Nanjing Putian Telecommunications Co., Ltd.
2010 Semi-Annual ReportNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
1
Nanjing Putian Telecommunications Co., Ltd.
2010 Semi-Annual Report
Important Notice
The Board of Directors, the Supervisory Committee, the directors, supervisors and
senior management of the Company hereby confirm that there are no factitious record,
misleading statements or material omission in this report, and collectively and individually
accepts full responsibility for the truthfulness, accuracy and completeness of the whole
contents.
Except the following directors, other directors attended the board meeting at which
this semi-annual report was considered:
Name of absent
director
Position of absent
director Reason for absence Entrusted
Li Tong Director Due to official business Huang
Haodong
Zhu Hongchen Director Due to official business Zhao Xinping
Han Shu Director Due to official business Sun Liang
Chairman of the BOD Mr. Zhao Xinping, General Manager Mr. Sun Liang, and Chief
Accountant Mr. Shi Lian hereby confirm that the financial report in this report is truthful and
complete.
This report is prepared both in Chinese and in English. In case of any inconsistency
between the two versions, the Chinese version should prevail.
The financial report for the first half of 2010 was not audited.
Contents
I. Basic Information............................................................................................................. 2
II. Changes in Share Capital & Major Shareholders.............................................................. 3
III. Directors, Supervisors & Senior Management ................................................................. 5
IV. Report of the Board of Directors ...................................................................................... 5
V. Significant Events ............................................................................................................. 8
VI. Financial Report ............................................................................................................ 12
VII. Documents for Inspection............................................................................................. 13Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
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I. Basic Information
I. Company profile
1. Company’s Legal Chinese Name: 南京普天通信股份有限公司
Company’s Legal English Name: Nanjing Putian Telecommunications Co., Ltd.
2. Legal Representative: Mr. Zhao Xinping
3. Secretary of the Board of Directors: Mr. Zhang Shenwei
Telephone: 86-25-58962289
Fax: 86-25-52409954
Mailing Address: No. 1 Putian Road, Qinhuai District Nanjing
Email Address: zsw@postel.com.cn
Representative of Securities Affairs: Ms. Xiao Hong
Telephone: 86-25-58962072
Fax: 86-25-52409954
Mailing Address: No. 1 Putian Road, Qinhuai District Nanjing
Email Address: xiaohong@postel.com.cn
4. Registration Address: No.58, Qinhuai Road, Jiangning Economics and
Technology Development Zone, Nanjing,
Jiangsu Province PRC
Postal Code: 211100
Office Address: No. 1 Putian Road, Qinhuai District Nanjing
Postal Code: 210012
Web Site: www.postel.com.cn
Email Address: securities@postel.com.cn
5. Appointed Newspaper for
Information Disclosure:
Securities Times & Hong Kong Commercial
Daily
Appointed Web Site for Information
Disclosure:
www.cninfo.com.cn
Semi-Annual Report Prepared at: Financial & Securities Department
6. Listing and Trading Place of the
Company Stock:
Shenzhen Stock Exchange
Abbreviation of Company Stock: NJ TEL B
Stock Code: 200468
7. Other Information
Registration At: Jiangsu Administration for Industry and
Commerce
Legal Person Operating License
Registration Code:
320000400000500
Taxation Registration Code: 320121134878054
II. Main financial data (Yuan):
1. Main financial data
30 June 2010 31 December 2009 Increase/decrease
（％）
Total assets 1,434,660,000.86 1,466,288,245.48 -2.16%
Equity attributable to owners of 344,527,304.59 333,659,473.27 3.26%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
3
the listed company
Share capital 215,000,000.00 215,000,000.00 0.00%
Net assets per share attributable
to shareholders of the listed
company(Yuan/share)
1.60 1.55 3.23%
January to June
2010
January to June
2009
Increase/decrease
(%)
Total operating income 855,707,517.90 655,468,338.04 30.55%
Operational profit 16,987,446.48 15,088,076.45 12.59%
Total profit 18,003,672.49 15,124,490.13 19.04%
Net profit attributable to the
shareholders of the listed
company
8,257,612.37 5,298,699.21 55.84%
Net profit attributable to the
shareholders of the listed
company after deducting
non-recurring profits/losses
7,463,324.40 5,214,544.48 43.13%
Basic earnings per share 0.0384 0.0246 56.10%
Diluted earnings per share 0.0384 0.0246 56.10%
Return on equity（%） 2.44% 1.61% 0.83%
Net cash generated from
operating activities -101,489,686.78 -38,659,739.54 -162.52%
Net cash per share generated
from operating activities
(Yuan/share)
-0.47 -0.18 -161.11%
Note: Details of the deducted non-recurring profits/losses for the first half of 2010(Yuan):
Item Amount
Profit and loss of non-current assets disposal 25,550.77
Government subsidy recorded into profit and loss of current
period 177,103.85
Profit and loss of debt restructure -48,140.00
Net amount of other non-operating profit and expenses
excluding items above 861,711.39
Influenced amount of minority interest -58,005.55
Influenced amount of income tax -163,932.49
Total 794,287.97
II. Changes in Share Capital & Major Shareholders
I. Change of the Company’s shares
Year-beginning
Increase/decre
ase during the
Year
Year-end
Number Proportion Number Proportion
I. Non-tradable shares 115,000,000 53.49% 115,000,000 53.49%
1.Promoter shares 115,000,000 53.49% 115,000,000 53.49%
Including:
State-owned shares 115,000,000 53.49% 115,000,000 53.49%
Domestic legal person sharesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
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Foreign legal person shares
Other
2.Placement legal person shares
3.Employee’s shares
4.Preference shares and other
II. Listed shares 100,000,000 46.51% 100,000,000 46.51%
1.RMB ordinary shares
2.Domestically-listed shares in
foreign currency 100,000,000 46.51% 100,000,000 46.51%
3.Overseas listed foreign shares
4.Other
III. Total number of shares 215,000,000 100% 215,000,000 100%
II. Top ten shareholders and top ten shareholders of tradable shares at
the end of the reporting period
Total number of
shareholders 14,750
Top ten shareholders
Shareholder’s name Type of
shareholder
Proportion in
share capital Shareholding
Non-tradable
shares held by
the shareholder
Number of
mortgaged or
frozen shares
China Potevio Company
Limited
State-owned
legal person 53.49% 115,000,000 115,000,000 0
Hu Yunjing Domestic
natural person 0.84% 1,805,400 0 Unknown
Chan Keung Overseas
natural person 0.60% 1,281,700 0 Unknown
Zhou Xianyu Overseas legal
person 0.50% 1,083,273 0 Unknown
Gu Feng Domestic
natural person 0.36% 770,800 0 Unknown
Wang Feifei Domestic
natural person 0.27% 588,008 0 Unknown
Chen Chaofan Overseas
natural person 0.19% 416,979 0 Unknown
Long Jianqiu Domestic
natural person 0.16% 340,000 0 Unknown
Wang Hongguang Domestic
natural person 0.15% 333,100 0 Unknown
Zhao Guanghui Domestic
natural person 0.15% 331,650 0 Unknown
Top ten shareholders of tradable shares
Shareholder’s name Number of tradable shares Share type
Hu Yunjing 1,805,400 Domestically-listed shares in
foreign currency
Chan Keung 1,281,700 Domestically-listed shares in
foreign currency
Zhou Xianyu 1,083,273 Domestically-listed shares in
foreign currency
Gu Feng 770,800 Domestically-listed shares in
foreign currency
Wang Feifei 588,008 Domestically-listed shares in
foreign currency
Chen Chaofan 416,979 Domestically-listed shares in
foreign currency
Long Jianqiu 340,000 Domestically-listed shares in
foreign currency
Wang Hongguang 333,100 Domestically-listed shares inNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
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foreign currency
Zhao Guanghui 331,650 Domestically-listed shares in
foreign currency
Chen Ren 310,000 Domestically-listed shares in
foreign currency
Specification of related
parties or persons acting in
concert among the
above-mentioned
shareholders
Among the top ten shareholders, China Potevio Company Limited is neither a
related party nor a person acting in concert with the others. It’s unknown by the
Company whether there are related parties or persons acting in concert among the
other shareholders.
The Company does not know whether there are related parities or persons acting in
concert among the top ten holders of tradable shares.
III. Change of the Company’s controlling shareholder or effective
controller
The Company’s controlling shareholder and effective controller kept unchanged during
the reporting period.
III. Directors, Supervisors & Senior Management
I. Shareholding of the directors, supervisors and senior management
None of the directors, supervisors and members of the senior management held or
traded shares of the Company during the reporting period.
II. Personnel changes in directors, supervisors and senior management
As approved by the Eighth Meeting of the Fifth BOD on 28 April 2010, Mr. Sun Liang
continued to be engaged as general manager of the Company, Mr. Zhang Shenwei
continued to be engaged as secretary of the Fifth BOD, Mr. Zou Dezhong, Mr. Jiang
Hanbin and Mr. Sun Qiang continued to be engaged as vice general managers of the
Company, Mr. Shi LIan continued to be engaged as chief accountant of the Company.
Their office term will last until the end of the office term of the fifth BOD.
IV. Report of the Board of Directors
I. General operating conditions in the reporting period
In the reporting period, surrounding operating target and tasks, the Company worked
hard to optimize the pattern of industry development through reform and restructure, and to
promote comprehensive competitive ability of the enterprise through upgrading industry
and innovating technology. With the construction of 3G and fixed-line broadband network
and infrastructure renovation for tri-networks integration in China, the competition in the
telecom sector became more and more fierce. The Company initiatively adjusted its
marketing strategy and took the opportunity of the construction of the Internet of Things. By
implementing system integration, the Company tried to seek new economic growth engine.
Meanwhile the Company kept on researching new technology and products and exploringNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
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new market according to the market trend and customer demand, enhancing the
Company’s viability, brand popularity and enterprise value. While reinforcing operations,
the Company continuously improved fundamental management in order to provide better
support and services for production and operation. Under the effort of the whole staff, the
Company fulfilled the operating target of the first half year. It realized revenue of 856
million Yuan, a year-on-year increase of 30.55 percent, operational profit of 16.99 million
Yuan, a year-on-year increase of 12.59 percent, and net profit of 8.26 million Yuan, a
year-on-year increase of 2.96 million Yuan.
II. Brief analysis on the operating results and financial position in the
reporting period (Yuan)
Item 30 June 2010 31 December 2009 Increase
/decrease(Yuan)
Increase
/decrease
Total assets 1,434,660,000.86 1,466,288,245.48 -31,628,244.62 -2.16%
Shareholders’
equity 344,527,304.59 333,659,473.27 10,867,831.32 3.26%
January to June
2010
January to June
2009
Increase
/decrease(Yuan)
Increase
/decrease
Operating income 855,707,517.90 655,468,338.04 200,239,179.86 30.55%
Operational profit 16,987,446.48 15,088,076.45 1,899,370.03 12.59%
Net profit 14,834,275.66 12,221,913.73 2,612,361.93 21.37%
Net profit
attributable to the
owners of parent
company
8,257,612.37 5,298,699.21 2,958,913.16 55.84%
Net Cash flow from
operating activities
-101,489,686.78 -38,659,739.54 -62,829,947.24 -162.52%
Net Cash flow from
investing activities
-7,995,797.24 -2,065,403.96 -5,930,393.28 -287.13%
Net Cash flow from
financing activities
-23,021,249.32 -20,855,436.45 -2,165,812.87 -10.38%
Explanation:
1. Increase of profit was mainly due to growth of sales.
2. Decrease of cash flow from operating activities compared with the same period of
last year was mainly due to growth of sales scale, which needed more cash payment for
inventory and brought about an increase of accounts receivable as well as growth
out-of-pocket cost, taxes and fees.
III. Main operating activities in the reporting period
1. Introduction of main businesses of the Company
The Company is mainly engaged in R&D, manufacturing and sales of
telecommunications equipment.
2. A breakdown of main business by industry and product is as follows (RMB 0’000):
A breakdown of main business by industry
A breakdown by
industry or product Revenue Cost Gross
margin（%）
Year-on-year
increase/decr
ease of
revenue（%）
Year-on-year
increase/decr
ease of cost
（%）
Year-on-year
increase/decr
ease of gross
margin（%）Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
7
Telecommunicatio
ns and related
equipments
industry
83,850.71 72,027.25 14.10% 28.18% 29.32% -0.76%
A breakdown of main business by product
Comprehensive
access products 36,499.59 29,030.34 20.46% 22.03% 22.60% -0.37%
Video conference
system 18,382.62 16,295.61 11.35% 43.93% 47.11% -1.92%
Other 28,968.49 26,701.30 7.83% 27.41% 27.50% -0.06%
3. A breakdown of main business by region is as follows( RMB0’000):
Region Revenue Year-on-year increase/decrease（％）
North China 19,867.36 95.19%
East China 39,355.48 1.83%
Other regions 24,627.87 48.44%
4. Change in the Company’s main business, the structure and profitability of main
business，and the composition of profit
(1) There were no material changes in the Company’s main business，the structure of main
business and the profitability of main business.
(2) Changes in the composition of profit(Yuan)
Item
January to June
2010
January to June
2009
Increase
/decrease(Yuan)
Increase
/decrease
Sales expense 51,518,189.17 37,948,082.52 13,570,106.65 35.76%
Administrative
expense
44,637,531.18 36,877,942.06 7,759,589.12 21.04%
Financial expenses 7,581,396.54 10,023,133.88 -2,441,737.34 -24.36%
Operational profit 16,987,446.48 15,088,076.45 1,899,370.03 12.59%
Non-operating
income
1,258,587.03 338,597.00 919,990.03 271.71%
Non-operating
expenses
242,361.02 302,183.32 -59,822.30 -19.80%
Net profit 14,834,275.66 12,221,913.73 2,612,361.93 21.37%
Net profit attributable
to the owners of
parent company
8,257,612.37 5,298,699.21 2,958,913.16 55.84%
Explanation
①Financial expense increased 35.76 percent compared with that of the same period
of last year, mainly because expenses like marketing expenses and transportation charges
increased along with the growth of sales scale.
②Growth of administrative expenses was mainly due to increase of input in
technology development. The technology development fee increased 7.92 million Yuan
over that of the same period of last year.
③Growth of not-operating income was mainly due to increase of occasional subsidy.
5. Associated companies that contributed more than 10 percent of the Company’s
net profit
Name of associated
company Equity owned
by the
Company
Main business
Net profit in
the reporting
period(Yuan)
Investment
Income
contributed to the
Company(Yuan)Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
8
Nanjing Mennekes
Electric Appliance Ltd. 50%
Manufacturing and
sales of plugs,
receptacles and
related products
5,600,830.03 2,800,415.01
6. Main problems and difficulty in operation
As a consequence of sales growth, there was an increase of accounts receivable,
which occupied a large amount of cash capital.
Measures: we will further reinforce demanding overpayment and assessment on such
work. Receivables of over one year will be classified into different types and handled in
differently way accordingly. More work will be done to supervise and clear accounts
receivables of over six months or exceeding credit period. Meanwhile, we will strengthen
fund reflowing by making out monthly payment demanding plans and tracking them
periodically to ensure the budget of sales revenue and fund reflowing is fulfilled. In addition,
we will continue to reinforce the centralized fund management in light of the financing,
distribution and usage management, boosting our ability to allocate fund, so as to keep the
cash flow at a balanced level.
IV. Investment in reporting period
1. Investment with proceeds raised from share issuing
The Company did not raise proceeds by issuing shares in the reporting period or use
proceeds raised in previous periods.
2. Investment with the Company’s own funds
The Company did not make any large investment by using its own funds.
The accumulative amount of input in technology development in the first half year was
11.67 million Yuan, and minor investment in fixed assets totaled to 3.12 million Yuan.
In the reporting period, the 8th Meeting of the Fifth BOD considered and approved the
proposal on investing in and incorporating SEI—Nanjing Putian Optical Network Co., Ltd.
with Sumitomo Electric Industries, Ltd. The registered capital of the joint venture is 4
million dollars. The Company and Sumitomo Electric Industries, Ltd. should make capital
contribution of 2 million dollars each and hold 50 percent of equity. The joint venture has
applied for a business license on 7 July. It will be engaged in development, manufacture
and sales of optical distribution frame, optical communication appliances, Remote Fiber
Test System (RFTS) and etc.
V. Significant Events
I. Company governance
The Company has made continuous efforts to improve its legal person governance
structure, amplify management rules and standardize its operations pursuant to the
Company Law, Securities Law and the requirement of CSRC. The general governance
status of the Company is in conformity with related regulations. In the reporting period, the
Company formulated Rules on Administration of Insiders of Inside Information and RulesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
9
on Responsibility Investigation for Material Errors in Annual Report Disclosure, to further
strengthen information disclosure and inside information management, and improve the
internal control system.
II. Proposal and implementation of profit distribution plan in the reporting
period
1. The Company conducted neither profit distribution nor transfer of capital reserves into
share capital for the Year 2009.
2. The Company will not conduct profit distribution or transfer of capital reserves into share
capital for the first half of 2010.
III. Material lawsuit or arbitration.
The Company was not involved in any significant lawsuit or arbitration in the reporting
period.
IV. Assets purchasing, selling or disposal and company merging
There was no significant assets purchasing, selling or disposal and company merging
in the reporting period.
V. Related-party transactions
1. Day-to-day related-party transactions
(1)Trading Merchandise, supply and receiving labor
2010.1-6
Related Parties
Type of
related
transaction
Related transaction
content Amount
(unit’0000)
Ratio in
similar
trade
amount %
Pricing policy and
decision-making
processes
China Potevio Company Limited Sale Telecommunications 1,560.69 1.82 Market Pricing
Potevio Institute of Technology
Co.,Ltd.
Sale
Telecommunications 0.56 0.00 Market Pricing
Sub-total 1,561.25 1.82
China Potevio Company Limited Purchase Telecommunications 1,380.24 1.88 Market Pricing
Sub-total 1,380.24 1.88
Among that, sales to the controlling shareholder and its subsidiaries amounted to 15.61
million Yuan in the reporting period.
(2) The company leased the land and houses of Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd. as offices and plant
Lessor Lessee Asset for
leasing
Amount invlolved
by leased assets
Date
start for
leasing
Date for
termination
of leasing
Rental
income
(expense)
Accordance for
reorganization
of rental income
Influence on
the Company
by rental
income
Nanjing Potevio
Telecommunication
Technology
Industry Park Co.,
Ltd.
The
company
Building
and land 161,143,525.01 2010.1.1 2010.6.30 5,874,451.00 Market Pricing -5,874,451.00Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
10
2. Related-party transactions in light of assets purchasing and selling
There were no related-party transactions in light of assets purchasing and selling in the
reporting period.
3. Receivables and payables with related parties (RMB0’000)
Item Name of the related parties As of 30 June, 2010
(unit’0000)
As of 31 December, 2009
(unit’0000)
Other payables Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd 114.62 2,065.43
Accounts payable Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd 12.58 11.57
Accounts payable Nanjing Putian Hongyan Electric
Appliance Company 24.26 57.01
Accounts payable China Potevio Company Limited 529.81
Advances to suppliers Nanjing Putian Datang Information and
Electric Company Ltd. 300.00 138.73
Accounts receivable Nanjing Zhongyou Telecommunication
Co., Ltd. 117.72
Accounts receivable China Potevio Company Limited 1,687.87 612.52
Accounts receivable ChengDu PuTian Telecommunications
Cable CO., Ltd 43.23 43.23
Accounts receivable Shanghai Potevio Co., Ltd 1,334.17 1,334.17
Other receivables Beijing Picom Telecommunications
Equipment Co., Ltd 2,891.30 2,908.10
Note: the accumulative amount of fund provided by the Company to its controlling
shareholder and the subsidiaries of the controlling shareholder during the reporting period
is 0.00 Yuan, and the balance at the end the reporting period is 0.00 Yuan.
VI. Important contracts
1. During the reporting period the Company did not trust, contract or lease assets to
other companies or vice versa.
In the reporting period the Company signed an agreement with Nanjing Potevio
Telecommunication Technology Industry Park Co., Ltd. to lease its realestate for
production and office. Except that, there were no significant issues in terms of trusting,
contracting or leasing assets to other units or vice versa.
2. Guaranty provided for other parties (RMB 0’000 ):
Guarantee offered by the Company(excluding the guarantee offered to the subsidiaries)
Name of
warrantee
Date and
No. of the
announcem
ent
disclosing
the
guarantee
limit
Guarantee
limit
Date of actual
guarantee(Ag
reement
signing date)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Whether
Completed
or not
Guarantee
whether
offered to a
related party
or not
Total guarantee limit
approved in reporting period
（A1）
0.00
Total amount of guarantee
actually offered in reporting
period（A2）
0.00
Approved guarantee limit by
the end of reporting period
（A3）
0.00
Balance of guarantee actually
offered at the end of the
reporting period（A4）
0.00Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
11
Guaranty offered to the subsidiaries
Name of
warrantee
Date and
No. of the
announcem
ent
disclosing
the
guarantee
limit
Guarantee
limit
Date of actual
guarantee(Ag
reement
signing date)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Whether
Completed
or not
Guarantee
whether
offered to a
related party
or not
Nanjing
Nanfang
Telecommunic
ations
Company
Limited
30 March
2010(Annou
ncement
NO.
2010-001)
1,700.00 31 May 2010 1,200.00 Joint liability
guarantee
31 May
2010-31
May 2011
No No
Nanjing Putian
Telege
Intelligent
Building Ltd.
30 March
2010(Annou
ncement
NO.
2010-001)
2,300.00 27 June 2010 1,000.00 Joint liability
guarantee
27 June
2010-27
September
2010
No No
Total guarantee limit to
subsidiaries approved in
reporting period（B1）
4,000.00
Total amount of guarantee
actually offered to
subsidiaries in reporting
period（B2）
2,200.00
Approved guarantee limit to
subsidiaries by the end of
reporting period（B3）
4,000.00
Balance of guarantee actually
offered to subsidiaries at the
end of the reporting period
（B4）
3,700.00
Total amount of guarantee offered by the Company(Total of the two types of guarantee above)
Total guarantee limit
approved in reporting period
（A1+B1）
4,000.00
Total amount of guarantee
actually offered in reporting
period（A2+B2）
2,200.00
Approved guarantee limit by
the end of reporting period
（A3+B3）
4,000.00
Balance of guarantee actually
offered at the end of the
reporting period（A4+B4）
3,700.00
Proportion of total amount of guarantee actually offered(A4+B4)
in net assets 10.74%
Among which,
Amount of guarantee offered to the Company’s shareholders,
effective controller and their related parties（C） 0.00
Amount of guarantee directly or indirectly offered to a debtor
whose assets liabilities ratio was above 70%（D） 0.00
Amount of guarantee exceeding 50% of net assets（E） 0.00
Total amount of the three types of guarantee above（C+D+E） 0.00
Explanation on possibility of bearing joint responsibility for
undue guarantee -
3. Entrusted investment
During the reporting period the Company did not entrust other parties to manage the
cash capital.
