0 80 42 10 .01
Building Co.,
the building
Ltd.
intelligent
products
Manufacture
and sales of
Nanjing
software of
Putian
telecommuni 10,000,000.0 41,785,865.4 25,244,118.4 -1,411,740.
Network Subsidiary 2,027,667.42 -1,411,740.59
cations, 0 5 7 55
Company
network and
Ltd.
electronic
equipment
Out-door
patch,
sub-line
equipment,
Nanjing
network
Putian
box(cube)of
Changle
out-door and 10,000,000.0 60,713,159.2 30,978,195.1 13,762,415.9 -916,779.5
Telecommun Subsidiary -916,779.53
machinery 0 2 4 0 3
ications
office,
Equipment
manufacture
Co., Ltd.
and sales of
communicati
on electrical
products
Nanjing Bada Manufacture 11,301,400.0 -4,071,447.0 -971,100.9
Subsidiary 803,736.80 39,751.62 -971,100.97
Telecommun of 0 9 7
17
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
ications card-terminal
Equipment communicati
Co., Ltd. on equipment
Export and
import of
telecommuni
Putian
cation
Telecommun
equipment, HK$ 2 -18,146,939.
ications Subsidiary 4,105,617.18 -39,944.26 -39,944.26
Hi-tech R & million 11
(H.K.) Co.,
D and
Ltd.
transfer,
technology
trade
Nanjing
Production,
Postel
sales and
Wongzhi 59,490,000.0 31,786,791.0 -266,636.2
Subsidiary processing of 9,853,478.09 -266,636.27
Telecommun 0 2 7
electrical
ications Co.,
products
Ltd.
Nanjing Manufacture
Putian and sales of
Information electrical and 14,000,000.0 11,937,566.6 -974,359.8
Subsidiary 4,263,044.62 -11,285.26 -972,074.35
Technology telecommuni 0 4 9
Company cation
Ltd. products
Electronic
components
Nanjing
assembly,
Putian
electronic
Telecommun
products, 30,975,283.7 -1,046,045.
ication Subsidiary 5,000,000.00 -159,403.89 411,321.12 -1,046,954.57
telecommuni 6 12
Technology
cation
Company
equipment,
Ltd.
Hi-tech R &
D and sales
Manufacture
Nanjing and sales of
Mennekes industrial US$ 5.2 210,732,524. 91,112,160.5 61,176,792.1 -3,711,311.
Subsidiary -3,890,741.63
Electrics Co., intelligent million 25 0 5 51
Ltd. distribution
products
Nanjing R&D,
10,000,000.0 47,004,653.8 28,565,244.9 24,607,127.0 1,716,038.
Putian Subsidiary manufacture 1,719,802.98
0 4 2 1 67
Datang and sales of
18
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Information solar
Electronic controller,
Co., Ltd. and
production &
processing
business of
electronic
products
R&D of
communicati
on
technology
products,
sales,
Potevio
network
Hi-tech Joint-stock 337,548,141. 351,619,844. 344,831,522. 15,876,141.4 3,848,794.
system 710,277.20
Industry Co., Company 29 30 33 1 83
integration,
Ltd.
rental of
industrial
park venue
and property
management
etc.
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Notes of holding and shareholding companies
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Risks and countermeasures
Policy risk
The communication equipment manufacturing industry of the company is vulnerable to the influence of
macroeconomic operation, economic cycle and industrial policies. At present, the economic environment at home
and abroad is complex and changeable. As a result of the trade war between China and the United States, the
macro economy is facing downward pressure, which may bring negative impact on the company's operation and
market development.
The company will keep track of macroeconomic policies and industrial development policies, adjust business
strategies and industrial structure in time to improve market competitiveness, reduce the impact of
macroeconomic policy adjustment and other uncertainties, and maintain overall profitability.
19
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Communication industry cycle risk
The company is mainly engaged in the manufacture and sales of communication products, and its customers
include several telecom operators in China. The establishment and adjustment of operator's network construction
cycle and investment plan have a great impact on the company's operation and bring cyclical risks to the industry.
The company will be market-oriented and actively seek market opportunities, further integrate high-quality
resources, accelerate industrial optimization and upgrading, and actively expand the industrial market to improve
industrial profitability according to the network construction status of operators, especially the current 5G
construction progress.
Technology R&D risk
The telecommunication industry is experiencing rapid change of technology development and product upgrade.
Therefore, the Company’s business operation will be adversely affected if it cannot adapt to market change, lag
behind in the technology reform or the developed products do not satisfy market demands.
The Company will actively follow up the latest development trend of industrial technology, develop and introduce
technology based on market requirements, focus on organization, planning and management of product
development and expand development of new products, aiming to maintaining the leading position in terms of
technology.
Market competition risk
The industry in which the Company operates is highly competitive with substantial market players. Besides,
customers, such as various operators, continue to adopt centralized procurement policy which led to very furious
market competition. Benefiting from long-term operation, the Company has accumulated certain competitive
advantages in terms of brand, technology, quality and marketing. If our products fail to cater for the market
variation in future, we may lose the existing advantages in market competition.
The Company will continue to capitalize on the existing advantages to consolidate traditional market while
expanding special network and industry markets actively. Through continuous cost control and scientific
innovation, it continues to improve production and research capability, which leads to rapid development of the
new products and enables the Company to maintain and improve profitability.
Cash flow shortage risk
Cash flow is essential for our survival and development. Insufficient provision of cash flow makes it difficult to
meet capital requirements for technology upgrade and business development, thus limit our business expansion
and long-term development to certain extent.
The Company implements capital budget management, prepare capital collection plan and capital payment budget
to ensure dynamic balance of cash flow. Besides, it increases management on inventory and trade receivables,
reinforces performance assessment, urges prompt collection of goods payments, strengthens inventory
management and decreases capital occupation. And it also conducts stringent capital management by insisting on
the principle based on appropriate balance between income and expense. Adhering to the basic control principle
of “pay-as-you-go” and management the funds strictly; obtain liquidity financing from the banks and other
financial institutions.
20
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section V. Important Events
I. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor
Session of meeting Type Date Date of disclosure Index of disclosure
participation
“Resolution Notice
of First Provisional
First Provisional Provisional
Shareholders'
Shareholders' Shareholders' 53.53% 2019-01-21 2019-01-22
Meeting in 2019”;
Meeting in 2019 Meeting
Published on: Juchao
Website
“Resolution Notice
of Annual General
Annual General
AGM 55.20% 2019-06-19 2019-06-20 Meeting of 2018”;
Meeting of 2018
Published on: Juchao
Website
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year.
III. Commitments that the committed party as the Company, actual controller, shareholders,
related party and buyer have fulfilled during the reporting period and have not yet fulfilled
by the end of reporting period
□ Applicable √ Not applicable
There are no commitments that the actual controller, shareholder, related parties, buyer and committed party as the Company etc.
have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
21
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
IV. Appointment and non-reappointment (dismissal) of CPA
Financial report has been audited or not
□ Yes √ No
Not been audited.
V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion”
that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in Period.
VIII. Lawsuits
Material lawsuits and arbitration
□ Applicable √ Not applicable
No significant lawsuits and arbitration occurred in the reporting period.
Other lawsuits
√ Applicable □ Not applicable
Amount
Resulted an
Lawsuits involved (in Trial result and Execution of Disclosure Disclosure
accrual liability Progress
(arbitration) 10 thousand influence judgment date index
(Y/N)
Yuan)
Case of Disputes
over Contracts-
Nanjing Yicheng Become
Electronics Co., reconciled
Ltd. bring a suit 133.24 N and - -
against Nanjing withdraw a
Putian lawsuit
Communication
Co., Ltd.
Case of Disputes
over Contracts- 9.1 N Hearing - -
Nanjing Putian
22
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Telege Intelligent
Building Co., Ltd.
bring a suit against
Beijing Yijian
Installation
Decoration Co.,
Ltd.
Case of Disputes
over
Contracts-Xiamen
Tangren Science
and Technology
45.28 N Hearing - -
Co., Ltd. bring a
suit against
Nanjing Putian
Telege Intelligent
Building Co., Ltd.
Case of Disputes
over Contracts-
Nanjing Putian
Telege Intelligent Become
Building Co., Ltd. reconciled
bring a suit against 7.81 N and - -
Ningxia Xiuyan withdraw a
Longtai lawsuit
Information
Technology Co.,
Ltd.
Case of Disputes
over
Contracts-Nanjing
Become
Lingshi Electrical
reconciled
Automation Co.,
9.08 N and - -
Ltd. bring a suit
withdraw a
against Nanjing
lawsuit
Putian
Communication
Co., Ltd.
Case of Disputes
over
Contracts-Zhongji 130 N Hearing - -
e Communications
Co., Ltd. bring a
23
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
suit against
Nanjing Putian
Communication
Co., Ltd.
Case of Disputes
over Contracts-
Nanjing Putian
Telege Intelligent
Building Co., Ltd. Achieve the
bring a suit against 25.09 N purpose of - In execution
Guangxia litigation
(Nanjing) Real
Estate
Development Co.,
Ltd.
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty or rectification for the Company in the reporting period.
X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period.
XII. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
Proporti Approve Whether Market
Trading
Related Related Related on in the d to Means price of Index
Related Pricing amount Date of
transacti transacti transacti Dealing amount transacti exceed of similar of
relations principl (in 10 disclosu
on on on price of the on the payment transacti disclos
hip e thousan re
parties type content same amount approve s on ure
d Yuan)
transacti (in 10 d availabl
24
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
on thousan amount e
d Yuan)
Enterpri
se with
share
participa
ted by
the
Notice
Compan
Purchasi on
y,
ng Foreca
director
products st of
SEI-Nan and
and Routin
jing senior
acceptin Telecom Market Bank 2019-01 e
Putian executiv 0 0 0.00% 1,050 N 0
g product price transfer -26 Relate
Optical e of the
services d
Network Compan
from Transa
y has
related ction
hold a
parties for
concurre
2019
nt post
as
director
in the
enterpris
e
Purchasi
ng
Subsidia products
ry of and The
PutianT
controlli acceptin Telecom Market Bank 2019-01 same
ongxin 0 0 0.00% 500 N 0
ng g product price transfer -26 as
Co., Ltd
sharehol services above
der from
related
parties
Purchasi
Putian
Subsidia ng
Oriental
ry of products The
Commu
controlli and Telecom Market Bank 2019-01 same
nication 0 0 0.00% 1,000 N 0
ng acceptin product price transfer -26 as
s Group
sharehol g above
Co.,
der services
Ltd.
from
25
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
related
parties
Purchasi
Other
ng
Other enterpris
products
Enterpri es
and The
ses controll
acceptin Telecom Market Bank 2019-01 same
Controll ed by 13.22 13.22 0.02% 2,000 N 13.22
g product price transfer -26 as
ed by the same
services above
China actual
from
Potevio controll
related
er
parties
-Nanjin
Purchasi
g Putian Other
ng
Hongya enterpris
products
n es
and The
Electric controll
acceptin Telecom Market Bank 2019-01 same
al ed by 13.22 13.22 0.02% N 13.22
g product price transfer -26 as
Applian the same
services above
ce actual
from
Technol controll
related
ogy Co., er
parties
Ltd.
Sales of
products
China
Controll and The
Potevio
ing provide Telecom Market 19065.7 19,065.7 Bank 19065.7 2019-01 same
Compan 25.18% 30,480 N
sharehol services product price 3 3 transfer 3 -26 as
y
der to above
Limited
related
parties
Sales of
Putian Subsidia products
Informat ry of and The
ion controlli provide Telecom Market Bank 2019-01 same
361.51 361.51 0.48% 4,550 N 361.51
Technol ng services product price transfer -26 as
ogy Co., sharehol to above
Ltd. der related
parties
Putian Subsidia Sales of The
Commu ry of products Telecom Market Bank 2019-01 same
626.21 626.21 0.83% 2,000 N 626.21
nication controlli and product price transfer -26 as
s Co., ng provide above
26
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Ltd. sharehol services
der to
related
parties
Other
Sales of
enterpris
products
es
Actual and The
controll
control provide Telecom Market Bank 2019-01 same
ed by 55.2 55.2 0.07% 1,200 N 55.2
is China services product price transfer -26 as
the same
Potevio to above
actual
related
controll
parties
er
-
Other
Beijing Sales of
enterpris
Potevio products
es
Taili and The
controll
Commu provide Telecom Market Bank 2019-01 same
ed by 3.13 3.13 0.00% N 3.13
nication services product price transfer -26 as
the same
s to above
actual
Technol related
controll
ogy Co., parties
er
Ltd.
- Other
Sales of
Potevio enterpris
products
Science es
and The
& controll
provide Telecom Market Bank 2019-01 same
Technol ed by 52.07 52.07 0.07% N 52.07
services product price transfer -26 as
ogy the same
to above
Industri actual
related
al Co., controll
parties
Ltd. er
Rent
Subsidia related
Putian ry of property The
Rent,
Hi-Tech controlli and Market Bank 2019-01 same
Property 128.98 128.98 71.87% 500 N 128.98
Industry ng accept price transfer -26 as
Fee
Co., Ltd sharehol related above
der property
services
20,250.8
Total -- -- -- 43,280 -- -- -- -- --
5
27
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Details of major sold-out order sent
N/A
back
At beginning of the year, the Company made a forecast for the routine related transactions
for year of 2019, it is estimated that routine related transactions occurred in 2019 will not
exceed 432.8 million Yuan (of which, the amount purchase product and received labor
services from related party will not be more than 45.5 million Yuan, sales of product and
The actual implementation of routine
provide labor services to related party will not be more than 382.3 million Yuan, paying
related transactions that is about to
rentals and relevant service costs to related party will not be more than 5 million Yuan and
occurred in the Period with total
received rental and relevant service costs from related party will not be more than one
amount estimated by category (if
million Yuan); the related transaction actually occurred amounted as 202.5085 million Yuan
applicable)
(of which, 0.1322 million Yuan from purchasing goods and receiving labor service, 20.10865
million Yuan from sales of product and provide labor services, rental and property expenses
amounted as 1.2898 million Yuan ) in total that not more than expected at beginning of the
year.
Reason for the great difference
between trade price and market Not applicable
reference price (if applicable)
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in Period.
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No related transactions of mutual investment outside for the Company in Period.
4. Contact of related credit and debt
√ Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□Yes √No
The Company has no non-operating contact of related credit and debt occurred in Period.
5. Other major related transactions
√Applicable □ Not applicable
The Company apply for entrusted loan from controlling shareholder China Putian Information Industry Co., Ltd. See the temporary
notice for details..
Website for temporary disclosure of the major connected transaction
Temporary notice Disclosure date Disclosure Website
28
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
“Connected transaction notice of Application
of Consignment Loans for Controlling 2019-04-23 Juchao Website
Shareholder”
XIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
The Company has no trusteeship in the Period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in Period.
(3) Leasing
√ Applicable □ Not applicable
Explanation on leasing
During the reporting period, the Company and its subsidiary rent other party’s property for production and office use, the cost for
leasing recognized in the period amounted as 0.89 million Yuan.
subsidiary of the Company rent-out property to others, the rental recognized in the period amounted as 0.88 million yuan.
Items generated over 10% gains/losses in total profit in reporting period for the Company
□ Applicable √ Not applicable
No items generated over 10% gains/losses in total profit in reporting period for the Company
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Name of the Related Guarantee Actual date of Actual Guarantee Guarantee Implemen Guarante
29
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Company Announce limit happening (Date guarantee limit type term ted (Y/N) e for
guaranteed ment of signing related
disclosure agreement) party
date (Y/N)
Guarantee of the Company for the subsidiaries
Related Guarante
Actual date of
Name of the Announce e for
Guarantee happening (Date Actual Guarantee Guarantee Implemen
Company ment related
limit of signing guarantee limit type term ted (Y/N)
guaranteed disclosure party
agreement)
date (Y/N)
Jointly
Nanjing Southern 2018.12.25-2
2018-04-24 6,000 2018-12-25 2,000 liability N N
Telecom Co., Ltd. 019.9.27
guaranty
Jointly
Nanjing Southern 2019.6.21-20
2019-05-30 7,500 2019-06-21 1,000 liability N N
Telecom Co., Ltd. 20.3.19
guaranty
Jointly
Nanjing Southern 2019.6.14-20
2018-04-24 6,000 2019-06-14 2,000 liability N N
Telecom Co., Ltd. 20.6.14
guaranty
Nanjing Putian Jointly
2018.8.22-20
Telege Intelligent 2018-04-24 2,500 2018-08-22 1,000 liability N N
19.8.20
Building Co., Ltd. guaranty
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 11,900 3,000
subsidiaries in report period
report period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 11,900 6,000
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of the subsidiary for subsidiaries
Related Guarante
Actual date of
Name of the Announce e for
Guarantee happening (Date Actual Guarantee Guarantee Implemen
Company ment related
limit of signing guarantee limit type term ted (Y/N)
guaranteed disclosure party
agreement)
date (Y/N)
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 11,900 occurred guarantee in report 3,000
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved 11,900 Total balance of actual 6,000
30
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
guarantee at the end of report guarantee at the end of report
period (A3+B3+C3) period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the
20.15%
net assets of the Company (that is A4+ B4+C4)
Including:
Amount guarantee offering to shareholders, actual controller
0
and its related parties (D)
The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly or 0
indirectly (E)
Proportion of total amount of guarantee in net assets of the
0
Company exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F) 0
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
Explanations on external guarantee against regulated
N/A
procedures (if applicable)
Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
No entrust financing and entrust loans for the Company in reporting period.
3. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department
No
The listed Company and its subsidiary did not belong to the key sewage units released from environmental protection department
Environment index has standard discharge in the reporting period, and no penalty has been imposed on the environmental protection
department.
31
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
2. Target poverty alleviation for the first half year
(1) Precise poverty alleviation plan
According to the Nanjing poverty alleviation and striving for relatively comfortable life action plan for the 13th
five-year plan period （NWBF[2016] No.13）and announcement on carrying out partner assistance actions of ten
thousand party members and cadres help thousands of families and hundreds of companies help hundreds of
villages on the hook and promoting precise poverty alleviation （NWBF[2016] No. 34） released by Nanjing
municipal party committee and municipal government, with the unified arrangement by municipal commission of
economy and information technology, Nanjing Potevio Telecommunications Co., Ltd., as a central enterprise in
Nanjing, has assisted the twinning Molihua village committee of Jinniu Lake Street in liuhe district of Nanjing
during the 13th five-year plan period. After several field visits and communications, both parties have reached a
preliminary agreement on donation to build roads and Nanjing Potevio partner twinning assistance work program
from 2016 to 2020 has been made hereby.
I. Basic strategy: The Company shall adhere to the basic principle of targeted poverty alleviation guided by spirit
of the 19th National Congress of the Communist Party of China and spirit of General Secretary Xi Jinping’s
important speeches for the 13th five-year plan period.
II. Overall target: to increase the poor’s income as the core target like blood making, to improve their living
quality as the important target like blood transfusion and to help them get rid of the poverty and achieve richness
as the final target. To insist combination of blood transfusion and blood making, which is an effective assistance
for the poor.
III. Primary mission: The Company shall adhere to overall planning and poverty alleviation with targeted and
differentiated measures, closely combining with reality of the Company. The Company shall strictly implement
annual budgets, focus on the improvement of village traffic conditions and raise the living standard of the
villagers.
IV. Measured adopted:
1.Capital assistance: according to the real need of the village, the Company shall help the repair of roads in groups
and villages, and assist the village to expand economics, totally 150,000 Yuan plans to be use.
2. Emotion assistance: to make frequent warm visits and contact with those farmers earning low income, and
communicate with them to know their difficulty. In the traditional holidays like the Spring Festival, the Company
would make further and prompt visit to the poor who experiences emergency and living difficulty, totally 50000
Yuan plans to be use.
3. Entrepreneurship assistance: to set pilot projects to carry out one-to-one assistance with the poor farmers taking
into account the diversified and considerable production of chicken, duck, agricultural products. Based on its own
needs, the Company helps the poor farmers to get rid of poverty and become rich by means of procurement of
green agricultural products.
32
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(2) Summary of semi-annual precise poverty alleviation
In the first half of 2019, Nanjing Putian actively fulfilled its social responsibilities and continued to help the
village complete the construction of the relevant village roads in accordance with the “Pairing Assistance Work
Plan of Nanjing Putian from 2016 to 2020”. Before the Spring Festival, the company leaders led the team into the
village to conduct on-site investigations on the construction of the four village roads donated by the company;
visited and sent condolences to some poor households fell into poverty due to illness and disabled due to accident
in the form of sending condolences to the households and assisting the impoverished students in the new spring,
and sent food and oil, school supplies and condolence payment. It actively strive to deepen the effect of helping
and effectively fulfill the responsibility of central enterprises for precise poverty alleviation.
(3) Results of the poverty
Measurement
Target Numbers/ implementation
unit
i. Overall —— ——
10 Thousand
Including: 1. Capital 0.5
Yuan
10 Thousand
2. Material discount 0.3
Yuan
ii. Invested by specific project —— ——
1. Industrial development poverty —— ——
2. Transfer employment —— ——
3.Relocation the poor —— ——
4.Education poverty —— ——
Including: 4.1 Amount input for subsidizing the impoverished 10 Thousand
0.3
students Yuan
4.2 Number of subsidized poor student s Person 5
5.Health poverty alleviation —— ——
6.Ecological protection and poverty alleviation —— ——
7.Fallback protection —— ——
10 Thousand
7.3 Amount input for poor disabled persons 0.5
Yuan
7.4 Number of poor disabled persons help Person 5
8.Social poverty alleviation —— ——
9. Other —— ——
33
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
iii. Awards (content and grade) —— ——
(4) Follow-up of precise poverty alleviation
In the first half year of 2019, the Company according to Nanjing Potevio partner twinning assistance work
program from 2016 to 2020, will continue to build roads in Molihua Villages with donations, and keep contact
and communication with the village committee, increase the field visits to the village, normalized the supporting
works.
XVI. Explanation on other significant events
√ Applicable □ Not applicable
Index of major events disclosed in the Year form period-begin of the reporting period to the Report released:
Event Disclosure date Index of information on appointed website
Notice on Progress of Housing Expropriation 2019.1.2 Juchao Website (www.cninfo.com.cn)
Notice on obtain Government Subsidies 2019.1.3 Juchao Website (www.cninfo.com.cn)
Notice on Resignation of Directors 2019.1.5 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 18th Session of 7th BOD 2019.1.5 Juchao Website (www.cninfo.com.cn)
st
Notice on Convening the 1 Extraordinary Shareholders General 2019.1.5 Juchao Website (www.cninfo.com.cn)
Meeting of 2019
Notice on Resolution of 1st Extraordinary Shareholders General 2019.1.22 Juchao Website (www.cninfo.com.cn)
Meeting of 2019
Notice on Resolution of 19th Session of 7th BOD 2019.1.26 Juchao Website (www.cninfo.com.cn)
Notice of the Forecast for Routine Related Transaction for year of 2019.1.26 Juchao Website (www.cninfo.com.cn)
2019
Notice on Resolution of 20th Session of 7th BOD 2019.1.29 Juchao Website (www.cninfo.com.cn)
Notice on Carry Out Accounts Receivable Factoring 2019.1.29 Juchao Website (www.cninfo.com.cn)
st th
Notice on Resolution of 21 Session of 7 BOD 2019.3.13 Juchao Website (www.cninfo.com.cn)
Notice on Carry out Financial Leasing Business 2019.3.13 Juchao Website (www.cninfo.com.cn)
Notice on Change the Continuous Supervision Sponsor 2019.3.27 Juchao Website (www.cninfo.com.cn)
Representative
Notice on obtain Government Subsidies 2019.4.4 Juchao Website (www.cninfo.com.cn)
Preliminary Earnings Estimate for 2018 2019.4.13 Juchao Website (www.cninfo.com.cn)
Performance Forecast for Q1 of 2019 2019.4.15 Juchao Website (www.cninfo.com.cn)
Notice of Director Resignation 2019.4.19 Juchao Website (www.cninfo.com.cn)
nd th
Notice on Resolution of 22 Session of 7 BOD 2019.4.23 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 9 Session of 7 Supervisory Committee 2019.4.23 Juchao Website (www.cninfo.com.cn)
Summary of Annual Report 2018 2019.4.23 Juchao Website (www.cninfo.com.cn)
Notice on Provision for Impairment of Assets for 2018 2019.4.23 Juchao Website (www.cninfo.com.cn)
Notice on Change of Accounting Policy 2019.4.23 Juchao Website (www.cninfo.com.cn)
34
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Notice on Related Transaction of Applying for Entrust Loans to 2019.4.23 Juchao Website (www.cninfo.com.cn)
Controlling Shareholder
Text of First Quarterly Report 2019 2019.4.30 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 24 Session of 7 BOD 2019.5.30 Juchao Website (www.cninfo.com.cn)
Notice on Guarantee for Controlling Subsidiary 2019.5.30 Juchao Website (www.cninfo.com.cn)
Notice on Convening the AGM of 2018 2019.5.30 Juchao Website (www.cninfo.com.cn)
Progress of Guarantee for Controlling Subsidiary 2019.6.18 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of AGM of 2018 2019.6.20 Juchao Website (www.cninfo.com.cn)
Progress of Guarantee for Controlling Subsidiary 2019.6.25 Juchao Website (www.cninfo.com.cn)
Performance Forecast for Semi-Annual of 2019 2019.7.13 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 25th Session of 7th BOD 2019.8.10 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 11th Session of 7th Supervisory 2019.8.10 Juchao Website (www.cninfo.com.cn)
Committee
Notice on Convening the 2nd Extraordinary Shareholders General 2019.8.10 Juchao Website (www.cninfo.com.cn)
Meeting of 2019
Notice on Resolution of 2nd Extraordinary Shareholders General 2019.8.28 Juchao Website (www.cninfo.com.cn)
Meeting of 2019
XVII. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
35
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitalizat
New
Bonus ion of
Amount Proportion shares Others Subtotal Amount Proportion
shares public
issued
reserve
115,000,0 115,000,0
I. Unlisted shares 53.49% 53.49%
00 00
115,000,0 115,000,0
1. Sponsor’s shares 53.49% 53.49%
00 00
Including: state-owned 115,000,0 115,000,0
53.49% 53.49%
shares 00 00
100,000,0 100,000,0
II. Listed shares 46.51% 46.51%
00 00
2. Domestically listed 100,000,0 100,000,0
46.51% 46.51%
foreign shares 00 00
215,000,0 215,000,0
III. Total shares 100.00% 100.00%
00 00
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing holdings of repurchase shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
36
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In Share
Total preference shareholders
Total common stock
with voting rights recovered at
shareholders in reporting 8,985 0
end of reporting period (if
period-end
applicable) (found in note 8)
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Total Number of share pledged/frozen
Amount
sharehol Amount
Changes of
Full name of Nature of Proportion of ders at of listed
in report un-listed
Shareholders shareholder shares held the end shares State of share Amount
period shares
of report held
held
period
China Potevio
State-owned 115,000, 115,000,
Company 53.49% 0 0
corporation 000 000
Limited
GUOTAI
JUNAN
Foreign 5,800,77 -1,149,3 5,800,77
SECURITIES( 2.70% 0
corporation 7 18 7
HONGKONG)
LIMITED
Shenwan
Foreign 5,646,50 5,646,50
HongYuan 2.63% 0 0
corporation 0 0
(H.K.) Limited
Domestic nature 2,443,93 2,443,93
Zheng Enyue 1.14% 0 0
person 9 9
Domestic nature 2,007,11 2,007,11
Sun Huiming 0.93% 0 0
person 0 0
Guosen
Securities Foreign 1,901,88 1,901,88
0.88% 40,000 0
(H.K.) Broker corporation 2 2
Co., Ltd.
37
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Domestic nature 1,862,37 1,862,37
Gu Jinhua 0.87% 0 0
person 1 1
BOCI
Foreign 1,466,94 -250,00 1,466,94
SECURITIES 0.68% 0
corporation 50 5
LIMITED
Domestic nature
Jin Yunhua 0.44% 950,162 0 0 950,162
person
Domestic nature
Xiang Yan 0.42% 910,602 0 0 910,602
person
Strategy investors or general legal
person becomes top 10 shareholders
N/A
due to rights issued (if applicable)
(see note 3)
Explanation on associated Among the top ten shareholders, China Potevio is neither a related party nor a person acting in
relationship among the aforesaid concert with the others. It’s unknown by the Company whether there are related parties or
shareholders persons acting in concert among the other shareholders.
Top 10 shareholders with circulation shares held
Type of shares
Shareholders’ name Amount of listed shares held at end of the Period
Type Amount
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 5,800,777 listed foreign 5,800,777
LIMITED shares
Domestically
Shenwan HongYuan (H.K.) Limited 5,646,500 listed foreign 5,646,500
shares
Domestically
Zheng Enyue 2,443,939 listed foreign 2,443,939
shares
Domestically
Sun Huiming 2,007,110 listed foreign 2,007,110
shares
Domestically
Guosen Securities (H.K.) Broker
1,901,882 listed foreign 1,901,882
Co., Ltd.
shares
Domestically
Gu Jinhua 1,862,371 listed foreign 1,862,371
shares
Domestically
BOCI SECURITIES LIMITED 1,466,945 listed foreign 1,466,945
shares
38
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Domestically
Jin Yunhua 950,162 listed foreign 950,162
shares
Domestically
Xiang Yan 910,602 listed foreign 910,602
shares
Domestically
Zheng Hongquan 831,500 listed foreign 831,500
shares
Expiation on associated relationship
or consistent actors within the top
10 un-restrict shareholders and It is unknown whether the shareholders just mentioned belong to consistent actors or have
between top 10 un-restrict associated relationship.
shareholders and top 10
shareholders
Explanation on shareholders
involving margin business about top
ten common stock shareholders N/A
with un-restrict shares held (if
applicable) (see note 4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□Yes √No
Top ten common shareholders or top ten common shareholders with un-restrict shares not held have a buy-back agreement dealing in
reporting period.
IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Controlling shareholder of the Company has no changed in the Period
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Actual controller of the Company has no changed in the Period.
39
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
40
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2018.
II. Resignation and dismissal of directors, supervisors and senior executives
√Applicable □ Not applicable
Name Title Type Date Cause
Liu Wei Director Leaving office 2019-01-04 Resignation
Li Linzhen GM Dismissed 2019-01-04 Dismissed by the Board of directors
Wang Wenkui GM Appointed 2019-01-04 Appointed by the Board of directors
Wang Wenkui Director Elected 2019-01-21 Election of Shareholders' Meeting
Director, Deputy
Li Linzhen Leaving office 2019-04-18 Resignation
Chairman
Deputy
Wang Wenkui Elected 2019-04-19 Elected by the Board of directors
Chairman
Lei Xu Deputy GM Appointed 2019-05-29 Appointed by the Board of directors
After deliberation and approval by the shareholders'
Cheng Wei Director Leaving office 2019-08-27
meeting, he will no longer serve as a director.
Supervisor,
Chairman of the After deliberation and approval by the shareholders'
Zhao Xinping Leaving office 2019-08-27
Supervisory meeting, he will no longer serve as a Supervisor.
Committee
After deliberation and approval by the shareholders'
Zhang Hong Supervisor Leaving office 2019-08-27
meeting, he will no longer serve as a Supervisor.
Li Tong Director Elected 2019-08-27 Election of Shareholders' Meeting
Liu Wei Director Elected 2019-08-27 Election of Shareholders' Meeting
Lv Dong Supervisor Elected 2019-08-27 Election of Shareholders' Meeting
Wei Jie Supervisor Elected 2019-08-27 Election of Shareholders' Meeting
Chairman of the
Lv Dong Supervisory Elected 2019-08-28 Election of the Board of Supervisors
Committee
41
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section IX. Corporation Bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
No
42
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section X. Financial Report
I. Audit reports
Whether the semi-annual report have been audited or not
□ Yes √ No
The financial report of the semi-annual report has not been audited.
