Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
2018 Annual Report
April 2019
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred
to as the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
Wang Wenkui, Principal of the Company, Cao Xurong, person in charge of
accounting works and Guan Xiaojian, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2018 Annual
Report is authentic, accurate and complete.
All directors attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with development strategy,
operation plans and targets involved in the Report, they do not constitute a
substantial commitment for investors. Investors are advised to exercise caution
when investment risks exist.
The Company has analyzed the risk factors that the Company may face in the
future in the “Section IV. Discussion and Analysis of Operation” of this report,
investors are advised to check the information.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2
Section II Company Profile and Main Finnaical Indexes ............................................................. 5
Section III Summary of Company Business ................................................................................ 10
Section IV Discussion and Analysis of Operation ....................................................................... 14
Section V Important Events .......................................................................................................... 34
Section VI Changes in shares and particular about shareholders............................................... 68
Section VII Preferred Stock……………………………………………………………………….75
Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 76
Section IX Corporate Governance ................................................................................................. 88
Section X Corporate Bonds ........................................................................................................... 93
Section XI Financial Report .......................................................................................................... 94
Section XII Documents available for reference ......................................................................... 184
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Paraphrase
Items Refers to Contents
CSRC Refers to China Securities Regulatory Commission
SZ Stock Exchange Refers to Shenzhen Stock Exchange
China Potevio Company Limited (controlling shareholder of the
China Potevio Refers to
Company)
The Company, Company, Nanjing Putian Refers to Nanjing Putian Telecommunications Co., Ltd.
Nanjing Southern Telecom Co., Ltd.(controlling subsidiary of the
Southern Telecom, Southern Company Refers to
Company)
Nanjing Putian Telege Intelligent Building Ltd.(controlling
Telege Building Refers to
subsidiary of the Company)
Nanjing Putian Datang Information Electronic Co., Ltd.
Datang Company Refers to
(controlling subsidiary of the Company)
Reporting period Refers to Year of 2018
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section II Company Profile and Main Financial Indexes
I. Company information
Short form of the stock NJ TEL B Stock code 200468
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
南京普天通信股份有限公司
Chinese)
Short form of the Company
南京普天
(in Chinese)
Foreign name of the
Nanjing Putian Telecommunications Co., Ltd.
Company(if applicable)
Legal representative Wang Wenkui
No. 58 Qinhuai Road, Jiangning Economics and Technology Development Zone, Nanjing, Jiangsu
Registrations add.
Province
Code for registrations add 211100
Offices add. No. 1 Putian Road, Qinhuai District Nanjing, Jiangsu Province
Codes for office add. 210012
Company’s Internet Web Site www.postel.com.cn
E-mail securities@postel.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Jing Xiao Hong
No. 1 Putian Road, Qinhuai District No. 1 Putian Road, Qinhuai District
Contact address
Nanjing, Jiangsu Province Nanjing, Jiangsu Province
Tel. 86-25-58962308 86-25-58962072
Fax. 86-25-52409954 86-25-52409954
E-mail lijing@postel.com.cn xiaohong@postel.com.cn
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times; Hong Kong Commercial Daily
Website for annual report publish appointed by CSRC www.cninfo.com.cn
Preparation place for annual report Office of the Board
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
IV. Registration changes of the Company
Organization code 91320000134878054G
Changes of main business since listing (if
No change
applicable)
The original controlling shareholder of the Company was China Putian Corporation. In
Previous changes for controlling 2005, China Putian Corporation transferred all the holding shares free to China Potevio
shareholders (if applicable) Company Limited. The controlling shareholder of the Company changed to China
Potevio Company Limited.
V. Other relevant information
CPA engaged by the Company
Name of CPA Pan-China Certified Public Accountants (LLP)
17/F, Tower B, Beijing International Building, No. 18, Nandajie Jia, ZOL, Haidian District,
Offices add. for CPA
Beijing
He Jiangxing, Jin Jingyu He Jiangxing, Jin Jingyu
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√Applicable □ Not applicable
Office address of sponsor
Sponsor institution Sponsor representative Continuous supervision period
institution
3/F, Tower B, Kaiheng Center,
China Securities Co., Ltd. No.2 Chaonei St., Dongcheng Zhuang Yunzhi, Wang Min 2018.8.15-2019.12.31
District, Beijing
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
√ Yes □No
Reasons for retrospective adjustment or restatement
Correction of accounting error
Changes over
2017 2016
last year
2018
Before After After Before After
adjustment adjustment adjustment adjustment adjustment
1,995,627,772. 2,254,399,406. 2,254,399,406. 1,853,911,278. 1,853,911,278.
Operating revenue (RMB) -11.48%
60 04 04 83 83
Net profit attributable to 5,859,214.84 11,885,170.28 8,982,857.76 -34.77% -6,434,558.27 -5,063,843.89
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
shareholders of the listed
Company(RMB)
Net profit attributable to
shareholders of the listed
Company after deducting -21,461,955.87 9,156,761.14 6,254,448.62 -443.15% -11,286,693.14 -9,915,978.76
non-recurring gains and
losses(RMB)
Net cash flow arising from -155,418,733.8
-47,217,136.32 -47,220,769.58 -229.13% 109,145,940.57 109,087,237.73
operating activities(RMB) 3
Basic earnings per share
0.03 0.06 0.04 -25.00% -0.03 -0.02
(RMB/Share)
Diluted earnings per share
0.03 0.06 0.04 -25.00% -0.03 -0.02
(RMB/Share)
Weighted average ROE 1.66% 3.43% 2.60% -0.94% -1.87% 1.47%
Changes over
End of 2017 End of 2016
end of last year
End of 2018
Before After After Before After
adjustment adjustment adjustment adjustment adjustment
2,120,744,292. 2,116,312,318. 2,114,332,229. 2,304,519,167. 2,307,031,427.
Total assets (RMB) 0.30%
41 51 50 54 07
Net assets attributable to
shareholder of listed Company 355,289,728.24 352,228,571.54 350,248,482.53 1.44% 339,838,415.21 340,760,638.72
(RMB)
Reasons of accounting policy change and accounting error correction
According to the relevant requirements addressed by the Jiangsu Securities Regulatory Bureau in the Decision Relating to Issue of
Warning Letter to Nanjing Putian Communications Co., Ltd., the Company made correction to the accounting errors for the financial
statements for the years 2014 to 2017 under retrospective restatement method as discussed and approved at the 10 th session of the 7th
BOD of the Company held on 13 July 2018. For details, please refer to the Notice on Correction of Earlier Accounting Errors
released on 14 July 2018.
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 579,271,964.31 387,578,640.64 445,518,808.43 583,258,359.22
Net profit attributable to
-6,411,052.72 -4,010,652.88 -7,943,829.27 24,224,749.71
shareholders of the listed Company
Net profit attributable to
shareholders of the listed Company
-29,910,522.65 -13,682,092.82 -2,803,874.44 24,934,534.04
after deducting non-recurring gains
and losses
Net cash flow arising from
-181,745,941.41 -43,529,287.52 -26,400,359.58 96,256,854.68
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the Company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2018 2017 2016 Note
Gains/losses from the disposal of
non-current asset (including the write-off 33,483,456.05 -481,922.28 210,219.85
that accrued for impairment of assets)
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 8,554,841.22 5,534,839.79 6,572,800.76
national standards, which are closely
relevant to enterprise’s business)
Gains/losses of debt restructuring -34,865.18
Other non-operating revenue and
expenditure except for the aforementioned -165,751.16 49,304.02 1,094,096.82
items
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Payable unable to paid 1,332,427.34
Less: impact on revenue tax 5,400,947.05 1,150,984.62 133,851.87
Impact on minority shareholders’
10,482,855.69 1,187,962.59 2,891,130.69
equity (post-tax)
Total 27,321,170.71 2,728,409.14 4,852,134.87 --
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. 2018 Annual Report
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with the disclosure requirement of the special industry
No
1.During the reporting period, main business and products as well as the utilization that the Company mainly
engaged in, including the operation mode, main performance drivers
The Company is a state-controlled communications equipment manufacturing Company, of which the main
business is R&D, production and sales of information communication equipment. The products of the company and
its subsidiaries cover optical communication networks, wireless communication networks, data applications, and
industrial electrical and other fields, the main products are optical communication network connection equipment,
private network communication products, multimedia communication equipment, integrated wiring, etc., customers
include domestic telecom operators, tower companies and industry customers in the government, finance, electric
power, medical and other fields, and the products cover all provinces and cities in the country and are exported to
foreign countries.
At present, the business of the company’s headquarters includes optical wiring network and communication
supporting overall solutions (ODN overall solution, optical network intelligent solution, energy-saving data center
solution), private network communication products. The optical wiring network and communication supporting
overall solution are mainly used for domestic communication network construction, radio and television network
transformation, high-speed rail communication construction, urban subway construction, etc., and have made
breakthroughs in the e-commerce industry. The private network communication products mainly produce and
process ad-hoc network communication equipment according to customer requirements for establishing small and
medium-sized dedicated communication networks.
The business of main subsidiaries includes multimedia communication and application solutions, building
intelligent integrated solutions, industrial intelligent power distribution systems, solar street light control systems,
etc., among them, the main business of the subsidiary Nanjing Southern Telecom Co., Ltd. is to offer remote
collaborative application solutions for large and medium-sized industry customers in governments, finance,
medical, education and other fields, and the main products are video conferencing products. The subsidiary Nanjing
Putian Telege Intelligent Building Co., Ltd. mainly provides medium- and high-end integrated wiring and
intelligent application solutions for customers. The subsidiary Nanjing Mennekes Electric Appliances Co., Ltd.
provides industrial intelligent power distribution products for various industrial sites such as rail transit, airports,
ports, etc. The subsidiary Nanjing Putian Datang Information Electronics Co., Ltd. mainly provides solar street
lamp controllers and IOT street lamp monitoring systems. .
The company has market networks covering all parts of the country, and its main customers include domestic
telecom operators and customers in various industries. The company mainly obtains business opportunities by
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
participating in project bidding, designs schemes according to the project requirements, produces or purchases the
equipment required by the customer, and takes responsible for the installation and debugging, and realizes the profit
after deducting the cost from the contract price. The company’s operating results are mainly affected by factors such
as capital expenditures, informatization investment and bidding results, fluctuations in raw material prices and
changes in other costs of telecom operators and industry customers.
2. Industry development status and industry position of the company during the reporting period
During the reporting period, China’s external environment was complex and severe, and the economy was facing
downward pressure, but the national economy was generally stable. However, during the reporting period, the 4G
investment of operators entered the later stage, and the investment in 4G construction slowed down, and the
competitive pressure in the industry market further increased. The information and communication industry was
developing rapidly, the information and communication industry was in the midst of a major transformation period
of system innovation and intelligence leading, new technologies such as big data, cloud computing, artificial
intelligence, internet of things, and 5G continued to break through and integrated with manufacturing and energy,
and new products, new models, and new business forms were emerging one after another, pushing human
development to accelerate into the age of intelligence. Therefore, the company is still in a period of valuable
development opportunities, the company will adhere to the initial intention and responsibility of the national team of
information and communication, focus on high-quality development, continuously strengthen the company’s
technological innovation capabilities, and increase the training and development of independent industries and
independent products.
As a state-owned holding communication equipment manufacturer, the company has good brand strength and
influence in the industry market. In 2018, the company won the “Top 10 Most Competitive Enterprises in China’s
Optical Transmission and Network Access Equipment” for the consecutive eleventh year, and the “Internet of
Things Platform Based on NB-IoT Technology” products won the China Potevio Innovation Award; completed the
corresponding communication support tasks of Two Sessions, Shanghai Cooperation Organization summit, World
Internet Conference, and the International Import Expo; Telege Building Company’s six types of integrated wiring
and security cable products helped the construction of the 2022 Beijing Winter Olympics venue; the mixed cloud
management solution provided by Southern Telecom for Guodu Securities won the “2018 China Information
Communication and Big Data Application Innovation Outstanding Achievement Award”, and the “Ruijing” audio
video digital integrated solution was awarded the “2017 China Information Technology Annual Best Solution
Award” by the China Information Technology Executive Conference.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Equity assets No major changes in the period
Fixed assets No major changes in the period
Intangible assets No major changes in the period
Construction in progress No major changes in the period
Account paid in advance has 189 million Yuan at end of the Year, increased 135 million
Yuan over that of year-beginning, mainly because the account paid in advance for
Account paid in advance
purchase of raw material for private network communication business increased in the
Period
Inventory has 287 million Yuan at end of the Year, decreased 203 million Yuan over that
Inventory of year-beginning, mainly because the external sales of private network communication
products in the period, thus the inventory decline.
Investment real estate has 8.3971 million Yuan at end of the Year, decreased 4.4054
million Yuan over that of year-beginning, mainly because the subsidiary’s original
Investment real estate
investment real estate leased abroad has been converted to self-use, transfer to fixed
assets
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with the disclosure requirement of the special industry
No
As a subsidiary of the national large-scale enterprise Putian Group, the company adheres to the “product + solution
+ service” strategy, and continuously accelerates the product innovation, industrial structure adjustment and
transformation and upgrading. After years of efforts, it has gradually transformed from a communication
manufacturer to an information communication integrated solution service provider. The company’s business
belongs to the key development and support area of the country, and has a large market demand and development
space. The company has a complete industrial chain structure, and good research and development capabilities,
production capacity, and marketing capabilities, and has established a good brand strength and influence in the
industry market and operator market. The company is market-oriented, adheres to independent innovation, and
constantly improves the technical level of its products. In 2018, the company invested 76,275,100 yuan in research
and development, an increase of 12.36% compared with 2017. In 2018, the company added 17 patents (including 3
invention patents), obtained 12 software copyrights, and 27 technical research and development projects passed the
evaluation of market and government experts.
The company’s leading products have strong market competitiveness in the industry. The company has a mature
market network nationwide, has good product promotion and marketing capabilities, has long-term good
cooperative relations with operators, has rich varieties in wiring products, and has won many awards in the wiring
industry. The subsidiary Southern Telecom has rich professional experience in the video conferencing field, in
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
recent years, it has increased independent innovation, and its proportion of independent product management has
gradually increased, and its sustainable development capability has further improved. The subsidiary Telege
Building has stable and good channel resources in integrated wiring products, pays attention to independent
innovation, and has won the top ten brands of integrated wiring for consecutive years. The subsidiary Nanman
Electric’s industrial intelligent power distribution products have a high market share in the rail transit market
segment with high product professionalism and strong competitiveness. The subsidiary Putian Datang’s solar
street lamp controller ranks first in the industry market. The company is accelerating the transformation and
upgrading from “manufacturing” to “intelligent manufacturing” to comprehensively enhance the industrial
competitiveness.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section IV Discussion and Analysis of Operation
1. Introduction
During the reporting period, the company focused on the main business of information and communication,
increased the scientific and technological innovation according to market demand, promoted product structure
adjustment, explored new cooperation, opened up new markets, continuously expanded business areas, promoted
the industrial transformation and upgrading, and strive to create new situation for development of the main business,
and the business development was generally stable. Affected by factors such as the shrinking scale of telecom
operators’ 4G construction and the decline in the market price of industrial products, during the reporting period,
the company achieved operating income of 1.996 billion yuan, a decrease of 11.48% on a year-on-year basis;
realized total profit of 28,907,200 yuan, a decrease of 17.81% on a year-on-year basis; and realized net profit
attributable to the owner of parent company was 5,859,200 yuan, a decrease of 34.77% on a year-on-year basis.
The company’s wiring products and integrated equipment cabinets were selected for the next round of competition
by Tower Group in many provinces. The company has become the A-level supplier for the optical distribution
frame of China Telecom, and successfully landed the new time space time computer room project of Jiangsu
Unicom by the innovative cooperation mode and leveraging the resources of operators, and won the bidding for
projects such as Taihu Information Center and Nanjing Telecom Data Center. The company vigorously expanded
the industry market, won the bidding for projects such as Guizhou Radio and Television, Jiangsu Radio and
Television Monitoring Hall. The company’s products served the Jingdong data room construction, and achieved
new breakthroughs in the e-commerce industry.
Southern Telecom continued to improve its software and hardware R&D and integration services capabilities,
actively explored the integration of high-definition video conferencing technology into the vertical domain
integration and other business applications, and gradually improved the independent product system, and Ruijing
multimedia integrated communication system has been applied in projects such as Postal Savings Bank of China
and Department of Transportation of Hunan Province. The video conferencing “Cloud Service” application
solution has successfully served customers and projects such as China Putian Group and Midea Group. In the
traditional video, we actively expanded big customers such as the government, and finance, and maintained the
leading position in the industry. Cloud network data communication completes product integration and the product
has been running stably and reliably.
Telege Company MPO (high speed transmission optical fiber jumper wire) pre-intervention products passed the
selection test of Shandong Mobile Henghua. Products such as Fengshang and Yishang series cables have passed the
third-party testing of domestic authorities and obtained relevant test reports. Six types of integrated wiring and
security cable products helped build the 2022 Beijing Winter Olympics venues.
Nanman Company successfully signed projects such as Xi’an Metro Line 4, Shenzhen Metro Line 9 and Shenyang
Metro, and continued to maintain its leading position in the rail transit industry, and successfully signed projects
such as the high pole lamp distribution project at the Capital New Airport and the Shuanghe Pharmaceutical Project.
Datang Company passed the identification of high-tech enterprises in Jiangsu Province in 2018, and the sales of
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
street lamp controllers exceeded 850,000 units throughout the year, ranking second in the sub-sector and enjoying a
high market reputation. The system integration division made new breakthroughs in the industry market, won the
bid for the Lianyungang Hengyuan power project and the State Grid Power Lianyungang Branch project; and
achieved breakthroughs in the railway market and won the bid for railway materials procurement in many railway
bureaus such as Xi’an, Taiyuan and Chengdu. .
At the same time, the company further teased out the industrial structure. By continuously increasing the
cooperation between school-enterprise and national thousand talents plan, actively deployed the intelligent access
based on IoT and big data applications, focused on the development goals of “low-carbon, intelligentization,
networked, and informationization” and information security to upgrade the company’s various products.
