Nanjing Putian Telecommunications Co., Ltd.
2011 Semi-Annual Report
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Nanjing Putian Telecommunications Co., Ltd.
2011 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 Position of absent
Reason for absence Entrusted
director director
Li Tong Director Due to official business Sun Liang
Ding Haiyan Independent Director Due to official business Zhang Shunyi
Chairman of the BOD Mr. Sun Liang, General Manager Mr. Kong Shanyou, 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 2011 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 ...................................................................................... 6
V. Significant Events ............................................................................................................. 8
VI. Financial Report ............................................................................................................ 14
VII. Documents for Inspection ............................................................................................. 14
1
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
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. Sun Liang
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 Securities Times & Hong Kong Commercial
Information Disclosure: Daily
Appointed Web Site for Information www.cninfo.com.cn
Disclosure:
Semi-Annual Report Prepared at: Financial & Securities Department
6. Listing and Trading Place of the Shenzhen Stock Exchange
Company Stock:
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 320000400000500
Registration Code:
Taxation Registration Code: 320121134878054
II. Main financial data (Yuan):
1. Main financial data
30 June 2011 31 December 2010 Increase/decrease
（％）
Total assets 1,892,543,867.21 1,582,643,987.41 19.58%
Equity attributable to owners of 368,553,191.23 360,616,964.74 2.20%
2
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
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 1.71 1.68 1.79%
company(Yuan/share)
January to June January to June Increase/decrease
2011 2010 (%)
Total operational income 1,167,066,717.47 855,707,517.90 36.39%
Operational profit 16,232,593.95 16,987,446.48 -4.44%
Total profit 17,513,563.03 18,003,672.49 -2.72%
Net profit attributable to the
shareholders of the listed 7,654,146.53 8,257,612.37 -7.31%
company
Net profit attributable to the
shareholders of the listed
7,017,683.63 7,463,324.40 -5.97%
company after deducting
non-recurring profits/losses
Basic earnings per share 0.036 0.038 -5.26%
Diluted earnings per share 0.036 0.038 -5.26%
Weighted average return on
2.10% 2.44% -0.34%
equity（%）
Weighted average return on
equity after deducting 1.93% 2.21% -0.28%
non-recurring profits/losses（%）
Net cash generated from
-123,457,082.73 -101,489,686.78 -21.64%
operating activities
Net cash per share generated
from operating activities -0.57 -0.47 -21.28%
(Yuan/share)
Note: Details of the deducted non-recurring profits/losses for the first half of 2011(Yuan):
Item Amount
Government subsidy recorded into profit and loss of current
1,305,540.73
period
Net amount of other non-operating profit and expenses
-24,571.65
excluding items above
Influenced amount of minority interest -375,413.27
Influenced amount of income tax -269,092.91
Total 636,462.90
II. Changes in Share Capital & Major Shareholders
I. Change of the Company’s shares
Increase/decre
Year-beginning ase during the Year-end
Year
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:
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Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
State-owned shares 115,000,000 53.49% 115,000,000 53.49%
Domestic legal person shares
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
100,000,000 46.51% 100,000,000 46.51%
foreign currency
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
14,433
shareholders
Top ten shareholders
Non-tradable Number of
Type of Proportion in
Shareholder’s name Shareholding shares held by mortgaged or
shareholder share capital
the shareholder frozen shares
China Potevio Company State-owned
53.49% 115,000,000 115,000,000 0
Limited legal person
Overseas
CHAN KEUNG 0.60% 1,289,600 0 Unknown
natural person
Domestic
Wang Feifei 0.27% 588,008 0 Unknown
natural person
Domestic
Shu Jianping 0.23% 500,500 0 Unknown
natural person
Domestic
Gu Feng 0.21% 442,400 0 Unknown
natural person
Domestic
Chen Chaofan 0.19% 416,979 0 Unknown
natural person
Domestic
Yan Zengqing 0.19% 399,806 0 Unknown
natural person
Domestic
Long Jianqiu 0.16% 340,000 0 Unknown
natural person
Domestic
Zhao Guanghui 0.15% 331,650 0 Unknown
natural person
Domestic
Liu Xiaoqi 0.15% 318,261 0 Unknown
natural person
Top ten shareholders of tradable shares
Shareholder’s name Number of tradable shares Share type
Domestically-listed shares in
CHAN KEUNG 1,289,600
foreign currency
Domestically-listed shares in
Wang Feifei 588,008
foreign currency
Domestically-listed shares in
Shu Jianping 500,500
foreign currency
Domestically-listed shares in
Gu Feng 442,400
foreign currency
Domestically-listed shares in
Chen Chaofan 416,979
foreign currency
Domestically-listed shares in
Yan Zengqing 399,806
foreign currency
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Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Domestically-listed shares in
Long Jianqiu 340,000
foreign currency
Domestically-listed shares in
Zhao Guanghui 331,650
foreign currency
Domestically-listed shares in
Liu Xiaoqi 318,261
foreign currency
Domestically-listed shares in
Chen Ren 310,000
foreign currency
Among the top ten shareholders, China Potevio Company Limited is neither a
Specification of related related party nor a person acting in concert with the others. It’s unknown by the
parties or persons acting in Company whether there are related parties or persons acting in concert among the
concert among the other shareholders.
above-mentioned
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 14th meeting of the Fifth BOD held on 10 May 2011, Mr. Kong
Shanyou was engaged as general manager of the Company, Mr. Li Tong was engaged as
vice general manager of the Company, and Mr. Sun Liang left the post of general
manager.
On 24 May 2011, Mr. Zhu Hongchen resigned from the Fifth Board of Directors.
As approved by the 15th Meeting of the Fifth BOD on 30 May 2011, Mr. Sun Liang
was elected as president of the board. Mr. Zhao Xinping left the post of the board president,
and Mr. Sun Liang left the post of vice president.
As approved by the First extraordinary general meeting of 2011 held on 17 June 2011,
Mr. Kong Shanyou and Ms. Li Ying was elected into the Fifth BOD, Mr. Yang Zhihe and Mr.
Zhu Hongchen was elected into the Fifth Supervisory Committee. Mr. Zhao Xinping left the
post of director and Ms. Liu Shuping and Mr. Xiong Weihua left the post of supervisor.
As approved by the 16th Meeting of the Fifth BOD on 17 June 2011, Mr. Kong
Shanyou was elected as vice president of the fifth BOD.
As approved by the 11th meeting of the Fifth Supervisory Committee on 17 June 2011,
Mr. Yang Zhihe was elected as president of the supervisory committee.
.
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Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
IV. Report of the Board of Directors
I. General operating conditions in the reporting period
In the reporting period, pursuant to the guideline established at the beginning of the
year and tightly surrounding the annual operational target and work tasks, the Company
worked hard on expanding marketing channels, accelerating the speed of technology
research, optimizing brand image and exploring principal business, and continuously
enhanced its core competiveness. Under the effort of the whole staff, the Company fulfilled
the operational target of the first half year smoothly. It realized revenue of 1167.07 million
Yuan, a year-on-year increase of 36.99 percent, operational profit of 16.23 million Yuan, a
year-on-year decrease of 4.44 percent, and net profit of 7.65 million Yuan, 7.31 percent
less than that of the same period of last year.
II. Brief analysis on the operating results and financial position in the
reporting period (Yuan)
31 December Increase Increase
Item 30 June 2011
2010 /decrease(Yuan) /decrease
Total assets 1,892,543,867.21 1,582,643,987.41 309,899,879.80 19.58%
Shareholders’ equity 368,553,191.23 360,616,964.74 7,936,226.49 2.20%
Notes receivable 784,673,761.32 537,895,136.38 246,778,624.94 45.88%
Inventory 461,649,695.56 328,533,395.99 133,116,299.57 40.52%
Accounts payable 845,960,435.73 581,633,610.57 264,326,825.16 45.45%
31 December Increase Increase
30 June 2011
2010 /decrease(Yuan) /decrease
Operational income 1,167,066,717.47 855,707,517.90 311,359,199.57 36.39%
Operational profit 16,232,593.95 16,987,446.48 -754,852.53 -4.44%
Net profit 14,749,678.10 14,834,275.66 -84,597.56 -0.57%
Net profit attributable
to the owners of 7,654,146.53 8,257,612.37 -603,465.84 -7.31%
parent company
Net Cash flow from
-123,457,082.73 -101,489,686.78 -21,967,395.95 -21.64%
operating activities
Net Cash flow from
-6,344,782.30 -7,995,797.24 1,651,014.94 20.65%
investing activities
Net Cash flow from
48,687,455.47 -23,021,249.32 71,708,704.79 311.49%
financing activities
Explanation:
1. Accounts receivable increased substantially mainly because (1) Sales amount was
expanded and receivable payment from customers within credit period was increased. (2)
Because of a seasonal characteristic in capital withdraw, the fund inflow din not match the
rising of sales scale. But according to the trend of previous years, capital collection is
estimated to be better.
2. Inventories increased mainly because sent-out goods increased as production and sales
amount went up.
3. Accounts payable increased mainly because purchase of materials from suppliers
increased as production scale in the reporting period expanded, thus balance of payment
payable to suppliers increased.
4. Due to fast growth of production and sales scale, accounts receivable increased
substantially, so did the purchase of inventories and costs and expenses, thus there was a
great outflow of cash, which resulted in cash flow from operating activities turning a
net-outflow in this period.
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Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
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
Year-on-year Year-on-year Year-on-year
A breakdown by Gross increase/decr increase/decr increase/decr
Revenue Cost
industry or product margin（%） ease of ease of cost ease of gross
revenue（%） （%） margin（%）
Telecommunicatio
ns and related
115,303.14 100,902.16 12.49% 37.51% 40.09% -1.61%
equipments
industry
A breakdown of main business by product
Comprehensive
44,976.26 37,173.59 17.35% 23.22% 28.05% -3.12%
access products
Video conference
32,292.99 28,529.50 11.65% 75.67% 75.07% 0.30%
system
Other 38,033.89 35,199.07 7.45% 31.29% 31.83% -0.37%
3. A breakdown of main business by region is as follows( RMB0’000):
Region Revenue Year-on-year increase/decrease（％）
North China 27,204.02 36.93%
East China 56,089.30 42.52%
Other regions 32,009.82 29.91%
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 or the structure of
main business.
(2) There were no material changes in profitability of the Company’s main business.
(3) Changes in the composition of profit(Yuan)
January to June January to June Increase Increase
Item 2011 2010 /decrease(Yuan) /decrease
Sales expense 67,934,941.52 51,518,189.17 16,416,752.35 31.87%
Administrative
51,471,437.38 44,637,531.18 6,833,906.20 15.31%
expense
Financial expenses 12,030,031.87 7,581,396.54 4,448,635.33 58.68%
Investment income 2,853,983.65 2,999,046.79 -145,063.14 -4.84%
Operational profit 16,232,593.95 16,987,446.48 -754,852.53 -4.44%
Non-Operating profit 1,338,341.42 1,258,587.03 79,754.39 6.34%
Non-operating
57,372.34 242,361.02 -184,988.68 -76.33%
expenses
Income tax 2,763,884.93 3,169,396.83 -405,511.90 -12.79%
Net profit 14,749,678.10 14,834,275.66 -84,597.56 -0.57%
Net profit attributable
to the owners of 7,654,146.53 8,257,612.37 -603,465.84 -7.31%
parent company
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Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Explanation
①Financial expense increased compared with that of the same period of last year,
mainly because sales scale expanded, thus marketing expenses, after-sale service
expenses, salaries, transportation charges and travelling expenses increased.
②Growth of administrative expenses was mainly due to increase of technology
development fee.
③Growth of financial expenses was mainly due to increase of bank loan and interest
expenses in the first six months of the year. Rising of bank loan interest rates and bank
acceptance discount rate also caused interest costs to grow.
5. Associated companies that contributed more than 10 percent of the Company’s
net profit
Name of associated Investment
Equity owned Net profit in
company Income
by the Main business the reporting
contributed to the
Company period(Yuan)
Company(Yuan)
Manufacturing and
Nanjing Mennekes sales of plugs,
50% 4,645,963.84 2,322,981.92
Electric Appliance Ltd. receptacles and
related products
6. Main problems and difficulty in operation
As sale scale further expanded, receivables and inventories increased at the same time.
Because the liquidity period of receivables and inventories is relatively long, the Company
is bearing pressure in respect of payables. The Company will strengthen control of
receivables and inventories, and reinforce receivables collecting and assessment of the
work. With the substantial increase of sale scale, the Company will strengthen contract
crisis management, 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
22.68 million Yuan, and minor investment in fixed assets totaled to 6.42 million Yuan.
V. Significant Events
I. Company governance
The Company has made continuous efforts to improve its legal person governance
structure, to amplify internal control rules and standardize its operations pursuant to the
Company Law, Securities Law, Governance Ordinance of Listing Company and other laws,
rules, and requirements, so as to improve its governance standard and promote healthy
and continuous development. By the end of the reporting period, the general governance
8
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
status of the Company is in conformity with related laws, regulations and standardization
documents issued by CSRC on governance of listed companies.
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 2010.
2. The Company will not propose a plan of profit distribution or transfer of capital reserves
into share capital for the first half of 2011.
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) Sale of goods, providing labor services for related parties
Jane to June 2011
Pricing policy
Related transaction and Ratio in
Related Parties similar
content decision-making Amount
processes trade
amount %
China Potevio Company
Telecommunications Market Pricing 33,380,033.13 2.86
Limited
Shanghai Potevio Network
Telecommunications Market Pricing 1,436,222.74 0.12
Technology Co., Ltd.
Nanjing Putian Datang
Telecommunications Market Pricing 35,170.94 0.00
information electronic Co., Ltd.
China Putian Corporation Telecommunications Market Pricing 82,051.28 0.01
Nanjing Prachanda Live Optical
Telecommunications Market Pricing 77,218.76 0.01
Network Co., Ltd.
Total 35,010,696.85 3.00
Among that, sales to the controlling shareholder and its subsidiaries amounted to 34.90
million Yuan in the reporting period.
(2) Purchasing goods, accept services from related parties
Jane to June 2011
Pricing policy
Related transaction and Ratio in
Related Parties similar
content decision-making Amount
processes trade
amount %
China Potevio Company Market Pricing
Telecommunications 10,895,243.68 0.92
Limited
Nanjing Prachanda Live Optical Market Pricing
Telecommunications 20,148,668.55 1.70
Network Co., Ltd.
Nanjing Postel Swanking Telecommunications Market Pricing 803,037.15 0.07
9
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Electrical Co., Ltd.
Total 31,846,949.38 2.69
(3) The company leased the land and houses of Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd. as offices and plant
Date start Date for Accordance for
Asset for for termination reorganization Rental expense
Lesser Lessee
leasing leasing of leasing of rental income of the period
Nanjing
Nanjing Potevio
Potevio
Telecommunication Building 2011-01-0
telecomm 2011-12-31 Market Pricing 6,093,860.00
Technology Industry and land 1
unication
Park Co., Ltd.
Co., Ltd.
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. Credits, debts and guarantee between the Company and its related parties
(RMB0’000)
(1) Receivables with related parties
Name of the related As of 30 June 2011 As of 31 December 2010
Item
parties Book amount Provision Book amount Provision
Accounts China Potevio
21,738,616.90 43,471.61 22,785,438.14 -
receivable Company Limited
Shanghai Potevio
Post and
13,500,320.00 4,262,017.60 13,664,248.00 1,853,185.60
Accounts Telecommunications
receivable Technology Co., Ltd.
Chengdu Potevio
Accounts cable companies 497,295.00 - 497,295.00 -
receivable limited by shares
Nanjing Zhongyou
Accounts Telecommunication 311,472.80 - 1,012,072.80 -
receivable Co., Ltd.
Nanjing Postel
Accounts Swanking Electrical 94,954.61 - - -
receivable Co., Ltd.
Nanjing Prachanda
-
Accounts Live Optical Network 96,932.87 - -
receivable Co., Ltd.
Nanjing Putian
Accounts Datang information 36,545.00 - - -
receivable electronic Co., Ltd.
Nanjing Putian
Other Datang information - - 3,365.00 -
receivables electronic Co., Ltd.
Nanjing Potevio
Telecommunication
352,019.2 -
Other Technology Industry
receivables Park Co., Ltd.
Beijing Picom
Other Telecommunications 28,912,952.71 28,912,952.71 28,912,952.71 28,912,952.71
receivables Equipment Co., Ltd.
(2) Payables with related parties
10
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Item As of 30 June As of 31
Name of the related parties
2011 December 2010
Other Nanjing Potevio Telecommunication
- 426,045.28
payables Technology Industry Park Co., Ltd.
Other Nanjing Putian Datang information
47,790.00 -
payables electronic Co., Ltd.
Accounts
China Potevio Company Limited 13,503,850.00 2,843,850.00
payable
Other
China Potevio Company Limited 20,681.13 164,859.92
payables
Accounts Nanjing Prachanda Live Optical Network
23,351,790.78 2,793,314.20
payable Co., Ltd.
Accounts Nanjing Postel Swanking Electrical Co.,
1,371,506.90 243,405.99
payable Ltd.
Accounts Nanjing Putian Datang information
275,465.02 -
payable electronic Co., Ltd.
Accounts Chengdu Potevio cable companies limited
159,106.27 -
payable by shares
Accounts Nanjing Potevio Telecommunication
148,254.48 130,508.96
payable Technology Industry Park Co., Ltd.
Accounts Wuhan is ablaze Potevio information
- 5,093,070.15
payable technology Co., Ltd.
Advances
from China Potevio Company Limited 8,158,434.00 -
customers
Advances
from China Putian Corporation 22,990 45,980.00
customers
(3) Credits and debts with related parties due to non-operating business (RMB0’000)
Supply fund to the Company
Provide fund for related party
from related party
Related parties
Occurring Occurring
Balance Balance
amount amount
Nanjing Putian Datang Information
0.00 0.00 4.78 4.78
and Electric Company Ltd.
Total 0.00 0.00 4.78 4.78
Of which: In the report period, the occurring amount which the Company provided funds to
the controlling shareholder and its subsidiaries was RMB 0.00 and the balance was RMB
0.00.