43
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
II. Financial statements
Units in Notes of Financial Statements is RMB
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at June 30, 2019
(Expressed in Renminbi Yuan)
Assets Note No. Jun. 30, 2019 Dec. 31, 2018
Current assets:
Cash and bank balances 136,567,071.22 261,938,068.72
Settlement funds
Loans to other banks
Held-for-trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 36,976,983.83 46,475,656.01
Accounts receivable 959,336,259.46 941,068,459.35
Advances paid 29,915,309.02 188,848,712.69
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 34,203,510.56 33,734,948.67
Financial assets under reverse repo
Inventories 255,486,163.16 286,972,632.59
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 17,580,665.17 13,497,540.69
Total current assets 1,470,065,962.42 1,772,536,018.72
Non-current assets:
Loans and advances paid
Debt investments
Available-for-sale financial assets 741,953.00
Other debt investments
Held-to-maturity investments
Long-term receivable
Long-term equity investments 181,617,987.10 183,244,080.23
Other equity instrument investments 741,953.00
Other non-current financial assets
44
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Investment property 8,103,661.99 8,397,113.98
Fixed assets 110,559,771.46 112,504,807.11
Construction in progress 17,268,676.17 9,472,383.76
Productive biological assets
Oil & gas assets
Intangible assets 29,300,021.15 30,285,598.77
Development expenditures
Goodwill
Long-term prepayments 3,037,751.17 3,562,336.84
Deferred tax assets
Other non-current assets
Total non-current assets 350,629,822.04 348,208,273.69
Total assets 1,820,695,784.46 2,120,744,292.41
45
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at June 30, 2019 (continued)
Liabilities & Equity Note No. Jun. 30, 2019 Dec. 31, 2018
Current liabilities:
Short-term borrowings 464,183,401.05 445,010,000.00
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 91,238,774.75 84,374,916.99
Accounts payable 695,496,740.26 743,028,953.62
Advances received 33,841,758.85 259,545,648.66
Financial liabilities under repo
Employee benefits payable 21,259,466.94 21,132,336.19
Taxes and rates payable 3,836,621.32 17,230,159.02
Other payables 41,857,252.04 55,128,492.65
Handling fee and commission payable
Reinsurance accounts payable
Contract liabilities
Liabilities classified as held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,351,714,015.21 1,625,450,507.13
Non-current liabilities:
Insurance policy reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables 28,947,368.42
Long-term employee benefits payable
Provisions
Deferred income 6,004,873.00 7,296,315.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 34,952,241.42 7,296,315.00
Total liabilities 1,386,666,256.63 1,632,746,822.13
Equity:
Share capital/Paid-in capital 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 185,374,533.85 185,374,533.85
Less: Treasury shares
Other comprehensive income -5,012,479.78 -4,947,588.58
Special reserve
Surplus reserve 589,559.77 589,559.77
General risk reserve
Undistributed profit -98,255,301.68 -40,726,776.80
Total equity attributable to the parent company 297,696,312.16 355,289,728.24
Non-controlling interest 136,333,215.67 132,707,742.04
Total equity 434,029,527.83 487,997,470.28
Total liabilities & equity 1,820,695,784.46 2,120,744,292.41
46
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at June 30, 2019
(Expressed in Renminbi Yuan)
Assets Note No. Jun. 30, 2019 Dec. 31, 2018
Current assets:
Cash and bank balances 78,496,286.22 80,553,208.65
Held-for-trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 3,142,881.55 6,620,178.00
Accounts receivable 569,391,656.54 586,635,878.62
Advances paid 8,639,524.01 155,717,638.43
Other receivables 37,779,362.09 31,077,389.58
Inventories 110,644,059.39 143,432,315.11
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 4,268,385.84 6,222,172.75
Total current assets 812,362,155.64 1,010,258,781.14
Non-current assets:
Debt investments
Available-for-sale financial assets 741,953.00
Other debt investments
Held-to-maturity investments
Long-term receivable
Long-term equity investments 332,925,737.74 333,367,967.90
Other equity instrument investments 741,953.00
Other non-current financial assets
Investment property
Fixed assets 48,729,251.36 50,769,872.87
Construction in progress 5,984,113.43 5,839,892.88
Productive biological assets
Oil & gas assets
Intangible assets 11,922,705.47 12,305,246.69
Development expenditures
Goodwill
Long-term prepayments 2,960,931.17 3,403,376.01
Deferred tax assets
Other non-current assets
Total non-current assets 403,264,692.17 406,428,309.35
Total assets 1,215,626,847.81 1,416,687,090.49
47
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at June 30, 2019 (continued)
(Expressed in Renminbi Yuan)
Liabilities & Equity Note No. Jun. 30, 2019 Dec. 31, 2018
Current liabilities:
Short-term borrowings 374,183,401.05 355,000,000.00
Held-for-trading financial liabilities
Financial liabilities at fair value through profit
or loss
Derivative financial liabilities
Notes payable 87,955,415.63 80,759,989.55
Accounts payable 354,176,500.26 340,405,588.53
Advances received 13,033,438.34 227,951,168.81
Contract liabilities
Employee benefits payable 8,664,119.99 7,854,213.23
Taxes and rates payable 31,150.92 8,674,579.20
Other payables 193,246,486.58 187,172,612.82
Liabilities classified as held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,031,290,512.77 1,207,818,152.14
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables 28,947,368.42
Long-term employee benefits payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 29,947,368.42 1,000,000.00
Total liabilities 1,061,237,881.19 1,208,818,152.14
Equity:
Share capital/Paid-in 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
48
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Less: treasury shares
Other comprehensive income
Special reserve
Surplus reserve 589,559.76 589,559.76
Undistributed profit -233,617,892.95 -180,137,921.22
Total equity 154,388,966.62 207,868,938.35
Total liabilities & equity 1,215,626,847.81 1,416,687,090.49
49
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended June 30, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 757,197,371.80 757,197,371.80
Including: Operating revenue 757,197,371.80 757,197,371.80
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 815,094,836.61 1,003,706,276.96
Including: Operating cost 633,095,768.07 824,358,695.32
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 and surcharges 4,493,183.68 5,664,250.54
Selling expenses 78,513,462.05 79,696,183.64
Administrative expenses 47,259,575.67 47,390,575.27
R&D expenses 35,909,040.49 36,398,106.80
Financial expense 15,823,806.65 10,198,465.39
Including: Interest expenses 12,296,091.86 11,625,553.62
Interest income 2,400,422.53 1,692,017.07
Assets impairment loss -3,030,783.16
Credit impairment loss -668,512.60
Add: Other income 6,006,842.30 5,799,343.86
Investment income (or less: losses) -442,230.16 407,793.10
Including: Investment income from associates and joint ventures -442,230.16 407,793.10
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Gains on asset disposal (or less: losses) 98,840.67 30,156,818.80
III. Operating profit (or less: losses) -52,902,524.60 -3,522,499.41
Add: Non-operating revenue 1,312,115.17 2,825,854.15
Less: Non-operating expenditures 238,652.04 308,586.00
IV. Profit before tax (or less: total loss) -51,829,061.47 -1,005,231.26
Less: Income tax 2,066,779.65 1,646,117.70
V. Net profit (or less: net loss) -53,895,841.12 -2,651,348.96
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) -53,895,841.12 -53,895,841.12
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) -57,528,524.88 -10,421,705.60
2. Net profit attributable to non-controlling shareholders (or less: net loss) 3,632,683.76 7,770,356.64
VI. Other comprehensive income after tax -72,101.33 -135,607.00
Items attributable to the owners of the parent company -64,891.20 -122,046.30
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
(II) To be reclassified subsequently to profit or loss -64,891.20 -122,046.30
1. Items under equity method that may be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from changes in fair value of available-for-sale financial assets
4. Profit or loss from reclassification of financial assets into other
comprehensive income
5. Profit or loss from reclassification of held-to-maturity investments as
available-for-sale financial assets
6. Provision for credit impairment of other debt investments
7.Cash flow hedging reserve (profit or loss on cash flow hedging) -64,891.20 -122,046.30
8. Translation reserve
9. Others
Items attributable to non-controlling shareholders -7,210.13 -13,560.70
VII. Total comprehensive income -53,967,942.45 -2,786,955.96
Items attributable to the owners of the parent company -57,593,416.08 -10,543,751.90
Items attributable to non-controlling shareholders 3,625,473.63 7,756,795.94
VIII. Earnings per share (EPS):
50
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(I) Basic EPS (yuan per share) -0.27 -0.05
(II) Diluted EPS (yuan per share) -0.27 -0.05
Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended June 30, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Operating revenue 341,411,818.58 497,806,967.24
Less: Operating cost 321,158,291.44 461,016,015.39
Taxes and surcharges 973,408.31 2,188,404.36
Selling expenses 28,375,553.20 33,623,765.06
Administrative expenses 24,427,461.58 22,687,329.39
R&D expenses 8,648,006.73 10,160,185.58
Financial expense 14,954,773.35 10,288,228.05
Including: Interest expenses 9,868,608.51 11,625,553.62
Interest income 481,846.95 1,692,017.07
Assets impairment loss -1,674,589.82
Credit impairment loss 2,562,201.43
Add: Other income 800,000.00 876,429.06
Investment income (or less: losses) -442,230.16 407,793.10
Including: Investment income from associates and joint ventures -442,230.16 407,793.10
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Gains on asset disposal (or less: losses) 8,421.83 18,909,015.41
Gains on foreign exchange (or less: losses)
II. Operating profit (or less: losses) -54,197,282.93 -23,638,312.84
Add: Non-operating revenue 954,802.59 1,994,545.83
Including: Gains on disposal of non-current assets
Less: Non-operating expenditures 237,491.39 210,933.46
Including: Losses on disposal of non-current assets
III. Profit before tax (or less: total loss) -53,479,971.73 -21,854,700.47
Less: Income tax
IV. Net profit (or less: net loss) -53,479,971.73 -21,854,700.47
(I) Net profit from continuing operations (or less: net loss) -53,479,971.73 -21,854,700.47
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
3. Changes in fair value of other equity instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
1. Items under equity method that may be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from changes in fair value of available-for-sale financial assets
4. Profit or loss from reclassification of financial assets into other
comprehensive income
5. Profit or loss from reclassification of held-to-maturity investments as
available-for-sale financial assets
51
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
6. Provision for credit impairment of other debt investments
7. Cash flow hedging reserve (profit or loss on cash flow hedging)
8. Translation reserve
9. Others
VI. Total comprehensive income -53,479,971.73 -21,854,700.47
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) -0.25 -0.10
(II) Diluted EPS (yuan per share) -0.25 -0.10
52
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended June 30, 2019
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 634,459,933.46 823,226,257.29
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 4,281,155.44 3,751,204.59
Other cash receipts related to operating activities 1 34,101,264.61 37,651,747.79
Subtotal of cash inflows from operating activities 672,842,353.51 864,629,209.67
Cash payments for goods purchased and services received 584,963,313.52 795,841,324.87
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 123,749,018.11 134,614,701.29
Cash payments for taxes and rates 49,887,398.91 43,357,641.42
Other cash payments related to operating activities 2 78,339,353.71 116,090,771.02
Subtotal of cash outflows from operating activities 836,939,084.25 1,089,904,438.60
Net cash flows from operating activities -164,096,730.74 -225,275,228.93
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 1,183,862.97
Cash receipts from investment income 197,567.20
Net cash receipts from the disposal of fixed assets, intangible assets and other 397,940.00 30,244,870.00
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 1,581,802.97 30,442,437.20
Cash payments for the acquisition of fixed assets, intangible assets and other 7,306,368.27 7,937,241.37
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
Subtotal of cash outflows from investing activities 7,306,368.27 7,937,241.37
Net cash flows from investing activities -5,724,565.30 22,505,195.83
III. Cash flows from financing activities:
Cash receipts from absorbing investments 2,169,200.00
53
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Note Current period Preceding period
Items
No. cumulative comparative
Including: Cash received by subsidiaries from non-controlling shareholders as 2,169,200.00
investments
Cash receipts from borrowings 295,400,273.89 266,510,000.00
Cash receipts from issuing of bonds
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 295,400,273.89 268,679,200.00
Cash payments for the repayment of borrowings 213,539,162.28 206,550,000.00
Cash payments for distribution of dividends or profits and for interest expenses 15,154,944.10 13,087,901.03
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit 2,169,200.00
Other cash payments related to financing activities 20,051,791.37
Subtotal of cash outflows from financing activities 248,745,897.75 219,637,901.03
Net cash flows from financing activities 46,654,376.14 49,041,298.97
IV. Effect of foreign exchange rate changes on cash & cash equivalents -92,357.05
V. Net increase in cash and cash equivalents -123,166,919.90 -153,821,091.18
Add: Opening balance of cash and cash equivalents 201,369,317.42 311,056,919.17
VI. Closing balance of cash and cash equivalents 78,202,397.52 157,235,827.99
54
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended June 30, 2019
(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 196,554,502.38 348,436,329.15
Receipts of tax refund 226,972.07
Other cash receipts related to operating activities 32,644,987.12 68,779,821.99
Subtotal of cash inflows from operating activities 229,199,489.50 417,443,123.21
Cash payments for goods purchased and services received 143,162,629.87 372,154,435.27
Cash paid to and on behalf of employees 52,522,811.25 53,879,491.46
Cash payments for taxes and rates 17,627,190.91 11,331,804.57
Other cash payments related to operating activities 66,818,288.91 60,181,711.77
Subtotal of cash outflows from operating activities 280,130,920.94 497,547,443.07
Net cash flows from operating activities -50,931,431.44 -80,104,319.86
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 400,000.00 197,567.20
Net cash receipts from the disposal of fixed assets, intangible 40,890.00 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 440,890.00 18,385,437.20
Cash payments for the acquisition of fixed assets, intangible assets 358,326.21 6,483,699.11
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 358,326.21 6,483,699.11
Net cash flows from investing activities 82,563.79 11,901,738.09
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 176,839,010.00 192,000,000.00
Other cash receipts related to financing activities 38,561,263.89
Subtotal of cash inflows from financing activities 215,400,273.89 192,000,000.00
Cash payments for the repayment of borrowings 133,529,162.28 165,000,000.00
Cash payments for distribution of dividends or profits and for 11,315,171.30 9,668,959.87
interest expenses
Other cash payments related to financing activities 20,000,000.00
Subtotal of cash outflows from financing activities 164,844,333.58 174,668,959.87
Net cash flows from financing activities 50,555,940.31 17,331,040.13
IV. Effect of foreign exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents -292,927.34 -50,871,541.64
Add: Opening balance of cash and cash equivalents 23,812,669.19 109,752,099.29
VI. Closing balance of cash and cash equivalents 23,519,741.85 58,880,557.65
55
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended June 30, 2019
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus interest
Share capital Capital reserve treasury comprehensive reserve risk Undistributed profit
Preferred Perpetual Others reserve
shares income reserve
shares bonds
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,947,588.58 589,559.77 -40,726,776.80 132,707,742.04 487,997,470.28
Add: Cumulative changes of accounting policies
Error correction of prior period
Business combination under common control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -4,947,588.58 589,559.77 -40,726,776.80 132,707,742.04 487,997,470.28
III. Current period increase (or less: decrease) -64,891.20 -57,528,524.88 3,625,473.63 -53,967,942.45
(I) Total comprehensive income -64,891.20 -57,528,524.88 3,625,473.63 -53,967,942.45
(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
56
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus interest
Share capital Capital reserve treasury comprehensive reserve risk Undistributed profit
Preferred Perpetual Others reserve
shares income reserve
shares bonds
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 -5,012,479.78 589,559.77 -98,255,301.68 136,333,215.67 434,029,527.83
57
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended June 30, 2019 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus Undistributed interest
Share capital Preferred Perpetual Others
Capital reserve treasury comprehensive reserve risk
profit
income reserve reserve
shares bonds shares
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.76 -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 -4,129,619.45 589,559.76 -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
58
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus Undistributed interest
Share capital Preferred Perpetual Others
Capital reserve treasury comprehensive reserve risk
profit
income reserve reserve
shares bonds shares
(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 -4,251,665.75 589,559.76 -57,007,697.24 128,650,622.50 468,355,353.13
59
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended June 30, 2019
(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 -180,137,921.22 207,868,938.35
Add: Cumulative changes of accounting policies
Error correction of prior period
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -180,137,921.22 207,868,938.35
III. Current period increase (or less: decrease) -53,479,971.73 -53,479,971.73
(I) Total comprehensive income -53,479,971.73 -53,479,971.73
(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 -233,617,892.95 154,388,966.62
60
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended June 30, 2019 (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 -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
61
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(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
[Wang Wen Kui] [Cao Xu Rong] [Cao Xu Rong]
[Legal representative] [Officer in charge of accounting] [Head of accounting department]
(Signature and stamp) (Signature and stamp) (Signature and stamp)
62
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
Semi-annual Report 2019
Monetary unit: RMB Yuan
I. Company profile
Nanjing Putian Telecommunications Co., Ltd. (the “Company”), whose predecessor is 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 session of the Board of Directors dated August 28, 2019.
The Company has brought 11 subsidiaries including Nanjing South Telecommunications Co., Ltd., Nanjing Putian Telege Intelligent
Building 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
(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.
63
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(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 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
64
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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 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 three categories when initially recognized: (1) financial assets at
amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair
value through profit or loss.
Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market
interest rate, which do not fall within the above category (1) ; (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method 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. However, at initial recognition, for accounts
receivable that do not contain a significant financing component or contracts in which the financing components
65
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
with associated period less than one year are not considered, the Company measures at their transaction price in
accordance with “CASBE14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses
on financial assets that are measured at amortized cost and are not part of hedging relationships shall be included
into profit or loss when the financial assets are derecognized, reclassified, through the amortization process or in
order to recognize impairment gains or losses.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and
gains and losses on foreign exchange that calculated using effective interest method shall be included into profit or
loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses that
initially recognized as other comprehensive income should be transferred out into profit or loss when the financial
assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as
part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included into
other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive
income should be transferred out into retained earnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss, except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss.
Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as
other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
66
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE23 – Transfer of Financial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan
at a below-market interest rate, which do not fall within the above category 1)
The Company measure its financial liabilities at the higher of: a. the amount of loss allowances in according to
impairment requirements of financial instruments; b. the amount initially recognized less the amount of
accumulated amortization recognized in accordance with “CASBE14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measure its financial liabilities at amortized cost using effective interest method. Gains or losses on
financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be included
into profit or loss when the financial liabilities are derecognized and through the amortization process.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE23 – Transfer of
Financial Assets”.
2) 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, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset. 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 does not retain its control over the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability; (2) if the Company retains 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 carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset, and the accumulative amount of the changes of the fair value originally included in other
comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). If the transfer of financial asset
partially satisfies the conditions to derecognition, the entire carry amount of the transferred financial asset is,
67
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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 carrying amount 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 other comprehensive income which is corresponding to the portion which is derecognized (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income).
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 of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrument
investments, contract assets or lease receivable at fair value through other comprehensive income, loan commitments other than
financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value
through profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies.
On the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since
initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.
For accounts receivable do not contain a significant financing component or contracts in which the financing components with
associated period less than one year are not considered, which result from transactions as regulated in “CASBE14 - Revenues”, the
Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.
For lease receivables, accounts receivable and contract assets that result from transactions as regulated in “CASBE14 - Revenues”
and contain a significant financing component, the Company chooses simplified approach to measure the loss allowance at an
amount equal to lifetime expected credit losses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the
financial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the
financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has
increased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial
instrument at an amount equal to 12-month expected credit loss.
68
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on the
financial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initial
recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition. For
loan commitments and financial guarantee contracts, the date that the Company becomes a part to the irrecoverable commitment
shall be considered to be the date of initial recognition for the purposes of applying the impairment requirements.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the
financial instrument is determined to have low credit risk on the balance sheet date.
The following factors should be considered when the Company makes the above assessment:
1) Whether the contract payment is overdue for more than 30 days. If the delay exceeds 30 days, the company determines that the
credit risk of the financial instrument has increased significantly. Unless the company does not have to pay much cost or effort to
obtain reasonable and substantiated information proving that the credit risk has not increased significantly since the initial
confirmation, although the payment term stipulated in the contract has exceeded 30 days.
2) Whether the company's credit management methods for financial instruments have changed.
3) Whether there are significant changes in the expected performance and repayment behavior of the debtor.
4) Whether there is any significant change in the actual or expected operating results of the debtor.
5) Whether there has been a significant adverse change in the regulatory, economic or technical environment of the debtor.
6) Whether there are adverse changes in business financial or economic conditions that are expected to cause a significant change in
the debtor's ability to meet its obligations.
7) Whether the internal price index caused by the change of credit risk changes significantly.
8) If an existing financial instrument is originated or issued as a new financial instrument on the reporting date, will the interest rate
or other terms of the financial instrument change significantly.
9) Whether the external market indicators of credit risk of the same financial instrument or similar financial instrument with the same
expected duration change significantly. These include credit spreads, the price of credit default swaps for borrowers, the length and
extent to which the fair value of a financial asset is less than its amortized cost, and other market information relevant to the borrower
(such as changes in the price of the borrower's debt instruments or equity instruments).
10) Whether there has been a significant change in the actual or expected external credit rating of financial instruments.
11) Whether the actual or expected internal credit rating of the debtor is downgraded.
12) Does the credit risk of other financial instruments issued by the same debtor increase significantly.
13) Whether there has been a significant change in the value of collateral or the quality of collateral or credit enhancement provided
by third parties.
14) Whether there is a significant change in the economic incentives that are expected to reduce borrowers' ability to meet
contractual deadlines.
15) Anticipated changes to a loan contract, including whether the expected breach of contract may result in the release or revision of
contractual obligations, the granting of an interest free period, a jump in interest rates, the demand for additional collateral or
guarantees, or other changes to the contractual framework of a financial instrument.
The company evaluates the expected credit risk and measures the expected credit loss on the basis of a single financial instrument or
a combination of financial instruments. When the financial instrument portfolio is the basis, the company divides the financial
instruments into different portfolios based on the common risk characteristics.
The company re-measures the expected credit loss on each balance sheet date, and the increase or reversal of the loss provision
resulting therefrom is recorded as impairment loss or profit in the current profit and loss. For a financial asset measured at amortized
cost, the loss provision shall be set off against the carrying value of the financial asset shown in the balance sheet; For creditor's
rights investment measured at fair value and whose changes are included in other comprehensive income, the company shall
69
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
recognize its loss provision in other comprehensive income and shall not deduct the book value of the financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
Items Basis for determination of Method for measuring expected credit
portfolio loss
Have similar risk
Loss reserves are measured against the
Other receivables – Portfolio characteristics, combined
grouped with temporary payments amount of expected credit losses for the
with historical experience
receivable next 12 months or for the entire duration
grouping
Have similar risk
Loss reserves are measured against the
characteristics, combined
Other receivables – Portfolio amount of expected credit losses for the
grouped with deposit receivables with historical experience
next 12 months or for the entire duration
grouping
Have similar risk
Loss reserves are measured against the
Other receivables – Portfolio characteristics, combined
grouped with petty cash amount of expected credit losses for the
with historical experience
receivables next 12 months or for the entire duration
grouping
Have similar risk
Loss reserves are measured against the
Other receivables – Portfolio characteristics, combined
amount of expected credit losses for the
grouped with other combinations with historical experience
next 12 months or for the entire duration
grouping
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
Specific portfolios and method for measuring expected credit loss
Items Basis for determination of portfolio Method for measuring expected credit loss
By referring to the historical experience of credit
losses and combining with the current situation and
Notes With similar risk characteristics, the
the forecast of the future economic situation, the
receivable – risk of bank acceptance bill is low,
comparison table of the aging of bank acceptance
Bank which is generally accepted by the
bills receivable and the expected credit loss rate of
acceptance bank
the whole duration was prepared to calculate the
expected credit loss
With reference to the historical experience of credit
losses and combined with the current situation and
Notes
the forecast of the future economic situation, the
receivable –
Have similar risk characteristics comparison table of the aging of commercial
Trade
acceptance receivables and the expected credit loss
acceptance
rate of the entire duration was prepared to calculate
the expected credit loss
Based on historical credit loss experience, the current
Accounts Merchandise sales receivables, with
situation and the forecast of future economic
receivable – similar risks, recognize expected
conditions, prepare the comparison table of overdue
Portfolio of credit losses throughout the life after
days/ages and lifetime expected credit loss rate of
affiliated initial recognition
accounts receivable, so as to calculate expected
70
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Basis for determination of portfolio Method for measuring expected credit loss
parties credit loss.
Based on historical credit loss experience, the current
Accounts
Merchandise sales receivables, with situation and the forecast of future economic
receivable –
similar risks, recognize expected conditions, prepare the comparison table of overdue
Portfolio of
credit losses throughout the life after days/ages and lifetime expected credit loss rate of
non-affiliate
initial recognition accounts receivable, so as to calculate expected
parties
credit loss.
(XI) 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.
(XII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: a. the asset must
be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets or
disposal groups; b. its sales must be highly probable, i.e., the Company has made a decision on the sale plan and has obtained a firm
purchase commitment, and the sale is expected to be completed within one year.
When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the non-current asset or
disposal group as held for sale at the acquisition date only if the requirement of “expected to be completed within one year” is met at
that date and it is highly probable that other criteria for held for sale will be met within a short period (usually within three months).
An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its plan to sell the asset or
71
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
disposal group in the circumstance that non-related party transactions fail to be completed within one year due to one of the
following reasons: a. a buyer or others unexpectedly set conditions that will extend the sale period, while the Company has taken
timely actions to respond to the conditions and expects a favorable resolution of the delaying factors within one year since the setting;
(2) a non-current asset or disposal group classified as held for sale fails to be sold within one year due to rare cases, and the Company
has taken action necessary to respond to the circumstances during the initial one-year period and the criteria for held for sale are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and remeasurement
For initial measurement and remeasurement as at the balance sheet date of a non-current asset or disposal group as held for sale,
where the carrying amount is higher than the fair value less costs to sell, the carrying amount is written down to the fair value less
costs to sell, and the write-down is recognized in profit or loss as assets impairment loss, meanwhile, provision for impairment of
assets as held for sale shall be made.
For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposal group is measured on
initial recognition at the lower of its initial measurement amount had it not been so classified and fair value less costs to sell. Apart
from the non-current asset or disposal group acquired through business combination, the difference arising from the initial
recognition of a non-current asset or disposal group at the fair value less costs to sell shall be included into profit or loss.
The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount of goodwill in the
disposal group first, and then reduce its carrying amount based on the proportion of each non-current asset’s carrying amount in the
disposal group.
No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-current assets in disposal
groups as held for sale, while interest and other expenses attributable to the liabilities of a disposal group as held for sale shall
continue to be recognized.
(2) Reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the balance sheet date, the
write-down shall be recovered, and shall be reversed not in excess of the impairment loss that has been recognized after the
non-current asset was classified as held for sale. The reversal shall be included into profit or loss. Assets impairment loss that has
been recognized before the classification is not reserved.
When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the balance sheet date, the
write-down shall be recovered, and shall be reversed not in excess of the non-current assets impairment loss that has been recognized
after the disposal group was classified as held for sale. The reversal shall be included into profit or loss. The reduced carrying amount
of goodwill and non-current assets impairment loss that has been recognized before the classification is not reserved.
The subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale, the carrying amount is
increased based on the proportion of carrying amount of each non-current assets (excluding goodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held for sale, or a
non-current asset that removed from a disposal group as held for sale shall be measured at the lower of: a. its carrying amount before
it was classified as held for sale, adjusted for any depreciation. Amortization or impairment that would have been recognized had it
not been classified as held for sale; and b. its recoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or losses shall be included
into profit or loss.
72
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(XIII)) 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 “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 remeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments 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 investments with control relationship, it is accounted for with cost method; for long-term equity investments
73
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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 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 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.
(XIV) 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.
(XV) 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 residual Annual
Useful life
Categories Depreciation method value proportion depreciation
(years)
(%) 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
74
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Estimated residual Annual
Useful life
Categories Depreciation method value proportion depreciation
(years)
(%) rate (%)
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
3. Recognition and pricing principles of fixed assets rented-in under finance lease
Finance lease is determined when one or a combination of the following conditions are satisfied: (1) the ownership has been
transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchase the leasing asset at a price that is much
lower than its fair value, so it can be reasonably determined that the lessee will take the option at the very beginning of the lease; (3)
the leasing term accounts for most time of the useful life (ordinarily accounting for 75% or higher) even if the ownership does not
transfer to the lessee; (4) the present value of the minimum amount of rent that the lessee has to pay at the first day of the lease
amounts to 90% or higher of its fair value at the same date; or the present value of the minimum amount of rent that the lessor
collects at the first day of the lease amounts to 90% or higher of its fair value at the same date; and/or (5) the leased assets are of such
a specialized nature that only the lessee can use them without major modifications.
Fixed assets rented-in under finance lease are recorded at the lower of fair value and the present value of the minimum lease payment
at the inception of the lease, and are depreciated following the depreciation policy for self-owned fixed assets.
(XVI) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic 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.
(XVII) 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
75
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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 accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used.
(XVIII) 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.
(XIX)) 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
76
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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.
(XX) 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 the following accounting periods, residual values of such items are included in profit or loss.
(XXI) 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
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
77
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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.
(XXII) 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.
(XVIII) 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 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.
78
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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.
(XIX) Government grants
Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with the
conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received
or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the
circumstance that fair value can’t be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company construct or otherwise acquire long-term assets
under requirements of government. In the circumstances that there is no specific government requirement, the Company shall
determine based on the primary condition to acquire the grants and government grants related to assets are government grants whose
primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets or recognized
as deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of
the relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold, transferred, disposed or
damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the year in which the
disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants that contain
both parts related to assets and parts related to income, in which those two parts are blurred and thus collectively classified as
government grants related to income. For government grants related to income used for compensating the related future cost,
expenses or losses of the Company are recognized as deferred income and are included in profit or loss or offset relevant cost during
the period in which the relevant cost, expenses or losses are recognized; for government grants related to income used for
compensating the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or directly
offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or offset
relevant cost based on business nature, while those not related to the ordinary course of business shall be included
into non-operating revenue or expenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for
the Company with a policy subsidised interest rate, borrowings are carried at the amount received, with relevant
borrowings cost computed based on the principal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidised interest shall offset
relevant borrowing cost.
(XXV) Deferred tax assets/Deferred tax liabilities
79
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the 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.
(XXVI) Leases
1. 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
as profit or loss in the periods in which they are incurred.
2. Finance leases
When the Company is the lessee, at the commencement of the lease term, lessees recognize finance leases as
assets and liabilities in their balance sheets at amounts equal to the lower of fair value of the leased property and
the present value of the minimum lease payments, each determined at the inception of the lease, and recognize the
minimum lease payments as the entering value of long-term payable, and treat the difference of the two as
unrecognized finance expense. Any initial direct costs of the lessee are added to the amount recognized as an asset.
The effective interest method is used to recognize finance expense of the period during the lease term.
When the Company is the lessor, at the commencement of the lease, lessor recognizes the aggregate of minimum
lease receipts and initial direct costs, each determined at the inception of the lease, as the entering value of finance
lease receivables, and recognize the unguaranteed residual value at the same time. The difference between the
80
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value, and the sum
of their present values is recognized as unrealized finance income. The effective interest method is used to
recognize finance income of the period during the lease term.
(XXVII) 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 flows is available.
(XXVIII) Other significant accounting policies and estimates
1. Recognition criteria and accounting treatment of discontinued operations
A component of the Company that has been disposed of, or is classified as held for sale and can be clearly
distinguished is recognized as a discontinued operation when it fulfills any of the following conditions:
(1) it represents a separate major line of business or a separate geographical area of operations;
(2) it is part of a related plan to dispose of a separate major line of business or a separate geographical area of
operations; or
(3) it is a subsidiary acquired exclusively with a review to resale.
(XXXIV) Significant changes in accounting policies and estimates
1. Changes in accounting policies
(1) Changes in accounting policies arising from changes in CASBEs
The Company prepared the financial statements for the year ended December 31, 2019 in accordance with “Notice of the Ministry of
Finance on Revising and Issuing Financial Statement Templates for General Enterprises” (numbered Cai Kuai [2019] 6), its
interpretations and CASBEs, and changes in accounting policies are applicable to retrospective application method. Financial
statement items and amounts significantly affected of 2018 are as follows:
Original financial statement items and amounts Revised financial statement items and amounts
Notes receivable and accounts Notes receivable 46,475,656.01
987,544,115.36
receivable Accounts receivable 941,068,459.35
Notes payable and accounts Notes payable 84,374,916.99
827,403,870.61
payable Accounts payable 743,028,953.62
Available-for-sale financial Other equity instrument
741,953.00 741,953.00
assets investments
Less:Assets impairment loss 3,030,783.16 Add:Assets impairment loss -3,030,783.16
2) The Company has adopted “CASBE 22 – Recognition and measurement of Financial Assets”, “CASBE 23 – Transfer of Financial
81
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Assets”, “CASBE 24 - Hedging” and “CASBE 37 - Presentation of Financial Instruments” (collectively, the “revised financial
instrument standard”) revised by Ministry of Finance of PRC. Pursuant to regulations on convergence between old and new standards,
no adjustment shall be made on comparable information, and the difference arising from adoption on the adopting date shall be
retrospectively adjusted into retained earnings or other comprehensive income at the beginning of the reporting period.
The revised financial instrument standard changes classification and measurement method of financial assets, and determines three
major categories of measurement: amortized cost; fair value through other comprehensive income; fair value through profit or loss.
The Company makes the above classification based on its own business model and the contractual cash flow characteristics of the
financial assets. The Company measures equity investments at fair value through profit or loss, but may make an irrevocable election
at initial recognition to measure them at fair value through other comprehensive income.
The revised financial instrument standard requires for a “expected credit loss model” instead of “incurred loss model”, which is
applicable to financial assets at amortized cost, financial assets, contract assets, lease receivable at fair value through other
comprehensive income.
2. Significant changes in accounting estimates
None.