In terms of management, the company increased internal business and personnel adjustment, promoted the system
reform of subsidiaries, increased the governance to the loss-making entity, and strive to improve profitability;
continuously strengthened the enterprise management with financial management as the core, and increased the
clean-up efforts of the receivables and stocks, optimized asset quality, strengthened procurement and cost reduction,
and carried out all kinds of operating management in a solid manner to ensure the sustainable and healthy
development of the company’s operations.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2018 2017
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
Total operation
1,995,627,772.60 100% 2,254,399,406.04 100% -11.48%
revenue
Industries
Communication
industry -Main 1,767,327,767.31 88.56% 2,046,250,382.47 90.77% -13.63%
business revenue
Communication
industry -Other 64,642,486.98 3.24% 43,554,406.50 1.93% 48.42%
business revenue
Electrical industry
159,936,978.03 8.01% 163,553,620.33 7.25% -2.21%
-Main business
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
revenue
Electrical industry
-Other business 3,720,540.28 0.19% 1,040,996.74 0.05% 257.40%
revenue
Products
Video conference
products- main 438,095,192.19 21.95% 502,964,251.00 22.31% -12.90%
business revenue
General cabling
products- main 329,431,898.41 16.51% 353,100,631.57 15.66% -6.70%
business revenue
Low-voltage
distribution
159,936,978.03 8.01% 163,553,620.33 7.25% -2.21%
products-main
business revenue
Private network
communication
329,938,045.09 16.53% 512,809,145.60 22.75% -35.66%
products -main
business revenue
Wiring and other
products-main 741,819,481.65 37.17% 773,769,849.91 34.32% -4.13%
business revenue
Interior offset -71,956,850.03 -3.61% -96,393,495.61 -4.28% 25.35%
Other business
68,363,027.26 3.43% 44,595,403.24 1.98% 53.30%
revenue
Regions
Domestic area-main
1,907,330,806.93 95.58% 2,209,400,566.06 98.00% -13.67%
business revenue
Domestic area
-Other business 68,363,027.26 3.43% 44,595,403.24 1.98% 53.30%
revenue
Abroad -main
19,933,938.41 1.00% 403,436.74 0.02% 4,841.03%
business revenue
(2) About the industries, products, or regions accounting for over 10% of the Company’s operating income
or operating profit
√Applicable □ Not applicable
Does the Company need to comply with the disclosure requirement of the special industry
No
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
In RMB
Increase/decrease Increase/decrease Increase/decrease
Operating
Operating cost Gross profit ratio of operating of operating cost of gross profit
revenue
revenue y-o-y y-o-y ratio y-o-y
Industries
Communication
industry-main 1,767,327,767.31 1,465,056,721.74 17.10% -13.63% -14.94% 1.28%
business revenue
Communication
industry-other 64,642,486.98 45,595,608.35 29.46% 48.42% 43.52% 2.40%
business revenue
Electrical
industry-main 159,936,978.03 129,682,091.07 18.92% -2.21% 3.12% -4.19%
business revenue
Electrical
industry-other 3,720,540.28 2,781,101.22 25.25% 257.40% 364.21% -17.20%
business revenue
Products
main business
revenue-Video
438,095,192.19 350,079,260.49 20.09% -12.90% -15.22% 2.19%
conference
products
main business
revenue-General 329,431,898.41 251,844,898.81 23.55% -6.70% -9.57% 2.43%
cabling products
main business
revenue-Low-volt
159,936,978.03 129,682,091.07 18.92% -2.21% 3.12% -4.19%
age distribution
products
main business
revenue-Private
network 329,938,045.09 322,000,131.86 2.41% -35.66% -34.20% -2.17%
communication
products
main business
revenue-Wiring
741,819,481.65 613,799,045.44 17.26% -4.13% -3.80% -0.28%
and other
products
Interior offset -71,956,850.03 -72,666,614.86 -0.99% 25.35% 24.61% -0.99%
other business 68,363,027.26 48,376,709.57 29.24% 53.30% 49.45% 1.82%
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
revenue
Regions
Domestic
area-main 1,907,330,806.93 1,581,172,774.03 17.10% -13.67% -14.43% 0.74%
business revenue
Domestic
area-other 68,363,027.26 48,376,709.57 29.24% 53.30% 49.45% 1.82%
business revenue
Abroad -main
19,933,938.41 13,566,038.78 31.95% 4,841.03% 3,507.01% 25.17%
business revenue
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Increase/decrease
Industries Item Unit 2018 2017
y-o-y
Sales volume Yuan 1,831,970,254.29 2,089,804,788.97 -12.34%
Communication
Production volume Yuan 1,603,585,767.76 2,040,493,030.98 -21.41%
industry
Inventory Yuan 243,314,835.5 430,882,498.28 -43.53%
Sales volume Yuan 163,657,518.31 164,594,617.07 -0.57%
Electrical industry Production volume Yuan 148,299,756.32 173,089,551.31 -14.32%
Inventory Yuan 43,657,797.09 59,015,559.08 -26.02%
Note: due to the wide variety of the Company’s products, it is difficult to unify the measurement unit, so the sales volume, production
volume and inventory are all expressed by the amount
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Inventory of the communication industry has major declined on a y-o-y basis, mainly because at beginning of the year, products of
private network communications are sales in the period, thus the Inventory declined.
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Industry classification
In RMB
18
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2018 2017
Increase/decrease
Industries Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Cost of raw
Communication material
1,374,600,698.15 83.66% 1,601,919,525.89 85.18% -14.19%
industry (procurement
cost)
Communication
Labor cost 52,344,772.26 3.19% 58,358,356.28 3.10% -10.30%
industry
Communication Depreciation
3,182,986.82 0.19% 4,348,175.64 0.23% -26.80%
industry cost
Communication Other business
45,595,608.35 2.77% 31,769,953.88 1.69% 43.52%
industry cost
Cost of raw
Electrical material
120,718,703.99 7.35% 112,920,411.71 6.00% 6.91%
industry (procurement
cost)
Electrical
Labor cost 5,130,063.12 0.31% 4,713,481.46 0.25% 8.84%
industry
Electrical Depreciation
483,128.69 0.03% 304,478.21 0.02% 58.67%
industry cost
Electrical Other business
2,781,101.22 0.17% 599,107.33 0.03% 364.21%
industry cost
Explanation
(6) Whether the changes in the scope of consolidation in Reporting Period
□ Yes √ No
(7)Major changes or adjustment in business, product or service of the Company in Reporting Period
□Applicable √Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 612,012,777.44
Proportion in total annual sales volume for top five clients 30.67%
Sales of related parties in annual sales from top five
18.06%
clients
Information of top five clients of the Company
19
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Serial Name Sales (RMB) Proportion in total annual sales
China Potevio Company Limited and other
1 360,483,509.53 18.06%
enterprise with the same controller
China Telecom Corporation and the
2 98,665,173.19 4.94%
subordinate enterprises controlled
China United Network Communications
3 Group Co.,Ltd and the subordinate 62,568,665.31 3.14%
enterprises controlled
4 Beijing Transtrue Technology Inc. 45,323,446.65 2.27%
Beijing UniStrong Science & Technology
5 44,971,982.76 2.25%
Co., Ltd.
Total -- 612,012,777.44 30.67%
Other situation of main clients
√Applicable □ Not applicable
Among the top five clients, China Potevio Company Limited is the controlling shareholder of the Company
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 476,265,748.23
Proportion in total annual purchase amount for top five
32.35%
suppliers
Purchase of related parties in annual amount from top five
0.00%
suppliers
Information of top five suppliers of the Company
Serial Supplier Sales (RMB) Proportion in total annual sales
Jiangsu Sainty International Group
1 251,391,365.14 17.08%
Machinery Imp.&Exp. Co., Ltd.
POLYCOM communications technology
2 89,541,823.03 6.08%
(Beijing) Co., LTD
Shanghai Xingditong Communication
3 52,161,750.00 3.54%
Technology Co., Ltd.
Zhejiang Xinwang Energy Engineering
4 43,170,258.61 2.93%
Co., Ltd.
5 Hongan Group Co., Ltd. 40,000,551.45 2.72%
Total -- 476,265,748.23 32.35%
Other notes of main suppliers of the Company
□Applicable √Not applicable
20
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
3. Expenses
In RMB
Increase/decrease
2018 2017 Note of major changes
y-o-y
Sales expense 153,522,328.27 159,627,776.44 -3.82%
Management expense 86,503,114.41 76,037,302.46 13.76%
Interest expenditure increased on a
Financial expense 22,540,260.58 16,288,251.03 38.38%
y-o-y basis 。
R&D expenses 76,275,133.26 67,887,029.53 12.36%
4. Investment in R&D
√ Applicable □ Not applicable
The company was market-oriented, adhered to independent innovation, and constantly improved the technical level
of its products. In 2018, the products researched and developed by the company included ADSS self-supporting
outdoor aerial optical cable withstand voltage fixing device, intelligent fiber optic main distribution frame, iron
tower AC distribution box, and intelligent optical cable splice box based on NB IoT. In 2018, the company added 17
patents (including 3 invention patents, 9 utility model patents, and 5 appearance patents), 12 software copyrights,
and 27 technical research and development projects passed the evaluation of market and government experts, and
obtained the project approval of Nanjing Municipality, and enjoyed the relevant tax policies.
R&D investment of the Company
2018 2017 Change ratio(+/-)
Number of R&D (people) 438 383 14.36%
Ratio of number of R&D 28.72% 26.27% 2.45%
R&D investment (Yuan) 76,275,133.26 67,887,029.53 12.36%
R&D investment accounted for
3.82% 3.01% 0.81%
R&D income
R&D investment capitalization
0.00 0.00 0.00%
(Yuan)
Capitalization R&D investment
0.00% 0.00% 0.00%
accounted for R&D investment
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
21
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
5. Cash flow
In RMB
Item 2018 2017 Y-o-y changes
Subtotal of cash in-flow from
1,685,497,160.30 1,996,119,868.02 -15.56%
operation activity
Subtotal of cash out-flow from
1,840,915,894.13 2,043,340,637.60 -9.91%
operation activity
Net cash flow arising from
-155,418,733.83 -47,220,769.58 -229.13%
operating activities
Subtotal of cash in-flow from
41,013,389.72 884,622.95 4,536.26%
investment activity
Subtotal of cash out-flow from
17,752,720.09 15,350,838.65 15.65%
investment activity
Net cash flow from investment
23,260,669.63 -14,466,215.70 260.79%
activity
Subtotal of cash in-flow from
455,510,000.00 482,500,000.00 -5.59%
financing activity
Subtotal of cash out-flow from
432,686,230.26 597,231,500.28 -27.55%
financing activity
Net cash flow from financing
22,823,769.74 -114,731,500.28 119.89%
activity
Net increased amount of cash
-109,687,601.75 -173,627,061.79 36.83%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√ Applicable □ Not applicable
Net cash flow arising from operating activities has major declined from a year earlier: the cash paid for purchasing raw materials
increased due to the growth of account receivable in the period
Cash in-flow from investment activity and net cash flow arising from investment activity have major growth from a year earlier:
during the period, received compensation due to part of the houses from subsidiary Bada Telecommunications are to be expropriated
by the government, which has an increase on a y-o-y basis in cash-inflow and net cash flow arising from investment activity.
Net cash flow arising from financing activities has major growth over that of last year: the loans paid to the bank declined on a y-o-y
basis.
Net increased amount of cash and cash equivalent has major growth over that of last year: the cash flow arising from investment and
financing activities increased over that of last year.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable □Not applicable
Net cash flow arising from operating activities in the year was negative, which is lower than the net profit, mainly because the cash
paid for purchasing raw materials increased due to the growth of account receivable in the period.
22
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
III. Analysis of the non-main business
√ Applicable □ Not applicable
In RMB
Amount Ratio in total profit Cause of formation Whether be sustainable (N/Y)
Income of long-term equity
Investment income -3,085,858.80 -10.68% investment measured by N
equity
Gain/loss of fair
0.00% - N
value changes
Loss of bad debts and
Asset impairment 20,599,295.35 71.26% N
inventory depreciation
Non-operation Non-operation revenue as
2,988,810.42 10.34% N
revenue government grants
External donation,
Non-operation
372,499.09 1.29% compensation and other N
expenditure
non-operation expenses
Compensation for property
Income from assets
33,522,820.90 115.97% expropriation received in N
disposal
the period
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2018 End of 2017
Ratio
Ratio in total Ratio in total Notes of major changes
Amount Amount changes
assets assets
261,938,068.7
Monetary fund 12.35% 327,477,701.36 15.49% -3.14%
2
Account 941,068,459.3
44.37% 780,089,607.41 36.90% 7.47%
receivable 5
Inventory of private network
286,972,632.5 communication products at year
Inventory 13.53% 489,898,057.36 23.17% -9.64%
9 beginning are sales in the Period, thus
the inventory at period-end declined
Investment real
8,397,113.98 0.40% 12,802,485.28 0.61% -0.21%
estate
Long-term equity 183,244,080.2
8.64% 186,977,506.23 8.84% -0.20%
investment 3
23
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
112,504,807.1
Fix assets 5.30% 119,741,921.78 5.66% -0.36%
1
Construction in
9,472,383.76 0.45% 2,163,267.89 0.10% 0.35%
process
445,010,000.0
Short-term loans 20.98% 387,550,000.00 18.33% 2.65%
0
Long-term loans 0.00% 0.00% 0.00%
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3. The assets rights restricted till end of the period
Assets with ownership or usage rights restricted:
Item Book value at period –end Restriction reason
Monetary funds 60,568,751.30 Note margin and guarantee margin
Account receivable 52,167,500.00 Secured borrowings
Fixed assets 31,763,049.94 Mortgage loan
Intangible assets 3,393,821.96 Mortgage loan
Investment real estate 2,274,411.81 Mortgage loan
Total 150,167,535.01
Saved as disclosed above, the Company pledged its stock rights of 4.8 million Yuan (40% equity in total) in the subsidiary Nanjing
Putian Telege Intelligent Building Ltd., stock rights of 33.17 million Yuan (96.99% equity in total) in the subsidiary Nanjing
Southern Telecom Co., Ltd., stock rights of 5.07 million Yuan (50.7 % equity in total)in the subsidiary Nanjing Putian Changle
Telecommunication Equipment Co., Ltd., stock rights of 60.4273 million Yuan ( 67% equity in total) in Nanjing Putian Wangzhi
Electronic Co., Ltd and stock rights of 7.8 million Yuan (78% equity in total) in Nanjing Putian Network Co., Ltd to the parent
Company for entrusting the loan from Bank of Beijing, and handled the Company's equity registration respectively at Market
Supervision Administration in Jiangning District, Hi-Tech Industry District, Yuhuatai District and Qinghuai District of Nanjing City.
The stock rights of the aforesaid subsidiaries are restricted before the pledge being lifted.
V. Investment
1. Overall situation
√ Applicable □ Not applicable
Investment in the same period of last year
Investment in the reporting (RMB) Changes(%)
( RMB)
12,596,188.70 14,617,352.43 -13.83%
24
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company had no application of raised proceeds in the reporting period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√ Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Main Register Operating Operating
Type Total assets Net Assets Net profit
name business capital revenue profit
Multimedia
Nanjing Subsidiary
communicati 34,205,147.8 346,598,053. 102,985,220. 438,495,192. 11,964,069.0 11,263,613.8
25
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Southern on and 3 41 80 19 8 9
application
Telecom Co., solutions
Ltd.
General
cabling,
Nanjing development,
Putian Telege production 20,000,000.0 300,491,563. 123,688,502. 332,950,645. 20,802,587.8 17,793,037.1
Subsidiary
Intelligent and sales of 0 44 02 89 4 3
Building Ltd. the building
intelligent
products
Manufacture
and sales of
Nanjing software of
Putian telecommuni 10,000,000.0 41,958,775.1 26,655,859.0 34,215,494.8
Subsidiary 613,435.42 993,856.82
Network Co., cations, 0 8 6 5
Ltd. network and
electronic
equipment
Out-door
patch,
sub-line
equipment,
Nanjing
network
Putian
box(cube)of
Changle
out-door and 10,000,000.0 60,002,503.9 31,894,974.6 35,352,405.1
Telecommun Subsidiary 582,042.85 832,042.85
machinery 0 3 7 8
ications
office,
Equipment
manufacture
Co., Ltd.
and sales of
communicati
on electrical
products
Nanjing Bada Manufacture
Telecommun of
11,301,400.0 -3,100,346.1 11,608,929.4 11,608,929.4
ications Subsidiary card-terminal 7,262,455.72 440,683.85
0 2 7 7
Equipment communicati
Co., Ltd. on equipment
Putian Export and
Telecommun import of
HK$ 2 -18,034,893.
ications Subsidiary telecommuni 4,129,128.10 -23,451.92 -23,451.92
million 52
(H.K.) Co., cation
Ltd. equipment,
26
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Hi-tech R &
D and
transfer,
technology
trade
Nanjing Production,
Putian sales and
59,490,000.0 32,465,396.1 10,120,114.3
Wangzhi Subsidiary processing of 4,556,153.15 1,086,091.19 801,300.17
0 7 6
Electronic electrical
Co., Ltd products
Nanjing Manufacture
Putian and sales of
Information electrical and 14,000,000.0
Subsidiary 8,338,876.35 5,235,118.97 4,556,153.15 -846,908.72 -818,264.15
Technology telecommuni 0
Company cation
Ltd. products
Electronic
components
Nanjing
assembly,
Putian
electronic
Telecommun
products, 10,659,181.8
ication Subsidiary 5,000,000.00 887,550.68 3,196,397.12 -983,060.77 -924,590.44
telecommuni 4
Technology
cation
Company
equipment,
Ltd.
Hi-tech R &
D and sales
Manufacture
Nanjing and sales of
Mennekes industrial US$ 5.2 215,685,611. 95,002,902.1 163,657,518.