(4)By the end of the reporting period, the 49.64% share equity of Nanjing Potevio
Telecommunication Technology Industry Park Co., Ltd held by the Company had been
mortgaged to China Potevio Company Limited as counter-guarantee of the 84,000,000
Yuan of bank loan guarantee offered by China Potevio Company Limited for the Company.
VI. Important contracts
1. During the reporting period the Company did not trust, contract or lease assets to
other companies or vice versa.
The Company leased the land and building of Nanjing Putian Telecommunication
Technology Industry Park Co., Ltd in the reporting time.
2. Guaranty provided for other parties (RMB 0’000 ):
Guarantee offered by the Company(excluding the guarantee offered to the subsidiaries)
Relevant Happening Guaranty
Actual
Name of the notice no. Amount of Date (the Type of Term of Completed whether
guarantee
debtor and guaranty date when guaranty guaranty or not offered to a
amount
disclosure the guaranty related party
11
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
date agreement or not
was signed)
From Sep.
2010 till
the
25 Aug.
correspondi
China Potevio 2010 Counter-gu
8,400.00 19 Sep. 2010 8,400.00 ng loan No Yes
Co., Ltd. (No.2010-0 arantee
guaranteed
14)
by
guarantor
was paid off
Total amount of external Total actual amount of
guarantee limit approved 0.00 external guarantee during the 0.00
during the report period(A1) report period(A2)
Total amount of external Total actual amount of
guarantee limit approved at 8,400.00 external guarantee at 8,400.00
period-end(A3) period-end(A4)
Guaranty offered to the subsidiaries
Happening
Relevant Guaranty
Date (the
notice no. Actual whether
Name of the Amount of date when Type of Term of Completed
and guarantee offered to a
debtor guaranty the guaranty guaranty guaranty or not
disclosure amount related party
agreement
date or not
was signed)
Nanjing
16 Apr. 3 May
Southern Jointly
2011(No. 4,000.00 3 May 2011 2,000.00 2011-3 May No No
Telecommunic liability
2011-008) 2012
ation Co., Ltd.
Nanjing
16 Apr. 23 May
Southern Jointly
2011(No. 4,000.00 23 May 2011 2,000.00 2011-22 No No
Telecommunic liability
2011-008) Dec. 2011
ation Co., Ltd.
Nanjing Putian
30 Mar. 16 Sep.
Tianji Building Jointly
2010(No. 2,300.00 16 Sep. 2010 1,000.00 2010-16 No No
Intelligent Co., liability
2010-006) Sep. 2011
Ltd.
Nanjing Putian
30 Mar 28 Sep.
Tianji Building Jointly
2010(No. 2,300.00 28 Sep. 2010 1,000.00 2010-28 No No
Intelligent Co., liability
2010-006) Sep. 2011
Ltd.
Total actual amount of
Total amount of guarantee
guarantee limit for
limit approved for subsidiaries 7,300.00 4,000.00
subsidiaries in the report
in the report period(B1)
period(B2)
Total amount of guarantee Total actual amount of
limit approved for subsidiaries 7,300.00 guarantee limit for 6,000.00
at period-end(B3) subsidiaries at period-end(B4)
Total guarantee of the Company (Including the above mentioned guarantees)
Total amount of guarantee
Total amount of guarantee in
limit approved in the report 7,300.00 4,000.00
the report period(A2+B2)
period(A1+B1)
Total amount of guarantee Total actual amount of
limit approved at 15,700.00 guarantee at 14,400.00
period-end(A3+B3) period-end(A4+B4)
The proportion of the total actual amount of guarantee in the net
39.07%
assets of the Company(A4+B4)
Including:
Amount of guarantee for shareholders, actual controller and its
8,400.00
related parties(C)
The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly or 4,000.00
indirectly(D)
Proportion of total amount of guarantee in net assets of the
0.00
Company exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 12,400.00
Explanations on possibly bearing joint and several liquidating -
12
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
responsibilities for undue guarantees
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 public accounting firm engaged by the Company in 2010 was Daxin Certified
Public Accountants. And the Company did not change the public accounting firm in the
reporting period.
IX. Investigation and punishment received by the Company and its directors,
supervisors, senior management, shareholders and effective controller
In the reporting period the Company, and its directors, supervisors, senior management
and effective controller were not punished by the or investigated by securities regulatory
departments or other administrative 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
Main topics of discussion and
Time Place Way Visitor
information provided
The operating conditions of
In the Telephone An individual
9 June 2011 Company in the last several
Company communication investor
yeas
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 2011.
According to our investigation, there was no appropriation of fund of the Company by
the controlling shareholder or other related parties through non-business transactions in
the first half of 2011.
2. Guarantee provided by the Company in the first half of 2011
According to our investigation, during January-June 2011, the Company provided
13
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
guaranty for some subsidiaries to help them to apply for bank loans pursuant to the
approval of shareholders general meeting with occurring amount of 40 million Yuan. The
ending balance of guarantee as of 30 June is 144 million Yuan, accounting for 39.07
percent of the value of net assets, of which 60 million Yuan for the subsidiaries and 84
million Yuan for the controlling shareholder as counter guarantee. The procedures of
guaranty offered for the subsidiaries 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 2011 were not audited.
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.
23 August 2011
14
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Balance Sheet
Company name: Nanjing Putian Telecommunications Co., Ltd. 30 June 2011 Unit: CNY
At the end of the current period At the beginning of the current period
Item
Consolidated Parent Company Consolidated Parent Company
Current asset:
Monetary funds 212,599,036.91 170,389,443.91 293,018,925.87 186,894,431.96
Settlement provision
Capital lent
Tradable financial assets
Notes receivable 8,371,358.94 2,965,486.00 8,756,893.05 2,778,605.86
Accounts receivable 784,673,761.32 538,052,194.23 537,895,136.38 399,959,567.19
Advances to suplliers 66,181,876.60 55,073,493.06 55,963,371.47 38,600,316.28
Insurance receivable
Reinsurance receivable
Contract reserve of reinsurance
receivable
Interest receivable
Dividends receivable
Other receivables 28,282,206.95 47,323,855.30 31,336,109.33 36,567,802.25
Purchase restituted finance asset
Inventories 461,649,695.56 246,885,751.51 328,533,395.99 192,660,176.68
Non-current asset due in year
Other current assets
Total current asset 1,561,757,936.28 1,060,690,224.01 1,255,503,832.09 857,460,900.22
Non-current assets
Granted loans and advances
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 241,289,228.36 348,903,455.65 238,518,944.71 346,489,259.30
Investment property 4,917,395.91 5,020,611.87
Fixed assets 72,656,055.37 33,649,179.25 74,312,488.05 35,143,253.92
Construction in progress 3,282,048.59 743,162.49
Construction materials
Fixed assets held for disposal
Productive biological assets
Petrol asstest
Intangible assets 8,641,202.70 5,186,924.12 9,288,110.69 5,656,457.31
Development costs
Goodwill
Long-term prepayment
Differed income tax asset
Other non-current assets
Total non-current assets 330,785,930.93 388,482,721.51 327,140,155.32 387,288,970.53
Total assets 1,892,543,867.21 1,449,172,945.52 1,582,643,987.41 1,244,749,870.75
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
15
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Balance Sheet (continued)
Company name: Nanjing Putian Telecommunications Co., Ltd. 30 June 2011 Unit: CNY
At the end of the current period At the beginning of the current period
Item
Consolidated Parent Company Consolidated Parent Company
Current liabilities
Short-term loans 505,000,000.00 335,000,000.00 437,000,000.00 320,000,000.00
Loan from Central Bank
Deposit received and hold for
others
Capital borrowed
Tradable financial liabilities
Notes payable 1,962,801.40 81,962,801.40 370,000.00 80,370,000.00
Accounts payable 845,960,435.73 522,430,347.14 581,633,610.57 342,106,705.49
Advances from customers 61,063,549.86 25,584,034.87 82,459,973.00 36,643,103.73
Selling financial asset of
repurchase
Commission charge and
commission payable
Accrued payroll 14,601,749.55 5,193,319.83 14,668,971.89 5,181,837.54
Tax payable -11,919,354.26 -352,891.61 9,130,272.74 11,481,928.76
Interest payable
Dividends payable
Other payables 45,071,997.87 166,666,975.97 36,186,930.21 132,649,038.48
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 1,461,741,180.15 1,136,484,587.60 1,161,449,758.41 928,432,614.00
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 1,461,821,298.15 1,136,564,705.60 1,161,529,876.41 928,512,732.00
Owners’ equity (or shareholders’
equity)
Paid-in capital (or share
215,000,000.00 215,000,000.00 215,000,000.00 215,000,000.00
capital)
Capital reserves 185,374,533.85 172,417,299.81 185,374,533.85 172,417,299.81
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 -28,093,006.12 -75,398,619.65 -35,747,152.65 -71,769,720.82
Balance difference of foreign
-4,317,896.27 -4,599,976.23
currency translation
Total equity attributable to owners
368,553,191.23 312,608,239.92 360,616,964.74 316,237,138.75
of the parent company
Minor interests 62,169,377.83 60,497,146.26
Total owners’ equity 430,722,569.06 312,608,239.92 421,114,111.00 316,237,138.75
Total of liabilities and owners’ equity 1,892,543,867.21 1,449,172,945.52 1,582,643,987.41 1,244,749,870.75
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
16
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Income Statement
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2011 Unit: CNY
Current Period Same Period of Last Year
Item
Consolidated Parent Company Consolidated Parent Company
I. Total operating income 1,167,066,717.47 742,733,409.56 855,707,517.90 562,175,577.34
Incl. operating income 1,167,066,717.47 742,733,409.56 855,707,517.90 562,175,577.34
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 1,153,688,107.17 753,485,331.60 841,719,118.21 569,748,558.85
Incl. operating cost 1,016,732,478.71 679,207,670.70 735,655,901.98 508,329,325.07
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 3,519,561.95 822,008.18 2,137,099.34 -158,126.30
Sales expense 67,934,941.52 39,477,459.42 51,518,189.17 33,295,465.17
Administration expense 51,471,437.38 22,348,797.17 44,637,531.18 21,285,548.18
Financial expenses 12,030,031.87 10,082,794.27 7,581,396.54 6,807,346.73
Losses of devaluation of asset 1,999,655.74 1,546,601.86 189,000.00 189,000.00
Plus: Gains from change of fair
value (“-“ for loss)
Investment income (“-“ for loss) 2,853,983.65 7,074,596.35 2,999,046.79 7,575,746.79
Incl. Investment income on
affiliated Company and joint 2,770,283.65 2,414,196.35 2,760,873.39 2,760,873.39
ventureand joint venture
Gains from currency exchange
(“-“ for loss)
III. Operational profit (“-“ for loss) 16,232,593.95 -3,677,325.69 16,987,446.48 2,765.28
Plus: Non-operating income 1,338,341.42 70,918.94 1,258,587.03 1,056,423.07
Less: Non-operating expenses 57,372.34 22,492.08 242,361.02 165,732.90
Incl. Loss from disposal of
6,665.20
non-current assets
IV. Total profit (“-“ for loss) 17,513,563.03 -3,628,898.83 18,003,672.49 893,455.45
Less: Income tax 2,763,884.93 3,169,396.83
V. Net profit (“-“ for net loss) 14,749,678.10 -3,628,898.83 14,834,275.66 893,455.45
Net profit attributable to the
7,654,146.53 -3,628,898.83 8,257,612.37 893,455.45
owners of parent company
Minority shareholders’ gains and
7,095,531.57 6,576,663.29
losses
VI. Earnings per share:
(I) Basic earnings per share 0.036 -0.017 0.038 0.004
(II) Diluted earnings per share 0.036 -0.017 0.038 0.004
VII. Other comprehensive income 282,079.96 -197,937.66
VIII. Total comprehensive income 15,031,758.06 -3,628,898.83 14,636,338.00 893,455.45
Total comprehensive income
attributable to owners of parent 7,936,226.49 -3,628,898.83 8,059,674.71 893,455.45
company
Total comprehensive income
7,095,531.57 6,576,663.29
attributable to minority shareholders
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
17
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Cash Flow Statement
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2011 Unit: CNY
Current Period Same Period of Last Year
Item
Consolidated Parent Company Consolidated Parent Company
I. Net cash flow from operating activities
Cash received from sales of products and providing of
services
1,095,959,459.48 718,196,416.62 872,454,491.27 540,782,892.27
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 735,842.73 177,103.85
Other cash received from operating activities 13,306,037.16 36,979,615.17 9,066,891.80 22,031,403.97
Sub-total of cash inflow from operating activities 1,110,001,339.37 755,176,031.79 881,698,486.92 562,814,296.24
Cash paid for goods and services 1,040,803,984.34 669,964,252.20 837,758,756.54 575,800,258.75
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 65,696,655.44 38,030,926.23 55,679,051.86 29,060,767.20
Payments of all types of taxes 47,189,266.63 17,447,965.23 35,262,364.53 10,787,587.10
Other cash payments relating to operating activities 79,768,515.69 51,886,587.26 54,488,000.77 60,897,375.69
Sub-total of cash outflow from operating activities 1,233,458,422.10 777,329,730.92 983,188,173.70 676,545,988.74
Net Cash flow from operating activities -123,457,082.73 -22,153,699.13 -101,489,686.78 -113,731,692.50
II. Cash flow from investing activities
Cash received from recovering investment
Cash received from investment income 83,700.00 4,660,400.00 238,173.40 238,173.40
Net cash retrieved from disposal of fixed assets, intangible
assets, and other long-term assets
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 83,700.00 4,660,400.00 238,173.40 238,173.40
Cash paid for purchasing fixed, intangible and other
long-term assets
6,428,482.30 2,338,623.63 8,233,970.64 6,037,510.00
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 6,428,482.30 2,338,623.63 8,233,970.64 6,037,510.00
Net cash flow from investing activities -6,344,782.30 2,321,776.37 -7,995,797.24 -5,799,336.60
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 271,000,000.00 201,000,000.00 270,000,000.00 250,000,000.00
Cash received from bond placing
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 271,000,000.00 201,000,000.00 270,000,000.00 250,000,000.00
Cash paid for settling debts 203,000,000.00 186,000,000.00 258,000,000.00 250,000,000.00
Cash paid for dividend and profit distributing or interest
paying
18,312,544.53 10,872,553.49 15,021,249.32 9,488,737.49
Incl. Dividend and profit of minority shareholder paid by
subsidiaries
5,423,300.00 5,423,300.00
Cash paid for other financing activities 1,000,000.00 1,000,000.00 20,000,000.00 20,000,000.00
Subtotal of cash outflow due to financing activities 222,312,544.53 197,872,553.49 293,021,249.32 279,488,737.49
Net cash flow from financing activities 48,687,455.47 3,127,446.51 -23,021,249.32 -29,488,737.49
IV. Influence of exchange rate alternation on cash and cash
equivalents
95,634.97 42,688.20 -9,448.96
V. Net increase of cash and cash equivalents -81,018,774.59 -16,661,788.05 -132,516,182.30 -149,019,766.59
Plus: Balance of cash and cash equivalents at the
beginning of term
291,447,011.87 185,951,591.96 422,853,002.17 348,384,407.10
VI. Balance of cash and cash equivalents at the end of term 210,428,237.28 169,289,803.91 290,336,819.87 199,364,640.51
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
18
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Statement of Changes in Owners' Equity (consolidated)
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2011 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 Minor Paid-in Minor
Reasona Reasona
capital Less: General Undistrib sharehol Total capital Less: General Undistrib sharehol Total
ble ble
(or share Capital Treasury Surplus risk uted ders' owners' (or share Capital Treasury Surplus risk uted ders' owners'
reserve reserve
capital) reserves stocks reserves provision profit Other equity equity capital) reserves stocks reserves provision profit Other equity equity
215,000, 185,374, 589,559. -35,747,1 -4,599,97 60,497,1 421,114,1 215,000, 182,566, 589,559. -59,459,1 -5,037,29 55,454,2 389,113,
I. Balance at the end of the last year
000.00 533.85 77 52.65 6.23 46.26 11.00 000.00 377.24 77 68.77 4.97 03.54 676.81
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this 215,000, 185,374, 589,559. -35,747,1 -4,599,97 60,497,1 421,114,1 215,000, 182,566, 589,559. -59,459,1 -5,037,29 55,454,2 389,113,
year 000.00 533.85 77 52.65 6.23 46.26 11.00 000.00 377.24 77 68.77 4.97 03.54 676.81
III. Increase/ Decrease in this year 7,654,14 282,079. 1,672,23 9,608,45 2,808,15 23,712,0 437,318. 5,042,94 32,000,4
(Decrease is listed with “-”) 6.53 96 1.57 8.06 6.61 16.12 74 2.72 34.19
7,654,14 7,095,53 14,749,6 23,712,0 15,649,1 39,361,1
(I) Net profit
6.53 1.57 78.10 16.12 71.65 87.77
282,079. 282,079. 2,808,15 437,318. 3,245,47
(II) Other comprehensive income
96 96 6.61 74 5.35
7,654,14 282,079. 7,095,53 15,031,7 2,808,15 23,712,0 437,318. 15,649,1 42,606,6
Subtotal of (I) and (II)
6.53 96 1.57 58.06 6.61 16.12 74 71.65 63.12
(III) Owners’ contributions and -2,808,15 -2,808,15
reduction in capital 6.61 6.61
1. Capital contribution from owners l
2. Share-based payment recognised
in shareholders' equity
-2,808,15 -2,808,15
3. Others
6.61 6.61
-5,423,30 -5,423,30 -7,798,07 -7,798,07
(IV) Profit distribution
0.00 0.00 2.32 2.32
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
provisions
3. Distribution for owners -5,423,30 -5,423,30 -7,798,07 -7,798,07
(shareholders) 0.00 0.00 2.32 2.32
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
(VII)Other
IV. Balance at the end of the report 215,000, 185,374, 589,559. -28,093,0 -4,317,89 62,169,3 430,722, 215,000, 185,374, 589,559. -35,747,1 -4,599,97 60,497,1 421,114,1
period 000.00 533.85 77 06.12 6.27 77.83 569.06 000.00 533.85 77 52.65 6.23 46.26 11.00
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
19
Nanjing Putian Telecommunications Co., Ltd. 2011 Semi-Annual Report
Statement of Changes in Owners' Equity (parent company)
Company name: Nanjing Putian Telecommunications Co., Ltd. January to June 2011 Unit: CNY
Current period Last year
Paid-in Paid-in
Items capital (or Less: Reasonable Total capital (or Less: Reasonable Total
share Capital Treasury reserve Surplus General risk Undistribute owners' share Capital Treasury reserve Surplus General risk Undistribute owners'
capital) reserves stocks reserves provision d profit equity capital) reserves stocks reserves provision d profit equity
215,000,000 172,417,299 -71,769,720 316,237,138 215,000,000 172,417,299 -77,157,087 310,849,772
I. Balance at the end of the last year 589,559.76 589,559.76
.00 .81 .82 .75 .00 .81 .57 .00
Add: Changes of accounting policy
Error correction of the last period
Others
215,000,000 172,417,299 -71,769,720 316,237,138 215,000,000 172,417,299 -77,157,087 310,849,772
II. Balance at the beginning of this year 589,559.76 589,559.76
.00 .81 .82 .75 .00 .81 .57 .00
III. Increase/ Decrease in this year -3,628,898. -3,628,898. 5,387,366.7 5,387,366.7
(Decrease is listed with “-”) 83 83 5 5
-3,628,898. -3,628,898. 5,387,366.7 5,387,366.7
(I) Net profit
83 83 5 5
(II) Other comprehensive income
-3,628,898. -3,628,898. 5,387,366.7 5,387,366.7
Subtotal of (I) and (II)
83 83 5 5
(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
(Vii)Others
IV. Balance at the end of the report 215,000,000 172,417,299 -75,398,619 312,608,239 215,000,000 172,417,299 -71,769,720 316,237,138
589,559.76 589,559.76
period .00 .81 .65 .92 .00 .81 .82 .75
Legal person representative：Sun Liang Financial controller: Kong Shanyou Accountant officer: Shi Lian
20
NANJING PUTIAN TELECOMMUNICATIONS CO. LTD.