3. Implementation of the new financial instruments guidelines, revenue standards and lease standards adjustments for the first time
implementation of the relevant financial statements at the beginning of the year
Consolidated Financial Statement
Items Dec,31 2018 Jau,1 2019 adjustments
Current assets:
Cash and bank balances 261,938,068.72 261,938,068.72
Notes receivable 46,475,656.01 46,475,656.01
Accounts receivable 941,068,459.35 941,068,459.35
Advances paid 188,848,712.69 188,848,712.69
Other receivables 33,734,948.67 33,734,948.67
Inventories 286,972,632.59 286,972,632.59
Other current assets 13,497,540.69 13,497,540.69
Total current assets 1,772,536,018.72 1,772,536,018.72
Available-for-sale financial
741,953.00 -741,953.00
assets
Long-term equity investments 183,244,080.23 183,244,080.23
Other equity instrument
741,953.00 741,953.00
investments
Investment property 8,397,113.98 8,397,113.98
Fixed assets 112,504,807.11 112,504,807.11
Construction in progress 9,472,383.76 9,472,383.76
Intangible assets 30,285,598.77 30,285,598.77
82
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Long-term prepayments 3,562,336.84 3,562,336.84
Total non-current assets 348,208,273.69 348,208,273.69
Total assets 2,120,744,292.41 2,120,744,292.41
Current liabilities: 445,010,000.00 445,010,000.00
Short-term borrowings 84,374,916.99 84,374,916.99
Notes payable 743,028,953.62 743,028,953.62
Accounts payable 259,545,648.66 259,545,648.66
Advances received 21,132,336.19 21,132,336.19
Employee benefits payable 17,230,159.02 17,230,159.02
Taxes and rates payable 55,128,492.65 55,128,492.65
Other payables 1,625,450,507.13 1,625,450,507.13
Total current liabilities 7,296,315.00 7,296,315.00
Non-current liabilities: 7,296,315.00 7,296,315.00
Deferred income 1,632,746,822.13 1,632,746,822.13
Total non-current liabilities 215,000,000.00 215,000,000.00
Total liabilities 185,374,533.85 185,374,533.85
Equity: -4,947,588.58 -4,947,588.58
Share capital/Paid-in capital 589,559.77 589,559.77
Capital reserve -40,726,776.80 -40,726,776.80
Other comprehensive income 355,289,728.24 355,289,728.24
Surplus reserve 132,707,742.04 132,707,742.04
Undistributed profit 487,997,470.28 487,997,470.28
Total equity attributable to the
2,120,744,292.41 2,120,744,292.41
parent company
4. Implementation of the new financial instrument guidelines, new lease criteria retrospective adjustment pre-comparison data
description
None.
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 16%、13%、6%
rendering of services
For housing property levied on the basis of price,
Housing property tax 1.2%,12%
housing property tax is levied at the rate of 1.2%
83
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Taxes Tax bases Tax rates
of the balance after deducting 30% of the cost; for
housing property 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
The “Company” 15%
Nanjing Mennekes Electrics Co., Ltd. 15%
Nanjing Putian Telege Intelligent Building Co., Ltd. 15%
Nanjing Putian Changle Telecommunications Equipment Co., Ltd. 15%
Nanjing Putian Datang Information Electronic Co., Ltd. 15%
Nanjing Putian Network Co., Ltd. 15%
Putian Telecommunications (H.K.) Co., Ltd. 16.5%
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 company obtained the high-tech enterprise certificate in December 2018, which is valid for 3 years and shall
pay the enterprise income tax at the rate of 15%.
The subsidiary, Nanjing Putian Telege Intelligent Building Co., Ltd. obtained high-tech enterprise certificate in December , 2017,
valid for 3 years. It is subject to the enterprise income tax at a rate of 15% .
The subsidiary, Nanjing Mennekes Electrics Co., Ltd. obtained high-tech enterprise certificate in October , 2016, valid for 3 years. It
is subject to the enterprise income tax at a rate of 15% .
The subsidiary, Nanjing Putian Changle Telecommunications Equipment Co., Ltd. obtained high-tech enterprise certificate in
October 10, 2015, valid for 3 years. It is subject to the enterprise income tax at a rate of 15% .
The subsidiary, Nanjing Putian Network Co., Ltd., obtained high-tech enterprise certificate in December 7, 2017, valid for 3 years. It
is subject to the enterprise income tax at a rate of 15% .
The subsidiary, Nanjing Putian Datang Information Electronic Co., Ltd. obtained high-tech enterprise certificate in November, 2018,
valid for 3 years. It is subject to the enterprise income tax at a rate of 15% .
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.
84
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
The subsidiaries, Nanjing Putian Datang Information Electronic Co., Ltd. and Nanjing Putian 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 3,553.38 1,886.33
Cash in bank 78,198,844.14 201,367,431.09
Other cash and bank balances 58,364,673.70 60,568,751.30
Total 136,567,071.22 261,938,068.72
(2) Details of other cash and bank balances
Items Closing balance Opening balance
Bank acceptance deposit 20,847,307.09 38,442,848.22
Guarantee money 37,517,366.61 22,125,903.08
Total 58,364,673.70 60,568,751.30
2. Notes receivable
(1) Details
1) Details of different categories
Closing balance
Book balance Provision for bad debts
Categories
% to Provision Carrying
Amount Amount proportion amount
total
(%)
Bad debts made on an individual
basis
Including: Bank acceptance
Trade acceptance
Bad debts made on a collective basis
Including: Bank acceptance 32,885,730.42 88.94 32,885,730.42
Trade acceptance 4,091,253.41 11.06 4,091,253.41
Total 36,976,983.83 100.00 36,976,983.83
Items Opening balance
85
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Book balance Provision for bad debts Carrying amount
Bank acceptance portfolio 37,837,668.81 37,837,668.81
Trade acceptance portfolio 8,637,987.20 8,637,987.20
Subtotal 46,475,656.01 46,475,656.01
(2) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 9,378,042.36 6,252,028.24
Trade acceptance 3,126,014.12
Subtotal 12,504,056.48 6,252,028.24
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.
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 with provision
made on an individual basis
Receivables with provision
1,015,892,712.42 100.00 56,556,452.96 5.90 959,336,259.46
made on a collective basis
Portfolio 1
Portfolio 2 1,015,892,712.42 100.00 56,556,452.96 5.90 959,336,259.46
Total 1,015,892,712.42 100.00 56,556,452.96 5.90 959,336,259.46
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables with provision
made on an individual basis
Receivables with provision 997,288,551.79 100.00 56,220,092.44 5.64 941,068,459.35
86
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
made on a collective basis
Portfolio 1
Portfolio 2 997,288,551.79 100.00 56,220,092.44 5.64 941,068,459.35
Total 997,288,551.79 100.00 56,220,092.44 5.64 941,068,459.35
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 769,215,633.23
1-2 years 115,804,345.06
2-3 years 55,713,805.24 5,571,380.52 10.00
3-4 years 18,835,120.82 5,650,536.25 30.00
4-5 years 15,713,782.15 6,285,512.86 40.00
5-6 years 7,805,012.96 6,244,010.37 80.00
Over 6 years 32,805,012.96 32,805,012.96 100.00
Subtotal 1,015,892,712.42 56,556,452.96
3) Bad debts disclosed by ages
Ages Closing balance
Within 1 year
1-2 years
2-3 years 5,571,380.52
Over 3 years 50,985,072.44
3-4 years 5,650,536.25
4-5 years 6,285,512.86
Over 5 years 39,049,023.33
Subtotal 56,556,452.96
(2) Provisions made, collected or reversed in current period
Increase
Items Opening balance Closing balance
Provision made Provision collected Others
Accounts receivable 56,220,092.44 319,224.33 3,900.00 -21,036.19 56,556,452.96
Subtotal 56,220,092.44 319,224.33 3,900.00 -21,036.19 56,556,452.96
Provision for bad debts made in current period totaled 319,224.33 yuan, collected totaled 3,900.00yuan and provision increased due
87
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
to fluctuations in exchange totaled -21,036.19yuan.
(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 (%)
Beijing UniStrong Science & Technology Co., Ltd. 52,167,500.00 5.14
China United Network Communications Group
29,514,969.14 2.91
Co.,Ltd. -Henan Branch
Beijing Zhongrui Haotian Information Technology
25,499,700.00 2.51
Co., Ltd.
Nanjing Hehao Communication Technology Co.,
22,940,243.35 2.26
Ltd.
Shenzhen Zhongchuang Electric Measurement
22,904,248.79 2.25
Technology Co., Ltd.
Subtotal 153,026,661.28 15.07
4. Advances paid
(1) Age analysis
Closing balance
Ages
Book balance % to total Provision for bad Carrying amount
debts
Within 1 year 21,515,674.72 71.92 21,515,674.72
1-2 years 3,553,031.52 11.88 3,553,031.52
2-3 years 1,139,873.30 3.81 1,139,873.30
Over 3 years 3,706,729.48 12.39 3,706,729.48
Total 29,915,309.02 100.00 29,915,309.02
(Continued)
Opening balance
Ages
Book balance % to total Provision for bad Carrying amount
debts
Within 1 year 179,718,854.19 95.17 179,718,854.19
1-2 years 3,256,231.30 1.72 3,256,231.30
2-3 years 1,176,772.69 0.62 1,176,772.69
Over 3 years 4,696,854.51 2.49 4,696,854.51
Total 188,848,712.69 100.00 188,848,712.69
(2) Details of the top 5 debtors with largest balances
Debtors Book balance Proportion to the total balance of
advances paid (%)
88
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Debtors Book balance Proportion to the total balance of
advances paid (%)
Jiangsu Sainty Machinery IMP.&Co.,Ltd. 7,342,908.43 24.55
Shenzhen KTC Commercial Display Technology
894,150.00 2.99
Co., Ltd.
Xuzhou hengxun network technology Co., Ltd. 881,472.90 2.95
Jiangsu huihong intelligent engineering Co. Ltd. 746,549.33 2.50
Erdos Tianjin Electric Co., Ltd. 618,750.00 2.07
Subtotal 10,483,830.66 35.05
5. Other receivables
(1) Details
1) Details on categories
Closing balance
Book balance Provision for bad debts
Categories
Carrying
Provision
Amount % to Amount amount
proportion
total
(%)
Receivables with provision
28,912,122.71 42.33 28,912,122.71 100.00
made on an individual basis
Including: Interest receivable
Dividend receivable
Other receivables 28,912,122.71 42.33 28,912,122.71 100.00
Receivables with provision
made on a collective basis 39,384,063.40 57.67 5,180,552.84 13.15 34,203,510.56
Including: Interest receivable
Dividend receivable
Other receivables 39,384,063.40 57.67 5,180,552.84 13.15 34,203,510.56
Portfolio 1
Portfolio 2 39,384,063.40 57.67 5,180,552.84 13.15 34,203,510.56
Total 68,296,186.11 100.00 34,092,675.55 49.92 34,203,510.56
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Carrying
Provision
Amount % to Amount amount
proportion
total
(%)
Receivables with provision
28,912,122.71 42.85 28,912,122.71 100.00
made on an individual basis
Including: Interest receivable
89
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Opening balance
Book balance Provision for bad debts
Categories
Carrying
Provision
Amount % to Amount amount
proportion
total
(%)
Dividend receivable
Other receivables 28,912,122.71 42.85 28,912,122.71 100.00
Receivables with provision
made on a collective basis 38,562,293.97 57.15 4,827,345.30 12.52 33,734,948.67
Including: Interest receivable
Dividend receivable
Other receivables 38,562,293.97 57.15 4,827,345.30 12.52 33,734,948.67
Portfolio 1
Portfolio 2 38,562,293.97 57.15 4,827,345.30 12.52 33,734,948.67
Total 67,474,416.68 100.00 33,739,468.01 50.00 33,734,948.67
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
With long age
Beijing Likangpu Communication 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) Other receivables with provision made on a collective basis
Closing balance
Ages Provision
Book balance Provision for bad debts
proportion (%)
Temporary advance
7,674,156.55 2,120,925.66 27.64
payment receivable
Deposits 24,776,510.58 2,037,288.82 8.22
Funds for business 1,148,198.17 92,636.03 8.07
Others 5,785,198.10 929,702.33 16.07
Subtotal 39,384,063.40 5,180,552.84
4)Provision for bad debts
Level 1 Level 2 Level 3
Expected credit loss Expected credit loss for the
Ages Expected credit losses in Total
for the entire duration entire duration (credit loss
the next 12 months
(no credit loss) has occurred)
Balance at 215,395.92 4,611,949.38 4,827,345.30
90
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Level 1 Level 2 Level 3
Expected credit loss Expected credit loss for the
Ages Expected credit losses in Total
for the entire duration entire duration (credit loss
the next 12 months
(no credit loss) has occurred)
Jau1,2019
Transfer level 2
Transfer level 3 215,395.92 215,395.92
Reversed level 2
Reversed level 1
Provision made 232,406.89 346,177.30 578,584.19
Provision Reserved 10,000.00 10,000.00
Other changes -19.27 -19.27
Balance at
222,426.16 4,958,126.68 5,180,552.84
Jun30,2019
5) Bad debts disclosed by ages
Ages Closing balance
Within 1 year
1-2 years
2-3 years 222,426.16
Over 3 years 4,958,126.68
3-4 years 268,083.90
4-5 years 103,949.20
Over 5 years 4,586,093.58
Subtotal 5,180,552.84
(2) Provisions made, collected or reversed in current period
Increase
Items Opening balance Closing balance
Provision made Provision collected Others
Other receivables 33,739,468.01 363,188.27 10,000.00 -19.27 34,092,675.55
Subtotal 33,739,468.01 363,188.27 10,000.00 -19.27 34,092,675.55
Provision for bad debts made in current period totaled363,188.27 yuan, collected totaled 10,000.00 yuan, and provision increased due
to fluctuations in exchange totaled -19.27 yuan.
(3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 36,354,429.26 33,879,523.33
91
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Nature of receivables Closing balance Opening balance
Deposits 25,008,360.58 24,126,517.87
Funds for business 1,793,318.17 2,652,720.79
Others 5,140,078.10 6,815,654.69
Total 68,296,186.11 67,474,416.68
(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 5 years 42.33 28,912,122.71
Equipment Co., Ltd. receivable
Ping An International
Financial Leasing Co., Deposits 4,000,000.00 Within 1 year 5.86 200,000.00
Ltd.
Haitong Unitrust
International Leasing Deposits 2,775,420.00 Within 1 year 4.06 138,771.00
Co.,Ltd.
China Potevio 1-3 years
Deposits 1,938,000.00 2.84 96,900.00
Information Industry Inc.
Far East International Within 1 year
Deposits 1,578,947.37 2.31 78,947.37
Leasing Co.,Ltd.
Subtotal 39,204,490.08 57.40 29,426,741.08
6. Inventories
(1) Details
Closing balance Opening balance
Items Book
Provision for Carrying amount Book balance Provision for Carrying amount
balance write-down write-down
Raw materials 78,124,583.39 3,401,987.55 74,695,978.70 84,431,224.04 3,401,987.55 81,029,236.49
Work in process 9,029,205.27 9,029,205.27 33,004,830.02 33,004,830.02
Goods on hand 112,971,236.01 7,337,485.59 105,633,750.42 80,895,523.20 7,337,485.59 73,558,037.61
Merchandise shipped 74,653,070.77 13,804,319.56 60,875,368.35 108,005,683.58 13,804,319.56 94,201,364.02
Materials in
6,056,552.41 804,691.99 5,251,860.42 5,983,856.44 804,691.99 5,179,164.45
consignors
Total 280,834,647.85 25,348,484.69 255,486,163.16 312,321,117.28 25,348,484.69 286,972,632.59
(2) Provision for inventory write-down
Increase Decrease
Items Opening balance Closing balance
Provision Others Reversal or written-off Others
Raw materials 3,401,987.55 3,401,987.55
Goods on hand 7,337,485.59 7,337,485.59
Goods dispatched 13,804,319.56 13,804,319.56
92
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Increase Decrease
Items Opening balance Closing balance
Provision Others Reversal or written-off Others
Materials on consignment for further processing 804,691.99 804,691.99
Subtotal 25,348,484.69 25,348,484.69
7. Other current assets
Items Closing balance Opening balance
Input VAT to be credited 17,477,582.88 13,497,540.69
Advance payment of income tax 103,082.29
Total 17,580,665.17 13,497,540.69
8. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Book balance Provision for
Carrying amount Carrying amount
impairment impairment
Investments in
associates 10,430,784.30 10,430,784.30 11,128,318.34 11,128,318.34
Investments in
joint ventures 171,187,202.80 171,187,202.80 172,115,761.89 172,115,761.89
Total 181,617,987.10 181,617,987.10 183,244,080.23 183,244,080.23
(2) Details
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
11,128,318.34 -697,534.04
Network Co., Ltd.