VII. Commitment by the Company or shareholders
During the reporting period, the Company or the shareholders holding more than 5
percent of share capital did not make any significant commitment.
VIII. Appointment and discharging of a public accounting firm
The Company did not change a the public accounting firm in the reporting period. The
current public accounting firm engaged by the Company is Daxin Certified Public
Accountants.Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
12
IX. Punishment by the securities regulatory departments
In the reporting period the Company, the Board of Directors and the directors were not
punished by the securities departments.
X. Securities investment
During the reporting period the Company did not make securities investment.
XI. Shareholding in other listed companies
During the reporting period the Company did not hold shares of other listed companies.
XII. Shareholding in un-listed financial enterprises or companies to be listed
During the reporting period the Company did not hold shares of any non-listed financial
enterprises or companies that plan to be listed.
XIII. Reception of visitors and interviews during the reporting period
In the reporting period, the Company did not receive investigation, communication or
interview of any specific investors.
Time Place Way Visitor Main topics of discussion and
information provided
10 May 2010 In the
Company
Onsite
investigation
Mr. Da, Consultant of
Shanghai Newland
Securities
Investment
Consultants Co.，
Ltd.
Introduced general conditions
of the Company; Provided
annual report and brochure of
the Company
XIV. Special statement and independent opinion presented by the independent
directors of the Company in terms of fund appropriation by the controlling
shareholder and other related parties and guaranty provided by the Company
1. Appropriation of fund of the Company by the controlling shareholder and other related
parties through non-business transactions in the first half of 2010.
According to our investigation, there was no appropriation of fund of the Company by
the controlling shareholder or its subsidiaries through non-business transactions in the first
half of 2010.
2. Guarantee provided by the Company in the first half of 2010
During January-June 2010, the Company provided guaranty for some subsidiaries to
help them to apply for bank loans. The ending balance of guarantee as of 30 June is 37
million Yuan, accounting for 10.74 percent of the value of net assets. The procedures of
guaranty were in conformity with the regulations of CSRC. There was no violation of laws
in providing the above guarantee, nor was there overdue guarantee. The interests of the
Company or of the Company’s shareholders were not harmed due to the guarantee.
VI. Financial Report
I. Auditor’s report
The Company’s Financial Statements for the first half of 2010 were not audited.Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
13
II. Financial statements and Notes to the financial statements: attached.
VII. Documents for Inspection
I. Original text of the semi-annual report signed by Chairman of the Board of
Directors.
II. Original text of accounting statements signed and sealed by legal person
representative, chief financial supervisor and accountant officer.
III. Original texts of all the files and announcements published on the newspapers
appointed by China Securities Regulatory Commission during the reporting period.
Board of Directors
Nanjing Putian Telecommunications Co., Ltd.
24 August 2010Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
14
Balance Sheet
Company name: Nanjing Putian Telecommunications Co., Ltd. 30 June 2010 Unit: CNY
Item CAotn tshoeli deantde do f the cPuarrreenntt Cpeormiopda ny AtC thoen sboeligdiantneidn g of thPea rceunrtr eCnot mpepraiondy
Current asset:
Monetary funds 310,336,819.87 219,364,640.51 482,952,642.17 408,484,047.10
Settlement provision
Capital lent
Tradable financial assets
Notes receivable 3,297,047.01 2,689,865.50
Accounts receivable 475,620,333.90 356,262,266.30 379,210,613.99 276,228,451.65
Advances to suplliers 47,008,461.46 42,216,856.88 35,576,591.92 30,583,115.40
Insurance receivable
Reinsurance receivable
Contract reserve of reinsurance
receivable
Interest receivable
Dividends receivable
Other receivables 25,892,028.87 36,682,464.41 24,727,816.32 37,147,639.59
Purchase restituted finance asset
Inventories 256,890,825.62 119,492,355.38 225,755,590.34 82,089,247.71
Non-current asset due in year
Other current assets
Total current asset 1,119,045,516.73 774,018,583.48 1,150,913,120.24 834,532,501.45
Non-current assets
Granted loans and advances
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 225,029,469.74 333,117,229.74 222,268,596.35 330,356,356.35
Investment property 5,123,827.83 5,227,043.79
Fixed assets 71,583,448.43 36,614,370.65 73,613,884.02 37,553,139.77
Construction in progress 5,201,750.38 5,100,000.00
Construction materials
Fixed assets held for disposal
Productive biological assets
Petrol asstest
Intangible assets 8,675,987.75 2,665,695.87 9,165,601.08 2,813,434.53
Development costs
Goodwill
Long-term prepayment
Differed income tax asset
Other non-current assets
Total non-current assets 315,614,484.13 372,397,296.26 315,375,125.24 370,722,930.65
Total assets 1,434,660,000.86 1,146,415,879.74 1,466,288,245.48 1,205,255,432.10
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
15
Balance Sheet (continued)
Company name: Nanjing Putian Telecommunications Co., Ltd. 30 June 2010 Unit: CNY
Item CoAnt sthoelid eantedd o f the cPuarrreenntt pCeormiopda ny ACt tohnes boelidgaintendin g of thPea creunrrte Cnto pmepraiondy
Current liabilities
Short-term loans 521,000,000.00 286,000,000.00 489,000,000.00 286,000,000.00
Loan from Central Bank
Deposit received and hold for
others
Capital borrowed
Tradable financial liabilities
Notes payable 28,285,236.00 216,285,236.00 92,746,648.00 260,746,648.00
Accounts payable 422,290,473.99 191,451,643.86 409,451,172.51 131,712,965.81
Advances from customers 38,041,716.05 26,372,938.31 23,147,428.55 5,647,562.09
Selling financial asset of
repurchase
Commission charge and
commission payable
Accrued payroll 13,697,291.73 3,795,746.80 14,229,929.03 4,388,612.57
Tax payable -12,966,065.73 -855,974.75 -2,393,571.28 4,856,932.31
Interest payable
Dividends payable
Other payables 25,904,516.01 111,542,944.07 50,912,843.86 200,972,821.32
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liability due in year
Other current liabilities
Total current liabilities 1,036,253,168.05 834,592,534.29 1,077,094,450.67 894,325,542.10
Non-current liabilities
Long-term borrowings
Bonds payable
Long-term payables 80,118.00 80,118.00 80,118.00 80,118.00
Special payables
Estimated liabilities
Differed income tax liabilities
Other non-recurrent liabilities
Total non-current liabilities 80,118.00 80,118.00 80,118.00 80,118.00
Total liabilities 1,036,333,286.05 834,672,652.29 1,077,174,568.67 894,405,660.10
Owners’ equity (or shareholders’
equity)
Paid-in capital (or share
capital) 215,000,000.00 215,000,000.00 215,000,000.00 215,000,000.00
Capital reserves 185,374,533.85 172,417,299.81 182,566,377.24 172,417,299.81
Less: Treasury stock
Reasonable reserve
Surplus reserve 589,559.77 589,559.76 589,559.77 589,559.76
Provision of general risk
Undistributed profit -51,201,556.40 -76,263,632.12 -59,459,168.77 -77,157,087.57
Balance difference of foreign
currency translation -5,235,232.63 -5,037,294.97
Total equity attributable to owners
of the parent company 344,527,304.59 311,743,227.45 333,659,473.27 310,849,772.00
Minor interests 53,799,410.22 55,454,203.54
Total owners’ equity 398,326,714.81 311,743,227.45 389,113,676.81 310,849,772.00
Total of liabilities and owners’ equity 1,434,660,000.86 1,146,415,879.74 1,466,288,245.48 1,205,255,432.10
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
16
Income Statement
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2010 Unit: CNY
Item ConsolidaCteudr rent PPeariroedn t Company ConsSoalimdaet ePde riod oPf Laaresnt tY Ceaorm pany
I. Total operating income 855,707,517.90 562,175,577.34 655,468,338.04 476,190,932.07
Incl. operating income 855,707,517.90 562,175,577.34 655,468,338.04 476,190,932.07
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 841,719,118.21 569,748,558.85 645,489,701.53 484,568,968.85
Incl. operating cost 735,655,901.98 508,329,325.07 557,468,259.62 429,832,076.47
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
Reinsurance expenses
Operating tax and extras 2,137,099.34 -158,126.30 1,667,456.97 325,479.60
Sales expense 51,518,189.17 33,295,465.17 37,948,082.52 22,905,148.25
Administration expense 44,637,531.18 21,285,548.18 36,877,942.06 21,065,005.82
Financial expenses 7,581,396.54 6,807,346.73 10,023,133.88 8,936,432.23
Losses of devaluation of asset 189,000.00 189,000.00 1,504,826.48 1,504,826.48
Plus: Gains from change of fair
value (“-“ for loss)
Investment income (“-“ for loss) 2,999,046.79 7,575,746.79 5,109,439.94 10,053,439.94
Incl. Investment income on
affiliated Company and joint
ventureand joint venture
2,760,873.39 2,760,873.39 2,656,375.94 2,656,375.94
Gains from currency exchange
(“-“ for loss)
III. Operational profit (“-“ for loss) 16,987,446.48 2,765.28 15,088,076.45 1,675,403.16
Plus: Non-operating income 1,258,587.03 1,056,423.07 338,597.00 196,480.16
Less: Non-operating expenses 242,361.02 165,732.90 302,183.32 57,898.66
Incl. Loss from disposal of
non-current assets 6,665.20 4,538.04
IV. Total profit (“-“ for loss) 18,003,672.49 893,455.45 15,124,490.13 1,813,984.66
Less: Income tax 3,169,396.83 2,902,576.40
V. Net profit (“-“ for net loss) 14,834,275.66 893,455.45 12,221,913.73 1,813,984.66
Net profit attributable to the
owners of parent company 8,257,612.37 893,455.45 5,298,699.21 1,813,984.66
Minority shareholders’ gains and
losses 6,576,663.29 6,923,214.52
VI. Earnings per share:
(I) Basic earnings per share 0.0384 0.0042 0.0246 0.0084
(II) Diluted earnings per share 0.0384 0.0042 0.0246 0.0084
VII. Other comprehensive income -197,937.66 -1,999,787.02
VIII. Total comprehensive income 14,636,338.00 893,455.45 10,222,126.71 1,813,984.66
Total comprehensive income
attributable to owners of parent
company
8,059,674.71 893,455.45 3,298,912.19 1,813,984.66
Total comprehensive income
attributable to minority shareholders 6,576,663.29 6,923,214.52
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
17
Cash Flow Statement
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2010 Unit: CNY
Item ConsolidatedC urrent PeriPoda rent Company ConsolSidaamteed Period of LaPsatr eYneta Cr ompany
I. Net cash flow from operating activities
Cash received from sales of products and providing of
services 872,454,491.27 540,782,892.27 663,602,122.78 422,118,934.56
Net increase of customer deposit and inter-bank deposit
Net increase of loans from central bank
Net increase of inter-bank loans from other financial
institutions
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Refunds of taxes 177,103.85 93,410.32
Other cash received from operating activities 9,066,891.80 22,031,403.97 3,781,155.14 55,962,573.87
Sub-total of cash inflow from operating activities 881,698,486.92 562,814,296.24 667,476,688.24 478,081,508.43
Cash paid for goods and services 837,758,756.54 575,800,258.75 580,895,580.85 404,502,204.96
Net increase of client trade and advance
Net increase of savings in central bank and brother
company
Cash paid for original insurance contract compensation
Cash paid for interest, commission charge and
commission
Cash paid for bonus of guarantee slip
Cash paid to and on behalf of employees 55,679,051.86 29,060,767.20 50,863,339.44 28,114,762.27
Payments of all types of taxes 35,262,364.53 10,787,587.10 31,292,635.78 16,091,372.86
Other cash payments relating to operating activities 54,488,000.77 60,897,375.69 43,084,871.71 81,298,788.23
Sub-total of cash outflow from operating activities 983,188,173.70 676,545,988.74 706,136,427.78 530,007,128.32
Net Cash flow from operating activities -101,489,686.78 -113,731,692.50 -38,659,739.54 -51,925,619.89
II. Cash flow from investing activities
Cash received from recovering investment 1,500,000.00
Cash received from investment income 238,173.40 238,173.40 18,000.00
Net cash retrieved from disposal of fixed assets, intangible
assets, and other long-term assets 50,500.00 27,000.00
Net cash received from disposal of subsidiaries or other
operational units
Other cash received concerning investing activities
Sub-total of cash inflow from investing activities 238,173.40 238,173.40 1,568,500.00 27,000.00
Cash paid for purchasing fixed, intangible and other
long-term assets 8,233,970.64 6,037,510.00 3,633,903.96 1,211,236.15
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries and other operational
units
Cash paid for other investing activities
Sub-total of cash outflow from investing activities 8,233,970.64 6,037,510.00 3,633,903.96 1,211,236.15
Net cash flow from investing activities -7,995,797.24 -5,799,336.60 -2,065,403.96 -1,184,236.15
III. Cash flow from financing activities
Cash received from absorbing investment
Incl. Cash received from absorbing minority
shareholders’ investment by subsidiaries
Cash received from loans 270,000,000.00 250,000,000.00 346,000,000.00 316,000,000.00
Cash received from bond placing
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 270,000,000.00 250,000,000.00 346,000,000.00 316,000,000.00
Cash paid for settling debts 258,000,000.00 250,000,000.00 355,000,000.00 320,000,000.00
Cash paid for dividend and profit distributing or interest
paying 15,021,249.32 9,488,737.49 11,855,436.45 10,802,698.18
Incl. Dividend and profit of minority shareholder paid by
subsidiaries 5,423,300.00 8,914,277.37
Cash paid for other financing activities 20,000,000.00 20,000,000.00
Subtotal of cash outflow due to financing activities 293,021,249.32 279,488,737.49 366,855,436.45 330,802,698.18
Net cash flow from financing activities -23,021,249.32 -29,488,737.49 -20,855,436.45 -14,802,698.18
IV. Influence of exchange rate alternation on cash and cash
equivalents -9,448.96 -35,363.85 -35,363.85
V. Net increase of cash and cash equivalents -132,516,182.30 -149,019,766.59 -61,615,943.80 -67,947,918.07
Plus: Balance of cash and cash equivalents at the
beginning of term 422,853,002.17 348,384,407.10 240,048,010.59 179,265,068.17
VI. Balance of cash and cash equivalents at the end of term 290,336,819.87 199,364,640.51 178,432,066.79 111,317,150.10
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
18
Statement of Changes in Owners' Equity (consolidated)
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2010 Unit: CNY
Current period Last year
Equity attributable to shareholders of the parent company Equity attributable to shareholders of the parent company
Item Paid-in
capital
(or share
capital)
Capital
reserves
Less:
Treasury
stocks
Reasona
ble
reserve Surplus
reserves
General
risk
provision
Undistrib
uted
profit Other
Minor
sharehol
ders'
equity
Total
owners'
equity
Paid-in
capital
(or share
capital)
Capital
reserves
Less:
Treasury
stocks
Reasona
ble
reserve Surplus
reserves
General
risk
provision
Undistrib
uted
profit Other
Minor
sharehol
ders'
equity
Total
owners'
equity
I. Balance at the end of the last year 215,000,
000.00
182,566,
377.24
589,559.
77
-59,459,1
68.77
-5,037,29
4.97
55,454,2
03.54
389,113,
676.81
215,000,
000.00
183,465,
955.00
589,559.
77
-70,126,6
11.10
-3,037,50
7.95
50,355,6
22.00
376,247,
017.72
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this
year
215,000,
000.00
182,566,
377.24
589,559.
77
-59,459,1
68.77
-5,037,29
4.97
55,454,2
03.54
389,113,
676.81
215,000,
000.00
183,465,
955.00
589,559.
77
-70,126,6
11.10
-3,037,50
7.95
50,355,6
22.00
376,247,
017.72
III. Increase/ Decrease in this year
(Decrease is listed with “-”) 2,808,15
6.61
8,257,61
2.37
-197,937.
66
-1,654,79
3.32
9,213,03
8.00
-899,577.
76
10,667,4
42.33
-1,999,78
7.02
5,098,58
1.54
12,866,6
59.09
(I) Net profit 8,257,61
2.37
6,576,66
3.29
14,834,2
75.66
10,667,4
42.33 12,585,3
21.15
23,252,7
63.48
(II) Other comprehensive income -197,937.
66 -197,937.
66
-1,999,78
7.02 -1,999,78
7.02
Subtotal of (I) and (II) 8,257,61
2.37
-197,937.
66
6,576,66
3.29
14,636,3
38.00
10,667,4
42.33
-1,999,78
7.02
12,585,3
21.15
21,252,9
76.46
(III) Owners’ contributions and
reduction in capital 2,808,15
6.61
-2,808,15
6.61
-899,577.
76 1,427,53
7.76
527,960.
00
1. Capital contribution from owners l 1,427,53
7.76
1,427,53
7.76
2. Share-based payment recognised
in shareholders' equity
3. Others 2,808,15
6.61
-2,808,15
6.61
-899,577.
76 -899,577.
76
(IV) Profit distribution -5,423,30
0.00
-5,423,30
0.00 -8,914,27
7.37
-8,914,27
7.37
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
provisions
3. Distribution for owners
(shareholders) -5,423,30
0.00
-5,423,30
0.00 -8,914,27
7.37
-8,914,27
7.37
4. Others
(V) Transfer within shareholders'
equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserve
4. Others
(VI) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
IV. Balance at the end of the report
period
215,000,
000.00
185,374,
533.85
589,559.
77
-51,201,5
56.40
-5,235,23
2.63
53,799,4
10.22
398,326,
714.81
215,000,
000.00
182,566,
377.24
589,559.
77
-59,459,1
68.77
-5,037,29
4.97
55,454,2
03.54
389,113,
676.81
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
19
Statement of Changes in Owners' Equity (parent company)
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2010 Unit: CNY
Current period Last year
Items
Paid-in
capital (or
share
capital)
Capital
reserves
Less:
Treasury
stocks
Reasonable
reserve Surplus
reserves
General risk
provision
Undistribute
d profit
Total
owners'
equity
Paid-in
capital (or
share
capital)
Capital
reserves
Less:
Treasury
stocks
Reasonable
reserve Surplus
reserves
General risk
provision
Undistribute
d profit
Total
owners'
equity
I. Balance at the end of the last year 215,000,000
.00
172,417,299
.81 589,559.76 -77,157,087
.57
310,849,772
.00
215,000,000
.00
172,417,299
.81 589,559.76 -84,416,720
.97
303,590,138
.60
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this year 215,000,000
.00
172,417,299
.81 589,559.76 -77,157,087
.57
310,849,772
.00
215,000,000
.00
172,417,299
.81 589,559.76 -84,416,720
.97
303,590,138
.60
III. Increase/ Decrease in this year
(Decrease is listed with “-”) 893,455.45 893,455.45 7,259,633.4
0
7,259,633.4
0
(I) Net profit 893,455.45 893,455.45 7,259,633.4
0
7,259,633.4
0
(II) Other comprehensive income
Subtotal of (I) and (II) 893,455.45 893,455.45 7,259,633.4
0
7,259,633.4
0
(III) Owners’ contributions and reduction
in capital
1. Capital contribution from owners l
2. Share-based payment recognised in
shareholders' equity
3. Others
(IV) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners
(shareholders)
4. Others
(V) Transfer within shareholders' equity
1. Capital reserves conversed to capital
(share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus reserve
4. Others
(VI) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
IV. Balance at the end of the report
period
215,000,000
.00
172,417,299
.81 589,559.76 -76,263,632
.12
311,743,227
.45
215,000,000
.00
172,417,299
.81 589,559.76 -77,157,087
.57
310,849,772
.00
Legal person representative：Zhao Xinping Financial controller: Sun Liang Accountant officer: Shi LianNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
20
NANJING PUTIAN TELECOMMUNICATIONS CO. LTD.
NOTES TO THE FINANCIAL STATEMENTS
From Jan. 1 to Jun. 30, 2010
(All amounts are stated by RMB Yuan unless otherwise stated）
I. Basic information of the Company
Nanjing Putian Telecommunications Co., Ltd. (hereafter refers to ‘the Company’) is the original Nanjing
Telecommunication Facility Factory, and was established as joint stock limited company by raising money
approved with TGS (1997) No. 28 issued by National Economic Institutional Reform Commission on March 21,
1997. The Company is mainly engaged in telecom equipment manufacture industry and was listed in
Shenzhen Stock Exchange on May 22, 1997. As of Jun. 30, 2010, the capital of the Company is RMB
215,000,000.00 Yuan. The business scope of the Company is data telecom product, wires telecom product,
wireless telecom product, distribution and allocation of layout of telecom product, research, manufacture of
media computer and digital television, vehicle electronics . Research, sale of video conference system, and
providing the related after-sales service ,including installation and maintenance and repairmen of
equipments .Design of telecom information net project and computer information systematic project, and
provision of related system combination and related consultancy service.
II Principal accounting policies and accounting estimate and correction of previous
errors
1. Basis for preparation of financial statement
The financial statements of the Company are prepared A) on the hypothesis of going concern and B) on the
actual transactions and events, C) by the “Accounting Standards for Business Enterprises - Basic Standard”
(issued by the Ministry of Finance in February 2006 ), 38 detailed accounting standards, the “Note to the
‘Accounting Standards for Business Enterprises - Practice Guide” , explanatory notes and other relative
regulations (hereinafter collectively referred to as “Accounting Standards for Business Enterprises”).and in
accordance with the accounting policy and estimation stated as follows.
2. Statement on Observation of Accounting Standard for Enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard for
Enterprise, and reflects the financial condition, operational achievements and cash flow of the Company
effectively and completely.
3. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December. This report cover
the period, which is from January 1,2010 to June 30,2010
4. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
5. Accounting treatment of Business Combination
Business combination includes combination of entities or businesses under common control and combination
under different control.
(1)Combination under common control
An acquirer of a business combination recognizes the assets acquired and liabilities assumed at their
acquisition-date carrying values. The excess of the carrying value of acquired net asset over the carrying
value of consideration transferred (or nominal value of shares issued) is charged to capital surplus. If capital
reserve’s not enough, the balance is charged to retained earnings. Transaction costs that are directly
attributable to the acquisition are recorded as profit or loss in the current period.
