Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Nanjing Putian Telecommunications Co., Ltd.
SEMI-ANNUAL REPORT 2014
August 2014
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as the Company) hereby
confirm that there are no any fictitious statements, misleading statements, or important
omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the
reality, accuracy and completion of the whole contents.
Other directors attending the Meeting for semi-annual report deliberation except for the
followed:
Name of director absent Title for absent director Reasons for absent Attorney
Li Tong Director Work causes Huang Haodong
Li Ying Director Work causes Han Shu
Ding Haiyan Independent Director Work causes Zhang Shunyi
The Company has no plans of cash dividend distributed, no bonus shares and has no share
converted from capital reserve either.
Wang Hong, principal of the Company, Shi Lian, person in charger of accounting works and
Qiu Huizhen, person in charge of accounting organ (accounting principal) hereby confirm that
the Financial Report of Semi-Annual Report 2014 is authentic, accurate and complete.
Concerning the forward-looking statements with future planning involved in the Semi-Annual
Report, they do not constitute a substantial commitment for investors. Investors are advised to
exercise caution of investment risks.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Content
Section I. Important Notice, Contents and Paraphrase ................................................................................................................................................... 2
Section II Company profile .............................................................................................................................................................................................. 5
Section III. Accounting data and summary of financial indexes ...................................................................................................................................... 7
Section IV. Report of the Board of Directors ................................................................................................................................................................... 9
Section VII. Preferred Stock .......................................................................................................................................................................................... 34
Section VIII. Directors, Supervisors and Senior Executives .......................................................................................................................................... 35
Section IX. Financial Report ...................................................................................................................................................................................... - 36 -
Section X. Documents available for reference ............................................................................................................................................................ 120
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Paraphrases
Items Refers to Definition
CSRC Refers to China Securities Regulatory Commission
SZ Stock Exchange Refers to Shenzhen Stock Exchange
The Company, Company, Nanjing Putian Refers to Nanjing Putian Telecommunications Co., Ltd.
China Potevio Refers to China Potevio Company Limited (controlling shareholder of the Company)
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section II Company profile
I. Company Profile
Short form for share NJ TEL B Code for share 200468
Listing stock exchange Shenzhen Stock Exchange
Chinese name of the Company 南京普天通信股份有限公司
English name of the Company(if
Nanjing Putian Telecommunications Co., Ltd.
applicable)
Legal Representative Wang Hong
II. Contact person and ways
Secretary of the Board Rep. of securities affairs
Name Zhang Shenwei Xiao Hong
Contact adds. No. 1 Putian Road, Qinhuai District Nanjing No. 1 Putian Road, Qinhuai District Nanjing
Tel. 86-25-58962010 86-25-58962072
Fax. 86-25-52409954 86-25-52409954
E-mail zsw@postel.com.cn xiaohong@postel.com.cn
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more
details in Annual Report 2013.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for
semi-annual report have no change in reporting period, found more details in Annual Report 2013.
3. Registration changes of the Company
Whether registration has changed in reporting period or not
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
□ Applicable √ Not applicable
Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and organization code
have no change in reporting period, found more details in Annual Report 2013.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section III. Accounting data and summary of financial indexes
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or
not
□Yes √ No
Increase/decrease in this
Current period Same period of last year
report y-o-y
Operating revenue (RMB) 1,173,023,650.25 1,207,557,538.82 -2.86%
Net profit attributable to shareholders of the
-9,418,674.05 -2,719,217.34 -246.37%
listed company(RMB)
Net profit attributable to shareholders of the
listed company after deducting non-recurring -13,163,451.04 -3,466,018.77 -279.79%
gains and losses(RMB)
Net cash flow arising from operating
-56,514,782.79 -135,255,287.95 58.22%
activities(RMB)
Basic earnings per share (RMB/Share) -0.044 -0.013 -238.46%
Diluted earnings per share (RMB/Share) -0.044 -0.013 -238.46%
Weighted average ROE (%) -2.49% -0.72% -1.77%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end
Total assets (RMB) 2,196,746,550.83 2,107,194,638.89 4.25%
Net assets attributable to shareholder of listed
373,637,925.56 383,210,520.22 -2.50%
company(RMB)
II. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting
Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
There is no difference of the net profit and net assets disclosued in financial report, under both IAS and Chinese GAAP
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and
Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
There is no difference of the net profit and net assts disclosed in financial report, under both foreign accounting rules and Chinese GAAP
III. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the
-104,438.63
write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not including
the subsidy enjoyed in quota or ration according to national standards, 1,458,478.28
which are closely relevant to enterprise’s business)
Note: Current non-recurring
gains/losses in the Period mainly
because in obtaining subsidiary
Income from the exceeding part between investment cost of the
Nanjing Putian Datang Information
Company paid for obtaining subsidiaries, associates and joint-ventures
3,276,764.14 Electronic Co., Ltd, the investment
and recognizable net assets fair value attributable to the Company when
cost lower than the fair value of
acquiring the investment
recognizable net assets attributable
to the Company when acquiring, that
is 3,276,764.14 Yuan
Other non-operating income and expenditure except for the
-295,414.67
aforementioned items
Less: impact on income tax 239,544.35
Impact on minority shareholders’ equity (post-tax) 351,067.78
Total 3,744,776.99 --
□ Applicable √ Not applicable
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit
(gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss,
explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit
(gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section IV. Report of the Board of Directors
I. Introduction
The Company is a state-owned communication equipment manufacturing enterprise that mainly engages in the manufacture
and sale of communications equipment; at present, it has 8 operating entities directly under it, including the wiring systems,
the cable systems, the wireless systems, and it also has 12 subsidiaries, including Nanjing South Telecommunications
Company Limited and Nanjing Putian Tianji Building Intelligent Ltd, and its product range covers optical communications,
network communications, multimedia communications and other fields. During the reporting period, facing the complicated
market situation and the difficult business environment, the company has focused on improving the core competitiveness of
the industry by optimizing the product structure, improving the product competitiveness, strengthening the technological
innovation, and promoting the transformation and upgrading, so that its major industries achieved balanced development trend,
and the production and business remained stable. Affected by the disinvestment of 3G operators and the fierce market
competition, in the first half year, the company has achieved the operating incomes of 1.173 billion Yuan, reduced by 2.86% on
a year-on-year basis, total profits of 185,100 Yuan, reduced by 91.25% on a year-on-year basis, and net profits attributable to
the parent company -9,418,700 Yuan.
II. Main business analysis
Year-on-year changes of main financial data
In RMB
Current period Same period of last year Y-o-y increase/decrease Reasons for changes
Sales declined resulted
from operators cuts the
Operation revenue 1,173,023,650.25 1,207,557,538.82 -2.86%
investment for broadband
and 3G construction
Sales declined on a y-o-y
Operation cost 1,008,242,535.79 1,043,008,171.55 -3.33%
basis in the Period
Market development
Sales expenses 84,634,467.99 82,273,548.91 2.87% charges goes up in the
Period
Salary growth on a y-o-y
Administrative expenses 64,294,527.99 62,829,331.87 2.33%
basis
Interest expense increased
Financial cost 15,922,237.55 11,488,031.64 38.60% over same period of last
year
Profit from subsidiary goes
Income tax expense 5,248,812.79 3,597,267.56 45.91%
up, than income tax
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
expenses increased
Part of the project approving
R&D investment 44,163,487.38 54,308,690.00 -18.68% later than the schedule, less
input in the first half year
The returned money
Net cash flow arising from
-56,514,782.79 -135,255,287.95 58.22% increased in Period, and
operation activities
controlling payment strictly
In reporting period, the
residual payment of equity
of stock-jointly company
Yulong Company transfer
10.66 million Yuan received
by the Company, cash
Net cash flow arising from in-flow increased y-o-y;
7,108,233.21 -14,400,330.30 149.36%
investment activities meanwhile, at same period
of last year, increased
capital 5 million Yuan to
stock-jointly company while
no such expenditure in the
Period, the cash out-flow
declined y-o-y
Net cash flow arising from Bank borrowings increased
5,420,723.59 581,666.30 831.93%
financing activities in the Period
The cash flow arising from
operation activity,
Net increase of cash and investment activity and
-43,926,675.63 -148,945,276.60 70.51%
cash equivalent financing activity in the
Period increased over same
period of last year
Major changes on profit composition or profit resources in reporting period
√Applicable □Not applicable
Increase or decre Range of
Item Jan -Jun 2014 Jan -Jun 2013 Main reason of great changes
ase (RMB) change
Sales declined resulted from operators
Operation
1,173,023,650.25 1,207,557,538.82 -34,533,888.57 -2.86% cuts the investment for broadband and
revenue
3G construction
Profit from subordinate stock-jointly
company increased, mainly because
Investment
227,042.96 -1,883,203.49 2,110,246.45 112.06% joint venture SEI-Nanjing Putian Optical
income
Network Co., Ltd. has less deficit in the
Period
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Financial expenses, human costs
and market development charges
Operation profit -4,150,260.40 788,992.83 -4,939,253.23 -626.02%
increased, the period expense growth
over same period of last year
Consolidation range increased in the
period, in obtaining subsidiary Nanjing
Putian Datang Information Electronic
Non-operation Co., Ltd, the investment cost lower than
4,748,462.85 1,927,667.56 2,820,795.29 146.33%
revenue the fair value of recognizable net
assets attributable to the Company
when acquiring, that is 3,276,800 Yuan
earned
Profit from part of the subsidiary
Income tax
5,248,812.79 3,597,267.56 1,651,545.23 45.91% increased, than the income tax
expenses
expenses growth
Net profit
Revenue from sales declined in the
attributable to
-9,418,674.05 -2,719,217.34 -6,699,456.71 -246.37% Period y-o-y, period expenses
owners’ of
increased
parent company
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing
memorandum and recapitalize statement
□ Applicable √ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing
memorandum and recapitalize statement
Review on the previous business plan and its progress during reporting period
The Company has disclosed its main business targets of 2014 in “2013 Annual Report”: to achieve the operating income of 2
billion Yuan, to return the funds of 2.04 billion Yuan, and to make progress in management quality.
Up to the end of June 2014, the Company has achieved operating income of 1.173 billion Yuan, completing 58.65% of the
annual plan, and returned funds of 1.051 billion Yuan, completing 51.50% of the annual plan.
The measures taken in the industrial management by the company: (1) Insist on keeping a foothold in the markets with
advantages, and constantly enhance the core competitiveness. In the traditional carrier market, the company keeps up with
the needs of the operators’ network construction, steps up the overall arrangement, actively cooperates to establish the group
norms for the operators, participates in the establishment of enterprise standards and test specifications in China Mobile,
China Unicom, and China Telecom Intelligent ODN; focus on carrying out the central purchasing, at present, the outdoor
cabinet, network cabinet, integrated shelves, and DDF products of Telecom Group Central have been classified as A category.
In the video filed, the company continues to open up the existing advantaged industries, such as the tax administration,
finance, oil, and agriculture, etc., while explore the new industries, innovate the solutions, and broaden the important markets
at the same time. In the rail transport field, continue to implement the market strategy of "run through the railway industry",
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
seize the opportunity, actively participate in the distribution box business in major cities throughout the country and the urban
railway and metro projects under construction, and successfully become the main contractor of distribution box for No. 4 line of
Nanjing Metro. The occupancy of maintenance box products in the 82 metro lines is in the front rank in the country's
low-voltage electrical industry. (2) Continue to carry forward the key projects, explore and innovate, and search for new
customers. Strengthen the market synergies and resource sharing, enhance the ability to make the overall solution for the
customer demands, focus on the operation and management of major projects, and strengthen the development and
marketing efforts to the major markets.(3) Integrate the resources, collaborate with the channels, and improve the brand
influence. Intensively integrate the internal and external resources, and enhance the overall value of the industry chain. (4)
Carry out the technological innovation according to the customer demand. Oriented towards the market demand, fully use the
external resources, enhance the strategic cooperation with the universities, research institutes and technology leading
enterprises at home and abroad, enhance the abilities of independent innovation, integrated innovation, and re-innovation
after digestion and absorption, while focus on the R &D cost control and assessment, pay attention to the investment and
benefits of the research and development expenditures, and increase the R & D investment returns. Focus on the user
experience, a number of new products have been developed according to the differentiation of user needs. (5) Optimize the
production management mode, and strictly control the product quality. Timely adjust the production line arrangement based on
the market change in demand, extend the production supply chain, and improve the production automation level and
productivity. Strengthen the quality control, the materials management, production site 6S management in the production
process. Regulate and control the procurement plan by combining with the market demands, optimize the process flow, and
improve the processing efficiency.
In the functional management, the company will transform the position of the management department office from the
investment management to the value-creating type, improve the professional level, give play to the leading and supporting role
of the management department office, reflect the management value, and strive to achieve the goals of "profession, simplicity
and efficiency". (1) Stay firmly rooted in the present while looking ahead to the future, make overall plans and take all factors
into consideration. Aim to timely adjust and optimize the industrial structure, fit the service market, save the cost, and improve
the operational efficiency, systemize the organizational structure, and integrate the industrial chain. (2) Strengthen the basic
management, consolidate the foundation for development. Continue to comprehensively promote the budget management,
strengthen the budget tracking analysis, and improve the use efficiency and safety of the funds. Advance the information
construction, deepen the popularization and application of ERP system and the construction of CRM project and reporting
system, and enhance the company's information construction and application level. Push forward the construction of quality
system, environmental management system and occupation health & safety management system, and complete the internal
audit of the integrated management system. Standardize the procurement processes, increase the approval procedures,
effectively control the inventory, and ensure the controllability of procurement plans. Improve the materials management
system, and reduce the company's operating cost pressures. (3) Strengthen the risk prevention, and further establish a sound
internal control system. Control the production and management risks and the financial risks by focusing on cleaning up the
funds, the bid bond and the open credit, strengthening the asset quality management, self-checking and self-assessing the
construction and operation of the internal control system. (4) Pay attention to the quality of people, enhance the benefits per
capita. Effectively implement the human resources system, strengthen the human resource management system. Carry out
the performance-oriented pay system, and improve the assessment and incentive policies. Organize various internal training
for the professional skills, put forth the best efforts to enhance the quality of all people in the company, and promote the
common development between the enterprise and employees.
In the second half year, the company will conscientiously implement the management philosophy of "manage the people,
manage the platform, and manage the resources", and accelerate to transform the management mode from extensive to
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
intensive and elaborate; adhere to the market innovation, increase the integration and resource sharing between the internal
resources and industry chain, accelerate the adjustment of industrial structure, improve the service quality and offer the
customized solutions with high value added in the good products, transform from the product supplier to the overall solution
provider, combine the market development with the industrial transformation and upgrading, the marketing platform
construction with the market expanding, and strive to achieve the targets the company set at the beginning of the year.
III. Constitution of main business
In RMB
Increase or Increase or Increase or
decrease of decrease of decrease of gross
Operating revenue Operating cost Gross profit ratio operating revenue operating cost over profit ratio over
over same period of same period of last same period of last
last year year year
According to industries
Communication
1,098,650,345.23 944,390,783.41 14.04% -4.42% -5.60% 1.07%
equipment
Electric apparatus
56,409,689.74 42,751,998.39 24.21% 11.28% 12.91% -1.09%
equipment
According to products
Communication
1,098,650,345.23 944,390,783.41 14.04% -4.42% -5.60% 1.07%
products
Electric apparatus
56,409,689.74 42,751,998.39 24.21% 11.28% 12.91% -1.09%
products
According to region
Domestic 1,133,705,754.02 966,504,571.87 14.75% -4.68% -5.96% 1.16%
Overseas 21,354,280.95 20,638,209.93 3.35% 96.37% 95.47% 0.45%
IV. Core competitive-ness analysis
As a state-owned communication equipment manufacturing enterprise with a long history, after years of development, the
company has formed the diversified business structures, including the optical communications networking industry, network
communications integrated access industry, multimedia network communications integrated services industry, etc., and the
company has good R & D capabilities, good production capacity, and good marketing capabilities, its products cover all
provinces and municipalities throughout the country, and are exported to more than ten countries and regions in the world, and
have established a good brand strength and influence in the industry markets.
During the reporting period, the company has focused on improving the core competitiveness of the industry, striven to
optimize the product structure, actively developed the technological innovation, and promoted the transformation and
upgrading. In the first half year, the company has successfully developed a number of new products; made three patent
applications for the product technology, one of which has been authorized by the State Intellectual Property Office; organized
and declared 40 projects to participate in the “Additional Deduction” of Nanjing Municipal Committee, 38 of which have been
approved.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
V. Investment analysis
1. Equity investment
(1) Investment outside
√ Applicable □ Not applicable
Investment outside
Investment in the same period of last year’s
Investment in the reporting(RMB) Change
(RMB)
200.00 500.00 -60.00%
Invested company
Equity ratio in invested company for listed
Name Main business
company
Nanjing Putian Datang Information Electronic Development, manufacture and sales of
40.00%
Co., Ltd. electronics, engineering technical service etc.
(2) Holding the equity of financial enterprise
□ Applicable √ Not applicable
No equity of financial enterprise held by the Company in Period
(3) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment in the Period
2. Trust financing, investment of derivatives and entrustment loan
(1) Trust financing
□ Applicable √ Not applicable
The Company has no trust financing in Period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivative investment in Period.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(3) Trust loans
□ Applicable √ Not applicable
The Company has no trust loans in the Period
3. Application of raised proceeds
(1)Overall application of raised proceeds
□ Applicable √ Not applicable
(2) Situation of committed project of raised proceeds
□ Applicable √ Not applicable
(3)The changed project of raised proceeds
□ Applicable √ Not applicable
There is no changed project of raised proceeds in the Period
(4)The project of raised proceeds
Summarize of the project of raised proceeds Date of disclosure Index of disclosure
4. Main subsidiaries and joint-stock companies analysis
√Applicable □Not applicable
Main subsidiaries and joint-stock companies
In RMB
Main
Industry Registered Operation Operation
Name Type products or Total assets Net assets Net profit
involved capital revenue profit
service
Nanjing
Manufacture
South
and sales of
Telecommuni Communicati 34,205,147.8 421,843,577. 116,284,683. 313,862,472. 11,703,374
Subsidiary data 7,673,587.87
cations on industry 3 52 25 94 .61
communicati
Company
on equipment
Limited
Nanjing Manufacture
Communicati 12,000,000.0 240,656,021. 86,503,195.9 123,079,198. 4,750,590.
Putian Subsidiary and sales of 4,285,600.81
on industry 0 41 6 33 61
Tianji intelligent
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Building building
Intelligent system
Ltd.
Manufacture
and sales of
Nanjing
software of
Putian
Communicati telecommuni 10,000,000.0 35,856,356.0 24,316,149.4 23,554,850.5 -641,466.1
Network Subsidiary -113,748.02
on industry cations, 0 9 7 8 2
Company
network and
Ltd.
electronic
equipment
Out-door
patch,
sub-line
equipment,
Nanjing
network
Putian
box(cube)of
Changle
Communicati out-door and 10,000,000.0 127,557,700. 26,209,779.3 63,938,484.4 1,154,565.
Telecommuni Subsidiary 1,669,135.26
on industry machinery 0 91 6 4 12
cations
office,
Equipment
manufacture
Co., Ltd.
and sales of
communicati
on electrical
products
Nanjing Bada Manufacture
Telecommuni of
Communicati 11,301,400.0 -3,345,917.3 -3,283,877.
cations Subsidiary card-terminal 9,625,147.58 3,365,570.10 -3,283,877.94
on industry 0 3 94
Equipment communicati
Co., Ltd. on equipment
Export and
import of
Putian telecommuni
Telecommuni cation
Communicati -16,237,596. 19,850,691.5
cations Subsidiary equipment, HK$ 2 million 8,992,671.38 17,121.23 17,121.23
on industry 22 4
(H.K.) Co., Hi-tech R & D
Ltd. and transfer,
technology
trade
Nanjing Production,
Postel sales and
Communicati 90,190,000.0 32,071,515.1 39,866,752.8 35,274,690.0 1,658,221.
Wongzhi Subsidiary processing of 1,658,221.95
on industry 0 7 1 9 95
Telecommuni electrical
cations Co., products
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Ltd.