Subsidiary 1,518,578.87 1,273,541.57
Electrics Co., intelligent million 14 3 31
Ltd. distribution
products
R&D,
manufacture
and sales of
Nanjing
solar
Putian
controller,
Datang 10,000,000.0 48,150,112.1 26,845,441.9 48,222,944.2
Subsidiary and 5,582,314.91 5,671,918.69
Information 0 6 4 3
production &
Electronic
processing
Co., Ltd.
business of
electronic
products
27
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Development
and
manufacture
SEI-Nanjing of ODN
Putian Joint-stock products, 37,088,800.0 23,735,362.5 22,256,636.6 15,440,522.0 -4,335,549.0 -4,335,549.0
Optical Company optical 0 6 7 8 1 1
Network communicati
on
components
and RFTS
R&D of
communicati
on
technology
products,
sales,
Potevio
network
Hi-tech Joint-stock 337,548,141. 352,625,584. 344,343,245. 21,089,902.4
system 1,304,078.01 983,452.15
Industry Co., Company 29 59 13 3
integration,
Ltd.
rental of
industrial
park venue
and property
management
etc.
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Notes of holding and shareholding companies
Subsidiary Nanjing Bada Telecommunications Equipment Co., Ltd. achieved a net profit of 11.6089 million Yuan in 2018 with an
increase of 10.5435 million Yuan from a year earlier; mainly because received a compensation for housing expropriation in the
period
Share participated enterprise SEI-Nanjing Putian Optical Network achieved a net profit of -4.3355 million Yuan in 2018 with a
decrease of 3.304 million Yuan from a year earlier; mainly due to the personnel resettlement for business adjustment
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
1. Analysis of industry competition pattern and development trend
From the perspective of macro economy, China’s national economy is generally stable and has a steady progress,
and the external environment is complex and severe, but it is still in the period of important strategic opportunities
for development, and the long-term positive trend of the economy will not change. From the perspective of industry
28
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
environment, 4G investment is in the late stage, 5G is expected to be put into commercial use in 2019, currently, the
communication industry is in the transition phase from 4G to 5G. According to the forecast of China Academy of
Information and Communications Technology, in 2020, telecom operators will invest more than 220 billion Yuan in
5G network equipment, and the expenditure on 5G equipment in various industries will exceed 54 billion Yuan. At
the same time, with the deep integration of new technologies such as mobile internet, cloud computing, big data, and
internet of things with various industries, the multimedia communication and video conferencing will also be
deeply applied to all walks of life, and the applications of multimedia communication and video conferencing will
also usher a new round of rapid growth opportunities.
2. The company’s development strategy
Focusing on the spirit of structural reform of the supply side of the country, combining with the needs of sustainable
and healthy development of enterprises, we will actively grasp the wave of major changes in system innovation and
intelligence leading of the information and communication industry, take the market-oriented, optimize the
company’s industrial structure, improve the core competitiveness of independent products, control risks, strengthen
the fund management, improve the operation quality, promote the healthy development of the company, and
continuously promote the transformation of the company from a traditional communication equipment
manufacturer to an informatization integrated solution provider and service provider.
3. Business plan for the next year
In 2019, the company will adhere to the general tone of making progress while ensuring stability in work, adhere to
the customer-centered and market-oriented, focus on the four key areas of income increasing, expenditure reducing,
innovation, and assessment, continuously consolidate the company’s operating basics, strive to enhance the
company’s development quality and core competitiveness, deepen the reform and innovation, and create a new
situation of transformation and development. The measures to be taken are as follows:
(1) Recognize the development situation and strengthen the development confidence
Concentrate on making a stronger leading industry. Adhere to the customer-centered and market-oriented, firmly
grasp the new round of scientific and technological revolution and industrial transformation opportunities,
vigorously strengthen independent innovation, concentrate on independent research and development, and increase
the source of innovation. Focus on its own superior technology, industry and customers, realize technological
innovation of key applications, form its own unique products and solutions with distinctive characteristics, and
continuously enhance the company’s core competitiveness. Specially-assigned persons do special projects,
accomplish the marketing of key projects, promote the cooperation and win-win among internal entities on the basis
of projects, actively explore the future development direction of main business and increment, and strive to achieve
new breakthroughs in high-quality development.
Information communication industry sector
Focus on the optical connector requirements in the 5G era and the trend of optical connector construction in the next
generation data center, and the development of high-density optical fiber connectors; complete the new product
research and development for intelligent precision monitoring systems and data center micro-module systems for
power distribution cabinets and array cabinets, and continue to create a one-stop service for intelligent, modular,
29
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
and high-performance data center high-speed connection systems.
Ensure that the central purchasing of wiring products of four major operators be selected to win the bid, increase the
operation of important projects of the operators, and continue to expand sales in the private network market. Expand
market sales of new products that have been initially formed for sale, such as melting end quick-connect, adaptive
protection stickers, and hardware fittings, and the new products such as intelligent manhole cover, and intelligent
machine room monitoring which are in trial stages should be able to form actual sales. Make efforts to promote the
development transformation of industrial hardware into a soft and hard combination of operation, and continuously
innovate products and cultivate them to become new profit growth points. Take advantage of the sales network and
combine the advantages of other industries of the company to actively explore the joint transformation and
upgrading of the large wiring industry.
Data application industry sector
Southern Telecom will continue to strengthen its software development capabilities, cultivate and enhance the
company’s future core competitiveness; further adjust its business structure, focus on the stability of multimedia
integration business and independent product development, and enhance the annual revenue of independent
products; actively explore new and deeper market field, on the basis of maintaining the channel customers, take the
financial and medical customer industries as the key market targets. Establish the model projects through the
independent products, and seize the opportunity to extend to the government’s peripheral fifth- and sixth-level
networks. Combine with the new opportunities of market development, and carry out exploration and development
of the storage industry.
Integrated access and electrical complete set industry sector
Telege Company should continue to increase investment in technology research and development, complete the
research and development of the integrated wiring fashion series and put it on the market, and seek new growth
points for the development of the company’s optical product. Pursue market innovation, pilot and promote the
market’s general agent sales model. Pay close attention to the development trend of the optical wiring market,
strengthen the tracking of key projects of key customers, and ensure the company’s position in the industry.
Nanman Company has gradually realized the transition from an equipment provider to a system integration service
provider by introducing high-quality components and enriching product lines. Explore the sales model throughout
the industry and region, and increase the proportion of social project operations while maintaining the market share
of the rail transit industry. Strengthen the brand promotion of “Nanman Electric” and “Nanman Annuo”.
Smart city and emerging industry sector
Datang Company will increase the market promotion of the smart city products using single-string controllers,
strive for 20,000 sets of IoT photovoltaic street lamp to enter the network and smart cruise ships and other projects
to achieve market breakthroughs, and focus on per capital output and improve the annual efficiency.
Internal exploration for different industries such as oil, electricity, railway, etc. customizes product design, increase
the share of industry market, focus on per capital output, and improve annual efficiency.
(2) Optimize the industrial structure and deepen reform and innovation. Promote reforms in response to the
company’s current situation: delayering of organizational structure, projectization of research and development
30
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
organization, iron hand of work implementation, prioritization of support work, reversion of cost control, and
normalization of cultural construction. Adhere to taking the “information communication and security” as the main
industry, insist on the working concepts of strengthening the traditional main business, cultivating and expanding
emerging industries, and intensively upgrading the weak industries, and actively optimize and adjust the company’s
original four industry sectors by actively introducing new resources and new businesses. Give full play to the
resource agglomeration effect and continuously improve the core competitiveness of the company’s industrial chain,
increase the internal restructuring of similar businesses, accelerate the reform and adjustment of business units with
poor economic returns, shut down or transfer, and centralize the company’s operating resources to highlight the
development of main business. Actively promote the mixed ownership reform in southern companies, continuously
explore the driving force behind the company’s internal growth, and improve the company’s own cohesiveness and
market competitiveness.
(3) Deepen “quality improvement and efficiency improvement” and promote the operations quality. Continue to
increase the clear-up work of receivables and de-stocking, and strengthen internal control management and
assessment efforts. Continue to promote cost reduction and efficiency enhancement, and promote the cost and
expense management of whole value chain and whole life cycle in accordance with the principle that all costs are
controllable, continuously strengthen the centralized management of procurement and bidding, and strictly control
the controllable expenses; continue to do a good job in downsizing staffs for improving efficiency, continuously
improves the company’s per capita profit rate, and supplement the necessary core talents to ensure the company’s
sustainable and healthy development. Further strengthen the special governance of loss-making enterprises,
improve the long-term mechanism for the management of loss-making enterprises, and further consolidate the
company’s operation quality.
(4) Strictly carry out budget management and strengthen risk prevention. Advance financial management in the
business activities, further strengthen the overall management of operating funds, actively explore the stock assets
to revitalize the business value, continue to improve the quantitative assessment of budget, strengthen the incentives,
and further promote the comprehensive budget management. Establish a long-term mechanism to prevent and
resolve major operational risks, and improve the scientific management level and risk prevention and control level.
4. Maintain the current business and complete the capital needs of the investment project under construction
In 2019, the company will mainly obtain the required circulating funds by dispatching its own funds and financing
to financial institutions. In order to maintain the current business and complete the circulating funds for projects
under construction, it is estimated that the financing scale will be around 590 million Yuan in 2019.
5. Risks the Company may face in the future development
Policy risk
The communications equipment manufacturing industry is vulnerable to the impacts of macroeconomic
performance, economic cycles and industrial policies. line with the 13th Five-Year Plan of the country, in later
years, China will continue to accelerate the construction of a high-speed, mobile, and safe new generation of
information infrastructure. If China's economic growth slows down in the future or the country adopts the
31
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
constrictive macro-control policies to infrastructure investment, the Company’s operating conditions will face
negative effects.
Communications industry cycle risk
The Company is mainly engaged in the manufacture and sales of communications products, customers include
several major telecom operators in China. The establishment and adjustment of network construction period and
investment plan of the operators have a significant impact on the operation of the Company and bring the industry
cycle risk.
The Company will continue to further integrate quality resources, accelerate industry upgrade, expand industry
market and improve industry profitability.
Technology R&D risk
The telecommunication industry is experiencing rapid change of technology development and product upgrade.
Therefore, the Company’s business operation will be adversely affected if it cannot adapt to market change, lag
behind in the technology reform or the developed products do not satisfy market demands.
The Company will actively follow up the latest development trend of industrial technology, develop and introduce
technology based on market requirements, focus on organization, planning and management of product
development and expand development of new products, aiming to maintaining the leading position in terms of
technology.
Market competition risk
The industry in which the Company operates is highly competitive with substantial market players. Besides,
customers, such as various operators, continue to adopt centralized procurement policy which led to very furious
market competition. Benefiting from long-term operation, the Company has accumulated certain competitive
advantages in terms of brand, technology, quality and marketing. If our products fail to cater for the market
variation in future, we may lose the existing advantages in market competition.
The Company will continue to capitalize on the existing advantages to consolidate traditional market while
expanding special network and industry markets actively. Through continuous cost control and scientific
innovation, it continues to improve production and research capability, which leads to rapid development of the
new products and enables the Company to maintain and improve profitability.
Cash flow shortage risk
Cash flow is essential for our survival and development. Insufficient provision of cash flow makes it difficult to
meet capital requirements for technology upgrade and business development, thus limit our business expansion
and long-term development to certain extent.
32
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
The Company implements capital budget management, prepare capital collection plan and capital payment budget
to ensure dynamic balance of cash flow. Besides, it increases management on inventory and trade receivables,
reinforces performance assessment, urges prompt collection of goods payment, strengthens inventory
management and reduced capital occupation. Adhering to the basic control principle of “pay-as-you-go” and
management the funds strictly; obtain liquidity financing from the banks and other financial institutions
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
□ Applicable √ Not applicable
No reception of research, communication and interview occurred in the period
33
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
□ Applicable √ Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
The Company did not distribute profits or capital reserve in recent three years.
In RMB
Ratio of the
Ratio of the
Ratio of the total cash
Net profit cash bonus by
cash bonus in bonus (other
attributable to other ways in
net profit ways included)
common stock Proportion for net profit
attributable to Total cash in net profit
Amount for shareholders of cash bonus by attributable to
Year for bonus common stock bonus attributable to
cash bonus (tax listed company other ways(i.e. common stock
shares shareholders of (including common stock
included) in share shareholders of
listed company other ways) shareholders of
consolidation buy-backs) listed company
contained in listed company
statement for contained in
consolidation contained in
bonus year consolidation
statement consolidation
statement
statement
2018 0.00 5,859,214.84 0.00% 0.00 0.00% 0.00 0.00%
2017 0.00 8,982,857.76 0.00% 0.00 0.00% 0.00 0.00%
2016 0.00 -5,063,843.89 0.00% 0.00 0.00% 0.00 0.00%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the year.
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyer and the Company have
fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
34
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
√Applicable □Not applicable
35
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Type of
Commitm Commitment Commitme
Commitments commitment Content of commitments Implementation
ent party date nt term
s
Commitments
for share
merger reform
Commitments
in report of
acquisition or
equity change
Commitments
in assets
reorganization
Commitments
make in initial
public offering
or re-financing
Equity
incentive
commitment
Commitm “As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
ents on intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as a
Other horizontal controlling shareholder of Nanjing Putian, made the following commitments: First, ensure the
China
commitments competitio personnel independence of Nanjing Putian. (1) Ensure that the production and management and
Potevio
for medium n, related public administration (including labour, personnel and wage management, etc.) of Nanjing Putian 8 April 2018 Long-term Implementing
Company
and small transactio are completely independent of the Company and other subordinate companies and enterprises of the
Limited
shareholders n and Company. (2) Ensure that the general manager, deputy general manager, chief financial officer,
occupatio secretary of the board and other senior management staff of Nanjing Putian work full time in
n of fund Nanjing Putian and get remuneration from Nanjing Putian, and don’t take part time jobs in other
36
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
positions other than directors and supervisors in the Company or other companies and enterprises of
the Company, nor get remuneration from the Company or other companies and enterprises of the
Company, and ensure that the financial staff of Nanjing Putian don’t take part time jobs or get
remuneration from the Company or other companies and enterprises of the Company. (3) Ensure that
the candidates recommended by the Company to take up the posts of directors, supervisors and
senior management in Nanjing Putian are checked by legal procedures, the Company does not
interfere with the personnel appointment and dismissal decision made by the board of directors and
the general meeting of shareholders of Nanjing Putian. Second, ensure the assets independence and
integrity of Nanjing Putian. (1) Ensure the independence and integrity of the assets of Nanjing
Putian and its subsidiaries, and all of these assets are under the control of Nanjing Putian and its
subsidiaries, and are independently owned and operated by Nanjing Putian and its subsidiaries. (2)
Ensure that the Company and the subordinate companies and enterprises of the Company do not
illegally occupy the assets, funds and other resources of Nanjing Putian. Third, ensure the business
independence of Nanjing Putian. (1) Ensure that Nanjing Putian has independent procurement and
sales systems, and has the assets, personnel, qualifications to carry out independent business
activities and the ability to operate independently in the market. (2) Ensure that the Company and
other companies and enterprises affiliated to the Company avoid horizontal competition with
Nanjing Putian and its subsidiaries. (3) Ensure strict control of related transactions, and minimize
the continuous related transactions between Nanjing Putian and its subsidiaries with the Company
and other companies and enterprises under the Company. Eliminate the illegal occupation of funds
and assets of Nanjing Putian, and don’t require Nanjing Putian and its subsidiaries to provide any
form of guarantee to the Company and other companies and enterprises affiliated to the Company.
For the unavoidable related transactions, insist on the principle of “fairness, justice and openness”,
and keep the transaction prices same as the non-related enterprises, and carry out the information
disclosure in a timely manner. (4) Ensure not to interfere with the major decision-making matters of
Nanjing Putian in any way other than the exercise of shareholders’ rights in accordance with the law
through a separate or concerted action, nor affect the independence of Nanjing Putian’s assets,
personnel, finance, organization and business. Fourth, ensure the institution independence of
Nanjing Putian. (1) Ensure that Nanjing Putian and its subsidiaries establish and improve the
corporate governance structure according to law, and completely separate from the Company and
37
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
other companies and enterprises under the Company; ensure that the office facilities and production
and operation sites of Nanjing Putian and its subsidiaries are completely separated from the
Company and other companies and enterprises affiliated to the Company, and there is no situation in
which institutions are mixed. (2) Ensure that Nanjing Putian and its subsidiaries operate
independently, and the Company will not directly or indirectly interfere with the decision-making
and operation of Nanjing Putian by surpassing the board of directors and shareholders’ meeting of
Nanjing Putian. (3) Ensure that the shareholders’ meeting, board of directors, independent directors,
board of supervisors, and senior management personnel of Nanjing Putian independently exercise
their official powers in accordance with laws, regulations, and articles of association. Fifth, ensure
the financial independence of Nanjing Putian. (1) Ensure that Nanjing Putian sets up an independent
financial accounting department and has an independent financial accounting system, and has a
standardized and independent financial accounting system and financial management system. (2)
Ensure that Nanjing Putian maintains independence in financial decision-making, the Company and
other companies and enterprises affiliated to the Company do not interfere with the use and dispatch
of funds by Nanjing Putian. (3) Ensure that Nanjing Putian maintains its own independent bank
account and does not share a bank account with the Company and other companies and enterprises
under the Company. (4) Ensure that Nanjing Putian shall pay taxes independently according to law.
The above commitments are valid and cannot be changed or revoked while the Company is a
shareholder of Nanjing Putian. If the above commitments are violated and economic losses are
caused to Nanjing Putian, the Company will compensate Nanjing Putian.”
“As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
Commitm
intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as a
ents on
controlling shareholder of Nanjing Putian, made the following commitments: (1), do not influence
horizontal
China and require Nanjing Putian and its subsidiaries to give rights superior to the third parties in the
competitio
Potevio market in business cooperation, nor engage in any acts to damage the interests of Nanjing Putian and
n, related 8 April 2018 Long-term Implementing
Company its subsidiaries by using its controlling shareholder status at Nanjing Putian. (2)do not influence and
transactio
Limited require preferential rights to make deals with Nanjing Putian and its subsidiaries by using its
n and
controlling shareholder status at Nanjing Putian. (3) when conducting necessary and inevitable
occupatio
related transactions, guarantee to conduct according to the principle of marketization and fair price,
n of fund
and perform the transaction procedures and information disclosure obligations in strict accordance
38
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
with the relevant laws, regulations, regulatory documents and the relevant provisions of the articles
of association of listed companies, and guarantee not to damage the legitimate rights and interests of
Nanjing Putian and other shareholders through related transactions. The above commitments are
valid and cannot be changed or revoked while the Company is a shareholder of Nanjing Putian. If
the above commitments are violated and economic losses are caused to Nanjing Putian, the
Company will compensate Nanjing Putian.