(2)Combination under different control
The consideration transferred in a business combination are measured at fair value, which shall be calculated
as the sum of the acquisition-date fair values of the assets transferred by the acquirer, the liabilities incurred
and the equity interests issued by the acquirer. For business combination achieved in stages, combination
costs are the sum of each transaction cost. Combination cost includes consideration transferred and
transaction costs that are directly attributable to the acquisition.
The acquirer shall recognize the acquisition-date fair value of contingent consideration as part of the
consideration transferred in exchange for the acquiree. An acquirer of a business combination recognizes the
identifiable assets acquired and liabilities and contingent liabilities assumed at their acquisition-date fair values.
Goodwill is measured as the excess of combination cost over the fair value of the net identifiable assets
acquired. When the fair value of the net identifiable assets acquired exceeds combination cost, before
recognizing a gain on a bargain purchase, the Company will reassess whether it has correctly measured all of
the identifiable assets acquired, all of the liabilities and contingent liabilities assumed and combination cost.
The difference is recorded to profit or loss in the current period if the fair value of the net identifiable assets
acquired exceeds combination cost after the review.
6. Basis of Preparation of Consolidated Financial Statements
The Company shall put subsidiaries which it controlling totally, main body with special purpose into
consolidated financial statements.
Consolidated financial statements have been prepared in accordance with the ASBEs No. 33 - ConsolidatedNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
21
Financial Statements and relevant supplementary regulations. All significant transactions and balances
between the Company and its subsidiaries are eliminated for the purpose of consolidation. The equity of
subsidiaries not held by the parent company shall be presented separately as minority shareholders’ equity in
consolidated shareholders’ equity.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
When preparing the consolidated financial statements, if the Company acquired the subsidiary through
business combination not involving under common control, the separate financial statements shall be adjusted
based on the fair value of identifiable net assets at the acquisition date. If the subsidiary is acquired through
business combination involving common control, the consolidated financial statements shall include the
carrying amount of assets, liabilities, operating result and cash flow of the subsidiary at the beginning of the
current period, as if business combination also had occurred the beginning of the current period.
7. Cash and cash equivalent
The cash reflected in the cash flow statement of the Company represents the inventory cash and the deposit
available for payment at any time. And the cash equivalent in the cash flow statement refers to the kind of
investment with short holding term and strong flow ability. At the same time, the cash equivalent is easy to
convert into cash with already-known amount and risk of value change is very small.
8. Foreign currency business and foreign currency financial statement conversion
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB amount
pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items
expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance
sheet date. As for the foreign currency non-monetary items measured by historical cost, conversion is made
with the spot exchange rate as of the business day, with no change in RMB amount.
The conversion difference occurred is recorded into prevailing gains and losses, other than the disclosure
which is made according to capitalization rules for the exchange difference occurred from the special foreign
currency borrowings borrowed for constructing and producing the assets satisfying condition of capitalization.
(2)Conversion of foreign currency financial statement
As for the subsidiaries and joint ventures with different standard currency for accounting from the
company ,the Company account for transaction and prepare consolidated financial statements after
conversion of related foreign currency financial statements.
Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreign
currency balance sheet; as for the items in statement of owners’ equity except for “Undistributed profit”,
conversion is made pursuant to the spot exchange rate of business day; income and expense items in income
statement then are also converted pursuant to the spot exchange rate of transaction day approximately, which
is systematic and reasonable method. Difference arising from the aforementioned conversions shall be listed
separately in items of owners’ equity.
Spot exchange rate as of the occurrence date of cash flow approximately is adopted for conversion of foreign
currency cash flow, which is systematic and reasonable method. The amount of cash affected by exchange
rate movement shall be listed separately in cash flow statement.
When disposing operation abroad, related difference arising from foreign currency exchange is transferred to
profit or loss in the current period, transferred proportionately when partially disposed.
9. Financial Instruments
(1)Classification, recognition and measurement of financial instruments
The Company classifies financial instruments into the following two categories, namely financial assets or
financial liabilities.
The company groups the financial assets owned by it as four categories , namely financial assets measured
by fair value and whose movement is recorded into prevailing gains and losses currently designated as at fair
value through profit(including held for trading financial assets and financial assets designated as at fair value
through profit or loss) or loss held-to-maturity investment, loans and accounts receivables, as well as financial
assets available-for-sale, when they are initially recognized. It is up to management’s intentions and abilities of
held- for - financial assets except loans and accounts receivables.
When making the initial recognition for financial liabilities, the Company classifies the financial liabilities into
ones which are measured by fair value and whose change is recorded into prevailing gains and losses, and
other financial liabilities. Financial liabilities which are measured by fair value and whose change is recorded
into prevailing gains and losses include tradable financial liabilities and financial liabilities which are measured
by fair value and whose change is recorded into prevailing gains and losses in the current period.
When the Company becomes a party to a financial instrument contract, it recognizes a related financial asset
or financial liability.
When making the initial recognition for financial assets or financial liabilities which are measured by fair value,
and then follow-up measurements are made by fair value, except that held-to-maturity investment, loans and
accounts receivables are shown in amortized cost, as well as financial assets or financial liabilities which are
measured at historical cost due to related fair value cannot been recognized and measured reliably.
Fair value change of financial assets or financial liabilities in the follow-up measurements, except they are
hedged against certain risk ,should be accounted as follows:①Fair value change of financial assets or
financial liabilities which are measured by fair value and whose fair value change is recorded into prevailing
gains and losses is recorded into gains and losses of fair value change; Interests or cash dividend acquiredNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
22
from holding assets are recognized as investment income; when disposing such assets, the difference
between their fair value and initial accounting amount is recognized as investment gains and losses.
Meanwhile, gains and losses of fair value shall be adjusted.②Fair value change of financial assets
available-for-sale is recorded into capital reserve; the interests calculated by effective interest rate method
during the holding period are written into investment income; cash dividend obtained from investment by
equity instrument available-for-sale is written into investment income at the time when the invested company
declares to grant dividend; the difference between the payment received when disposal of such assets and
carrying value after deducting the accumulative fair value change which is originally and directly recorded into
capital reserve, is written into investment gains and losses.
(2) Recognition and measurement of transferring of financial assets
Where there is a transfer of financial assets, the Company should derecognize the entire financial asset if it
has transferred nearly all of the risks and rewards related to ownership of the financial asset to the transferee;
or it is out of the control of the asset, although it has not yet transferred the asset or it has not retained almost
the risks and rewards relating to ownership of the financial asset.
When the transfer of financial assets qualify for derecognition criteria, the Company should measure
correspondingly, namely differences between the book value of the transferred financial assets and the sum of
consideration received by the transfer, and the accumulated changes in fair value directly included in the
capital reserve (when transferred financial assets involve available-for-sale financial assets) should be
included in profit and loss in the current period.
If the partial transfer of financial assets qualify for derecognition criteria, the Company should measure
correspondingly, namely the overall book value of the transferred financial assets are divided according to the
fair value of transferred and retained part, and the difference between the book value of the derecognized part
and the sum of the consideration of the derecognized part, and the amount of the corresponding part of the
accumulated changes in fair value directly included in the capital reserve (when the transfer involve
available-for-sale financial assets) is recorded to profit or loss in the current period.
(3)Derecognition of financial liabilities
Recognition of certain liability should be terminated when related current obligation has already been wholly or
partly discharged.
(4)Recognition of fair value of financial assets and liabilities
For those financial instruments existing in active markets, market quotation in the active market is used to
confirm their fair values. Fair value of the financial instruments which have no active market is confirmed by
adoption of estimation technology
Estimation technology includes reference to the price applied by parties which know well situation and are
willing to make deals in the latest market business, reference to the current fair value of other financial assets
which are the same in principle, reference to discounted cash flow method and so on.
When estimation technology is adopted, Parameters of the market should be applied at the most, prior to the
parameters of the Company and its subsidiaries.
(5) The impairment test and the impairment provision of the financial assets
Except for the financial assets which are measured by fair value and whose fair value change is recorded into
prevailing gains and losses, the Company will make check in the carrying value of other financial assets as at
the balance sheet date. The impairment provision is recognized where there is any objective evidence proving
that such financial asset has been impaired.
When the impairment provision happen, the carrying amount of this financial asset is written down to the
present value of the predicted future cash flow and the written down shall be recognized as the impairment
loss of the asset and shall be recorded into the profit or loss of the current period.
The present value of the predicted future cash flow refer to two factors: predicted future cash flow and
discounted rate.
Predicted future cash flow is estimated by different types of financial assets generating cash flow in use and
disposal finally.
Discounted rate is determined reasonably, based on time value of current money market and pre-tax interest
rate of special risk associated with the financial asset.
Discounted rate is required rate of return on investment.
(6)Reclassification of financial asset
Held-to-maturity investment that is not yet expired can be reclassified as available-for-sale financial assets,
When it meet the following situation:
①There is no financial resource to be utilized providing requisite funds continually to hold the financial assets
to maturity.
②There is no intention of holding the financial assets to maturity for management.
③It is difficult to hold the financial assets to maturity due to the restriction of laws and regulations and other
factors.
④Others showing that the Company has not the ability to hold the financial assets to maturity.
Significant parts of above must be approved by the board of directors before making a decision.
10. Accounts receivable
On the balance sheet day, there is any objective evidence proving that accounts receivable has been impaired,Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
23
an impairment provision is made according to the difference between the carrying amount of accounts
receivable and the present value of the predicted future cash flow.
(1)Recognition Criteria and Provision of bad debt for receivables with a great single amount
Recognition criteria Top five largest accounts receivable
Provision method
Carry out an independent impairment test to withdraw bad debt provision where there
is any objective evidence proving that such accounts receivable has been impaired,
an impairment provision is measured at the difference between carrying amount
and estimated future cash flow, and impairment loss should be recognized.
(2)Recognition criteria and provision of bad debt for receivables belong to category with high credit
risk
Recognition criteria Accounts receivable with aging over 2 years, except for receivables with a great single amount
Provision method
Based on the effective loss ratio of the accounts receivable portfolio of the same aging,
which has common or similarity or similar credit risk characteristics, the Company confirms
the ratio of bad debt provision provided for various portfolio of this year with consideration
of the actual condition, pursuant to which bad debt provision provided for this year is
calculated ,reference to aging analysis below. When there is objective evidence proving
probability of recovery of accounts receivable is different obviously, make a separate
impairment test.
Categorize accounts receivable which have no significant single items into certain portfolio in consideration of
credit risk characteristics based on aging factors. Provision ratio of bad debt provision of accounts receivable
classified according to ageing is as follows:
11. Inventories
(1)Classification of inventory
The company holds the assets for sale , which are finished goods in the ordinary course of the business, or
in the process of production for such sale, or in the form of materials or supplies to be consumed in the
production process or in the rendering of services.
The inventories of the Company comprises of raw materials, turn-over materials , consigned materials for
processing ,packing materials, low-value consumable items ,work in process, self-made semi-finished product,
finished goods etc.
(2)Measurement of issued inventory
The inventory is measured using weighted average method when issued.
(3)Recognition and measurement for inventory impairment provision
On balance sheet date, the inventories are measured at lower of cost and net realizable value.
it is provided according to the difference between the cost of single inventory item and its net realizable value.
But as for others with large quantity and low price, the reserve is provided according to categories.
The determination of net realizable value of inventories based on: ① Net realizable value of finished products
is the estimated selling price less estimated selling expenses and the relevant tax payments; ②As for
materials hold for production, when net realizable value of finished products derived from these materials is
higher than the cost of those, measured at cost; when the material prices show that the net realizable value
of finished products produced by these materials is below cost, net realizable value will be the estimated sale
price less estimated cost to completion , estimated selling expenses and related tax expense. ③As for
materials held for sale, net realizable value is the market price.
Provision ratio（%） Provision ratio（%）
Ageing
Telecommunication products None telecommunication products
Within 2 year 0.00 0.00
2-3 years 10.00 20.00
3-4 years 30.00 50.00
4-5 years 40.00 80.00
5-6 years 80.00 100.00
Above 6 years 100.00 100.00Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
24
(4)The stocktaking system is perpetual inventory system
(5)Amortization method for low value consumable items and packing materials
The low value consumable items are amortized by step-amortization method and packaging materials are
amortized by applying immediate write-off method when consumed.
12. Long-term equity investment
(1)Initial measurement of long-term equity investment
①The long-term equity investment acquired through combination under common control are measured at the
attributable share of carrying amount of owners’ equity as its initial investment cost; the investment acquired
through combination under different control are initially recognized at combination cost.
②The long-term equity investment is acquired through cash payment, the actual payment for the purchase
shall be deemed as initial investment cost.
③The long-term equity investment is acquired by issuing the equity securities, the fair values of issued equity
securities will be deemed as the initial investment cost.
④The long-term equity investment made by the investors, the agreed price in investment contract or
agreement will be deemed as the initial investment cost.
⑤long-term equity investment which is acquired through debt reorganization and non-monetary assets
exchange, regulations of relevant accounting standards shall be referred to for confirming initial investment
cost.
(2)Subsequent measurement of long-term equity investment and recognition of investment income
Cost method and equity method is adopted for long-term equity investment respectively.
The long-term investment of the Company under the equity method includes long-term equity investment with
joint control or significant influence over the investee. After the Company acquires a long-term equity
investment, the Company recognizes the investment profits or losses and adjusts the book value of the
long-term equity investment in accordance with its attributable share of the net profits or losses of the
investee.
The long-term equity investment under cost method is initially measured at investment cost. If there are
additional investments or disinvestments, the cost of the long-term equity investment is adjusted. The
dividends or profits declared by the investee are recognized as the current investment income.
When the Company has joint control or significant influence over the investee, adopting equity method,
otherwise cost method will be applied.
(3)Recognition criteria for joint control and significant influence
①The recognition criteria for joint control includes: Decision relating to financial policies and operation policies
of joint company needs identical agreement by all the joining parties based on agreement in the contract
between all the joining parties.
②The recognition criteria for significant influence includes: when the Company owns above 20% (including
20%) below 50% voting shares of investee company. When the Company owns below 20% (excluding 20%)
voting shares of investee company, Significant influence over investee company should be recognized when it
meets one of the following situations:①Delegation of certain representative in the board of directors or similar
situation of investee company.②Participate the decision-making of investee company③Delegation of certain
management staff in the investee company.④Reliance to technology or technological materials of investee
company.⑤others stating significant influence over investee company.
(4)Test of impairment and provision of impairment
On balance sheet date, the Company carries out an inspection if there is any evidence that the long-term
investment is impaired. When any evidence stating long-term investment impaired occurs
The Company should estimate its recoverable amount and carry out impairment test. Impairment loss is
measured at difference between carrying value and recoverable amount .The impairment loss will never be
reversed in the future once it is ascertained.
Recoverable amount is the higher amount of the net fair value for sale and the present value of estimated
future cash flows.
The net fair value for sale is sell price agreed less related tax expenses when there is fair price for transaction
or without fair price for transaction but existence of similar active market. The net fair value for sale will beNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
25
present value of estimated future cash flows arising from using normally and disposal finally when net fair
value for sale cannot be estimated realizably.
13. Investment real estate
(1)Classification and measurement
The investment real estate of the Company includes rented land use rights, leased houses and buildings, land
use rights which are held and prepared for transfer after appreciation and rented buildings. The Company
adopts the cost model to measure
initially and subsequently.
(2)Accounting for cost model
For investment real estate for lease accounted for under the cost model, the same depreciation policies as
those of the Company’s fixed assets are adopted
For land use right for lease, the same amortization policies as those of the intangibles are adopted.
14. Fixed assets
(1)Recognition
Fixed assets are tangible assets that have useful life more than one year, and are held for use in the
production or supply of goods or services, for rental to others or for administrative purposes. No fixed asset
may be recognized unless it meets all the following conditions:
a. The economic benefits related with the fixed asset are probably to flow to the enterprise; and
b. The cost of the fixed asset can be measured reliably
(2)Classification and Depreciation
The Company’s fixed assets are classified as buildings and structures, machinery equipment, transportation
equipment and electronic and other equipment. Depreciation is provided monthly using the straight-line
method.
The depreciation rate is recognized in accordance with category, estimated useful life and estimated residual
rate of fixed assets，based on nature and utilization of each category. The Company will review the useful life,
estimated residual value and deprecation method of the fixed assets at the year end, and make necessary
adjustment once difference occurs from estimated before. The Company withdraws depreciation for all fixed
assets except for those which have been fully depreciated while continuing to use and the land which is
accounted with separate pricing. The estimated residual value rate, useful life and annual depreciation rate of
each category of fixed assets are as follows:
Category of fixed assets Useful life (year)
Residual value rate
(%)
Depreciation rate (%)
Building/structure 15－35 3 2.77%-6.47%
Machinery equipment 10－15 3 6.47%-9.70%
Transportation equipment 6－8 3 12.13%-16.17%
Electronic and other
equipment 4－11 3 2.20%-24.25%
(3)Impairment
On balance sheet date, the Company carries out an inspection if there is any evidence that the fixed asset is
impaired based on information below. If fixed asset is impaired, the Company will estimate its recoverable
amount and carry out impairment test, the impairment loss should be recognized in profit or loss and provision
identified, based on the lower of its carrying value and recoverable amount. The impairment loss will never be
reversed in the future once it is ascertained.
Method impairment test: Carry out impairment test, once there is any evidence that the fixed asset is impaired.
Recoverable amount is measured as the higher value of fixed asset’s fair value less costs to sell and present
value of its estimated cash flow.
The net fair value for sale is sell price agreed less directly attributable costs to sell when there is fair price for
transaction or without fair price for transaction but existence of similar active market. The net fair value for sale
will be present value of estimated future cash flows arising from using normally and disposal finally when net
fair value for sale cannot be estimated realizably.Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
26
(4)Recognition and measurement of fixed assets under finance lease
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership.
Examples of situations that individually or in combination would normally lead to a lease being classified as a
finance lease are:
①The lease transfers ownership of the asset to the lessee by the end of the lease term;
②The lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than the
fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of the
lease, that the option will be exercised;
③The lease term is for the major part of the economic life of the asset even if title is not transferred;
④At the inception of the lease the present value of the minimum lease payments amounts to at least
substantially all of the fair value of the leased asset;
⑤The leased assets are of such a specialized nature that only the lessee can use them without major
modifications.
At the commencement of the lease term, lessees shall recognize finance leases as assets and liabilities in
their balance sheets at amounts equal to the fair value of the leased property or, if lower, the present value of
the minimum lease payments,each determined at the inception of the lease.
The depreciation policy for depreciable leased assets shall be consistent with that for depreciable assets that
are owned, and the depreciation recognized shall be calculated in accordance with fixed assets, as well as
test of impairment.
15. Construction in process
(1) Classification
The Company will classify construction in progress as self- construction and contract-out- construction.
(2)Criterion and timeless of Construction in progress being transferred to fixed assets
Construction in progress is transferred to fixed assets when the project is substantially ready for its intended
use.
Examples of situations that shows being ready for its intended use are listed below
①Substantial construction has already finished.
②Result of pilot production indicates that it can run normally.
③Expenditure in the future associated with it will not happen nearly.
④It is accordance with the requirement of intended design or contract, or nearly
(3)Method of the carrying out impairment test and provision of impairment
On balance sheet date, the Company carries out an inspection if there is any evidence that the construction in
progress is impaired. If construction in progress is impaired, the Company will estimate its recoverable amount
and carry out impairment test, the impairment loss should be recognized in profit or loss and provision
identified, based on the lower of its carrying value and recoverable amount. The impairment loss will never be
reversed in the future once it is ascertained.
Method impairment test: Carry out impairment test, once there is any evidence that the construction in
progress is impaired.
Recoverable amount is measured as the higher value of construction in progress’s fair value less costs to sell
and present value of its estimated cash flow.
16. Borrowing expense
(1) Recognition of borrowing expense capitalization
The borrowing expense which could be directly attributable to purchase or production of assets satisfying
capitalization condition, starts capitalization and are recorded to the cost of related assets. Other borrowing
expense is recognized as expense as soon as it happens. Assets satisfying capitalization principle generally
refer to fixed assets, investment real estate and inventories which can only arrive at predicted
available-for-use and available-for-sale state after quite a long time in purchase or production activities.
(2)Calculation of borrowing expense capitalization
The company starts capitalization when capital expenditure and borrowing expense
occur and when necessary purchase or production conducted for promoting assets to reach the predictedNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
27
available-for-use or available-for-sale state; and capitalization shall cease when purchased or produced assets
satisfying capitalization condition have reached the predicted available-for-use or available-for-sale state.
If abnormal interruption happens during purchase or production of assets satisfying capitalization principle and
the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until the
purchase or production restarts.
Amount of borrowing expense capitalization: ①Capitalization shall be exercised for interest expense actually
occurred from special borrowings in current period after deduction of the interest income arising from
unutilized borrowing capital which is saved in banks or deduction of investment income obtained from
temporary investment; ②For reorganization of capitalized amount of common borrowing, it equals to the
weighted average of the assets whose accumulated expense or capital disburse is more than common
borrowing times capitalization rate of occupied common borrowing. Capitalization rate is determined according
to weighted average interest rate of common borrowing. ③amortization of discount or premium by effective
interest method in each accounting period ,adjusting interest expense in the responding period , when
borrowings happened originally in discount or premium.
Effective interest method determines interest expense, amortization of discount or premium in effective
interest, which is IRR of carrying value of the borrowing equal to NPV of future estimated cash flows resulting
from the borrowing.
17. Intangible assets
(1)Measurement of intangible assets
Initial measurement:
The intangible assets shall be initially measured at cost. For those intangible assets purchased in by the
Company, their effective cost consist of actual payment and relevant other expenditure; for the intangible
assets input by investors, effective cost is determined according to the value agreed in investment contracts
and agreements, while if the agreed value is not fair, then effective value is confirmed according to fair value.
The cost of an internally generated intangible asset is the sum of expenditure incurred from the date when the
intangible asset first meets the recognition criteria to the date that expected usable condition are reached.
Subsequent measurement:
①The amortization amount of an intangible asset with a finite useful life should be allocated on a
systematically basis over the its useful life once ready for its intended use, or adopting straight-line method if
benefits realize cannot estimate reliably. The amortization period and the amortization method for an intangible
asset shall be reviewed at least at each financial year-end, shall be adjusted if necessary.
②There is no amortization for intangible assets with indefinite use life. But during each accounting period,
Re-examination on predicted service life of intangible assets which have uncertain service life shall be
conducted. For any evidence proving that service life of intangible assets is limited, then the service life shall
be estimated and the Company shall make amortization within the predicted service life period, which would
be treated as change of accounting estimation.