Nanjing Manufacture
Putian and sales of
Information Communicati electrical and 14,000,000.0 12,324,125.2
Subsidiary 5,304,741.13 5,916,978.31 220,523.05 212,164.13
Technology on industry telecommuni 0 4
Company cation
Ltd. products
Electronic
components
Nanjing
assembly,
Putian
electronic
Telecommuni
Communicati products, 16,731,460.5 -534,420.7
cation Subsidiary 5,000,000.00 8,642,786.20 927,960.28 -348,494.50
on industry telecommuni 1 1
Technology
cation
Company
equipment,
Ltd.
Hi-tech R & D
and sales
Manufacture
Nanjing and sales of
Electrical
Mennekes plug & socket US$ 5.20 145,237,981. 84,493,967.8 56,960,971.7 2,510,486.
Subsidiary apparatus 1,796,928.41
Electrics Co., of million 52 1 9 24
industry
Ltd. industrial-use
d
Development
, production,
sale,
engineering
Nanjing
technical
Putian
service of
Datang Communicati 10,000,000.0 39,114,944.0 22,461,935.5 1,295,349.
Subsidiary electronic 6,567,336.99 1,239,203.25
Information on industry 0 5 9 29
product;
Electronic
processing
Co., Ltd.
service of
surface
mounting and
welding
Development
SEI-Nanjing and
Putian manufacture
Joint-stock Communicati 37,088,800.0 68,204,417.8 25,503,501.9 12,863,084.5 -2,336,632.
Optical of ODN -1,978,976.75
company on industry 0 9 8 5 81
Network Co., products,
Ltd. optical
communicati
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
on
components
and RFTS
5. Major project invested by non-raised funds
In ten thousand Yuan
√ Applicable □ Not applicable
Amount invested
Total investment Amount invested in this
Project accumulative till end of Progress Earnings
planned period
reporting period
Phase I of Putian
Technology Innovation 5,683.5 522.8 2,212.19 38.92% -
Park
Total 5,683.5 522.8 2,212.19 -- --
Index date for extraordinary notice disclosed (if
2013-10-18
applicable)
Index website for extraordinary notice disclosed Notice: “Notice of Investment for the Phase I of Putian Technology Innovation Park”; Notice No.:
(if applicable) 2013-025; Website: Juchao website (www.cninfo.com.cn)
VI. Prediction of business performance from January – September 2013
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its
material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from the CPA of
this year’s
□ Applicable √ Not applicable
VIII. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
IX. Implementation of profit distribution in reporting period
Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital reserve in
particular
□ Applicable √ Not applicable
Profit distribution plan for first half year was: no plans of cash dividend distributed, no bonus shares and has no share converted from capital
reserve either
18
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
X. Profit distribution plan and transfer of public reserve to common shares in the period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the
semi-annual of the year.
XI. In the report period, reception of research, communication and interview
□ Applicable √ Not applicable
The Company has no reception of research, communication and interview activity occurred in the Period
19
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section V. Important Events
I. Corporate governance
By strictly followed requirement of relevant laws and regulations as well as relevant normative documents of “Company Law”, “Securities Laws” etc.
and China Securities Regulatory Commission on corporate governance requirements, the Company constantly perfected its corporate governance.
Actual corporate governance of the Company shows no difference with the Company Law and relevant regulations of CSRC until the period-end.
II. Significant lawsuits and arbitrations of the Company
□Applicable √Not applicable
The Company has no significant lawsuits and arbitrations in reporting period
III. Question from media
□ Applicable √ Not applicable
No universal questioned by media in reporting period
IV. Bankruptcy reorganization
□ Applicable √ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred..
V. Transaction in assets
1. Acquisition of assets
□ Applicable √ Not applicable
The Company has no assets purchased in the Period
2. Assets sold
□ Applicable √ Not applicable
The Company has no assets for sale in the Period
3. Enterprise mergers
□ Applicable √ Not applicable
In the reporting period, the Company has no enterprise merger.
VI. Implementation of the Company’s equity incentive and its influence
□ Applicable √ Not applicable
The Company has no equity incentive plan and its implementation either in the Period
20
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
VII. Significant related transaction
1. Related transaction connected to routine operations
√ Applicable □ Not applicable
Related Proportion Available
Related
transaction in the Related market
Related Related Related Related transaction Related
amount (in amount of transaction prices of Date of Index of
transaction relationshi transaction transaction explanatio transaction
10 the same settlement similar disclosure disclosure
parties p type content n on price price
thousand transaction mode transaction
setting
Yuan)) (%) s
“Expected
Related
Transactio
n with
ChengduP
Routine
utian Controlling
Operation
Telecomm shareholde Purchase Telecom Market Bank 2014-03-1
2,654.68 2.69% Concerned
unications r’s products product price transfer 1
for year of
Cable Co., subsidiary
2014”
Ltd.
published
on Juchao
Website-
No.:
2014-007
Director
and senior
executives “Expected
of the Related
Company Transactio
hold n with
SEI-Nanjin additional Routine
g Putian post as Operation
Purchase Telecom Market Bank 2014-03-1
Optical Director in 1,096.53 1.11% Concerned
products product price transfer 1
Network the for year of
Co., Ltd. enterprise 2014”
(an published
enterprise on Juchao
with Website-
shares No.:
held by the 2014-007
Company)
21
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
“Expected
Related
Transactio
n with
Routine
China
Controlling Procureme Operation
Potevio Bank 2014-03-1
Sharehold nt of 2,132.88 1.82% Concerned
Company transfer 1
ers products for year of
Limited Telecom Market
2014”
product price
published
on Juchao
Website-
No.:
2014-007
Stock-jointl
“Expected
y
Related
enterprise
Transactio
of the
Telecom Market n with
Company ,
SEI-Nanjin product price Routine
Directors
g Putian Operation
and Senior Sales Bank 2014-03-1
Optical 0.55 0.00% Concerned
executive goods transfer 1
Network for year of
of the
Co., Ltd. 2014”
Company
published
serves as
on Juchao
Director of
Website-
the
No.:
company
2014-007
“Expected
Related
Subsidiary
Transactio
of
n with
controlling
Routine
Potevio shareholde Renting
Operation
Hi-tech r(an and Market Bank 2014-03-1
Renting 450.55 85.59% Concerned
Industry enterprise property price transfer 1
for year of
Co.,Ltd. with charge
2014”
shares
published
held by the
on Juchao
Company)
Website-
No.:
22
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
2014-007
Total -- -- 6,335.19 -- -- -- -- --
Return of major sales Not applicable
At the beginning of the year, the Company made the prediction on routine related transactions
for year of 2014. The total amount for related transaction with routine operation concerned was
RMB 313 million at most, including selling products to related parties amount as RMB 157 million
Report the actual implementation of the normal
at most, purchasing products from related parties amount as RMB 142 million at most, rental and
related transactions which were projected about
property charges paid to related parties was RMB 14 million at most.
their total amount by types during the reporting
Actual total amount of routine related transactions amounted as RMB 63.3519 million up to June
period(if applicable)
of 2014; including purchasing products from related parties RMB37.5121 million, selling products
to relate party RMB 21.3343 million and the rental and property charge RMB 4.5055 million
within the expected amount.
Reason for the great difference between trade
Not applicable
price and market reference price (if applicable)
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
The Company has no related transactions occurred by assets acquisition and sold in the Period
3. Major related transactions of mutual outward investment
□ Applicable √ Not applicable
The Company has no related transaction of mutual outward investment occurred in the Period
4. Contact of related credit and debt
√ Applicable □ Not applicable
Whether exist non-operating contact of related credit and debt or not
□Yes √No
The Company has no non-operating contact of related credit and debt occurred in Period
5. Other significant related transactions
√ Applicable □ Not applicable
As of reporting period, 49.64 percnet equity of Ptevio Hi-Tech Industry Co., Ltd. held by the Company was pledged to China Potevio Company
Limited, controlling shareholder of the Company, as a counter-guarantee for RMB 84 million loans for the Company.
Up to the reporting period, the Company offer a loan gurantee of 10.02 million Yuan based on the ratio of investments for SEI-Nanjing Putian
Optical Network, a subordinate joint venture of the Company.
Found more in 2. Guarantee under the IX. of Section V in the Report
23
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Website for temporary disclosure of the significant related transaction
Announcement Date of disclosure Website for disclosure
”Notice of Counter-guarantee Offer to Controlling
2010-08-25 Juchao Website(www.cninfo.com.cn)
Shareholder of the Company”
”Notice of Guarantee Offer to Enterprise whose
2013-07-16 Juchao Website(www.cninfo.com.cn)
Shares are Hold by the Company”
VIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period.
IX. Significant Contracts and its performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
The Company has no trusteeship in the Period
(2) Contract
□ Applicable √ Not applicable
The Company has no contracting in the Period
(3) Leasing
√ Applicable □ Not applicable
Explanation on leasing
In reporting period, the Company rented lands and property from Potevio Hi-tech Industry Co., Ltd for purpose of production and office, rental for
first half of 2014 amounting to 3.6536 million Yuan, property charge as 852,000 Yuan.
Items generated over 10% gains/losses in total profit in reporting period for the Company
√ Applicable □ Not applicable
Amount
Leasing Determine Consist of
Condition of involved in Influence on
Contract-out Leasing Leasing end profit (10 basis for related Related
Lessee assets leasing(10 the
party date from at thousand leasing transaction relationship
leasing thousand company
Yuan) profit or not
Yuan)
Potevio Nanjing Well-capitali Rents Subsidiary
3,624.1 2014-01-01 2014-12-31 365.36 Market price Y
Hi-tech Putian zed amounting of
24
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Industry Telecommu as 3.6536 controlling
Co.,Ltd. nications million Yuan shareholder
Co., ltd. and (shares of
property the
expenses enterprise
was 852000 held by
Yuan for the Company)
first half
year
2. Guarantee Providing
√ Applicable □ Not applicable
In ten thousand Yuan
Guarantee offered by the Company(excluding the guarantee offered to the subsidiaries)
Happening Date
Relevant Guaranty
(the date when
notice Guaranty Actual guarantee Type of Term of Completed offered to
Name of the debtor the guaranty
disclosure limit amount guaranty guaranty or not a related
agreement was
date party (Y/N)
signed)
Ended as
corresponding
loans paid
which was
secured by
China Potevio
since
China Potevio
2010-08-25 8,400 2010-09-19 8,400 Pledge September N Y
Company Limited
2012 (note:
this guarantee
is a counter
guarantee that
the Company
offers to China
Potevio)
SEI-Nanjing Putian
Joint liability 2013.9.2-2014
Optical Network Co., 2013-07-16 1,500 2013-08-13 500 N Y
assurance .8.14
Ltd.
SEI-Nanjing Putian
Joint liability 2013.10.23-20
Optical Network Co., 2013-07-16 1,500 2013-08-13 400 N Y
assurance 14.7.21
Ltd.
SEI-Nanjing Putian 2013-07-16 1,500 2013-08-13 19 Joint liability 2014.1.15-201 Y Y
25
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Optical Network Co., assurance 4.6.13
Ltd.
SEI-Nanjing Putian
Joint liability 2014.1.22-201
Optical Network Co., 2013-07-16 1,500 2013-08-13 102 N Y
assurance 4.7.22
Ltd.
Total amount of external guarantee Total actual amount of external
limit approved during the report 0 guarantee during the report 121
period(A1) period(A2)
Total amount of external guarantee Total actual amount of external
9,900 9,402
limit approved at period-end(A3) guarantee at period-end(A4)
Guaranty offered to the subsidiaries
Happening Date
Relevant Guaranty
(the date when
notice Guaranty Actual guarantee Type of Term of Completed offered to
Name of the debtor the guaranty
disclosure limit amount guaranty guaranty or not a related
agreement was
date party (Y/N)
signed)
Nanjing Putian Tianji Joint liability 2013.9.23-201
2013-03-26 2,000 2013-09-18 1,000 N N
Building Intelligent Ltd. assurance 4.9.22
Nanjing Putian Tianji Joint liability 2013.10.10-20
2013-03-26 2,000 2013-10-09 1,000 N N
Building Intelligent Ltd. assurance 14.10.9
Nanjing South
Joint liability 2013.11.25-20
Telecommunications 2013-03-26 6,000 2013-11-24 2,000 N N
assurance 14.11.24
Company Limited
Nanjing South
Joint liability 2013.8.30-201
Telecommunications 2013-03-26 6,000 2013-08-30 1,000 N N
assurance 4.8.29
Company Limited
Nanjing South
Joint liability 2013.9.28-201
Telecommunications 2013-03-26 6,000 2013-09-28 1,000 N N
assurance 4.9.27
Company Limited
Nanjing South
Joint liability 2014.1.13-201
Telecommunications 2013-03-26 6,000 2014-01-13 2,000 N N
assurance 4.12.31
Company Limited
Total amount of guarantee limit Total actual amount of guarantee
approved for subsidiaries in the report 8,000 limit for subsidiaries in the report 2,000
period(B1) period(B2)
Total amount of guarantee limit Total actual amount of guarantee
approved for subsidiaries at 8,000 limit for subsidiaries at 8,000
period-end(B3) period-end(B4)
Total guarantee of the Company (Including the above mentioned guarantees)
Total amount of guarantee limit 8,000 Total amount of guarantee in the 2,121
26
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
approved in the report period(A1+B1) report period(A2+B2)
Total amount of guarantee limit Total actual amount of guarantee
17,900 17,402
approved at period-end(A3+B3) at period-end(A4+B4)
The proportion of the total actual amount of guarantee in the net
46.57%
assets of the Company (A4+B4)
Including:
Amount of guarantee for shareholders, actual controller and its related
8,400
parties(C)
The debts guarantee amount provided for the guaranteed parties
6,000
whose assets-liability ratio exceed 70% directly or indirectly(D)
Proportion of total amount of guarantee in net assets of the Company
0
exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 14,400
Explanations on possibly bearing joint and several liquidating
Not applicable
responsibilities for undue guarantees (if applicable)
Explanation on guarantee provided outside against regulations (if
Not applicable
applicable)
Explanation on guarantee with way of complex
Nil
(1) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period
3. Other significant contract
□ Applicable √ Not applicable
The Company has no other significant contract in Period.
4. Other significant transactions
□ Applicable √ Not applicable
The Company has no other significant transaction in Period.
X. Commitments from the Company or shareholders (with over 5% shares held) in or continued to
reporting period
□ Applicable √ Not applicable
The Company has no commitments from the Company or shareholders (with over 5% shares held) in or continued to reporting period
27
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
XI. Engagement and non-reappointment of CPA
Whether the semi-annual report was audited or not
□Yes √No
XII. Penalty and rectification
□ Applicable √ Not applicable
The Company has no penalty or rectification in Period.
XIII. Risk disclosure of delisting with laws and rules violated
□ Applicable √ Not applicable
The Company has no delisting risks with laws and rules violated in Period.
XIV. Explanation on other significant events
√ Applicable □ Not applicable
Index of major events disclosed in the Year before the Report released:
Query index for appointed website of
Notice No. Date published Content
information disclosure
2014-001 2014.1.29 Notice of Progress of Equity of Joint-Stock Juchao Website (www.cninfo.com.cn)
Enterprise Transfer
2014-002 2014.3.11 Resolution notice of 17th meeting of 6th session of Juchao Website (www.cninfo.com.cn)
the Board
2014-003 2014.3.11 Resolution notice of 8th meeting of 6th session of Juchao Website (www.cninfo.com.cn)
supervisory committee
2014-004 2014.3.11 Notice of Annual General Meeting 2013 Juchao Website (www.cninfo.com.cn)
2014-005 2014.3.11 Summary of annual report of 2013 Juchao Website (www.cninfo.com.cn)
2014-006 2014.3.11 Notice of provision for the devaluation of assets for Juchao Website (www.cninfo.com.cn)
year of 2013
2014-007 2014.3.11 Estimation of Routine Related Transaction for year Juchao Website (www.cninfo.com.cn)
of 2014
2014-008 2014.3.11 Guarantee offer to controlling subsidiary Juchao Website (www.cninfo.com.cn)
2014-009 2014.4.12 Performance Forcast for 1Q of 2014 Juchao Website (www.cninfo.com.cn)
2014-010 2014.4.19 Resolution notice of annual general meeting of Juchao Website (www.cninfo.com.cn)
2013
2014-011 2014.4.29 Text of 1Q of 2014 Juchao Website (www.cninfo.com.cn)
2014-012 2014.6.12 Resolution notice of 19th meeting of 6th session of Juchao Website (www.cninfo.com.cn)
the Board
2014-013 2014.6.12 Convening 1st extraordinary general meeting of Juchao Website (www.cninfo.com.cn)
2014
28
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
2014-014 2014.6.30 Implementation of Commitment from the Company Juchao Website (www.cninfo.com.cn)
and Related Main Body
2014-015 2014.7.3 Resolution notice of 1st extraordinary general Juchao Website (www.cninfo.com.cn)
meeting of 2014
2014-016 2014.7.15 Performance Forcast for Fist Half Year of 2014 Juchao Website (www.cninfo.com.cn)
29
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitalizati
New shares Bonus
Amount Ratio on of public Others Subtotal Amount Ratio
issued shares
reserve
115,000,00
I. Unlisted shares 115,000,000 53.49% 53.49%
0
115,000,00
1. Sponsor’s shares 115,000,000 53.49% 53.49%
0
Including: state-owned 115,000,00
115,000,000 53.49% 53.49%
shares 0
100,000,00
II. Listed shares 100,000,000 46.51% 46.51%
0
2. Domestically listed foreign 100,000,00
100,000,000 46.51% 46.51%
shares 0
215,000,00
III. Total shares 215,000,000 100.00% 100.00%
0
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer for shares changed
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of
Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
□ Applicable √ Not applicable
II. Number of shares and shares held
In Share
Total preference shareholders with
Total common shareholders at end
13,036 voting rights recovered at end of 0
of reporting period
reporting period (if applicable) (see
30
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Note 8)
Particulars about shares held above 5% by shareholders or top 10 shares holding
Amount Amount Number of share pledged/frozen
Chang
Number of of of
es in
Nature of Proportion of shares held holding holding
Shareholders reporti
shareholder shares held at unlisted listed State of share Amount
ng
period-end circulatio circulatio
period
n shares n shares
China Potevio State-owned 115,000,00 115,000,
53.49% 0 0
Company Limited corporate 0 000
GUOTAI JUNAN
-2,145, 5,531,99
SECURITIES(HON Overseas corporate 2.57% 5,531,994 0
600 4
GKONG) LIMITED
Shanghai H.K. -160,0 4,693,00
Overseas corporate 2.18% 4,693,000 0
Wanguo Security 00 0
Overseas natural 1,780,61
Sun Huiming 0.83% 1,780,610 62,000 0
person 0
Overseas natural Unkno 1,289,60
Chen Qiang 0.60% 1,289,600 0
person wn 0
Domestic nature Unkno 1,000,00
Gao Lingyun 0.47% 1,000,000 0
person wn 0
Domestic nature
Wang Feifei 0.27% 584,408 0 0 584,408
person
Domestic nature
Hu Jun 0.24% 519,150 6,100 0 519,150
person
Domestic nature
Shu Jianping 0.23% 500,500 0 0 500,500
person
Domestic nature
Duan Ruifeng 0.17% 374,100 0 0 374,100
person
Strategy investors or general corporate
becomes top 10 shareholders due to N/A
rights issued (if applicable)(Note 3)
Among the top ten shareholders, China Potevio Company Limited is neither a related party nor a
Explanation on associated relationship
person acting in concert with the others. It’s unknown by the Company whether there are related
among the aforesaid shareholders
parties or persons acting in concert among the other shareholders.