NOTES TO THE FINANCIAL STATEMENTS
From Jan. 1 to Jun. 30, 2011
(All amounts are stated by RMB Yuan unless otherwise stated）
I Basic information of the Company
Nanjing Putian Telecommunications Co., Ltd. (in the following we refers to as ‘the company’) is the original Nanjing
Telecommunication Facility Factory. The company 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 was
listed in Shenzhen Stock Exchange on May 22, 1997. By 30 June 2011, the capital of the Company is RMB 215,000,000.00
Yuan. The company is mainly engaged in telecom equipment manufacture industry. 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 on the hypothesis of going concern according to the actual occurred
transactions and events, according to the “Accounting Standards for Business Enterprises - Basic Standard” (issued by the
Ministry of Finance in 15 February 2006 ), 38 specific 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,
reflects the financial condition at 30 June 2011, operational achievements and cash flow of the Company from January to June
in 2011 effectively and completely.
3. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
4. Standard currency for accounting
The recording currency of the Company is Renminbi (thereafter refer as the “RMB”).
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 under common control 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 under different control are measured at fair value, which shall be
calculated as the sum of the acquisition-date fair value 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 under different control, the acquirer occur audit, legal service, evaluation consultation etc
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intermediary fee and other related administrative expenses for business combination, shall be recorded into the profits and
losses; the consideration of the equity securities issued or debt securities transaction costs, shall be included in the equity
securities or debt amount of initial recognition of securities. Combination cost includes consideration transferred and
transaction costs that are directly attributable to the acquisition. The acquirer shall recognize the fair value of contingent
consideration at acquisition date 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 value. The excess of combination cost over the fair value of the net identifiable assets
acquired is measured as goodwill. 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 - 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.
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.
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, for prompt exchange rate on the spot rate and the time of initial recognition or before the date of the balance
sheet at the spot exchange rate and produce different exchange balance, except a qualified foreign currency exchange
balance specifically borrowed in the capitalization period shall be included in the relevant asset costs of capitalization of the, all
included in the current profits and losses.
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. With the fair value measurement of foreign currency non-monetary
items at the fair value determined day at the spot exchange rate, convert the amount of functional currency with the original
amount of functional currency of the variance, as the changes in the fair value (including exchange rate fluctuation) processing,
included in the current profits and losses or confirmed for other comprehensive income and included in the capital reserve.
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(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.
Financial assets at initial recognition are classified as: financial assets measured at fair value through profit or loss (including
trading financial assets and those financial assets designated at fair value through profit or loss of), held-to-maturity investment,
loans and accounts receivables, as well as financial assets available-for-sale. In addition to accounts receivable outside of the
financial assets depends on the company’s and its subsidiaries’ classification of the financial assets held intention and hold
ability, etc.
Financial liabilities at initial recognition are classified as: financial liabilities at fair value through profit or loss (including trading
financial liabilities and financial liabilities designated at fair value through profit or loss) and other financial liabilities.
When the Company becomes one party of financial instrument contracts, it recognizes a related financial asset or financial
liability.
The financial assets or financial liabilities initial recognition is measured at fair value. Follow-up measurement is classification
treatment: with the fair value measurement and the changes are included in the profits and losses of the financial assets,
available for sale financial assets and to the fair value measurement and the financial liability measured at fair value and
changes included in the profits and losses; financial guarantee contract and below the market rate loans loan commitment, in
the initial confirmed according to the Accounting Standards for Enterprises 13 - Contingencies determine the amount and the
initial affirm amount deducted ,according to the Accounting Standards for Enterprises 14-Revenue, the principles of determine
income of the cumulative amortize frontal balance after the higher among a follow-up measurement; held-to-maturity
investment, loans and accounts receivable and other financial liabilities at the amortized cost measurement.
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 acquired 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
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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 de-recognition 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 de-recognition 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) De-recognition 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.
For single amount significant financial assets impairment test separately; individual amount not significant financial assets,
impairment test separately or included in the portfolio with similar credit risk characteristics of financial asset for impairment test.
Separate impairment test did not occur impair (both single amount significant and not significant financial assets), including in
the portfolio with similar credit risk characteristics of financial asset for impairment test again. Already single confirm the
impairment loss of financial assets, no need to do impairment test again.
The held-to-maturity investment, loans and accounts receivable become impaired, write down their book value to expected
future cash flow, write-down amount recognized as the impairment loss, included in the current profits and losses. Financial
asset available for sale impaired originally recorded in the capital reserve, because of the fair value of the cumulative losses
shall drop formation transferred out and included in the current profits and losses, transferred cumulative loss of the assets
initial acquisition cost deducting already recovered principal and amortization amount, the current fair value and the balance of
impairment loss original already included in the profit and loss.
(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
Accounts receivable include accounts receivable and long-term accounts receivable and other account receivable. On the
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balance sheet day, there is any objective evidence proving that accounts receivable has been impaired, 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) Single amount dramatic and individual provision for the accounts receivable:
Recognition criteria Individual amount more than RMB10,000,000Yuan
Provision method Individual identification method
(2) Classification as the combination of provision for account receivable
Group recognition criteria Amount, risk size
Group1 Single amount major but not separate accrual provision
Group 2 Single amount not significant and portfolio risk is low
Group 3 Single amount not significant but risk is high in the group
Provision method for group
Group 1 Age analysis
Group 2 No provision
Group 3 Age analysis
Adopt age analysis provision in group as follows:
Accounts receivable provision
Aging Other receivables provision proportion (%)
proportion (%)
Within 1 year (contain 1 year) 0.00% 0.00%
1 to 2 years 0.00% 0.00%
2 to 3 years 10.00% 10.00%
3 to 4years 30.00% 30.00%
4 to 5 years 40.00% 40.00%
5 to 6 years 80.00% 80.00%
6 years or above 100.00% 100.00%
(3) Single amount not significant but single provision for accounts receivable
Single provision reason Separately impairment test, exist objective evidence for impairment
Provision method Individual identification method
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
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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.
(4) Inventory system
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 investments 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.
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(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 under the equity
method should be entitled to or shared by the investee's net share of profit or loss, recognize the long-term equity investment income
and investment. When declare distribution of profits or cash dividends should be allocated to the part, a corresponding reduction in the
carrying value of long-term equity investments.
The long-term equity investment under cost method, except for additional or return on investment, the carrying value is generally same.
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 company
③Delegation 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 existent fair trade agreement price. When there is no fair trade
sales agreement but there is an active market or transaction prices for similar assets with the industry, according to market price less
the related tax
13. Investment property
(1)Classification and measurement
The investment property of the company includes: leasing land use rights, rent buildings, land use rights which are hold and prepared
for transfer after appreciation of land use rights.
The company's investment property is initially measured at cost, with subsequent measurement at cost model.
(2) Accounting for cost model
The company investment property of rental building adopts straight-line method depreciation, specific depreciation policies the same
as fixed assets.
The company investment property of land use, hold appreciation land-use right for transfer using the straight-line method amortize. For
land use right for lease, the same amortization policies as those of the intangibles are adopted.
The balance sheet date, the company should review investment property whether there are impairment of signs, when there is any
sign of impairment should undertake impairment test confirmed recoverable amount, which is the lower of book value and the
recoverable amount, provision for impairment loss is no longer in the future accounting periods turn back.
14. Fixed assets
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(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:
①The economic benefits related with the fixed asset are probably to flow to the enterprise; and
②The 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 method is 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 2.2-24.25
(3) Impairment
On balance sheet date, the company carries out an inspection if there is any evidence that the fixed asset is impaired. 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.
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
according to the sales agreement can be directly allocated the price minus the disposal expenses determined the amount of assets;
when without fair price for transaction but existence of similar active market according to the market price minus the disposal expenses
to determine the amount.
(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.
The valuation of finance lease: the initial recognition of fixed assets financed by leasing at the lease period begins is the lower of the
fair value of the leased asset and the present value of minimum lease payments.
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
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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
① The physical construction of fixed assets (including installation) have been completed or substantially completed;
②Have been pre-production or test run, and the results show that the assets to normal operation or to stabilize the production of
qualified products, or test the results show that it can operate normally or business;
③Expenditure in the future associated with fixed assets, little or no place;
④The acquisition or construction of fixed assets has reached the design or contract requirements, or consistent with the basic design
or contract requirements.
(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.
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 property and inventories which can only
arrive at predicted available-for-use or available-for-sale state after quite a long time in purchase or production activities.
(2) Calculation of borrowing expense capitalization
The capitalization period: from borrowing cost starts capitalization to stop capitalization. The capitalization of the borrowing costs
suspended during not included.
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
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 of intangible assets, classified as: ①the intangible asset with a finite useful life should be allocated on
straight-line method, 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; ② no amortization for intangible assets with uncertain useful life, but at the end of
each accounting period, re-examination on useful life of intangible assets, for any evidence proving that life of intangible assets is
limited, then estimate of its useful life, according to the straight-line amortization.
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(2) Estimation of useful life of intangible asset with a finite useful life
The intangible assets with limited useful life, estimating its useful life often consider the following factors: ① for the asset of the
relevant legal provisions control period or similar restrictions, such as franchise system, the lease term, etc; ② using the assets in
the production of products usually the life cycle, can obtain similar asset life information; ③ the connection with other assets life.
(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: ① acquisition of an intangible asset arising from contractual or other legal rights without prescribed
detailed use life; ② 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.
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: ① the technical feasibility of completing
the intangible asset so that it will be available for use or sale; ② its intention to complete the intangible asset and use or sell it; ③
how the intangible asset will generate probable future economic benefits, 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 can be
proved; ④ the availability of adequate technical, financial resource and other resources to complete the development and the ability
to use or sell the intangible asset; ⑤ the expenditure attributable to the intangible asset during its development can be measured
reliably. 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 knowledge 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
When contingencies related obligation is present obligation of the company; 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
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The estimated liabilities for initially recognized should be the best estimate of the expenditure required to settle the present obligation,
such as the existence of a continuous range of expenditure required, and the various outcomes within the same likelihood, the best
estimate in accordance with the intermediate range value determined; involving multiple projects, according to a variety of possible
outcomes and associated probabilities to determine the best estimate.
On balance sheet date, the company reviews the carrying amount of provision. 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; 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; 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 revenues from alienation of right to use assets will be recognized when all the following conditions have been satisfied: ① it is
probable that the economic benefits associated with the transaction will flow to the company; and ② 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: ①the 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; ②the 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
The deferred tax assets and deferred tax liabilities confirmation:
(1) 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.
(2) 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
25
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.
(3) 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 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. Major accounting policy modification, alteration accounting estimates description
(1) The main changes in accounting policies and accounting estimates
The company report period without accounting policy change, no accounting estimates changes.
(2) Correction of previous errors and effects
During the report period no preliminary accounting error correction.
III．Taxations
Major taxes and tax rates
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 tax 3%
Local education surcharge Turnover tax 1%
Corporate income tax Taxable income 15%-25%
The income tax, tax preferential policies advancements have not changed compared to last year.
Subsidiary Nanjing Putian Telege Intelligent Building Co., LTD, and Nanjing Putian Changle Telecommunications Equipment Co., LTD
is a high-tech enterprise, at a reduced rate of 15 % pay enterprise income tax.
Putian Telecommunications (Hong Kong) Co., Ltd. was established in Hong Kong on 1 December 2000, and is subject to the
Enterprise Income Tax at a rate of 17.5% according to relevant rules in Hong Kong.
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
26
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
Balance of other Shareholding Voting
Registered The Year End’s Essentially proportion Rights
Name Business Business
Type Registration capital( Unit: actual amount of constituting net (%) proportion
nature Scope
RMB’0000） capital Investment Investment in (%)
Subsidiary
Nanjing Southern
Telecommunications Stated-controlled Nanjing Trading 3,420.50 telecommunications 33,175,148.00 98.24 98.24
Company Limited
Nanjing Bada
Telecommunications Stated-controlled Nanjing Manufacture 1,130.14 telecommunications 5,610,000.00 60.00 60.00
Co., Ltd
Nanjing Putian
Inforamtion Trading&
Stated-controlled Nanjing 1,400.00 telecommunications 13,860,000.00 99.98 99.98
Technology Manufacture
Company Ltd.
Nanjing Putian
Trading&
Telege Intelligent Stated-controlled Nanjing 1,200.00 telecommunications 3,320,003.45 45.77 45.77
Manufacture
Building Ltd.
Putian
Telecommunications
Stated-controlled Hongkong Trading HK 200.00 telecommunications 1,910,520.00 90.00 90.00
(Hong Kong) Co.,
Ltd.
Beijing Picom
Telecommunications Stated-controlled Beijing Trading USD 50.00 telecommunications 1,854,910.00 51.00 51.00
Equipment Ltd
Nanjing Postel
Wongshi Trading& USD
Stated-controlled Nanjing telecommunications 40,997,683.00 99.42 99.42
Telecommunications Manufacture 1,090.00
Co., Ltd.
Nanjing Putian
Changle Trading&
Stated-controlled Nanjing 1,000.00 telecommunications 2,610,457.00 50.70 50.70
Telecommunications Manufacture
Equipment Co., Ltd.
Nanjing Putian
Trading&
Network Company Stated-controlled Nanjing 1,000.00 telecommunications 7,741,140.40 78.00 78.00
Manufacture
Ltd.
Nanjing Putian
Trading&
Telecommunication Stated-controlled Nanjing 475.00 telecommunications 1,294,510.00 70.00 70.00
Manufacture
Technology Co., Ltd
Total 112,374,371.85
(Continued)
Amount in minority interest used The balance after the parent company’ s owner’s equity writing down the
statements combined or for writing down minority gain excess of the current loss undertaken by minority shareholders of the
Name Minority interest
not and loss subsidiary over the share enjoyed by minority shareholders in the original
owner’s equity of the subsidiary
Nanjing Southern
Telecommunications Yes 1,180,762.76
Company Limited
Nanjing Bada
Telecommunications Yes 4,275,489.06
Co., Ltd
Nanjing Putian Yes 913.37
27
Inforamtion Technology
Company Ltd.
Nanjing Putian Telege
Yes 36,349,430.74
Intelligent Building Ltd.
Putian
Telecommunications Yes
(Hong Kong) Co., Ltd.
Beijing Picom
Telecommunications No -
Equipment Ltd
Nanjing Postel Wongshi
Telecommunications Yes 216,260.99
Co., Ltd.
Nanjing Putian Changle
Telecommunications Yes 15,280,204.21
Equipment Co., Ltd.
Nanjing Putian Network
Yes 4,679,445.11
Company Ltd.
Nanjing Putian
Telecommunication Yes 186,871.59
Technology Co., Ltd
Total 62,169,377.83
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 30 June 2011, 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 30 June 2011 and as of 31 December 2010, announced by Foreign Exchange
Bureau in China.