(2) Estimation of useful life of intangible asset with a finite useful life
The company should analyze intangible asset’s useful life with a finite useful life. If acquirement with
contractual rights or
other statutory rights, useful life will be within the period of contractual rights or other statutory rights. If the
period when the
Company use the intangible asset is shorter than that of contractual rights or other statutory rights, useful life
will be intended
useful life.
The company estimate useful life of intangible asset’s useful life with a finite useful life referring to situations
normally as follows: limitation of related laws or similar restriction associated with controlling the intangible
asset such as license period, lease term, contractual rights or other statutory rights, intangible asset’s useful
life with a finite useful life is within contractual rights or other statutory rights normally. The company normallyNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
28
determines the period when economical will benefit inflows to the company, considering comprehensive
factors, such as industry information, historical information, employing specialist to analyze ,as for intangible
asset’s useful life without limitation of related laws or similar restriction.
Estimation of intangible asset’s useful life with a finite useful life as follows:
Category of intangible assets Useful life (year) Proof
Land use right 50
Land use right certificate
period
Software 5-10 Update cycle
Exclusive technology 10 Exclusive certificate period
(3)Basis of determination of indefinite use life with intangible assets
An intangible asset is regarded as having an indefinite useful life when there is no foreseeable limit to the
period over which the asset is expected to generate economic limit to benefits for the Company. The useful life
of intangible asset that are not stipulated by contact or laws is ascertained based on previous experience or
experts’ verification. If the period in which the asset’s future economic benefits are expected to flow to the
entity cannot be confirmed according to above ways, the Company classified the intangible asset as intangible
asset with indefinite useful life.
Criteria of indefinite use life: Acquisition of an intangible asset arising from contractual or other legal rights
without prescribed detailed use life. Connection historical information with experts’ verification, the useful life of
intangible asset that are not stipulated by contact or laws is ascertained yet.
On balance sheet date, the company is required to test intangible asset with an indefinite useful life for useful
life at the end of each year, mainly in top-down method.
(4) Impairment
On balance sheet date, the Company carries out an inspection if there is any evidence that the intangible
asset is impaired . If intangible asset is impaired, the Company will estimate its recoverable amount and carry
out impairment test, the impairment loss should be recognized in profit or loss and provision identified ,based
on the lower of its carrying value and recoverable amount. The impairment loss will never be reversed in the
future once it is ascertained.
Method impairment test: Carry out impairment test, once there is any evidence that the intangible asset is
impaired.
Recoverable amount is measured as the higher value of intangible asset’s fair value less costs to sell and
present value of its estimated cash flow.
(5) Research and Development Cost
Research cost is recorded to profit or loss when it is incurred. An intangible asset arising from the
development phase of an internal project shall be recognized if, and only if, the Company can demonstrate all
of the following:
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
Its intention to complete the intangible asset and use or sell it;
How the intangible asset will generate probable future economic benefits. among other things, the entity 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;
The availability of adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset; Its ability to measure reliably the expenditure attributable to the intangible asset
during its development. Cost in development phase that does not meet above conditions is recorded to profit
or loss when it is incurred.
Costs of internal projects should be distinguished into cost in research phase and cost in development phase.
Research cost refers to cost arising from inventive activities aimed at obtaining new knowledge. It is typical of
planning and exploratory.
Development cost refers to cost arising from activities that apply result in research phase or other knowledgeNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
29
in a certain plan or design, to produce new or substantially improved material, equipment, and products etc.
before commercial production or application. It is typical of being concise and to the point and higher
possibility of success.
18. Long-term prepaid expenses
The long-term prepaid expenses of the Company are expenses for current and future periods that have been
disbursed but will be amortized over one year (not include 1 year). It mainly includes parking fees, housing
and decoration costs. Long-term prepayments are amortized based on the expected beneficial periods. If such
long-term deferred expense could not bring benefit to following accounting periods, the unamortized value of
the item shall be fully transferred to current gains and losses.
19. Provision
(1) Recognition criteria
Obligations are recognized as a provision when meet all the following conditions:
That obligation is a present obligation of the Company; It is probable that an outflow of economic benefits from
the Company will be required to settle the obligation; and A reliable estimate can be made of the amount of the
obligation.
(2) Measurement
The estimated liabilities initially recognized should be the best estimate of the expenditure required to settle
the present obligation, taken in to consideration the risk, uncertainty and time value of money etc. related to
contingencies. Best estimate is discounted amount of estimated future cash flow if time value of money is
significant. The Company reviews the carrying amount of provision on balance sheet date. Where there is any
concrete evidence that its carrying amount is not the best estimate, the carrying amount is adjusted based on
the best estimate.
20. Revenues
(1)Revenue recognition for sale of goods
Revenue from the sale of goods shall be recognized when all the following conditions have been satisfied:
①The significant risks and rewards of ownership of the goods have been transferred to the buyer by the
Company;
②The Company retains neither continuous managerial involvement to the degree usually associated with the
ownership nor effective control over the sold goods;
③The amount of revenue can be measured reliably;
④It is probable that the economic benefits associated with the transaction will flow to the Company; and
⑤The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Where the receipt of revenue agreed in the contract is delayed beyond the normal credit conditions, which is
of financing intention, the receipt of revenue shall be determined on the basis of the fair value of the contract.
(2)Revenue recognition for rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue
associated with the transaction shall be recognized by reference to the stage of completion of the transaction
at the balance sheet date. The stage of completion is based on the measurement of the work completed.
If the Company cannot reliably estimate the service performed the date of the balance sheet, the Company
applies the following treatment respectively:
①If the service expenses incurred are recoverable, the revenue from rendering of services shall be
recognized to the extent of the expenses incurred and the cost of sale transferred at the same amount; or
②If the service expenses incurred are not recoverable, the expenses incurred shall be recognized in the profit
or loss and no revenue from rendering of services shall be recognized.
(3)Revenue recognition from alienation of right to use assets
The principle of revenue recognition from alienation of right to use assets
The revenues from alienation of right to use assets will be recognized when all the following conditions have
been satisfied:Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
30
(i)It is probable that the economic benefits associated with the transaction will flow to the Company; and
(ii)The amount of revenue can be measured reliably.
21 .Government grant
(1)Types of government grant
Government grant comprise government grant related with assets and grant related with income
(2)Accounting for government grant
Government grant related with assets shall be recognized as deferred income, which is recognized as income
over the useful life of the asset. But the government grant measured at nominal amounts shall be directly
included in the current profit or loss. The government related with income shall be treated respectively in
accordance with the circumstances as follows: the grant used for compensating the related future expenses or
losses of the Company shall be recognized as deferred income and shall included in the current profit or loss
during the period when the relevant expenses are recognized; or the grant used for compensating the related
expenses or losses incurred to the Company shall be directly included in the current profit or loss.
22. Deferred tax asset or liability
A deferred tax asset and deferred tax liability shall be recognized by a difference (temporary difference)
between the carrying amount of an asset or liability and its tax base, as well between carrying amount of items
which have a tax base according to tax law but not recognized as assets or liabilities and its tax base,
conjunction with expected income tax rate to be applied in the period when recovery of the asset or settlement
of the obligation occur.
The Company shall recognize the corresponding deferred tax asset for deductible temporary differences as no
higher than the taxable profits that will be available in the future, against which the temporary difference can
be utilized. The Company shall
recognize the deferred tax asset that has not been recognized before ,once there are sufficient evidences
probably showing sufficient taxable profits will be available against the temporary deductible difference. The
Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable
that sufficient taxable profits will be available in future periods to allow the benefit of the deferred tax asset to
be utilized.
The Company recognizes a deferred tax liability for all temporary differences arising from investments in
subsidiaries, branches and associates, and interests in joint ventures, unless the Company can control the
time when
the temporary difference will reverse in the foreseeable future, and the temporary difference will probably not
reverse in the foreseeable future simultaneously.
The Company recognizes a deferred tax asset for all deductible temporary differences arising from
investments in subsidiaries, branches and associates, and interests in joint ventures, to the extent that it is
probable that: the temporary difference will reverse in the foreseeable future; and taxable profit will be
available against which the temporary difference can be utilized.
23 .The main changes in accounting policies and accounting estimates
None
24 . Correction of previous errors and effects
None
III．Taxations
Major taxes and tax rates
Type of tax Tax base Tax rateNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
31
Type of tax Tax base Tax rate
VAT Income from sales of goods and materials 17%
Business tax
Income from lease, installation ,procession, rendering of
service 3%-5%
Urban maintenance and
construction tax Turnover tax 7%
Education surcharge Turnover 3%
Local education surcharge Turnover 1%
Corporate income tax Taxable income 15%-25%
Note:
1. Urban maintenance and construction tax
The Urban maintenance and construction tax is recognized and paid as 7% of the turnover tax, and the foreign
invested enterprise affiliated to the Company is exempt from the City Maintenance & Construction Tax
according to rules.
2. Education surcharge
The Education surcharge is recognized and paid as 3% of the turnover tax, and the foreign invested enterprise
affiliated to the Company is exempt from the Education surcharge.
3. Corporate income tax
Name of the Company and its subsidiaries Note
This year’s
income tax
rate
Last year’s
income tax
rate
The Company （1） 15% 15%
Nanjing Nanfang Telecommunications Company
Limited
（3） 25% 25%
Nanjing Bada Telecommunications Co., Ltd. （3） 25% 25%
Nanjing Putian Inforamtion Technology Company Ltd. （3） 25% 25%
Nanjing Putian Telecommunication Technology Co.,
Ltd.
（3） 25% 25%
Nanjing Putian Tianji Intelligent Building Ltd. （1） 15% 15%
Putian Telecommunications (Hong Kong) Co., Ltd. （2） 17.5% 17.5%
Beijing Picom Telecommunications Equipment Ltd
（3）
25% 25%
Nanjing Putian Network Company Ltd.
（3）
25% 25%
Nanjing Postel Wongshi Telecommunications Co., Ltd.
（3）
25% 25%
Nanjing Putian Changle Telecommunications
Equipment Co., Ltd.
（3）
25% 25%
Nanjing Telecommunication Factory ,seven branch
（3）
25% 25%
(1)The company and Nanjing PutianTianji Intelligent Building Ltd. are the high-technique enterprise. In
accordance with relevant rules, they are all subject to taxation at a rate of 15% of the standard EnterpriseNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
32
Income Tax rate.
(2) Putian Telecommunications (Hong Kong) Co., Ltd. was established in Hong Kong on December 1, 2000,
and is subject to the Enterprise Income Tax at a rate of 17.5% according to relevant rules in Hong Kong.
(3) Others are subject to the Enterprise Income Tax at a rate of 25%.
IV. Business combination and consolidated financial statements
The Company shall put subsidiaries which it controlling totally, main body with special purpose into
consolidated financial statements.
Consolidated financial statements have been prepared in accordance with the ASBEs No. 33 - Consolidated
Financial Statements and relevant supplementary regulations. All significant transactions and balances
between the Company and its subsidiaries are eliminated for the purpose of consolidation. The equity of
subsidiaries not held by the parent company shall be presented separately as minority shareholders’ equity in
consolidated shareholders’ equity.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
When preparing the consolidated financial statements, if the Company acquired the subsidiary through
business combination not involving under common control, the separate financial statements shall be adjusted
based on the fair value of identifiable net assets at the acquisition date. If the subsidiary is acquired through
business combination involving common control, the consolidated financial statements shall include the
carrying amount of assets, liabilities, operating result and cash flow of the subsidiary at the beginning of the
current period, as if business combination also had occurred the beginning of the current period.
1. Subsidiary
Subsidiaries that are setup or obtained by the investment
Name
Type Registration
Business
nature
Registered
capital( Unit:
RMB’0000）
Business
Scope
The Year End’s
actual amount
of capital
Investment
Balance of other
Essentially
constituting net
Investment in
Subsidiary
Shareholding
proportion
(%)
Voting
Rights
proportion
(%)
Nanjing Nanfang
Telecommunications
Company Limited
Stated-controlled Nanjing Trading 3,420.50 telecommunications 33,175,148.00 98.24% 98.24%
Nanjing Bada
Telecommunications
Co., Ltd
Stated-controlled Nanjing
Manufacture 1,130.14 telecommunications 5,610,000.00
60.00% 60.00%
Nanjing Putian
Inforamtion
Technology
Company Ltd.
Stated-controlled Nanjing
Trading&
Manufacture
1,400.00 telecommunications 13,860,000.00
99.98% 99.98%
Nanjing Putian
Tianji Intelligent
Building Ltd.
Stated-controlled Nanjing
Trading&
Manufacture
1,200.00 telecommunications 3,320,003.45
45.77% 45.77%
Putian
Telecommunications
(Hong Kong) Co.,
Ltd.
Stated-controlled Hongkong Trading HK 200.00 telecommunications 1,910,520.00
90.00% 90.00%
Beijing Picom
Telecommunications
Equipment Ltd
Stated-controlled Beijing Trading USD 50.00 telecommunications 1,854,910.00
51.00% 51.00%
Nanjing Postel
Wongshi
Telecommunications
Co., Ltd.
Stated-controlled Nanjing
Trading&
Manufacture
USD
1,090.00
telecommunications 40,997,683.00
99.42% 99.42%
Nanjing Putian Stated-controlled Nanjing Trading& 1,000.00 telecommunications 2,610,457.00 50.70% 50.70%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
33
Changle
Telecommunications
Equipment Co., Ltd.
Manufacture
Nanjing Putian
Network Company
Ltd.
Stated-controlled Nanjing
Trading&
Manufacture
1,000.00 telecommunications 7,741,140.40
78.00% 78.00%
Nanjing Putian
Telecommunication
Technology Co., Ltd
Stated-controlled Nanjing
Trading&
Manufacture
475.00 telecommunications 1,294,510.00
70.00% 70.00%
Total 112,374,371.85
(Continued)
Name
statements combined or
not
Minority interest
Amount in minority interest
used for writing down minority
gain and loss
The balance after the parent company’ s owner’s equity writing down
the excess of the current loss undertaken by minority shareholders of
the subsidiary over the share enjoyed by minority shareholders in the
original owner’s equity of the subsidiary
Nanjing Nanfang
Telecommunications
Company Limited
Yes
985,602.04
Nanjing Bada
Telecommunications
Co., Ltd
Yes
4,698,430.96
Nanjing Putian
Inforamtion
Technology Company
Ltd.
Yes
852.52
Nanjing Putian
Intelligent Building
Ltd.
Yes
31,805,787.29
Putian
Telecommunications
(Hong Kong) Co., Ltd.
Yes
Beijing Picom
Telecommunications
Equipment Ltd
No
Nanjing Postel
Wongshi
Telecommunications
Co., Ltd.
Yes
211,959.67
Nanjing Putian
Changle
Telecommunications
Equipment Co., Ltd.
Yes
12,602,870.72
Nanjing Putian
Network Company
Ltd.
Yes
3,493,907.02
Nanjing Putian
Telecommunication
YesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
34
Technology Co., Ltd
Total
53,799,410.22
Note: Nanjing Putian Intelligent Building Ltd. changed its name into Nanjing Putian Tianji Intelligent Building
Ltd. on 17 April ,2010, and the company recovered 4.42% interest with respect to 1st shareholder
meeting ,holding on 2 April,2010.
2. Conversion of foreign currency financial statement for accounting entity operation at oversea
Items of assets and liabilities shall be conversed at average exchange rate as of Jun.30,2010 announced by
Foreign Exchange Bureau in China. Items of equity shall be conversed at spot rate when occurring, except
retained profit. Items of income statement shall be conversed at average exchange rate as of Jan.1,2010 and
as of Jun.30,2010,announced by Foreign Exchange Bureau in China.
V. Notes to the major items in the consolidated financial statements
With respect to the financial statements figures disclosed below, unless otherwise specified,
“year-beginning” refers to Jan. 1, 2010; “year-end” refers to Jun. 30, 2010; ”this year” refers to Jan. 1 to Jun.
30, 2010; “the last year” refers to Jan. 1 to Jun. 30, 2009; the currency is RMB.
1. Monetary funds
（1）Classification of Monetary funds
As of 30 June, 2010 As of 31 December, 2009
Item Original currency
Exchange
rate RMB converted Original currency
Exchange
rate RMB converted
Cash on hand 236,070.48 106,404.38
CNY 236,070.48 1.0000 236,070.48 106,404.38 1.0000 106,404.38
Cash in bank 184,018,938.57 306,961,848.75
CNY 169,518,298.56 1.0000 169,518,298.56 292,555,491.59 1.0000 292,555,491.59
USD 1,705,220.29 6.7909 11,579,980.47 1,590,067.35 6.8282 10,857,297.88
HKD 462,521.82 0.87239 403,499.41 644,731.82 0.8805 567,686.37
EUR 304,077.82 8.271 2,515,027.65 304,077.82 9.7971 2,979,080.81
GBP 208.79 10.2135 2,132.48 208.79 10.9780 2,292.10
Other
monetary
funds 126,081,810.82 175,884,389.04
CNY 125,619,684.05 1.0000 125,619,684.05 175,418,687.02 1.0000 175,418,687.02
USD 66,583.12 6.7909 452,159.31 66,583.12 6.8282 454,642.86
EUR 1,205.11 8.271 9,967.46 1,128.82 9.7971 11,059.16
GBP
Total 310,336,819.87 482,952,642.17
(2) Other monetary funds
Item As of 30 June, 2010 As of 31 December, 2009
Security deposit for bank acceptance bills 124,000,000.00 174,000,000.00
Security deposit for contract 849,640.00 99,640.00
Other security deposit 1,232,170.82 1,784,749.04
Total 126,081,810.82 175,884,389.04
2.Notes receivables
Item As of 30 June, 2010 As of 31 December, 2009Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
35
Item As of 30 June, 2010 As of 31 December, 2009
Bank acceptance bills 3,297,047.01 2,689,865.50
Total 3,297,047.01 2,689,865.50
There were no notes receivable used in discount or pledge at the end of the year.
3. Accounts receivable
(1)Classification of accounts receivable
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount
Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 71,574,922.38 14.58%
Receivables belong to category with high
credit risk 43,703,658.94 8.90% 15,376,071.19 35.18%
Other insignificant receivables 375,717,823.77 76.52%
Total 490,996,405.09 100.00% 15,376,071.19 3.13%
As of 31 December, 2009
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 75,597,266.63 19.17% 259,507.80 0.34%
Receivables belong to category with high
credit risk 27,832,541.03 7.06% 14,954,763.39 53.73%
Other insignificant receivables 290,995,077.52 73.77%
Total 394,424,885.18 100.00% 15,214,271.19 3.86%
Note: Top five largest accounts receivable means top five largest accounts receivable. Other insignificant
receivables mean accounts receivable with aging over 2 years, except for receivables with a great single
amount
(2)The single item huge sum accounts receivable with separated impairment test and not being single
item huge sum accounts receivable while requirement of separated impairment test
Accounts receivable content Book balance
Reserve for
bad debts
Percentage
of bad
debts
Reason
China Potevio Company Limited 15,300,576.38
Little possibility of
bad debt
Agricultural Bank of China 14,972,079.19
Little possibility of
bad debt
China Mobile Group Jiangsu Co.,Ltd.
Nanjing Branch 14,212,463.46
Little possibility of
bad debtNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
36
China mobile Group Shandong Co.,Ltd. 13,572,797.72
Little possibility of
bad debt
Jiangsu Branch of China Telecom
Co.,Ltd. 13,517,005.63
Little possibility of
bad debt
Chongqing Eagle Communication
Technology Development Co., Ltd 1,093,571.51 1,093,571.51 100.00%
No possibility for
recovery
Beijing Tongchengdaye of
Communication Technology Co., Ltd 296,288.78 296,288.78 100.00%
No possibility for
recovery
Jiangsu Taihewei Network Technology
Co., Ltd. 419,504.72 419,504.72 100.00%
No possibility for
recovery
Market department, Gansu Telecome
Equipement Co.,Ltd. 473,489.83 473,489.83 100.00%
No possibility for
recovery
NEPAL TELE 1,663,794.42 1,663,794.42 100.00%
No possibility for
recovery
XI'AN OVERLOAD SCIENCE 664,557.16 664,557.16 100.00%
No possibility for
recovery
Hubei Police 901,282.80 901,282.80 100.00%
No possibility for
recovery
Beijing Zhen Yuan Innovation and
Technology Development Corporation 166,612.12 166,612.12 100.00%
No possibility for
recovery
M/S WHISTLER TELECOM（PVT）LTD 1,998,060.65 1,998,060.65 100.00%
No possibility for
recovery
Total 79,252,084.37 7,677,161.99 9.69%
(3)Explanation of receivables belong to category with high credit risk
Account receivables with aging of over 2 years excluding that of a great single amount will be possible to be
bad debt and the Company classify them into Receivables belong to category with high credit risk.
Reservation of bad debt is based on aging analysis except that there is any evidence showing separate
reservation of bad debt.
(4) Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Aging Book balance Reserve for bad debts Book balance Reserve for bad debts
Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%)
Within 1
year 419,133,780.22 85.36% 329,104,360.39 83.44%
1-2 years 28,158,965.93 5.74% 37,487,983.76 9.50%
2-3 years 25,986,975.93 5.29% 2,605,338.78 10.03% 10,438,301.01 2.65% 2,525,035.00 24.19%
3-4 years 9,247,887.36 1.88% 5,562,417.54 60.15% 8,773,077.57 2.22% 5,419,974.61 61.78%
4-5 years 3,964,117.48 0.81% 2,703,636.70 68.20% 4,116,484.28 1.04% 2,764,583.41 67.16%
over 5
years 4,504,678.17 0.92% 4,504,678.17 100.00% 4,504,678.17 1.15% 4,504,678.17 100.00%
Total 490,996,405.09 100.00% 15,376,071.19 3.13% 394,424,885.18 100.00% 15,214,271.19 3.86%
(5) Recovery or reversal of current accounts receivableNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
37
None of recovery or reversal of current accounts receivable with full provision for bad debts or a larger
percentage of provision for bad debts before and recovery or reversal of them this period, as well a larger
percentage of recovery or reversal this period.
(6) Written -off of accounts receivable in the current period
Written-off RMB 27,200.00 Yuan of accounts receivable, arising from non-related party transactions. It is
longer aging and not expected to recover, being full provision before and being offset this period.
(7) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting shares of
the Company at year-end
Amount of RMB16,878,660.54 Yuan is due from China Potevio Company Limited, Parent company ,aging
within 1year, none of reservation of provision at period-end.
Amount of RMB 6,125,162.66 Yuan is due from China Potevio Company Limited, Parent company, aging
within 1year, none of reservation of provision at period-beginning.