Particulars about the shares held by the top ten unrestricted shareholders
Type of shares
Shareholders Amount of circulated shares held at period-end
Type Amount
GUOTAI JUNAN 5,531,994 Domestically listed 5,531,994
31
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
SECURITIES(HONGKONG) LIMITED foreign shares
Domestically listed
Shanghai H.K. Wanguo Security 4,693,000 4,693,000
foreign shares
Domestically listed
Sun Huiming 1,780,610 1,780,610
foreign shares
Domestically listed
Chen Qiang 1,289,600 1,289,600
foreign shares
Domestically listed
Gao Lingyun 1,000,000 1,000,000
foreign shares
Domestically listed
Wang Feifei 584,408 584,408
foreign shares
Domestically listed
Hu Jun 519,150 519,150
foreign shares
Domestically listed
Shu Jianping 500,500 500,500
foreign shares
Domestically listed
Duan Ruifeng 374,100 374,100
foreign shares
Domestically listed
Long Jianqiu 339,900 339,900
foreign shares
Expiation on associated relationship or
consistent actors within the top 10 It is unknown whether the shareholders just mentioned belong to consistent actors or have associated
un-restrict shareholders and between top relationship.
10 un-restrict shareholders and top 10
shareholders
Explanation on shareholders involving
N/A
margin business (if applicable)(note 4)
Whether has a buy-back agreement dealing in reporting period
□Yes √No
The Company has no buy-back agreement deals occurred in the Period
III. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Controlling shareholder of the Company has no changed in the Period
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Actual controller of the Company has no changed in the Period
IV. Share holding increasing plan proposed or implemented in reporting period from shareholder of the
32
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Company and its concerted action person
□ Applicable √ Not applicable
No share holding increasing plan proposed or implemented in reporting period from shareholder of the Company and its concerted action person as
the Company knows.
33
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section VII. Preferred Stock
I. Issuance and listing of preferred stock in Period
□ Applicable √ Not applicable
II. Number of shareholders with preferred stock held and shareholdings
□ Applicable √ Not applicable
III. Repurchase and conversion of preferred stock
1. Preferred stock repurchased
□ Applicable √ Not applicable
2. Preferred stock converted
□ Applicable √ Not applicable
IV. Preferred stock with voting rights recovered and executed
□ Applicable √ Not applicable
V. Accounting policy taken for preferred stock and reasons
□ Applicable √ Not applicable
34
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2013.
II. Change of directors, supervisors and senior executive
□ Applicable √ Not applicable
Directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2013.
35
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section IX. Financial Report
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited
II. Financial statements
Units in Notes of Financial Statements is RMB
1、The Consolidated Statement Of Financial Position
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. 30 June 2014 Unit: RMB Yuan
Items 30 June 2014 31 December 2013
Current assets
Monetary funds 373,421,559.18 430,024,326.63
Settlement provisions
Capital lent
Held for trading financial assets
Notes receivable 15,775,288.49 21,919,480.05
Accounts receivable 916,224,218.74 789,984,001.55
Prepayments 36,217,980.91 33,144,854.82
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable
Dividend receivable 1,000,000.00 1,000,000.00
Other receivables 41,785,203.50 58,091,611.43
Purchase restituted finance
asset
Inventories 458,327,909.99 431,011,396.33
Long-term debt investment due
within a year
Other current assets
Total current assets 1,842,752,160.81 1,765,175,670.81
Non-current assets
Granted loans and advances
Available-for-sale financial
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 185,263,840.00 190,546,965.84
Investment property 10,898,773.38 4,401,316.11
Fixed assets 112,029,232.36 106,610,502.71
- 36 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Construction in progress 17,508,197.87 16,157,767.87
Construction materials
Fixed assets held for disposal
Productive biological assets
Petrol assets
Intangible assets 28,294,346.41 24,302,415.55
Development costs
Goodwill
Long-term prepayments
Deferred tax assets
Other non-current assets
Total non-current assets 353,994,390.02 342,018,968.08
Total assets 2,196,746,550.83 2,107,194,638.89
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting Department: Huizhen Qiu
1、The Consolidated Statement Of Financial Position (continued)
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. 30 June 2014 Unit: RMB Yuan
Items 30 June 2014 31 December 2013
Current liabilities
Short-term loans 485,000,000.00 462,000,000.00
Loan from central bank
Absorbing deposit and interbank
deposit
Capital borrowed
Tradable financial liabilities
Notes payable 101,330,272.30 70,809,648.50
Accounts payable 992,343,742.16 955,777,528.37
Advances from customers 69,424,907.77 77,659,452.52
Selling financial asset of repurchase
Commission charge and
commission payable
Accrued payroll 16,540,975.47 16,664,127.11
Taxes payable -5,119,536.50 1,544,609.90
Interest payable
Dividend payable 1,946,045.39 1,946,045.39
Other payables 59,219,908.35 52,249,025.93
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Long-term liabilities due within a
year
Other current liabilities
Total current liabilities 1,720,686,314.94 1,638,650,437.72
Non-current liabilities
Long-term borrowings
Bonds payable
- 37 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Long-term payables 80,118.00 80,118.00
Special payables
Estimated liabilities
Deferred tax liabilities
Other long-term liabilities
Total non-current liabilities 80,118.00 80,118.00
Total liabilities 1,720,766,432.94 1,638,730,555.72
Owner’s equity
Share capital 215,000,000.00 215,000,000.00
Capital reserve 185,374,533.85 185,374,533.85
Less: Treasury stock
Reasonable reserve
Surplus reserve 589,559.77 589,559.77
Provision of general risk
Undistributed profit -23,907,814.55 -14,489,140.50
Balance difference of foreign
-3,418,353.51 -3,264,432.90
currency translation
Total shareholder’s equity
373,637,925.56 383,210,520.22
attributable to parent Company
Minority interests 102,342,192.33 85,253,562.95
Total shareholder’s equity 475,980,117.89 468,464,083.17
Total liabilities and shareholder’s
2,196,746,550.83 2,107,194,638.89
equity
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting Department: Huizhen Qiu
2、The Statement Of Financial Position For Parent Company
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. 30 June 2014 Unit: RMB Yuan
Items 30 June 2014 31 December 2013
Current assets
Monetary funds 202,121,906.06 243,256,318.34
Tradable financial assets
Notes receivable 2,095,343.97 4,080,113.29
Accounts receivable 583,724,164.81 484,405,832.01
Prepayments 16,463,672.23 19,253,965.98
Interest receivable
Dividend receivable 1,000,000.00 1,000,000.00
Other receivables 29,564,930.78 72,664,367.17
Inventories 203,460,491.61 215,007,723.17
Long-term debt investment due within
a year
Other current assets
Total current assets 1,038,430,509.46 1,039,668,319.96
Non-current assets
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 356,161,227.46 356,301,955.13
Investment property
- 38 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Fixed assets 27,224,920.95 28,670,106.90
Construction in progress 17,508,197.87 16,157,767.87
Construction materials
Fixed assets held for disposal
Productive biological assets
Petrol assets
Intangible assets 9,019,040.17 9,548,633.35
Development costs
Goodwill
Long-term prepayments
Deferred tax assets
Other non-current assets
Total non-current assets 409,913,386.45 410,678,463.25
Total assets 1,448,343,895.91 1,450,346,783.21
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting Department: Huizhen Qiu
2、The Statement Of Financial Position For Parent Company (continued)
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. 30 June 2014 Unit: RMB Yuan
Items 30 June 2014 31 December 2013
Current liabilities
Short-term loans 356,000,000.00 356,000,000.00
Tradable financial liabilities
Notes payable 95,529,854.40 65,529,854.40
Accounts payable 560,787,025.02 570,182,414.45
Advances from customers 23,220,525.51 20,352,488.47
Accrued payroll 6,153,572.57 6,287,114.97
Taxes payable 519,711.12 -3,416,878.08
Interest payable
Dividend payable
Other payables 149,984,747.74 156,451,289.08
Long-term liabilities due within a year
Other current liabilities
Total current liabilities 1,192,195,436.36 1,171,386,283.29
Non-current liabilities
Long-term borrowings
Bonds payable
Long-term payables 80,118.00 80,118.00
Special payables
Estimated liabilities
Deferred tax liabilities
Other long-term liabilities
Total non-current liabilities 80,118.00 80,118.00
Total liabilities 1,192,275,554.36 1,171,466,401.29
Owner’s equity
Share capital 215,000,000.00 215,000,000.00
Capital reserve 172,417,299.81 172,417,299.81
Less: Treasury stock
Special reserves
- 39 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Surplus reserve 589,559.76 589,559.76
Provision of general risk
Undistributed profit -131,938,518.02 -109,126,477.65
Currency translation differences
Total shareholder’s equity 256,068,341.55 278,880,381.92
Total liabilities and shareholder’s equity 1,448,343,895.91 1,450,346,783.21
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting Department: Huizhen Qiu
3、Consolidated Income Statement for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Items Jan. to Jun. 2014 Jan. to Jun. 2013
I. Total operating income 1,173,023,650.25 1,207,557,538.82
Including: Operating income 1,173,023,650.25 1,207,557,538.82
Interest income
Insurance gained
Commission charge and commission
income
II. Total operating cost 1,177,400,953.61 1,204,885,342.50
Including: Operating cost 1,008,242,535.79 1,043,008,171.55
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 expense
Sales tax and surcharge 3,109,272.27 4,694,575.67
Sales expenses 84,634,467.99 82,273,548.91
Administration expenses 64,294,527.99 62,829,331.87
Financial expenses 15,922,237.55 11,488,031.64
Losses of devaluation of asset 1,197,912.02 591,682.86
Add: Changing income of fair value(Loss is listed
with“-”)
Investment income (Loss is listed with “-”) 227,042.96 -1,883,203.49
Including: Investment income on affiliated
227,042.96 -1,862,331.47
Company and joint venture and joint venture
Exchange income (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) -4,150,260.40 788,992.83
Add: Non-operating income 4,748,462.85 1,927,667.56
Less: Non-operating expense 413,073.73 600,115.85
Including: Disposal loss of non-current asset 105,658.79
IV. Total Profit (Loss is listed with “-”) 185,128.72 2,116,544.54
Less: Income tax 5,248,812.79 3,597,267.56
V. Net profit (Net loss is listed with “-”) -5,063,684.07 -1,480,723.02
Include: the net profit of the consolidated party
before consolidation
- 40 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Net profit attributable to owner’s equity of parent
-9,418,674.05 -2,719,217.34
Company
Minority shareholders’ gains and losses 4,354,989.98 1,238,494.32
VI. Earnings per share -- --
i. Basic earnings per share -0.044 -0.013
ii. Diluted earnings per share -0.044 -0.013
VII. Other comprehensive income -153,920.61 293,104.46
VIII. Total comprehensive income -5,217,604.68 -1,187,618.56
Total comprehensive income attributable to
-9,572,594.66 -2,426,112.88
owners of the parent company the parent company
Total comprehensive income attributable to
4,354,989.98 1,238,494.32
minority interests
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
4、Income Statement of Parent Company for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Items Jan. to Jun. 2014 Jan. to Jun. 2013
I. Sales Income 614,677,489.24 725,615,062.25
Less: Business costs 552,638,621.78 655,279,644.09
Sales tax and surcharges 1,157,827.97 2,658,463.54
Sales expenses 41,612,512.74 43,577,265.99
Administration expenses 28,264,465.63 25,456,357.31
Financial expenses 13,816,618.39 9,674,355.31
Losses of devaluation of asset 11,032.50 34,764.05
Add: Changing income of fair value(Loss is
listed with “-”)
Investment income (Loss is listed with
157,112.33 -1,862,331.47
“-”)
Including: Investment income on affiliated
157,112.33 -1,862,331.47
Company and joint venture
II. Operating profit (Loss is listed with “-”) -22,666,477.44 -12,928,119.51
Add: Non-operating income 15,276.00 78,240.00
Less: Non-operating expense 160,838.93 259,677.17
Including: Disposal loss of non-current
asset
III. Total Profit (Loss is listed with “-”) -22,812,040.37 -13,109,556.68
Less: Income tax
IV. Net profit (Net loss is listed with “-”) -22,812,040.37 -13,109,556.68
V. Earnings per share -- --
i. Basic earnings per share -0.106 -0.061
ii. Diluted earnings per share -0.106 -0.061
VI. Other comprehensive income
VII. Total comprehensive income -22,812,040.37 -13,109,556.68
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
5、Consolidated Cash Flow Statement for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
- 41 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Items Jan. to Jun. 2014 Jan. to Jun. 2013
I. Cash flows arising from operating activities:
Cash received from the sale of goods or rendering of
1,229,120,473.25 1,218,515,488.00
services
Net increase of customer deposit and interbank
deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Insured savings and net increase of investment
Net increase of disposal of transaction financial asset
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Refunds of taxes 1,555,477.70 858,508.30
Other cash receipts relating to operating activities 56,541,699.10 14,337,476.96
Sub-total of cash inflows arising from operating activities 1,287,217,650.05 1,233,711,473.26
Cash paid for goods and services 1,091,173,084.56 1,122,929,225.96
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
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 102,021,641.36 90,660,354.19
Payments of all types of taxes 46,730,180.60 60,343,173.64
Other cash payments relating to operating activities 103,807,526.32 95,034,007.42
Subtotal of cash outflow arising from operating activities 1,343,732,432.84 1,368,966,761.21
Net cash flows arising from operating activities -56,514,782.79 -135,255,287.95
II. Cash flows arising from investing activities
Cash received from recovering investment 10,657,600.00
Cash received from investment income 297,840.00
Net cash received from the sale of fixed assets,
intangible assets and other long-term assets long-term 1,220.16 36,352.80
assets
Net cash received from disposal of subsidiaries and
other units
Other cash received concerning investing activities 3,277,688.08
Subtotal of cash inflow from investing activities 14,234,348.24 36,352.80
Cash paid for purchasing fixed, intangible and other
7,126,115.03 9,436,683.10
long-term assets
Cash paid for investment 5,000,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities
- 42 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Subtotal of cash outflow from investing activities 7,126,115.03 14,436,683.10
Net cash flows arising from investing activities 7,108,233.21 -14,400,330.30
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders’ investment by subsidiaries
Cash received from loans 194,000,000.00 176,000,000.00
Cash received from issuing bonds
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 194,000,000.00 176,000,000.00
Cash paid for settling debts 171,000,000.00 161,800,000.00
Cash paid for dividend and profit distributing or
17,579,276.41 13,618,333.70
interest paying
Including: Dividend and profit of minority shareholder
paid by subsidiaries
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 188,579,276.41 175,418,333.70
Net cash flows arising from financing activities 5,420,723.59 581,666.30
IV. Influence on cash due to fluctuation in exchange rate 59,150.36 128,675.35
V. Net increase of cash and cash equivalents -43,926,675.63 -148,945,276.60
Add: Balance of cash and cash equivalents at the period
402,037,725.25 429,693,529.41
-begin
VI. Balance of cash and cash equivalents at the period
358,111,049.62 280,748,252.81
-end
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
6、Cash Flow Statement of Parent Company for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Items Jan. to Jun. 2014 Jan. to Jun. 2013
I. Cash flows arising from operating activities:
Cash received from the sale of goods or rendering of
609,353,898.33 715,324,074.82
services
Refunds of taxes 110,575.42
Other cash receipts relating to operating activities 31,438,573.22 37,379,114.46
Sub-total of cash inflows arising from operating activities 640,903,046.97 752,703,189.28
Cash paid for goods and services 556,164,809.62 717,541,302.03
Cash paid to and on behalf of employees 46,706,605.47 47,384,233.37
Payments of all types of taxes 9,946,758.24 27,750,342.93
Other cash payments relating to operating activities 43,091,916.57 51,173,375.01
Subtotal of cash outflow arising from operating activities 655,910,089.90 843,849,253.34
Net cash flows arising from operating activities -15,007,042.93 -91,146,064.06
II. Cash flows arising from investing activities
Cash received from recovering investment 10,657,600.00
Cash received from investment income 297,840.00
Net cash received from the sale of fixed assets,
intangible assets and other long-term assets
long-term assets
Net cash received from disposal of subsidiaries and
- 43 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 10,955,440.00
Cash paid for purchasing fixed, intangible and other
2,302,703.48 5,377,085.19
long-term assets
Cash paid for investment 5,000,000.00
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 2,302,703.48 10,377,085.19
Net cash flows arising from investing activities 8,652,736.52 -10,377,085.19
III. Cash flows arising from financing activities
Cash received from absorbing investment
Cash received from loans 136,000,000.00 136,000,000.00
Cash received from bonds issued
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 136,000,000.00 136,000,000.00
Cash paid for settling debts 136,000,000.00 131,800,000.00
Cash paid for dividend and profit distributing or
14,492,578.87 11,240,332.77
interest paying
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 150,492,578.87 143,040,332.77
Net cash flows arising from financing activities -14,492,578.87 -7,040,332.77
IV. Influence on cash due to fluctuation in exchange rate 103,473.36 92,336.87
V. Net increase of cash and cash equivalents -20,743,411.92 -108,471,145.15
Add: Balance of cash and cash equivalents at the period
217,989,348.06 267,226,515.29
-begin
VI. Balance of cash and cash equivalents at the period
197,245,936.14 158,755,370.14
-end
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
7、Consolidated Statement of Changes in Owners’ Equity for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Amount for this period
Amount for the period ended 30 June 2014
Shareholders’ equity attributable to the parent Company
General Total
Items Less: Minority
Capital Reasonabl Surplus risk Undistributed shareholders’
Share capital Treasur Others interests
reserves e reserve reserves provisio profit equity
y Stock
n
I. Balance at
the end of the 215,000,000.0 185,374,533.8 589,559.7 -14,489,140.5 -3,264,432.9
85,253,562.95
468,464,083.1
last year 0 5 7 0 0 7
Add:
Changes of
accounting
policy
Error
correction of
the last period
Others
II. Balance at 215,000,000.0 185,374,533.8 589,559.7 -14,489,140.5 -3,264,432.9 85,253,562.95 468,464,083.1
- 44 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
the beginning 0 5 7 0 0 7
of this year
III. Increase/
Decrease in
this year -9,418,674.05 -153,920.61 17,088,629.38 7,516,034.72
(Decrease is
listed with “-”)
(I) Net profit -9,418,674.05 4,354,989.98 -5,063,684.07
(II) Other
comprehensiv -153,920.61 -153,920.61
e income
Subtotal of (I)
and (II) -9,418,674.05 -153,920.61 4,354,989.98 -5,217,604.68
(III)
Shareholders’
contributions
and 12,733,639.40 12,733,639.40
reduction in
capital
1. Capital
contribution
from owners
2.
Share-based
payment
recognized in
shareholders'
equity
3. Others 12,733,639.40 12,733,639.40
(IV) Profit
distribution
1.
Withdrawal of
surplus
reserves
2.
Withdrawal of
general risk
provisions
3.
Distribution for
shareholders
4. Others
(V)Transfer
within
shareholders'
equity
1.
Capitalization
of capital
reserve
2.
Capitalization
of surplus
reserve
3.
Remedying
loss with
surplus
reserve
4. Others
(VI)
- 45 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Reasonable
reserve
1.
Withdrawal in
the report
period
2. Usage in
the report
period
(Ⅶ) others
IV. Balance at
215,000,000.0 185,374,533.8 589,559.7 -23,907,814.5 -3,418,353.5 102,342,192.3 475,980,117.8
the end of the
report year 0 5 7 5 1 3 9
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
7、Consolidated Statement of Changes in Owners’ Equity for the period ended 30 June 2014 (continued)
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Amount for last period
Amount for the period ended 30 June 2013
Shareholders’ equity attributable to the parent Company
General Total
Items Less: Minority
Capital Reasonabl Surplus risk Undistributed shareholders’
Share capital Treasur Others interests
reserves e reserve reserves provisio profit equity
y Stock
n
I. Balance at
the end of the 215,000,000.0 185,374,533.8 589,559.7 -19,387,788.4 -3,770,851.8 87,657,416.1 465,462,869.5
last year 0 5 7 1 2 4 3
Add:
Retroactive
adjustment
under the
same control
Add:
Changes of
accounting
policy
Error
correction of
the last period
Others
II. Balance at
the beginning 215,000,000.0 185,374,533.8 589,559.7 -19,387,788.4 -3,770,851.8 87,657,416.1 465,462,869.5
of this year 0 5 7 1 2 4 3
III. Increase/
Decrease in
this year -2,719,217.34 293,104.46 1,238,494.32 -1,187,618.56
(Decrease is
listed with “-”)
(I) Net profit -2,719,217.34 1,238,494.32 -1,480,723.02
(II) Other
comprehensiv 293,104.46 293,104.46
e income
Subtotal of (I)
and (II) -2,719,217.34 293,104.46 1,238,494.32 -1,187,618.56
(III)
Shareholders’
contributions
and
- 46 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
reduction in
capital
1. Capital
contribution
from owners
2.