“As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as a
controlling shareholder of Nanjing Putian, made the following commitments:(i) the Company and
other related enterprise controlled by the Company have not engaged in any production and business
operations or activities that directly or indirectly compete with Nanjing Putian; and guarantee that
they will not engage in any production and business operations or activities that directly or indirectly
compete with Nanjing Putian in the future. (ii) the Company does not own, manage, control, invest
or engage in any business or project that is the same or similar to the business of Nanjing Putian.
Commitm
(iii) if the Company or any related enterprise obtains any business opportunity from any third party
ents on
that has substantial competition with the business of Nanjing Putian or may have substantial
horizontal
China competition in the future, the Company will immediately notify Nanjing Putian, and transfers the
competitio
Potevio business opportunity to Nanjing Putian after obtaining the promise from the third party. (iv) the
n, related 8 April 2018 Long-term Implementing
Company Company will supervise and restrict the production and operation activities of itself and other related
transactio
Limited enterprises. If the Company and other related enterprises have products or business the same or
n and
similar to those of Nanjing Putian, the Company promises to take the following measures to resolve:
occupatio
(1) When Nanjing Putian considers it necessary, the Company and other related enterprises will
n of fund
reduce the holdings until all the relevant assets and businesses held by the Company and related
enterprises are transferred; (2) When Nanjing Putian considers it necessary, the relevant assets and
businesses held by the Company and other related enterprises may be preferentially acquired
through appropriate means; (3) If the Company and related enterprises have conflicts of interest with
Nanjing Putian due to horizontal competition, give priority to the interests of Nanjing Putian; (4)
Other measures that help avoid horizontal competition. The above commitments are valid and
cannot be changed or revoked while the Company is a shareholder of Nanjing Putian. If the above
commitments are violated and the economic losses are caused to Nanjing Putian, the Company will
39
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
compensate Nanjing Putian.
“As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as an
actual controller of Nanjing Putian, made the following commitments: First, ensure the personnel
independence of Nanjing Putian. (1) Ensure that the production and management and public
administration (including labour, personnel and wage management, etc.) of Nanjing Putian are
completely independent of the Company and other subordinate companies and enterprises of the
Company. (2) Ensure that the general manager, deputy general manager, chief financial officer,
secretary of the board and other senior management staff of Nanjing Putian work full time in
Nanjing Putian and get remuneration from Nanjing Putian, and don’t take part time jobs in other
positions other than directors and supervisors in the Company or other companies and enterprises of
Commitm the Company, nor get remuneration from the Company or other companies and enterprises of the
ents on Company, and ensure that the financial staff of Nanjing Putian don’t take part time jobs or get
horizontal remuneration from the Company or other companies and enterprises of the Company. (3) Ensure that
competitio the candidates recommended by the Company to take up the posts of directors, supervisors and
China Putian
n, related senior management in Nanjing Putian are checked by legal procedures, the Company does not 8 April 2018 Long-term Implementing
Corporation
transactio interfere with the personnel appointment and dismissal decision made by the board of directors and
n and the general meeting of shareholders of Nanjing Putian. Second, ensure the assets independence and
occupatio integrity of Nanjing Putian. (1) Ensure the independence and integrity of the assets of Nanjing
n of fund Putian and its subsidiaries, and all of these assets are under the control of Nanjing Putian and its
subsidiaries, and are independently owned and operated by Nanjing Putian and its subsidiaries. (2)
Ensure that the Company and the subordinate companies and enterprises of the Company do not
illegally occupy the assets, funds and other resources of Nanjing Putian. Third, ensure the business
independence of Nanjing Putian. (1) Ensure that Nanjing Putian has independent procurement and
sales systems, and has the assets, personnel, qualifications to carry out independent business
activities and the ability to operate independently in the market. (2) Ensure that the Company and
other companies and enterprises affiliated to the Company avoid horizontal competition with
Nanjing Putian and its subsidiaries. (3) Ensure strict control of related transactions, and minimize
the continuous related transactions between Nanjing Putian and its subsidiaries with the Company
and other companies and enterprises under the Company. Eliminate the illegal occupation of funds
40
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
and assets of Nanjing Putian, and don’t require Nanjing Putian and its subsidiaries to provide any
form of guarantee to the Company and other companies and enterprises affiliated to the Company.
For the unavoidable related transactions, insist on the principle of “fairness, justice and openness”,
and keep the transaction prices same as the non-related enterprises, and carry out the information
disclosure in a timely manner. (4) Ensure not to interfere with the major decision-making matters of
Nanjing Putian in any way other than the exercise of shareholders’ rights in accordance with the law
through a separate or concerted action, nor affect the independence of Nanjing Putian’s assets,
personnel, finance, organization and business. Fourth, ensure the institution independence of
Nanjing Putian. (1) Ensure that Nanjing Putian and its subsidiaries establish and improve the
corporate governance structure according to law, and completely separate from the Company and
other companies and enterprises under the Company; ensure that the office facilities and production
and operation sites of Nanjing Putian and its subsidiaries are completely separated from the
Company and other companies and enterprises affiliated to the Company, and there is no situation in
which institutions are mixed. (2) Ensure that Nanjing Putian and its subsidiaries operate
independently, and the Company will not directly or indirectly interfere with the decision-making
and operation of Nanjing Putian by surpassing the board of directors and shareholders’ meeting of
Nanjing Putian. (3) Ensure that the shareholders’ meeting, board of directors, independent directors,
board of supervisors, and senior management personnel of Nanjing Putian independently exercise
their offical powers in accordance with laws, regulations, and articles of association. Fifth, ensure
the financial independence of Nanjing Putian. (1) Ensure that Nanjing Putian sets up an independent
financial accounting department and has an independent financial accounting system, and has a
standardized and independent financial accounting system and financial management system. (2)
Ensure that Nanjing Putian maintains independence in financial decision-making, the Company and
other companies and enterprises affiliated to the Company do not interfere with the use and dispatch
of funds by Nanjing Putian. (3) Ensure that Nanjing Putian maintains its own independent bank
account and does not share a bank account with the Company and other companies and enterprises
under the Company. (4) Ensure that Nanjing Putian shall pay taxes independently according to law.
The above commitments are valid and cannot be changed or revoked while the Company is a
shareholder of Nanjing Putian. If the above commitments are violated and economic losses are
caused to Nanjing Putian, the Company will compensate Nanjing Putian.”
41
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
“As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as a
actual controller of Nanjing Putian, made the following commitments: (1)do not influence and
require Nanjing Putian and its subsidiaries to give rights superior to the third parties in the market in
Commitm
business cooperation, nor engage in any acts to damage the interests of Nanjing Putian and its
ents on
subsidiaries by using its actual controller status at Nanjing Putian. (2) do not influence and require
horizontal
preferential rights to make deals with Nanjing Putian and its subsidiaries by using its actual
competitio
China Putian controller status at Nanjing Putian. (3) when conducting necessary and inevitable related
n, related 8 April 2018 Long-term Implementing
Corporation transactions, guarantee to conduct according to the principle of marketization and fair price, and
transactio
perform the transaction procedures and information disclosure obligations in strict accordance with
n and
the relevant laws, regulations, regulatory documents and the relevant provisions of the articles of
occupatio
association of listed companies, and guarantee not to damage the legitimate rights and interests of
n of fund
Nanjing Putian and other shareholders through related transactions. The above commitments are
valid and cannot be changed or revoked while the Company is a actual controller of Nanjing Putian.
If the above commitments are violated and economic losses are caused to Nanjing Putian, the
Company will compensate Nanjing Putian.
“As Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as “Nanjing Putian”)
intended to apply for resumption of listing to the Shenzhen Stock Exchange, the Company, as a
actual controller of Nanjing Putian, made the following commitments: (i)the Company and other
Commitm
related enteprises controlled by the Company have not engaged in any production and business
ents on
operations or activities that directly or indirectly compete with Nanjing Putian; and guarantee that
horizontal
they will not engage in any production and business operations or activities that directly or indirectly
competitio
China Putian compete with Nanjing Putian in the future. (ii) the Company does not own, manage, control, invest
n, related 8 April 2018 Long-term Implementing
Corporation or engage in any business or project that is the same or similar to the business of Nanjing Putian.
transactio
(iii) if the Company or any related enterprise obtains any business opportunity from any third party
n and
that has substantial competition with the business of Nanjing Putian or may have substantial
occupatio
competition in the future, the Company will immediately notify Nanjing Putian, and transfers the
n of fund
business opportunity to Nanjing Putian after obtaining the promise from the third party. (iv) the
Company will supervise and restrict the production and operation activities of itself and other related
enterprises. If the Company and other related enterprises have products or business the same or
42
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
similar to those of Nanjing Putian, the Company promises to take the following measures to resolve:
(1) When Nanjing Putian considers it necessary, the Company and other related enterprises will
reduce the holdings until all the relevant assets and businesses held by the Company and related
enterprises are transferred; (2) When Nanjing Putian considers it necessary, the relevant assets and
businesses held by the Company and other related enterprises may be preferentially acquired
through appropriate means; (3) If the Company and related enterprises have conflicts of interest with
Nanjing Putian due to horizontal competition, give priority to the interests of Nanjing Putian; (4)
Other measures that help avoid horizontal competition. The above commitments are valid and
cannot be changed or revoked while the Company is a shareholder of Nanjing Putian. If the above
commitments are violated and the economic losses are caused to Nanjing Putian, the Company will
compensate Nanjing Putian.
“The Group makes statements and commitments regarding the business condition and future
development planning of the private network communications business of Nanjing Putian, and the
operations of the Group and other enterprises controlled by the Group (other than Nanjing Putian
and its controlled enterprises) as follows: in order to optimize the internal resources allocation of the
group, make full use of the business capability of Nanjing Putian, starting from 2016, the Group will
convert the private network communication products originally purchased by China Potevio
Information Industry Co., Ltd. (hereinafter referred to as “Potevio Shares”), a wholly-owned
subsidiary of the Group, into commissioning Nanjing Putian for production. The Group’s private
Other network communication business which was originally a trade-oriented business and was purchased
China Putian
commitme by Potevio Shares from external suppliers to sell has successfully transformed into an independent 19 June 2018 Long-term Implementing
Corporation
nt processing and production business in 2016, and the current business model is that Potevio Shares
obtains orders from customers, and then signs entrusted production contracts with Nanjing Putian
and its subsidiary Nanfang Company, and Nanjing Putian is responsible for the specific production.
At present, the customer of Potevio Shares is Fushen Industrial Co., Ltd., and the annual order
amount of the existing model products remains above 500 million Yuan, and it is predicted that there
will be a stable demand period of 3 to 5 years. The Group promises to take Nanjing Putian as the
business entity of the private network communication services, including but not limited to: 1.
Nanjing Putian is the military-civilian integration industrial base of the Group, and is the only
production entity of the existing product multi-mesh cloud data processing communication
43
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
equipment and related military-civilian integration project (i.e. the private network communication
service signified in this commitment), which is exclusive; 2. The Group promises to gradually
integrate the complete business processes and related resources of the private network
communication business, including the sales link, into Nanjing Putian within three years; if relevant
business resources cannot be integrated into Nanjing Putian due to external factors, for example,
downstream customers have special requirements for the direct partner’s subject qualification (for
example, must be non-foreign-invested enterprises), the Group will cooperate with Nanjing Putian to
carry out related business in accordance with the requirements of relevant laws and regulations, that
is, to undertake related business in the name of the Group or its subsidiaries, and Nanjing Putian is
responsible for the actual operation. The above commitments shall take effect on the date of signing
this commitment, and shall remain in force and irrevocable during the period of existence of Nanjing
Putian and during the period that the Group is deemed to be a related person whom is not allowed to
engage in the same or similar business with the private network communication business of Nanjing
Putian in accordance with relevant regulations. If the above commitment proved to be untrue or not
complied with, all the benefits obtained by the Group in violation of the commitment shall be owned
by Nanjing Putian, and the Group will compensate Nanjing Putian for all direct and indirect losses
and bear corresponding legal liabilities.”
As of May 2018,
those that had been
“In order to protect the legitimate rights and interests of all types of investors, China Potevio
fulfilled included:
Company Limited (hereinafter referred to as “China Potevio”), as the controlling shareholder of NJ
Share 1.China Potevio did
TEL B (200468), now makes the following commitments: (i) China Potevio, as a responsible
keeping not reduce its
China controlling shareholder, starting from July 8, 2015, will not reduce the company’s stock within the
Other commitmen shareholding of the
Potevio next six months. (ii) at present, NJ TEL B has stable operations and its main business is running
commitme 8 July 2015 t: within six Company within 6
Company normally. China Potevio will continue to promote the transformation and upgrading and structural
nt months months from the
Limited adjustment of listed companies by asset restructuring and optimizing allocation of resources so as to
since 8 July date of its
vigorously improve the quality of listed companies. (iii) China Potevio will accelerate the long-term
2015 commitment on July
mechanism of improving the return of investors in listed companies, and improve the operation
8, 2015. 2. In order
quality and profitability of listed companies so as to continuously improve investor returns.”
to optimize resource
allocation, make full
44
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
use of the
company’s business
capabilities, and
enhance the
company’s
profitability and
comprehensive
competitiveness,
since 2016, China
Potevio has been
supporting the
company’s
introduction of the
production and
processing business
for private network
communication
products, and its
private network
communication
products that was
previously
purchased externally
has been
commissioned to the
company for
production and
processing since
2017, which
increased new
45
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
economic growth
points for the
company and
accelerated the
transformation and
upgrading of the
company’s
industries.
Continued to
provide guarantees
for the company’s
bank loans, and
since 2016, the
newly increased
entrusted loans to
the company have
been providing
financial supports
for the company’s
main business
development;
continued to guide
the company to
carry out work to
improve quality and
efficiency and
strengthen internal
control management
so as to improve
operational capacity
46
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
and risk
management and
control of the
company. 3. With
the support of China
Potevio, the
company has
gradually improved
operations quality
and profitability by
actively promoting
the adjustment of
leading industrial
structure and the
market
development,
clearing out the
unprofitable
business,
strengthening the
internal
management, and
optimizing asset
structure and
resource allocations,
in 2017, the
company turned loss
into gain, the
business
performance
47
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
continued to
improve, which laid
the foundation for
returning investors.
For details, please
refer to the
“Announcement on
the Progress of the
Implementation of
the Commitment of
the Controlling
Shareholders” of the
company on May 7,
2018.
Completed on
Y
time(Y/N)
As for the
commitment
out of the
commitment
-
time, explain
the specific
reasons and
further plans
48
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Modified Audit Report” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
√Applicable □ Not applicable
Accounting policy changes due to the change of Accounting Standards for Business Enterprises
1) In accordance with the Notice of Ministry of Finance on Revising and Issuing the Format of General Enterprise Financial
Statement for 2018 (CK [2018] No.15) and interpretation for the Notice, the Company prepared the financial statement of 2018 in
line with the requirement of Accounting Standards, therefor, the accounting policy change adopts the retrospective adjustment. The
items and amount with major influence in financial statement of 2017 are as:
Item and amount in original statement Item and amount in new statement
Note receivable 32,477,463.59 Note receivable and account 812,567,071.00
Account receivable 780,089,607.41 receivable
Note payable 20,161,687.14 Note payable and account payable 826,833,861.31
Account payable 806,672,174.17
Interest payable 531,667.36 Other account payable 63,027,802.63
Dividend payable 1,692,213.38
Other account payable 60,803,921.89
Administrative expenses 143,924,331.99 Administrative expenses 76,037,302.46
R&D expenses 67,887,029.53
2) In 2017, the Ministry of Finance issued the “Accounting Standards for Business Enterprises Interpretation No. 9 - Accounting
Treatment of Net Loss of Investment Under the Equity Method”, “Accounting Standards for Business Enterprises Interpretation No.
10 - Depreciation Method Based on Income from the Use of Fixed Assets”, “Accounting Standards for Business Enterprises
Interpretation No. 11 - Amortization Method Based on Income from the Use of Intangible Assets” and “Accounting Standards for
Business Enterprises Interpretation No. 12 - If the Provider and Recipient Served by Key Managers Are Related Parties. The
company has implemented the above-mentioned interpretations of the accounting standards for business enterprises since January 1,
2018, and the implementation of the above interpretations had no impact on the company’s financial data at the beginning of the
49
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
period.
The change of the accounting policy was approved by the 22nd meeting of the Seventh BOD.
VII. Major accounting errors within reporting period that needs retrospective restatement
√Applicable □ Not applicable
According to the relevant requirements of the Decision on the Adoption of Warning Letters for Nanjing Putian Telecommunications
Co., Ltd. ([2018] No. 38) made by Jiangsu Securities Regulatory Bureau, and reviewed and approved by the 10th session of the 7th
board of directors of the company held on July 13, 2018, the company adopted the retrospective restatement method to correct the
accounting errors in the 2014-2017 financial reports. For details, please refer to the “Announcement on Correction of Previous
Accounting Errors” disclosed by the company on July 14, 2018.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
□ Applicable √ Not applicable
No changes occurred in consolidate scope during the reporting period
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm Pan-China Certified Public Accountants (LLP)
Remuneration for domestic accounting firm (in 10 thousand
101
Yuan)
Continuous life of auditing service for domestic accounting firm 5
Name of domestic CPA He Jiangxing, Jin Jingyu
Continuous service years from domestic CPA 5 years, 3 years
Re-appointed accounting firms in this period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
Pan-China Certified Public Accountants (LLP) was engaged as audit institute of internal control for the Company of 2018, auditing
fee for internal control was 0.32 million Yuan.