(8) Top 5 debtors of accounts receivable
Name of the debtors
Relationship
with the
Company
Amount Aging
Proportion of
total amount
(%)
China Potevio Company Limited related party 15,300,576.38
Within 1
year 3.12%
Agricultural Bank of China
non-related
party 14,972,079.19
Within 1
year 3.05%
China Mobile Group Jiangsu Co.,Ltd.
Nanjing Branch
non-related
party 14,212,463.46
Within 1
year 2.89%
China mobile Group Shandong Co.,Ltd.
non-related
party 13,572,797.72
Within 1
year 2.76%
Jiangsu Branch of China Telecom Co.,Ltd.
non-related
party 13,517,005.63
Within 1
year 2.75%
Total 71,574,922.38 14.58%
(9) Accounts receivable of related parties accounts
Name of the debtors Relationship with the
Company Amount Proportion of
total amount (%)
China Potevio Company Limited, Parent company 16,878,660.54 3.44%
ChengDu PuTian Telecommunications
Cable CO., LTD
Under the same parent
company 432,295.00 0.09%
Shanghai Potevio Co., Ltd Under the same parent
company 13,341,700.00 2.72%
Total 16,878,660.54 3.44%
(10) Balance of accounts receivable in foreign currencies
As of 30 June, 2010 As of 31 December, 2009
Foreign
currency Original currency
Exchange
rate
RMB
converted
Original
currency
Exchange
rate
RMB
converted
USD 1,333,399.61 6.8282 9,104,719.22
HKD 6,010,532.01 0.87239 5,243,528.02
Total 6,010,532.01 0.87239 5,243,528.02 1,333,399.61 6.8282 9,104,719.22
4. Advances to suppliersNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
38
(1)Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 25,076,986.53 53.35% 13,645,116.99 38.35%
1-2 years 18,929,224.93 40.27% 18,929,224.93 53.21%
2-3 years 3,000,000.00 6.38% 3,000,000.00 8.43%
over 3 years 2,250.00 0.00% 2,250.00 0.01%
Total 47,008,461.46 100.00% 35,576,591.92 100.00%
Note: The amount of prepayment includes the land use right fee of RMB21,800,000.00 Yuan for the project of
Industry Park as of Jun.30, 2010, including RMB18,800,000.00Yuan with1-2 years; RMB3,000,000.00
Yuanwith 2-3 years, the project is still in development at present.
(2)Top five largest accounts paid in advance
Company
Relationship
with the
Company
Amount
Proportion
of total
amount (%)
Aging
Reasons for
un-settlement
People's Government Office of
the Ningnan, Yuhuatai District
non-related
party 20,000,000.00 42.55% 1-3year
Prepayment
in accordance
with the
contract
Jurisdiction of the Commission,
Nanjing Yuhua Economic
Development Zone
non-related
party 4,220,000.00 8.98% Within
1 year
Prepayment
in accordance
with the
contract
Nanjing Postel DaTang
Electrical Co., Ltd related party 3,000,000.00 6.38% Within
1 year
Prepayment
in accordance
with the
contract
Wuxi KEH Electronics Co., Ltd non-related
party 2,830,953.20 6.02% Within
1 year
Prepayment
in accordance
with the
contract
Shanghai Bell Communications
Co., Ltd
non-related
party 2,629,030.80 5.59% Within
1 year
Prepayment
in accordance
with the
contract
Total 32,679,984.00 69.52%
(3)Prepayment of shareholder who has more than 5% (including 5 %)voting shares of the Company at
year-end
There is no prepayment due from shareholder who has more than 5% (including 5 %) voting shares of the
Company as of Jun.30, 2010
5. Other receivables
(1) Classification of other receivables
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount
Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 37,140,513.51 60.16% 32,622,976.44 87.84%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
39
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount
Percentage
(%) Amount Percentage
(%)
Receivables belong to category with high
credit risk 4,971,079.17 8.05% 3,217,279.13 64.72%
Other insignificant receivables 19,620,691.76 31.79%
Total 61,732,284.44 100.00% 35,840,255.57 58.06%
As of 31 December, 2009
Item Book balance Reserve for bad debts
Amount Amount Amount Amount
Receivables with a great single amount 39,085,703.19 64.53% 32,790,976.44 83.90%
Receivables belong to category
with high credit risk 4,803,079.17 7.93% 3,049,279.13 63.49%
Other insignificant receivables 16,679,289.53 27.54%
Total 60,568,071.89 100.00% 35,840,255.57 59.17%
Note: Top five largest other receivables means top five largest other receivables; Other insignificant
receivables means other receivables with aging over 2 years, except for other receivables with a great single
amount。
(2)The single item huge sum other receivables with separated impairment test and not being single
item huge sum other receivables while requirement of separated impairment test
other receivables content Book balance
Reserve for
bad debts
Percentage
of bad
debts
Reason
Beijing Picom Telecommunications
Equipment Ltd 28,912,952.71 28,912,952.71 100.00%
No possibility for
recovery
Shanghai Zhidong Media
Investment Co.,Ltd. 5,000,000.00 2,500,000.00 50.00%
Higher possibility of
bad debts
Shanghai Network -chen
Rong-speed Technology
Development Co., Ltd. 2,037,560.80 1,210,023.73 59.39%
Higher possibility of
bad debts
China Telecom, Quanzhou network
assets Branch 600,000.00
Little possibility of bad
debts
Shanxi Tainuo Bidding Agent
Co.,Ltd. 590,000.00
Little possibility of bad
debts
Total 37,140,513.51 32,622,976.44 87.84%
(3) Explanation of other receivables belong to category with high credit risk
Other receivables with aging of over 2 years excluding that of a great single amount will be possible to be bad
debt and the Company classify them into Receivables belong to category with high credit risk. Reservation of
bad debt is based on aging analysis except that there is any evidence showing separate reservation of bad
debt.
(4) Analysis of aging
Aging As of 30 June, 2010 As of 31 December, 2009Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
40
Book balance Reserve for bad debts Book balance Reserve for bad debts
Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%)
Within
1 year 15,354,687.37 24.87% 14,190,474.82 23.43%
1-2
years 12,493,565.19 20.24% 3,710,023.73 29.70% 12,493,565.19 20.63% 3,710,023.73 29.70%
2-3
years 1,160,925.00 1.88% 116,092.50 10.00% 1,160,925.00 1.92% 116,092.50 10.00%
3-4
years 358,015.68 0.58% 107,404.70 30.00% 358,015.68 0.59% 107,404.70 30.00%
4-5
years 29,735,952.71 48.17% 29,342,952.71 98.68% 29,735,952.71 49.10% 29,342,952.71 98.68%
over
5years 2,629,138.49 4.26% 2,563,781.93 97.51% 2,629,138.49 4.33% 2,563,781.93 97.51%
Total 61,732,284.44 100.00% 35,840,255.57 58.06% 60,568,071.89 100.00% 35,840,255.57 59.17%
(5) Recovery or reversal of current other receivables
None of recovery or reversal of current other receivables with full provision for bad debts or a larger
percentage of provision for bad debts before and recovery or reversal of them this year, as well a larger
percentage of recovery or reversal this year.
(6) written -off of other receivables in the current period
No Written-off of other receivables in the current period.
(7) Other accounts due from shareholder who has more than 5% (including 5 %) voting shares of the
Company at year-end
None
(8)Contents or types of other receivables with larger amount
Name of debtors Amount
Type (or contents)
of other receivables
Beijing Picom Telecommunications Equipment Ltd 28,912,952.71 incomings and outgoings
Shanghai Zhidong Media Investment Co., 5,000,000.00 incomings and outgoings
Shanghai Network -chen Rong-speed Technology
Development Co., Ltd. 2,037,560.80 incomings and outgoings
Total 35,950,513.51
(9) Top 5 debtors of other receivables
Name of debtors Relationship with
the Company Amount Aging
Proportion of
total amount
(%)
Beijing Picom Telecommunications
Equipment Ltd Subsidiary 28,912,952.71 4-5year 46.84%
Shanghai Zhidong Media Investment
Co.,Ltd. Non-related party 5,000,000.00 1-2 year 8.10%
Shanghai Network -chen Rong-speed
Technology Development Co., Ltd. Non-related party 2,037,560.80 1-2 year 3.30%
China Telecom, Quanzhou network
assets Branch
Non-related party 600,000.00 Within 1
year 0.97%
Shanxi Tainuo Bidding Agent Co.,Ltd. Non-related party 590,000.00 Within 1
year 0.96%
Total 37,140,513.51 60.17%
(10)Other receivables from related parties
Name of debtors Relationship with the
Company Amount Proportion of
total amount (%)Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
41
Name of debtors Relationship with the
Company Amount Proportion of
total amount (%)
Beijing Picom Telecommunications
Equipment Ltd Subsidiary 28,912,952.71 46.84%
Total 28,912,952.71 46.84%
Note:Beijing Picom Telecommunications Equipment Ltd(Subsidiary) is excluded from the consolidated
scope since 2008
(11)Balance of other receivables in foreign currencies
Foreign As of 30 June, 2010 As of 31 December, 2009
currency
Original currency Exchange
rate
RMB
converted
Original
currency Exchange rate RMB
converted
HKD 491,480.39 0.87239 428,762.58 471,480.39 0.8805 415,138.48
Total 491,480.39 0.87239 428,762.58 471480.39 0.8805 415,138.48
6. Inventories
(1)Classification of inventories
As of 30 June, 2010 As of 31 December, 2009
Item
Book balance
Provision
for
devaluation
Book value Book balance
Provision for
devaluation
Book value
Raw
materials
26,435,841.8
5 882,790.85 25,553,051.0
0
23,580,730.3
0 882,790.85 22,697,939.45
Goods-inprocess
33,393,464.2
6 33,393,464.2
6
17,918,075.4
1 - 17,918,075.41
Finished
goods
199,796,766.
89
1,852,456.5
3
197,944,310.
36
187,495,870.
34 2,356,294.86 185,139,575.4
8
Total 259,626,073.
00
2,735,247.3
8
256,890,825.
62
228,994,676.
05 3,239,085.71 225,755,590.3
4
(2) Provision for inventory devaluation
Amount reduced this period
Item
As of 31
December,
2009
Amount
provided this
period
Reversal Written off
As of 30 June,
2010
Raw materials 882,790.85 882,790.85
Goods-in-proces
s
Finished goods 2,356,294.86 503,838.33 1,852,456.53
Total 3,239,085.71 2,735,247.38
(3)Supplement explanation
None capitalized borrowing expense is included in the inventory at period-end
7. Long-term equity investments of the joint ventures and associated venturesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
42
(1)Information of the joint ventures
Invested
units Type Registration Legal
Representative
Business
nature
Share capital
(unit”000000))
Share
holding
percentage
of the
company
Nanjing
Mennekes
Electric
Appliances
Ltd.
Sino-foreign
joint
ventures
Nanjing Walter.
Mennekes
Manufacture
and sales of
industrial
plugs and
sockets
5.20USD
Dollar 50%
(Continued)
Invested
units
Voting right
proportion of
the company
among
invested units
Total assets
at
period-end
Total
liabilities at
period-end
Total net
assets at
period-end
Total sales of
this period
Net profit of
this period
Nanjing
Menneke
s Electric
Applianc
es Ltd.
50% 132,959,092.
58
68,625,419.1
6
64,333,673.4
2
53,905,008.7
4 5,600,830.03
(2)Information of the associated ventures
Invested units Type Registrati
on
Legal
Representat
ive
Business
nature
Share
capital
(unit”000000
))
Share
holding
percentage
of the
company
Nanjing Putian
DatangInformati
on and Electric
Company Ltd
Domesti
c
enterpri
se
Nanjing Yan
Yaoming
Manufacture
and sales of
telecommunica
tion products
5,000,000.0
0 40%
Nanjing
Zhongyou
Telecommunica
tion Co., Ltd.
Domesti
c
enterpri
se
Nanjing Zhao
Tiwu
Manufacture
and sales of
telecommunica
tion products
1,000,000.0
0 30%
Nanjing Potevio
Telecommunica
tion Technology
Industry Park
Co., Ltd.
Domesti
c
enterpri
se
Nanjing Sun Liang
Land leasing
and
management
of the industry
park
337,548,141
.29 49.64%
Shanghai
Yulong Biotech
Ltd.
Domesti
c
enterpri
se
Nanjing Mu Haidong
Development,
manufacture
and sales of
bio-tech
products
32,000,000.
00 21%
Qufu
YulongBio-Tech
Co., Ltd.
Domesti
c
enterpri
se
Nanjing Mu Haidong
Development,
manufacture
and sales of
bio-tech
products
72,242,800.
00 21%
(continued)
Invested
units
Voting right
proportion of the
company among
invested units
Total assets
at
period-end
Total
liabilities at
period-end
Total net
assets at
period-end
Total sales of
this period
Net profit
of
this
period
Nanjing 40% 12,788,658.1 7,057,206.43 5,731,451.75 9,081,638.81 -98,854.05Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
43
Putian
Datang
Informati
on and
Electric
Compan
y Ltd
8
Nanjing
Zhongyo
u
Telecom
municati
on Co.,
Ltd.
30% 2,799,049.17 1,464,157.86 1,334,891.31 60,973.00 22,668.79
Nanjing
Potevio
Telecom
municati
on
Technolo
gy
Industry
Park
Co., Ltd.
49.64% 340,074,945.
50 998,284.36 339,076,661.
14 6,148,685.78 70,179.86
Shangha
i Yulong
Biotech
Ltd.
21% 73,746,693.6
7
22,634,392.8
0
51,112,300.8
7 4,911,329.88 867,610.59
Qufu
YulongBi
o-Tech
Co., Ltd.
21% 121,670,727.
39
39,979,338.0
4
81,691,389.3
5 271,798.72 -1,065,886.
39
8. Long-term equity investments
(1)List of Information of Long-term Equity Investment
Invested units
Accounti
ng
Method
Initial cost of
investment
Book
balance at
beginning of
the period
Movement
Book
balance at
end of the
period
Share
holding
percentage
of the
Company
among
invested
units
Nanjing
Mennekes
Electric
Appliances
Ltd.
Equity
Method
15,037,508.0
0
29,758,325.0
6
2,800,415.0
1
32,558,740.
07 50
Nanjing
Putian Tianji
Cable Co.,
Ltd.
Equity
Method 2,250,000.00 2,250,000.00 2,250,000.0
0 45
Nanjing
Putian Datang
Information
and Electric
Company Ltd
Equity
Method 600,000.00 2,334,791.79 -39,541.62 2,295,250.1
7 40
Nanjing
Zhongyou
Telecommunic
ation Co., Ltd.
Equity
Method 300,000.00 222,950.64 6,800.64 229,751.28 30Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
44
Nanjing
Potevio
Telecommunic
ation
Technology
Industry Park
Co., Ltd.
Equity
Method
167,548,141.
29
167,922,749.
52 34,837.28 167,957,586
.80 49.64
Shanghai
Yulong
Biotech Ltd.
Equity
Method
23,310,000.0
0
14,340,739.5
8 182,198.22 14,522,937.
80 21
Qufu
YulongBio-Tec
h Co., Ltd.
Equity
Method 4,515,384.92 -223,836.1
4
4,291,548.7
8 21
Nanjing Yuhua
Galvanization
Factory
Cost
Method 420,915.00 420,915.00 420,915.00 10
Hangzhou
HongyanElect
ric Appliance
Cost
Method 321,038.00 321,038.00 321,038.00 2.26
Nanjing
Putian
Industry
Co.,Ltd
Cost
Method 181,701.84 181,701.84 181,701.84 10
Beijing Picom
Telecommunic
ations
Cost
Method 1,854,910.00 1,854,910.00 1,854,910.0
0 51
Total 213,324,214.
13
224,123,506.
35
2,760,873.3
9
226,884,379
.74
(Continued)
Invested units
Voting right
proportion
of the
Company
among
invested
units
Interpretations of
difference
between the equity
percentage and vote right
percentage in the
invested unit
Depreciatio
n
reserve
Depreciatio
n
reserves
withdraw
n
during
the
period
Cash
dividend
during the
period
Nanjing
Mennekes
Electric
Appliances Ltd.
50
Danyang Putian
Building Digital
Cable Co., Ltd.
50
Nanjing Putian
Tianji Cable Co.,
Ltd.
45
Nanjing Putian
DatangInformatio
n and Electric
Company Ltd
40
Nanjing
Zhongyou
Telecommunicatio
n Co., Ltd.
30
Nanjing Potevio
Telecommunicatio
n Technology
Industry Park Co.,
Ltd.
49.64
Shanghai Yulong
Biotech Ltd. 21
Qufu
YulongBio-Tech 21Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
45
Co., Ltd.
Nanjing Yuhua
Galvanization
Factory
10 238,173.40
Hangzhou
HongyanElectric
Appliance
2.26
Nanjing Putian
Industry Co.,Ltd 10
Beijing Picom
Telecommunicatio
ns
51 1,854,910.
00
Total
-
1,854,910.
00
- 238,173.40
(2)Explanation of Long-term Equity Investment
None of Long-term Equity Investment with restriction of sale at the year-end
9.Investment property
Investment properties measured at costs
Item
As of 31
December,
2009
Increase
during the
period
Decrease
during the
period
As of 30 June,
2010
Total original cost 10,032,417.29 10,032,417.29
Houses and buildings 6,390,269.42 6,390,269.42
Land use rights 3,642,147.87 3,642,147.87
Total accumulated depreciation and
accumulated amortization
2,962,955.50 103,215.96 3,066,171.46
Houses and buildings 2,158,066.75 50,042.79 2,208,109.54
Land use rights 804,888.75 53,173.17 858,061.92
Total net book value 7,069,461.79 103,215.96 6,966,245.83
Houses and buildings 4,232,202.67 50,042.79 4,182,159.88
Land use rights 2,837,259.12 53,173.17 2,784,085.95
Total accumulated provision for
impairment 1,842,418.00 1,842,418.00
Houses and buildings 1,842,418.00 1,842,418.00
Land use rights
Total carrying value 5,227,043.79 103,215.96 5,123,827.83
Houses and buildings 2,389,784.67 50,042.79 2,339,741.88
Land use rights 2,837,259.12 53,173.17 2,784,085.95
Note: The accrual of depreciation and amortization this year is RMB 103,215.96 Yuan.
10. Fixed assets
(1)Lists of fixed assets and accumulated depreciation, including movement
Item
As of 31
December,
2009
Increase
during the
period
Decrease
during the
period
As of 30 June,
2010
Total original cost of fixed assets 199,506,832.43 3,120,575.14
925,132.51 201,702,275.06Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
46
Item
As of 31
December,
2009
Increase
during the
period
Decrease
during the
period
As of 30 June,
2010
Building/structure 68,363,430.35 408,563.57
72,636.74 68,699,357.18
Machinery equipment 63,009,022.45 406,853.78
816,519.35 62,599,356.88
Transportation equipment 12,862,915.85 1,314,949.35 - 14,177,865.20
Electronic equipment 55,271,463.78 990,208.44
35,976.42 56,225,695.80
Total accumulated depreciation 122,298,869.21 5,115,263.43
653,831.70 126,760,300.94
Building/structure 23,977,177.73 1,203,492.54
37,968.84 25,142,701.43
Machinery equipment 43,343,556.75 2,468,057.80
580,965.84 45,230,648.71
Transportation equipment 8,726,649.84
518,242.80 - 9,244,892.64
Electronic and other equipment 46,251,484.89
925,470.29
34,897.02 47,142,058.16
Total net book value of fixed assets 77,207,963.22 3,774,406.84
6,040,395.94 74,941,974.12
Building/structure 44,386,252.62
446,532.41
1,276,129.28 43,556,655.75
Machinery equipment 19,665,465.70
987,819.62
3,284,577.15 17,368,708.17
Transportation equipment 4,136,266.01 1,314,949.35
518,242.80 4,932,972.56
Electronic and other equipment 9,019,978.89 1,025,105.46
961,446.71 9,083,637.64
Total impairment of fixed assets 3,594,079.20 235,553.51 3,358,525.69
Building/structure 539,124.00
539,124.00
Machinery equipment 809,015.29 235,553.51
573,461.78
Transportation equipment
Electronic and other equipment 2,245,939.91 2,245,939.91
Total carrying value of fixed assets 73,613,884.02 4,009,960.35
6,040,395.94 71,583,448.43
Building/structure 43,847,128.62 446,532.41
1,276,129.28 43,017,531.75
Machinery equipment 18,856,450.41 1,223,373.13
3,284,577.15 16,795,246.39
Transportation equipment 4,136,266.01 1,314,949.35 518,242.80 4,932,972.56
Electronic and other equipment 6,774,038.98 1,025,105.46 961,446.71 6,837,697.73
Note: The accumulated depreciation increased of RMB 10,603,697.14 Yuan in the year was provided
actually;In the fixed assets increased in the year, the amount transferred from construction in progress
was RMB 5,206,052.58 Yuan.