V. Notes to the major items in the consolidated financial statements
1. Monetary funds
（1）Classification of Monetary funds
As of 30 June 2011 As of 31 December, 2010
Exchange Exchange
Item Original currency rate RMB converted Original currency rate RMB converted
Cash on hand —— —— 49,506.46 —— —— 42,806.75
RMB 49,506.46 1.0000 49,506.46 42,806.75 1.0000 42,806.75
Cash in bank —— —— 165,454,216.48 —— —— 249,624,827.52
RMB 153,250,306.73 1.0000 153,250,306.73 234,469,134.86 1.0000 234,469,134.86
USD 1,361,736.89 6.4716 8,812,616.46 1,747,541.70 6.6227 11,573,444.42
HKD 646,446.77 0.8316 537,585.13 1,056,435.32 0.8509 898,920.81
EUR 304,612.34 9.3612 2,851,537.04 304,456.25 8.8065 2,681,193.97
GBP 208.79 10.3986 2,171.12 208.79 10.2182 2,133.46
Other monetary
—— —— —— ——
funds 47,095,313.97 43,351,291.60
RMB 47,009,121.75 1.0000 47,009,121.75 43,263,982.75 1.0000 43,263,982.75
USD 11,683.62 6.4716 75,611.72 11,680.70 6.6227 77,357.77
EUR 1,130.25 9.3612 10,580.50 1,129.97 8.8065 9,951.08
28
As of 30 June 2011 As of 31 December, 2010
Exchange Exchange
Item Original currency rate RMB converted Original currency rate RMB converted
Total —— —— 212,599,036.91 —— —— 293,018,925.87
(2) Other monetary funds
Item As of 30 June 2011 As of 31 December 2010
Security deposit for bank acceptance bills 41,000,000.00 40,000,000.00
Security deposit for contract 1,170,799.63 900,000.00
Other security deposit 4,924,514.34 2,451,291.60
Total 47,095,313.97 43,351,291.60
2. Notes receivables
(1).Receivable by category list below
Item As of 30 June 2011 As of 31 December 2010
Commercial acceptance bill 3,713,942.94 1,765,135.86
Bank acceptance bills 4,657,416.00 6,991,757.19
Total 8,371,358.94 8,756,893.05
(2).Endorsed but not yet expired top five largest amount receivable listed below
Remitter Date of issue Date of expiry Amount Memo
1、Hangzhou Hehe Glass Industry
2011-01-26 2011-07-25 1,000,000.00
Co.Ltd
2、China United Network
communication Co., Ltd. Tianjin 2011-03-15 2011-09-15 738,581.00
branch
3、Yancheng Orient Investment &
2011-01-19 2011-07-19 500,000.00
Development Group Co., Ltd.
4、CSCEC Huitai Construction &
2011-03-22 2011-09-21 500,000.00
Development Co., Ltd, Wuxi
5、Shangdong Zhiboyuan
2011-04-28 2011-10-27 500,000.00
International Trade Co., Ltd
3. Accounts receivable
(1)Classification of accounts receivable
As of 30 June 2011
Book balance Provision
Classification
Proportion Proportion
Amount Amount
(%) (%)
1. Single amount dramatic and individual
provision for the accounts receivable
29
2. Classification as the group of provision for
794,086,579.48 98.68 9,412,818.16 1.19
account receivable
Group1 310,182,113.76 38.54 1,896,657.01 0.61
Group 2 417,269,291.05 51.86 - -
Group 3 66,635,174.67 8.28 7,516,161.15 11.28
3. Single amount not significant but single
10,651,114.22 1.32 10,651,114.22 100.00
provision for accounts receivable
Total 804,737,693.70 100.00 20,063,932.38 2.49
As of 31 December 2010
Book balance Provision
Classification
Proportion Proportion
Amount Amount
(%) (%)
1. Single amount dramatic and individual
provision for the accounts receivable
2. Classification as the group of provision for
545,430,787.81 98.06 7,535,651.43 1.38
account receivable
Group1 134,859,797.31 24.24 1,857,733.90 1.38
Group 2 391,824,782.52 70.44
Group 3 18,746,207.98 3.38 5,677,917.53 30.29
3. Single amount not significant but single 10,809,194.97 1.94 10,809,194.97 100.00
provision for accounts receivable
Total 556,239,982.78 100.00 18,344,846.40 3.30
Notes：Single amount dramatic and individual provision for accounts receivable refers to single exceed 10,000,000.00 Yuan, test no
impairment, the company according to age analysis accrual impairment provision. According to the group of receivables provision for
more than 2 years of age receivables, via test no impairment, according to age analysis accrual impairment provision.
Adopt age analysis provision in group as follows:
As of 30 June 2011 As of 31 December 2010
Proportion Proportion
Age Book balance (%) Provision Book balance (%) Provision
Within 1 year
295,070,151.67 78.30 - 109,504,967.61 71.29
(contain 1 year)
1 to 2 years 45,264,719.21 12.01 - 28,349,440.44 18.46
2 to 3 years 24,648,940.09 6.54 2,464,894.01 5,755,193.07 3.75 575,519.31
3 to 4years 5,749,997.87 1.53 1,724,999.36 678,531.03 0.44 203,559.31
4 to 5 years 671,379.43 0.18 268,551.77 3,545,166.30 2.31 1,418,066.52
5 to 6 years 2,288,635.71 0.61 1,830,908.57 2,171,002.75 1.41 1,736,802.20
6 years or
3,123,464.45 0.83 3,123,464.45 3,601,704.09 2.34 3,601,704.09
above
Total 376,817,288.43 100.00 9,412,818.16 153,606,005.29 100.00 7,535,651.43
Closing single amount not significant but single provision for accounts receivable
Receivables Book amount Bad debt Proportion Reason
Aging longer
1,835,261.63 1,835,261.63 100.00%
M/S WHISTLER TELECOM(PVT) LTD difficult to recover
30
Aging longer
156,294.45 156,294.45 100.00%
PRADUFA difficult to recover
Aging longer
12,500.00 12,500.00 100.00%
China Unicom Nanjing branch difficult to recover
Beijing Zhen Yuan Innovation and Technology
Aging long
Development Corporation 157,907.04 157,907.04 100.00%
Taiyuan High-tech Industrial Import and Export Co. 259,557.76 259,557.76 100.00% Aging long
Jiangsu Changzhou DahuaCo. 1,415,526.73 1,415,526.73 100.00% Aging long
Hubei Police 854,192.96 854,192.96 100.00% Aging long
Zhongshan Group International Trade Center 121,879.64 121,879.64 100.00% Aging long
NEPAL TETE 1,576,865.20 1,576,865.20 100.00% Aging long
XI'AN OVERLOAD SCIENCE 629,835.66 629,835.66 100.00% Aging long
Chongqing Eagle communication Technology
Lawsuit
Development Company Limited 1,093,571.51 1,093,571.51 100.00%
Beijing Tongchengdaye Communication Technology
Lawsuit
Co., LTD 785,065.00 785,065.00 100.00%
Jiangsu Taihewei Nets Technology Co., LTD 419,504.72 419,504.72 100.00% Lawsuit
Beijing Blue Scene Inheritance Communication
434,878.00 434,878.00 100.00% Lawsuit
Technology Co., LTD, Chengdu Branch
Shandong University of Traditional Chinese Medicine 340,868.40 340,868.40 100.00% Lawsuit
Heilongjiang Blue Ocean Silver Ann technology
Lawsuit
Development Co., LTD 215,111.86 215,111.86 100.00%
Changchun Jiachen Network Technology Co., LTD 182,970.86 182,970.86 100.00% Lawsuit
Suzhou Tyrone Real Estate Development Co. 159,322.80 159,322.80 100.00% Lawsuit
Total 10,651,114.22 10,651,114.22 —— ——
(2) Current payback or return of receivables
During this year no full provision for bad prophase preparation, or larger proportion, but in this period fully recovery or payback, or
recovery or payback larger proportion of account receivable.
(3) The income in the actual cancel after verification of receivables
None
(4) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting shares of the
Company at year-end
Amount of RMB 21,738,616.90Yuan is due from China Potevio Company Limited, Parent company, aging within 1-3years, has
provision for bad debts of 43,471.61 Yuan at 30 June 2011.
Amount of RMB 22,785,438.14 Yuan is due from China Potevio Company Limited, Parent company, aging within 2 year, none of
reservation of provision at 31 December 2010.
(5)Top 5 debtors of accounts receivable
Relationship with the Proportion of
Name of the debtors Amount Aging
Company total amount (%)
Within 1
Jiangsu Branch of China Telecom Co., Ltd. non-related party 122,816,003.06 15.26
year
Agricultural Bank of China non-related party 36,033,866.79 1-2 yeas 4.48
Within 1
China Network Communications Group Corporation non-related party 23,794,273.94 2.96
year
Nanjing ZongTeng Electronic Technology Co., Ltd. non-related party 22,028,500.00 Within 1 2.74
31
Relationship with the Proportion of
Name of the debtors Amount Aging
Company total amount (%)
year
Beijing Xinliwen Technology Co., Ltd. non-related party 18,595,225.20 1-2 yeas 2.31
Total —— 223,267,868.99 —— 27.75
(6) Accounts receivable of related parties accounts
Proportion of total
Name of the debtors Relationship with the Company Amount
amount (%)
China Potevio Company Limited Parent company 21,738,616.90 2.70
Shanghai Potevio Post and Telecommunications Under the same parent
13,500,320.00 1.68
Technology Co., Ltd. company
Chengdu Potevio Telecommunications Cable Under the same parent
497,295.00 0.06
Co., Ltd. company
Nanjing Zhongyou Telecommunication Co., Ltd. Associated enterprise 311,472.80 0.04
Under the same parent
Nanjing Postel Swanking Electrical Co., Ltd. 94,954.61 0.01
company
Nanjing Prachanda Live Optical Network Co., Ltd. Joint venture 96,032.87 0.01
Nanjing Putian Datang Information and Electric
36,545.00 0.00
Company Ltd. Associated enterprise
Total —— 36,275,237.18 4.50
(7) Balance of accounts receivable in foreign currencies
As of 30 June 2011 As of 31 December 2010
Foreign
currency Original currency Exchange rate RMB Original currency Exchange rate RMB
USD 1,085,291.31 6.4716 7,023,571.24 1,126,232.65 6.6227 7,458,700.97
HKD 402,000.00 0.8316 334,303.20
Total —— —— 7,357,874.44 1,126,232.65 —— 7,458,700.97
4. Advances to suppliers
(1)Analysis of aging
As of 30 June 2011 As of 31 December 2010
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 33,185,743.39 50.14 33,006,443.10 58.98
1-2 years 10,263,988.38 15.51 1,066,313.86 1.91
2-3 years 850,769.83 1.29 18,888,364.51 33.75
over 3 years 21,881,375.00 33.06 3,002,250.00 5.36
Total 66,181,876.60 100.00 55,963,371.47 100.00
(2)Top five largest accounts paid in advance
Proportion of
Relationship with Reasons for
Company Amount total amount Aging
the Company un-settlement
(%)
Yuhuatai People's Government of 2-5
non-related party 20,000,000.00 30.22 In credit period
Nanning Office years
32
Proportion of
Relationship with Reasons for
Company Amount total amount Aging
the Company un-settlement
(%)
Shanghai Netway technology Within 1
non-related party 11,589,085.00 17.51 In credit period
development Co., Ltd. year
Nanjing Yuhua Economy Development 2-4
non-related party 6,020,000.00 9.10 In credit period
Co., Ltd. years
Jiangsu Sainty International Group 1 to 2
non-related party 5,739,374.01 8.67 In credit period
Technology Development Co. Ltd. years
Nanjing Hengzhi Electric Appliance Co., Within 1
non-related party 2,311,374.89 3.49 In credit period
Ltd. year
Total 45,659,833.90 68.99 ——- ——
(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 30 June
2011.
5. Other receivables
(1)Classification of other receivables
As of 30 June 2011
Classification Book balance Provision
Proportion Proportion
Amount Amount
(%) (%)
1. Single amount dramatic and individual provision for the
28,912,952.71 47.78 28,912,952.71 100.00
accounts receivable
2. Classification as the group of provision for account
31,603,179.13 52.22 3,320,972.18 10.51
receivable
Group1 - - - -
Group 2 23,011,798.99 38.02 - -
Group 3 8,591,380.14 14.20 3,320,972.18 38.65
3. Single amount not significant but single provision for
- - - -
accounts receivable
Total 60,516,131.84 100.00 32,233,924.89 53.27
As of 31 December 2010
Classification Book balance Provision
Proportion Proportion
Amount Amount
(%) (%)
1. Single amount dramatic and individual provision for the
28,912,952.71 45.68 28,912,952.71 100.00
accounts receivable
2. Classification as the group of provision for account
34,376,511.75 54.32 3,040,402.42 8.84
receivable
Group1
Group 2 18,839,583.18 29.77
Group 3 15,536,928.57 24.55 3,040,402.42 19.57
3. Single amount not significant but single provision for
accounts receivable
Total 63,289,464.46 100.00 31,953,355.13 50.49
33
Notes：Single amount dramatic and individual provision for other receivable refers to single exceed 10,000,000.00 Yuan, test no
impairment, the company according to age analysis accrual impairment provision. According to the group of other receivables
provision for more than 2 years of age receivables, via test no impairment, according to age analysis accrual impairment provision.
Adopt age analysis provision in group as follows:
As of 30 June 2011 As of 31 December 2010
Proportion Proportion
Age Book balance (%) Provision Book balance (%) Provision
Within 1 year
801,158.21 9.33 - 10,089,114.62 64.94
(contain 1 year)
1 to 2 years 3,089,906.50 35.96 - 484,633.98 3.12
2 to 3 years 479,301.73 5.58 47,930.17 1,302,834.80 8.39 130,283.48
3 to 4years 1,041,116.80 12.12 312,335.04 251,006.18 1.62 75,301.85
4 to 5 years 246,223.38 2.86 98,489.35 408,061.50 2.63 163,224.60
5 to 6 years 357,279.50 4.16 285,823.60 1,648,425.00 10.61 1,318,740.00
6 years or above 2,576,394.02 29.99 2,576,394.02 1,352,852.49 8.69 1,352,852.49
Total 8,591,380.14 100.00 3,320,972.18 15,536,928.57 100.00 3,040,402.42
(2) 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.
(3) Written -off of other receivables in the current period
This period without verification or take other receivables has cancel after verification.
(4) Other accounts due from shareholder who has more than 5% (including 5 %) voting shares of the
Company at year-end
None
(5)Contents or types of other receivables with larger amount
Type (or contents)
Name of debtors Amount
of other receivables
Beijing Picom Telecommunications Equipment Ltd 28,912,952.71 Incomings and outgoings
Pay taxes of temporary 2,039,679.66 Tax to be offset
Total 30,952,632.37 ——
(6) Top 5 debtors of other receivables
Relationship with the Proportion of total
Name of debtors Amount Aging
Company amount (%)
Beijing Picom Telecommunications
Subsidiary 28,912,952.71 5-6 yeas 47.78
Equipment Ltd
Within 1
Pay taxes of temporary Non-related party 2,039,679.66 3.37
year
Flextronics Electronics (Changzhou) Co., Within 1
Non-related party 1,227,988.10 2.03
Ltd. year
China Mobile Communications Group
Non-related party 980,000.00 2-5 years 1.62
Jiangsu Co., Nanjing Branch
China Telecom Co., Ltd. Quanzhou
Non-related party 600,000.00 2-3 years 0.99
Branch
Total —— 33,760,620.47 —— 55.79
(7)Other receivables from related parties
34
Relationship with the Proportion of total
Name of debtors Amount
Company amount (%)
Nanjing Potevio Telecommunication Technology
Associated enterprise 352,019.20 0.58
Industry Park Co., Ltd.
Beijing Picom Telecommunications Equipment Ltd Subsidiary 28,912,952.71 47.78
Total 29,264,971.91 48.36
(8)Balance of other receivables in foreign currencies
As of 30 June 2011 As of 31 December 2010
Foreign currency Exchange
Original currency RMB converted Original currency Exchange rate RMB converted
rate
HKD 576,996.14 0.8316 479,829.99 576,996.14 0.8509 490,966.02
Total 576,996.14 —— 479,829.99 576,996.14 —— 490,966.02
6. Inventories
(1)Classification of inventories
As of 30 June 2011 As of 31 December 2010
Item Provision for Provision for
Book balance Book value Book balance Book value
devaluation devaluation
Raw
materials 42,073,929.93 2,073,459.63 40,000,470.30 31,902,519.33 2,317,591.89 29,584,927.44
Goods-in-
process 17,398,874.36 - 17,398,874.36 19,693,732.87 - 19,693,732.87
Finished
goods 404,940,419.13 690,068.23 404,250,350.90 281,173,254.34 1,918,518.66 279,254,735.68
Total 464,413,223.42 2,763,527.86 461,649,695.56 332,769,506.54 4,236,110.55 328,533,395.99
(2) Provision for inventory devaluation
As of 31 December Amount provided Amount reduced this year
Item As of 30 June 2011
2010 this year Reversal Written off
Raw materials 2,317,591.89 244,132.26 2,073,459.63
Goods-in-process -
Finished goods 1,918,518.66 1,228,450.43 690,068.23
Total 4,236,110.55 1,472,582.69 2,763,527.86
7. Long-term equity investments of the joint ventures and associated ventures
(1)Information of the joint ventures
Share Voting right
holding proportion of
Total net
percentage the company Total assets at Total liabilities Total sales of Net profit of
Invested units assets 30 June
of the among 30 June 2011 30 June 2011 this period this period
2011
company invested
(%) units (%)
Nanjing Mennekes Electric
Appliances Ltd. 50.00 50.00 123,266,693.77 50,361,318.99 72,905,374.78 63,689,001.80 4,645,963.84
35
Share Voting right
holding proportion of
Total net
percentage the company Total assets at Total liabilities Total sales of Net profit of
Invested units assets 30 June
of the among 30 June 2011 30 June 2011 this period this period
2011
company invested
(%) units (%)
Nanjing Prachanda Live
Optical Network Co., Ltd 50.00 50.00 53,444,558.69 29,316,098.27 24,128,460.42 33,976,266.22 -50,595.24
(2)Information of the associated ventures
Voting right
Share proportion of
holding the
Total assets at Total liabilities Total net assets Total sales of Net profit of
Invested units percentage company
30 June 2011 30 June 2011 at 30 June 2011 this period This period
of the among
company (%) invested
units (%)
Nanjing Putian Datang
Information and Electric 40.00 40.00 14,884,266.23 8,857,357.92 6,026,908.31 4,396,804.48 30,842.98
Company Ltd
Nanjing Zhongyou
Telecommunication Co., 30.00 30.00 1,943,747.29 690,343.18 1,253,404.11 522,564.10 43,500.03
Ltd.
Nanjing Potevio
Telecommunication
49.64 49.64 341,132,421.29 1,165,122.27 339,967.299.02 6,508,873.08 183,571.41
Technology Industry Park
Co., Ltd.
Shanghai Yulong Bio-Tech
21.00 21.00 112,414,440.79 39,479,375.00 72,935,065.79 7,968,836.00 675,032.76
Co., Ltd.
Qufu Yulong Bio-Tech Co.,
21.00 21.00 107,103,031.12 38,192,223.69 68,910,807.43 3,158,500.92 -1,660,843.78
Ltd.