The Company engaged China Securities Co., Ltd as sponsors for resumption of listing for application of resumption, fee for
sponsoring amounted as 1.06 million Yuan.
50
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
□Applicable √Not applicable
No significant lawsuits and arbitration occurred in the Period.
The amount involved in other lawsuits that fail to meet the criteria for disclosure of major lawsuits counted as 21.5182 million Yuan
without liability accrual.
XIII. Penalty and rectification
√ Applicable □Not applicable
Types of
Conclusion (if
item/name Type Cause investigation Disclosure date Disclosure index
applicable)
penalty
As a Director of
the Shanghai
Received a Potevio, he is the
Decision on other person who
Investigated on
Administrative is directly
file or
Punishment from responsible for
Li Linzhen Director administrative
Shanghai the illegal acts of
punishment by
Securities information
CSRC
Regulatory disclosure of
Bureau Shanghai Potevio.
Warned and fined
40,000 Yuan
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership plan
or other employee incentives
□ Applicable √ Not applicable
51
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
Approv
Proporti Whethe Market
ed
Trading on in the r to price of
Related Related transacti Means Index
Related Related Pricing amount amount exceed similar Date of
transacti transacti Dealing on of of
transactio relations principl (in 10 of the the transacti disclosu
on on price amount paymen disclos
n parties hip e thousan same approve on re
type content (in 10 ts ure
d Yuan) transacti d availabl
thousan
on amount e
d Yuan)
Enterpri
se with
share
particip
ated by
the
Notice
Compan
Purchas on
y,
e Forecas
SEI-Nanji director
product t of
ng Putian of the Telecom Market Bank 30 Nov.
and 195.73 195.73 0.13% 2,100 N 195.73 Routine
Optical Compan product price transfer 2017
receive Related
Network y has
labor Transac
hold a
services tion for
concurr
2018
ent post
as
director
in the
enterpri
se
Director
Purchas
China Controll e
The
Potevio ing product Telecom Market Bank 30 Nov.
0 0 0.00% 1,000 N 0 same as
Company sharehol and product price transfer 2017
above
Limited der receive
labor
52
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
services
Other
enterpri
se
Actual Purchas
controll
control is e
ed by
the other product The
controlli Telecom Market Bank 30 Nov.
enterprise and 149.18 0.00% 1,100 N 0 same as
ng product price transfer 2017
of receive above
sharehol
Potevio labor
der/actu
Co., Ltd. services
al
controll
er
Other
enterpri
se
-Includin Purchas
controll
g:Nanjing e
ed by
Putian product The
controlli Telecom Market Bank 30 Nov.
Honyar and 19.44 19.44 0.01% N 19.44 same as
ng product price transfer 2017
Electrics receive above
sharehol
Tech. Co., labor
der/actu
Ltd services
al
controll
er
Other
enterpri
se
-Includin Purchas
controll
g:Potevio e
ed by
Informati product The
controlli Telecom Market Bank 30 Nov.
on and 129.74 129.74 0.09% N 129.74 same as
ng product price transfer 2017
Technolo receive above
sharehol
gy Co., labor
der/actu
Ltd. services
al
controll
er
Other Sales of
Potevio enterpri product The
Telecom Market Bank 30 Nov.
Industrial se and 137.13 137.13 0.07% 1,000 N 137.13 same as
product price transfer 2017
Co., Ltd controll provide above
ed by labor
53
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
controlli services
ng
sharehol
der/actu
al
controll
er
Sales of
China Controll product
The
Potevio ing and Telecom Market 33657.5 33,657. Bank 33657.5 30 Nov.
16.87% 87,000 N same as
Company sharehol provide product price 7 57 transfer 7 2017
above
Limited der labor
services
Other
enterpri
se
Potevio controll Sales of
Informati ed by product
The
on controlli and Telecom Market 1,935.4 Bank 30 Nov.
1935.43 0.97% 13,000 N 1935.43 same as
Technolo ng provide product price 3 transfer 2017
above
gy Co., sharehol labor
Ltd. der/actu services
al
controll
er
Other
enterpri
se
controll Sales of
Actual ed by product
The
control is controlli and Telecom Market Bank 30 Nov.
318.22 0.00% 1,100 N 0 same as
China ng provide product price transfer 2017
above
Potevio sharehol labor
der/actu services
al
controll
er
-Includin Other Sales of
g:Beijig enterpri product The
Telecom Market Bank 30 Nov.
Putian se and 1.2 1.2 0.00% N 1.2 same as
product price transfer 2017
Taili controll provide above
Communi ed by labor
54
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
cation controlli services
Technolo ng
gy Co., sharehol
Ltd. der/actu
al
controll
er
Other
enterpri
se
-Includin controll Sales of
g:Putian ed by product
The
Internatio controlli and Telecom Market Bank 30 Nov.
2.73 2.73 0.00% N 2.73 same as
nal ng provide product price transfer 2017
above
Trading sharehol labor
Co., Ltd. der/actu services
al
controll
er
Other
enterpri
se
-Includin controll Sales of
g:Nanjing ed by product
The
Putian controlli and Telecom Market Bank 30 Nov.
1 1 0.00% N 1 same as
Honyar ng provide product price transfer 2017
above
Electrics sharehol labor
Co., Ltd der/actu services
al
controll
er
Other
enterpri
-Includin se
Sales of
g:Chengd controll
product
u Putian ed by The
and Telecom Market Bank 30 Nov.
Telecom controlli 6.15 6.15 0.00% N 6.15 same as
provide product price transfer 2017
municatio ng above
labor
ns Cable sharehol
services
Co., Ltd der/actu
al
controll
55
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
er
Other
enterpri
se
controll Sales of
-Includin ed by product
The
g:Eastco controlli and Telecom Market Bank 30 Nov.
17.81 17.81 0.01% N 17.81 same as
m Co., ng provide product price transfer 2017
above
Ltd sharehol labor
der/actu services
al
controll
er
Other
enterpri
se
-Includin
controll Sales of
g:Putian
ed by product
Eastern The
controlli and Telecom Market Bank 30 Nov.
Communi 123.85 123.85 0.06% N 123.85 same as
ng provide product price transfer 2017
cations above
sharehol labor
Group
der/actu services
Co., Ltd.
al
controll
er
Other
enterpri
se
controll Sales of
-Includin ed by product
The
g:PutianT controlli and Telecom Market Bank 30 Nov.
152.42 152.42 0.08% N 152.42 same as
ongxin ng provide product price transfer 2017
above
Co., Ltd sharehol labor
der/actu services
al
controll
er
-Includin Other Sales of
g:Tianjin enterpri product The
Telecom Market Bank 30 Nov.
Zhongtian se and 13.06 13.06 0.01% N 13.06 same as
product price transfer 2017
Tongxin controll provide above
Co., Ltd ed by labor
56
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
controlli services
ng
sharehol
der/actu
al
controll
er
Other
enterpri
se House
controll and
Putian ed by Leasing building
The
Hi-Tech controlli and s, Market 322.80 Bank 30 Nov.
377.61 377.61 600 N 377.611 same as
Industry ng property property price % transfer 2017
above
Co., Ltd sharehol charge service
der/actu expense
al s
controll
er
Enterpri
se with
share
particip
ated by
the
Compan
y,
SEI-Nanji director House
The
ng Putian of the and Market Bank 30 Nov.
Rent out 65.55 65.55 24.73% 100 N 65.55 same as
Optical Compan building price transfer 2017
above
Network y has s
hold a
concurr
ent post
as
director
in the
enterpri
se
Director
Total -- -- 36,836. -- 107,000 -- -- -- -- --
57
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
42
Details of major sold-out order sent
N/A
back
It is estimated that routine related transactions occurred in 2018 will not exceed 1.07 billion
Yuan (of which, the amount purchase product and received labor services from related party
will not be more than 42 million Yuan, sales of product and provide labor services to related
The actual implementation of routine party will not be more than 1021 million Yuan, paying rentals and relevant service costs to
related transactions that is about to related party will not be more than 6 million Yuan and received rental and relevant service
occurred in the Period with total costs from related party will not be more than one million Yuan); the related transaction
amount estimated by category (if actually occurred amounted as 368.3642 million Yuan (of which, 3.4491 million Yuan from
applicable) purchasing goods and receiving labor service, 360.4835 million Yuan from sales of product
and provide labor services, rental and property expenses amounted as 3.7761 million Yuan
and 655,500 Yuan obtained from rental income ) in total that not more than expected at
beginning of the year.
Reason for the great difference
between trade price and market Not applicable
reference price (if any)
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
√ Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Yes √ No
The Company had no non-operating contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable □ Not applicable
The Company apply for entrusted loan from controlling shareholder of 207 million Yuan in the reporting period.
Website for temporary disclosure of the major connected transaction
Announcement Date of disclosure Website for disclosure
Relation Transaction of Applying Entrust Loan
24 April 2018 Juchao Website
from Controlling Shareholder
Relation Transaction of Applying Entrust Loan 31 October 2018 Juchao Website
58
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
from Controlling Shareholder
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
√ Applicable □ Not applicable
Explanation on leasing:
During the reporting period, the Company and its subsidiary rent other party’s property for production and office use, the cost for
leasing recognized in the period amounted as 3.04 million Yuan.
During the reporting period, subsidiary of the Company rent-out property to others, the rental recognized in the period amounted as
2.65 million yuan.
Items that bringing gain/loss to the Company more than 10% of the total profits in reporting period
√ Applicable □ Not applicable
Amount of Leasing Basis for Impact of Whether
assets income determinin lease its is a
Assets Lease Lease Incidence
Lessor Tenantry leasing (10 (10 g the income on related
leasing From Ended relation
thousand thousand leasing the transaction
Yuan) Yuan) income Company (Y/N)
Subsidiary
of the
controlling
shareholde
r;
Nanjing enterprise
Putian Contract
Putian 31 with share
Hi-Tech 1 January and Cost
Telecomm Property December -187.44 Y participate
Industry 2018 accounting formation
unications 2018 d by the
Co., Ltd rules
Co., Ltd. Company,
director of
the
Company
has hold a
concurrent
59
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
post as
director in
the
enterprise
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Guarante
Related
e for
Announce Actual Implemen
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit
date party
(Y/N)
Guarantee of the Company for the subsidiaries
Guarante
Related
e for
Announce Actual Implemen
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit
date party
(Y/N)
Jointly
Nanjing Southern 29 April 2018.2.5-201
6,400 5 Feb. 2018 1,000 liability N N
Telecom Co., Ltd. 2017 9.2.5
guaranty
Jointly
Nanjing Southern 29 April 2018.3.13-20
6,400 13 Mar. 2018 1,000 liability Y N
Telecom Co., Ltd. 2017 18.10.22
guaranty
Jointly
Nanjing Southern 29 April 2018.6.8-201
6,400 8 Jun. 2018 2,000 liability N N
Telecom Co., Ltd. 2017 9.6.8
guaranty
Jointly
Nanjing Southern 24 Apr. 2018.9.7-201
6,000 7 Sept. 2018 1,000 liability N N
Telecom Co., Ltd. 2018 9.6.7
guaranty
Jointly
Nanjing Southern 24 Apr. 2018.12.25-2
6,000 25 Dec. 2018 2,000 liability N N
Telecom Co., Ltd. 2018 019.9.27
guaranty
Nanjing Putian Telege Jointly
24 Apr. 2018.8.22-20
Intelligent Building 2,500 22 Aug. 2018 1,000 liability N N
2018 19.8.20
Ltd. guaranty
60
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telege Jointly
24 Apr. 2018.10.26-2
Intelligent Building 2,500 26 Oct. 2018 1,000 liability N N
2018 019.4.26
Ltd. guaranty
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 8,500 9,000
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 8,500 8,000
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of the subsidiary for subsidiaries
Guarante
Related
e for
Announce Actual Implemen
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit
date party
(Y/N)
Total amount of guarantee of the Company( total of three above mentioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 8,500 occurred guarantee in report 9,000
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 8,500 guarantee at the end of 8,000
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
22.52%
assets of the Company (that is A4+ B4+C4)
Including:
Amount of guarantee for shareholders, actual controller and its
0
related parties(D)
The debts guarantee amount provided for the guaranteed parties
0
whose assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the
0
Company exceed 50%(F)
Total amount of the aforesaid three guarantees(D+E+F) 0
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
Explanations on external guarantee against regulated procedures
N/A
(if applicable)
Explanation on guarantee with composite way
Not applicable
61
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(2)Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Performance of social responsibility
During the reporting period, the company continued to keep a foothold in the communications industry, continuously improved the
quality of business operations and the core competitiveness, kept being honest and trustworthy, operated according to law, attached
importance to environmental protection, actively participated in social welfare undertakings, and maintained the legitimate rights and
interests of the companies, shareholders, employees, customers and suppliers and other cooperative partners, and actively undertook
social obligations and fulfilled social responsibilities while pursuing economic benefits.
2. Precise poverty alleviation social responsibility
(1) Precise poverty alleviation plan
According to the spirit of the relevant documents of the Nanjing Municipal Party Committee and the Municipal Government, under the
unified arrangement of the Economic and Information Commission of Municipal Committee, the company provides assistance to the
Jasmine Village of the economically underdeveloped village in Liuhe District during the period of 2016-2020.
Guided by the spirit of the 19th National Congress of the Communist Party of China and the spirit of the important speech of General
Secretary Xi Jinping, and guided by the socialist ideology with Chinese characteristics in Xi Jinping new era, the company adheres to
the basic principle of precise poverty alleviation. The company has formulated the “partnering with assistance work plan” to focus on
improving the living conditions of poor households, to help poor households get rid of poverty and become better off, and to adhere to
the combination of “blood transfusion” and “blood making” to effectively help poor households. The company also adheres to overall
planning and differential poverty alleviation; adheres to the work thinking of self-reliance and treating both the symptoms and the root
causes, and provides in-depth and effective assistance to Jasmine Village through financial support and emotional condolences.
62
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(2) Summary of annual precise poverty alleviation
In 2018, based on its actual operations, the company insisted on visiting the village for regular visits, in the middle of the year, the
company signed an agreement to contribute money for building roads with the village after sufficient surveys so as to help improve
the village roads and facilitate the villagers to go out, and the construction of some roads has been completed, which effectively
strengthened the infrastructure construction of Jasmine Village, and the company actively fulfilled its social responsibility as a central
enterprise.
(3) Results of the poverty
Target Measurement unit Numbers/ implementation
i. Overall —— ——
In 10 thousand
Including: 1. capital 9.5
Yuan
ii. Invested by specific project —— ——
1. Industrial development poverty —— ——
2. Transfer employment —— ——
3.Relocation the poor —— ——
4.Education poverty —— ——
5.Health poverty alleviation —— ——
6.Ecological protection and poverty
—— ——
alleviation
7.Fallback protection —— ——
8.Social poverty alleviation —— ——
8.2 Capital input in fixed poverty In 10 thousand
9.5
alleviation work Yuan
9. Other —— ——
iii. Awards (content and grade) —— ——
(4) Follow-up of precise poverty alleviation
In 2019, continue to giver priority to the implementation of helping the poverty, help the villages get rid of poverty and become rich.
The Company plans to input 85,000 Yuan for the poverty alleviation.