(2)Fixed assets not in use temporarily
Item Original cost
Accumulated
depreciation
Impairment
of fixed
assets
Carrying
value of
fixed assets
Note
Building/structureNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
47
Item Original cost
Accumulated
depreciation
Impairment
of fixed
assets
Carrying
value of
fixed assets
Note
Machinery equipment 1,483,166.76 951,601.88 531,564.88
Transportation equipment
Electronic equipment 1,341,786.76 777283.02 564,503.74
Total 2,824,953.52 1,728,884.90 1,096,068.62
(3) Information of Fixed Assets without Certificate of Title
Item Original cost
Accumulated
depreciation
Impairment
of fixed
assets
Carrying
value of fixed
assets
Reasons for no
Certificate of Title
Estimated
Time to
Complete
Certificate
of Title
Building/structure 12,191,531.61 6,767,523.08 5,424,008.53
No certification of
land use right
Unknown
Total 12,191,531.61 6,767,523.08 5,424,008.53
11. Construction in progress
(1)Basic information of Construction in progress
As of 30 June, 2010 As of 31 December, 2009
Item Book
balance
Impairment
provision
Book
value
Book
balance
Impairment
provision
Book
value
SMT production line of
of Su Meida 5,094,350.38 5,094,350.38 5,100,000.00 5,100,000.00
Purchase of Air
Compressor from
Shanghai Yiqiao
68,850.00 68,850.00
Connection Machine
from Shanghai Jisha 38,550.00 38,550.00
Total 5,201,750.38 5,201,750.38 5,100,000.00 5,100,000.00
(2)Movement of significant Construction in progress
Item Budget
As of 31
December,
2009
Increase
during the
year
Transfer to
fixed
assets
Other
decrease
As of 30
June, 2010
Proportion
N
of project
Investment
in
budget
(%)
SMT production
line of of Su
Meida
6,100,000.00 5,100,000.00 852,984.00 858,633.62 5,094,350.38 83.51%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
48
Item Budget
As of 31
December,
2009
Increase
during the
year
Transfer to
fixed
assets
Other
decrease
As of 30
June, 2010
Proportion
N
of project
Investment
in
budget
(%)
Purhcase of
Fengxing Vehicle 152,367.00 152,367.00 152,367.00 0.00 100.00%
Purhcae of Power
line from
Shanghai Gudeng 5,500.00 5,500.00 5,500.00 0.00 100.00%
Purchase of Air
Compressor from
Shanghai Yiqiao 68,850.00 68,850.00
Connection
Machine from
Shanghai Jisha 38,550.00 38,550.00
Total 6,257,867.00 5,100,000.00 1,118,251.00 157,867.00 858,633.62 5,201,750.38
(Continued)
Item
Accumulated
progress
Accumulated amount
of interest
capitalization
Including interest
capitalized amount
of the year
Interest
capitalization
rate of the year
Capital
source
SMT production line
of of Su Meida 83.51% others
Purhcase of
Fengxing Vehicle 100.00% others
Purhcae of Power
line from Shanghai
Gudeng 100.00%
others
Purchase of Air
Compressor from
Shanghai Yiqiao
others
Connection Machine
from Shanghai Jisha others
Total
12. Intangible assets
Item
As of 31
December, 2009
Increase
during the year
Decrease
during the year
As of 30 June,
2010
Total original cost 21,617,668.00 42,645.47 1,966.60 21,658,346.87
Land use right 8,250,892.87 8,250,892.87
Exclusive technology 5,775,000.00 5,775,000.00
Software 7,591,775.13 42,645.47 1,966.60 7,632,454.00
Total accumulated
amortization 12,452,066.92
530,292.20
12,982,359.12
Land use right 1,120,959.47 82,504.86 1,203,464.33Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
49
Item
As of 31
December, 2009
Increase
during the year
Decrease
during the year
As of 30 June,
2010
Exclusive technology 4,585,541.58 288,750.00 4,874,291.58
Software 6,745,565.87 159,037.34 6,904,603.21
Total net book value 9,165,601.08 489,613.33 8,675,987.75
Land use right 7,129,933.40 82,504.86 7,047,428.54
Exclusive technology 1,189,458.42 288,750.00 900,708.42
Software 846,209.26 118,358.47 727,850.79
Total accumulated provision
for impairment
Land use right
Exclusive technology
Software
Total carrying value 9,165,601.08 489,613.33 8,675,987.75
Land use right 7,129,933.40 82,504.86 7,047,428.54
Exclusive technology 1,189,458.42 288,750.00 900,708.42
Software 846,209.26 118,358.47 727,850.79
Note: The amortization amount of the intangible assets this period is RMB 530,292.20 yuan.
13. Details of asset impairment
Amount reduced this year
Item
As of 31
December,
2009
Amount
provided
this year
Reversal Written off
As of 30 June,
2010
Bad debts reserve 51,054,526.76 189,000.00 27,200.00 51,216,326.76
Provision for inventory
devaluation 3,239,085.71 503,838.33 2,735,247.38
Provision of available-for-sale
financial assets
Provision of Held-to-maturity
investments
Provision of long-term equity
investments 1,854,910.00 1,854,910.00
Provision of investment
property 1,842,418.00 1,842,418.00
Provision of fixed assets 3,594,079.20 235,553.51 3,358,525.69
Provision of construction
materials
Provision of construction in
progress
Provision of productiveNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
50
Amount reduced this year
Item
As of 31
December,
2009
Amount
provided
this year
Reversal Written off
As of 30 June,
2010
biological assets
Including: provision of mature
productive biological assets
Provision of petrol assets
Provision of intangible assets
Provision of goodwill
Provision of others
Total 61,585,019.67 189,000.00 766,591.84 61,007,427.83
14 .Lists of all assets with restriction of certificate of title or use right
Item As of 30 June,
2010
Reasons for restriction of
certificate of title or use right
Building/structure 29,019,777.11
Land use right 3,217,685.47 Mortgaged for bank loan
Total 32,237,462.58
15. Short-term loans
Kinds of loans As of 30 June, 2010 As of 31 December, 2009
Pledged loan 104,000,000.00 84,000,000.00
Loan in mortgage 110,000,000.00 100,000,000.00
Guaranteed loan 307,000,000.00 305,000,000.00
Loan in credit
Total 521,000,000.00 489,000,000.00
Note:
1. The company borrows short-term loan of RMB16 million Yuan from the Shanghai Pudong Development
Bank, Nanjing Branch and the borrowing period is from 21 February, 2010 to 29 January, 2011. Two real
estates with the fair value RMB 27,011,000.00 Yuan and the book value of real estate RMB 20,031,227.58
Yuan are mortgaged
2. The company borrows short-term loan of RMB 40 million Yuan from Pudong Development Bank Nanjing
Jiangning Branch and obtain the bills of RMB 88 million Yuan from the Shanghai Pudong Development Bank,
Nanjing Branch. The affiliated venture, Nanjing Potevio Telecommunication Technology Industry Park Co.,Ltd,
pldged three real estates to the banks with the gurantee of 84 million Yuan (The company provided 44 million
security deposit as morgages). The borrowing period of 30 million is from 25 Feb 2010 to 24 Feb 2011. The
period of 10 million is from 3 Mar, 2010 to 2 Mar 2010. The book value of three real estates is RMB
161,159,247.57 Yuan.
3. The company guaranteed the borrowing of RMB 20 million Yuan for Nanjing Putian Tianji Intelligent
Building Ltd. and the borrowing of RMB 17 million Yuan for Nanjing Nanfang Telecommunications CompanyNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
51
Limited. To obtain the loan, the subsidiary, Nanjing Putian Tianji Intelligent Building Ltd., pledged two real
estates as below:
R&D and auxiliary building, located on No 18, Song Gang Street, Mo Lin District. Real Estate License No.:
Jiang Ning real estate licence Dong Shan Zi No. JN00133108. The land Right Licence No.: Ning Jiang Guo
Yong 2007 No. 07887.
Data cable production workshop: Located on No 18, Song Gang Street, Mo Lin District. Real Estate License
No.: Jiang Ning real estate licence Dong Shan Zi No. JN00133109. The land Right Licence No.: Ning Jiang
Guo Yong 2007 No. 07887.
4. The final controller China Putian Corporation Group guaranteed the borrowing of RMB 200 million
Yuan ,including
RMB50 million Yuan from Bank of Hua Xia Co., Ltd. Nanjing Branch and RMB 150 million Yuan from Bank of
Communications Co., Ltd., Branch in Jiangsu Province.
5. The final controller China Putian Corporation Group guaranteed RMB40 millions Yuan for the bank
acceptance bills of RMB100 million Yuan from Bank of Min Sheng , and the company Pledge fixed deposit of
RMB 40 millions Yuan and security deposit of RMB 60 millions.
6. The parent company China Potevio Company Limited guaranteed the borrowing of RMB30 million Yuan
from Bank of Hua Xia Co., Ltd. Nanjing Branch.
16. Notes payable
Item As of 30 June, 2010 As of 31 December, 2009
Bank acceptance bills 25,747,200.00 90,000,000.00
Commercial acceptance bills 2,538,036.00 2,746,648.00
Total 28,285,236.00 92,746,648.00
17. Accounts payable
(1)Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Item
Amount
Percentage
(%) Amount
Percentage
(%)
Within 1 year 326,933,128.90 77.42% 314,093,827.42 76.71%
1-2 years 78,071,463.96 18.49% 78,071,463.96 19.07%
2-3 years 4,662,787.47 1.10% 4,662,787.47 1.14%
over 3 years 12,623,093.66 2.99% 12,623,093.66 3.08%
Total 422,290,473.99 100.00% 409,451,172.51 100.00%
(2) Accounts payable to shareholders holding 5% or above voting shares of the Company
There is RMB 5,298,103.96 accounts payable due from the Parent Company.
as of 30 Jun., 2010
(3) Significant accounts payable with ageing over one year as at period-endNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
52
No significant accounts payable with aging more than one-year.
18. Advances from customers
(1)Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Item
Amount
Percentage
(%)
Amount
Percentage
(%)
Within 1 year 33,722,013.73 88.64% 18,827,726.23 81.34%
1-2 years 2,963,252.60 7.79% 2,963,252.60 12.80%
2-3 years 922,552.15 2.43% 922,552.15 3.99%
over 3 years 433,897.57 1.14% 433,897.57 1.87%
Total 38,041,716.05 100.00% 23,147,428.55 100.00%
(2) Accounts received in advance from shareholders holding 5% or above voting shares of the
company, as well as that of related parties.
There is no advances for customers due from shareholder who has more than 5% (including 5 %) voting
shares of the Company as of 31Dec. ,2009
(3) Account received in advance denominated in foreign currency
As of 30 June, 2010 As of 31 December, 2009
Foreign currency
Original
currency
Exchange
rate
RMB
converted
Original
currenc
y
Exchange
rate
RMB
converted
USD 64,485.7 6.8282 440,321.26
Total 64,485.7 6.8282 440,321.26
19. Accrued payroll
Item
As of 31
December,
2009
Increase
during the year
Decrease
during the year
As of 30 June,
2010
Wages, bonuses and allowance 1,761,051.45 8,115,230.72 28,115,230.72 3,625,349.12
Welfare expense 3,717,069.29 3,736,234.07 -19,164.78
Social insurance charges 10,772,438.29 10,758,273.51 14,164.78
Including: Medical insurance 2,983,660.34 3,063,144.86 -79,484.52
Basic endowment insurance 6,700,548.92 6,826,165.00 -125,616.08
Annuity Payment -
Unemployment insurance 471,882.83 479,499.12 -7,616.29Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
53
Item
As of 31
December,
2009
Increase
during the year
Decrease
during the year
As of 30 June,
2010
Work injury insurance 235,046.81 237,638.25 -2,591.44
Maternity insurance 147,291.20 151,826.28 -4,535.08
Housing fund 8,769,454.49 3,354,292.73 3,309,364.73 6,950,084.82
Compensation for cancellation of
labor relationship 86,838.00 86,838.00 3,625,349.12
Others 3,699,423.09 392,715.05 1,025,280.35 3,126,857.79
Including: labor union
expenditure and employee
education expenses
3,699,423.09 387,363.05 959,928.35 3,126,857.79
Total 14,229,929.03 46,498,584.08 47,031,221.38 13,697,291.73
20. Taxes payable
Item
As of 30 June,
2010
Amount at
year-beginning Note
Value-added tax -15,280,232.12 -7,246,234.64 17%
Business tax 98,859.95 42,511.38 3%,5%
Urban maintenance and construction
tax
281,041.92
375,492.10 7% of the turnover tax
Corporate income tax 1,394,245.33 3,550,455.96
House Tax
Tenure tax -
Individual Income Tax 264,630.23 229,778.30
Stamp Tax 5,618.50 2,451.49
Education surcharge 269,770.46 651,974.13 3%,1% of the turnover tax
Embankment expenses -
Total -12,966,065.73 -2,393,571.28
21. Other payables
(1)Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Item
Amount
Percentage
(%)
Amount
Percentage
(%)
Within 1 year 20,268,637.86 78.24% 45,276,965.71 88.93%
1-2 years 2,306,796.64 8.90% 2,306,796.64 4.53%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
54
As of 30 June, 2010 As of 31 December, 2009
Item
Amount
Percentage
(%)
Amount
Percentage
(%)
2-3 years 1,319,541.20 5.09% 1,319,541.20 2.59%
over 3 years 2,009,540.31 7.76% 2,009,540.31 3.95%
Total 25,904,516.01 100.00% 50,912,843.86 100.00%
(2) Other payables to shareholders holding 5% or above voting shares of the company, as well as
that of related parties.
There is no other payables to shareholder who has more than 5% (including 5 %) voting shares of the
Company as of 30 Jun, 2010, only to affiliated venture Nanjing Potevio Telecommunication Technology
Industry Park Co., Ltd amount of RMB1,272,022.69Yuan as of 30 Jun, 2010.
22. Share capital
Increases(+) or decreases(-) in current period
Item
As of 31
December,
2009
Issuance
of new
shares
Gift
share
Shares
transferred
from
capital
reserve
Others Subtotal
As of 30 June,
2010
1 ． Unlisted
shares
115,000,000.00 115,000,000.00
(1)Promotion
shares
115,000,000.00 115,000,000.00
Including:
State-holding
shares
Including:
State-owned
shares
State-owned
legal entity
shares
115,000,000.00 115,000,000.00
Domestic legal
entity shares
Foreign legal
entity shares
Natural person’s
shares
(2)Recruitment
legal entity
shares
(3)Internal staff
shares
(4)Preferred
shares or others
Including:
Transferred
sharesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
55
Increases(+) or decreases(-) in current period
Item
As of 31
December,
2009
Issuance
of new
shares
Gift
share
Shares
transferred
from
capital
reserve
Others Subtotal
As of 30 June,
2010
Total of unlisted
shares
115,000,000.00 115,000,000.00
2. Listed shares
(1) CNY
ordinary shares
(2) Domestically
listed foreign
shares
100,000,000.00 100,000,000.00
(3) Overseas
listed foreign
shares
(4) Others
Total of listed
shares
100,000,000.00 100,000,000.00
Total 215,000,000.00 215,000,000.00
23. Capital reserve
Item
As of 31
December,
2009
Increase
during the
period
Decrease
during the
period
As of 30 June,
2010
Share capital premium 139,592,332.04 2,808,156.61 142,400,488.65
Other capital reserves 42,974,045.20 42,974,045.20
Total 182,566,377.24 2,808,156.61 185,374,533.85
Note: The subsidiary Nanjing PutianTianji Intelligent Building Ltd transfer 4.42% technology shares to the
Company, free of charge.
24. Surplus reserve
Item
As of 31
December, 2009
Increase
during the period
Decrease
during the period
As of 30 June,
2010
Statutory surplus
reserves 589,559.77 589,559.77
Total 589,559.77 589,559.77
25. Undistributed profit
Item Amount
Proportion of
Extraction or
Distribution
Undistributed profit at the end of last year before
adjustments -59,459,168.77Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
56
Item Amount
Proportion of
Extraction or
Distribution
The sum of undistributed profit at the beginning of the
adjustment year (increase +, reduction -)
Undistributed profit at the beginning of a year after
adjustment -59,459,168.77
Add: Net profit attributable to the owner of the parent
company this year
8,257,612.37
Less: Extracted statutory surplus reserves
Extracted discretional surplus reserves
Extracted provision of general risk
Dividend payable to ordinary shares
Dividends for ordinary shares transferred into
capitals
Undistributed profit at the ending of period -51,201,556.40
26. Operating revenues and costs
(1)Operating revenues
Item 2010.1-6 2009.1-6
Main operating revenue 838,507,104.04 654,187,992.21
Other operating revenue 17,200,413.86 1,280,345.83
Total 855,707,517.90 655,468,338.04
(2)Operating costs
Item 2010.1-6 2009.1-6
Main operating cost 720,272,477.44 556,986,653.17
Other operating cost 15,383,424.54 481,606.45
Total 735,655,901.98 557,468,259.62
(3)Main Business (In terms of different products)
2010.1-6 2009.1-6
Item Main operating
revenue Main operating cost Main operating
revenue Main operating cost
Communication
products 838,507,104.04 720,272,477.44 654,187,992.21 556,986,653.17
Electronic products
Total 838,507,104.04 720,272,477.44 654,187,992.21 556,986,653.17
(4)Main Business (In terms of different regions)
2010.1-6 2009.1-6
Name of Region Main operating
revenue Main operating cost Main operating
revenue Main operating cost
Domestic market 836,747,859.49 718,822,563.86 651,364,223.89 554,493,868.85
Oversea market 1,759,244.55 1,449,913.58 2,823,768.32 2,492,784.32Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
57
Total 838,507,104.04 720,272,477.44 654,187,992.21 556,986,653.17
(5)The amount of operating revenues received from the top 5 customers this period
Item Operating revenues
Proportion taking in total operating
income of the Company (%)
Jiangsu Branch of China Telecom Co., Ltd. 102,036,706.71 11.92%
China Mobile Communications Group Co.,
Ltd.( Jiangsu), Nanjing Branch 29,518,469.15 3.45%
Nanjing Branch of China Telecom Co., Ltd. 23,382,804.44 2.73%
China Potevio Company Limited, 13,935,656.83 1.63%
Xing Tang Communcation Technology Co.,Ltd. 13,238,072.14 1.55%
Total 182,111,709.26 21.28%
27 Operating tax and extras
Item Rate 2010.1-6 2009.1-6
Business tax 3%-5% 821,853.06 581,816.16
Education surcharge 4% 330,558.51 737,932.30
Urban maintenance and
construction tax 7% 984,187.40 347,708.51
Others 500.37
Total 2,137,099.34 1,667,456.97
28. Investment income
(1)Details of Investment Income
Item 2010.1-6 2009.1-6
Long-term equity investment income by cost method 238,173.40 2,453,064.00
Long-term equity investment income by equity method 2,760,873.39 2,656,375.94
Income from disposal of long-term equity investment
Investment income from period of holding tradable financial assets
Investment income from period of holding hold-to-maturity
investment
Income from investment in holding of financial assets available for
sale, etc
Income from investment in disposal of financial assets available for
sale, etc.
Investment income from disposal of hold-to-maturity investment
Investment income from disposal of financial assets available for
sale
Others
Total 2,999,046.79 5,109,439.94Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
58
(2)Long-term equity investment income by cost method
Investee 2010.1-6 2009.1-6 Reasons for movement
Nanjing Yuhua Galvanization
Factory
238,173.40 No bonus last period
Nanjing Putian Tianji Intelligent
Building Ltd.
2,435,064.00 No profit distribution
Nanjing Putian Industry Co.,Ltd 18,000.00 No Bonus this period
Total 238,173.40 2,453,064.00
(3)Long-term equity investment income by equity method
Investee 2010.1-6 2009.1-6 Reasons for movement
Nanjing Mennekes Electric Appliances Ltd 2,800,415.01 2,638,941.97 Increase of profit owned by
Investee
Nanjing Putian Datang Information and
Electric Company Ltd. -39,541.62 10,028.63 Decrease of profit owned by
Investee
Nanjing Zhongyou Telecommunication Co.,
Ltd. 6,800.64 -11,150.77 Increase of profit owned by
Investee
Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd 34,837.28 18,556.11 Increase of profit owned by
Investee
Shanghai Yulong Biotech Ltd. 182,198.22 Increase of profit owned by
Investee
Qufu YulongBio-Tech Co., Ltd. -223,836.14 Decrease of profit owned by
Investee
Total 2,760,873.39 2,656,375.94
(4)None of significant limitation of the repatriation of investment income
29. Financial expenses
Item 2010.1-6 2009.1-6
Interest Expense 10,164,375.02 11,855,436.45
Less: Interest income 2,789,082.81 2,254,349.37
Exchange losses or gains -35,363.85
bank charges 196,655.37 457,410.65
Total 7,581,396.54 10,023,133.88
30. Losses of devaluation of asset
Item 2010.1-6 2009.1-6
Loss on bad debt 189,000.00 1,504,826.48
Provision for falling price of inventory
Provision for devaluation of financial asset available for sales
Provision for devaluation of held-to-maturity
investment
Provision for devaluation of long-term equity investment
Provision for devaluation of investing propertyNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
59
Item 2010.1-6 2009.1-6
Provision for devaluation of fixed assets
Provision for devaluation of engineering materials
Provision for devaluation of construction in progress
Provision for devaluation of productive biological asset
Provision for devaluation of oil asset
Provision for devaluation of intangible asset
Provision for devaluation of goodwill
Others
Total 189,000.00 1,504,826.48
31. Non-operating income
(1)Details of Non-operating Income
Item 2010.1-6 2009.1-6
Gains from disposal of non-current assets 29,423.07 58,295.30
Include: Gains from disposal of fixed assets 29,423.07 58,295.30
Gains from disposal of Intangible assets
Gains from debt restructuring 4,500.00
Gains from exchange of non-monetary capital
Gains from donation
Government subsidy 177,103.85 93,410.32
Others 1,052,060.11 182,391.38
Total 1,258,587.03 338,597.00
(2)Details of Government Subsidy
Item 2010.1-6 2009.1-6 Note
Refund of VAT 177,103.85 93,410.32
The grandson Nanjing Telecommunication
Factory ,seven branch has the VAT preferential policies
Of refunding ,due to being welfare production
enterprises
Refund of VAT
The subsidiary Nanjing Putian Telecommunication
Technology Co., Ltd has the VAT preferential policies of
refunding upon collection once rate in excess of
3%,due
to being manufacture of software
Total 177,103.85 93,410.32
32. Non-operating expense
Item 2010.1-6 2009.1-6
Loss from disposal of non-current assets 3,872.30 4,538.04
Include: loss from disposal of fixed assets 3,872.30 4,538.04Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
60
Item 2010.1-6 2009.1-6
loss from disposal of Intangible assets
Loss from debt restructuring 48,140.00 180,412.50
Loss from exchange of non-monetary asset capital
External donation 30,000.00
Abnormal loss
Loss from shortages
Fine expenses 677.64
Various fund expenses 90,019.63
Others 160,348.72 26,535.51
Total 242,361.02 302,183.32
33. Income tax
Item 2010.1-6 2009.1-6
Current income tax expense calculated to tax law and relevant
provisions
3,169,396.83 2,902,576.40
Deferred income tax charges
Total 3,169,396.83 2,902,576.40
34. Calculation of basic earnings per share and diluted earnings per share
The company calculate basic earnings per share and diluted earnings per share in accordance with issued by China securities
regulatory commission.( China Securities Regulatory Commission Announcement [2010] No. 2)< Public
offering of securities of the company's Information Disclosure Explanatory Notice No. 1 - Non-recurrent gains
and losses (2008).( China Securities Regulatory Commission Announcement [2008] No. 43)
Item Code 2010.1-6 2009.1-6
Net profit attributable to ordinary shareholders of parent
company(Ⅰ)
P0
10,667,442.33
5,298,699.21
Net profit attributable to the company's ordinary shareholders
after
deducting non-recurring gains and losses(Ⅱ)
P0
7,277,240.97
5,214,544.48
Amount of common stock at the year-beginning S0 215,000,000.00 215,000,000.00
Increase of amount of common stock owing to capital reserve
transferred to share capital or distribution of stock dividend S1
Increase of amount of common stock owing to issue of bonds
newly or bonds issued to be transfer to common stock Si
Decrease of amount of common stock due to purchase-back
common stock ,etc Sj
Decrease of amount of common stock in the reporting period SkNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
61
Amount of months in the reporting period M0 12 12
Accumulated months since the second month when increase
of amount of common stock Mi
Accumulated months since the second month when decrease
of amount of common stock Mj
Average weighted amount of common stock outstanding S 215,000,000.00 215,000,000.00
Basic earnings per share(Ⅰ) 0.04 0.02
Basic earnings per share(Ⅱ) 0.03 0.02
Net profit attributable to ordinary shareholders of parent
company after adjustment(Ⅰ)
P1
8,257,612.37
5,298,699.21
Net profit attributable to the company's ordinary shareholders
after
deducting non-recurring gains and losses after adjustment(Ⅱ)
P1
7,463,324.40
5,214,544.48
Increase amount of average weighted of common stock owing
to realization of warrants, stock options and convertible bonds
Average weighted amount of common stock outstanding after
consideration of diluted affect 215,000,000.00 215,000,000.00
Diluted earnings per share(Ⅰ) 0.04 0.02
Diluted earnings per share(Ⅱ) 0.03 0.02
Basic earnings per share
Basic earnings per share = P0÷ S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Where;P0 means net profit attributable to ordinary shareholders of parent company or net profit attributable to
the company's ordinary shareholders after deducting non-recurring gains and losses; S means average
weighted amount of common stock outstanding; S0 means amount of common stock at the year-beginning;
S1 means increase of amount of common stock owing to capital reserve transferred to share capital or
distribution of stock dividend; Si means increase of amount of common stock owing to issue of bonds newly or
bonds issued to be transfer to common stock; Sj means decrease of amount of common stock due to
purchase-back common stock ,etc; Sk means decrease of amount of common stock in the reporting period;
M0 means amount of months in the reporting period; Mi means accumulated months since the second month
when increase of amount of common stock; Mj means accumulated months since the second month when
decrease of amount of common stock;
(1)Diluted earnings per share
Diluted earnings per share=P1/(S0 ＋ S1 ＋ Si×Mi÷M0–Sj×Mj÷M0–Sk+ Increase amount of average
weighted of common stock owing to realization of warrants, stock options and convertible bonds
Where:P1 means net profit attributable to ordinary shareholders of parent company or net profit attributable to
the company's ordinary shareholders after deducting non-recurring gains and losses after adjustment in
consideration of the effect of dilutive potential ordinary share, regulated by accounting criteria for enterprises
in china or other related regulations.