Share-based
payment
recognized in
shareholders'
equity
3. Others
(IV) Profit
distribution
1.
Withdrawal of
surplus
reserves
2.
Withdrawal of
general risk
provisions
3.
Distribution for
shareholders
4. Others
(V)Transfer
within
shareholders'
equity
1.
Capitalization
of capital
reserve
2.
Capitalization
of surplus
reserve
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 215,000,000.0 185,374,533.8 589,559.7 -22,107,005.7 -3,477,747.3 88,895,910.4 464,275,250.9
report year 0 5 7 5 6 6 7
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
- 47 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
8、Statement of Changes in Owners’ Equity of Parent Company for the period ended 30 June 2014
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
Amount for this period
Amount for the period ended 30 June 2014
Less: General Total
Items Capital Reasonable Surplus Undistributed
Share capital Treasury risk shareholders'
reserves reserve reserves profit
Stock provision equity
I. Balance at the end of the last
year 215,000,000.00 172,417,299.81 589,559.76 -109,126,477.65 278,880,381.92
Add: Changes of accounting
policy
Error correction of the last
period
Others
II. Balance at the beginning of this
year 215,000,000.00 172,417,299.81 589,559.76 -109,126,477.65 278,880,381.92
III. Increase/ Decrease in this year
(Decrease is listed with “-”) -22,812,040.37 -22,812,040.37
(I) Net profit -22,812,040.37 -22,812,040.37
(II) Other comprehensive
income
Subtotal of (I) and (II) -22,812,040.37 -22,812,040.37
(III) Shareholders’ contributions
and reduction in capital
1. Capital contribution from
owners
2. Share-based payment
recognized in shareholders' equity
3. Others
(IV) Profit distribution
1. Withdrawal of surplus
reserves
2. Withdrawal of general risk
provisions
3. Distribution for shareholders
4. Others
(V)Transfer within shareholders'
equity
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
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
year 215,000,000.00 172,417,299.81 589,559.76 -131,938,518.02 256,068,341.55
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
8、Statement of Changes in Owners’ Equity of Parent Company for the period ended 30 June 2014
(continued)
Prepared by: NANJING PUTIAN TELECOMMUNICATIONS CO., LTD. Jan. to Jun. 2014 Unit: RMB Yuan
- 48 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Amount for last period
Amount for the period ended 30 June 2013
Less: General Total
Items Capital Reasonable Surplus Undistributed
Share capital Treasury risk shareholders'
reserves reserve reserves profit
Stock provision equity
I. Balance at the end of the last
year 215,000,000.00 172,417,299.81 589,559.76 -96,087,336.19 291,919,523.38
Add: Changes of accounting
policy
Error correction of the last
period
Others
II. Balance at the beginning of this
year 215,000,000.00 172,417,299.81 589,559.76 -96,087,336.19 291,919,523.38
III. Increase/ Decrease in this year
(Decrease is listed with “-”) -13,109,556.68 -13,109,556.68
(I) Net profit -13,109,556.68 -13,109,556.68
(II) Other comprehensive income
Subtotal of (I) and (II) -13,109,556.68 -13,109,556.68
(III) Shareholders’ contributions
and reduction in capital
1. Capital contribution from
owners
2. Share-based payment
recognized in shareholders' equity
3. Others
(IV) Profit distribution
1. Withdrawal of surplus
reserves
2. Withdrawal of general risk
provisions
3. Distribution for shareholders
4. Others
(V)Transfer within shareholders'
equity
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
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
year 215,000,000.00 172,417,299.81 589,559.76 -109,196,892.87 278,809,966.70
Legal Representative: Hong Wang Person in Charge of Accounting Works: Lian Shi Person in Charge of Accounting
Department: Huizhen Qiu
- 49 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
III 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 21 March, 1997. The company was listed in
Shenzhen Stock Exchange on 22 May, 1997. By 30 D 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.
IV 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 position at 31 December 2013, operational achievements and cash flow of the company for 2013 effectively and
completely.
3. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
4. Functional currency for accounting
The functional 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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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
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. The accounting treatment for step disposal of subsidiary equity to lose control
(1) Step disposal of equity to determine the loss of control during the transaction whether the
principle of a "package deal"
When the terms of the disposal of the equity investment in the subsidiary transaction, subject to the following conditions and the
economic impact of one or more of the multiple transactions accounted for as a package deal:
① These transactions are considered simultaneously, or in the case of each of the affected parties;
② These transactions as a whole in order to reach a complete business results;
③ The occurrence of a transaction depends on the occurrence of at least one other transaction;
④ One transaction alone is not economical to see, but when considered together with other transaction is economical.
(2) The accounting treatment for step disposal of equity is not a "package deal" to the loss of control
of the transactions in the financial statements of the parent company and consolidated financial
statements
For every loss of control of a transaction before, the difference is recognized in the parent company's financial statements for the
disposal proceeds and the carrying value of the disposal of the investment in the corresponding investment income for the current
period; consolidated financial statements will be at the disposal of the investment cost and disposal entitled to the corresponding
sub-the difference between the Company's share of net assets in accordance with the "no loss on the disposal of certain
circumstances under the control of the accounting treatment of investments in subsidiaries reply" (accounting will [2009] No. 14)
provisions included in capital surplus (capital premium), capital premium insufficient, any excess is adjusted to retained earnings.
For the loss of control transaction, the parent company financial statements, for the stake disposal, in accordance with
"Accounting Standards for Enterprises No. 2 - Long-term equity investment," the provisions of the accounting treatment;
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Meanwhile, the remaining equity, their carrying value is recognized long-term equity investment or other related financial assets.
After the disposal of the remaining equity to implement joint control or significant influence on the existing subsidiaries, the
relevant cost method to equity method accounting treatment of the relevant provisions. In the consolidated financial statements,
the remaining equity, in accordance with their re-measured at fair value loss of control date. Disposal of the shares acquired on
the price and the fair value of the equity and the remainder, less the original stake should have calculated the difference between
the share of the net assets of the subsidiary from the original purchase date of the beginning of sustained calculated between the
current period included a loss of control investment income. Other comprehensive income related to the former subsidiary's equity
investment in the loss of control into investment income.
(3) Step disposal of equity belonging to the "package deal" to the loss of control of the transactions
in the financial statements of the parent company and consolidated financial statements of the
accounting treatment
For part of the "package deal" will the transaction as a loss on disposal of a subsidiary and accounting control of transactions
processed in the parent company financial statements at each disposal proceeds and the carrying value corresponding to the
difference between the disposal of investments are recognized as investment income; for the remaining equity after the loss of
control over their book value is recognized as a long-term equity investments or other financial assets, the remaining equity after
the loss of control to implement joint control or significant influence on the former subsidiary, according to the relevant provisions
of the relevant cost method to the equity method of accounting.
In the consolidated financial statements, for a loss of control before each transaction, and will dispose of the net assets of the
subsidiary entitled to the difference between the share price and the corresponding disposal of investments are recognized in
other comprehensive income, together with the loss of control into a loss of control profit or loss; for transactions when control is
lost, the remaining equity, in accordance with their re-measured at fair value at the date of loss of control, the fair value of the
consideration and the remaining equity stake acquired and disposed of, is calculated by subtracting the original stake should have
started from the purchase date between the share of the net assets of the ongoing calculation of the difference between the
original subsidiary, included in investment income lost control of the current period. Other comprehensive income related to the
former subsidiary's equity investment in the loss of control into investment income.
7. 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.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
8. 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.
9. 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.
(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.
10. 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.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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
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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
11. Accounts receivable
Accounts receivable include accounts receivable and long-term accounts receivable and other account receivable. On the 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.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(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
12. 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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
On balance sheet date, the inventories are measured at lower of cost and net realizable value. It is provided according to the
difference between the cost of single inventory item and its net realizable value. But as for others with large quantity and low price,
the reserve is provided according to categories.
The determination of net realizable value of inventories based on: ① net realizable value of finished products is the estimated
selling price less estimated selling expenses and the relevant tax payments; ②as for materials hold for production, when net
realizable value of finished products derived from these materials is higher than the cost of those, measured at cost; when the
material prices show that the net realizable value of finished products produced by these materials is below cost, net realizable
value will be the estimated sale price less estimated cost to completion, estimated selling expenses and related tax expense. ③
as 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.
13. 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.
(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
The recognition criteria for joint control includes: decision relating to financial policies and operation policies of joint company
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
needs identical agreement by all the joining parties based on agreement in the contract between all the joining parties.
The recognition criteria for significant influence includes: when the company owns above 20% (including 20%) below 50% voting
shares of invested company. When the company owns below 20% (excluding 20%) voting shares of invested company, significant
influence over invested 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.
14. 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.
15. Fixed assets
(1) Recognition
Fixed assets are tangible assets that have useful life more than one year, and are held for use in the production or supply of
goods or services, for rental to others or for administrative purposes. No fixed asset may be recognized unless it meets all the
following conditions:
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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 test and provision for 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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
16. Construction in process
(1) Classification
The Company will classify construction in progress as self- construction and contract-out- construction.
(2) Criterion and timeless of Construction in progress being transferred to fixed assets
Construction in progress is transferred to fixed assets when the project is substantially ready for its intended use. Examples of
situations that shows being ready for its intended use are listed below
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.
17. 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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
18. 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.
(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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
19. 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.
20. 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
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
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
carrying amount is not the best estimate, the carrying amount is adjusted based on the best estimate.
21. 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.
(4) Revenue from construction contracts
The presence of construction contract revenue, indicating completion method to determine the basis for progress.
22. 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.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
23. 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 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.
24. Leasing
If the terms of the lease transfer substantially transferred all the risks and rewards of ownership of the leased asset to the lessee,
the lease is a finance lease, other leases, compared with an operating lease.
25. Major accounting policy modification, alteration accounting estimates description
(1) The main changes in accounting policies
The company report period without accounting policy change, no accounting estimates changes.
(2) The main changes accounting estimates
During the report period without previous accounting error corrected.
26. Preliminary accounting errors
During the report period without previous accounting error corrected.
V Taxations
(1) 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%
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Type of tax Tax base Tax rate
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 16.5% according to relevant rules in Hong Kong.
(2) Tax incentives and approvals
None.
(3) Others need to explain matters
None.
VI. Business combination and consolidated financial statements
The Company shall put subsidiaries which it controlling totally, main body with special purpose into consolidated financial
statements.
Consolidated financial statements have been prepared in accordance with the ASBEs No. 33 - Consolidated Financial Statements
and relevant supplementary regulations. All significant transactions and balances between the Company and its subsidiaries are
eliminated for the purpose of consolidation. The equity of subsidiaries not held by the parent company shall be presented
separately as minority shareholders’ equity in consolidated shareholders’ equity.
Any difference arising from the inconformity of accounting year or accounting policies between the subsidiaries and the Company
shall be adjusted in the consolidated financial statements.
When preparing the consolidated financial statements, if the Company acquired the subsidiary through business combination not
involving under common control, the separate financial statements shall be adjusted based on the fair value of identifiable net
assets at the acquisition date. If the subsidiary is acquired through business combination involving common control, the
consolidated financial statements shall include the carrying amount of assets, liabilities, operating result and cash flow of the
subsidiary at the beginning of the current period, as if business combination also had occurred the beginning of the current period.
1. Subsidiary
(1) Subsidiaries that are setup or obtained by the investment
Balance of other Shareholding Voting
Registered
The Year End’s Essentially proportion Rights
Name Business capital( Unit: Business
Type Registration actual amount of constituting net (%) proportion
nature RMB Wan Scope
capital Investment Investment in (%)
Yuan）
Subsidiary
Nanjing Southern
Telecommunications Stated-controlled Nanjing Trading 3,420.50 telecommunications 33,175,148.00 98.24 98.24
Company Limited
- 65 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Nanjing Bada
Telecommunications Stated-controlled Nanjing Manufacture 1,130.14 telecommunications 5,610,000.00 60.00 60.00
Co., Ltd
Nanjing Putian
Information 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 Putian
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
for writing down minority gain and excess of the current loss undertaken by minority shareholders of the
Name statements combined or not Minority interest
loss subsidiary over the share enjoyed by minority shareholders in the original
owner’s equity of the subsidiary
Nanjing Southern
Telecommunications Yes 1,911,555.27
Company Limited
Nanjing Bada
Telecommunications Co., Yes 0.00
Ltd
Nanjing Putian Yes 1,018.52
- 66 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Information Technology
Company Ltd.
Nanjing Putian Telege
Yes 44,589,068.39
Intelligent Building Ltd.
Putian
Telecommunications Yes
(Hong Kong) Co., Ltd.
Beijing Picom
Telecommunications No
Equipment Ltd
Nanjing Putian Wongshi
Telecommunications Co., Yes 221,609.49
Ltd.
Nanjing Putian Changle
Telecommunications Yes 12,098,537.54
Equipment Co., Ltd.
Nanjing Putian Network
Yes 5,374,577.46
Company Ltd.
Nanjing Putian
Telecommunication Yes 382,936.43
Technology Co., Ltd
Total 64,579,303.10
(2) Subsidiaries obtained by combination under different control
Registered The Year End’s actual
Name Business
Type Registration Business nature capital( Unit: RMB Wan amount of capital
Scope
Yuan） Investment
Product industrial plugs,
sockets, cable coupler,
Product low-voltage distribution
Nanjing Mennekes and sale box, cabinet accessories,
Limited ﹩
Electric Appliances Co., Nanjing industrial and parts; sale of 57,831,011.71
5,200,000.00
company
Ltd plugs, self-produced products.
sockets And the main products are
plugs and sockets for
industry
Software product
development, production
Production and sales; electronic
and product development,
Nanjing Putian Datang marketing
Limited production and sales;
Information Electronics Nanjing of 10,000,000.00 engineering and technical 4,326,243.64
company electronic services; surface mount
Co., Ltd. products soldering processing
etc. services; property
management; business
and agent all kinds of
- 67 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Name Registered Business The Year End’s actual
Type Registration Business nature
capital( Unit: RMB Wan
goods and technology
Scope amount of capital
Yuan）
import and export Investment
(Continued)
Shareholding Voting Amount in The balance after the parent company’ s
Balance of other
proportion Rights minority interest owner’s equity writing down the excess of the
Essentially statements
Name (%) proportion Minority used for writing current loss undertaken by minority
constituting net combined
(%) interest down minority shareholders of the subsidiary over the share
Investment in or not
gain and loss enjoyed by minority shareholders in the
Subsidiary
original owner’s equity of the subsidiary
Nanjing Mennekes
Electric Appliances Co., 75.00 75.00 Yes 20,674,259.85
Ltd
Nanjing Putian Datang
Information Electronics 40.00 40.00 Yes 13,477,161.35
Co., Ltd.
2. Description Changes in scope of consolidation
Instructions about changes in consolidation scope
√ Applicable □ Not applicable
（1）The subsidiaries in the scope of consolidation include half or less than half voting rights
Item Voting rights Reasons for consolidated
Nanjing Putian Datang Information
40.00 Achieve control rights
Electronics Co., Ltd.
（2）The subsidiaries no longer in the scope of consolidation include half or more than half voting
rights
None.
3. Newly included in the scope of consolidation of the subject and the issue is no longer included in the
consolidation scope
Newly included subsidiaries, special purpose entities consolidated form of control by the trustee or leasing and other forms of
business entities
Name Net asset Net profit
Nanjing Putian Datang Information Electronics Co.,
22,461,935.59 1,239,203.25
Ltd.
No longer included subsidiaries, special purpose entities consolidated form of control by the trustee or leasing and other forms of
business entities.
4. Current occurred under the control of the same company merger
None.
5. Current businesses under common control combination occurs
Combined party Amount of goodwill Goodwill calculation method
- 68 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
According to the share fair value of identifiable net assets
Nanjing Putian Datang Information
about the combined party on the merger date exceeds the
Electronics Co., Ltd.
cost of the combination
6. Current sell stake in loss of control of a subsidiary reduced
None.
7. Reverse current period purchases
None.
8. Current merger occurs
None.
9. 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 2014, 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 2014 and As of 31 December 2013, announced by Foreign Exchange
Bureau in China.
- 69 -
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
VII. Notes to the major items in the consolidated financial statements
1. Monetary funds
As of 30 June 2014 As of 31 December 2013
Item Exchange
Original currency RMB Original currency Exchange rate RMB
rate
Cash on hand -- -- 60,174.45 -- -- 10,154.33
RMB -- -- 60,174.45 -- -- 10,154.33
Cash in bank -- -- 303,434,172.06 -- -- 369,426,901.36
RMB -- -- 294,895,573.89 -- -- 359,396,286.96
USD 1,283,185.48 6.1528 7,895,183.62 1,409,644.88 6.0969 8,594,463.85
HKD 781,807.89 0.79375 620,560.01 843,665.32 0.78623 663,314.98
EUR 2,470.03 8.3946 20,734.88 91,548.13 8.4189 770,734.55
GBP 201.91 10.4978 2,119.66 208.94 10.0556 2,101.02
Other monetary funds -- -- 69,927,212.67 -- -- 60,587,270.94
RMB -- -- 69,927,212.67 -- -- 60,506,166.78
USD 11,739.43 6.0969 71,574.13
EUR 1,131.98 8.4189 9,530.03
Total -- -- 373,421,559.18 -- -- 430,024,326.63
Other monetary funds
Item As of 30 June 2014 As of 31 December 2013
Security deposit 69,927,212.67 60,587,270.94
Total 69,927,212.67 60,587,270.94
2. Notes receivables
(1) Receivable by category list below
Item As of 30 June 2014 As of 31 December 2013
Commercial acceptance bills 2,238,868.97 4,591,240.18
Bank acceptance bills 13,536,419.52 17,328,239.87
Total 15,775,288.49 21,919,480.05
(2) Endorsed but not yet expired top five largest amount receivable listed below
70
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Remitter Date of issue Date of expiry Amount Memo
China Railway Electrification Bureau
Group, Beijing Construction Engineering 2014-06-18 2014-12-18 1,601,436.66
Co., Ltd.
Shanghai Yide Trade Co., Ltd. 2014-05-14 2014-11-13 1,000,000.00
China Telecom Co., Ltd. Hubei Branch 2014-03-28 2014-09-11 898,052.41
China Railway Electrification Bureau
2014-03-07 2014-09-07 570,868.00
Group Co., Ltd.
WISDRI (Wuhan) Automation Co., Ltd. 2014-03-11 2014-09-11 566,000.00
Total -- -- 4,636,357.07 --
3. Accounts receivable
(1)Classification of accounts receivable
As of 30 June 2014 As of 31 December 2013
Book balance Provision for bad debts Book balance Provision for bad debts
Classification
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Classification as the group of provision for account receivable
Group1 245,302,379.95 26.16% 192,459,984.01 23.78%
Group 2 578,157,493.09 61.66% 567,532,079.05 70.12%
Group 3 106,024,401.34 11.31% 13,260,055.64 12.51% 41,256,568.97 5.10% 11,264,630.48 27.30%
Subtotal 929,484,274.38 99.13% 13,260,055.64 1.43% 801,248,632.03 99.00% 11,264,630.48 1.41%
Single amount not significant
but single provision for 8,146,734.29 0.87% 8,146,734.29 100.00% 8,101,537.99 1.00% 8,101,537.99 100.00%
accounts receivable
Total 937,631,008.67 -- 21,406,789.93 -- 809,350,170.02 -- 19,366,168.47 --
Notes：Single amount dramatic and individual provision for accounts receivable refers to single exceed RMB 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.