8. Long-term equity investments
(1)List of Information of Long-term Equity Investment
Share holding
Book balance at Book balance
percentage of
Invested units Accounting Initial cost of 31 December at 30 June
Movement the Company
Method investment 2010 2011
among invested
units (%)
Nanjing
Mennekes Equity
15,037,508.00 34,370,832.11 2,322,981.92 36,693,814.03 50.00
Electric Method
Appliances Ltd.
Nanjing Putian Equity
Datang Method
Information and 600,000.00 2,386,213.94 12,337.19 2,398,551.13 40.00
Electric Company
Ltd
Nanjing Equity
Zhongyou Method
300,000.00 237,125.45 13,050.01 250,175.46 30.00
Telecommunicati
on Co., Ltd.
Nanjing Potevio Equity
Telecommunicati Method 167,548,141.29 168,308,574.60 91,124.85 168,399,699.45 49.64
on Technology
36
Industry Park
Co., Ltd.
Shanghai Yulong
Equity
Bio-tech Co., 23,310,000.00 14,721,843.51 14,721,843.51 21.00
Method
Ltd.
Qufu Yulong
Equity
Bio-Tech Co., - 3,113,727.00 3,113,727.00 21.00
Method
Ltd.
Nanjing Equity
Prachanda Live Method
13,544,400.00 12,089,527.83 -25,297.62 12,064,230.21 50.00
Optical Network
Co., Ltd
Beijing Picom
Cost
Telecommunicati 1,854,910.00 1,854,910.00 1,854,910.00 51.00
Method
ons
Nanjing Yuhua
Cost
Galvanization 420,915.00 420,915.00 420,915.00 10.00
Method
Factory
Hangzhou Postel
Cost
Swanking 321,038.00 321,038.00 321,038.00 2.26
Method
Electrical Co., Ltd
Nanjing Putian Cost
181,701.84 181,701.84 181,701.84 10.00
Industry Co., Ltd Method
Nanjing Putian
Equity
Telege Cable 2,250,000.00 2,367,445.43 356,087.30 2,723,532.73 45.00
Method
Co., Ltd.
Total 240,373,854.71 2,770,283.65 243,144,138.36 ——
(Continued)
Voting right
Depreciation
proportion of Interpretations of difference
reserves Cash dividend
Invested units the Company between the equity percentage Depreciation
withdrawn during the
among and vote right percentage in reserve
during the period
invested units the invested unit
period
(%)
Nanjing Mennekes
Electric Appliances 50.00
Ltd.
Nanjing Putian
Datang Information
40.00
and Electric Company
Ltd
Nanjing Zhongyou
Telecommunication 30.00
Co., Ltd.
Nanjing Potevio
Telecommunication
49.64
Technology Industry
Park Co., Ltd.
Shanghai Yulong
21.00
Bio-tech Co., Ltd.
Qufu Yulong
21.00
Bio-Tech Co., Ltd.
Nanjing Prachanda
Live Optical Network 50.00
Co., Ltd
Beijing Picom 51.00 1,854,910.00
37
Telecommunications
Nanjing Yuhua
10.00 83,700.00
Galvanization Factory
Hangzhou Swanking
2.26
Electric Appliance
Nanjing Putian
10.00
Industry Co. Ltd
Nanjing Putian
Telege Cable Co., 45.00
Ltd.
Total —— —— 1,854,910.00 - 83,700.00
(2)Explanation of Long-term Equity Investment
There is no long-term equity investment with restriction for sale at the end of this period.
9. Investment property
Investment properties measured at costs
As of 31 Increase Decrease As of 30 June
Item
December 2010 during the year during the year 2011
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
3,169,387.42 103,215.96 3,272,603.38
accumulated amortization
Houses and buildings 2,244,538.03 43,235.64 2,287,773.67
Land use rights 924,849.39 59,980.32 984,829.71
Total net book value 6,863,029.87 -103,215.96 6,759,813.91
Houses and buildings 4,145,731.39 -43,235.64 4,102,495.75
Land use rights 2,717,298.48 -59,980.32 2,657,318.16
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 5,020,611.87 -103,215.96 4,917,395.91
Houses and buildings 2,303,313.39 -43,235.64 2,260,077.75
Land use rights 2,717,298.48 -59,980.32 2,657,318.16
Note: The accrual of depreciation and amortization this year is RMB 103,215.96 Yuan, provision for investment property is 0 Yuan.
10. Fixed assets
(1)Lists of fixed assets and accumulated depreciation, including movement
Increase
As of 31 Decrease As of 30 June
Item during the year
December 2010 during the year 2011
Total original cost of fixed assets 207,005,773.83 2,915,397.53 209,921,171.36
Building/structure 68,837,158.45 736,075.22 69,573,233.67
38
Increase
As of 31 Decrease As of 30 June
Item during the year
December 2010 during the year 2011
Machinery equipment 67,986,802.78 1,326,627.60 69,313,430.38
Transportation equipment 14,750,947.14 262,682.00 15,013,629.14
Others 55,430,865.46 590,012.71 56,020,878.17
Addition in Depreciation in
the period the period
Total accumulated depreciation 129,155,188.22 4,571,830.21 133,727,018.43
Building/structure 26,311,468.61 1,165,283.59 27,476,752.20
Machinery equipment 46,813,311.76 2,099,207.71 48,912,519.47
Transportation equipment 9,335,490.80 644,635.82 9,980,126.62
Others 46,694,917.05 662,703.09 47,357,620.14
Total net book value of fixed assets 77,850,585.61 -1,656,432.68 76,194,152.93
Building/structure 42,525,689.84 -429,208.37 42,096,481.47
Machinery equipment 21,173,491.02 -772,580.11 20,400,910.91
Transportation equipment 5,415,456.34 -381,953.82 5,033,502.52
Others 8,735,948.41 -72,690.38 8,663,258.03
Total impairment of fixed assets 3,538,097.56 3,538,097.56
Building/structure 539,124.00 539,124.00
Machinery equipment 573,461.78 573,461.78
Transportation equipment -
Others 2,425,511.78 2,425,511.78
Total carrying value of fixed assets 74,312,488.05 -1,656,432.68 72,656,055.37
Building/structure 41,986,565.84 -429,208.37 41,557,357.47
Machinery equipment 20,600,029.24 -772,580.11 19,827,449.13
Transportation equipment 5,415,456.34 -381,953.82 5,033,502.52
Others 6,310,436.63 -72,690.38 6,237,746.25
Note: The depreciation amount is 4,571,830.21 Yuan.
(2)Fixed assets not in use temporarily
Accumulated Impairment of Carrying value
Item Original cost Notes
depreciation fixed assets of fixed assets
Building/structure
Machinery equipment 2,157,790.39 1,238,749.69 919,040.70 0.00 Plan to sell
Transportation equipment
Land assets
Others 6,850.00 6,011.26 838.74 0.00 Plan to sell
Total 2,164,640.39 1,244,760.95 919,879.44 0.00
(3) Information of Fixed Assets without Certificate of Title
39
Estimated
Time to
Impairment Carrying Complete
Accumulated Reasons for no secured property
Item Original cost of fixed value of fixed Certificate
depreciation
assets assets right certificate of Title
Building/structure 12,191,531.61 7,616,439.92 4,575,091.69 No certification of land use right
Total 12,191,531.61 7,616,439.92 4,575,091.69
11. Construction in progress
(1)Basic information of Construction in progress
As of 30 June 2011 As of 31 December 2010
Item Book Impairment Book Impairment
Book value Book value
balance provision balance provision
Assembly building 2,538,886.10 2,538,886.10
Yuhua science 743,162.49 743,162.49
Total 3,282,048.59 3,282,048.59
(2) Significant movement of construction in progress
Proportion
N
Increase
As of 31 Transfer to Other of project
during the As of 30 June
Item Budget December fixed assets decrease Investment
year 2011
2010 in
budget
(%)
Assembly building 15,000,000.00 2,538,886.10 2,538,886.10 16.93%
Yuhua science 50,000,000.00 743,162.49 743,162.49 1.49%
Total 65,000,000.00 3,282,048.59 3,282,048.59
(Continued)
Including interest Interest
Accumulated Accumulated amount of Capital
Item capitalized amount capitalization
progress interest capitalization source
of the year rate of the year
Assembly building 16.93% Self-owned
Yuhua science 1.49% Self-owned
Total
12. Intangible assets
As of 31 December Increase Decrease
Item As of 30 June 2011
2010 during the year during the year
Total original cost 22,821,613.47 22,821,613.47
Land use right 8,250,892.87 8,250,892.87
Exclusive technology 5,775,000.00 5,775,000.00
Software 8,795,720.60 8,795,720.60
40
As of 31 December Increase Decrease
Item As of 30 June 2011
2010 during the year during the year
Total accumulated amortization 13,533,502.78 646,907.99 14,180,410.77
Land use right 1,285,969.19 82,504.86 1,368,474.05
Exclusive technology 5,163,041.58 288,750.00 5,451,791.58
Software 7,084,492.01 275,653.13 7,360,145.14
Total net book value 9,288,110.69 -646,907.99 8,641,202.70
Land use right 6,964,923.68 -82,504.86 6,882,418.82
Exclusive technology 611,958.42 -288,750.00 323,208.42
Software 1,711,228.59 -275,653.13 1,435,575.46
Total accumulated provision for
impairment
Land use right -
Exclusive technology -
Software -
Total carrying value 9,288,110.69 -646,907.99 8,641,202.70
Land use right 6,964,923.68 -82,504.86 6,882,418.82
Exclusive technology 611,958.42 -288,750.00 323,208.42
Software 1,711,228.59 -275,653.13 1,435,575.46
Note: The amortization amount of the intangible assets this year is RMB 646,907.99 Yuan.
13. Details of asset impairment
Amount Amount reduced this period
As of 31 As of 30 June
Item provided this
December 2010 Reversal Written off 2011
period
Bad debts reserve 50,298,201.53 1,999,655.74 52,297,857.27
Provision for inventory devaluation 4,236,110.55 1,472,582.69 2,763,527.86
Provision of available-for-sale
financial assets
Provision of Held-to-maturity
investments
Provision of long-term equity
1,854,910.00 1,854,910.00
investments
Provision of investment property 1,842,418.00 1,842,418.00
Provision of fixed assets 3,538,097.56 3,538,097.56
Provision of construction materials
Provision of construction in progress
Provision of productive biological
assets
Including: provision of mature
productive biological assets
Provision of petrol assets
Provision of intangible assets
Provision of goodwill
Provision of others
41
Amount Amount reduced this period
As of 31 As of 30 June
Item provided this
December 2010 Reversal Written off 2011
period
Total 61,769,737.64 1,999,655.74 1,472,582.69 62,296,810.69
14 .Lists of all assets with restriction of certificate of title or use right
Reasons for restriction of
Item As of 30 June 2011
certificate of title or use right
Used to guarantee the assets
Real estate 35,520,932.31 For loan security
Land 6,882,418.82 For loan security
Others causes ownership restrictions assets
Total 42,403,351.13
15. Short-term loans
Short-term borrowings classified by listed below
Kinds of loans As of 30 June 2011 As of 31 December 2010
Pledged loan 40,000,000.00 40,000,000.00
Loan in mortgage 46,000,000.00 16,000,000.00
Guaranteed loan 404,000,000.00 381,000,000.00
Loan in credit 15,000,000.00
Total 505,000,000.00 437,000,000.00
Notes:
1. The parent company's controlling shareholder China Putian Corporation for the company opens SPDB RMB80,000,000.00 Yuan
bank acceptance, provide RMB40,000,000.00 Yuan, the company provides guaranty RMB 40,000,000.00 Yuan deposit as the pledge.
2. To obtain the Nanjing Branch of China Merchants Bank short-term loan of RMB16,000,000.00 Yuan, the company will mortgage
two real estates, both sides confirmed the total value of RMB29,960,000.00 Yuan of real estate, book value of housing collateral of
RMB16,683,618.73 Yuan, the land value of RMB2,260,223.42 Yuan, and the loan period is from 7 April 2011 to 7 April 2012.
3. The final controller China Putian Corporation guaranteed the borrowing of RMB230,000,000.00 Yuan, including
RMB180,000,000.00 Yuan from Bank of Communications Co., Ltd., Branch in Jiangsu Province and RMB50,000,000.00 Yuan from
Bank of Hua Xia Co., Ltd
4. The parent company China Potevio Company Ltd. guaranteed the borrowing of RMB74,000,000.00 Yuan, including RMB
44,000,000.00 from Shanghai Pudong Development Bank, Nanjing Branch and RMB30,000,000.00 Yuan from Bank of Hua Xia Co.,
Ltd. Nanjing Branch.
5. The company guaranteed the borrowing of RMB 20,000,000.00 Yuan for Nanjing Putian Telege Cable Co., Ltd. and the
borrowing of RMB 40,000,000.00 Yuan for Nanjing Southern Telecommunications Company Ltd.
6. To obtain short-term loan of RMB30,000,000.00 Yuan from the Agricultural Bank of China Nanjing Branch, the subsidiary Nanjing
Putian Telege Cable Co., Ltd. mortgage two real estates, both sides confirmed the total value of RMB50,340,000.00 Yuan of real
estate, book value of housing collateral of RMB18,837,313.58 Yuan, the land value of RMB4,622,195.40Yuanand the borrowing
period is from 28 January 2011 to 27 January 2012.
16. Notes payable
Item As of 30 June 2011 As of 31 December 2010
Bank acceptance bills 1,000,000.00
Commercial acceptance bills 962,801.40 370,000.00
42
Item As of 30 June 2011 As of 31 December 2010
Total 1,962,801.40 370,000.00
Notes: Notes payable closing balance next accounting periods expire the amount of the1,962,801.40 Yuan.
17. Accounts payable
(1)Analysis of aging
As of 30 June 2011 As of 31 December 2010
Item Percentage
Amount (%) Amount Percentage (%)
Within 1 year 659,374,774.90 77.94 575,598,627.27 98.96
1-2 years 180,835,574.02 21.38 1,014,234.30 0.17
2-3 years 1,014,036.25 0.12 2,175,911.69 0.38
over 3 years 4,736,050.56 0.56 2,844,837.31 0.49
Total 845,960,435.73 100.00 581,633,610.57 100.00
(2) Accounts payable to shareholders holding 5% or above voting shares of the Company
At 30 June 2011, accounts payable to parent company China Potevio Company Limited RMB13,503,850.00 Yuan.
(3)Significant accounts payable with ageing over one year as at year-end
As of 30 June 2011 As of 31 December 2010
Foreign Exchange
currency Original currency rate RMB Original currency Exchange rate RMB
HKD 1,215,949.41 0.8316 1,011,183.53 1,649,866.21 0.8509 1,403,871.16
Total —— —— 1,011,183.53 —— —— 1,403,871.16
18. Advances from customers
(1)Analysis of aging
As of 30 June 2011 As of 31 December 2010
Item Percentage
Amount Amount Percentage (%)
(%)
Within 1 year 55,113,594.48 90.25 78,731,050.64 95.48
1-2 years 4,031,480.95 6.60 2,785,000.40 3.38
2-3 years 1,170,310.74 1.92 448,046.52 0.54
over 3 years 748,163.69 1.23 495,875.44 0.60
Total 61,063,549.86 100.00 82,459,973.00 100.00
(2) Accounts received in advance from shareholders holding 5% or above voting shares of the company,
as well as that of related parties.
This period closing advance parent China Potevio Company Limited funds RMB8,158,434.00 Yuan.
(3) Account received in advance denominated in foreign currency
As of 30 June 2011 As of 31 December 2010
Foreign currency Original RMB Original Exchange
currency Exchange rate converted currency rate RMB converted
43
As of 30 June 2011 As of 31 December 2010
Foreign currency Original RMB Original Exchange
currency Exchange rate converted currency rate RMB converted
USD 29,097.89 6.4716 188,309.90 33,391.39 6.6227 221,141.16
HKD —— —— —— 3,531.63 0.8509 3,005.06
Total —— —— 188,309.90 —— —— 224,146.22
19. Accrued payroll
As of 31 Increase Decrease
Item As of 30 June 2011
December 2010 during the period during the period
Wages, bonuses and allowance 1,761,051.45 41,950,560.71 41,950,560.71 1,761,051.45
Welfare expense 4,879,890.45 4,879,890.45
Social insurance charges 13,584,452.46 13,584,452.46
Including: Medical insurance 4,269,928.02 4,269,928.02
Basic endowment insurance 8,019,683.89 8,019,683.89
Unemployment insurance 898,907.04 898,907.04
Work injury insurance 158,656.40 158,656.40
Maternity insurance 237,277.11 237,277.11
Housing fund 8,828,431.61 3,076,445.55 3,055,709.55 8,849,167.61
Compensation for cancellation of
32,302.00 32,302.00 -
labor relationship
Others 4,079,488.83 2,105,781.93 2,193,740.27 3,991,530.49
Including: labor union expenditure 842,526.17 867,619.94 482,117.59 1,228,028.52
Employee education expenses 3,236,962.66 1,238,161.99 1,711,622.68 2,763,501.97
Total 14,668,971.89 65,629,433.10 65,696,655.44 14,601,749.55
Notes:
1. Deal with accrued payroll including labor union expenditure and employee education expenses for the amount of
RMB3,991,530.49 Yuan, for the cancellation of labor relationship to the amount of compensation for RMB32,302.00 Yuan.
2. Payroll at 18 monthly.
20. Taxes payable
As of 31 December
Item Note
As of 30 June 2011 2010
Value-added tax -13,855,233.47 -567,436.78 17%
Business tax 206,205.67 269,978.65 3%,5%
Urban maintenance and construction tax 270,266.16 1,282,544.19 7% of the turnover tax
Corporate income tax 965,828.75 6,993,979.17
Individual Income Tax 295,964.00 291,891.01
Education surcharge 146,225.34 798,739.35 3%、1%of the turnover tax
Stamp Tax 5,202.90 2,167.10
Local educational expenses to add 46,186.39 58,410.05
Total -11,919,354.26 9,130,272.74
44
21. Other payables
(1)Analysis of aging
As of 30 June 2011 As of 31 December 2010
Item Percentage Percentage
Amount Amount
(%) (%)
Within 1 year 35,178,533.81 78.05 25,705,360.86 71.03
1-2 years 4,225,496.13 9.37 7,520,414.41 20.78
2-3 years 3,370,854.77 7.48 1,031,694.79 2.85
over 3 years 2,297,113.16 5.10 1,929,460.15 5.34
Total 45,071,997.87 100.00 36,186,930.21 100.00
(2) Other payables to shareholders holding 5% or above voting shares of the company, as well as that of
related parties.