When calculation of diluted earnings per share, all effects of Net profit attributable to the company's ordinary
shareholders after deducting non-recurring gains and losses after adjustment and average weighted amount
of common stock outstanding ,associated with dilutive potential ordinary share, calculating of diluted earnings
per share to the degree that is minimum of EPS, according to their degree of descending order of diluted
earnings per share referred.Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
62
35.Other comprehensive income
Item 2010.1-6 2009.1-6
1. gains (losses) arising from financial assets available for sale
Less: affect of income tax arising from financial assets
available for sale
Net, written in other comprehensive income in previous period and carried
forward to gains and losses in current period
Subtotal
2. Share in other comprehensive income of invested units by
equity method
Less: affect of income tax arising from Share in other
comprehensive income of invested units by equity method
Net, written in other comprehensive income in previous
period and carried forward to gains and losses in current period
Subtotal
3. gains (losses) arising from cash flow hedge instruments
Less: affect of income tax arising from cash flow hedge
instruments
Net, written in other comprehensive income in previous
period and carried forward to gains and losses in current period
Adjustment, converted to initial reorganization amount
of projects in hedge
Subtotal
4. Conversion difference arising from foreign currency financial
statement -197,937.66 -1,999,787.02
Less: net, carried forward to gains and losses in current
period after disposing overseas operation
Subtotal -197,937.66 -1,999,787.02
5. Others
Less: affect of income tax arising from others which are
written in other comprehensive income
Net, others written in other comprehensive income in previous period and
carried forward to gains and losses in current period
Subtotal
Total -197,937.66 -1,999,787.02
36. Item description in the statement of cash flow
(1) Other cash receipts relating to operating activities
Item 2010.1-6 2009.1-6
Interest income 2,789,082.81 2,254,349.37
Repayment of temporary payment 6,225,748.93 881,127.68
Others 52,060.06 645,678.09
Total 9,066,891.80 3,781,155.14
(2) Other cash payments relating to operating activitiesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
63
Item 2010.1-6 2009.1-6
Temporary payment 25,008,327.85 25,554,626.64
Various expenses 29,174,524.20 17,413,012.29
Others 305,148.72 117,232.78
Total 54,488,000.77 43,084,871.71
(3) Other cash paid concerning financing activities
Item 2010.1-6 2009.1-6
Repayment of borrowing from Putian Technology
Park 20,000,000.00
Total 20,000,000.00
37. Supplementary information about consolidated statement of cash flows
Item 2010.1-6 2009.1-6
1、Adjustment of net profit into operation activity cash flow:
Net profit 14,834,275.66 12,221,913.73
Add: provision for depreciation of assets 189,000.00 1,504,826.48
Depreciation of fixed assets, consumption of oil gas assets and
depreciation of productive biological assets 5,218,479.39 4,961,083.69
Amortization of intangible assets 530,292.20 564,048.24
Amortization of long-term prepayments
Loss from disposal of fixed assets, intangible assets and other
long term assets (gain is listed with “-”) -25,550.77 -53,757.26
Loss from discarding fixed assets as useless (gain is listed with
“-”)
Loss from change of fair value(gain is listed with “-”)
Financial expense (gain is listed with “-”) 10,164,375.02 11,855,436.45
Investment loss (gain is listed with “-”) -2,999,046.79 -5,109,439.94
Decrease of deferred income tax assets (increase is listed
with“-”)
Increase of deferred income tax liabilities (decrease is listed
with “-”)
Decrease of inventories (increase is listed with “-”) -30,631,396.95 -25,743,380.40
Decrease of operational accounts receivable (increase is listed
with “-”) -171,611,397.16 -107,883,574.39
Increase of operational accounts payable (decrease is listed
with “-”) 72,841,282.62 69,023,103.86
Others
Net cash flow arising from operation activities -101,489,686.78 -38,659,739.54
2. Significant investment and financing activities with no
reference to cash collection and payment:
Debt convert to capital
Convertible bond due within one yearNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
64
Item 2010.1-6 2009.1-6
Fixed assets leased in by financing
3. Net change in cash and cash equivalent:
Balance of cash at period-end 290,336,819.87 258,531,706.79
Less: Balance of cash at period-begin 422,853,002.17 320,147,650.59
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-begin
Net increase in cash and cash equivalent -132,516,182.30 -61,615,943.80
VI .Related parties and related transaction
1.Condition of parent company
Name of the
parent
company
Relation
Type of
entity
Registered
address
Legal
representativ
e
Busines
s nature
Registration
capital
(unit:RMB’0000
China Potevio
Company
Limited
Parent
Company
State-own
ed
No. 2 Tudi 2
Road,
Zhongguan
village economy
zone, Haidian
district, Beijing
Xing Wei
informat
ion
industry
308,694.00
(continued)
Name of the
parent
company
Rate of Share Held between
Parent
Company and the Company
The proportion of voting
rights
between parent company
and the company
The
company's
Ultimate
controlling
party
Organization
code
China Potevio
Company
Limited
53.49% 53.49% China Putian
Corporation
71093155-5
2.Condition of subsidiaries
Name of the companies Type of
subsidiaries
Type of
entity
Registere
d
Address
Legal
Representati
ve
Business
Nature
Nanjing Nanfang
Telecommunications
Company Limited
Limited
company Trading Nanjing Zhou
Dezhong
Sale of
telecommunicatio
nsNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
65
Name of the companies Type of
subsidiaries
Type of
entity
Registere
d
Address
Legal
Representati
ve
Business
Nature
Nanjing Bada
TelecommunicationsCo.,
Ltd.
Limited
company
Manufactur
e Nanjing Qiao Jin
Manufacture of
telecommunicatio
ns
Nanjing Putian Inforamtion
Technology
Company Ltd.
Limited
company
Manufactur
e Nanjing Qiao Jin
Manufacture
and sale of
telecommunicatio
ns
Nanjing Putian Intelligent
Building Ltd
Limited
company
Manufactur
e Nanjing Fu Baosun
Manufacture
and sale of
telecommunicatio
ns
Putian Telecommunications
(Hong Kong)
Co., Ltd.
company
limited by
shares
Manufactur
e
HongKon
g Sun Liang
Sale of
telecommunicatio
ns
Beijing Picom
Telecommunications
Equipment Ltd.
Limited
company
Manufactur
e Beijing Lu Junhai
Web-based
electronic
products, digital
transmission
equipment
Nanjing Postel WongShi
Telecommunications Co.,
Ltd.
Limited
company
Manufactur
e Nanjing Sun Liang
Manufacture
and sale of
telecommunicatio
ns
Nanjing Putian Changle
Telecommunications
Equipment Co., Ltd
Limited
company
Manufactur
e Nanjing Wang Qiang
Manufacture
and sale of
telecommunicatio
ns
Nanjing Putian Network
Company Ltd
Limited
company
Manufactur
e Nanjing Guan
Yingqian
Manufacture
and sale of
telecommunicatio
ns
Nanjing Putian
TelecommunicationTechnolo
gy Co., Ltd
Limited
company
Manufactur
e Nanjing Liu Chuanxi
Manufacture
and sale of
telecommunicatio
ns
(continued)
Name of the companies Registration
Capital(unit:’0000)
Rate of Share
held between
parent Company
and the Company
The proportion of
voting rights
between parent
company and the
company
Organization
code
Nanjing Nanfang
Telecommunications Company
Limited
3,420.50 98.24% 98.24% 13492047-8
Nanjing Bada
TelecommunicationsCo.,
Ltd.
1,130.14 60.00% 60.00% 13554048-5
Nanjing Putian Inforamtion
Technology
Company Ltd.
1,400.00 99.98% 99.98% 13498233-7
Nanjing Putian Tianji
Intelligent Building Ltd 1,200.00 45.77% 45.77% 72172045-4
Putian Telecommunications
(Hong Kong)
Co., Ltd.
HK 200.00 90.00% 90.00% #61770414Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
66
Name of the companies Registration
Capital(unit:’0000)
Rate of Share
held between
parent Company
and the Company
The proportion of
voting rights
between parent
company and the
company
Organization
code
Beijing Picom
Telecommunications
Equipment Ltd.
USD 50.00 51.00% 51.00% 717741092
Nanjing Postel WongShi
Telecommunications Co., Ltd. USD 1,090.00 99.42% 99.42% 71093784-2
Nanjing Putian Changle
Telecommunications
Equipment Co., Ltd
1,000.00 50.70% 50.70% 13554526-X
Nanjing Putian Network
Company Ltd 1,000.00 78.00% 78.00% 74236858-4
Nanjing Putian
TelecommunicationTechnology
Co., Ltd
475.00 70.00% 70.00% 13513422-5
3. Condition of the joint ventures and associates
Invested units
Relationship with
the company
Organization code
Nanjing Mennekes Electric Appliances Ltd. Joint venture 60895120X
Nanjing Putian Datang Information and
Electric Company Ltd. Affiliated venture 777019050
Nanjing Zhongyou Telecommunication Co.,
Ltd.
Affiliated venture 249702200
Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd.
Affiliated venture 667372881
Shanghai Yulong Biotech Ltd. Affiliated venture 739043367
Qufu YulongBio-Tech Co., Ltd. Affiliated venture 739282544
4. Other related parties
Company Name
Relationship with
the company
Organization code
Nanjing Postel Swanking Electrical Co., Ltd Controlled by the parent
company 724594270
Shenzhen Potevio Lingyun Electronics Co.
Ltd
Controlled by controlling
shareholder of the parent
company
732050660
Shanghai Putian Post And
Telecommunications Technology Co., Ltd.
Controlled by the parent
company 607285751
Beijing Great Gragon Information Technology
International Co.,Ltd.
Controlled by the parent
company 743349502
ChengDu PuTian Telecommunications Cable
CO., LTD
Controlled by the parent
company 20193968X
Potevio Institute of Technology Co.，Ltd. Controlled by the parent
company 710929105
5.Related transaction
(1)Trading Merchandise, supply and receiving labor
2010.1-6
Related Parties
Type of
related
transaction
Related transaction
content Amount
(unit’0000)
Ratio in
similar
Pricing policy and
decision-making
processesNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
67
trade
amount %
China Potevio Company
Limited Sale Telecommunications 1,560.69 1.82 Market Pricing
Potevio Institute of Technology
Co.,Ltd.
Sale
Telecommunications 0.56 0.00 Market Pricing
Sub-total 1,561.25 1.82
China Potevio Company
Limited Purchase Telecommunications 1,380.24 1.88 Market Pricing
Sub-total 1,380.24 1.88
2009.1-6
Related Parties
Type of
related
transaction
Related transacti
On content
Amount
(unit’0000)
Ratio in
similar
trade
amount
%
Pricing policy and
decision-making
processes
Nanjing Putian Datang
Information and Electric
Company Ltd.
Sale Telecommunications 1.57 Market Pricing
Beijing Great Gragon
Information Technology
International Co.,Ltd
Sale Telecommunications 1.27 Market Pricing
China Potevio Company
Limited Sale Telecommunications 1,055.96 1.61 Market Pricing
Nanjing Zhongyou
Telecommunication Co., Ltd Sale Telecommunications 16.73 0.03 Market Pricing
ChengDu PuTian
Telecommunications Cable
CO., LTD
Sale Telecommunications 133.53 0.20 Market Pricing
Potevio Institute of Technology
Co.,Ltd. Sale Telecommunications 4.87 0.01 Market Pricing
Sub-total 1,213.93 1.85
Nanjing Putian Datang
Information and Electric
Company Ltd.
Purchase Telecommunications 147.20 0.25 Market Pricing
Nanjing Postel Swanking
Electrical Co., Ltd Purchase Telecommunications 4.21 0.01 Market Pricing
Sub-total 151.41 0.26
(2)Related leasing
Lessor Lessee Asset for
leasing
Amount
invlolved by
leased assets
Date
start for
leasing
Date for
terminati
on of
leasing
Rental
income
(expens
e)
Accordance for
reorganization
of rental
income
Influence
on the
Company
by rental
income
Nanjing Potevio
Telecommunicati
on Technology
Industry Park
Co., Ltd.
The
compan
y
Building
and land 161,143,525.01 2010.1.1 2010.6.30 5,874,451.0
0 Market Pricing -5,874,451.00
(3)Related guaranteeNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
68
Assurance
Provider
Secured party
Amount of
guarantee
(unit’0000)
Date start
for
guarantee
Due date
for
guarantee
Whether
the
guarantee
is
carried out
The Company
Nanjing Nanfang
Telecommunications
Company Limited
500 2009-12-28 2010-12-28 No
The Company
Nanjing Nanfang
Telecommunications
Company Limited
1,200 2010-5-31 2011-5-30 No
The Company Nanjing Putian Tianji
Intelligent Building Ltd 1,000 2009-9-8 2010-9-8 No
The Company Nanjing Putian Tianji
Intelligent Building Ltd 1,000 2010-6-27 2010-9-27
China Putian Corporation The Company 2,000 2010-5-18 2011-5-17 No
China Putian Corporation The Company 2,000 2010-5-20 2011-5-19 No
China Putian Corporation The Company 3,000 2010-5-27 2011-5-26 No
China Putian Corporation The Company 2,000 2010-6-12 2011-6-11 No
China Putian Corporation The Company 3,000 2010-6-4 2011-6-3 No
China Putian Corporation The Company 3,000 2009-7-30 2010-7-30 No
China Putian Corporation The Company 2,000 2009-8-6 2010-8-6 No
China Putian Corporation The Company 3,000 2010-6-21 2011-6-20 No
China Putian Corporation The Company 2,000 2010-4-27 2010-7-27 No
China Putian Corporation The Company 2,000 2010-5-5 2010-8-5 No
China Potevio Company
Limited The Company 3,000 2009-12-4 2010-12-4 No
Nanjing Potevio
Telecommunication
Technology Industry Park
Co., Ltd.
The Company 3,000 2010-2-25 2011-2-24 No
Nanjing Potevio
Telecommunication
Technology Industry Park
Co., Ltd.
The Company 1,000 2010-3-3 2011-3-2 No
Nanjing Potevio
Telecommunication
Technology Industry Park
Co., Ltd.
The Company 2,000 2010-1-8 2010-7-8 No
Nanjing Potevio
Telecommunication
Technology Industry Park
Co., Ltd.
The Company 2,400 2010-1-14 2010-7-14 No
6.Payables and receivables of related parties
Item Name of the related parties As of 30 June,
2010 (unit’0000)
As of 31 December,
2009 (unit’0000)
Other payables
Nanjing Potevio
Telecommunication Technology
Industry Park Co., Ltd
114.62 2,065.43
Accounts payable
Nanjing Potevio
Telecommunication Technology
Industry Park Co., Ltd
12.58 11.57
Accounts payable Nanjing Putian Hongyan Electric
Appliance Company 24.26 57.01
Accounts payable China Potevio Company Limited 529.81Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
69
Item Name of the related parties As of 30 June,
2010 (unit’0000)
As of 31 December,
2009 (unit’0000)
Advances to suppliers Nanjing Putian Datang Information
and Electric Company Ltd. 300.00 138.73
Accounts receivable Nanjing Zhongyou
Telecommunication Co., Ltd. 117.72
Accounts receivable China Potevio Company Limited 1,687.87 612.52
Accounts receivable
ChengDu PuTian
Telecommunications Cable CO.,
Ltd
43.23 43.23
Accounts receivable Shanghai Potevio Co., Ltd 1,334.17 1,334.17
Other receivables Beijing Picom Telecommunications
Equipment Co., Ltd 2,891.30 2,908.10
VII．Contingencies
There are none of pending actions of the company at 30 Jun, 2010
2.Contingent liabilities formed by external guarantee
Detains about the following two guarantees are carried in (II) Related guarantee of Note IX: Other than
these, the Company has no external guarantee.
3. Other contingent liabilities: nil.
VIII. Commitments
None
IX. Events occurring after the balance sheet date
None
X. Other significant matters
As of April 28,2010, the 8th meeting within board of directors holding 5th meeting ,approval that
establishment a joint venture with Japan SUMITOMO ELECTRIC, named by Nanjing Puzhu L-network
Co. Ltd, whose share capital is USD 4 million dollars;50% spectively.
XI. Notes to main items of financial statement of parent company
1. Account receivable
(1)Classification of accounts receivable
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 71,574,922.38 19.76%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
70
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables belong to category with high
credit risk 30,766,830.97 8.49% 5,948,527.29 19.33%
Other insignificant receivables 259,869,040.24 71.75%
Total 362,210,793.59 100.00% 5,948,527.29 1.64%
As of 31 December, 2009
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 62,651,697.13 22.22% 262,402.80 0.42%
Receivables belong to category with high
credit risk 13,386,870.55 4.75% 5,524,324.49 41.27%
Other insignificant receivables 205,976,611.26 73.03%
Total 282,015,178.94 100.00% 5,786,727.29 2.05%
Note: Top five largest accounts receivable means top five largest accounts receivable;Other insignificant
receivables，Accounts receivable with aging over 2 years, except for receivables with a great single amount
(2)The single item huge sum accounts receivable with separated impairment test and not being
single item huge sum accounts receivable while requirement of separated impairment test
Accounts receivable content Book balance
Reserve for
bad debts
Percentage
of bad
debts
Reason
China Potevio Company Limited 15,300,576.38
Little possibility
of bad debt
Agricultural Bank of China 14,972,079.19
Little possibility
of bad debt
China Mobile Group Jiangsu Co.,Ltd.
Nanjing Branch 14,212,463.46
Little possibility
of bad debt
China mobile Group Shandong Co.,Ltd. 13,572,797.72
Little possibility
of bad debt
Jiangsu Branch of China Telecom Co.,Ltd. 13,517,005.63
Little possibility
of bad debt
Subtotal of receivables with a great single
amount 71,574,922.38
M/S WHISTLER TELECOM（PVT）LTD in
Pakistan 1,998,060.65 1,998,060.65 100.00%
No possibility for
recovery
Subtotal 1,998,060.65 1,998,060.65 100.00%
Total 73,572,983.03 1,998,060.65 2.72%
(3) Explanation of receivables belong to category with high credit risk
Account receivables with aging of over 2 years excluding that of a great single amount will be possible to be
bad debt and the Company classify them into receivables belong to category with high credit risk. ReservationNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
71
of bad debt is based on aging analysis except that there is any evidence showing separate reservation of bad
debt.
(4)Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Aging Book balance Reserve for bad debts Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%) Amount Percentage
(%) Amount Percentage
(%)
Within
1 year 307,551,598.29 84.91% 235,500,274.87 83.51%
1-2
years 23,892,364.33 6.60% 30,523,305.53 10.82%
2-3
years 22,019,405.22 6.08% 872,299.62 3.96% 7,290,565.00 2.59% 729,056.50 10.00%
3-4
years 5,868,493.50 1.62% 3,159,190.50 53.83% 5,868,493.49 2.08% 3,159,190.50 53.83%
4-5
years 1,603,158.47 0.44% 641,263.39 40.00% 1,556,766.27 0.55% 622,706.51 40.00%
over 5
years 1,275,773.78 0.35% 1,275,773.78 100.00% 1,275,773.78 0.45% 1,275,773.78 100.00%
Total 362,210,793.59 100.00% 5,948,527.29 1.64% 282,015,178.94 100.00% 5,786,727.29 2.05%
(5) Recovery or reversal of current accounts receivable
None of recovery or reversal of current accounts receivable with full provision for bad debts or a larger
percentage of provision for bad debts before and recovery or reversal of them this year, as well a larger
percentage of recovery or reversal this year.
(6) Written -off of accounts receivable in the current period
Written-off of accounts receivable RMB 27,200.00Yuan, arising from non-related party transactions. with
longer aging and not expected to recover , being full provision before and being offset this year.
(7) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting
shares of the Company at year-end
Amount of RMB 15,300,576.38 Yuan is due from China Potevio Company Limited, Parent company ,aging
within 1year,none of reservation of provision at year-end.
(8) Top 5 debtors of accounts receivable
Name of the debtors
Relationship
with the
Company
Amount Aging
Proportion of
total amount
(%)
China Potevio Company Limited related party 15,300,576.38
Within
1year 4.22%
Agricultural Bank of China
non-related
party 14,972,079.19
Within
1year 4.13%
China Mobile Group Jiangsu Co.,Ltd.