As of 30 June 2014 As of 31 December 2013
Book balance Book balance
Age Provision for bad
Proportion Provision for bad debts Proportion
Amount Amount debts
(%) (%)
Within 1 year 224,726,293.13 63.96% 172,114,115.60 73.64%
71
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(contain 1 year)
1 to 2 years 84,319,010.63 24.00% 35,147,789.37 15.04%
2 to 3 years 24,189,786.26 6.89% 2,418,978.51 10,439,624.42 4.47% 1,043,962.46
3 to 4years 18,091,691.27 5.15% 10,841,077.13 16,015,023.59 6.85% 10,220,668.02
4 to 5 years 7,294,486.75 2.08% 2,188,346.07 4,604,420.43 1.97% 1,381,326.14
5 to 6 years 2,995,806.26 0.85% 1,198,322.56 3,030,610.69 1.30% 1,212,244.29
6 years or
7,801,398.26 2.22% 7,454,408.50 8,379,992.47 3.58% 7,627,097.59
above
Total 351,326,781.29 -- 13,260,055.64 233,716,552.98 -- 11,264,630.48
Closing single amount not significant but single provision for accounts receivable
Receivables Book amount Bad debt Proportion (%) Reason
M/S Whlstler Telecom(pvt) Aging longer cannot be
1,724,928.12 1,724,928.12 100.00%
LTD recalled
Aging longer cannot be
NEPAL TETE 1,499,774.77 1,499,774.77 100.00%
recalled
Jiangsu Changzhou Dahua Aging longer cannot be
1,346,323.87 1,346,323.87 100.00%
Co. recalled
Hubei Provincial Public Aging longer cannot be
812,432.82 812,432.82 100.00%
Security recalled
Aging longer cannot be
XI'AN Overload Science 599,043.99 599,043.99 100.00%
recalled
Beijing Tongchengdaye
Aging longer cannot be
Communication Technology 486,001.22 486,001.22 100.00%
recalled
Co., Ltd.
Jiangsu Taihewei Nets Aging longer cannot be
419,504.72 419,504.72 100.00%
Technology Co., Ltd. recalled
Taiyuan High-tech Industry Aging longer cannot be
246,868.39 246,868.39 100.00%
Import and Export Co recalled
Nanjing Zhongjiang Aging longer cannot be
223,600.00 223,600.00 100.00%
Construction Group Co., Ltd. recalled
Suzhou Tailong Real Estate Aging longer cannot be
159,322.80 159,322.80 100.00%
Development Co. recalled
Heilongjiang Blue Ocean
Aging longer cannot be
Silver Ann technology 155,111.86 155,111.86 100.00%
recalled
Development Co., LTD
72
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Beijing Zhenyuan Innovation
Aging longer cannot be
Science and Technology 150,187.22 150,187.22 100.00%
recalled
Development Co
Zhongshan Group Aging longer cannot be
115,921.14 115,921.14 100.00%
International Trade Center recalled
Aging longer cannot be
PRADUFA 100,182.00 100,182.00 100.00%
recalled
Shandong University of
Aging longer cannot be
Traditional Chinese 64,868.40 64,868.40 100.00%
recalled
Medicine
Changchun Jiachen
Aging longer cannot be
Network Technology Co., 30,162.97 30,162.97 100.00%
recalled
LTD
China Unicom Nanjing Aging longer cannot be
12,500.00 12,500.00 100.00%
Branch recalled
Total 8,146,734.29 8,146,734.29 -- --
(2) Current payback or return of receivables
None.
Closing single amount not significant but single provision for accounts receivable
Receivables Book amount Bad debt Proportion (%) Reason
M/S Whlstler Telecom(pvt) Aging longer cannot be
1,724,928.12 1,724,928.12 100.00%
LTD recalled
Aging longer cannot be
NEPAL TETE 1,499,774.77 1,499,774.77 100.00%
recalled
Jiangsu Changzhou Dahua Aging longer cannot be
1,346,323.87 1,346,323.87 100.00%
Co. recalled
Hubei Provincial Public Aging longer cannot be
812,432.82 812,432.82 100.00%
Security recalled
Aging longer cannot be
XI'AN Overload Science 599,043.99 599,043.99 100.00%
recalled
Beijing Tongchengdaye
Aging longer cannot be
Communication Technology 486,001.22 486,001.22 100.00%
recalled
Co., Ltd.
Jiangsu Taihewei Nets Aging longer cannot be
419,504.72 419,504.72 100.00%
Technology Co., Ltd. recalled
Taiyuan High-tech Industry Aging longer cannot be
246,868.39 246,868.39 100.00%
Import and Export Co recalled
73
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Nanjing Zhongjiang Aging longer cannot be
223,600.00 223,600.00 100.00%
Construction Group Co., Ltd. recalled
Suzhou Tailong Real Estate Aging longer cannot be
159,322.80 159,322.80 100.00%
Development Co. recalled
Heilongjiang Blue Ocean
Aging longer cannot be
Silver Ann technology 155,111.86 155,111.86 100.00%
recalled
Development Co., LTD
Beijing Zhenyuan Innovation
Aging longer cannot be
Science and Technology 150,187.22 150,187.22 100.00%
recalled
Development Co
Zhongshan Group Aging longer cannot be
115,921.14 115,921.14 100.00%
International Trade Center recalled
Aging longer cannot be
PRADUFA 100,182.00 100,182.00 100.00%
recalled
Shandong University of
Aging longer cannot be
Traditional Chinese 64,868.40 64,868.40 100.00%
recalled
Medicine
Changchun Jiachen
Aging longer cannot be
Network Technology Co., 30,162.97 30,162.97 100.00%
recalled
LTD
China Unicom Nanjing Aging longer cannot be
12,500.00 12,500.00 100.00%
Branch recalled
Total 8,146,734.29 8,146,734.29 -- --
(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
As of 30 June 2014 As of 31 December 2013
Name
Book amount Bad debt Book amount Bad debt
China Potevio Information Industry Co.,
23,171,706.49 100,904.72 24,187,722.30 2,936.37
Ltd.
Total 23,171,706.49 100,904.72 24,187,722.30 2,936.37
(5)Top 5 debtors of accounts receivable
Relationship with the Proportion of total amount
Name of the debtors Amount Aging
Company (%)
China Telecom Co., Ltd. non-related party 109,059,323.32 within 1 year 11.63%
74
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Jiangsu Branch
Agricultural Bank of China non-related party 35,302,050.79 within 2 year 3.77%
China Potevio Information
parent company 23,171,706.49 within 4 year 2.47%
Industry Co., Ltd.
China Telecom Co., Ltd.
non-related party 16,968,052.69 within 4 year 1.81%
Henan Branch
Nanjing Hehao
Communication Technology non-related party 16,741,407.40 1 to 2 year 1.79%
Co., Ltd.
Total -- 201,242,540.69 -- 21.47%
(6) Accounts receivable of related parties accounts
Name of the debtors Relationship with the Company Amount Proportion of total amount (%)
China Potevio Information
Parent company 23,171,706.49 2.47%
Industry Co., Ltd.
Shanghai Putian Post and
Telecommunications Technology 13,341,700.00 1.42%
Co., Ltd. Under the same parent company
Shanghai Putian Network
803,719.70 0.09%
Technology Co,. Ltd Under the same parent company
Putian Information Technology
80,784.00 0.01%
Research Institute Co., Ltd Under the same parent company
Total -- 37,397,910.19 3.99%
(7) Balance of accounts receivable in foreign currencies
Foreign As of 30 June 2014 As of 31 December 2013
Currency Original currency Exchange rate RMB Original currency Exchange rate RMB
USD 1,083,624.05 6.15 6,667,322.05 775,067.49 6.0969 4,725,508.98
Total —— —— 6,667,322.05 —— —— 4,725,508.98
4. Other receivables
(1)Classification of other receivables
As of 30 June 2014 As of 31 December 2013
Book balance Provision for bad debts Book balance Provision for bad debts
Classification
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
75
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Individually significant and
individual provision for the 28,912,122.71 35.21% 28,912,122.71 100.00% 28,912,122.71 29.27% 28,912,122.71 100.00%
accounts receivable
Classification as the group of provision for account receivable
Group1 12,000,000.00 14.62% 4,800,000.00 40.00% 45,664,951.95 46.24% 6,400,000.00 14.02%
Group 2 26,779,042.58 32.62% 13,091,792.41 13.26%
Group 3 14,411,287.05 17.55% 6,605,126.13 45.83% 11,095,426.52 11.23% 5,360,559.45 48.31%
Subtotal 53,190,329.63 64.79% 11,405,126.13 21.44% 69,852,170.88 70.73% 11,760,559.45 16.84%
Total 82,102,452.34 -- 40,317,248.84 -- 98,764,293.59 -- 40,672,682.16 --
Notes：Single amount dramatic and individual provision for other receivable refers to single exceed RMB 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.
Closing single amount significant and single provision for accounts receivable
Name of debtors Amount Provision Proportion Reason
Beijing Picom
Aging longer cannot be
Telecommunications 28,912,122.71 28,912,122.71 100.00%
recalled
Equipment Ltd
Total 28,912,122.71 28,912,122.71 ——
Adopt age analysis provision in group as follows:
As of 30 June 2014 As of 31 December 2013
Book balance Book balance
Age Provision for bad
Proportion debts Proportion Provision for bad
Amount
(%) Book balance Amount (%) debts
Within 1 year (contain
790,646.21 2.99% 15,919,860.38 28.04%
1 year)
1 to 2 years 557,128.84 2.11% 14,839,036.04 26.14%
2 to 3 years 3,876,109.19 14.68% 387,610.93 1,763,147.23 3.11% 176,314.72
3 to 4years 21,187,402.81 80.22% 11,017,515.20 24,238,334.82 42.71% 11,584,244.73
4 to 5 years 1,622,394.42 6.14% 486,718.34 2,727,959.45 4.81% 818,387.84
5 to 6 years 14,626,679.10 55.38% 5,850,671.64 17,683,802.20 31.16% 7,073,520.88
6 years or above 4,938,329.29 18.70% 4,680,125.22 3,826,573.17 6.74% 3,692,336.01
Total 26,411,287.05 -- 11,405,126.13 56,760,378.47 -- 11,760,559.45
(2) Recovery or reversal of current other receivables
76
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
Closing single amount significant and single provision for accounts receivable
Name of debtors Amount Provision for bad debts Proportion Reason
Beijing Picom
Aging longer cannot be
Telecommunications 28,912,122.71 28,912,122.71 100.00%
recalled
Equipment Ltd
Total 28,912,122.71 28,912,122.71 ——
(3) Other accounts due from shareholder who has more than 5% (including 5 %) voting shares of the Company at 30
June 2014
As of 30 June 2014 As of 31 December 2013
Name of debtors
Amount Provision for bad debts Amount Provision for bad debts
China Potevio Information Industry Co.,
360,680.00 0.00 17,500.00 0.00
Ltd.
Total 360,680.00 0.00 17,500.00 0.00
(4)Contents or types of other receivables with larger amount
Type (or contents) of other
Name of debtors Amount Proportion
receivables
Beijing Picom Telecommunications
28,912,122.71 Receivables and payables 35.21%
Equipment Ltd
The Yuhua People's Government
12,000,000.00 Receivables and payables 14.62%
Nanning Office
Total 40,912,122.71 -- 49.83%
(5) Top 5 debtors of other receivables
Relationship with the Proportion of total amount
Name of debtors Amount Aging
Company (%)
Beijing Picom
Telecommunications Related party 28,912,122.71 Over 6 years 35.21%
Equipment Ltd
The Yuhua People's
Non-related party 12,000,000.00 4 to 5 years 14.62%
Government Nanning Office
Henan Zhongguang
Information Network Co., Non-related party 1,000,000.00 Over 6 years 1.22%
Ltd.
77
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
China Mobile Group Jiangsu
Non-related party 730,000.00 Within 1 year 0.89%
Co., Ltd. Nanjing Branch
China Mobile Group Jiangsu
Non-related party 250,000.00 Over 6 years 0.30%
Co., Ltd. Nanjing Branch
China United Network
Communications Co., Ltd. Non-related party 730,000.00 Within 5 year 0.89%
Liaoning Branch
Total -- 43,622,122.71 -- 53.13%
(6) Other receivables from related parties
Name of debtors Relationship with the Company Amount Proportion of total amount (%)
Beijing Picom
Telecommunications Equipment 28,912,122.71 35.21%
Ltd Related party
China Potevio Information
360,680.00 0.44%
Industry Co., Ltd. Parent company
Total -- 29,272,802.71 35.65%
(7)Balance of other receivables in foreign currencies
None
5. Prepayments
(1)Analysis of aging
As of 30 June 2014 As of 31 December 2013
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year 22,670,075.76 62.59% 19,368,994.01 58.44%
1-2 years 6,251,866.38 17.26% 8,942,129.35 26.98%
2-3 years 3,840,870.29 10.61% 2,878,492.17 8.68%
over 3 years 3,455,168.48 9.54% 1,955,239.29 5.90%
Total 36,217,980.91 -- 33,144,854.82 --
(2)Top five largest accounts paid in advance
Relationship with the
Company Amount Aging Reasons for un-settlement
Company
Jiangsu Wujin Construction
non-related party 4,708,400.00 within 2 years In credit period
and Installation Engineering
78
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Co., Ltd.,
Jiangsu Huayu Intelligent
Systems Engineering Co., non-related party 2,303,277.50 within 3 years In credit period
Ltd.
Nanjing Rui Yi Technology
non-related party 1,230,000.00 within 1 year In credit period
Co., Ltd.
Honeywell Security (China)
non-related party 1,136,553.24 within 1 year In credit period
Co., Ltd. Shanghai Branch
Lanzhou Xinyuan Electric
non-related party 1,000,000.00 within 1 year In credit period
Power Equipment Co., Ltd.
Total -- 10,378,230.74 -- --
(3) Prepayment of shareholder who has more than 5% (including 5 %) voting shares of the Company at year-end
None.
6. Inventories
(1)Classification of inventories
As of 30 June 2014 As of 31 December 2013
Item Provision for Provision for
Book balance Book value Book balance Book value
devaluation devaluation
Raw materials 41,697,587.67 1,510,725.67 40,186,862.00 38,013,219.98 1,510,725.67 36,502,494.31
Goods-in-
132,089,201.70 132,089,201.70 262,382,981.59 262,382,981.59
process
Finished goods 292,833,749.85 6,781,903.56 286,051,846.29 138,980,558.36 6,854,637.93 132,125,920.43
Total 466,620,539.22 8,292,629.23 458,327,909.99 439,376,759.93 8,365,363.60 431,011,396.33
(2) Provision for inventory devaluation
As of 31 December Amount provided this Amount reduced this year
Item As of 30 June 2014
2013 year Reversal Reversal
Raw materials 1,510,725.67 1,510,725.67
Finished goods 6,854,637.93 72,734.37 6,781,903.56
Total 8,365,363.60 72,734.37 8,292,629.23
(3) Inventory devaluation case
Item Provision for inventory impairment Reasons for the reversal of Percentage (%)
79
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
inventory impairment
Raw materials Net realizable value
Impairment on inventory of
Finished goods Net realizable value
merchandise has been sold
7. Long-term equity investments of the joint ventures and associated ventures
Voting right
Share holding proportion of the Total assets at Total net assets
Total liabilities 31 Total sales of Net profit of this
Invested units percentage of company among 31 December 31 December
December 2013 this period period
the company (%) invested units 2013 2013
(%)
Information of the joint ventures
Nanjing Prachanda
Live Optical 50.00% 50.00% 68,204,417.89 42,700,915.91 25,503,501.98 12,863,084.55 -1,978,976.75
Network Co., Ltd.
Information of the associated ventures
Nanjing Putian
Zhongyou
30.00% 30.00% 1,370,139.44 99,297.63 1,270,841.81 42,461.55 -30,110.24
Telecommunication
Co., Ltd.
Nanjing Putian
High Technology 49.64% 49.64% 343,842,315.89 3,220,015.49 340,622,300.40 7,720,975.78 524,809.72
Industry Co., Ltd.
Nanjing Putian
Telege Cable Co., 45.00% 45.00% 7,788,172.52 1,865,028.24 5,923,144.28 4,942,276.42 155,401.41
Ltd.
8. Long-term equity investments
(1)List of Information of Long-term Equity Investment
Voting Interpretati
Share
right ons of
holding Depreciati
Book proporti difference Cash
Book percenta on
Accounti balance at on of between dividend
Initial cost of balance at ge of the Depreciati reserves
Invested units ng 31 Movement the the equity during
investment 30 June Compan on reserve withdrawn
Method December Compa percentage the
2014 y among during the
2013 ny and vote period
invested period
among right
units (%)
invested percentage
80
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
units in the
(%) invested
unit
Nanjing Putian
Datang
Cost 5,212,328.8 4,326,243.6 -4,326,243.
Information and 40.00% 40.00%
Method 0 4 64
Electric
Company Ltd
Nanjing Putian
Zhongyou Equity
300,000.00 219,528.61 219,528.61 30.00% 30.00%
Telecommunicati Method
on Co., Ltd.
Nanjing Putian
High Technology Equity 167,548,141 168,922,896 168,885,571 297,840.
-37,324.45 49.64% 49.64%
Industry Co., Method .29 .40 .95 00
Ltd.
Nanjing
Prachanda Live Equity 13,544,400. 13,740,859. -989,488.3 12,751,371.
50.00% 50.00%
Optical Network Method 00 91 8 53
Co., Ltd
Beijing Picom
Cost 1,854,910.0 1,854,910.0 1,854,910.0 1,854,910.
Telecommunicati 51.00% 51.00%
Method 0 0 0 00
ons
Nanjing Yuhua
Cost
Galvanization 420,915.00 420,915.00 420,915.00 10.00% 10.00%
Method
Factory
Hangzhou
Putian Swanking Cost
321,038.00 321,038.00 321,038.00 2.26% 2.26%
Electrical Co., Method
Ltd
Nanjing Putian Cost
181,701.84 0.00% 0.00%
Industry Co., Ltd Method
Nanjing Putian
Equity 2,250,000.0 2,595,484.2 2,665,414.9
Telege Cable 69,930.63 45.00% 45.00%
Method 0 8 1
Co., Ltd.
191,633,434 192,401,875 -5,283,125. 187,118,750. 1,854,910. 297,840.
Total -- -- -- --
.93 .84 84 00 00 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.
81
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
9. Investment property
Investment properties measured at costs
Decrease during the
Item As of 31 December 2013 Increase during the year As of 30 June 2014
year
Total original cost 10,032,417.29 7,237,046.93 17,269,464.22
Houses and buildings 6,390,269.42 7,237,046.93 13,627,316.35
Land use rights 3,642,147.87 3,642,147.87
Total accumulated
depreciation and 3,788,683.18 739,589.66 4,528,272.84
accumulated amortization
Houses and buildings 2,503,951.87 679,609.34 3,183,561.21
Land use rights 1,284,731.31 59,980.32 1,344,711.63
Total book value 6,243,734.11 6,497,457.27 12,741,191.38
Houses and buildings 3,886,317.55 6,557,437.59 10,443,755.14
Land use rights 2,357,416.56 -59,980.32 2,297,436.24
Total accumulated
1,842,418.00 1,842,418.00
provision for impairment
Houses and buildings 1,842,418.00 1,842,418.00
Total carrying value 4,401,316.11 6,497,457.27 10,898,773.38
Houses and buildings 2,043,899.55 8,601,337.14
Land use rights 2,357,416.56 2,297,436.24
10. Fixed assets
(1)Lists of fixed assets and accumulated depreciation, including movement
As of 31 December Increase Decrease
Item As of 30 June 2014
2013 during the year during the year
Total original cost of fixed
267,398,407.23 15,715,227.33 639,495.11 282,474,139.45
assets
Building/structure 122,596,766.53 7,436,426.36 96,844.00 129,936,348.89
Machinery equipment 75,269,719.32 6,053,969.11 81,323,688.43
Transportation equipment 14,928,617.08 620,820.16 428,107.17 15,121,330.07
Others 54,603,304.30 1,604,011.70 114,543.94 56,092,772.06
82
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Total accumulated depreciation 158,428,251.86 4,511,855.71 5,653,114.69 507,967.83 168,085,254.43
Building/structure 41,935,628.45 884,889.26 2,322,055.65 18,265.85 45,124,307.51
Machinery equipment 60,756,778.65 3,002,815.66 1,996,873.35 65,756,467.66
Transportation equipment 10,640,534.98 329,918.62 662,164.60 385,296.45 11,247,321.75
Others 45,095,309.78 294,232.17 672,021.09 104,405.53 45,957,157.51
Total net book value of fixed
108,970,155.37 -- 114,388,885.02
assets
Building/structure 80,661,138.08 -- 84,812,041.38
Machinery equipment 14,512,940.67 -- 15,567,220.77
Transportation equipment 4,288,082.10 -- 3,874,008.32
Others 9,507,994.52 -- 10,135,614.55
Total impairment of fixed assets 2,359,652.66 -- 2,359,652.66
Building/structure 539,124.00 -- 539,124.00
Machinery equipment 573,461.78 -- 573,461.78
Others 1,247,066.88 -- 1,247,066.88
Total carrying value of fixed
106,610,502.71 -- 112,029,232.36
assets
Building/structure 80,122,014.08 -- 84,272,917.38
Machinery equipment 13,939,478.89 -- 14,993,758.99
Transportation equipment 4,288,082.10 -- 3,874,008.32
Others 8,260,927.64 -- 8,888,547.67
Note: The depreciation amount is RMB 5,653,114.69 Yuan, in this period there was RMB 0.00 Yuan construction in progress turn to fixed assets.