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
No
The listed Company and its subsidiary did not belongs to the key sewage units released from environmental protection department
63
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
XIX. Explanation on other significant events
√ Applicable □ Not applicable
Index of the material events that disclosed in reporting period:
Event Disclosure date Index of information on appointed website
Notice on the Measures Taken to Resume Listing and the 2018.1.6 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on System-Changing and Renamed of the Actual 2018.1.18 Juchao Website: www.cninfo.com.cn
Controller
Performance Forecast for Year of 2017 2018.1.31 Juchao Website: www.cninfo.com.cn
Notice on the Measures Taken to Resume Listing and the 2018.2.7 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on the Measures Taken to Resume Listing and the 2018.3.6 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on Signing of a Framework Agreement on 2018.3.20 Juchao Website: www.cninfo.com.cn
Expropriation and Compensation
Notice on the Measures Taken to Resume Listing and the 2018.4.10 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on Progress of Housing Expropriation 2018.4.14 Juchao Website: www.cninfo.com.cn
Preliminary Earnings Estimate for 2017 2018.4.14 Juchao Website: www.cninfo.com.cn
Performance Forecast for 1Q of 2018 2018.4.14 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 6 Session of 7 BOD 2018.4.24 Juchao Website: www.cninfo.com.cn
Notice on Resolution of 4th Session of 7th Supervisory 2018.4.24 Juchao Website: www.cninfo.com.cn
Committee
Summary of Annual Report 2017 2018.4.24 Juchao Website: www.cninfo.com.cn
Notice on Provision for Impairment of Assets for 2017 2018.4.24 Juchao Website: www.cninfo.com.cn
Notice on Change of Accounting Policy 2018.4.24 Juchao Website: www.cninfo.com.cn
Notice on Guarantee for Controlling Subsidiary 2018.4.24 Juchao Website: www.cninfo.com.cn
Notice on Related Transaction of Applying for Entrust 2018.4.24 Juchao Website: www.cninfo.com.cn
Loans to Controlling Shareholder
Notice on Capital Reduction for Subsidiary 2018.4.24 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 7 Session of 7 BOD 2018.4.28 Juchao Website: www.cninfo.com.cn
Text of First Quarterly Report 2018 2018.4.28 Juchao Website: www.cninfo.com.cn
Notice on Application for Resumption of Listing to 2018.5.3 Juchao Website: www.cninfo.com.cn
Shenzhen Stock Exchange
Notice on Progress of Commitments of Controlling 2018.5.7 Juchao Website: www.cninfo.com.cn
Shareholder
Notice on the Measures Taken to Resume Listing and the 2018.5.8 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on Accepting the Application for Resumption of 2018.5.11 Juchao Website: www.cninfo.com.cn
64
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Listing from Shenzhen Stock Exchange
Notice on Receiving the Letter of Matters Concerning the 2018.5.11 Juchao Website: www.cninfo.com.cn
Submission of Supplementary Materials for the Resumption
of Listing from Shenzhen Stock Exchange
Notice on Resolution of 8th Session of 7th BOD 2018.5.23 Juchao Website: www.cninfo.com.cn
Notice on Convening the AGM of 2017 2018.5.23 Juchao Website: www.cninfo.com.cn
Notice on the Measures Taken to Resume Listing and the 2018.6.7 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Progress of Guarantee for Controlling Subsidiary 2018.6.12 Juchao Website: www.cninfo.com.cn
Notice on Resolution of AGM of 2017 2018.6.16 Juchao Website: www.cninfo.com.cn
Notice on the Measures Taken to Resume Listing and the 2018.6.23 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on Resolution of 9th Session of 7th BOD 2018.6.30 Juchao Website: www.cninfo.com.cn
Notice on the Measures Taken to Resume Listing and the 2018.7.5 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Notice on Receiving Warning Letter from Jiangsu Securities 2018.7.11 Juchao Website: www.cninfo.com.cn
Regulatory Bureau
Progress of the Housing Expropriation 2018.7.13 Juchao Website: www.cninfo.com.cn
Performance Forecast for Semi-Annual of 2018 2018.7.14 Juchao Website: www.cninfo.com.cn
Notice on Resolution of 10th Session of 7th BOD 2018.7.14 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 6 Session of 7 Supervisory 2018.7.14 Juchao Website: www.cninfo.com.cn
Committee
Notice on Correction of Earlier Accounting Errors 2018.7.14 Juchao Website: www.cninfo.com.cn
Notice on Correction of the Annual Report 2017 2018.7.31 Juchao Website: www.cninfo.com.cn
Notice on the Reply to the Letter of Matters Concerning the 2018.7.31 Juchao Website: www.cninfo.com.cn
Submission of Supplementary Materials for the Resumption
of Listing from Management Department of Shenzhen Stock
Exchange
Notice on Commitment of the Actual Controller and the 2018.7.31 Juchao Website: www.cninfo.com.cn
Controlling Shareholder
Notice on the Approval of Shenzhen Stock Exchange on the 2018.8.1 Juchao Website: www.cninfo.com.cn
Resumption of Shares Listing
Notice on Resolution of 11th Session of 7th BOD 2018.8.1 Juchao Website: www.cninfo.com.cn
Notice on Applying for Withdrawing the Delisting Risk 2018.8.1 Juchao Website: www.cninfo.com.cn
Warning for Company’s Stock to Shenzhen Stock Exchange
Notice on the Measures Taken to Resume Listing and the 2018.8.2 Juchao Website: www.cninfo.com.cn
Progress of the Relevant Work
Resumption of Listing 2018.8.8 Juchao Website: www.cninfo.com.cn
Notice on Withdrawal the Delisting Risk Warning of the 2018.8.8 Juchao Website: www.cninfo.com.cn
Company’s Stock
65
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Notice on Resolution of 12th Session of 7th BOD 2018.8.10 Juchao Website: www.cninfo.com.cn
Rectification Report on the Relevant Issues in Decision on 2018.8.10 Juchao Website: www.cninfo.com.cn
Administrative Supervision Measures of Jiangsu Securities
Regulatory Bureau
Indicative Notice on the Resumption of the First Day for 2018.8.15 Juchao Website: www.cninfo.com.cn
Trading of the Company’s Share
Notice on Receipt of the Regulatory Letter from Shenzhen 2018.8.18 Juchao Website: www.cninfo.com.cn
Stock Exchange
Notice on Listed in the Enterprise of “Double Hundred 2018.8.18 Juchao Website: www.cninfo.com.cn
Action” in State-Owned Enterprises Reform
Notice on Resolution of 13th Session of 7th BOD 2018.8.28 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 7 Session of 7 Supervisory 2018.8.28 Juchao Website: www.cninfo.com.cn
Committee
Summary of Semi-Annual Report of 2018 2018.8.28 Juchao Website: www.cninfo.com.cn
Notice on Provision for Impairment of Assets 2018.8.28 Juchao Website: www.cninfo.com.cn
Progress of Guarantee for Controlling Subsidiary 2018.9.11 Juchao Website: www.cninfo.com.cn
Notice of Independent Director Resignation 2018.10.9 Juchao Website: www.cninfo.com.cn
Performance Forecast of 3Q of 2018 2018.10.13 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 14 Session of 7 BOD 2018.10.31 Juchao Website: www.cninfo.com.cn
Notice on Related Transaction of Applying for Entrust 2018.10.31 Juchao Website: www.cninfo.com.cn
Loans to Controlling Shareholder
Notice on Convening the 1st Extraordinary Shareholders 2018.10.31 Juchao Website: www.cninfo.com.cn
General Meeting of 2018
Text of 3Q report of 2018 2018.10.31 Juchao Website: www.cninfo.com.cn
Notice on Resolution of 15th Session of 7th BOD 2018.11.3 Juchao Website: www.cninfo.com.cn
Notice on Carry Out Accounts Receivable Factoring 2018.11.3 Juchao Website: www.cninfo.com.cn
Progress of Guarantee for Controlling Subsidiary 2018.11.6 Juchao Website: www.cninfo.com.cn
th th
Notice on Resolution of 16 Session of 7 BOD 2018.11.15 Juchao Website: www.cninfo.com.cn
Notice on Abnormal Volatility in Stock Trading 2018.11.16 Juchao Website: www.cninfo.com.cn
st
Notice on Resolution of 1 Extraordinary Shareholders 2018.11.17 Juchao Website: www.cninfo.com.cn
General Meeting of 2018
Notice on Resolution of 17th Session of 7th BOD 2018.12.1 Juchao Website: www.cninfo.com.cn
nd
Notice on Convening the 2 Extraordinary Shareholders 2018.12.1 Juchao Website: www.cninfo.com.cn
General Meeting of 2018
Notice on Resolution of 2nd Extraordinary Shareholders 2018.12.18 Juchao Website: www.cninfo.com.cn
General Meeting of 2018
Progress of Guarantee for Controlling Subsidiary 2018.12.29 Juchao Website: www.cninfo.com.cn
66
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
67
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section VI. Changes in Shares and Particular about Shareholders
I. Changes in shares
1.Changes in shares
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitaliza
New
Bonus tion of Proportio
Amount Proportion shares Others Subtotal Amount
shares public n
issued
reserve
115,000,0 115,000,0
I. Unlisted shares 53.49% 53.49%
00 00
115,000,0 115,000,0
1. Sponsor’s shares 53.49% 53.49%
00 00
Including: state-owned 115,000,0 115,000,0
53.49% 53.49%
shares 00 00
100,000,0 100,000,0
II. Listed shares 46.51% 46.51%
00 00
2. Domestically listed 100,000,0 100,000,0
46.51% 46.51%
foreign shares 00 00
215,000,0 215,000,0
III. Total shares 100.00% 100.00%
00 00
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing holdings of repurchase shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
68
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Current internal staff shares
□ Applicable √ Not applicable
III. Shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total preference
Total preference shareholders
Total common shareholders with voting
Total common
stock with voting rights recovered
stock
shareholders at rights recovered at end of last
shareholders in 8,628 8,979 0 0
end of last month at end of month before
reporting
before annual reporting period annual report
period-end
report disclosed (if applicable) disclosed (if
(see note8) applicable) (see
note8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Number of share pledged/frozen
Amount
sharehol Amount
Proportio Changes of
Full name of Nature of n of ders at of listed
in report un-listed
Shareholders shareholder shares the end shares State of share Amount
held period shares
of report held
held
period
China Potevio State-owned 115,000, 115,000, 115,000,
53.49% 0
Company Limited corporation 000 000 000
69
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
GUOTAI JUNAN
SECURITIES(H Foreign 6,950,09 -2,646,43
3.23% 0 6,950,095
ONGKONG) corporation 52
LIMITED
Shenwan
Foreign 5,646,50 -3,941,42
HongYuan (H.K.) 2.63% 0 5,646,500
corporation 05
Limited
Domestic nature 2,443,93
Zheng Enyue 1.14% 38,200 0 2,443,939
person 9
Domestic nature 2,007,11
Sun Huiming 0.93% - 0 2,007,110
person 0
Domestic nature 1,992,59 1,615,25
Wang Xiaoyan 0.93% 0 1,992,590
person 05
Domestic nature 1,862,37
Gu Jinhua 0.87% 78,600 0 1,862,371
person 1
Guosen Securities
Foreign 1,861,88
(H.K.) Broker 0.87% - 0 1,861,882
corporation 2
Co., Ltd.
BOCI
Foreign 1,716,94
SECURITIES 0.80% - 0 1,716,945
corporation 5
LIMITED
LI SHERYN Foreign nature 1,146,70
0.53% 1,700 0 1,146,700
ZHAN MING person 0
Strategy investors or general legal
person becomes top 10 shareholders
Not applicable
due to rights issued (if applicable)
(see note3)
Explanation on associated Among the top ten shareholders, China Potevio Company Limited is neither a related party
relationship or concerted action nor a person acting in concert with the others. It’s unknown by the Company whether there
among the aforesaid shareholders are related parties or persons acting in concert among the other shareholders.
Top 10 shareholders with circulation shares held
Type of shares
Shareholders’ name Amount of listed shares held at end of the Period
Type Amount
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 6,950,095 listed foreign 6,950,095
LIMITED shares
Domestically
Shenwan HongYuan (H.K.) Limited 5,646,500 5,646,500
listed foreign
70
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
shares
Domestically
Zheng Enyue 2,443,939 listed foreign 2,443,939
shares
Domestically
Sun Huiming 2,007,110 listed foreign 2,007,110
shares
Domestically
Wang Xiaoyan 1,992,590 listed foreign 1,992,590
shares
Domestically
Gu Jinhua 1,862,371 listed foreign 1,862,371
shares
Domestically
Guosen Securities (H.K.) Broker
1,861,882 listed foreign 1,861,882
Co., Ltd.
shares
Domestically
BOCI SECURITIES LIMITED 1,716,945 listed foreign 1,716,945
shares
Domestically
LI SHERYN ZHAN MING 1,146,700 listed foreign 1,146,700
shares
Domestically
Jin Yunhua 950,162 listed foreign 950,162
shares
Expiation on associated relationship
or consistent actors within the top 10
It’s unknown by the Company whether there are related parties or persons acting in concert
un-restrict shareholders and between
among the above mentioned shareholders.
top 10 un-restrict shareholders and
top 10 shareholders
Explanation on shareholders
involving margin business about top
ten common stock shareholders with N/A
un-restrict shares held(if applicable)
(see note4)
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
71
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. Controlling shareholder of the Company
Nature of controlling shareholders: central state-owned holding
Type of controlling shareholders: legal person
Legal person/person
Controlling shareholder Date of foundation Organization code Main operation business
in charge of the unit
China Potevio is a large
central enterprise under
direct administration of
State-owned Assets
Supervision and
Administration
Commission of the State
Council, focusing on
manufacture and trading of
China Potevio Company
Lv Weiping 23 July 2003 91110000710931555N information
Limited
telecommunication
products, relevant
technology research and
services. The operation
scope covers information
telecommunication,
broadcasting, industrial
information, financial
electrics and new energy.
Equity of other
Domestic and overseas listed companies directly controlled includes Shanghai Potevio Co., Ltd.,
domestic/oversea listed
Nanjing Putian Telecommunications Co., Ltd., Chengdu Potevio Cable Co., Ltd.; Domestic and
Company control by
overseas listed companies indirectly controlled includes Eastern Communications Co., Ltd.,
controlling shareholder as
Eastcompeace Smart Card Co., Ltd., the Company takes no stake in domestic and overseas listed
well as stock-joint in report
Company.
period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller and person acting in concert of the Company
Nature of actual controller: central state-owned assets management
Type of actual controller: legal person
Legal
Actual controlling shareholders Date of foundation Organization code Main operation business
person/person in
72
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
charge of the unit
A large central enterprise under
direct administration of
State-owned Assets Supervision
and Administration Commission
of the State Council, focusing on
manufacture and trading of
information telecommunication
China Putian Corporation Lv Weiping 29 March 1980 9111000010000157XE
products, relevant technology
research and services. The
operation scope covers
information telecommunication,
broadcasting, industrial
information, financial electrics
and new energy.
No domestic and overseas listed Company directly controlled and held by the Company. Domestic
Equity of domestic/oversea
and overseas listed Company indirectly controlled by China Potevio includes Shanghai Potevio
listed Company control by
Co., Ltd, Nanjing Putian Telecommunications Co., Ltd., Chengdu Putian Telecommunications
actual controller in report period
Cable Co., Ltd, Eastern Communications Co., Ltd. and Eastcompeace Smart Card Co., Ltd.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
State-owned Assets Supervision and Administration Commission of the State Council
100%
China Putian Corporation
100%
China Potevio Company Limited
53.49%
Nanjing Putian Telecommunications Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
73
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
74
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
75
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section VIII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount Amount
Shares Shares
of shares of shares
Start held at Other held at
Working End date increased decreased
dated of
Title Sex(M/F) Age of office period-be changes period-en
Name status office in this in this
term
term gin (share) d
period period
(Share) (Share)
(Share) (Share)
Director( Currently 23 Aug.
Xu Qian M 56 0 0 0 0 0
President) in office 2013
Currently 21 Jan.
Director M 44 0 0 0 0 0
in office 2019
Wang
Deputy
Wenkui Currently 19 Apr..
President M 44 0 0 0 0 0
in office 2019
of BOD
Cheng Currently 23 Aug.
Director F 48 0 0 0 0 0
Wei in office 2017
Currently 23 Aug.
Qin Zhen Director M 50 0 0 0 0 0
in office 2017
Wang Currently 23 Aug.
Director F 48 0 0 0 0 0
Jinfeng in office 2017
Independ
Tang Currently 23 Aug.
ent F 62 0 0 0 0 0
Fuxin in office 2017
director
Independ
Xie Currently 23 Aug.
ent M 55 0 0 0 0 0
Manlin in office 2017
director
Independ
Du Currently 23 Aug.
ent F 50 0 0 0 0 0
Xiaorong in office 2017
director
Superviso
r(Chairma
Zhao Currently 23 Aug.
n of the M 52 0 0 0 0 0
Xinping in office 2017
Superviso
ry
76
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Committe
e)
Zhang Superviso Currently 23 Aug.
F 45 0 0 0 0 0
Hong r in office 2017
Qiu Superviso Currently 23 Aug.
F 45 0 0 0 0 0
Huizhen r in office 2017
Wang Currently 4 Jan.
GM M 44 0 0 0 0 0
Wenkui in office 2019
Deputy Currently 26 Aug.
Qin Zhen M 50 0 0 0 0 0
GM in office 2016
Jia Deputy Currently 29 June
F 38 0 0 0 0 0
Haowen GM in office 2018
Chief
Cao Currently 29 June
Accounta M 43 0 0 0 0 0
Xurong in office 2018
nt
Liu General Currently 20 Apr.
F 47 0 0 0 0 0
Xiaodong Counsel in office 2018
Secretary
Currently 23 Aug.
Li Jing of the F 43 0 0 0 0 0
in office 2017
Board
Office 23 Aug. 4 Jan.
Liu Yun Director F 45 0 0 0 0 0
leaving 2017 2019
Li Office 15 Jun. 4 Jan.
GM M 47 0 0 0 0 0
Linzhen leaving 2016 2019
Director(
Li deputy Office 23 Aug. 18 Apl.
M 47 0 0 0 0 0
Linzhen president leaving 2017 2019
)
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Liu Xiaodong General Counsel Appointment 20 Apr. 2018 Appointment by the Board
Jia Haowen Deputy GM Appointment 29 June 2018 Appointment by the Board
Cao Xurong Chief Accountant Appointment 29 June 2018 Appointment by the Board
Liu Yun Director Office leaving 4 Jan. 2019 Resignation
77
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Contract
Li Linzhen GM 4 Jan. 2019 Director Contract termination
termination
Wang Wenkui GM Appointment 4 Jan. 2019 Appointment by the Board
Wang Wenkui Director Election 21 Jan. 2019 Election in Shareholder General Meeting
Director(deputy
Li Linzhen Office leaving 18 Apr. 2019 Resignation
president )
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and
senior executive at the present
Director:
Xu Qian (Male), born in 1962, owes a graduate degree, a senior executive getting a MBA. He joints the work in 1984, and worked as
engineer of the communication equipment dept. in China P&T Appliances from August 1984 to July 1993; a deputy GM of
communication device department in China P&T Appliances from July 1993 to July 1994; deputy GM of China P&T Appliances
Beijing Company from July 1994 to July 1995 and GM from July 1995 to March 1998; vice-secretary (secondment for getting
experience) of CPC Lankao County Committee, Henan Province from March 1998 to March 1999; GM assistant of China P&T
Appliances from March 1999 to August 2000; deputy GM of China P&T Appliances from August 2000 to February 2002 and deputy
GM of China P&T Appliances Group from February 2002 to June 2003; Party members and deputy GM in China P&T Appliances
Group from June 2003 to April 2009; Party members and deputy GM of the China Potevio from April 2009 to December 2017;
senior vice president (concurrently) of China Potevio Company Limited and GM (concurrently) of communications industry business
from June 2009 to May 2016; party secretary of the Company from May 2013 to June 2016; and he servers as president (concurrently)
of China Potevio Company Limited since May 2016; he also serves as Standing committee of the Party Committee and Deputy GM
of China Potevio since December 2017.
Mr. Xu Qian hold a concurrent post as Director and President of the Company since August 2013.
Wang Wenkui, male, born in 1974, bachelor degree, a major in communication engineering, joined in work in 1996. From July 1996 to
December 2002, he served as the deputy manager and WCDMA project manager of WCDMA project department of the Network
Communication Research Institute of Eastcom Co., Ltd.; from December 2002 of to August 2004, he served as the manager of
WCDMA Project Department of the Network Communication Research Institute of Eastcom Co., Ltd.; from August 2004 to December
2007, he was dispatched and appointed as the deputy general manager of Hangzhou Sanxing Eastcom Network Technology Co., Ltd.
by the Investment Management Department of Eastcom Co., Ltd.; from December 2007 to November 2009, he served as the deputy
general manager of Trunked Radio Business Division of Eastcom Co., Ltd.; from November 2009 to April 2012, he served as the
general manager of Manufacturing Business Division of Eastcom Co., Ltd.; from April 2012 to June 2015, he served as the vice
president and the general manager of Manufacturing Business Division (concurrently) of Eastcom Co., Ltd.; from June 2015 to
December 2018, he served as the vice president and the general manager of Financial Business Division (concurrently) of Eastcom
Co., Ltd.; since January 2019, he has been serving as the general manager of Nanjing Putian Telecommunications Co., Ltd.