This final cope with the parent company, China Potevio Company Limited funds RMB20,681.13 Yuan.
22. Share capital
Increases(+) or decreases(-) in current year
As of 31 December Shares As of 30 June
Item Issuance
2010 Gift transferred 2011
of new Others Subtotal
share from capital
shares
reserve
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 shares
Total of unlisted
shares 115,000,000.00 115,000,000.00
2. Listed shares
45
Increases(+) or decreases(-) in current year
As of 31 December Shares As of 30 June
Item Issuance
2010 Gift transferred 2011
of new Others Subtotal
share from capital
shares
reserve
(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
As of 31 December Increase
Decrease
Item 2010 during the year As of 30 June 2011
during the year
Share capital premium 139,592,332.04 139,592,332.04
Other capital reserves 45,782,201.81 45,782,201.81
Total 185,374,533.85 185,374,533.85
24. Surplus reserve
As of 31 December Increase Decrease
Item As of 30 June 2011
2010 during the year during the year
Statutory surplus reserves
589,559.77 589,559.77
Total
589,559.77 589,559.77
25. Undistributed profit
Proportion of Extraction or
Item Amount
Distribution
Undistributed profit at the end of last year before adjustments -35,747,152.65 ——
The sum of undistributed profit at the beginning of the adjustment
——
year (increase +, reduction -)
Undistributed profit at the beginning of a year after adjustment -35,747,152.65 ——
Add: Net profit attributable to the owner of the parent company
7,654,146.53 ——
this year
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 -28,093,006.12
46
26. Operating revenues and costs
(1)Operating revenues
Item As of 30 June 2011 As of 30 June 2010
Main operating revenue 1,153,031,389.80 838,507,104.04
Other operating revenue 14,035,327.67 17,200,413.86
Total 1,167,066,717.47 855,707,517.90
(2)Operating costs
Item As of 30 June 2011 As of 30 June 2010
Main operating cost 1,009,021,574.66 720,272,477.44
Other operating cost 7,710,904.05 15,383,424.54
Total 1,016,732,478.71 735,655,901.98
(3)Main Business (In terms of different products)
As of 30 June 2011 As of 30 June 2010
Item
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communication products 1,153,031,389.80 1,009,021,574.66 838,507,104.04 720,272,477.44
Total 1,153,031,389.80 1,009,021,574.66 838,507,104.04 720,272,477.44
(4)Main Business (In terms of different regions)
As of 30 June 2011 As of 30 June 2010
Name of Region
Main operating revenue Main operating cost Main operating revenue Main operating cost
Domestic market 1,146,943,846.73 1,003,244,432.20 836,747,859.49 718,822,563.86
Oversea market 6,087,543.07 5,777,142.46 1,759,244.55 1,449,913.58
Total 1,153,031,389.80 1,009,021,574.66 838,507,104.04 720,272,477.44
(5)The amount of operating revenues received from the top 5 customers this year
Proportion taking in total operating
Item Operating revenues
income of the Company (%)
China Telecom Co., Ltd., Jiangsu Branch 266,894,558.39 22.87
Beijing True Vision Technology Co. Ltd. 37,888,659.02 3.25
China Telecom, Jiangsu Network Assets Branch 31,176,572.70 2.67
China Telecom Co., Ltd., Shanghai Branch 28,389,924.28 2.43
Nanjing Zongteng Electronic Technology Co., Ltd. 18,827,777.78 1.61
Total 383,177,492.17 32.83
27. Sales tax and extra charges
Item Rate As of 30 June 2011 As of 30 June 2010
Business tax 3%-5% 1,742,522.42 821,853.06
Education surcharge 4% 765,644.07 330,558.51
47
Item Rate As of 30 June 2011 As of 30 June 2010
Urban maintenance and
7% 1,005,416.55 984,187.40
construction tax
Others 5,978.91 500.37
Total 3,519,561.95 2,137,099.34
28. Sales expenses
Items As of 30 June 2011 As of 30 June 2010
Salary 13,159,781.04 10,767,564.83
Benefits 1,042,511.05 931,934.12
Social insurance premium 3,996,024.65 3,146,520.40
Depreciation expense 351,646.60 302,471.44
Lease expense 319,162.88 287,246.59
Business entertainment 20,206,684.31 16,036,154.83
Low-valued consumables and amortize 220,771.43 40,670.72
Transport fees and transport damages 11,032,520.48 9,353,368.36
Repair charge 158,012.05 111,351.01
Advertising and exhibition fee 291,155.39 243,604.95
Sales service charge 1,516,332.17 814,168.49
Business promotion expenses 1,000,481.98 700,337.38
Technical services and equipment maintenance fee 1,610,717.85 1,288,574.28
Consulting, intermediary, legal fees 19,167.00 90,596.60
Labor protection fees 212,225.20 148,557.64
Packing expenses 127,921.39 116,633.87
Conference expenses 3,487,049.11 1,989,639.28
Travel expenses 6,257,880.19 4,469,198.16
Office allowance & Others 2,924,896.75 679,596.22
Total 67,934,941.52 51,518,189.17
29. Administrative expenses
Items As of 30 June 2011 As of 30 June 2010
Salary expenses 12,212,201.14 15,096,106.23
Depreciation expense 1,171,690.31 1,165,783.38
Amortization charge 339,579.95 50,328.00
Lease expense 4,194,268.05 3,764,315.95
Office allowance 1,400,554.82 1,739,404.93
Travelling expense 1,068,140.63 438,943.95
Business entertainment 2,263,005.59 1,724,632.78
Insurance Expense 136,653.15 468,546.79
48
Items As of 30 June 2011 As of 30 June 2010
Low-valued consumables and amortization 209,766.86 41,224.72
Technology development costs 22,678,536.44 15,433,012.09
Repair charge 455,678.30 325,458.46
Consulting, intermediary, legal fees 1,396,011.10 1,206,283.40
Taxation 1,140,997.52 972,645.75
Pollutant charge 124,675.06 84,496.55
Transport charge 554,527.57
Dismiss welfare 32,302.00
Others 2,092,848.89 2,126,348.20
Total 51,471,437.38 44,637,531.18
30. Financial expenses
Item As of 30 June 2011 As of 30 June 2010
Interest expense 12,889,244.53 10,164,375.02
Less: Interest income 1,077,938.89 2,789,082.81
Exchange loss 47,329.11
Less: Exchange gain 104,066.63
Bank charges 275,463.75 206,104.33
Total 12,030,031.87 7,581,396.54
31. Losses of devaluation of asset
Item As of 30 June 2011 As of 30 June 2010
Loss on bad debt 1,999,655.74 189,000.00
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 property
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 1,999,655.74 189,000.00
49
32. Investment income
(1)Details of Investment Income
Item As of 30 June 2011 As of 30 June 2010
Long-term equity investment income by cost method 83,700.00 238,173.40
Long-term equity investment income by equity method 2,770,283.65 2,760,873.39
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 2,853,983.65 2,999,046.79
(2)Long-term equity investment income by cost method
Investee As of 30 June 2011 As of 30 June 2010 Reasons for movement
Nanjing Yuhua Galvanization Factory 83,700.00 238,173.40 less dividends received
Total
83,700.00 238,173.40
(3)Long-term equity investment income by equity method
Investee As of 30 June 2011 As of 30 June 2010 Reasons for movement
2,800,415.01 Business fluctuations
Nanjing Mennekes Electric Appliances Ltd 2,322,981.92
Production commenced at
Nanjing Prachanda Live Optical Network Co., Ltd -25,297.62 the second half of 2010
Nanjing Putian Datang Information and Electric
Company Ltd. 12,337.19 -39,541.62 Business fluctuations
Nanjing Zhongyou Telecommunication Co., Ltd. 13,050.01 6,800.64 Business fluctuations
Nanjing Potevio Telecommunication Technology
Industry Park Co., Ltd 91,124.85 34,837.28 Business fluctuations
Production commenced at
Nanjing Putian Telege Intelligent Building Ltd 356,087.30 the second half of 2010
Shanghai Yulong Biotech Ltd. 182,198.22 Business fluctuations
Qufu YulongBio-Tech Co., Ltd. -223,836.14 Business fluctuations
Total 2,770,283.65 2,760,873.39
(4) Explain of investment income
During the reporting period, no significant repatriation of investment income restrictions
33. Non-operating income
(1) Details of Non-operating Income
50
As of 30 June 2011 As of 30 June 2010
Included in the Included in the
current profits and current profits and
Item
Amount losses of the Amount losses of the
decriminalizes decriminalizes
amount amount
Gains from disposal of
29,423.07 29,423.07
non-current assets
Include: Gains from disposal of
29,423.07 29,423.07
fixed assets
Gains from disposal of
Intangible assets
Gains from debt restructuring
Gains from exchange of
non-monetary capital
Gains from donation
Government subsidy 1,305,540.73 1,305,540.73 177,103.85 177,103.85
Others 32,800.69 32,800.69 1,052,060.11 1,052,060.11
Total 1,338,341.42 1,338,341.42 1,258,587.03 1,258,587.03
(2) Details of Government Subsidy
Item As of 30 June 2011 As of 30 June 2010 Note
The grandson Nanjing Telecommunication
Factory ,seven branch has the VAT preferential
Refund of VAT 440,416.68 177,103.85
policies of refunding ,due to being welfare
production enterprises
The subsidiary Nanjing Putian
Telecommunication Technology Co., Ltd has
Refund of VAT 295,426.05 the VAT preferential policies of refunding upon
collection once rate in excess of 3%, due to
being manufacture of software
The company to get QinHuaiOu business
Service outsourcing rewards 26,698.00 bureau service outsourcing rewards
The company subsidiary Nanjing South
Telecommunications LTD. made nanjing hi-tech
Finance subsidy 2,500.00
industry development zone administration
committee bureau subsidies
The company to get service outsourcing talents
Subsidy income 40,500.00
training support fund
Small and medium-sized The company subsidiary Nanjing Putian Telege
enterprise development Intelligent Building Ltd. obtained enterprise
500,000.00
JiangNing bureau of development fund
technology-based funds
Total 1,305,540.73 177,103.85
51
34. Non-operating expense
As of 30 June 2011 As of 30 June 2010
Included in the Included in the
current profits and current profits and
Item
Amount losses of the Amount losses of the
decriminalizes decriminalizes
amount amount
Loss from disposal of non-current
3,872.30 3,872.30
assets
Include: loss from disposal of
3,872.30 3,872.30
fixed assets
loss from disposal of Intangible
assets
Loss from debt restructuring 48,140.00 48,140.00
Loss from exchange of
non-monetary asset capital
External donation 20,000.00 20,000.00 30,000.00 30,000.00
Abnormal loss
Loss from shortages
Others 37,372.34 37,372.34 160,348.72 160,348.72
Total 57,372.34 57,372.34 242,361.02 242,361.02
35. Income tax
Item As of 30 June 2011 As of 30 June 2010
Current income tax expense calculated to tax law and relevant provisions 2,763,884.93 3,169,396.83
Deferred income tax charges
Total 2,763,884.93 3,169,396.83
36. 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 < No.9 the company's Information
Disclosure Requirement of calculation of basic earnings per share and rate of return on net asset applied by Entities of Public offering
of securities (revised in 2010) > 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 As of 30 June 2011 As of 30 June 2010
Net profit attributable to ordinary shareholders of parent company(Ⅰ) P0 7,654,146.53 8,257,612.37
Net profit attributable to the company's ordinary shareholders after
P0 7,017,683.63 7,463,324.40
deducting non-recurring gains and losses(Ⅱ)
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
S1
share capital or distribution of stock dividend
Increase of amount of common stock owing to issue of bonds newly or
Si
bonds issued to be transfer to common stock
Decrease of amount of common stock due to purchase-back common
Sj
stock ,etc
52
Decrease of amount of common stock in the reporting period Sk
Amount of months in the reporting period M0 6 6
Accumulated months since the second month when increase of amount of
Mi
common stock
Accumulated months since the second month when decrease of amount of
Mj
common stock
Average weighted amount of common stock outstanding S 215,000,000.00 215,000,000.00
Basic earnings per share(Ⅰ) 0.04 0.04
Basic earnings per share(Ⅱ) 0.03 0.03
Net profit attributable to ordinary shareholders of parent company after
P1 7,654,146.53 8,257,612.37
adjustment(Ⅰ)
Net profit attributable to the company's ordinary shareholders after
P1 7,017,683.63 7,463,324.40
deducting non-recurring gains and losses after adjustment(Ⅱ)
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
215,000,000.00 215,000,000.00
of diluted affect
Diluted earnings per share(Ⅰ) 0.04 0.04
Diluted earnings per share(Ⅱ) 0.03 0.03
(1)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;
(2)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.
37. Other comprehensive income
As of 30 June As of 30 June
Item
2011 2010
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
53
As of 30 June As of 30 June
Item
2011 2010
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 282,079.96 -197,937.66
Less: net, carried forward to gains and losses in current
period after disposing overseas operation
Subtotal 282,079.96 -197,937.66
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 282,079.96 -197,937.66
38. Item description in the statement of cash flow
(1) Other cash receipts relating to operating activities
Item As of 30 June 2011 As of 30 June 2010
Interest income 1,077,938.89 2,789,082.81
Temporary receipts and repayment of temporary payment 11,658,400.27 6,225,748.93
Subsidy income 569,698.00
Others 52,060.06
Total 13,306,037.16 9,066,891.80
(2) Other cash payments relating to operating activities
Item As of 30 June 2011 As of 30 June 2010
Temporary payment 20,612,132.83 25,008,327.85
Various expenses 58,880,919.11 29,174,524.20
Others 275,463.75 305,148.72
Total 79,768,515.69 54,488,000.77
(3) Other cash payment concerning financing activities
54
Item As of 30 June 2011 As of 30 June 2010
Pay off Potevio science park 20,000,000.00
Draft margin 1,000,000.00
Total 1,000,000.00 20,000,000.00
39. Supplementary information about consolidated statement of cash flows
(1) Supplementary information about consolidated statement of cash flows
Item As of 30 June 2011 As of 30 June 2010
1、Adjustment of net profit into operation activity cash flow:
Net profit 14,749,678.10 14,834,275.66
Add: provision for depreciation of assets 1,999,655.74 189,000.00
Depreciation of fixed assets, consumption of oil gas assets and depreciation
4,675,046.17
of productive biological assets 5,218,479.39
Amortization of intangible assets 646,907.99 530,292.20
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
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 “-”) 12,889,244.53 10,164,375.02
Investment loss (gain is listed with “-”) -2,853,983.65 -2,999,046.79
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 “-”) -131,887,849.14 -30,631,396.95
Decrease of operational accounts receivable (increase is listed with “-”) -255,557,349.34 -171,611,397.16
Increase of operational accounts payable (decrease is listed with “-”) 231,881,566.87 72,841,282.62
Others
Net cash flow arising from operation activities -123,457,082.73 -101,489,686.78
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 210,428,237.28 290,336,819.87
Less: Balance of cash at period-begin 291,447,011.87 422,853,002.17
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-begin
Net increase in cash and cash equivalent -81,018,774.59 -132,516,182.30
(2) Cash and cash equivalent
55
Item As of 30 June 2011 As of 30 June 2010
Cash
Cash in hand 49,506.46 236,070.48
May at any time is used to pay the bank deposit 165,454,216.48 184,018,938.57
May at any time for the payment of the other monetary funds 44,924,514.34 106,081,810.82
Can be used for the storage of the central bank money to pay
Deposit money of payment
Dismantle put trade payment
Cash equivalent
Three months due debt investments
Cash and cash equivalent at the year end 210,428,237.28 290,336,819.87
VI .Related parties and related transaction
1. Condition of parent company
Name of the Registration
Relation Type of Registered Legal Business
parent company capital
entity address representative nature
(unit:RMB’0000
No. 2 Tudi 2 Road,
Zhongguan village
China Potevio Parent information
State-owned economy zone, Xing Wei 308,694.00
Company Limited Company industry
Haidian district,
Beijing
(continued)
The
The proportion of voting rights company's Organization
Name of the Rate of Share Held between Parent
between parent company Ultimate code
parent company Company and the Company (%)
and the company (%) controlling
party
China Potevio
China Putian
Company 53.49 53.49 71093155-5
Corporation
Limited
2. Condition of subsidiaries
Type of Type of Registered Legal Business
Name of the companies
subsidiaries entity Address Representative Nature
Nanjing Southern Sales
Limited
Telecommunications Company Trading Nanjing Zhou Dezhong telecommunication
company
Limited products
Nanjing Bada Telecommunications
Limited Manufacture of
Co., Manufacture Nanjing Qiao Jin
company telecommunications
Ltd.