(2)Fixed assets not in use temporarily
None
(3) Information of Fixed Assets without Certificate of Title
Estimated Time to Complete Certificate of
Item Reasons for no secured property right certificate
Title
Production houses No certification of land use right
Structures No certification of land use right
Non-production houses No certification of land use right
Total
11. Construction in progress
(1)Basic information of Construction in progress
83
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
As of 30 June 2014 As of 31 December 2013
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Nanjing Putian Yuhua Venture
16,893,907.29 16,893,907.29 15,543,477.29 15,543,477.29
park
Cable production line 614,290.58 614,290.58 614,290.58 614,290.58
Total 17,508,197.87 17,508,197.87 16,157,767.87 16,157,767.87
(2) Significant movement of construction in progress
Proportio
Including
n of Accumulat
Transf interest Interest
As of 31 Increase Other project Accumulat ed amount
Budg er to capitalize capitalizati Capital As of 30
Item December during the decreas Investme ed of interest
et fixed d amount on rate of source June 2014
2013 year e nt in progress capitalizati
assets of the the year
budget on
year
(%)
Nanjing
Putian
15,543,477. 1,350,430. Self-owne 16,893,907.
Yuhua
29 00 d 29
Venture
park
Cable
Self-owne
productio 614,290.58 614,290.58
d
n line
16,157,767. 1,350,430. 17,508,197.
Total -- -- -- --
87 00 87
12. Intangible assets
Decrease during the
Item As of 31 December 2013 Increase during the year As of 30 June 2014
year
Total original cost 43,638,112.72 5,049,141.66 48,687,254.38
Land use right 26,841,664.95 5,049,141.66 31,890,806.61
Exclusive technology 6,600,762.11 6,600,762.11
Software 10,195,685.66 10,195,685.66
Total accumulated amortization 19,335,697.17 1,057,210.80 20,392,907.97
Land use right 4,930,820.80 728,780.31 5,659,601.11
Exclusive technology 5,912,794.24 5,912,794.24
84
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Software 8,492,082.13 328,430.49 8,820,512.62
Total net book value 24,302,415.55 3,991,930.86 28,294,346.41
Land use right 21,910,844.15 4,320,361.35 26,231,205.50
Exclusive technology 687,967.87 687,967.87
Software 1,703,603.53 -328,430.49 1,375,173.04
Total accumulated provision for
0.00 0.00
impairment
Land use right
Exclusive technology
Software
Total carrying value 24,302,415.55 3,991,930.86 28,294,346.41
Land use right 21,910,844.15 4,320,361.35 26,231,205.50
Exclusive technology 687,967.87 687,967.87
Software 1,703,603.53 -328,430.49 1,375,173.04
Note: The amortization amount of the intangible assets this year is RMB 656,070.80Yuan.
13. Details of asset impairment
As of 31 December Amount provided this Amount reduced this period
Item As of 30 June 2014
2013 period Reversal Written off
Bad debts reserve 60,038,850.63 1,777,312.46 534,911.54 61,281,251.55
Provision for inventory
8,365,363.60 72,734.37 8,292,629.23
devaluation
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 2,359,652.66 2,359,652.66
Provision of intangible assets 0.00 0.00
Total 74,461,194.89 1,777,312.46 607,645.91 75,630,861.44
14. Lists of all assets with restriction of certificate of title or use right
Item As of 30 June 2014 Reasons for restriction of certificate of title or use right
Used to guarantee the assets
Real estate 57,853,072.44 For loan security
85
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Land 11,318,933.67 For loan security
Others causes ownership restrictions assets
Total 69,172,006.11
15. Short-term loans
Short-term borrowings classified by listed below
Item As of 30 June 2014 As of 31 December 2013
Loan in mortgage 81,000,000.00 78,000,000.00
Guaranteed loan 404,000,000.00 384,000,000.00
Total 485,000,000.00 462,000,000.00
Notes:
1、To obtain the two bank short-term loan of RMB 32,000,000.00 Yuan, the company will mortgage two real estates, confirmed the total value
of RMB32,138,800 Yuan of real estate. The loan period is from 26 May 2014 to 26 May 2015. The subsidiaries Nanjing Putian Telege Cable Co.,
Ltd. mortgaged its real estate for loan of RMB 35,000,000.00 Yuan, Nanjing Mennekes Electric Appliances Co., Ltd. mortgaged its real estate for
loan of RMB 11,000,000.00 Yuan, and Nanjing Putian Datang Information Electric Co., Ltd. mortgaged its real estate for loan of RMB 3,000,000.00
Yuan.
2、The parent company China Potevio Information Industry Co., Ltd. guaranteed the borrowing of RMB 324,000,000.00 Yuan. The company
guaranteed the borrowing of RMB 60,000,000.00 Yuan for Nanjing Southern Telecommunications Company Ltd. and the borrowing of RMB
20,000,000.00 Yuan for Nanjing Putian Telege Cable Co., Ltd .
16. Notes payable
Item As of 30 June 2014 As of 31 December 2013
Commercial acceptance bills 15,529,854.40 25,529,854.40
Bank acceptance bills 85,800,417.90 45,279,794.10
Total 101,330,272.30 70,809,648.50
Notes: Notes payable closing balance next accounting periods expire the amount of the RMB101,330,272.30 Yuan.
17. Accounts payable
(1)Analysis of aging
Item As of 30 June 2014 As of 31 December 2013
Within 1 year 670,510,835.27 870,502,221.95
1-2 years 286,478,009.82 65,499,246.98
2-3 years 23,997,952.50 8,263,933.47
over 3 years 11,356,944.57 11,512,125.97
86
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Total 992,343,742.16 955,777,528.37
(2) Accounts payable to shareholders holding 5% or above voting shares of the Company
Item As of 30 June 2014 As of 31 December 2013
China Potevio Information Industry Co., Ltd. 21,290,106.90 21,290,106.90
Total 21,290,106.90 21,290,106.90
(3)Significant accounts payable with ageing over one year as at year-end
Name Amount Aging Other payables nature or content
12,829,454.32 Within 1 year Purchase payable
Nanjing Prachanda Live Optical Network Co.,
36,868,794.71 1 to 2 year Purchase payable
Ltd
1,622,336.00 2 to 3 year Purchase payable
12,282,184.00 Within 1 year Purchase payable
Beijing Xinliwen Science and Technology
Development Co., Ltd. 14,378,874.74 1 to 2 year Purchase payable
17,290,106.90 1 to 2 year Purchase payable
China Potevio Information Industry Co., Ltd.
4,000,000.00 Over 3 years Purchase payable
7,514,725.87 Within 1 year Purchase payable
Nanjing Hua Heng Electric Control Equipment
12,891,629.86 1 to 2 year Purchase payable
Co., Ltd.
20,185.43 Over 3 years Purchase payable
33,750.00 Within 1 year Purchase payable
Wuxi Taitong Data Communication Co., Ltd.
12,150,000.00 1 to 2 year Purchase payable
Total 131,882,041.83 —— ——
(4)Balance of accounts payable in foreign currency
As of 30 June 2014 As of 31 December 2013
Foreign Currency
Original currency Exchange rate RMB Original currency Exchange rate RMB
HKD 3,567,154.79 0.79375 2,831,429.11 7,355,082.65 0.7862 5,782,786.63
Total 3,567,154.79 0.79375 2,831,429.11 7,355,082.65 0.7862 5,782,786.63
18. Advances from customers
(1)Analysis of aging
Item As of 30 June 2014 As of 31 December 2013
Within 1 year 36,317,290.64 58,142,480.12
1-2 years 14,745,598.55 5,957,445.42
87
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
2-3 years 4,909,359.07 10,313,120.74
over 3 years 13,452,659.51 3,246,406.24
Total 69,424,907.77 77,659,452.52
(2) Accounts received in advance from shareholders holding 5% or above voting shares of the company, as well as
that of related parties.
Item As of 30 June 2014 As of 31 December 2013
China Potevio Information Industry Co., Ltd. 8,163,434.00 8,163,434.00
China Putian Information Industry Group Co., 22,990.00 22,990.00
Total 8,186,424.00 8,186,424.00
(3) Large advances from customers aged over one year
None.
19. Accrued payroll
Item As of 31 December 2013 Increase during the period Decrease during the period As of 30 June 2014
Wages, bonuses and
5,175,640.30 61,696,467.01 62,362,667.01 4,509,440.30
allowance
Welfare expense 7,190,858.22 6,895,813.41 295,044.81
Social insurance
35,245,736.18 35,245,736.18
charges
Including: Medical
16,496,411.56 16,496,411.56
insurance
Supplementary
5,003,952.60 5,003,952.60
medical insurance
Basic endowment
11,492,458.96 11,492,458.96
insurance
Unemployment
980,191.19 980,191.19
insurance
Work injury
253,677.18 253,677.18
insurance
Maternity insurance 400,129.18 400,129.18
Annuity 618,915.51 618,915.51
Housing fund 6,194,486.88 4,606,025.20 4,606,025.20 6,194,486.88
Compensation for
53,444.70 53,444.70
cancellation of
88
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
labor relationship
Others 5,293,999.93 3,078,324.61 2,830,321.06 5,542,003.48
Including: labor
1,845,088.07 1,300,741.55 831,250.52 2,314,579.10
union expenditure
Employee education
3,448,911.86 1,525,026.05 1,746,513.53 3,227,424.38
expenses
Others 252,557.01 252,557.01
Total 16,664,127.11 111,870,855.92 111,994,007.56 16,540,975.47
Notes: Unpaid wages do not exist; closing payroll of RMB4,509,440.30 Yuan should be paid to the employee of not paying payroll.
20. Taxes payable
Item As of 30 June 2014 As of 31 December 2013
Value-added tax -7,744,730.58 -4,379,153.01
Business tax 0.11 103,424.74
Corporate income tax 2,117,369.63 4,363,611.90
Individual Income Tax 156,650.78 343,924.10
Urban maintenance and construction tax 192,608.16 647,480.53
Stamp Tax 11,815.79 4,496.30
Education surcharge 112,902.64 460,825.34
Land use tax 14,503.13
Property tax 19,343.84
Total -5,119,536.50 1,544,609.90
21. Dividends payable
Name As of 30 June 2014 As of 31 December 2013 超过一年未支付原因
Jiangsu Huabang Mechanical and
253,832.01 253,832.01
electrical equipment engineering Co., Ltd
Ningbo Yinzhou New Star Plastic
253,832.01 253,832.01
Electronic Co., Ltd
Yuyao Guochang Electronic Co., Ltd 423,053.34 423,053.34
Nanjing Yongxin Electrical Appliance
253,832.01 253,832.01
Matching Co., Ltd.
Jingjiang Huasheng Communication
84,610.67 84,610.67
Equipment Co., Ltd.
Jiangdu Yate Communications Plastic 423,053.34 423,053.34
89
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Products Co,. Ltd (Jiangdu Branch)
Zhenjiang Shengtang Photoelectric
253,832.01 253,832.01
Device Co,. Ltd
Total 1,946,045.39 1,946,045.39 --
22. Other payables
(1)Analysis of aging
Item As of 30 June 2014 As of 31 December 2013
Within 1 year 36,248,723.55 43,924,558.52
1-2 years 14,959,256.91 1,494,666.54
2-3 years 1,251,390.50 1,165,895.45
over 3 years 6,760,537.39 5,663,905.42
Total 59,219,908.35 52,249,025.93
(2) Other payables to shareholders holding 5% or above voting shares of the company, as well as that of related
parties.
None.
(3) Aged over one year of significant other payables
None.
(4) A large amount of other payables
None.
23. Share capital
Increases(+) or decreases(-) in current year
As of 31 Shares As of 30 June
December 2013 Issuance of new Gift share transferred from Others Subtotal 2014
shares
capital reserve
Total number of
215,000,000.00 215,000,000.00
shares
24. Capital reserve
Item As of 31 December 2013 Increase during the year Decrease during the year As of 30 June 2014
Share capital premium 139,592,332.04 139,592,332.04
90
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Other capital reserves 45,782,201.81 45,782,201.81
Total 185,374,533.85 185,374,533.85
25. Surplus reserve
Decrease during the
Item As of 31 December 2013 Increase during the year As of 30 June 2014
year
Statutory surplus reserves 589,559.77 589,559.77
Total 589,559.77 589,559.77
26. Undistributed profit
Proportion of Extraction or
Item Amount
Distribution
Undistributed profit at the end of last year before
-14,489,140.50 --
adjustments
Undistributed profit at the beginning of a year after
-14,489,140.50 --
adjustment
Add: Net profit attributable to the owner of the parent
-9,418,674.05 --
company this year
Undistributed profit at the ending of period -23,907,814.55 --
27. Operating revenues and costs
(1)Operating revenues
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Main operating revenue 1,155,060,034.97 1,200,190,368.34
Other operating revenue 17,963,615.28 7,367,170.48
Total 1,008,242,535.79 1,043,008,171.55
(2)Operating costs
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Main operating cost 987,142,781.80 1,038,297,903.22
Other operating cost 21,099,753.99 4,710,268.33
Total 1,008,242,535.79 1,043,008,171.55
(3)Main Business (In terms of different products)
91
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Jan. to Jun. 2014 Jan. to Jun. 2013
Name of industry
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communication products 1,098,650,345.23 944,390,783.41 1,149,500,752.80 1,000,433,034.29
Electrical products 56,409,689.74 42,751,998.39 50,689,615.54 37,864,868.93
Total 1,155,060,034.97 987,142,781.80 1,200,190,368.34 1,038,297,903.22
(4) Main business items listed by Industry
Jan. to Jun. 2014 Jan. to Jun. 2013
Name of product
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communications Equipment 1,098,650,345.23 944,390,783.41 1,149,500,752.80 1,000,433,034.29
Electrical industry 56,409,689.74 42,751,998.39 50,689,615.54 37,864,868.93
Total 1,155,060,034.97 987,142,781.80 1,200,190,368.34 1,038,297,903.22
(5) Main Business (In terms of different regions)
Jan. to Jun. 2014 Jan. to Jun. 2013
Name of Region
Main operating revenue Main operating cost Main operating revenue Main operating cost
Domestic market 1,133,705,754.02 966,504,571.87 1,189,316,018.09 1,027,739,558.96
Oversea market 21,354,280.95 20,638,209.93 10,874,350.25 10,558,344.26
Total 1,155,060,034.97 987,142,781.80 1,200,190,368.34 1,038,297,903.22
(6)The amount of operating revenues received from the top 5 customers this year
Item Operating revenues Proportion taking in total operating income of the Company (%)
China Telecom Co., Ltd and
380,721,946.56 32.46%
Subordinate Enterprises
China Mobile Co., Ltd and Subordinate
123,253,414.28 10.51%
Enterprises
China United Co., Ltd and Subordinate
58,373,903.22 4.98%
Enterprises
Beijing True Vision Technology Co.,
38,870,270.94 3.31%
Ltd.
Xi'an Huilong Technology Co., Ltd. 36,881,844.44 3.14%
Total 638,101,379.44 54.40%
28. Sales tax and extra charges
Item Jan. to Jun. 2014 Jan. to Jun. 2013 Rate
92
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Business tax 216,902.57 460,965.09 3%、5%
Education surcharge 1,683,088.56 2,565,200.19 7%
Urban maintenance and construction tax 1,208,055.99 1,668,410.39 3%、2%
Others 1,225.15
Total 3,109,272.27 4,694,575.67 --
29. Sales expenses
Items Jan. to Jun. 2014 Jan. to Jun. 2013
Salary 23,815,187.48 22,286,765.42
Employee benefits 2,421,523.53 1,880,925.49
Housing accumulation funds 1,694,214.24 1,261,947.34
Union funds 340,517.02 238,137.23
Worker education funds 355,467.33 304,153.84
Social insurance premium 5,595,745.31 3,926,171.42
Depreciation expense 518,735.76 438,796.55
Lease expense 359,522.52 153,155.50
Office allowance 8,169,483.64 6,844,885.69
Travel expenses 10,885,943.69 9,254,061.36
Business entertainment 11,817,721.08 14,427,339.98
Water and electricity fees 71,756.18 402,659.48
Low-valued consumables and amortize 80,710.26 92,747.81
Transport fees and transport damages 7,570,739.93 10,053,206.72
Repair charge 232,748.65 149,818.82
Service charge 1,804,523.70 1,892,650.70
Advertising fees 418,754.99 372,783.11
Exhibition fees 57,500.00
Conference expenses 1,712,295.64 2,219,895.40
Sales service charge 1,496,427.73 1,138,934.81
Business publicity fees 979,838.22 487,840.68
Technical services charge 379,825.95 131,166.00
Consulting, intermediary, legal fees 362,031.78 186,697.56
Labor protection fees 44,754.00 339,015.04
Postage telephone and telegram fees 334,598.05 65,165.57
93
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Co-ordination fee 1,284,522.65
Packing expenses 72,417.34 106,261.34
Insurance premium 3,300.00 746,023.16
Cost of quality 7,014.89
Power expenditures 10,816.03
Equipment maintain fees 1,431,989.41 949,474.00
Test fee 137,707.53 176,414.14
Others 1,515,171.00 397,417.21
Total 84,634,467.99 82,273,548.91
30. Administrative expenses
Items Jan. to Jun. 2014 Jan. to Jun. 2013
Salary expenses 13,123,827.18 8,876,366.36
Employee benefits 2,420,279.38 1,915,788.35
Housing Fund 1,678,084.30 1,253,989.20
Union funds 337,480.13 251,001.70
Worker education funds 347,209.33 289,483.95
Social insurance premium 4,097,332.44 3,891,379.62
Depreciation expense 1,495,673.96 1,524,595.94
Amortization charge 507,601.26 300,390.80
Lease expense 3,817,176.87 3,612,956.35
Office allowance 2,135,508.47 1,661,645.73
Travelling expense 1,704,246.73 1,667,981.55
Business entertainment 1,443,464.96 1,597,446.05
Insurance Expense 118,308.06 458,613.09
Water and electricity fees 713,296.17 499,345.22
Low-valued consumables and amortization 74,051.18 110,881.59
Technology development costs 24,184,207.17 29,618,867.19
Repair charge 278,615.14 461,578.12
Audit expenses 572,981.21 164,070.38
Labor protection fees 32,595.12 186,331.05
Postage telephone and telegram fees 25,714.10
Director membership dues 172,717.95 166,923.08
94
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Consulting, intermediary, legal fees 1,175,989.22 711,985.28
Environmental expenditure 51,500.00 31,300.00
Taxation 802,643.24 945,903.57
Conference expenses 429,589.81 551,019.09
Taxation 81,709.07
Conference expenses 700,630.80 758,993.80
Taxation 878,456.91 508,925.35
Conference expenses 149,162.15 41,136.99
Advertising fees 85,797.22 311,192.76
Site use fee 115,845.13
Others 684,392.56 317,680.48
Total 64,294,527.99 62,829,331.87
31. Financial expenses
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Interest expense 17,583,995.66 13,618,333.70
Less: Interest income 1,829,898.72 2,139,988.73
Exchange loss 59,150.36 62,968.20
Less: Exchange gain 35.08 191,643.55
Bank charges 108,289.53 138,256.78
Others 735.80 105.24
Total 15,922,237.55 11,488,031.64
32. Investment income
(1) Details of Investment Income
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Long-term equity investment income by cost method 84,149.16
Long-term equity investment income by equity method 227,042.96 -1,967,352.65
Total 227,042.96 -1,883,203.49
(2) Long-term equity investment income by cost method
Investee Jan. to Jun. 2014 Jan. to Jun. 2013 Reasons for movement
Nanjing Putian Telecommunications Co.,
84,149.16 Assigned dividend
Ltd.