Mr. Wang Wenkui hold a concurrent post as Director of the Company since January 2019 and as Deputy President of the BOD since
April 2019..
78
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Cheng Wei (Female), born in 1970, obtaining a master’s degree with major in fluid power transmission and control, started her career
in 1992. Mr. Cheng was engaged in the R&D work at the institute affiliated to Hubei Yichang Machine-tool Industry Company from
August 1992 to April 1994; she took on technical development work at the equipment department of No. 57619 Troops of China’s
People’s Liberation Army from May 1994 to August 1995; Ms. Cheng successively served as the director of new technology institute
and deputy chief engineer of Beijing Post and Telephone Equipment Factory from June 1998 to May 2002; She held the position of
vice factory manager of Beijing Post and Telephone Equipment Factory from June 2002 to December 2005; Ms. Cheng successively
worked as the general manager of system business unit and the third department of marketing of communications industry business
unit of China Potevio Company Limited from January 2006 to October 2010; she held the position of deputy general manager of
communications industry business unit as well as held a concurrent post of general manger of third department of marketing of China
Potevio Company Limited from October 2010 to September 2014;a GM of third department of marketing of China Potevio Company
Limited from September 2014 to October 2018; Ms. Cheng serves as the Party Secretary of Potevio New Energy Co., Ltd since
October 2018.
Ms. Cheng Wei hold a concurrent post as Director of the Company since August 2017.
Qin Zhen (Male), born in 1969, bachelor degree, major in administrative engineering. He worked in 1990 and successively worked as
the production office scheduling and department assistant in Nanjing Communication Equipment Plant from August 1990 to January
1999; he worked as the deputy GM and deputy secretary of the Party branch in wiring Company of Nanjing Putian
Telecommunication Co., Ltd. from January 1999 to March 2001; and served as deputy director of the enterprise development dept.
and enterprise management dept. and director of the enterprise management dept. in Nanjing Putian Telecommunication Co., Ltd.
and GM of the Putian Industrial Co., Ltd. from March 2001 to January 2006; served as deputy GM in network cabinet division of the
Company from January 2006 to November 2006; he served as GM in Putian manufacturing department and party branch secretary of
the Company from November 2006 to March 2012; the director of party committee of the Company from March 2012 and August
2015; serves as deputy chairman of the labor union in the Company from May 2012 to March 2013 an acted as GM assistant from
March 2013 to September 2016; now he serves as deputy GM of the Company since September 2016.
Mr. Qin Zhen hold a concurrent post as Director of the Company since August 2017.
Wang Jinfeng (Female), born in 1970, obtained a bachelor’s degree with major in accounting, started her career in 1993. Ms. Wang
worked as the accountant of the financial department of Beijing Posts and Telecommunications Equipment Factory from August
1993 to April 1995; she served as the accounting officer of the marketing center of Beijing Posts and Telecommunications
Equipment Factory from April 1995 to February 2002; she held the position of financial accounting manager of Beijing Capitek Co.
Ltd. from March 2002 to April 2005; Ms. Wang successively served as the financial manager of terminal services, agency services,
agency and telecommunications services of China Potevio Company Limited from April 2005 to November 2013; she has worked as
the assistant of the general manager of financial department of China Potevio Company Limited from November 2013 until now.
Ms. Wang Jinfeng hold a concurrent post as Director of the Company since August 2017.
Tang Fuxin (Female), born in 1956, obtaining a master’s degree with major in business administration, started her career in 1975. Ms.
Tang worked at the countryside in Shunyi Beijing from March 1975 to December 1976; she successively served as an accountant of
financial division and the deputy director of inspection division of the original ministry of posts and telecommunications from
September 1976 to October 1998; she served as the manager of planning financial department of the original Guoxin Paging Co.,Ltd.
from October 1998 to July 2000; she worked as the vice general manager of financial department of China United Communications
79
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Limited from July 2000 to September 2001; she served as the vice general manger of financial department of China United
Communications Limited from September 2001 to March 2005; Ms. Tang held the position of general manager of the financial
department of China United Communications Limited from March 2005 to February 2006; she served as the general manager of
auditing department of China United Communications Limited from February 2006 to April 2011; she worked as the senior manager
of auditing department of China United Communications Limited from April 2011 to February 2016.
Ms. Tang Fuxin hold a concurrent post as independent director of the Company since August 2017.
Xie Manlin (Male), born in 1963, bachelor degree major in the laws. He worked in 1986, and in the Nanjing Second Laws Firm from
August 1986 to September 1989; he worked in Nanjing Jinling Laws Firm from October 1989 to October 1994; and serves as
director of Jiangsu Xie Manlin Laws Firm since December 1994.
Mr. Xie Manlin hold a concurrent post as independent director of the Company since August 2017.
Du Xiaorong (Female), born in 1968, holding a doctor’s degree with major in technological economy and management, started her
career in 1989. Ms. Du worked as an assistant teacher at the management department of Hohai University from July 1989 to March
1995; she served as a lecturer of International Business School of Hohai University from April 1995 to March 2001; Ms. Du worked
as an associate professor of Business School of Hohai University from April 2001 to March 2002; Ms. Du was put on field practice
at Taihu Basin Administration and worked as the assistant of the director of planning department from April 2002 to April 2003; She
served as an assistant professor of Business School and the deputy director of Chrematistics Department of Hohai University from
May 2003 to December 2003 ;She served as an assistant professor of Business School as well as the director of Chrematistics
Department of Hohai University from January 2004 to May 2008; she worked as a professor of Business School and director of
Chrematistics Department of Hohai University from June 2008 to September 2010; Ms. Du also worked as a professor and the
director of Finance Department of Business School of Hohai University from October 2010 to May 2013; She also serves as a
professor and Head of Accounting Dept. of Hohai University since June 2013
Ms. Du Xiaorong hold a concurrent post as independent director of the Company since August 2017.
Supervisor:
Zhao Xinping(Male), born in 1966, holding a doctor’s and a master’s degree with major in international trade, started his career 1989.
Mr. Zhao worked at the rural development research center of state council from July 1989 to September 1989; he successively served
as the senior accountant of financial department, deputy general manager of investment management department and general
manager of investment department of China Posts and Telecommunications Industries Co.,Ltd. from September 1989 to September
1999; he successively held the post of as the general manager of investment management department and general manager of
business financial department, assistant general manager, deputy chief accountant (a concurrent post) and chief accountant of Potevio
Company Limited from September 1999 to December 2006; he worked as the financial director of China Potevio Company Limited
from July 2003 to February 2005; Mr. Zhao held the position of secretary of the Board of China Potevio Company Limited from
February 2005 to August 2014; worked as the general manager of purchasing center of China Potevio Company Limited from
January 2003 to December 2014; general manager of in investment and financing development department of China Potevio
Company Limited from March 2011 to January 2013; Mr. Zhao also serves as the chairman of the supervisory committee of China
Potevio Company Limited since September 2014; he held a post of general manager of the legal department of auditing and
supervision of China Potevio Company Limited from March 2015 to December 2017; and a GM of audit dept. In Potevio Company
limited since October 2018.
Mr. Zhao Xinping hold a concurrent post as Chairman of the Supervisory Committee in the Company since August 2017
80
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Zhang Hong(Female), born in 1973 with bachelor degree of law. She commenced to work in 1994, with details as follows: acted as a
lawyer in Jiangxi Jingde Law Office during the period from September 1994 to December 2000; a lawyer in Beijing Hechuan Law
Office during the period from January 2001 to December 2003; legal manager in Beijing Shouxin Co., Ltd. during the period from
December 2003 to July 2014; a senior solicitor in the department of audit, supervision and law of China Potevio Company Limited
from July 2014 to October 2018, she serves as supervisor of the Company since August 2017; and a senior lawyers of law &risk
control dept. in Potevio Company Limited since October 2018.
Ms. Zhang Hong hold a concurrent post as supervisor in the Company since August 2017.
RTQi Huizhen(Female), born in 1973 with bachelor degree major in accounting. She commenced to work in 1997, with details as
follows: successively served as the female director and secretary of the Youth League Committee in Shaokou Village Government,
Wan’an County, Jiangxi Province from July 1997 to January 2000; served as the cost accountant and the CFO in the finance
department of Nanjing Putian Telecommunications Co., Ltd from February 2000 to October 2004; the deputy director of the HR
department of Nanjing Putian Telecommunications Co., Ltd from November 2004 to November 2005; successively served as the
deputy director and director of the finance department of Nanjing Putian Telecommunications Co., Ltd from December 2005 to
September 2016, she serves as director of the department of audit, supervision and law of Nanjing Putian Telecommunications Co.,
Ltd since October 2016.
Ms. Qiu Huizhen hold a concurrent post as the staff representative supervisor of the Company since August 2017
Senior Executives:
GM Mr. Wang Wenkui found in the introduction in Director.
Deputy GM Mr. Qin Zhen found in the introduction in Director.
Jia Haowen (female) born in 1980, bachelor degree, a major in land management, joined in work in 2002, worked on administrative
management and sales at Shanghai Xinhaoshi Real Estate Company from July 2002 to March 2004; from April 2004 to April 2007, she
served as the confidential secretary and secretary of the President Office of Nanjing Putian Telecommunications Co., Ltd.; from April
2007 to February 2008, she successively served as the assistant director of the General Management Department and the assistant
director of the Human Resources Department of Nanjing Putian Telecommunications Co., Ltd.; from February 2008 to October 2009,
she served as the deputy director of Human Resources Department of Nanjing Putian Telecommunications Co., Ltd.; from October
2009 to March 2012, she served as the director of Human Resources Department of Nanjing Putian Telecommunications Co., Ltd.;
from March 2012 to August 2012, she served as the director of the General Management Department and the director of Human
Resources Department of Nanjing Putian Telecommunications Co., Ltd.; from August 2012 to June 2013, she served as the director of
the General Management Department of Nanjing Putian Telecommunications Co., Ltd. (during the period, from May 2012 to May
2013), she was studying in the class for further studies as a business administration major at the Graduate School of Tsinghua
University); from June 2013 to November 2014, she served as the assistant general manager and the director of General Management
Department of Nanjing Putian Telecommunications Co., Ltd.; from November 2014 to August 2015, she served as the assistant general
manager and the director of General Management Department and the director of Multimedia Application Industry Department of
Nanjing Putian Telecommunications Co., Ltd.; from August 2015 to September 2016, she served as the assistant general manager and
the director of Multimedia Application Industry Department of Nanjing Putian Telecommunications Co., Ltd.; from September 2016
to November 2017, she served as the assistant general manager of Nanjing Putian Telecommunications Co., Ltd.; since November
2017, she has been serving as a member of the party committee and the assistant general manager of Nanjing Putian
Telecommunications Co., Ltd.; and since July 2018, she has been serving as the deputy general manager of Nanjing Putian
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Telecommunications Co., Ltd.
Cao Xurong (male) born in 1975, bachelor degree, a major in economic management, joined in work in 1993, and served as a cashier at
the Finance Department of Nanjing Putian Telecommunications Co., Ltd. from August 1993 to July 1996. From July 1996 to May 1997,
he served as the accountant in charge at Shanghai Huaning Co., Ltd. which was subordinate to Nanjing Putian Telecommunications
Co., Ltd.; from May 1997 to April 2006, he served as the financial controller of Putian Yuhua Electroplating Factory, Bada Company,
Hongyan Company and Building Company under Nanjing Putian Telecommunications Co., Ltd.; from September 2005 to March 2006,
he successively served as the assistant director of Finance Department and the chief financial officer of the Wiring Industry
Department of Nanjing Putian Telecommunications Co., Ltd.; from March 2006 to January 2007, he served as general department
manager of the Wiring Business Division of Nanjing Putian Telecommunications Co., Ltd.; from January 2007 to April 2009, he
served as the general manager of the wiring marketing department of Nanjing Putian Telecommunications Co., Ltd.; from April 2009 to
July 2012, he successively served as the executive deputy general manager of the Wiring System Department and the general manager
of the Wiring Marketing Department (concurrently) of Nanjing Putian Telecommunications Co., Ltd.; from July 2012 to March 2013,
he successively served as the executive deputy general manager of the Wiring System Department and the general manager of the
Wiring Marketing Department (concurrently) of Nanjing Putian Telecommunications Co., Ltd., and the general manager of Nanjing
Putian Telecommunications Technology Co., Ltd.; from March 2013 to July 2013, he successively served as the general manager of the
Wiring System Department of Nanjing Putian Telecommunications Co., Ltd. and the general manager of Telecommunications
Technology Company; from July 2013 to April 2015, he served as the general manager of the Wiring System Department of Nanjing
Putian Telecommunications Co., Ltd.; from April 2015 to February 2017, he successively served as the general manager of the Wiring
System Department of Nanjing Putian Telecommunication Co., Ltd. and the general manager of Changle Company; from February
2017 to November 2017, he served as the assistant to the general managerand the general manager of the wiring system department
(concurrently) of Nanjing Putian Telecommunications Co., Ltd., and the general manager of Changle Company (concurrently); since
November 2017, he has been serving as a member of the party committee, the general manager assistant, and the general manager of
the Wiring System Department (concurrently) of Nanjing Putian Telecommunications Co., Ltd., and the general manager of Changle
Company (concurrently); since June 2018, he has been serving as the chief accountant of Nanjing Putian Telecommunications Co.,
Ltd.
Liu Xiaodong (female) born in 1971, bachelor degree, a major in accounting, joined in work in 1995, served as the Company’s
accountant, auditor, deputy director of the audit department, deputy director of the Audit and Supervision Department. From April
2006 to September 2016, she served as the head of the Audit and Supervision Department, and the head of the Audit Law Department,
and the head of the Audit and Supervision Law Department of Nanjing Putian Telecommunications Co., Ltd. From July 2007 to July
2016, she served as the deputy secretary of the Disciplinary Inspection Committee of Nanjing Putian Telecommunications Co., Ltd.
From May 2009 to August 2017, she served as the employee supervisor of Nanjing Putian Telecommunications Co., Ltd. Since June
2013, she has been serving as the general counsel of Nanjing Putian Telecommunications Co., Ltd. Since July 2016, she has been
serving as the deputy secretary of the Party Committee and the secretary of the Disciplinary Inspection Committee and the chairman of
the Labor Union of Nanjing Putian Telecommunications Co., Ltd.
Li Jing (Female), born in 1975 with equivalent master degree of business administration, a master degree and major in business
management. She commenced to work in 1996, with details as follows: worked as the secretary and customs declaring in Nanjing
Mennekes from August 1996 to March 1998; worked as the buyer and industrial officer of Nanjing Potevio Computer Co., Ltd from
March 1998 to August 2001; served as the investment management officer and deputy director of the corporate development
department of Nanjing Putian Telecommunications Co., Ltd from August 2001 to August 2015; serves as the director of the strategic
investment department of Nanjing Putian Telecommunications Co., Ltd since August 2015 and GM assistant and secretary of the
Board of Nanjing Putian Telecommunications Co., Ltd since August 2017.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Received
Position in
Start dated of End date of remuneration from
Name Name of shareholder’s unit shareholder’s
office term office term shareholder’s unit
unit n
(Y/N)
Xu Qian China Potevio Company Limited President 5 May 2016 Y
Director,
Executive
Director,
Xu Qian China Potevio Company Limited 19 May 2011 Y
member of
the executive
council
Deputy GM
Wang Jinfeng China Potevio Company Limited of Finance 13 Dec. 2017 Y
dept.
Chairman of
the
Zhao Xinping China Potevio Company Limited 24 Sept. 2014 Y
Supervisory
Committee
Post-holding in other unit
√ Applicable □ Not applicable
Received
Position in Start dated of End date of office remuneration
Name Name of other units
other unit office term term from other unit
(Y/N)
Standing
committee of
Xu Qian Potevio Company Limited the Party 27 Dec. 2017 N
Committee,
Deputy GM
Director,
Xu Qian Potevio Guomai Networks Ltd 23 Oct. 2012 N
President
Beijig Putian Taili Communication Director,
Xu Qian 11 Jun. 2015 N
Technology Co., Ltd. President
Director,
Xu Qian Shanghai Potevio Co., Ltd. 20 Nov. 2015 N
President
Xu Qian Putian Eastern Communications Group Co., Director, 30 May. 2016 N
83
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Ltd. President
Director,
Xu Qian Hangzhou Honyar Electric Co., Ltd. 28 Jun. 2017 N
President
Cheng Wei Potevio New Energy Co., Ltd GM 16 Oct. 2018
Party
Cheng Wei Potevio New Energy Co., Ltd 10 Oct. 2018
Secretary
Cheng Wei Shanghai Potevio Co., Ltd. Director 20 Nov. 2015 N
Qin Zhen Putian Hi-Tech Industry Co., Ltd Director 1 Dec. 2016 N
Beijig Putian Taili Communication
Wang Jinfeng Director 19 Jun. 2015 N
Technology Co., Ltd.
Wang Jinfeng Puxing Mobile Telecom Equipment Ltd Director 21 Dec. 2015 N
Xie Manlin Jiangsu Xie Manlin Laws Firm Executive 1 Dec. 1994 Y
Independent
Xie Manlin Jiangsu NandaSoft Company Limited 10 Jun. 2011 Y
director
Professor,
Head of
Du Xiaorong Business School of Hohai University 15 Jun. 2013 Y
Accounting
Dept.
Part-time
supervisor of
the
Supervisory
Zhao Xinping Potevio Company Limited 23 Dec. 2016 N
Committee(St
aff
representative
s)
GM of Audit
Zhao Xinping Potevio Company Limited 22 Oct. 2018 N
Dept.