Nanjing Branch
non-related
party 14,212,463.46
Within
1year 3.92%Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
72
Name of the debtors
Relationship
with the
Company
Amount Aging
Proportion of
total amount
(%)
China mobile Group Shandong Co.,Ltd.
non-related
party 13,572,797.72
Within
1year 3.75%
Jiangsu Branch of China Telecom
Co.,Ltd.
non-related
party 13,517,005.63
Within
1year 3.73%
Total 71,574,922.38 19.76%
(9) Accounts receivable of related parties accounts
Name of the debtors Relationship with the
Company Amount Proportion of
total amount (%)
China Potevio Company Limited Parent company 15,300,576.38 4.22%
Shanghai Potevio Co., Ltd Controlled by the same
company 13,341,700.00 3.68%
Total 28,642,276.38 7.91%
(10) Balance of accounts receivable in foreign currencies
As of 30 June, 2010 As of 31 December, 2009
Foreign currency Original
currency
Exchange
rate
RMB
converted
Original
currency
Exchange
rate
RMB
converted
USD 327,207.12 6.8282 2,234,235.66
Total 327,207.12 6.8282 2,234,235.66
2. Other receivables
(1)Classification of other receivables
As of 30 June, 2010
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 47,831,297.51 62.94% 35,498,119.04 74.22%
Receivables belong to category with high credit
risk 4,055,127.85 5.34% 2,602,681.79 64.18%
Other insignificant receivables 24,106,863.61 31.72% 1,210,023.73 5.02%
Total 75,993,288.97 100.00% 39,310,824.56 51.73%
As of 31 December, 2009
Item Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%)
Receivables with a great single amount 55,348,298.90 72.39% 31,580,952.71 57.06%
Receivables belong to category with high credit
risk 7,972,294.18 10.43% 6,519,848.12 81.78%
Other insignificant receivables 13,137,871.07 17.18% 1,210,023.73 9.21%
Total 76,458,464.15 100.00% 39,310,824.56 51.41%
Note: Top five largest other receivables means top five largest other receivables; Other insignificantNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
73
receivables，Accounts receivable with aging over 2 years, except for receivables with a great single amount.
(2)The single item huge sum other receivables with separated impairment test and not being
single item huge sum other receivables while requirement of separated impairment test
other receivables content Book balance Reserve for
bad debts
Percentage
of bad
debts
Reason
Beijing Picom Telecommunications
Equipment Ltd 28,912,952.71 28,912,952.71 100.00%
No possibility for
recovery
Nanjing Putian Telecommunication
Technology Co., Ltd 6,281,273.72
Little possibility
for recovery
Shanghai Zhidong Media
Investment Co., Ltd. 5,000,000.00 2500000 50.00%
Higher
possibility of
bad debts
Putian Telecommunications (Hong
Kong) Co., Ltd. 4,085,166.33 4,085,166.33 100.00%
No possibility for
recovery
Nanjing Putian Inforamtion
Technology Company Ltd. 3,551,904.75
Little possibility
for recovery
Sub-Total 47,831,297.51 35,498,119.04 8.49%
Shanghai Network -chen
Rong-speed Technology
Development Co., Ltd. 2,037,560.80 1,210,023.73 59.39%
Higher
possibility of
bad debts
Total 49,868,858.31 36,708,142.77 73.61%
(3) Explanation of other receivables belong to category with high credit risk
Other receivables with aging of over 2 years excluding that of a great single amount will be possible to be bad
debt and the Company classify them into Receivables belong to category with high credit risk. Reservation of
bad debt is based on aging analysis except that there is any evidence showing separate reservation of bad
debt.
(4) Analysis of aging
As of 30 June, 2010 As of 31 December, 2009
Book balance Reserve Aging for bad debts Book balance Reserve for bad debts
Amount Percentage
(%) Amount Percentage
(%) Amount Percentage
(%) Amount Percentage
(%)
Within
1 year 26,660,475.23 35.08% 27,125,650.41 35.48%
1-2
years 12,279,566.85 16.16% 3,710,023.73 30.21% 12,279,566.85 16.06% 3,710,023.73 30.21%
2-3
years 1,140,655.00 1.50% 114,065.50 10.00% 1,140,655.00 1.49% 114,065.50 10.00%
3-4
years 5,000.00 0.01% 1,500.00 30.00% 5,000.00 0.01% 1,500.00 30.00%
4-5
years 33,821,119.04 44.51% 33,428,119.04 98.84% 33,821,119.04 44.23% 33,428,119.04 98.84%
over 5
years 2,086,472.85 2.75% 2,057,116.29 98.59% 2,086,472.85 2.73% 2,057,116.29 98.59%
Total 75,993,288.97 100.00% 39,310,824.56 51.73% 76,458,464.15 100.00% 39,310,824.56 51.41%
(5) Recovery or reversal of current other receivables
None of recovery or reversal of current other receivables with full provision for bad debts or a larger
percentage of provision for bad debts before and recovery or reversal of them this year, as well a largerNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
74
percentage of recovery or reversal this year.
(6) Written -off of other receivables in the current period
No Written-off occurring this year. None of recovery of accounts that has been offset already.
(7) Other accounts due from shareholder who has more than 5% (including 5 %) voting shares of
the Company at year-end
None
(8)Contents or types of other receivables with larger amount
Name of debtors Amount Type (or contents) of other receivables
Beijing Picom Telecommunications
Equipment Ltd 28,912,952.71 incomings and outgoings
Nanjing Putian Telecommunication
Technology Co., Ltd 6,281,273.72 incomings and outgoings
Shanghai Zhidong Media Investment Co.,
Ltd. 5,000,000.00 incomings and outgoings
Total 40,194,226.43
(9) Top 5 debtors of other receivables
Name of debtors Relationship with the
Company Amount Aging
Proportion of
total amount
(%)
Beijing Picom Telecommunications
Equipment Ltd Subsidiary 28,912,952.71 4-5year 38.05%
Nanjing Putian Telecommunication
Technology Co., Ltd Subsidiary 6,281,273.72
Within
1year 8.27%
Shanghai Zhidong Media
Investment Co., Ltd. Non-related party 5,000,000.00 1-2year 6.58%
Putian Telecommunications (Hong
Kong) Co., Ltd. Subsidiary 4,085,166.33 4-5year 5.38%
Nanjing Putian Inforamtion
Technology Company Ltd. Subsidiary
3,551,904.75
Within
1year 4.67%
Total 47,831,297.51 62.94%
(10)Other receivables from related parties
Name of debtors Relationship with the
Company Amount Proportion of
total amount (%)
Beijing Picom Telecommunications
Equipment Ltd Subsidiary 28,912,952.71 38.05%
Nanjing Putian Telecommunication
Technology Co., Ltd Subsidiary 6,281,273.72 8.27%
Putian Telecommunications (Hong
Kong) Co., Ltd. Subsidiary 4,085,166.33 5.38%
Nanjing Putian Inforamtion Technology
Company Ltd. Subsidiary 3,551,904.75 4.67%
Total 42,831,297.51 56.37%
3. Long-term equity investments
(1)List of Information of Long-term Equity InvestmentNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
75
Invested
units
Accountin
g Method
Initial cost of
investment
Book balance at
beginning of the
year
Movement
Book balance
at end of the
year
Share
holding
percenta
ge of the
Compan
y among
invested
units)
(%)
Voting
right
proportio
n of the
Company
among
invested
units)
(%))
Nanjing Nanfang
Telecommunication
s Company Limited
Cost
Method 33,175,148.00 33,175,148.00 33,175,148.00 98.24 98.24
Nanjing Bada
Telecommunication
s Co., Ltd
Cost
Method 5,610,000.00 5,610,000.00 5,610,000.00 60.00 60.00
Nanjing Putian
Inforamtion
Technology
Company Ltd.
Cost
Method 13,860,000.00 13,860,000.00 13,860,000.00 99.98 99.98
Nanjing Putian
Tianjji Intelligent
Building Ltd.
Cost
Method 3,320,003.45 3,320,003.45 3,320,003.45 45.77 45.77
Putian
Telecommunication
s (Hong Kong) Co.,
Ltd.
Cost
Method 1,910,520.00 1,910,520.00 1,910,520.00
90.00 90.00
Nanjing Putian
Network Company
Ltd.
Cost
Method 9,146,455.13 7,741,140.40 7,741,140.40
78.00 78.00
Nanjing Postel
Wongshi
Telecommunication
s Co., Ltd.
Cost
Method 40,997,683.00 40,997,683.00 40,997,683.00
99.42 99.42
Nanjing Putian
Changle
Telecommunication
s Equipment Co.,
Ltd.
Cost
Method 2,610,457.00 2,610,457.00 2,610,457.00
50.70 50.70
Beijing Picom
Telecommunication
s Equipment Ltd
Cost
Method 1,854,910.00 1,854,910.00 1,854,910.00
51.00 51.00
Nanjing Putian
Telecommunication
Technology Co.,
Ltd
Cost
Method 1,294,510.00 1,294,510.00 1,294,510.00
70.00 70.00
Nanjing Mennekes
Electric Appliances
Ltd.
Equity
Method 15,037,508.00 29,758,325.05 2,800,415.0
1 32,558,740.06
50.00 50.00
Nanjing Putian
DatangInformation
and Electric
Company Ltd
Equity
Method 600,000.00 2,334,791.79 -39,541.62 2,295,250.17
40.00 40.00
Nanjing Zhongyou
Telecommunication
Co., Ltd.
Equity
Method 300,000.00 222,950.64 6,800.64 229,751.28
30.00 30.00
Nanjing Potevio
Telecommunication
Technology
Industry Park Co.,
Ltd.
Equity
Method
167,548,141.2
9 167,922,749.52 34,837.28 167,957,586.8
0
49.64 49.64
Shanghai Yulong
Biotech Ltd.
Equity
Method 23,310,000.00 14,340,739.57 182,198.22 14,522,937.79 21.00 21.00
Qufu
YulongBio-Tech
Co., Ltd.
Equity
Method 4,515,384.92 -223,836.14 4,291,548.78
21.00 21.00
Nanjing Yuhua
Galvanization
Factory
Cost
Method 420,915.00 420,915.00 420,915.00
10.00 10.00
Hangzhou
HongyanElectric
Appliance
Cost
Method 321,038.00 321,038.00 321,038.00
2.26
2.26
Total 321,317,288.8
7 332,211,266.35 2,760,873.3
9
334,972,139.7
4
(continued)
Invested
units
Depreciation
Reserve
Depreciation Reserves
Withdrawn During the
Period
Cash Dividend During the
PeriodNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
76
Invested
units
Depreciation
Reserve
Depreciation Reserves
Withdrawn During the
Period
Cash Dividend During the
Period
Nanjing Nanfang
Telecommunications Company
Limited
Nanjing Bada Telecommunications
Co., Ltd
Nanjing Putian Inforamtion
Technology Company Ltd.
Nanjing Putian Tianji Intelligent
Building Ltd. 4,576,700.00
Putian Telecommunications (Hong
Kong) Co., Ltd.
Nanjing Putian Network Company
Ltd.
Nanjing Postel Wongshi
Telecommunications Co., Ltd.
Nanjing Putian Changle
Telecommunications Equipment Co.,
Ltd.
Beijing Picom Telecommunications
Equipment Ltd
1,854,910.00
Nanjing Putian Telecommunication
Technology Co., Ltd
Nanjing Mennekes Electric
Appliances Ltd.
Nanjing Putian DatangInformation
and Electric Company Ltd
Nanjing Zhongyou
Telecommunication Co., Ltd.
Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd.
Shanghai Yulong Biotech Ltd.
Qufu YulongBio-Tech Co., Ltd.
Nanjing Yuhua Galvanization Factory 238,173.40
Hangzhou HongyanElectric
Appliance
Total
1,854,910.00 4,814,873.40
(2) Explanation of Long-term Equity Investment
None of Long-term Equity Investment with restriction of sale at the year-end
4. Operating revenues and costs
(1)Operating revenues
Item 2010.1-6 2009.1-6
Main operating revenue 539,791,992.12 448,027,347.71
Other operating revenue 22,383,585.22 28,163,584.36
Total 562,175,577.34 476,190,932.07
(2)Operating costs
Item 2010.1-6 2009.1-6
Main operating cost 487,182,219.61 401,827,150.88
Other operating cost 21,147,105.46 28,004,925.59
Total 508,329,325.07 429,832,076.47
(3)Main Business (In terms of different products)Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
77
2010.1-6 2009.1-6
Item Main operating
revenue Main operating cost Main operating
revenue Main operating cost
Communication
products 539,791,992.12 487,182,219.61 448,027,347.71 401,827,150.88
Total 539,791,992.12 487,182,219.61 448,027,347.71 401,827,150.88
(4) Main Business (In terms of different regions)
2010.1-6 2009.1-6
Item Main operating
revenue Main operating cost Main operating
revenue Main operating cost
Domestic market 538,032,747.57 485,732,306.03 445,203,579.39 399,334,366.56
Oversea market 1,759,244.55 1,449,913.58 2,823,768.32 2,492,784.32
Total 539,791,992.12 487,182,219.61 448,027,347.71 401,827,150.88
(5)The amount of operating revenues received from the top 5 customers this year
Item operating revenues Proportion taking in total operating
income of the Company (%)
Jiangsu Branch of China Telecom Co., Ltd.
102,036,706.71 18.15%
China Mobile Communications Group Co.,
Ltd.( Jiangsu), Nanjing Branch 29,518,469.15 5.25%
Nanjing Branch of China Telecom Co., Ltd.
23,382,804.44 4.16%
China Potevio Company Limited
13,935,656.83 2.48%
China Telecom, Jiangsu network assets Branch
13,046,478.99 2.32%
Total 181,920,116.12 32.36%
5.Investment income
(1)Details of Investment Income
Item 2010.1-6 2009.1-6
Long-term equity investment income by cost
method 4,814,873.40 7,397,064.00
Long-term equity investment income by equity
method 2,760,873.39 2,656,375.94
Income from disposal of long-term equity
investment
Investment income from period of holding tradable
financial assets
Investment income from period of holding
hold-to-maturity investment
Income from investment in holding of financial
assets available for saleNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
78
Item 2010.1-6 2009.1-6
Income from investment in disposal of financial
assets available for sale
Investment income from disposal of
hold-to-maturity investment
Investment income from disposal of financial
assets available for sale
Others
Total 7,575,746.79 10,053,439.94
(2)Long-term equity investment income by cost method
Investee 2010.1-6 2009.1-6 Reasons for movement
Nanjing Putian Tianji Intelligent
Building Ltd. 4,576,700.00 7,397,064.00 Decrease in Profit
Nanjing Putian Changle
Telecommunications Equipment
Co., Ltd.
Nanjing Yuhua Galvanization
Factory 238,173.40 Distribution this year, only
Total
4,814,873.40 7,397,064.00
(3)Long-term equity investment income by equity method
Investee 2010.1-6 2009.1-6 Reasons for movement
Nanjing Mennekes Electric
Appliances Ltd 2,800,415.01 2,638,941.97 Increase in profit
Nanjing Putian Datang Information
and Electric Company Ltd. -39,541.62 10,028.63 Decrease in profit
Nanjing Zhongyou
Telecommunication Co., Ltd. 6,800.64 -11,150.77 Increase in profit
Nanjing Potevio
Telecommunication Technology
Industry Park Co., Ltd
34,837.28 18,556.11
Increase in profit
Shanghai Yulong Biotech Ltd. 182,198.22 Increase in profit
Qufu YulongBio-Tech Co., Ltd. -223,836.14 Decrease in profit
Total
2,760,873.39 2,656,375.94
(4)None of significant limitation of the repatriation of investment income
6.Supplementary information about consolidated statement of cash flows
Item 2010.1-6 2009.1-6
1、Adjustment of net profit into operation activity cash flow：
Net profit 893,455.45 1,813,984.66
Add: provision for depreciation of assets 189,000.00 1,504,826.48
Depreciation of fixed assets, consumption of oil gas assets
and depreciation of productive biological assets 2,779,977.22 2,859,539.36
Amortization of intangible assets 174,738.66 209,880.66
Amortization of long-term prepaymentsNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
79
Item 2010.1-6 2009.1-6
Loss from disposal of fixed assets, intangible assets and
other long term assets (gain is listed with “-”) 26,630.17 14,696.32
Loss from discarding fixed assets as useless (gain is listed
with “-”)
Loss from change of fair value(gain is listed with “-”)
Financial expense (gain is listed with “-”) 9,315,245.82 10,755,528.17
Investment loss (gain is listed with “-”) -7,575,746.79 -10,053,439.94
Decrease of deferred income tax assets (increase is listed
with“-”)
Increase of deferred income tax liabilities (decrease is
listed with “-”)
Decrease of inventories (increase is listed with “-”) -37,403,107.67 -14,625,839.25
Decrease of operational accounts receivable (increase is
listed with “-”) -111,828,754.80 -71,604,342.95
Increase of operational accounts payable (decrease is
listed with “-”) 29,696,869.44 27,199,546.60
Others
Net cash flow arising from operation activities -113,731,692.50 -51,925,619.89
2 、Significant investment and financing activities with no
reference to cash collection and payment:：
Debt convert to capital
Convertible bond due within one year
Fixed assets leased in by financing
3、Net change in cash and cash equivalent:
Balance of cash at period-end 199,364,640.51 111,317,150.10
Less: Balance of cash at period-begin 348,384,407.10 179,265,068.17
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-beginning
Net increase in cash and cash equivalent -149,019,766.59 -67,947,918.07
XII. Supplementary Information
1.Non-recurring gains and losses of current year (Profit: +, loss: -)
Calculation of non-recurring gains and losses below,in accordance with No. 1, Information Disclosure
Interpretative Bulletin for public offering of securities of enterprises ,namely non-recurring gains and
losses(version of 2008),[ China Securities Regulatory Commission Announcement [2008] No. 43] issued by
China securities regulatory commission.
Item 2010.1-6 Note
1．Gains and losses from disposal of non-current assets, including reversal of
provision for impairment before
25,550.77
2．Tax refund and relief without authorized approval or formal approval
document or accident
3．Government subsidy recorded in current gains and losses,(except the fixed 177,103.85Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
80
Item 2010.1-6 Note
or quantitative government subsidy closely related to the enterprise businesses
and according to the national uniform standard)
4．Capital occupancy expense, collected from non-financial enterprises and
recorded in current gains and losses
5．Income from the exceeding part between investment cost of the Company
paid for obtaining subsidiaries, associates and joint-ventures and recognizable
net assets fair value attributable to the Company when acquiring the
investment
6．Gains and losses from exchange of non-monetary assets
7．Gains and losses from assets under trusted investment or management
8．Various provision for impairment of assets due to act of God, such as natural
disaster
9．Gains and losses from debt restructuring -48,140.00
10．Enterprise reorganization expense, such as expense for placement of
workers
or expense for integration charges etc.
11．Gains and losses of the part arising from transaction in which price is unfair
and exceeding fair value
12．Current net gains and losses occurred from period-begin to combination
day by subsidiaries resulting from business combination under common control
13．Gains and losses arising from contingent proceedings irrelevant to normal
operation of the Company
14．Except for effective hedge business relevant to normal operation of the
Company, gains and losses arising from fair value change of tradable financial
assets and tradable financial liabilities, and investment income from disposal of
tradable financial assets, tradable financial liabilities and financial assets
available for sale
15．Reversal of provision of impairment of account receivable which are
treated with separate depreciation test
16．Gains and losses obtained from external trusted loans
17．Gains and losses arising from change of fair value of investment real estate
whose follow-up measurement are conducted according to fair value pattern
18．Affect on current gains and losses after an one-time adjustment according
to requirements of laws and regulations regarding to taxation and accounting
19．Trust fee obtained from trust operation
20 ． Other non-operating income and expenditure except for the
aforementioned ones
861,711.39
21．Other gains and losses items complying with definition for non-recurring
gains and loses
22．Affect on minority equity(after taxation)
-58,005.55
23．Affect on income tax
-163,932.49
Total 794,287.97
2.Return on equity and earnings per share
Calculation of return on equity and earnings per share based on issued by China securities regulatory commission.( ChinaNanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
81
Securities Regulatory Commission Announcement [2010] No. 2)< Public offering of securities of the
company's Information Disclosure Explanatory Notice No. 1 - Non-recurrent gains and losses (2008).( China
Securities Regulatory Commission Announcement [2008] No. 43)
（1） 2010.1-6
Earnings per share
Profits of the reporting period
Weighted average
return on equity
（%）
Basic earnings
per share
Diluted earnings per
share
Net profit attributable to shareholders of
parent company 2.44 0.04 0.04
Net profit attributable to shareholders of
parent company
after deduction of non-current gains and
losses 2.21 0.03 0.03
（2） 2009.1-6
Earnings per share
Profits of the reporting period
Weighted
average return
on equity（%）
Basic earnings
per share
Diluted
earnings per
share
Net profit attributable to shareholders of parent
company 1.61 0.02 0.02
Net profit attributable to shareholders of parent
company
after deduction of non-current gains and losses 1.59 0.02 0.02
3.Description of the abnormality in the main accounting statement item
Analysis of items of financial statements ,which vary in 30% (including 30%) or more and account for 5%
(including 5%) or 10% of the total profits of the reporting period (including 10%)
(1)Item of balance sheet
Item As of 30 June,
2010
As of 31 Dec.,
2009
Amount of
movement
Proportion
of
movement
Note
Monetary funds 310,336,819.87 482,952,642.17 -172,615,822.30 -35.74%
Note 1
Notes payable 28,285,236.00 92,746,648.00 -64,461,412.00 -69.50%
Note 2
Other payable 25,904,516.01 50,912,843.86 -25,008,327.85 -49.12%
Note 3
Note1：Scale up the operation and increase in sale, as well money withdrawn from circulation accelerated
Note2：Scale up the operation
Note3：Scale up the operation
(2)Item of Income Statement
Item 2010.1-6 2009.1-6 Amount of
movement
Proportion
of
movement
Note
Revenue 855,707,517.90 655,468,338.04 200,239,179.86 30.55% Note1
Cost of sales 735,655,901.98 557,468,259.62 178,187,642.36 31.96% Note2Nanjing Putian Telecommunications Co., Ltd. 2010 Semi-Annual Report
82
Operation expense 51,518,189.17 37,948,082.52 13,570,106.65 35.76% Note3
Non-operation
revenue 1,258,587.03 338,597.00 919,990.03 271.71% Note4
Note1：Scale up the operation
Note2：Scale up the operation
Note3：Scale up the operation
Note4：Subsidy from occasional activity.
XIII. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for reporting
dated 20 Aug.2010.