Nanjing Putian Information Manufacture
Limited
Technology Manufacture Nanjing Qiao Jin and sale of
company
Company Ltd. telecommunications
Manufacture
Nanjing Putian Telege Intelligent Limited
Manufacture Nanjing Fu Baosun and sale of
Building Ltd company
telecommunications
Putian Telecommunications (Hong company Manufacture HongKong Sun Liang Sale of
56
Type of Type of Registered Legal Business
Name of the companies
subsidiaries entity Address Representative Nature
Kong) limited by telecommunications
Co., Ltd. shares
Web-based electronic
Beijing Picom Telecommunications Limited products, digital
Manufacture Beijing Lu Junhai
Equipment Ltd. company transmission
equipment
Manufacture
Nanjing Postel WongShi Limited
Manufacture Nanjing Sun Liang and sale of
Telecommunications Co., Ltd. company
telecommunications
Nanjing Putian Changle Manufacture
Limited
Telecommunications Equipment Manufacture Nanjing Wang Qiang and sale of
company
Co., Ltd telecommunications
Manufacture
Nanjing Putian Network Company Limited
Manufacture Nanjing Guan Yingqian and sale of
Ltd. company
telecommunications
Manufacture
Nanjing Putian Telecommunication Limited
Manufacture Nanjing Liu Chuanxi and sale of
Technology Co., Ltd company
telecommunications
(continued)
The proportion of
Rate of Share
voting rights between
Registration held between Organization
Name of the companies parent
Capital(unit:’0000) parent Company code
company and the
and the Company (%)
company (%)
Nanjing Southern
Telecommunications Company 3,420.50 98.24 98.24 13492047-8
Limited
Nanjing Bada Telecommunications
Co., 1,130.14 60.00 60.00 13554048-5
Ltd.
Nanjing Putian Inforamtion
Technology 1,400.00 99.98 99.98 13498233-7
Company Ltd.
Nanjing Putian Intelligent Building
1,200.00 45.77 45.77 72172045-4
Ltd
Putian Telecommunications (Hong
Kong) HK 200.00 90.00 90.00 #61770414
Co., Ltd.
Beijing Picom Telecommunications
USD 50.00 51.00 51.00 717741092
Equipment Ltd.
Nanjing Postel WongShi
USD 1,090.00 99.42 99.42 71093784-2
Telecommunications Co., Ltd.
Nanjing Putian Changle
Telecommunications Equipment 1,000.00 50.70 50.70 13554526-X
Co., Ltd
Nanjing Putian Network Company
1,000.00 78.00 78.00 74236858-4
Ltd
Nanjing Putian Telecommunication
500.00 70.00 70.00 13513422-5
Technology Co., Ltd
3. Condition of the joint ventures and associates
(1) Joint venture
57
Voting
proportion
Proportion of Relationshi
Place of Legal Business in p with Organization
Invested units Types shareholding
registration person nature invested the company code
（%）
company
(%)
Industrial use
Nanjing Mennekes
Sino-foreign Walter. plug, socket
Electric Appliances Nanjing 50 50 Joint venture 60895120-X
joint venture Mennekes production and
Ltd.
marketing, etc
Nanjing Prachanda Optical
Sino-foreign Jiang
Live Optical Nanjing communication 50 50 Joint venture 55553484-X
joint venture Hanbin
Network Co., Ltd of production
(2)Affiliated venture
Voting
Proportion proportion
Relationshi
Place of Legal Business of in p with Organization
Invested units Types
registration person nature shareholdin invested the company code
g (%) company
(%)
Nanjing Putian Communicatio
Domestic
Datang Information n products
(limited liability Nanjing Yan Yaoming 40 40 Affiliated venture 777019050
and Electric production
company)
Company Ltd. sales, etc
Domestic
Communicatio
Nanjing Zhongyou (limited
n products
Telecommunication liability Nanjing ZhaoTiwu 30 30 Affiliated venture 249702200
company) production
Co., Ltd.
sales, etc
Domestic
Nanjing Potevio
(limited Industrial park
Telecommunication
liability venue rental
Technology company)） Nanjing SunLiang 49.64 49.64 Affiliated venture 667372881
management
Industry Park Co.,
etc
Ltd.
Domestic
Medical
(limited
devices,
Shanghai Yulong liability
company)） Shanghai MuHaidong diagnostic 21.00 21.00 Affiliated venture 73904336-7
Biotech Ltd.
reagents
production and
58
Voting
Proportion proportion
Relationshi
Place of Legal Business of in p with Organization
Invested units Types
registration person nature shareholdin invested the company code
g (%) company
(%)
marketing, etc
Domestic
Qufu Biotechnology,
(limited
YulongBio-Tech liability Qufu MuHaidong diagnostic 21.00 21.00 Affiliated venture 73928254-4
Co., Ltd. company) technology, etc
4. Other related parties
Relationship with
Company Name Organization code
the company
Nanjing Postel Swanking Electrical Co., Ltd. Controlled by the parent company 724594270
Controlled by controlling
Shenzhen Putian Lingyun Electronics Co. Ltd. 732050660
shareholder of the parent company
Shanghai Potevio Post And Telecommunications
Controlled by the parent company 607285751
Technology Co., Ltd.
Beijing Great Gragon Information Technology
Controlled by the parent company 743349502
International Co.,Ltd.
ChengDu Potevio Telecommunications Cable CO.,
Controlled by the parent company 20193968X
LTD
Potevio Institute of Technology Co., Ltd. Controlled by the parent company 710929105
Wuhan is ablaze Potevio information technology Co.,
Controlled by the parent company 695345127
Ltd.
5. Related transaction
(1) Purchasing goods, accept services related party transactions
As of 30 June 2011
Pricing policy and
Related transaction Ratio in
Related Parties decision-making
content Amount similar trade
processes
amount %
China Potevio Company Limited Telecommunications Market Pricing 10,895,243.68 0.92
Nanjing Prachanda Live Optical Market Pricing
Telecommunications 20,148,668.55 1.70
Network Co., Ltd.
Nanjing Postel Swanking Electrical Co., Market Pricing
Telecommunications 803,037.15 0.07
Ltd.
Total 31,846,949.38 2.69
As of 31 December 2010
Pricing policy and
Related transaction Ratio in
Related Parties decision-making
content Amount similar trade
processes
amount %
China Potevio Company Limited Telecommunications Market Pricing 13,802,400.00 1.88
59
Total 13,802,400.00 1.88
(2) The sale of goods, providing labor services related transaction
As of 30 June 2011
Pricing policy and
Related transaction Ratio in
Related Parties decision-making
content Amount similar trade
processes
amount %
China Potevio Company Limited Telecommunications Market Pricing 33,380,033.13 2.86
Shanghai Potevio Network Technology
Telecommunications Market Pricing 1,436,222.74 0.12
Co., Ltd.
Nanjing Putian Datang information
Telecommunications Market Pricing 35,170.94 0.00
electronic Co., Ltd.
China Putian Corporation Telecommunications Market Pricing 82,051.28 0.01
Nanjing Prachanda Live Optical
Telecommunications Market Pricing 77,218.76 0.01
Network Co., Ltd.
Total 35,010,696.85 3.00
As of 31 December 2010
Pricing policy and
Related transaction Ratio in
Related Parties decision-making
content Amount similar trade
processes
amount %
China Potevio Company Limited Telecommunications Market Pricing 15,606,900.00 1.82
Potevio information institute of
Telecommunications Market Pricing 5,600.00 0.00
technology Co., Ltd.
Total 15,612,500.00 1.82
(3)Related leasing
Date start Date for Accordance for Influence on the
Asset for for termination of reorganization Company
Lessor Lessee
leasing leasing leasing of rental income by rental income
Nanjing
Nanjing Potevio
Putian
Telecommunication Building and
telecommuni 2011-01-01 2011-12-31 Market Pricing 6,093,860.00
Technology Industry Park land
cation Co.,
Co., Ltd.
Ltd.
(4)Related guarantee
Amount of Whether the
Assurance Date start for Due date for
Secured party guarantee guarantee is
Provider guarantee guarantee
carried out
Nanjing Putian Telecommunication
China Putian Corporation 20,000,000.00 2011-04-28 2011-10-27 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 20,000,000.00 2011-05-10 2011-10-09 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 30,000,000.00 2011-05-24 2011-10-22 No
Co., Ltd.
60
Amount of Whether the
Assurance Date start for Due date for
Secured party guarantee guarantee is
Provider guarantee guarantee
carried out
Nanjing Putian Telecommunication
China Putian Corporation 30,000,000.00 2011-06-03 2011-11-01 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 20,000,000.00 2011-06-08 2011-11-08 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 30,000,000.00 2011-06-16 2011-11-15 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 30,000,000.00 2010-07-16 2011-07-15 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 30,000,000.00 2010-12-22 2011-12-22 No
Co., Ltd.
Nanjing Putian Telecommunication
China Putian Corporation 20,000,000.00 2011-01-14 2012-01-14 No
Co., Ltd.
Nanjing Putian Telecommunication
China Potevio Company Limited 30,000,000.00 2010-12-06 2011-09-06 No
Co., Ltd.
Nanjing Putian Telecommunication
China Potevio Company Limited 44,000,000.00 2010-07-28 2011-07-28 No
Co., Ltd.
Nanjing Putian Telecommunication
China Potevio Company Limited 20,000,000.00 2011-01-24 2011-07-24 No
Co., Ltd.
Nanjing Putian Telecommunication
China Potevio Company Limited 20,000,000.00 2011-03-02 2011-09-02 No
Co., Ltd.
Nanjing Putian Nanjing Putian Telege Intelligent
10,000,000.00 2010-09-16 2011-09-16 No
Telecommunication Co., Ltd. Building Ltd
Nanjing Putian Nanjing Putian Telege Intelligent
10,000,000.00 2010-09-28 2011-09-28 No
Telecommunication Co., Ltd. Building Ltd.
Nanjing Southern
Nanjing Putian
Telecommunications Company 20,000,000.00 2011-05-03 2012-05-03 No
Telecommunication Co., Ltd.
Limited
Nanjing Southern
Nanjing Putian
Telecommunications Company 20,000,000.00 2011-05-24 2011-12-22 No
Telecommunication Co., Ltd.
Limited
6. Payables and receivables of related parties
(1) The accounts affiliated parties shown in the list below money situation
As of 30 June 2011 As of 31 December 2010
Item Name of the related parties
Book amount Provision Book amount Provision
Accounts China Potevio Company
21,738,616.90 43,471.61 22,785,438.14 -
receivable Limited
Shanghai Potevio Post and
Accounts Telecommunications 13,500,320.00 4,262,017.60 13,664,248.00 1,853,185.60
receivable Technology Co., Ltd.
Chengdu Potevio cable
Accounts companies limited by 497,295.00 - 497,295.00 -
receivable shares
Nanjing Zhongyou
Accounts Telecommunication Co., 311,472.80 - 1,012,072.80 -
receivable Ltd.
Accounts Nanjing Postel Swanking
94,954.61 - - -
receivable Electrical Co., Ltd.
61
Item Name of the related parties As of 30 June 2011 As of 31 December 2010
Accounts Nanjing Prachanda Live -
96,932.87 - -
receivable Optical Network Co., Ltd.
Nanjing Putian Datang
Accounts information electronic Co., 36,545.00 - - -
receivable Ltd.
Nanjing Putian Datang
information electronic Co., - - 3,365.00 -
Other receivables Ltd.
Nanjing Potevio
Telecommunication
352,019.2 -
Technology Industry Park
Other receivables Co., Ltd.
Beijing Picom
Telecommunications 28,912,952.71 28,912,952.71 28,912,952.71 28,912,952.71
Other receivables Equipment Co., Ltd.
(2) The cope with affiliated parties shown in the list below money situation
Item Amount at the
Name of the related parties Amount at the year end
year-beginning
Nanjing Potevio Telecommunication Technology
Other payables - 426,045.28
Industry Park Co., Ltd.
Other payables Nanjing Putian Datang information electronic Co., Ltd. 47,790.00 -
Accounts payable China Potevio Company Limited 13,503,850.00 2,843,850.00
Other payables China Potevio Company Limited 20,681.13 164,859.92
Accounts payable Nanjing Prachanda Live Optical Network Co., Ltd. 23,351,790.78 2,793,314.20
Accounts payable Nanjing Postel Swanking Electrical Co., Ltd. 1,371,506.90 243,405.99
Accounts payable Nanjing Putian Datang information electronic Co., Ltd. 275,465.02 -
Accounts payable Chengdu Potevio cable companies limited by shares 159,106.27 -
Nanjing Potevio Telecommunication Technology
Accounts payable 148,254.48 130,508.96
Industry Park Co., Ltd.
Wuhan is ablaze Potevio information technology Co.,
Accounts payable - 5,093,070.15
Ltd.
Advances from
China Potevio Company Limited 8,158,434.00 -
customers
Advances from
China Putian Corporation 22,990 45,980.00
customers
VII．Contingencies
1. The pending litigation or arbitration formed a liability and its financial effect
None
2. Contingent liabilities formed by external guarantee and its financial effect
In addition the Company provides guarantees to related parties, the inaction of other non-related parties to provide security matters.
3. Other contingent liabilities
None
62
VIII. Commitments
1. Significant commitment matters
None
2. Early promise fulfillment situation
None
IX. Events occurring after the balance sheet date
1. Important matters after balance sheet date
None
2. Balance sheet date profit allocation illustrate
None
3. Other matters after balance sheet date
None
X. Other significant matters
1. Financial assets and financial liabilities in foreign currency
the cumulative
Current Current
As of 31 changes in fair As of 30 June
Items changes in fair provision for
December 2010 value included 2011
value impairment
in equity
Financial assets:
1. Financial assets measure at fair
value through profit or loss
(excluding derivative financial
assets)
2. Derivative financial assets
3. Loans and receivables 7,949,666.99 -9,554.09 7,837,704.43
4. Financial assets available for sale
5. Hold to maturity
Total 7,949,666.99 -9,554.09 7,837,704.43
Financial liability
2. Other significant matters
None
Ⅺ. Notes to main items of financial statement of parent company
1. Account receivable
(1)Classification of accounts receivable
Item As of 30 June 2011
63
Book balance Reserve for bad debts
Percentage Percentage
Amount Amount
(%) (%)
1. Single amount dramatic and individual
provision for the accounts receivable
2. Classification as the group of provision for
545,803,296.60 99.63 7,751,102.37 1.42
account receivable
Group1 235,707,289.62 43.03 1,896,657.01 0.80
Group 2 248,357,445.90 45.33 - -
Group 3 61,738,561.08 11.27 5,854,445.36 9.48
3. Single amount not significant but single
2,004,056.08 0.37 2,004,056.08 100.00
provision for accounts receivable
Total 547,807,352.68 100.00 9,755,158.45 1.78
As of 31 December 2010
Book balance Reserve for bad debts
Item
Percentage Percentage
Amount Amount
(%) (%)
1. Single amount dramatic and individual
provision for the accounts receivable
2. Classification as the group of provision for
406,256,620.48 99.51 6,297,053.29 1.55
account receivable
Group1 110,654,937.52 27.10 1,857,733.90 1.68
Group 2 280,616,668.53 68.74
Group 3 14,985,014.43 3.67 4,439,319.39 29.63
3. Single amount not significant but single 1,995,008.63 0.49 1,995,008.63 100.00
provision for accounts receivable
Total 408,251,629.11 100.00 8,292,061.92 2.03
Notes：Single amount dramatic and individual provision for accounts receivable refers to single exceed 10,000,000.00 Yuan, test no
impairment, the company according to age analysis accrual impairment provision. According to the group of receivables provision for
more than 2 years of age receivables, via test no impairment, according to age analysis accrual impairment provision.
Adopt age analysis provision in group as follows:
As of 30 June 2011 As of 31 December 2010
Age Proportion Reserve for bad Proportion Reserve for bad
Book balance (%) debts Book balance (%) debts
Within 1
year
221,349,600.83 74.42 - 71,965,194.40 57.28
(contain 1
year)
1 to 2
44,510,445.91 14.96 - 25,318,060.12 20.15
years
2 to 3
22,081,092.99 7.42 2,208,109.30 18,907,088.35 15.05 1,890,708.83
years
3 to 4
4,580,389.98 1.54 1,374,116.99 4,841,688.05 3.85 1,452,506.42
years
4 to 5 554,515.93 0.19 221,806.37 2,347,615.27 1.87 939,046.11
64
years
5 to 6
2,113,676.76 0.71 1,690,941.41 1,227,569.16 0.98 982,055.33
years
6 years or
2,256,128.30 0.76 2,256,128.30 1,032,736.60 0.82 1,032,736.60
above
Total 297,445,850.70 100.00 7,751,102.37 125,639,951.95 100.00 6,297,053.29
Closing single amount not significant but single provision for accounts receivable
Receivables Book amount Bad debt Proportion Reason
Age longer
1,835,261.63 1,835,261.63 100.00% cannot be
M/S WHISTLER TELECOM(PVT)LTD recalled
Age longer
156,294.45 156,294.45 100.00% cannot be
PRADUFA recalled
Age longer
12,500.00 12,500.00 100.00% cannot be
China Unicom Nanjing branch recalled
Total 2,004,056.08 2,004,056.08 —— ——
(2) Current payback or return of receivables
During this year no full provision for bad prophase preparation, or larger proportion, but in this period fully recovery or payback, or
recovery or payback larger proportion of account receivable.
(3) Written -off of accounts receivable in the current period
None
(4) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting shares of the
Company at year-end
At 30 June 2011, amount of RMB11,121,469.30 Yuan is due from China Potevio Company Limited, Parent company, aging within 1-3
years, has provision for bad debts of 43,471.61 Yuan at 30 June 2011.
At 31 December 2010, amount of RMB21,207,061.44 Yuan is due from China Potevio Company Limited, Parent company, aging
within 1 year, none of reservation of provision at year-end.