Total 84,149.16 --
95
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(3)Long-term equity investment income by equity method
Investee Jan. to Jun. 2014 Jan. to Jun. 2013 Reasons for movement
Nanjing Prachanda Live Optical Network Business fluctuations
-989,488.38 -2,559,926.08
Co., Ltd
Nanjing Putian Datang Information and Business fluctuations
886,085.16 477,145.68
Electric Co., Ltd.
Nanjing Putian Zhongyou Business fluctuations
Telecommunication Co., Ltd.
Putian Hi-tech Industry Co., Ltd. 260,515.55 220,448.93 Business fluctuations
Nanjing Putian Telege Cable Co., Ltd. 69,930.63 -105,021.18 Business fluctuations
Total 227,042.96 -1,967,352.65 --
(4) Explain of investment income
During the reporting period, no significant repatriation of investment income restrictions
33. Losses of devaluation of asset
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Loss on bad debt 1,197,912.02 591,682.86
Total 1,197,912.02 591,682.86
34. Non-operating income
(1) Details of Non-operating Income
Non-recurring gains and losses
Item Jan. to Jun. 2014 Jan. to Jun. 2013 recognized in the income
amount
Gains from disposal of non-current assets 1,220.16 36,352.80 1,220.16
Include: Gains from disposal of fixed assets 1,220.16 36,352.80 1,220.16
Government grants 1,458,478.28 1,793,770.76 1,458,478.28
Others 3,288,764.41 97,544.00 3,288,764.41
Total 4,748,462.85 1,927,667.56 4,748,462.85
(2) Details of Government Subsidy
Relating to assets / Non-recurring gains and
Grant project Jan. to Jun. 2014 Jan. to Jun. 2013
income-related losses
Refund of VAT 1,444,902.28 1,391,604.16 Income-related Yes
96
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Enterprise Incentive Yes
13,576.00 Income-related
payments
Subsidy income 402,166.60 Income-related Yes
Total 1,458,478.28 1,793,770.76 -- --
35. Non-operating expense
Non-recurring gains and
Item Jan. to Jun. 2014 Jan. to Jun. 2013 losses recognized in the
income amount
Loss from disposal of non-current assets 105,658.79 105,658.79
Include: loss from disposal of fixed assets 105,658.79 105,658.79
Loss from debt restructuring 30,865.75
External donation 1,000.00
Abnormal expenses 75,000.00 75,000.00
Others 232,414.94 568,250.10 232,414.94
Total 413,073.73 600,115.85 413,073.73
36. Income tax
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Current income tax expense calculated to tax law and relevant
5,248,812.79 3,597,267.56
provisions
Total 5,248,812.79 3,597,267.56
37. Calculation of basic earnings per share and diluted earnings per share
Calculation of basic earnings per share and diluted earnings per share
Item Code Jan. to Jun. 2014 Jan. to Jun. 2013
Net profit attributable to ordinary shareholders of parent company(Ⅰ) P0 -9,418,674.05 -2,719,217.34
Net profit attributable to the company's ordinary shareholders after P0 -13,163,451.04 -3,466,018.77
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 share S1
capital or distribution of stock dividend
Increase of amount of common stock owing to issue of bonds newly or bonds issued Si
to be transfer to common stock
97
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Decrease of amount of common stock due to purchase-back common stock ,etc Sj
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 common Mi
stock
Accumulated months since the second month when decrease of amount of common Mj
stock
Average weighted amount of common stock outstanding S 215,000,000.00 215,000,000.00
Basic earnings per share(Ⅰ) -0.0438 -0.013
Basic earnings per share(Ⅱ) -0.0612 -0.016
Net profit attributable to ordinary shareholders of parent company after P1 -9,418,674.05 -2,719,217.34
adjustment(Ⅰ)
Net profit attributable to the company's ordinary shareholders after P1 -13,163,451.04 -3,466,018.77
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 of diluted 215,000,000.00 215,000,000.00
affect
Diluted earnings per share(Ⅰ) -0.0438 -0.013
Diluted earnings per share(Ⅱ) -0.0612 -0.016
(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
98
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
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.
38. Other comprehensive income
Item Jan. to Jun. 2014 Jan. to Jun. 2013
4. Foreign currency translation differences of financial statements -153,920.61 293,104.46
Subtotal -153,920.61 293,104.46
Total -153,920.61 293,104.46
39. Item description in the statement of cash flow
(1) Other cash receipts relating to operating activities
Item Amount
Interest income 1,829,898.72
Temporary receipts and repayment of temporary payment 53,956,029.20
Others 755,771.18
Total 56,541,699.10
(2) Other cash payments relating to operating activities
Item Amount
Temporary payment 14,262,612.34
Various expenses 89,377,474.09
Others 167,439.89
Total 103,807,526.32
40. Supplementary information about consolidated statement of cash flows
(1) Supplementary information about consolidated statement of cash flows
Item Jan. to Jun. 2014 Jan. to Jun. 2013
1、Adjustment of net profit into operation activity cash flow: -- --
Net profit -5,063,684.07 -1,480,723.02
Add: Impairment of assets 1,197,912.02 591,682.86
Depreciation of fixed assets, consumption of oil gas assets and
5,653,114.69 5,378,053.88
depreciation of productive biological assets
99
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Amortization of intangible assets 1,057,210.80 722,546.81
Loss from disposal of fixed assets, intangible assets and other long
104,438.63 -36,352.80
term assets (gain is listed with “-”)
Financial expense (gain is listed with “-”) 15,749,377.69 13,618,333.70
Investment loss (gain is listed with “-”) -227,042.96 1,883,203.49
Decrease of inventories (increase is listed with “-”) -27,316,513.66 778,710.84
Decrease of operational accounts receivable (increase is listed
-106,705,473.15 -153,427,525.04
with “-”)
Increase of operational accounts payable (decrease is listed with
59,035,877.22 -3,283,218.67
“-”)
Net cash flow arising from operation activities -56,514,782.79 -135,255,287.95
2. Significant investment and financing activities with no
-- --
reference to cash collection and payment:
3. Net change in cash and cash equivalent: -- --
Balance of cash at period-end 358,111,049.62 280,748,252.81
Less: Balance of cash at period-begin 402,037,725.25 429,693,529.41
Net increase in cash and cash equivalent -43,926,675.63 -148,945,276.60
(2) Cash and cash equivalent
Item As of 30 June 2014 As of 31 December 2013
Cash 358,111,049.62 402,037,725.25
Cash in hand 60,174.45 10,154.33
May at any time is used to pay the bank deposit 303,434,172.06 402,027,570.92
May at any time for the payment of the other monetary funds 54,616,703.11
Cash and cash equivalent at the year end 358,111,049.62 402,037,725.25
VIII .Related parties and related transaction
1. Condition of parent company
Rate of The
Share Held proportion
The
between of voting
Name of the company's
Type of Registered Legal Business Registration Parent rights Organization
parent Relation Ultimate
entity Address representative nature capital Company between code
company controlling
and the parent
party
Company company
(%) and the
100
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
company
(%)
No. 2 Tudi 2
Road,
China Zhongguan China
Potevio village Putian
Parent Information
Information State-owned economy Xing Wei 1903050000 53.49% 53.49% Information 71093155-5
Company industry
Industry zone, Industry
Co., Ltd. Haidian Group Co.
district,
Beijing
2. Condition of subsidiaries
The
Rate of proportio
Share n of
held voting
Registratio
Type of Legal between rights
Name of the Type of Registere n Capital Organizatio
subsidiarie Representativ Business Nature parent between
companies Entity d Address (unit: Wan n code
s e company parent
Yuan)
and the company
Compan and the
y (%) company
(%)
Nanjing Southern Sales
Limited
Telecommunication Trading Nanjing Hong Wang telecommunication 3,420.50 98.24 98.24 13492047-8
company
s Company Limited products
Nanjing Bada Manufacture of
Limited Manufactur
Telecommunication Nanjing Jin Qiao telecommunication 1,130.14 60.00 60.00 13554048-5
company e
s Co., Ltd. s
Nanjing Putian Manufacture and
Information Limited Manufactur sale of
Nanjing Yong Shu Lu 1,400.00 99.98 99.98 13498233-7
Technology company e telecommunication
Company Ltd. s
Manufacture and
Nanjing Putian
Limited Manufactur sale of
Telege Intelligent Nanjing Baosun Fu 1,200.00 45.77 45.77 72172045-4
company e telecommunication
Building Ltd
s
Putian company Manufactur Sale of
HongKong Liang Sun HK 200.00 90.00 90.00 #61770414
Telecommunication limited by e telecommunication
101
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
s (Hong Kong) Co., shares s
Ltd.
Web-based
Beijing Picom
Limited Manufactur electronic products,
Telecommunication Beijing Junhai Lu USD 50.00 51.00 51.00 717741092
company e digital transmission
s Equipment Ltd.
equipment
Nanjing Putian Manufacture and
WongShi Limited Manufactur sale of USD
Nanjing Qiang Sun 99.42 99.42 71093784-2
Telecommunication company e telecommunication 1,090.00
s Co., Ltd. s
Nanjing Putian
Manufacture and
Changle
Limited Manufactur sale of
Telecommunication Nanjing Qiang Wang 1,000.00 50.70 50.70 13554526-X
company e telecommunication
s Equipment Co.,
s
Ltd
Manufacture and
Nanjing Putian
Limited Manufactur sale of
Network Company Nanjing Yingqian Guan 1,000.00 78.00 78.00 74236858-4
company e telecommunication
Ltd.
s
Manufacture and
Nanjing Putian
Limited Manufactur sale of
Telecommunication Nanjing Chuanxi Liu 475.00 70.00 70.00 13513422-5
company e telecommunication
Technology Co., Ltd
s
Nanjing Mennekes Product and sales
Limited Manufactur
Electric Appliances Nanjing Hong Wang socket for industrial USD 520.00 75.00 75.00 60895120-X
company e
Ltd. use
Production and
Nanjing Putian
Limited Manufactur marketing of
Datang Information Nanjing Yaoming Yan 1,000.00 40.00 40.00 777019050
company e electronic products,
Electronics Co., Ltd.
etc.
3. Condition of the joint ventures and associates
Voting
Registration Proportion of Relationsh
Place of Business proportion in Organization
Invested units Types Legal person Capital (unit: Wanshareholding ip with
registration nature invested code
Yuan) （%） the company
company (%)
Joint venture
Nanjing Prachanda Optical
Sino-foreign Shenwei
Live Optical Nanjing communication37,088,800.00 50 50 Joint venture 55553484-X
joint venture Zhang
Network Co., Ltd of production
102
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Affiliated venture
Nanjing PutianDomestic Communication
Zhongyou (limited products Affiliated
Nanjing ZhaoTiwu 1,000,000.00 30 30 249702200
Telecommunicationliability production venture
Co., Ltd. company) sales, etc
Domestic Industrial park
Nanjing Putian
(limited venue rental Affiliated
High Technology Nanjing Kong ShanYou 337,548,141.29 49.64 49.64 667372881
liability management venture
Industry Co., Ltd.
company)） etc
4. Other related parties
Relationship with
Company Name Organization code
the company
Nanjing Putian Swanking Electrical Co., Ltd Controlled by the parent company 724594270
Controlled by controlling shareholder of the
Shenzhen Putian Lingyun Electronics Co. Ltd 732050660
parent company
Shanghai Putian 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 Putian Telecommunications Cable
Controlled by the parent company 20193968X
CO., LTD
Putian Institute of Technology Co., Ltd. Controlled by the parent company 710929105
5. Related transaction
(1) Purchasing goods, accept services related party transactions
Jan. to Jun. 2014 Jan. to Jun. 2013
Pricing policy and Ratio in Ratio in
Related transaction
Related Parties decision-making similar similar
content Amount Amount
processes trade trade
amount % amount %
Chengdu Putian
Telecommunications Telecommunications Market Pricing 26,546,759.66 2.69% 3,080,417.95 0.31%
Cable CO., Ltd.
Nanjing Prachanda
Live Optical Network Telecommunications Market Pricing 10,965,345.57 1.11% 23,300,743.64 2.33%
Co., Ltd
103
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
China Potevio
Information Industry Telecommunications Market Pricing 11,021,914.53 1.10%
Co., Ltd.
Total 37,512,105.23 3.80% 37,403,076.12 3.74%
(2) The sale of goods, providing labor services related transaction
Jan. to Jun. 2014 Jan. to Jun. 2013
Pricing policy and Ratio in Ratio in
Related transaction
Related Parties decision-making similar similar
content Amount Amount
processes trade trade
amount % amount %
China Potevio
Information Industry Telecommunications Market Pricing 21,328,788.21 1.82% 66,840,783.74 5.82%
Co., Ltd.
Nanjing Putian
Zhongyou
Telecommunications Market Pricing 61,920.00 0.01% 107,692.31 0.01%
Telecommunication
Co., Ltd.
Nanjing Prachanda
Live Optical Network Telecommunications Market Pricing 5,494.00 12,129.05
Co., Ltd
Putian Technology
Research Institute Co., Telecommunications Market Pricing 489,564.10 0.04%
Ltd.
Nanjing Putian Datang
Information and Electric Telecommunications Market Pricing 2,431.63
Company Ltd.
Total 21,396,202.21 1.83% 67,452,600.83 5.87%
(3)Related leasing
Rental revenue
Date start for Date for termination Accordance for
Lessor Lessee Leased assets reorganization of impact on the
leasing of leasing rental income
company
Nanjing Putian High Nanjing Putian
Technology Industry telecommunication Land Property 2014-01-01 2014-12-31 Market Pricing 3,653,577.35
Co., Ltd. Co., Ltd
Associated lease note:
Leased Value of the Accordance Rental revenue
Lessor Lessee Date start for Date for Rental fee Property costs
asset leased asset for impact on the
104
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
position reorganization company
leasing termination of rental
of leasing income
Nanjing
Putian High Nanjing Putian
Market
Technology telecommunication good 36,241,036.82 2014-01-01 2014-12-31 3,653,577.35 851,970.83 4,505,548.18
Pricing
Industry Co., Ltd
Co., Ltd.
(4)Related guarantee
Assurance Date start for Whether the guarantee
Secured party Amount of guarantee Due date for guarantee
Provider guarantee is carried out
Nanjing Putian Nanjing Southern
telecommunication Co., Telecommunications 20,000,000.00 2013-11-25 2014-11-24 No
Ltd. Company Ltd.
Nanjing Putian Nanjing Southern
telecommunication Co., Telecommunications 10,000,000.00 2013-08-30 2014-08-29 No
Ltd. Company Ltd.
Nanjing Putian Nanjing Southern
telecommunication Co., Telecommunications 10,000,000.00 2013-09-28 2014-09-27 No
Ltd. Company Ltd.
Nanjing Putian Nanjing Southern
telecommunication Co., Telecommunications 20,000,000.00 2014-01-13 2014-12-31 No
Ltd. Company Ltd..
Nanjing Putian
Nanjing Putian Telege
telecommunication Co., 10,000,000.00 2013-10-10 2014-10-09 No
Intelligent Building Ltd
Ltd.
Nanjing Putian
Nanjing Putian Telege
telecommunication Co., 10,000,000.00 2013-09-23 2014-09-22 No
Intelligent Building Ltd
Ltd.
Nanjing Putian Nanjing Prachanda
telecommunication Co., Live Optical Network 5,000,000.00 2013-09-02 2014-08-14 No
Ltd. Co., Ltd.
Nanjing Putian Nanjing Prachanda
telecommunication Co., Live Optical Network 4,000,000.00 2013-10-23 2014-07-21 No
Ltd. Co., Ltd.
Nanjing Putian Nanjing Prachanda
telecommunication Co., Live Optical Network 1,020,000.00 2014-01-22 2014-07-22 No
Ltd. Co., Ltd.
China Potevio Nanjing Putian 20,000,000.00 2014-01-14 2015-01-14 No
105
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Information Industry telecommunication Co.,
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 30,000,000.00 2013-12-10 2014-12-09 No
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 20,000,000.00 2013-12-06 2014-12-05 No
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 44,000,000.00 2014-05-05 2015-05-05 No
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 30,000,000.00 2014-06-05 2015-06-05 No
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 160,000,000.00 2013-08-21 2014-08-20 No
Co., Ltd. Ltd.
China Potevio Nanjing Putian
Information Industry telecommunication Co., 20,000,000.00 2013-09-01 2014-08-31 No
Co., Ltd. Ltd.
6. Payables and receivables of related parties
(1) Receivables from related parties
Name of the related As of 30 June 2014 As of 31 December 2013
Item
parties Book amount Provision Book amount Provision
Nanjing Putian
Zhongyou
Accounts receivable 384,272.80
Telecommunication Co.,
Ltd.
China Potevio
Accounts receivable Information Industry Co., 23,171,706.49 100,904.72 24,187,722.30 2,936.37
Ltd.
Putian Technology
Accounts receivable Research Institute Co., 80,784.00 80,784.00
Ltd.
Shanghai Putian
Accounts receivable 803,719.70 8,420.00 973,829.70
Network Company Ltd.
Shanghai Putian
Accounts receivable 13,341,700.00 13,341,700.00
Youtong Technology
106
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Co., Ltd.
China Potevio
Other receivables Information Industry Co., 360,680.00 17,500.00
Ltd.
Beijing Picom
Other receivables Telecommunications 28,912,122.71 28,912,122.71 28,912,122.71 28,912,122.71
Equipment Co., Ltd.
(2) Payables to related parties
Item Name of the related parties As of 30 June 2014 As of 31 December 2013
Nanjing Prachanda Live Optical
Accounts payable 51,320,585.03 49,444,830.71
Network Co., Ltd.
China Potevio Information
Accounts payable 21,290,106.90 21,290,106.90
Industry Co., Ltd.
China Potevio Information
Receipts in advance 8,163,434.00 8,163,434.00
Industry Co., Ltd.
China Putian Information Industry
Receipts in advance 22,990.00 22,990.00
Group Co.,
Nanjing Putian High Technology
Other payables 1,443,989.64 974,661.69
Industry Co., Ltd.
Chengdu Putian
Accounts payable Telecommunications Cable Co., 514,074.00
Ltd.
Nanjing Prachanda Live Optical
Other payables 1,372,064.01 155,951.65
Network Co., Ltd.
Nanjing Putian Datang
Accounts payable 118,628.05
information electronic Co., Ltd.
Nanjing Putian High Technology
Accounts payable 222,381.72 74,127.24
Industry Co., Ltd.
Nanjing Putian Swanking
Accounts payable 2,002.01
Electrical Co., Ltd
IX．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.