Subtotal 11,128,318.34 -697,534.04
Associates
Nanjing Putian Telege Cable
1,183,862.97 1,183,862.97
Co., Ltd.
Potevio Hi-tech Industry Co.,
170,931,898.92 255,303.88
Ltd.
Subtotal 172,115,761.89 1,183,862.97 255,303.88
Total 183,244,080.23 1,183,862.97 -442,230.16
(Continued)
Investees Increase/decrease Closing balance Closing
93
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Cash balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Joint ventures 10,430,784.30
SEI-Nanjing Potevio
10,430,784.30
Optical Network Co., Ltd.
Subtotal
Associates
Nanjing Putian Telege
Cable Co., Ltd.
Potevio Hi-tech Industry
171,187,202.80
Co., Ltd.
Subtotal 171,187,202.80
Total 181,617,987.10
9. Other equity instrument investments
(1) Details
Accumulated amount of gains or
losses transferred from other
Items Closing January 1, Dividend comprehensive income to
balance 2018 income retained earnings
Amount Reasons
Nanjing Yuhua
420,915.00 420,915.00
Electroplating Factory
Hangzhou Honyar Electrical
321,038.00 321,038.00
Co.,Ltd.
Beijing Likangpu
Communication Equipment
Co., Ltd.
Subtotal 741,953.00 741,953.00
(2) Reasons for equity instrument investments designated as at fair value through other comprehensive income
The company's equity instrument investment is an investment that the company plans to hold for a long time for strategic purposes,
so the company designates it as a financial asset measured at fair value and whose changes are included in other comprehensive
income.
[Note]: Beijing Likangpu Communication Equipment Co., Ltd. by the end of 2007 has become a serious insolvent situation, remain
closed, since 2008, no business continues today, October 2007, the Beijing municipal administration of industry and commerce
issued the license of the decision and asked the company liquidation in accordance with the law, according to “CASBE 33 -
Consolidated Financial Statements”, relevant provisions of the company in 2008 began to no longer be included in the annual report
consolidated range, which has been submitted to the China Potevio Information Industry Inc. and the state-owned assets supervision
and administration for the record.
10. Investment property
94
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Buildings and structures Land use right Total
Cost
Opening balance 18,646,397.35 3,642,147.87 22,288,545.22
Increase
Decrease
1) Transferred into fixed assets
Closing balance 18,646,397.35 3,642,147.87 22,288,545.22
Accumulated depreciation and
amortization
Opening balance 10,164,478.73 1,884,534.51 12,049,013.24
Increase 233,471.67 59,980.32 293,451.99
1) Accrual or amortization 233,471.67 59,980.32 293,451.99
Decrease
1) Transferred into fixed assets
Closing balance 10,397,950.40 1,944,514.83 12,342,465.23
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 6,406,028.95 1,697,633.04 8,103,661.99
Opening balance 6,639,500.62 1,757,613.36 8,397,113.98
11. Fixed assets
(1) Details
Office
Items Buildings and Machinery Electronic Total
Transport facilities equipment and
structures equipment equipment
others
Cost
Opening balance 146,734,468.68 47,510,328.82 12,956,558.48 7,377,179.98 46,466,540.34 261,045,076.30
Increase 1,414,689.30 1,651,396.01 96,322.28 90,938.96 3,253,346.55
1) Acquisition 1,651,396.01 96,322.28 90,938.96 1,838,657.25
2) Transferred in
from construction in 1,414,689.30 1,414,689.30
progress
Decrease 2,728,393.48 1,591,072.72 325,115.25 253,492.00 4,898,073.45
95
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Office
Items Buildings and Machinery Electronic Total
Transport facilities equipment and
structures equipment equipment
others
1) Disposal/scrap 2,728,393.48 1,591,072.72 325,115.25 253,492.00 4,898,073.45
Closing balance 148,149,157.98 46,433,331.35 11,365,485.76 7,148,387.01 46,303,987.30 259,400,349.40
Accumulated depreciation
Opening balance 50,615,949.47 37,030,086.33 11,631,222.35 5,825,140.46 42,701,045.00 147,803,443.61
Increase 2,457,450.35 952,404.53 234,157.15 623,511.43 500,825.74 4,768,349.20
1) Accrual 2,457,450.35 952,404.53 234,157.15 623,511.43 500,825.74 4,768,349.20
2) Transferred in
from construction in
progress
Decrease 2,361,925.33 1,549,003.25 311,224.63 245,887.24 4,468,040.45
1) Disposal/scrap 2,361,925.33 1,549,003.25 311,224.63 245,887.24 4,468,040.45
Closing balance 53,073,399.82 35,620,565.53 10,316,376.25 6,137,427.26 42,955,983.50 148,103,752.36
Provision for impairment
Opening balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Increase
Decrease
Closing balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Carrying amount
Closing balance 94,536,634.16 10,801,902.80 1,049,109.51 999,911.40 3,172,213.59 110,559,771.46
Opening balance 95,579,395.21 10,469,379.47 1,325,336.13 1,540,991.17 3,589,705.13 112,504,807.11
(2) Fixed assets temporarily idle
Items Cost Accumulated Provision for
Carrying amount
depreciation impairment
Machinery equipment 208,085.00 192,141.10 11,048.35 4,895.55
Transport facilities 225,000.00 218,250.00 6,750.00
Electronic equipment 36,000.00 34,920.00 1,080.00
Office equipment and others 370,885.18 184,349.93 175,408.71 11,126.54
Subtotal 839,970.18 629,661.03 186,457.06 23,852.09
(3) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Buildings and structures 2,455,263.86 Not applicable for allocated land
Buildings and structures 31,920,799.34 Under procedure
Subtotal 34,376,063.20
96
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
12. Construction in progress
(1) Details
Items Closing balance Opening balance
Construction in progress 17,268,676.17 9,472,383.76
Total 17,268,676.17 9,472,383.76
(2) Construction in progress
1) Details
Closing balance Opening balance
Projects
Provision for Book balance Provision for
Book balance Carrying amount Carrying amount
impairment impairment
Nanjing putian
science and
technology pioneer
park intelligent 5,781,757.54 5,781,757.54 5,781,757.54 5,781,757.54
construction related
building intelligent
equipment.
Reconstruction of
1,160,141.27 1,160,141.27
distribution building
Nanjing hao Ming
litong information
58,135.34 58,135.34 58,135.34 58,135.34
technology Co.,
Ltd.
Nanjing Putian
Datang Information
Electronic Co., Ltd. 11,284,562.74 11,284,562.74 2,472,349.61 2,472,349.61
-Product
development center
Block c-2, putian
No.1, geological
engineering and 44,339.62 44,339.62
exploration institute
of jiangsu province
Comprehensive
pipeline
70,754.72 70,754.72
construction of
putian pioneering
Putian science and
technology
29,126.21 29,126.21
pioneering park
planning
Total 17,268,676.17 17,268,676.17 9,472,383.76 9,472,383.76
(2) Changes in significant projects
Projects Budgets Opening Increase Transferred to Other
Closing balance
balance fixed assets decrease
Nanjing putian
science and
technology pioneer
9,920,000.00 5,781,757.54 5,781,757.54
park intelligent park
construction related
building intelligent
97
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Projects Budgets Opening Increase Transferred to Other
Closing balance
balance fixed assets decrease
equipment
Nanjing Putian
Datang Information
Electronic Co., Ltd. 20,000,000.00 2,472,349.61 8,812,213.13 11,284,562.74
-Product
development center
Subtotal 25,920,000.00 8,254,107.15 8,812,213.13 17,066,320.28
(Continued)
Completio Accumulated Amount of
Accumulate n Annual
Projects amount of borrowing cost Fund
d investment percentage capitalizatio
borrowing cost capitalization in source
to budget n rate (%)
(%) capitalization current period
Nanjing putian science and
technology pioneer park Self-ow
intelligent park construction 58.28 60.00 ned
related building intelligent fund
equipment
Nanjing Putian Datang
Self-ow
Information Electronic Co.,
56.42 60.00 ned
Ltd. -Product development
fund
center
Subtotal
13. Intangible assets
Items Software Land use right Patent right Non-patent Total
technology
Cost
Opening balance 34,638,346.69 11,978,112.74 607,500.00 4,560,000.00 51,783,959.43
Increase
1) Acquisition
2) Internal research
and development
Decrease
1) Disposal
Closing balance 34,638,346.69 11,978,112.74 607,500.00 4,560,000.00 51,783,959.43
Accumulated
amortization
Opening balance 6,865,500.72 9,465,359.94 607,500.00 4,560,000.00 21,498,360.66
Increase 431,228.92 554,348.70 985,577.62
1) Accrual 431,228.92 554,348.70 985,577.62
Decrease
1) Disposal
Closing balance 7,296,729.64 10,019,708.64 607,500.00 4,560,000.00 22,483,938.28
Carrying amount
98
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Software Land use right Patent right Non-patent Total
technology
Closing balance 27,341,617.05 1,958,404.10 29,300,021.15
Opening balance 27,772,845.97 2,512,752.80 30,285,598.77
14. Long-term prepayments
Items Opening balance Increase Amortization Other decreases Closing balance
Reconstruction of
789,761.03 106,524.99 683,236.04
canteen
Reconstruction of
1,262,446.69 131,003.64 455,399.48 938,050.85
office building
Others 1,510,129.12 59,433.96 153,098.80 1,416,464.28
Total 3,562,336.84 190,437.60 715,023.27 3,037,751.17
15. Short-term borrowings
Items Closing balance Opening balance
Pledged borrowings 290,670,651.05 250,000,000.00
Mortgaged borrowings 48,820,000.00 65,010,000.00
Secured borrowings 124,692,750.00 130,000,000.00
Total 464,183,401.05 445,010,000.00
16. Notes payable
Items Closing balance Opening balance
Trade acceptance 10,409,478.80 15,932,068.77
Bank acceptance 80,829,295.95 68,442,848.22
Total 91,238,774.75 84,374,916.99
17. Accounts payable
(1) Details
Items Closing balance Opening balance
Purchase of materials 673,053,507.64 742,212,386.80
Project payment 22,443,232.62 816,566.82
Total 695,496,740.26 743,028,953.62
(2) Significant accounts payable over 1 year
Items Closing balance Reasons for unsettlement
Jiangsu Sainty Machinery IMP.&Co.,Ltd. 30,253,013.65 Settlement is not completed
China Potevio Information Industry Inc. 19,641,228.50 Settlement is not completed
99
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Closing balance Reasons for unsettlement
SEI-Nanjing Potevio Optical Network Settlement is not completed
18,589,974.96
Co., Ltd.
POLYCOM communications technology Settlement is not completed
17,737,438.13
(Beijing) Co.,Ltd.
Beijing LDL Technology Co.,Ltd. 4,917,823.33 Settlement is not completed
Subtotal 91,139,478.57
18. Advances received
(1) Details
Items Closing balance Opening balance
Payment for goods 33,841,758.85 259,545,648.66
Total 33,841,758.85 259,545,648.66
19. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 21,132,336.19 114,390,630.00 114,263,499.25 21,259,466.94
Post-employment benefits -
13,903,520.86 13,903,520.86
defined benefit plan
Total 21,132,336.19 128,294,150.86 128,167,020.11 21,259,466.94
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance and
11,254,526.62 86,829,481.55 87,760,265.29 10,323,742.88
subsidy
Employee welfare fund 5,135,787.68 5,049,623.58 86,164.10
Social insurance premium 7,251,507.99 7,251,507.99
Including: Medicare premium 6,668,985.01 6,668,985.01
Occupational injuries
145,471.57 145,471.57
premium
Maternity premium 437,051.41 437,051.41
Housing provident fund 156,533.23 5,569,529.31 5,569,529.31 156,533.23
Trade union fund and
9,721,276.34 2,300,465.23 1,349,391.60 10,672,349.97
employee education fund
Compensation for
1,702,830.64 1,702,830.64
termination of labor relations
Others 5,601,027.60 5,580,350.84 20,676.76
Subtotal 21,132,336.19 114,390,630.00 114,263,499.25 21,259,466.94
(3) Details of defined benefit plan
100
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Opening balance Increase Decrease Closing balance
Basic endowment insurance
11,836,850.07 11,836,850.07
premium
Unemployment insurance
531,469.10 531,469.10
premium
Company annuity payment 1,535,201.69 1,535,201.69
Subtotal 13,903,520.86 13,903,520.86
20. Taxes and rates payable
Items Closing balance Opening balance
VAT 1,042,577.52 11,419,693.22
Enterprise income tax 2,314,752.33 3,685,037.85
Individual income tax -143,774.49 233,032.97
Urban maintenance and
155,806.29 900,385.94
construction tax
Housing property tax 210,621.97 248,142.34
Land use tax 81,754.17 83,316.67
Education surcharge 15,824.82 655,635.04
Other taxes 159,058.71 4,914.99
Total 3,836,621.32 17,230,159.02
21. Other payables
(1) Details
Items Closing balance Opening balance
Interest payable 396,333.33 454,333.33
Dividend payable 2,018,213.38 2,018,213.38
Other payables 39,442,705.33 52,655,945.94
Total 41,857,252.04 55,128,492.65
(2) Interest payable
Items Closing balance Opening balance
Short-term borrowings interest 396,333.33 454,333.33
Subtotal 396,333.33 454,333.33
(3) Dividend payable
Items Closing balance Opening balance
Dividend of ordinary shares 2,018,213.38 2,018,213.38
Subtotal 2,018,213.38 2,018,213.38
(4) Other payables
101
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Closing balance Opening balance
Deposits 23,393,548.33 23,338,514.42
Temporary receipts payable 1,708,699.79 18,165,474.04
Unsettled installation cost 4,980,031.75 5,611,697.12
Operating expenses 6,403,540.74 2,899,584.68
Others 2,956,884.72 2,640,675.68
Total 39,442,705.33 52,655,945.94
22. Long-term payable
(1) Details
Items Closing balance Opening balance
Long-term payable 28,947,368.42
Total 28,947,368.42
(2) Long-term payable
1) Details
Items Closing balance Opening balance
Finance lease payable 28,947,368.42
Total 28,947,368.42
23. Deferred income
(1) Details
Items Opening balance Increase Decrease Closing balance
Government grants 7,296,315.00 1,291,442.00 6,004,873.00
Total 7,296,315.00 1,291,442.00 6,004,873.00
(2) Other remarks
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.
24. Share capital
Movements
Items Opening balance Reserve Closing balance
Issue of Bonus Others Subtotal
transferred to
new shares shares
shares
Total shares 215,000,000.00 215,000,000.00
25. Capital reserve
102
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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
26. Other comprehensive income (OCI)
Current period cumulative
Items Opening balance Current period Less: Attributable to Attributable to Closing balance
cumulative before income parent non-controllin
income tax tax company g interest
Items to be
reclassified
-4,947,588.58 -72,101.33 -64,891.20 -7,210.13 -5,012,479.78
subsequently to
profit or loss
Including:
-4,947,588.58 -72,101.33 -64,891.20 -7,210.13 -5,012,479.78
Translation reserve
Total -4,947,588.58 -72,101.33 -64,891.20 -7,210.13 -5,012,479.78
27. 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
28. Undistributed profit
(1) Details
Preceding period
Items Current period cumulative
comparative
Balance before adjustment at the end of preceding
-40,726,776.80 -44,605,902.63
period
Add: Increase due to adjustment (or less: decrease) -1,980,089.01
Opening balance after adjustment -40,726,776.80 -46,585,991.64
Add: Net profit attributable to owners of the parent -57,528,524.88 5,859,214.84
company
Closing balance -98,255,301.68 -40,726,776.80
(2) Other remarks
The undistributed profit at the beginning of the period was affected by RMB -44,284,870.45 due to changes in accounting policies.