(5) Top 5 debtors of accounts receivable
Relationship with the Proportion of
Name of the debtors Amount Aging
Company total amount (%)
China Telecom Co., Ltd. Jiangsu Branch Non-related party 122,816,003.06 Within 1year 22.42
Agricultural Bank of China Non-related party 36,033,866.79 1-2 years 6.58
China Telecom Group Co. Jiangsu Branch
Non-related party 14,775,373.86 Within 1year 2.70
Network Assets
Shanghai Potevio Co., Ltd. Related party 13,500,320.00 2 to 4year 2.46
China Telecom Co., Ltd. Shanghai Branch Non-related party 12,422,147.24 Within 1year 2.27
Total —— 199,547,710.95 —— 36.43
(6) Accounts receivable of related parties accounts
Relationship with the Proportion of total
Name of the debtors Amount
Company amount (%)
Controlled by the same
13,500,320.00 2.46
Shanghai Potevio Co., Ltd. company
65
China Potevio Company Limited Parent company 11,121,469.30 2.03
Nanjing Zhongyou Telecommunication
311,472.80 0.06
Co., Ltd. Affiliated venture
Nanjing Prachanda Live Optical Network
96,932.87 0.02
Co., Ltd. Joint venture
Nanjing Putian Datang information
36,545.00 0.01
electronic Co., Ltd. Affiliated venture
Total 25,066,739.97 4.58
(7) Balance of accounts receivable in foreign currencies
As of 30 June 2011 As of 31 December 2010
Foreign currency Exchange RMB Original Exchange RMB
Original currency rate converted currency rate converted
USD 310,248.82 6.4716 2,007,806.26 306,720.48 6.6227 2,031,317.72
Total 310,248.82 —— 2,007,806.26 306,720.48 —— 2,031,317.72
2. Other receivables
(1)Classification of other receivables
As of 30 June 2011
Book balance Reserve for bad debts
Item
Percentage Percentage
Amount Amount
(%) (%)
1. Single amount dramatic and individual provision for
28,912,952.71 34.95 28,912,952.71 100.00
the accounts receivable
2. Classification as the group of provision for account
49,724,811.28 60.11 2,400,955.98 5.00
receivable
Group1 22,252,292.91 26.90
Group 2 20,286,233.28 24.52
Group 3 7,186,285.09 8.69 2,400,955.98 33.41
3. Single amount not significant but single provision for
4,085,166.33 4.94 4,085,166.33 100.00
accounts receivable
Total 82,722,930.32 100.00 35,399,075.02 42.79
As of 31 December 2010
Book balance Reserve for bad debts
Item
Percentage Percentage
Amount Amount
(%) (%)
1. Single amount dramatic and individual provision for
28,912,952.71 40.22 28,912,952.71 100.00
the accounts receivable
2. Classification as the group of provision for account
38,885,252.90 54.10 2,317,450.65 5.96
receivable
Group1 11,763,892.01 16.37
Group 2 21,850,416.66 30.40
Group 3 5,270,944.23 7.33 2,317,450.65 43.97
66
3. Single amount not significant but single provision for
4,085,166.33 5.68 4,085,166.33 100.00
accounts receivable
Total 71,883,371.94 100.00 35,315,569.69 49.13
Notes：Single amount dramatic and individual provision for accounts receivable refers to single exceed 10,000,000.00 Yuan, test no
impairment, the company according to age analysis accrual impairment provision. According to the group of receivables provision for
more than 2 years of age receivables, via test no impairment, according to age analysis accrual impairment provision.
Adopt age analysis provision in group as follows:
As of 30 June 2011 As of 31 December 2010
Age Reserve for bad Proportion Reserve for bad
Book balance Proportion (%) debts Book balance (%) debts
Within 1 year
(contain 1 23,053,451.12 78.31 - 9,687,456.96 56.87
year)
1 to 2 years 3,089,906.50 10.50 - 3,538,529.43 20.77
2 to 3 years 151,100.00 0.51 15,110.00 1,355,238.00 7.96 135,523.80
3 to 4 years 940,392.00 3.19 282,117.60 170,000.00 1.00 51,000.00
4 to 5 years 165,000.00 0.56 66,000.00 5,000.00 0.03 2,000.00
5 to 6 years 5,000.00 0.02 4,000.00 748,425.00 4.39 598,740.00
6 years or
2,033,728.38 6.91 2,033,728.38 1,530,186.85 8.98 1,530,186.85
above
Total 29,438,578.00 100.00 2,400,955.98 17,034,836.24 100.00 2,317,450.65
(2) Current payback or return of receivables
During this period no full provision for bad prophase preparation, or larger proportion, but in this period fully recovery or payback, or
recovery or payback larger proportion of account receivable.
(3) Written -off of accounts receivable in the current period
During this period, no written-off or written off has been recovered in other receivables
(4) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting shares of the
Company at year-end
The current held no more than 5% (including 5%) voting shares shareholders outstanding.
(5) Large amount of other receivables nature or content
Name of the debtors Amount Other receivables nature or content
Beijing Picom Telecommunications Equipment Ltd. 28,912,952.71 incomings and outgoings
Nanjing Southern telecom Co., Ltd. 22,252,292.91 incomings and outgoings
Nanjing Putian Information Technology
4,916,544.47 incomings and outgoings
Co., Ltd.
Nanjing Putian Telecommunication Technology
4,815,104.00 incomings and outgoings
Co., Ltd.
Putian Telecommunication (Hong Kong) Co., Ltd. 4,085,166.33 incomings and outgoings
Total 64,982,060.42 ——
(6) Top 5 debtors of other receivables
Relationship with the Proportion of total
Name of debtors Amount Aging
Company amount (%)
67
Relationship with the Proportion of total
Name of debtors Amount Aging
Company amount (%)
Beijing Picom Telecommunications
Subsidiary 28,912,952.71 5 to 6 years 34.95
Equipment Ltd.
Nanjing Southern telecom Co., Ltd. Subsidiary 22,252,292.91 Within 1year 26.90
Nanjing Putian Information Technology
Subsidiary 4,916,544.47 1 to 2 years 5.94
Co., Ltd.
Nanjing Putian Telecommunication
Subsidiary 4,815,104.00 1 to 2 years 5.82
Technology Co., Ltd.
Putian Telecommunication (Hong Kong)
Subsidiary 4,085,166.33 2 to 3 years 4.94
Co., Ltd.
Total 64,982,060.42 78.55
(7) Other receivables from related parties
Proportion of total
Name of debtors Relationship with the Company Amount
amount (%)
Beijing Picom Telecommunications Equipment Subsidiary
28,912,952.71 34.95
Ltd.
Nanjing Southern telecom Co., Ltd. Subsidiary 22,252,292.91 26.90
Nanjing Putian Information Technology Subsidiary
4,916,544.47 5.94
Co., Ltd.
Nanjing Putian Telecommunication Technology Subsidiary
4,815,104.00 5.82
Co., Ltd.
Putian Telecommunication (Hong Kong) Co., Ltd. Subsidiary 4,085,166.33 4.94
Nanjing Potevio Telecommunication Technology Industry Affiliated venture
352,019.20 0.43
Park Co., Ltd.
Total 65,334,079.62 78.98
3. Long-term equity investments
(1) List of Information of Long-term Equity Investment
Share Voting
holding right
percenta proporti
Book balance at the ge of the on of the
Invested Accounting Initial cost of Book balance at the
end of 31 December Movement Compan Compan
units Method investment end of 30 June 2011
2010 y among y among
invested invested
units) units)
(%) (%))
Nanjing Southern
Telecommunications Cost Method 33,175,148.00 33,175,148.00 - 33,175,148.00 98.24 98.24
Company Limited
Nanjing Putian Telege
Cost Method 3,320,003.45 3,320,003.45 - 3,320,003.45 45.77 45.77
Intelligent Building Ltd.
Nanjing Putian Changle
Telecommunications Cost Method 2,610,457.00 2,610,457.00 - 2,610,457.00 50.70 50.70
Equipment Co., Ltd.
Nanjing Bada
Telecommunications Cost Method 5,610,000.00 5,610,000.00 - 5,610,000.00 60.00 60.00
Co., Ltd
68
Share Voting
holding right
percenta proporti
Book balance at the ge of the on of the
Invested Accounting Initial cost of Book balance at the
end of 31 December Movement Compan Compan
units Method investment end of 30 June 2011
2010 y among y among
invested invested
units) units)
(%) (%))
Nanjing Postel Wongshi
Telecommunications Cost Method 40,997,683.00 40,997,683.00 - 40,997,683.00 99.42 99.42
Co., Ltd.
Nanjing Putian Network
Cost Method 9,146,455.13 7,741,140.40 - 7,741,140.40 78.00 78.00
Company Ltd.
Putian
Telecommunications Cost Method 1,910,520.00 1,910,520.00 - 1,910,520.00 90.00 90.00
(Hong Kong) Co., Ltd.
Nanjing Putian
Information Technology Cost Method 13,860,000.00 13,860,000.00 - 13,860,000.00 99.98 99.98
Company Ltd.
Nanjing Putian
Telecommunication Cost Method 1,294,510.00 1,294,510.00 - 1,294,510.00 70.00 70.00
Technology Co., Ltd
Beijing Picom
Telecommunications Cost Method 1,854,910.00 1,854,910.00 - 1,854,910.00 51.00 51.00
Equipment Ltd
Nanjing Yahoo
Cost Method 420,915.00 420,915.00 - 420,915.00 10.00 10.00
Galvanization Factory
Hangzhou Swanking
Cost Method 321,038.00 321,038.00 - 321,038.00 2.26 2.26
Electric Appliance
Nanjing Menaces Equity 2,322,981.92 36,693,814.03
34,370,832.11 34,370,832.11 50.00 50.00
Electric Appliances Ltd. Method
Nanjing Putian Datang
Equity 2,398,551.13
Information and Electric 2,386,213.94 2,386,213.94 12,337.19 40.00 40.00
Method
Company Ltd
Nanjing Zhongyou
Equity
Telecommunication 237,125.45 237,125.45 13,050.01 250,175.46 30.00 30.00
Method
Co., Ltd.
Nanjing Potevio
Telecommunication Equity 168,399,699.45
168,308,574.60 168,308,574.60 91,124.85 49.64 49.64
Technology Industry Method
Park Co., Ltd.
Shanghai Yulong Equity
14,721,843.51 14,721,843.51 14,721,843.51 21.00 21.00
Biotech Ltd. Method
Qufu Yulong Bio-Tech Equity
3,113,727.00 3,113,727.00 3,113,727.00 21.00 21.00
Co., Ltd. Method
Nanjing Prachanda
-25,297.62 12,064,230.21
Live Optical Equity 12,089,527.83 12,089,527.83 50.00 50.00
Network Co., Ltd Method
2,414,196.35
Total 349,749,484.02 348,344,169.30 350,758,365.65 —— ——
(continued)
69
Depreciation Reserves
Invested Cash Dividend During the
Depreciation Reserve Withdrawn During the
units Period
Period
Nanjing Southern Telecommunications
Company Limited
Nanjing Putian Telege Intelligent Building Ltd. 4,576,700.00
Nanjing Putian Changle Telecommunications
Equipment Co., Ltd.
Nanjing Bada Telecommunications Co., Ltd
Nanjing Postel Wongshi Telecommunications
Co., Ltd.
Nanjing Putian Network Company Ltd.
Putian Telecommunications (Hong Kong)
Co., Ltd.
Nanjing Putian Information Technology
Company Ltd.
Nanjing Putian Telecommunication
Technology Co., Ltd
Beijing Picom Telecommunications
1,854,910.00
Equipment Ltd
Nanjing Yuhua Galvanization Factory 83,700.00
Hangzhou Swanking Electric Appliance
Nanjing Mennekes Electric Appliances Ltd.
Nanjing Putian Datang Information and
Electric Company Ltd
Nanjing Zhongyou Telecommunication Co.,
Ltd.
Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd.
Shanghai Yulong Biotech Ltd.
Qufu Yulong Bio-Tech Co., Ltd.
Nanjing Puzhuguang network limited
Total 1,854,910.00 - 4,660,400.00
4. Operating revenues and costs
(1) Operating revenues
Item As of 30 June 2011 As of 30 June 2010
Main operating revenue 722,549,891.61 539,791,992.12
Other operating revenue 20,183,517.95 22,383,585.22
Total 742,733,409.56 562,175,577.34
(2) Operating costs
Item As of 30 June 2011 As of 30 June 2010
Main operating cost 664,627,325.63 487,182,219.61
Other operating cost 14,580,345.07 21,147,105.46
Total 679,207,670.70 508,329,325.07
(3) Main Business (In terms of different products)
70
As of 30 June 2011 As of 30 June 2010
Item
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communication products 722,549,891.61 664,627,325.63 539,791,992.12 487,182,219.61
Total 722,549,891.61 664,627,325.63 539,791,992.12 487,182,219.61
(4) Main Business (In terms of different regions)
As of 30 June 2011 As of 30 June 2010
Item
Main operating revenue Main operating cost Main operating revenue Main operating cost
Domestic market 716,462,348.54 658,850,183.17 538,032,747.57 485,732,306.03
Oversea market 6,087,543.07 5,777,142.46 1,759,244.55 1,449,913.58
Total 722,549,891.61 664,627,325.63 539,791,992.12 487,182,219.61
(5) The amount of operating revenues received from the top 5 customers this year
Proportion taking in total operating income
Item operating revenues
of the Company (%)
China Telecom Co., Ltd., Jiangsu Branch 266,894,558.39 35.93
China Telecom, Jiangsu network assets Branch 31,176,572.70 4.20
China Telecom Co., Ltd., Shanghai Branch
28,389,924.28 3.82
China Mobile Communications Group Co., Ltd., Shandong
11,025,488.01 1.48
China Mobile Communications Group Co. Ltd., Jilin
9,234,810.00 1.24
Total 346,721,353.38 46.67
5. Investment income
(1) Details of Investment Income
Item As of 30 June 2011 As of 30 June 2010
Long-term equity investment income by cost method 4,660,400.00 4,814,873.40
Long-term equity investment income by equity method 2,414,196.35 2,760,873.39
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
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 7,074,596.35 7,575,746.79
(2) Long-term equity investment income by cost method
71
Investee As of 30 June 2011 As of 30 June 2010 Reasons for movement
Nanjing Putian Telege Intelligent
Building Ltd. 4,576,700.00 4,576,700.00
Nanjing Yuhua Galvanization Factory 83,700.00 238,173.40 Received less distribution of dividends
Total
4,660,400.00 4,814,873.40
(3) Long-term equity investment income by equity method
Investee As of 30 June 2011 As of 30 June 2010 Reasons for movement
Nanjing Mennekes Electric Appliances Ltd. 2,322,981.92 2,800,415.01 Business fluctuations
Nanjing Prachanda Live Optical Network Start-up at the second half of
Co., Ltd. -25,297.62 2010
Nanjing Putian Datang Information and
Electric Company Ltd. 12,337.19 -39,541.62 Business fluctuations
Nanjing Zhongyou Telecommunication
Co., Ltd. 13,050.01 6,800.64 Business fluctuations
Nanjing Potevio Telecommunication
Technology Industry Park Co., Ltd 91,124.85 34,837.28 Business fluctuations
Shanghai Yulong Biotech Ltd. 182,198.22 Business fluctuations
Qufu Yulong Bio-Tech Co., Ltd. -223,836.14 Business fluctuations
Total
2,414,196.35 2,760,873.39
(4)None of significant limitation of the repatriation of investment income
6. Supplementary information about consolidated statement of cash flows
Item As of 30 June 2011 As of 30 June 2010
1、Adjustment of net profit into operation activity cash flow：
Net profit -3,628,898.83 893,455.45
Add: provision for depreciation of assets 1,546,601.86 189,000.00
Depreciation of fixed assets, consumption of oil gas assets and
2,741,215.53 2,779,977.22
depreciation of productive biological assets
Amortization of intangible assets 469,533.19 174,738.66
Amortization of long-term prepayments
Loss from disposal of fixed assets, intangible assets and other long term
26,630.17
assets (gain is listed with “-”)
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 “-”) 10,872,553.49 9,315,245.82
Investment loss (gain is listed with “-”) -7,074,596.35 -7,575,746.79
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 “-”) -54,225,574.83 -37,403,107.67
Decrease of operational accounts receivable (increase is listed with “-”) -167,055,338.87 -111,828,754.80
Increase of operational accounts payable (decrease is listed with “-”) 194,200,805.68 29,696,869.44
Others
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Item As of 30 June 2011 As of 30 June 2010
Net cash flow arising from operation activities -22,153,699.13 -113,731,692.50
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 169,289,803.91 199,364,640.51
Less: Balance of cash at period-begin 185,951,591.96 348,384,407.10
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-beginning
Net increase in cash and cash equivalent -16,661,788.05 -149,019,766.59
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 As of 30 June 2011 Note
1．Gains and losses from disposal of non-current assets, including reversal of provision for
impairment before
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 or quantitative
government subsidy closely related to the enterprise businesses and according to the national 1,305,540.73
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
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
73
Item As of 30 June 2011 Note
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 -24,571.65
21．Other gains and losses items complying with definition for non-recurring
gains and loses
22．Affect on minority equity(after taxation)
375,413.27
23．Affect on income tax
269,092.91
Total 636,462.90
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.( 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)
(1) For the end of 30 June 2011
Earnings per share
Weighted average Diluted earnings per
Profits of the reporting period Basic earnings per
return on equity（%） share
share
Net profit attributable to shareholders of parent
company 2.10 0.04 0.04
Net profit attributable to shareholders of parent
company
after deduction of non-current gains and losses 1.93 0.03 0.03
(2) For the end of 30 June 2010
Earnings per share
Weighted average
Profits of the reporting period Basic earnings per Diluted earnings per
return on equity（%）
share 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
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
74
As of 31 December Amount of Proportion of
As of 30 June 2011 Note
Item 2010 movement movement
Accounts receivable 784,673,761.32 537,895,136.38 246,778,624.94 45.88% Note1
Inventory 461,649,695.56 328,533,395.99 133,116,299.57 40.52% Note2
Accounts payable 845,960,435.73 581,633,610.57 264,326,825.16 45.45% Note3
Note1：Sales receipts drop than the previous;
Note2：Scale up the operation;
Note3：Scale up the operation;
(2)Item of Income Statement
Proportion of
Amount of
As of 30 June 2011 As of 30 June 2010 movement Note
movement
Item (%)
Operating income 1,167,066,717.47 855,707,517.90 311,359,199.57 36.39% Note1
Operating costs 1,016,732,478.71 735,655,901.98 281,076,576.73 38.21% Note2
Sales expense 67,934,941.52 51,518,189.17 16,416,752.35 31.87% Note3
Administrative expense 12,030,031.87 7,581,396.54 4,448,635.33 58.68% Note4
Loss of asset impairment 1,999,655.74 189,000.00 1,810,655.74 958.02% Note5
Note1：Scale up the operation;
Note2：Scale up the operation;
Note3：Scale up the operation;
Note4：Loan increase in this period;
Note5：Aging long receivables increase in this period.
XIII. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for reporting dated
19 August 2011.
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