107
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
3. Other contingent liabilities
None
X. Commitments
1. Significant commitment matters
None
2. Early promise fulfillment situation
None
XI. 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
XII. Other significant matters
1. Financial assets and financial liabilities in foreign currency
the cumulative
As of 31 December Current changes in Current provision for
Items changes in fair value As of 30 June 2014
2013 fair value impairment
included in equity
Financial assets:
3. Loans and receivables 4,725,508.98 4,770,705.93
Subtotal 4,725,508.98 4,770,705.93
Financial liability 5,782,786.63 3,567,154.79
XIII. Notes to main items of financial statement of parent company
1. Account receivable
(1)Classification of accounts receivable
Item As of 30 June 2014 As of 31 December 2013
108
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Book balance Reserve for bad debts Book balance Reserve for bad debts
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount
(%) (%) (%) (%)
Classification as the group of provision for account receivable
Group1 182,075,050.74 30.64% 130,443,704.30 26.39%
Group 2 335,315,864.28 56.43% 342,775,948.10 69.35%
Group 3 75,007,211.76 12.62% 8,673,961.97 11.56% 19,225,197.21 3.89% 8,039,017.60 41.82%
Subtotal 592,398,126.78 99.69% 8,673,961.97 1.46% 492,444,849.61 99.63% 8,039,017.60 1.63%
Single amount not
significant but single
1,837,610.12 0.31% 1,837,610.12 100.00% 1,837,610.12 0.37% 1,837,610.12 100.00%
provision for accounts
receivable
Total 594,235,736.90 -- 10,511,572.09 -- 494,282,459.73 -- 9,876,627.72 --
Notes：Single amount dramatic and individual provision for accounts receivable refers to single exceed RMB 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 2014 As of 31 December 2013
Age Book balance Book balance
Reserve for bad debts Reserve for bad debts
Amount Percentage (%) Amount Percentage (%)
Within 1 year
(contain 1 172,379,120.33 67.05% 109,836,962.71 73.39%
year)
1 to 2 years 58,882,704.20 22.90% 24,222,714.86 16.18%
2 to 3 years 14,545,016.98 5.66% 1,454,501.69 4,854,306.48 3.24% 485,430.66
3 to 4 years 11,275,420.99 4.39% 7,219,460.28 10,754,917.46 7.19% 7,553,586.94
4 to 5 years 3,904,397.58 1.52% 1,171,319.29 2,150,016.08 1.44% 645,004.82
5 to 6 years 1,994,567.21 0.77% 797,826.91 1,800,024.19 1.20% 720,009.68
6 years or
5,376,456.20 2.10% 5,250,314.08 6,804,877.19 4.55% 6,188,572.44
above
Total 257,082,262.50 -- 8,673,961.97 149,668,901.51 -- 8,039,017.60
Closing single amount not significant but single provision for accounts receivable
Receivables Book amount Bad debt Proportion Reason
China Unicom Nanjing Age longer cannot be
12,500.00 12,500.00 100.00%
Branch recalled
109
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
M/S WHISTLER TELECOM Age longer cannot be
1,724,928.12 1,724,928.12 100.00%
(PVT) LTD recalled
Age longer cannot be
PRADUFA 100,182.00 100,182.00 100.00%
recalled
Total 1,837,610.12 1,837,610.12 -- --
(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
As of 30 June 2014 As of 31 December 2013
Name
Book balance Reserve for bad debts Book balance Reserve for bad debts
China Potevio Information Industry
20,533,400.80 44,555.15 21,794,542.40 0.00
Co., Ltd.
Total 20,533,400.80 44,555.15 21,794,542.40 0.00
(5) Top 5 debtors of accounts receivable
Relationship with the Proportion of total amount
Name of the debtors Amount Aging
Company (%)
China Telecom Co., Ltd.
Non-related party 108,903,821.32 Within 1 year 18.33%
Jiangsu Branch
Agricultural Bank of China Non-related party 35,302,050.79 Within 2 year 5.94%
China Potevio Information
Parent company 20,553,400.80 Within 3 year 3.46%
Industry Co., Ltd.
China Telecom Co., Ltd.
Non-related party 16,968,052.69 Within 4 year 2.86%
Henan Branch
Shenzhen Qianzhiwei
Communication Technology Non-related party 16,729,250.00 1 to 2 year 2.82%
Co., Ltd.
Total -- 198,456,575.60 -- 33.41%
(6) Accounts receivable of related parties accounts
Name of the debtors Relationship with the Company Amount Proportion of total amount (%)
China Potevio Information Parent company 20,553,400.80 3.46%
110
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Industry Co., Ltd.
Shanghai Putian Youtong Controlled by the same parent
13,341,700.00 2.25%
Technology Co., Ltd. company
Shanghai Putian Network Controlled by the same parent
803,719.70 0.13%
Company Ltd. company
Putian Technology Research Controlled by the same parent
80,784.00 0.01%
Institute Co., Ltd. company
Total -- 34,779,604.50 5.85%
(7) Balance of accounts receivable in foreign currencies
As of 30 June 2014 As of 31 December 2013
Foreign currency Exchange
RMB converted RMB converted
Original currency rate Original currency Exchange rate
USD 308,556.56 6.1528 1,898,486.80
Total —— —— 1,898,486.80
2. Other receivables
(1)Classification of other receivables
2. Other receivables
(1)Classification of other receivables
2. Other receivables
(1)Classification of other receivables
As of 30 June 2014 As of 31 December 2013
Book balance Reserve for bad debts Book balance Reserve for bad debts
Item
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount
(%) (%) (%) (%)
Single amount dramatic and
individual provision for the 28,912,122.71 39.92% 28,912,122.71 100.00% 28,912,122.71 24.89% 28,912,122.71 100.00%
accounts receivable
Classification as the group of provision for account receivable
Group1 12,000,000.00 16.57% 4,800,000.00 40.00% 47,021,708.19 40.49% 6,400,000.00 13.61%
Group 2 15,682,024.17 21.66% 27,119,206.47 23.35%
Group 3 11,736,823.42 16.21% 5,053,916.81 43.06% 9,001,281.19 7.75% 4,077,828.68 45.30%
Subtotal 39,418,847.59 54.44% 9,853,916.81 25.00% 83,142,195.85 71.59% 10,477,828.68 12.60%
Single amount not significant 4,085,166.33 5.64% 4,085,166.33 100.00% 4,085,166.33 3.52% 4,085,166.33 100.00%
111
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
but single provision for
accounts receivable
Total 72,416,136.63 -- 42,851,205.85 -- 116,139,484.89 -- 43,475,117.72 --
Notes：Single amount dramatic and individual provision for other receivable refers to single exceed RMB 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.
Closing single amount significant and single provision for accounts receivable
Type (or contents) of other
Name of debtors Amount Provision Proportion
receivables
Beijing Picom
Telecommunications 28,912,122.71 28,912,122.71 100.00% Receivables and payables
Equipment Co., Ltd.
Total 28,912,122.71 28,912,122.71 -- --
Adopt age analysis provision in group as follows:
As of 30 June 2014 As of 31 December 2013
Age Book balance Book balance
Reserve for bad debts Reserve for bad debts
Amount Percentage (%) Amount Percentage (%)
Within 1 year
720,645.00 3.04% 13,985,538.10 24.97%
(contain 1 year)
1 to 2 years 553,770.84 2.34% 18,099,703.03 32.31%
2 to 3 years 3,226,486.62 13.59% 322,648.67 1,229,403.73 2.19% 122,940.37
3 years or above 19,235,920.96 81.03% 9,531,268.14 22,708,344.52 40.53% 10,354,888.31
3 to 4 years 1,090,358.32 4.59% 327,107.50 2,560,408.10 4.57% 768,122.43
4 to 5 years 14,560,408.10 61.34% 5,824,163.24 17,418,567.57 31.09% 6,967,427.03
5 years or above 3,585,154.54 15.10% 3,379,997.40 2,729,368.85 4.87% 2,619,338.85
Total 23,736,823.42 -- 9,853,916.81 56,022,989.38 -- 10,477,828.68
Receivables Book amount Bad debt Proportion Reason
single amount not significant
Aging longer difficult to
and single provision for 4,085,166.33 4,085,166.33 100.00%
recover
other receivables
Total 4,085,166.33 4,085,166.33 -- --
(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.
112
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(3) Accounts receivable due from shareholder who has more than 5% (including 5 %) voting shares of the Company
at year-end
The outstanding amount of the parent company China Putian Information Industry Co. arrears of RMB 17,500.00 Yuan, aged less than 1 year.
(4) Large amount of other receivables nature or content
As of 30 June 2014 As of 31 December 2013
Name
Book amount Bad debt Book amount Bad debt
China Potevio Information Industry Co.,
360,680.00 0.00 17,500.00 0.00
Ltd.
Total 360,680.00 0.00 17,500.00 0.00
(5) Large amount of other receivables nature or content
Name of the debtors Amount Other receivables nature or content
Beijing Picom Telecommunications Equipment Ltd 28,912,122.71 Aging longer difficult to recover
Yuhua Peoples’ Government Nanning Office 12,000,000.00 Receivables and payables
Total 40,912,122.71 ——
(6) Top 5 debtors of other receivables
Relationship with the Proportion of total amount
Name of debtors Amount Aging
Company (%)
Beijing Picom
Telecommunications Related party 28,912,122.71 More than 6 years 39.92%
Equipment Co., Ltd.
Yuhua Peoples’ Government
Non –related party 12,000,000.00 4 to 5 years 16.57%
Nanning Office
Nanjing Southern
Telecommunications Subsidiary 1,461,598.51 Within 2 year 2.02%
Company Ltd..
Henan Zhongguang
Information Network Co., Non –related party 1,000,000.00 More than 6 years 1.38%
Ltd.
China Mobile Group Jiangsu
Non –related party 730,000.00 4 to 5 years 1.01%
Co.
China Mobile Group Jiangsu
Non –related party 250,000.00 More than 6 years 0.35%
Co.
Total -- 44,353,721.22 -- 61.25%
113
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(7) Other receivables from related parties
Name of debtors Relationship with the Company Amount Proportion of total amount (%)
Beijing Picom
Telecommunications Equipment Related party 28,912,122.71 39.92%
Co., Ltd.
Nanjing Southern
Telecommunications Company Subsidiary 1,461,598.51 2.02%
Ltd..
China Potevio Information Parent company
360,680.00 0.50%
Industry Co., Ltd.
Nanjing Putian Subsidiary
Telecommunication Technology 54,539.96 0.08%
Co., Ltd.
Total -- 30,788,941.18 42.52%
3. Long-term equity investments
(1) List of Information of Long-term Equity Investment
Voting Descriptio
Share right n about
Impairme
holding proporti inconsiste
Book Book nt Cash
percenta on of nt in
Accounti balance at balance at provision dividends
Initial cost of Movemen ge of the the shareholdi Impairment
Invested units ng the end of 31 the end of 31 withdraw during
investment t Company Compan ng and provision
Method December December n during the
among y among voting
2013 2013 the period
invested invested rights of
period
units) (%) units) the
(%)) investee
Nanjing Southern
Telecommunicati Cost 33,175,148.0 33,175,148.0 33,175,148.0
98.24% 98.24%
ons Company Method 0 0 0
Limited
Nanjing Putian
Cost
Telege Intelligent 3,320,003.45 3,320,003.45 3,320,003.45 45.77% 45.77%
Method
Building Ltd.
Nanjing Putian
Changle Cost
2,610,457.00 2,610,457.00 2,610,457.00 50.70% 50.70%
Telecommunicati Method
ons Equipment
114
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Co., Ltd.
Nanjing Bada
Cost
Telecommunicati 5,610,000.00 5,610,000.00 5,610,000.00 60.00% 60.00%
Method
ons Co., Ltd
Nanjing Putian
Wongshi Cost 40,997,683.0 40,997,683.0 40,997,683.0
99.42% 99.42%
Telecommunicati Method 0 0 0
ons Co., Ltd.
Nanjing Putian
Cost
Network 9,146,455.13 7,741,140.41 7,741,140.41 78.00% 78.00%
Method
Company Ltd.
Putian
Telecommunicati Cost
1,910,520.00 1,910,520.00 1,910,520.00 90.00% 90.00%
ons (Hong Kong) Method
Co., Ltd.
Nanjing Putian
Information Cost 13,860,000.0 13,860,000.0 13,860,000.0
99.98% 99.98%
Technology Method 0 0 0
Company Ltd.
Nanjing Putian
Telecommunicati Cost
1,294,510.00 1,294,510.00 1,294,510.00 70.00% 70.00%
on Technology Method
Co., Ltd.
Beijing Picom
Telecommunicati Cost 1,854,910.
1,854,910.00 1,854,910.00 1,854,910.00 51.00% 51.00%
ons Equipment Method 00
Ltd
Nanjing Yahua
Cost
Galvanization 420,915.00 420,915.00 420,915.00 10.00% 10.00%
Method
Factory
Hangzhou
Swanking Cost
321,038.00 321,038.00 321,038.00 2.26% 2.26%
Electric Method
Appliance
Nanjing
Mennekes
Cost 15,037,508.0 57,831,011.7 57,831,011.7
Electric 75.00% 75.00%
Method 0 1 1
Appliances Co.,
Ltd.
Nanjing Putian Equity 5,212,328.80 4,326,243.64 886,085.1 5,212,328.80 40.00% 40.00%
115
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Datang Method 6
information
electronic Co.,
Ltd.
Nanjing Putian
Zhongyou Equity
300,000.00 219,528.61 219,528.61 30.00% 30.00%
Telecommunicati Method
on Co., Ltd.
Nanjing Putian
Equity 167,548,141. 168,922,896. -37,324.4 168,885,571. 297,840.
High Technology 49.64% 49.64%
Method 29 40 5 95 00
Industry Co., Ltd.
Nanjing
Prachanda Live Equity 13,544,400.0 13,740,859.9 -989,488. 12,751,371.5
50.00% 50.00%
Optical Network Method 0 1 38 3
Co., Ltd.
316,164,017. 358,156,865. -140,727. 358,016,137. 1,854,910. 297,840.
Total -- -- -- --
67 13 67 46 00 00
4. Operating revenues and costs
(1) Operating revenues
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Main operating revenue 590,311,613.59 713,341,159.34
Other operating revenue 24,365,875.65 12,273,902.91
Total 614,677,489.24 725,615,062.25
Operating costs 552,638,621.78 655,279,644.09
(2) Operating costs
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Main operating cost 532,025,730.03 644,761,608.58
Other operating cost 20,612,891.75 10,518,035.51
Total 552,638,621.78 655,279,644.09
(3) Main Business (In terms of different products)
Jan. to Jun. 2014 Jan. to Jun. 2013
Item
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communication products 590,311,613.59 532,025,730.03 713,341,159.34 644,761,608.58
Total 590,311,613.59 532,025,730.03 713,341,159.34 644,761,608.58
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
(4) Main business items listed by Industry
Jan. to Jun. 2014 Jan. to Jun. 2013
Item
Main operating revenue Main operating cost Main operating revenue Main operating cost
Communications equipment
590,311,613.59 532,025,730.03 713,341,159.34 644,761,608.58
industry
Total 590,311,613.59 532,025,730.03 713,341,159.34 644,761,608.58
(5) Main Business (In terms of different regions)
Jan. to Jun. 2014 Jan. to Jun. 2013
Area Name
Main operating revenue Main operating cost Main operating revenue Main operating cost
Domestic market 588,808,024.18 530,863,284.56 713,189,349.68 644,657,596.57
Oversea market 1,503,589.41 1,162,445.47 151,809.66 104,012.01
Total 590,311,613.59 532,025,730.03 713,341,159.34 644,761,608.58
(6) The amount of operating revenues received from the top 5 customers this year
Proportion taking in total
Item operating revenues operating income of the
Company (%)
China Telecom Co., Ltd & Controlled Subordinate Enterprises 356,004,796.54 57.92%
China Mobile Co., Ltd & Controlled Subordinate Enterprises 121,777,687.79 19.81%
China United Network Co., Ltd &Controlled Subordinate Enterprises 56,047,427.97 9.12%
Nanjing Yuanda Information Technology Co., Ltd. 11,310,111.11 1.84%
Quanzhou Huahe Communication Technology Co., Ltd. 16,795,143.59 2.73%
Total 561,935,167.00 91.42%
5. Investment income
(1) Details of Investment Income
Item Jan. to Jun. 2014 Jan. to Jun. 2013
Long-term equity investment income by equity method 157,112.33 -1,862,331.47
Total 157,112.33 -1,862,331.47
(2) Long-term equity investment income by cost method
None
(3) Long-term equity investment income by equity method
Investee Jan. to Jun. 2014 Jan. to Jun. 2013 Reasons for movement
117
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Nanjing Prachanda Live Optical Network Co., Ltd. -989,488.38 -2,559,926.08 Business fluctuations
Nanjing Putian Datang information electronic Co.,
886,085.16 477,145.68
Ltd. Business fluctuations
Nanjing Putian High Technology Industry Co., Ltd. 260,515.55 220,448.93 Business fluctuations
Total 157,112.33 -1,862,331.47 --
6. Supplementary information about consolidated statement of cash flows
Item Jan. to Jun. 2014 Jan. to Jun. 2013
1、Adjustment of net profit into operation activity cash flow： -- --
Net profit -22,812,040.37 -13,109,556.68
Add: impairment of assets 11,032.50 34,764.05
Depreciation of fixed assets, consumption of oil gas assets and
2,127,553.33 2,420,609.59
depreciation of productive biological assets
Amortization of intangible assets 316,630.23 423,561.03
Loss from disposal of fixed assets, intangible assets and other long term
78,578.15
assets (gain is listed with “-”)
Financial expense (gain is listed with “-”) 14,492,578.87 11,240,332.77
Investment loss (gain is listed with “-”) -11,032.50 1,862,331.47
Decrease of inventories (increase is listed with “-”) 11,547,231.56 -4,517,187.53
Decrease of operational accounts receivable (increase is listed with “-”) -41,566,727.77 -114,949,312.27
Increase of operational accounts payable (decrease is listed with “-”) 20,809,153.07 25,448,393.51
Net cash flow arising from operation activities -15,007,042.93 -91,146,064.06
2、Significant investment and financing activities with no reference to cash
-- --
collection and payment:：
3、Net change in cash and cash equivalent: -- --
Balance of cash at period-end 197,245,936.14 158,755,370.14
Less: Balance of cash at period-begin 217,989,348.06 267,226,515.29
Net increase in cash and cash equivalent -20,743,411.92 -108,471,145.15
XIV. Supplementary Information
1. Non-recurring gains and losses of current year (Profit: +, loss: -)
Item As of 30 June 2014 Note
Gains and losses from disposal of non-current assets, including reversal -104,438.63
118
Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
of provision for impairment before
Government subsidy recorded in current gains and losses,(except the
fixed or quantitative government subsidy closely related to the enterprise 1,458,478.28
businesses and according to the national uniform standard)
The company's current non-recurring
gains and losses are mainly
Income from the exceeding part between investment cost of the Company
generated from， the cost of acquire
paid for obtaining subsidiaries, associates and joint-ventures and
3,276,764.14 subsidiary Nanjing Putian Datang
recognizable net assets fair value attributable to the Company when
information electronic Co., Ltd. less
acquiring the investment
than identifiable net assets at fair
value RMB 3,276,764.14Yuan
In addition to the above other operating income and expenses -295,414.67
Affect on minority equity(after taxation) 239,544.35
Affect on income tax 351,067.78
Total 3,744,776.99 --
2. Return on equity and earnings per share
Weighted average return on Earnings per share
Profits of the reporting period
equity（%） Basic earnings per share Basic earnings per share
Net profit attributable to shareholders of parent
-2.49% -0.0438 -0.0438
company
Net profit attributable to shareholders of parent
company after deduction of non-current gains and -3.48% -0.0612 -0.0612
losses
3. Description of the abnormality in the main accounting statement item
(1) Item of Income Statement
Proportion of
Item Jan. to Jun. 2014 Jan. to Jun. 2013 Amount of movement Note
movement
Investment property 10,898,773.38 4,401,316.11 6,497,457.27 147.63% Note1
Finance costs 15,922,237.55 11,488,031.64 4,434,205.91 38.60% Note2
Non -operating income 4,748,462.85 1,927,667.56 2,820,795.29 146.33% Note3
Note 1: During this period Nanjing Putian Datang information electronic Co., Ltd. was consolidated, resulting in a substantial increase in investment real estate;
Note 2: Interest expense increased;
Note 3: Nanjing Putian Datang information electronic Co., Ltd. consolidated goodwill adjustment.
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Nanjing Putian Telecommunications Co., Ltd. SEMI-ANNUAL REPORT 2014
Section X. Documents available for reference
(I)Financial statement of the Company with signature and seal from the person in charge of the Company, person in charge of the accounting works
and person in charge of accounting;
(II)Original text of all documents of the Company as well as manuscript of the announcement that disclosed on website appointed by CSRC
Board of Directors of
Nanjing Putian Telecommunications Co., ltd.
26 August 2014
120