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
Items Current period cumulative Preceding period comparative
103
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Income Cost Income Cost
Revenue from main
748,403,711.97 627,020,995.66 934,501,599.83 796,224,938.08
operations
Revenue from other
8,793,659.83 6,074,772.41 32,349,005.12 28,133,757.24
operations
Total 757,197,371.80 633,095,768.07 966,850,604.95 824,358,695.32
2. Taxes and surcharge for operations
Items Current period cumulative Preceding period comparative
Urban maintenance and 2,182,407.41
1,777,930.30
construction tax
Education surcharge 1,269,818.71 2,054,225.98
Housing property tax 557,385.97 749,055.08
Land use tax 422,897.78 320,919.70
Other taxes 465,150.92 357,642.37
Total 4,493,183.68 5,664,250.54
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 39,112,434.18 40,217,290.65
Transport fees and transport
10,243,144.78 7,900,716.87
damages
Business hospitality 10,874,241.76 12,549,783.07
Travelling expenses 6,968,112.26 7,876,538.22
Office expenses 1,360,197.08 2,593,640.68
Sales service charges 1,741,668.30 1,658,518.68
Promotion expenses 324,310.03 1,002,873.79
Conference expenses 766,545.15 720,798.25
Equipment maintain fees 61,318.09 345,262.15
Others 7,061,490.42 4,830,761.28
Total 78,513,462.05 79,696,183.64
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 31,499,550.76 29,511,436.71
Consulting, agency fee 2,715,146.65 3,131,873.17
Depreciation and amortization 3,344,059.93 2,348,170.20
Office expenses 2,705,032.24 1,987,484.94
104
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Current period cumulative Preceding period comparative
Lease expenses 900,914.93 1,477,494.62
Travelling expense 705,272.98 1,732,042.57
Business hospitality 1,167,004.52 1,351,907.52
Funds for Party Construction 610,733.18
Others 3,611,860.48 5,850,165.54
Total 47,259,575.67 47,390,575.27
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 29,168,313.31 23,171,707.81
Intermediate test expenses 8,469.63 2,135,693.09
Travelling expense 1,071,110.21 1,948,834.81
Material used 557,435.00 4,615,230.61
Depreciation and amortization 776,073.03 910,835.79
Commissioned development 842,161.13 698,345.52
Others 3,485,478.18 2,917,459.17
Total 35,909,040.49 36,398,106.80
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenditures 12,296,091.86 11,625,553.62
Less: Interest income 2,400,422.53 1,692,017.07
Losses on foreign exchange 7,644.23 18,361.79
Handling charges 454,996.92 246,567.05
Financing charges 5,465,496.17
Total 15,823,806.65 10,198,465.39
7. Other income
Items Current period Preceding period Amount included in
cumulative comparative non-recurring profit or loss
Government grants
6,006,842.30 5,799,343.86 3,456,342.00
related to income
Total 6,006,842.30 5,799,343.86 3,456,342.00
8. Investment income
105
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments -442,230.16 407,793.10
under equity method
Total -442,230.16 407,793.10
9. Credit impairment loss
Items Current period cumulative
Bad debts -668,512.60
Total -668,512.60
10. Assets impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -3,030,783.16
Inventory write-down loss
Total -3,030,783.16
11. Gains on disposal of assets
The amount included in the
Current period Preceding period
Items current non-recurring profit
cumulative comparative
and loss.
Gains on disposal of 98,840.67 30,156,818.80 98,840.67
non-current assets
Total 98,840.67 30,156,818.80 98,840.67
12. Non-operating revenue
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Government grants 300,000.00 2,375,370.56 300,000.00
Unpayable payables 891,670.89 225,371.60 891,670.89
Fine income 12,300.00 1,000.00 12,300.00
Others 108,144.28 224,111.99 108,144.28
Total 1,312,115.17 2,825,854.15 1,312,115.17
13. Non-operating expenditures
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Fines expenditures 444.60 135,029.97 444.60
106
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Donation expenditures 18,845.00 97,000.00 18,845.00
Disposal of fixed assets 386.54 386.54
Others 218,975.90 76,556.03 218,975.90
Total 238,652.04 308,586.00 238,652.04
14. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax expenses 2,066,779.65 1,646,117.70
Total 2,066,779.65 1,646,117.70
(2) Reconciliation of accounting profit to income tax expenses
Items Current period cumulative Preceding period comparative
Profit before tax -51,829,061.47 -1,005,231.26
Income tax expenses based on statutory -251,307.82
-7,774,359.22
tax rate applicable to the parent company
Effect of different tax rate applicable to -874,737.23
-38,556.99
subsidiaries
Effect of prior income tax reconciliation -280,669.75 67,935.55
Effect of non-taxable income 114,572.30 -101,948.28
Effect of non-deductible costs, expenses 1,826,473.01
and losses
Effect of deducible temporary differences
or deductible losses not recognized as -2,407,065.64
deferred income tax assets
Effect of deductible temporary difference
or the deductible loss of deferred income 7,620,079.35
tax assets in the current period
Deduction of R&D expenditures 16,531,798.36 -4,233,311.26
Income tax expenses -6,486,005.05 1,646,117.70
(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 1,904,900.00 4,377,764.52
Interest income 2,391,843.99 1,692,017.07
Temporary receipts and recovery of
28,106,277.94 28,106,277.94
temporary payment
Others 1,698,242.68 1,698,242.68
107
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Current period cumulative Preceding period comparative
Total 34,101,264.61 37,651,747.79
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Expenses by cash payment 40,048,152.96 52,338,653.48
Temporary payment and repayment of 62,678,023.35
37,196,104.12
temporary receipts
Others 1,095,096.63 1,074,094.19
Total 78,339,353.71 116,090,771.02
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 -53,895,841.12 -2,651,348.96
Add: Provision for assets impairment loss 3,030,783.16
Credit impairment loss 668,512.60
Depreciation of fixed assets, oil and gas assets, 5,073,524.74
4,768,349.20
productive biological assets
Amortization of intangible assets 985,577.62 692,753.77
Amortization of long-term prepayments 715,023.27 1,387,749.95
Loss on disposal of fixed assets, intangible assets and -30,156,818.80
-98,840.67
other non-current assets (Less: gains)
Fixed assets retirement loss (Less: gains)
Losses on changes in fair value (Less: gains)
Financial expenses (Less: gains) 17,761,588.03 11,625,553.62
Investments losses (Less: gains) 442,230.16 -407,793.10
Decrease of deferred tax assets (Less: increase)
Increase of deferred tax liabilities (Less: decrease)
Decrease in inventories (Less: increase) 31,486,469.43 141,110,892.98
Decrease in operating receivables (Less: increase) 146,744,343.43 -263,703,522.06
Increase of operating payables (Less: decrease) -313,674,142.69 -91,277,004.23
Others
Net cash flow from operating activities -164,096,730.74 -225,275,228.93
(2) Significant investing and financing activities not related
to cash receipts and payments:
108
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Supplement information Current period Preceding period
cumulative comparative
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 78,202,397.52 157,235,827.99
Less: Cash at the beginning of the period 201,369,317.42 311,056,919.17
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 -123,166,919.90 -153,821,091.18
(2) Cash and cash equivalents
Items Closing balance Opening balance
1) Cash 78,202,397.52 201,369,317.42
Including: Cash on hand 3,553.38 1,886.33
Cash in bank on demand for payment 78,198,844.14 201,367,431.09
2) Cash equivalents
Including: Bond investments maturing within three months 78,202,397.52 201,369,317.42
3) Cash and cash equivalents at the end of the period 78,202,397.52 201,369,317.42
Including: Cash and cash equivalents of parent company or
subsidiaries with use restrictions
(IV) Others
1. Assets with title or use right restrictions
Items Closing carrying amount Reasons for restrictions
Deposit for acceptance and deposit
Cash and bank balances 58,364,673.70
for L/G
Accounts receivable 98,424,500.00 Pledge borrowings
Providing mortgaged guarantee for
Fixed assets 63,341,997.31
borrowings
Providing mortgaged guarantee for
Intangible assets 7,178,053.74
borrowings
Providing mortgaged guarantee for
Investment property 2,184,290.01
borrowings
Total 229,493,514.76
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 Telege Intelligent Building Co., Ltd.
amounting to 4.80 million yuan, Nanjing South Telecommunications Co., Ltd. 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.
109
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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 foreign Exchange rate RMB equivalent
currencies
Cash and bank balances
Including: USD 635,133.18 6.8747 4,366,350.07
EUR 522.27 7.8170 4,082.58
HKD 603,229.93 0.8797 530,661.37
GBP 208.79 8.7113 1,818.83
3. Government grants
1. Details
(1) Government grants related to income and used to compensate future relevant costs, expenses or losses
Opening Presented Closing
Presented
Items balance of under balance of Related to assets/income
Increase under other
deferred non-operating deferred
income
income income income
Zombie enterprise
6,296,315.00 1,291,442.00 5,004,873.00 Related to income
financial aid.
Government
subsidies on
technical
1,000,000.00 1,000,000.00 Related to income
development plans
and technical
funding
Subtotal 7,296,315.00 1,291,442.00 6,004,873.00
(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 2,550,500.30 Other income
High-tech enterprise reward 1,250,000.00 Other income
Enterprise special funds 600,000.00 Other income
Provincial award for enterprise Non-operating revenue
300,000.00
research and development in 2018
R&D expenditure award by Nanjing Other income
10,000.00
Yuhuatai district
Science and technology award by Other income
300,000.00
Nanjing Qinhuai district
Patent subsidiaries 4,900.00 Other income
Subtotal 5,015,400.30
VI. Interest in other entities
(I) Interest in significant subsidiaries
110
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
1. Significant subsidiaries
(1) Basis information
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
Nanjing Putian Changle
Nanjing Nanjing Manufacture Set up
Telecommunications 50.70
City City
Equipment Co., Ltd.
Nanjing Putian Telege
Nanjing Nanjing Manufacture Set up
Intelligent Building 45.77
City City
Co., Ltd.
Nanjing South
Nanjing Nanjing Manufacture Set up
Telecommunications 96.99 1.38
City City
Co., Ltd.
Business
combination
Nanjing Mennekes Nanjing Nanjing Manufacture not under
75.00
Electrics Co., Ltd. City City
common
control
Nanjing Putian Nanjing Nanjing Manufacture Set up
78.00
Network Co., Ltd. City City
Business
combination
Nanjing Putian Datang
Nanjing Nanjing Manufacture not under
Information Electronic 40.00
City City
Co., Ltd. common
control
Nanjing Putian
Nanjing Nanjing Manufacture Set up
Communication 70.00
City City
Technology Co., Ltd.
Nanjing Putian
Nanjing Nanjing Manufacture Set up
Wangzhi Electronic 100.00
City City
Co., Ltd.
Nanjing Bada
Nanjing Nanjing Manufacture Set up
Communication 60.00
City City
Equipment Co., Ltd.
Nanjing Putian
Nanjing Nanjing Manufacture Set up
Information Technology 100.00
City City
Co., Ltd.
Putian Communications Hong Hong Commercial Set up
90.00
(Hong Kong) Co., Ltd. Kong Kong
(2) Other remarks
1) 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 Co., 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 Co., Ltd.’s related activity. The Company has
the ability to impact the amount of return and control over Nanjing Putian Telege Intelligent Building Co., Ltd.
111
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
2)The Company holds 40% equity of Nanjing Putian Datang Information Electronic Co., Ltd. The Company signed the agreement
with 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. 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 Co., 1.63% 23,873.64 1,702,532.74
Ltd.
Nanjing Putian Telege
54.233% 5,165,421.76 72,244,873.26
Intelligent Building Co., Ltd.
3. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
Closing balance
Subsidiaries Current
Current assets Non-current Total assets Non-current Total liabilities
assets liabilities liabilities
Nanjing South
Telecommunications 295,585,309.01 4,015,365.80 299,600,674.81 195,150,813.60 195,150,813.60
Co., Ltd.
Nanjing Putian
Telege Intelligent 215,284,703.52 35,379,077.28 250,663,780.80 117,450,779.38 117,450,779.38
Building Co., Ltd.
(Continued)
Opening balance
Subsidiaries Current
Current assets Non-current Total assets Non-current Total liabilities
assets liabilities liabilities
Nanjing South
Telecommunications 342,548,804.01 4,049,249.40 346,598,053.41 243,612,832.61 243,612,832.61
Co., Ltd.
Nanjing Putian
Telege Intelligent 263,041,060.54 37,450,502.90 300,491,563.44 176,803,061.42 176,803,061.42
Building 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 161,078,673.03 1,464,640.41 1,464,640.41 -40,474,734.54
Co., Ltd.
Nanjing Putian Telege
172,230,459.10 9,524,499.40 9,524,499.40 -67,113,843.29
Intelligent Building
112
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Current period cumulative
Subsidiaries Total Cash flows from
Operating Net profit comprehensive operating
revenue
income activities
Co., Ltd.
(Continued)
Preceding period comparative
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
Co., Ltd.
Nanjing Putian Telege
Intelligent Building 175,165,797.66 7,863,323.16 7,863,323.16 -63,303,867.53
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
Potevio Hi-tech Nanjing Nanjing Industrial park venue 49.64 Equity
Industry Co., Ltd. City City rental management etc. method
2. 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 160,770,173.48 161,743,478.51
Non-current assets 190,849,670.82 190,882,106.08
Total assets 351,619,844.30 352,625,584.59
Current liabilities 6,788,321.97 8,282,339.46
Non-current liabilities
Total liabilities 6,788,321.97 8,282,339.46
Non-controlling interest
Equity attributable to owners of
344,343,245.13 344,343,245.13
parent company
Proportionate share in net assets 171,187,202.80 170,931,898.92
Adjustments
Goodwill
Unrealized profit in internal
trading
Others
113
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
Carrying amount of investments
171,187,202.80 170,931,898.92
in associates
Fair value of equity investments
in associates in association with
quoted price
Operating revenue 15,876,141.41 12,964,410.68
Net profit 710,277.20 650,880.98
Net profit of discontinued
operations
Other comprehensive income
Total comprehensive income 710,277.20 650,880.98
Dividend from associates
255,303.88 197,567.20
received in current period
3. Aggregated financial information of insignificant joint ventures and associates
Opening
Items Closing balance/current
balance/preceding period
period cumulative
comparative
Joint ventures
Total carrying amount of investments 10,430,784.30 11,128,318.34
Proportionate shares in the following
items
Net profit -697,534.04 82,233.20
Total comprehensive income -697,534.04 82,233.20
Associates
Total carrying amount of investments 1,183,862.97
Proportionate shares in the following
items
Net profit 75,194.64
Total comprehensive income 75,194.64
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.
114
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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
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, 2019, 15.07% (December 31, 2018:
16.85%) 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
115
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Registered Holding Voting right
Parent company Business capital
Place of registration proportion over proportion over
nature
(in million) the Company the Company
No.2 Shangdi 2 Road,
China Potevio Information
Zhongguan Village 1,903,05 53.49% 53.49%
Information
Economy Zone, Haidian industry
Industry Inc.
District, Beijing
The Company’s ultimate controlling party is Potevio Company 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
SEI-Nanjing Potevio Optical Network Co., Ltd. Joint ventures
4. Other related parties of the Company
Related parties Relationships with the Company
An affiliated company of the ultimate
Nanjing Potevio Honyar Electrical Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Nanjing Potevio Honyar Electrical Co., Ltd.
controlling party
An affiliated company of the ultimate
Shanghai Potevio Post and Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Beijing Potevio Taili Communications Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Hangzhou Honyar Dongbei Photoelectric Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Shanghai Potevio Network Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Potevio Telecommunications Co., Ltd.
controlling party
An affiliated company of the ultimate
Potevio Information Technology Co., Ltd.
controlling party
An affiliated company of the
Beijing Likangpu Communication Equipment Co., Ltd.
Company
Non-controlling shareholder of the
Mennekes Electric Industrial(China) Co., Ltd.
Company’s subsidiary
An affiliated company of the ultimate
Potevio Heping Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Hangzhou Honyar Electrical Co.,Ltd.
controlling party
An affiliated company of the
Potevio International Trading Co., Ltd.
ultimate controlling party
An affiliated company of the ultimate
Chengdu Putian Telecommunications Cable Co.,Ltd.
controlling party
116
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Related parties Relationships with the Company
An affiliated company of the ultimate
Eastern Communications Inc.
controlling party
An affiliated company of the ultimate
Potevio Eastern Communications Co.,Ltd.
controlling party
An affiliated company of the ultimate
Potevio Science & Technology Industrial Co., Ltd.
controlling party
An affiliated company of the ultimate
Tianjin Potevio Innovation and Entrepreneur Technology Co., Ltd.
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
Nanjing Potevio Honyar Electrical Telecommunication
132,195.74 85,492.00
Technology Co., Ltd. products
Potevio Information Technology Co., Telecommunication
597,863.25
Ltd. products
(2) Sale of goods and rendering of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Potevio Information Technology Co., Telecommunication
3,615,050.89 12,975,234.34
Ltd. products
China Potevio Information Industry Telecommunication
190,657,333.97 238,683,644.38
Inc. products
Beijing Potevio Taili Communications Telecommunication
31,310.35 6,423.67
Technology Co., Ltd. products
Potevio Science & Technology Telecommunication
520,689.63
Industrial Co., Ltd. products
Telecommunication
Potevio Telecommunications Co., Ltd. 6,262,055.95
products
2. Related party leases
(1) The Company as the lessor
Lessees Lease income for Lease income for the
Types of asset leased
current period preceding period
SEI-Nanjing Potevio Optical Buildings and 318,215.64
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 386,216.95 372,669.04 903,601.03 797,626.96
Industry Co., Ltd. structures
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
117
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Whether the
Guarantors Amount Commence-m
Maturity date guarantee is
guaranteed ent date
mature
China Potevio Information Industry Inc. 30,000,000.00 2018/3/9 2019/3/8 Yes
China Potevio Information Industry Inc. 40,000,000.00 2018/9/28 2019/6/28 Yes
China Potevio Information Industry Inc. 30,000,000.00 2018/10/23 2019/10/23 No
China Potevio Information Industry Inc. 30,000,000.00 2019/6/11 2020/6/11 No
China Potevio Information Industry Inc. 50,000,000.00 2019/6/05 2020/5/14 Yes
4. Interest expenditures
In the current period, the Company paid to China Potevio Information Industry Inc. a total of 6,186,106.38 yuan as interest
expenditures.
5. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 1,354,188.02 1,155,082.00
(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
Accounts China Potevio
12,204,488.63 660,400.00 20,981,660.73 709,020.78
receivable Information Industry Inc.
Potevio Information
16,377,198.52 12,941,118.68
Technology Co., Ltd.
Shanghai Potevio
Network Technology Co., 536,319.70 429,055.76 536,319.70 429,055.76
Ltd.
Shanghai Potevio Post
8,755,534.00 8,755,534.00 8,755,534.00 8,755,534.00
and Technology Co., Ltd.
Potevio Heping
333,706.00 33,370.60 333,706.00
Technology Co., Ltd.
Eastern Communications
144,617.20 206,596.00
Inc.
Potevio
Telecommunications Co., 199,000.00
Ltd.
Tianjin Potevio
Innovation and
1,003,948.40 941,969.60
Entrepreneur Technology
Co., Ltd.
Potevio Company
8,164,069.30 1,768,070.00
Limited.
118
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Mennekes Electric
Industrial(China) Co., 4,546.26 4,546.26
Ltd.
Guangxi Potevio Post
Communication 629,899.32 186,044.64 629,899.32 186,044.64
Equipment Co., Ltd.
Potevio Science &
Technology Industrial 12,709.44 200.81
Co., Ltd.
Subtotal 73,040.00
Advances Potevio Heping
436,294.00 436,294.00 436,294.00
paid Technology Co., Ltd.
Potevio Information
25,000.00 25,000.00
Technology Co., Ltd.
Subtotal 461,294.00 436,294.00 461,294.00
Other China Potevio
1,963,000.00 60,000.00 3,839,000.00 400,000.00
receivables Information Industry Inc.
Potevio Eastern
1,209,297.25
Communications Co.,Ltd.
Potevio Information
Engineering Design 30,000.00 30,000.00
Service Co., Ltd.
Potevio Science &
Technology Industrial 1,300.00 1,300.00
Co., Ltd.
Subtotal 1,203,052.00 1,203,052.00
2. Balance due to related parties
Items Related parties Closing balance Opening balance
Accounts payable SEI-Nanjing Potevio Optical Network
1,630,750.70 20,819,725.66
Co., Ltd.
China Potevio Information Industry Inc. 19,641,228.50 19,641,228.50
Nanjing Potevio Honyar Electrical Co.,
242,595.99 242,595.99
Ltd.
Shanghai Potevio Network Technology
11,685.00 11,685.00
Co., Ltd.
Mennekes Electric Industrial(China)
5,433,476.69
Co., Ltd.
Potevio Information Technology Co.,
69,950.00 69,950.00
Ltd.
Nanjing Potevio Honyar Electrical
232,843.05 86,243.30
Technology Co., Ltd.
Subtotal 21,829,053.24 46,304,905.14
Advances received China Potevio Information Industry Inc. 2,720,702.86 223,246,886.73
Subtotal 2,720,702.86 223,246,886.73
Other payables Potevio Hi-tech Industry Co., Ltd. 138,657.24
119
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Related parties Closing balance Opening balance
Potevio Telecommunications Co., Ltd. 200,000.00 200,000.00
Potevio Company Limited. 10,638,000.00 14,580,000.00
Subtotal 10,976,657.24 14,780,000.00
IX. Commitments and contingencies
None
X. Events after balance sheet day
None
XI. Other important matters
1. Identification basis for reportable segments
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, various low-voltage distribution products, private
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
160,888,196.84 171,197,491.27 59,996,386.53 186,594,827.60 189,089,692.12 -19,362,882.39 748,403,711.97
main operations
Cost of main
123,774,773.25 126,510,910.63 47,656,142.16 183,479,607.25 164,962,444.76 -19,362,882.39 627,020,995.66
operations
Total assets 299,600,674.81 271,481,638.09 210,732,524.25 38,418,675.80 1,362,789,970.59 -423,343,638.37 1,759,679,845.17
Total liabilities 195,150,813.60 138,268,636.67 119,620,363.75 1,213,613,713.10 -259,379,964.05 1,407,273,563.07
XII. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Details
120
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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
603,322,197.30 100.00 33,930,540.76 5.62 569,391,656.54
using portfolios with similar
credit risk features
Portfolio 1 14,044,807.00 2.33 14,044,807.00
Portfolio 2 589,277,390.30 97.67 33,930,540.76 5.76 555,346,849.54
Total 603,322,197.30 100.00 33,930,540.76 5.62 569,391,656.54
(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
618,514,189.40 99.70 31,878,310.78 5.15 586,635,878.62
using portfolios with similar
credit risk features
Portfolio 1 14,042,487.00 2.27 14,042,487.00
Portfolio 2 604,471,702.40 97.73 31,878,310.78 5.27 572,593,391.62
Total 618,514,189.40 100.00 31,878,310.78 5.15 586,635,878.62
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 444,373,134.11
1-2 years 75,053,008.28
2-3 years 24,387,009.62 2,438,700.96 10.00
3-4 years 12,695,673.43 3,808,702.03 30.00
4-5 years 7,606,783.87 3,042,713.55 40.00
5-6 years 2,606,783.87 2,085,427.10 80.00
Over 6 years 22,554,997.12 22,554,997.12 100.00
121
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Subtotal 589,277,390.30 33,930,540.76
3) Bad debts disclosed by ages
Ages Closing balance
Within 1 year
1-2 years
2-3 years 2,438,700.96
Over 3 years 31,491,839.8
3-4 years 3,808,702.03
4-5 years 3,042,713.55
Over 5 years 24,640,424.22
Subtotal 33,930,540.76
(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 2,056,129.98 yuan and recovered 3,900.00 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 (%)
Beijing UniStrong Science & Technology Co., Ltd. 52,167,500.00 8.85
China United Network Communications Group
29,514,969.14 5.01
Co.,Ltd. -Henan Branch
Beijing Zhongrui Haotian Information Technology
25,499,700.00 4.33
Co., Ltd.
Shenzhen Zhongchuang Electric Measurement
22,904,248.79 3.89
Technology Co., Ltd.
Dongpo Laos Co., Ltd. 19,708,086.54 3.34
Subtotal 149,794,504.47 25.42
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 provision
28,912,122.71 47.30 28,912,122.71 100.00
made on an individual basis
Including: other receivable 28,912,122.71 47.30 28,912,122.71 100.00
122
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables with provision
made on a collective basis 40,869,343.18 52.70 3,089,981.09 7.56 37,779,362.09
using portfolios
Including: other receivable 40,869,343.18 52.70 3,089,981.09 7.56 37,779,362.09
Portfolio 1 11,873,459.99 11.14 11,873,459.99
Portfolio 2 28,995,883.19 41.55 3,089,981.09 10.66 25,905,902.10
Total 69,781,465.89 100.00 32,002,103.80 45.86 37,779,362.09
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of provision
28,912,122.71 42.71 28,912,122.71 100.00
made on an individual basis
Including: other receivable 28,912,122.71 42.71 28,912,122.71 100.00
Receivables with provision
made on a collective basis 38,781,802.08 57.29 7,704,412.50 19.87 31,077,389.58
using portfolios
Including: dividend
400,000.00 0.59 400,000.00
receivable
other receivable 38,381,802.08 56.70 7,704,412.50 20.07 30,677,389.58
Portfolio 1 6,913,310.33 10.21 6,913,310.33
Portfolio 2 31,468,491.75 46.49 7,704,412.50 24.48 23,764,079.25
Total 67,693,924.79 100.00 36,616,535.21 54.09 31,077,389.58
2) Other receivables of individually significant amount and with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for
debts proportion (%) provision made
Beijing Likangpu With long age
Communication Equipment Co., 28,912,122.71 28,912,122.71 100.00 and hard to
Ltd. recover
Subtotal 28,912,122.71 28,912,122.71
3) Other receivables with provision made on portfolios
Closing balance
Portfolio
Book balance Provision for bad debts Provision proportion (%)
Temporary advance
4,754,936.71 1,277,357.90 26.86
payment receivable
Deposit 19,892,455.22 1,277,357.90 6.42
123
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Closing balance
Portfolio
Book balance Provision for bad debts Provision proportion (%)
Funds for business 1,023,880.04 74,944.00 7.32
Others 3,324,611.22 401,195.71 12.07
Subtotal 28,995,883.19 3,089,981.09
4)Provision for bad debts
Level 1 Level 2 Level 3
Expected credit Expected credit loss for
Ages Expected credit loss for the Total
losses in the next 12 the entire duration (credit
entire duration (no credit loss)
months loss has occurred)
Balance at
190,895.92 7,513,516.58 7,704,412.50
Jau1,2019
Transfer level 2
Transfer level 3 190,895.92 190,895.92
Reversed level 2
Reversed level 1
Provision made 198,926.16 -4,622,461.65 -4,423,535.49
Provision Reserved
Other changes
Balance at
198,926.16 2,891,054.93 3,089,981.09
Jun30,2019
5) Bad debts disclosed by ages
Ages Closing balance
Within 1 year
1-2 years
2-3 years 198,926.16
Over 3 years 2,891,054.93
3-4 years 223,083.90
4-5 years 69,309.20
Over 5 years 2,598,661.83
Subtotal 3,089,981.09
(2) Provisions made, collected or reversed in current period
Increase
Items Opening balance Closing balance
Provision made Provision collected Others
124
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Increase
Items Opening balance Closing balance
Provision made Provision collected Others
Other receivables 36,616,535.21 -4,614,431.41 32,002,103.80
Subtotal 36,616,535.21 -4,614,431.41 32,002,103.80
Provisions for bad debts made in current period totaled-4,614,431.41 yuan.
(3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 45,540,519.41 46,230,393.22
Deposits 19,892,455.22 18,558,706.28
Funds for business 1,023,880.04 1,348,181.93
Others 3,324,611.22 1,156,643.36
Total 69,781,465.89 67,293,924.79
(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 5 years 41.43 28,912,122.71
Equipment Co., Ltd. receivable
Putian Temporary
Telecommunications advance payment 4,097,886.33 Over 5 years 5.87 4,097,886.33
(H.K.) Co., Ltd. receivable
Ping An International
Financial Leasing Co., Deposits 4,000,000.00 Within 1 year 5.73
Ltd.
Haitong Unitrust
International Leasing Deposits 2,775,420.00 1-3 years 3.98 138,771.00
Co.,Ltd.
China Potevio
Information Industry Deposits 1,938,000.00 1-3 years 2.78 96,900.00
Inc.
Subtotal 41,723,429.04 59.79 33,245,680.04
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
153,218,270.64 1,910,520.00 151,307,750.64 153,218,270.64 1,910,520.00 151,307,750.64
subsidiaries
Investments in associates
181,617,987.10 181,617,987.10 182,060,217.26 182,060,217.26
and joint ventures
Total 334,836,257.74 1,910,520.00 332,925,737.74 335,278,487.90 1,910,520.00 333,367,967.90
(2) Investments in subsidiaries
125
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Opening Provision for Closing balance of
Investees Increase Decrease Closing balance impairment made in provision for
balance
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 Communication 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 Co., Ltd.
Putian Telecommunications (H.K.) Co., 1,910,520.00
Ltd.
Nanjing Putian Network Co., Ltd. 7,741,140.41 7,741,140.41
Nanjing Putian Wangzhi Electronic Co., 20,428,683.00 20,428,683.00
Ltd.
Nanjing South Telecommunications Co., 33,175,148.00 33,175,148.00
Ltd.
Nanjing Putian Datang Information 5,436,797.07 5,436,797.07
Electronic Co., Ltd.
151,307,750.6
Subtotal 151,307,750.64 1,910,520.00
4
(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
11,128,318.34 -697,534.04
Network Co., Ltd.
Subtotal 11,128,318.34 -697,534.04
Associates
Potevio Hi-tech Industry
170,931,898.92 255,303.88
Co., Ltd.
Subtotal 170,931,898.92 255,303.88
Total 182,060,217.26 -442,230.16
(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
126
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
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
SEI-Nanjing Potevio
10,430,784.30
Optical Network Co., Ltd.
Subtotal 10,430,784.30
Associates
Potevio Hi-tech Industry
171,187,202.80
Co., Ltd.
Subtotal 171,187,202.80
Total 181,617,987.10
(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 main
336,659,233.97 318,589,542.51 473,077,482.03 437,252,856.53
operations
Revenue from other
4,752,584.61 2,568,748.93 24,729,485.21 23,763,158.86
operations
Total 341,411,818.58 321,158,291.44 497,806,967.24 461,016,015.39
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments -442,230.16 407,793.10
under equity method
Total -442,230.16 407,793.10
XIII. 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
98,454.13
written-off of provision for impairment
Government grant included in profit or loss (excluding
those closely related to operating activities, or regular 3,756,342.00
government grants)
Gains on debt restructuring -1,291,442.00
Other non-operating revenue or expenditures 56,538.47
Subtotal 2,619,892.60
127
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Items Amount Remarks
Less: enterprise income tax affected -305,760.82
Non-controlling interest affected (after tax) -982,101.05
Net non-recurring profit or loss attributable to
1,332,030.73
shareholders of the parent company
(II) RONA and EPS
1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average
RONA (%) Basic EPS Diluted EPS
Net profit attributable to shareholders
-17.62 -0.2676 -0.2676
of ordinary shares
Net profit attributable to shareholders
of ordinary shares after deducting -18.03 -0.2738 -0.2738
non-recurring profit or loss
2. Calculation process of weighted average RONA
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary shares A -57,528,524.88
Non-recurring profit or loss B 1,332,030.73
Net profit attributable to shareholders of ordinary shares C=A-B -58,860,555.61
after deducting non-recurring profit or loss
Opening balance of net assets attributable to shareholders D 355,289,728.24
of ordinary shares
Net assets attributable to shareholders of ordinary shares
increased due to offering of new shares or conversion of E
debts into shares
Number of months counting from the next month when the F
net assets were increased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares
decreased due to share repurchase or cash dividends G
appropriation
Number of months counting from the next month when the H
net assets were decreased to the end of the reporting period
Translation reserve -64,891.20
increased in current period
Number of months counting
Others 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
Weighted average net assets L= D+A×1/2
326,525,465.80
+ E×F/K-G×H/K±I×J/K
Weighted average RONA M=A/L -17.62
Weighted average RONA after deducting non-recurring N=C/L -18.03
profit or loss
3. Calculation process of basic EPS and diluted EPS
128
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
(1) Calculation process of basic EPS
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary shares A -57,528,524.88
Non-recurring profit or loss B 1,332,030.73
Net profit attributable to shareholders of ordinary shares C=A-B -58,860,555.61
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 E
share capital or share dividend appropriation
Number of shares increased due to offering of new shares F
or conversion of debts into shares
Number of months counting from the next month when the G 3.00
share was increased to the end of the reporting period
Number of shares decreased due to share repurchase H
Number of months counting from the next month when the I
share was decreased to the end of the 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/K-J 215,000,000.00
Basic EPS M=A/L -0.2676
Basic EPS after deducting non-recurring profit or loss N=C/L -0.2738
(2) The calculation process of diluted EPS is the same with that of basic EPS.
129
Nanjing Putian Telecommunications Co., Ltd. Semi-Annual Report 2019
Section XI. Documents Available for Reference
(I) Financial statement of the Company with signature and seal from the person in charge of the Company, person in charge of the
accounting works and person in charge of accounting;
(II) Original text of all documents of the Company as well as manuscript of the announcement that disclosed on website appointed by
CSRC.
Board of Directors of
Nanjing Putian Telecommunications Co., Ltd.
30 August 2019
130