Great Dragon Information Technology
Zhao Xinping Director 1 Nov. 2001 N
Group Co., ltd
Director,
Zhao Xinping Putian International Fund Management ltd deputy 30 Jul. 2003 N
president
Zhao Xinping Putian Innovation Venture Management ltd Supervisor 22 Jan. 2016 N
Senior
lawyers of
Zhang Hong Potevio Company Limited 22 Oct. 2018 Y
law & risk
control dept.
84
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Cao Xurong SEI-Nanjing Putian Optical Network Director 27 Jul. 2017 N
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors, supervisors and
senior management during the reporting period
√ Applicable □ Not applicable
Found more in the XIII. Penalty and rectification under the Section V in the Report
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
The Company has not paid directors and supervisors, the directors and supervisors get paid as the Company's administrative duties.
The independent directors receive the allowance in the Company, while subsidiary standard is determined by the general meeting of
shareholders. Senior management personnel salary standard and assessment methods are decided by the board of directors.
The Company implements performance salary system on senior management, making evaluation and paying compensation according
to the completion of the production and operation as well as performance of the senior management personnel.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Post-holding
Name Title Sex (M/F) Age obtained from the obtained from
status
Company (before related party of
taxes) the Company
Director(Presiden Currently in
Xu Qian M 56 Y
t) office
Director(deputy Currently in
Wang Wenkui M 44 N
president ) office
Currently in
Cheng Wei Director F 48 Y
office
Currently in
Qin Zhen Director M 50 N
office
Currently in
Wang Jinfeng Director F 48 Y
office
Independent Currently in
Tang Fuxin F 62 9N
director office
Independent Currently in
Xie Manlin M 55 9N
director office
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Independent Currently in
Du Xiaorong F 50 9N
director office
Supervisor(Chair
man of the Currently in
Zhao Xinping M 52 Y
Supervisory office
Committee)
Currently in
Zhang Hong Supervisor F 45 Y
office
Currently in
Qiu Huizhen Supervisor F 45 20.99 N
office
Currently in
Wang Wenkui GM M 44 N
office
Currently in
Qin Zhen Deputy GM M 50 51.73 N
office
Currently in
Jia Haowen Deputy GM F 38 20.4 N
office
Currently in
Cao Xurong Chief Accountant M 43 22.77 N
office
Currently in
Liu Xiaodong General Counsel F 47 40.6 N
office
Secretary of the Currently in
Li Jing F 43 26.73 N
Board office
Liu Yun Director F 45 Office leaving Y
Li Linzhen GM M 47 Office leaving 68.78 N
Director(deputy Currently in
Li Linzhen M 47 N
president ) office
Total -- -- -- -- 279 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of staff, professional composition and education background
The number of On-the-job staff of the parent Company (people) 594
The number of On-the-job staff of major subsidiaries (people) 931
The total number of on-the-job staff (people) 1,525
Total number of staff receiving remuneration in the current
1,810
period (people)
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
The number of the retired staff of the parent Company and the
424
major subsidiaries bearing the expenses (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 410
Salesman 514
Technical staff 438
Financial staff 37
Administrative staff 126
Total 1,525
Education background
Category of education Number (people)
Master’s degree above 42
Bachelor 617
Junior college 517
High School and above 349
Total 1,525
2. Remuneration policy
The company strictly implements the national, provincial and municipal laws and regulations, and normatively implemented the
distribution and payment of compensation and benefits. In order to further mobilize the enthusiasm, initiative and creativity of the
employees, the company implements an efficiency-oriented, performance-based compensation distribution mechanism, and formulates
salary and performance appraisal methods for different positions according to their different characteristics, and at the same time, pays
five insurances and one housing fund and enterprise annuities according to relevant national regulations.
3. Training programs
The company always adheres to the people-oriented development concept, continuously carries out employee training, and establishes
and continuously improves the matching training system according to the company’s development needs, and improves the quality of
the staff. According to the company’s development strategy, we will continue to innovate talent training methods around the annual
business plan, pay attention to the cultivation of compound talents, rationally arrange flexible learning methods, strengthen training in
layers and grades, formulate annual training plans, and do a good job in talent reserves and cultivation of young cadres for the company
to implement innovation transformation.
4. Labor outsourcing
□ Applicable √ Not applicable
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section IX. Corporate Governance
I. Corporate governance of the Company
In reporting period, by strictly followed requirement of laws, regulations of Company Law, Securities Laws, Rules of Corporate
Governance for Listed Company, Rules of Stock Listing in Main Board of Shenzhen Stock Exchange as well as requirement of
relevant documents from CSRC and Shenzhen Stock Exchange , the Company constantly improve structure of the corporate
governance, complete and perfected the internal control system, and promoted the standards of corporate governance and regulative
operations. The internal governance structure of the company is sound, and the shareholders’ meeting, the board of directors, the
board of supervisors and the managerial level have clear rights and responsibilities, and the operation is standardized and complies
with the Company Law and the Securities Law and other laws and regulations, and the requirements of regulatory documents about
corporate governance issued by the China Securities Regulatory Commission and the Shenzhen Stock Exchange.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed Company from CSRC
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed Company from CSRC.
II. Independence of a Company relative to its controlling shareholder in business, personnel,
assets, institution and finance
The Company owes self-management ability with independence in aspect of business, personnel, assets, institute and finance relative
to its controlling shareholder.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held AGM and extraordinary shareholders’ general
meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor
Session of meeting Type Meeting date Date of disclosure Index of disclosure
participation
Resolution Notice of
Annual General
AGM 55.70% 15 June 2018 16 June 2018 AGM of 2017 on
Meeting 2017
Juchao Website
Resolution Notice of
First Extraordinary First Extraordinary
Extraordinary
Shareholders Shareholders
Shareholders 54.99% 16 Nov. 2018 17 Nov. 2018
General Meeting of General Meeting of
General Meeting
2018 2018 on Juchao
Website
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Resolution Notice of
Second Second
Extraordinary Extraordinary Extraordinary
Shareholders Shareholders 53.49% 17 Dec. 2018 18 Dec. 2018 Shareholders
General Meeting of General Meeting General Meeting of
2018 2018 on Juchao
Website
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board Meeting and shareholders general meeting
The attending of independent directors to Board Meeting and shareholders general meeting
Times of Absent the Times of
Times of Times of Times of
Board meeting Times of Board Meeting presence on
Independent Presence on attending by entrusted
supposed to Absence in for the second shareholders
director the Board communicatio presence in
attend in the Board Meeting time in a row general
Meeting n Board Meeting
report period (Y/N) meeting
Tang Fuxin 12 0 12 0 0N 0
Xie Manlin 12 0 12 0 0N 1
Du Xiaorong 12 1 11 0 0N 2
Explanation of absent the Board Meeting for the second time in a row
There are no independent directors absent the Board Meeting for the second time in a row in reporting period
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
In 2018, the independent directors of the Company earnestly exercised the relevant laws and regulations and the various functions
and powered conferred by the Articles of Association, actively attended the board of directors and shareholders' meetings of the
Company, carefully reviewed the proposals, exercised their rights to vote with cautious attitude; independently and objectively
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
express independent opinions on relevant important issues in line with the regulations of the regulatory authorities; actively promote
the scientific decision-making for the Board, and maintained communication with the Company’s operating management layer via
telephone and seminars, and other channels, gave counsels to the Company's operation status and information disclosure, making out
plans and ideas for the development of the Company by their owned professional knowledge, urged the Company to regulate the
operations in strict accordance with the requirements of relevant laws and regulations, and effectively safeguarded the Company's
overall interests and the legitimate rights and interests of the majority of small and medium shareholders.
VI. Duty performance of the special committees under the board during the reporting period
In 2018, the Audit Committee of the Board of Directors deliberated on major events as previous periodic reports and the appointment
of audit institution as well as submit the proposal to the Board; in accordance with the relevant provisions of Annual Report Working
Rules of the Audit Committee, actively performed their duties in the annual report auditing process, made audit opinions on the
financial statements, supervised and urged the accounting firm to complete the auditing work.
The Remuneration and Appraisal Committee of the Board of Directors reviewed and made audit opinions on the remuneration of the
directors, supervisors and senior executives disclosed in the annual report in accordance with relevant provisions.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
The Company exercise performance year-income system for senior executives carries on appraisals and paying remuneration to
senior executives based on operation target and performance of target implementation of senior executives.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
23 April 2019
evaluation report
Disclosure index of full internal control Appraisal report of internal control for year of 2018 of Nanjing Putian
evaluation report Telecommunications Co., Ltd. published on Juchao Website (www.cninfo.com.cn)
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 100.00%
Company's consolidated financial
statements
The ratio of the operating income of units 100.00%
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
included in the scope of evaluation
accounting for the operating income on the
Company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Indicators for material defect of internal Indicators for material defect of internal
control in financial report: invalid control control in non-financial report:
environment; fraud by our directors, decision-making procedures lead to
supervisors and senior management, which material faults; lack of system control or
brings significant loss and negative system void for major business, and lack
influences to the Company; external auditor of effective compensation control;
finds material misstatement which is not first serious loss of senior management and
found by the Company; the board of senior technicians; assessment results of
directors or the authorized body and internal internal control, especially material
audit department conduct invalid supervision defects, are not rectified; other situations
over our internal control. Indicators for that would materially and adversely
major defect of internal control in financial affect the Company. Indicators for major
report: not select and apply accounting defect of internal control in non-financial
Qualitative criteria policies under the generally accepted report: decision-making procedures lead
accounting principles; not establish to general fault; defects exist in major
anti-fraud procedures and controlling business systems; serous loss of key
measures; not establish corresponding staff; assessment results of internal
controlling system or not implement control, especially major defects, are not
corresponding compensation control in rectified; other situations that would
connection with accounting for abnormal or relatively materially and adversely affect
special transactions; one or more defects the Company. Indicators for general
exist in control of ending financial reports defect of internal control in non-financial
and there is no assurance that financial report: low efficiency of
statement prepared correspondingly is decision-making procedures; defects
truthful and accurate. General defect: other exist in general business systems; serious
internal control defects that do not constitute loss of general staff; general defects are
material or major defects. not rectified.
Any of the following situations may be
viewed as material defect: potential Major deficiencies: the amount of direct
misstatement of total profit ≥ 5% of total property loss is or more than 10 million
profit; potential misstatement of total assets Yuan; Significant deficiencies: the
≥ 1% of total assets; potential misstatement amount of direct property loss is between
Quantitative standard
of operating income ≥ 1% of total operating 5 million Yuan and 10 million Yuan (5
income. Any of the following situation may million Yuan included); Common
be viewed as major defect: 3% of total profit deficiencies: the amount of direct
≤ potential misstatement of total profit＜ property loss is less than 5 million Yuan.
5% of total profit; 0.5% of total assets ≤
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
potential misstatement of total assets ＜ 1%
of total assets; :0.5% of total operating
income ≤ potential misstatement of operating
income ＜ 1% of total operating income.
Any of the following situation may be
viewed as general defect: potential
misstatement of total profit＜3% of total
profit; potential misstatement of total assets
＜ 0.5% of total assets; potential
misstatement of operating income ＜ 0.5%
of total operating income.
Amount of significant defects in financial
0
reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
0
reports
Amount of important defects in
0
non-financial reports
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
We believe that according to relevant regulations and Basic Norms of Internal Control, the Company maintained an efficiency
internal control of financial report dated 31st December 2018, in all material aspects.
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
23 April 2019
internal control (full-text)
Index of audit report of internal Audit report of internal control for year of 2018 of Nanjing Putian Telecommunications Co.,
control (full-text) Ltd. published on Juchao Website (www.cninfo.com.cn)
Opinion type of auditing report of
Standard unqualified
IC
whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section X Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
annual report approved for released or fail to cash in full on due
No
93
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section XI. Financial Report
I. Audit report
Type of audit opinion Standard unqualified
Signing date of audit report 19 April 2019
Name of audit institute Pan-China Certified Public Accountants (LLP)
Document serial of audit report Pan-China Shen〔2019〕No.1-349
Name of CPA He Jiangxing, Jin Jingyu
Auditor’s Report
Auditor’s Report
PCCPAAR [2019] No. 1-349
To the Shareholders of Nanjing Putian Telecommunications Co.,Ltd.:
I. Audit Opinion
We have audited the financial statements of Nanjing Putian Telecommunications Co.,Ltd.
(hereinafter referred to as ”the Company”), which comprise the consolidated and parent company
balance sheets as at December 31, 2018, the consolidated and parent company income statements,
the consolidated and parent company cash flow statements, and the consolidated and parent
company statements of changes in equity for the year then ended, as well as notes to financial
statements.
In our opinion, the financial statements present fairly, in all material respects the financial position
of the Company’s as at December 31, 2018, and of its financial performance and its cash flows for
the year then ended in accordance with China Accounting Standards for Business Enterprises.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Standards on Auditing for Certified Public
Accountants. The auditor's responsibility for the audit of financial statements is further elaborated
by the auditor's responsibility for the audit of financial statements. According to the code of
professional ethics for Certified Public Accountants. We are independent of the Company and fulfill
other responsibilities of professional ethics. We believe that the audit evidence we have obtained is
94
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
fair and adequate to provide the basis for the publication of the audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not express a separate opinion on these matters.
(I) Revenue recognition
1.Key audit matters
Please refer to section III,24 and V,1 of the notes to the financial statements for details.
Revenue of the Company’s mainly from Video conferencing products，Generic cable products,
Electrical products，Special network communication products, Wiring products etc. The Company’s
revenue shown 1,995,627,772.60 yuan in Financial Statements in 2018.
The main products sold by the Company have the characteristics of long period from the products
received to the final confirmation. Therefore, the revenue recognition may have the risk of
multi-period. Authenticity and fairness of revenue of the Company is a key indicator on the
financial statements. Thus we regarded the recognition of revenue as a key audit matter.
2. Responsive audit procedures
In connection with revenue recognition, our audit procedures mainly include:
（1）We obtained understandings of key internal controls related to revenue recognition, assessed
the effectiveness of its design and execution, and tested the effectiveness of its operation;
（2）Based on the customer's classification, we conduct such as analytical procedures to test the
customer's gross profit, and then carry out detailed test procedures to those customer's with high
gross profit margin and high gross profit contribution;
（3）Check the contract, the goods delivery documents, the transport records and the final
confirmation, etc;
（4）Taking interviews with new customers;
（5）In conjunction with the accounts receivable letter of credit, confirme the revenue of its major
customers by sampling;
（6）We checked whether information related to operating revenue had been presented and
disclosed appropriately in the financial statements.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(II) Impairment of accounts receivable
1. Key audit matters
Please refer to section III,11 and V,2 of the notes to the financial statements for details.
As of December 31, 2018, the book balance of accounts receivable amounts to 997,288,551.79 yuan
with provision for bad debts of 56,220,092.44 yuan, and the carrying amount amounts to
941,068,459.35 yuan.
For accounts receivable with impairment tested on an individual basis, if there is objective evidence
indicating impairment loss, the Management shall estimate present value of future cash flow and
determine to accrue provision for bad debts based on a comprehensive consideration of debtors’
industry condition, management situation, financial status, lawsuits, repayment records and other
factors, then estimate the present value of future cash flow and determine the provision for bad
debts. For accounts receivable with impairment tested on a collective basis, the Management
classifies portfolios of accounts receivable based on ages, asset type, industry segment, and
overdue state, and estimates present value of future cash flow and determines accrued provision for
bad debts based on the historical loss rate of portfolios with similar credit risk features after making
adjustments in combination with actual situation.
Therefore, the amount of accounts receivable shown a significant part of the Company’s Financial
Statement and impairment of accounts receivables involving major management judgment. Thus we
regarded the impairment of accounts receivables as a key audit matter.
2. Responsive audit procedures
In connection with impairment of accounts receivables, our audit procedures mainly include:
（1）Understanding the internal control of the impairment of accounts receivables and evaluating
the design of its internal control, then evaluate whether being Implemented;
（2）Obtain the accounts receivable listed by its age, analyze the reasonableness of the age and
review whether the bad debt provision of accounts receivable is fully accounted according to the
portfolio proportion determined by the accounting policy;
（3）Implement the procedure of letter of credit;
（4）Check the post-period payment of accounts receivable and evaluate the rationality of
Management's provision for bad debts of accounts receivable；
（5）Check the information related to revenue has been properly presented and disclosed in the
financial statements;
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(Ⅲ) Impairment of inventory
1. Key audit matters
Please refer to section III,12 and V,2 of the notes to the financial statements for details.
As at December 31, 2018, the book balance of inventory is 312,321,117.28 yuan with provision of
25,348,484.69 yuan and its carrying amount totaled286,972,632.59 yuan. As at December 31, 2018,
impairment of inventory is determined by an difference between estimation of the net realizable
value of inventory and its costs classified by category. The determination of the net realizable value
of the inventory requires Management to estimate selling price，contract price and any estimated
selling price for the same or similar product market price. Then the net realizable value of the
inventory is determined by the estimated selling price minus the estimated cost of the completion,
estimated selling expenses and related taxes.
Therefore, the amount of inventory shown a significant part of the Company’s Financial Statement
and the net realizable value of the inventory involving major management judgment. Thus we
regarded the impairment of inventory as a key audit matter.s
2. Responsive audit procedures
In connection with impairment of inventory our audit procedures mainly include:
（1）Understanding the internal control of the impairment of inventory and evaluating the design of
its internal control, then evaluate whether being Implemented;
（2）Review the cost accounting process, check the large amount of items included in the cost of
the product and determine whether relevant accounting is accurate;
（3）Implementing the supervisory procedures for the inventory at the year end, implementing the
letter of credit procedure for the inventories that cannot be counted,. Checking the status of the
inventory on the spot, and identifying whether there are obsolete and outdated inventories;
（4）Evaluation the rationality of the Management’s assumptions involved in the net realizable
value and checking the completeness of impairment of inventory at the year end. Re-calculate the
amount of impairment of inventory when necessary.
（5）Check the information related to the net realizable value of the inventory has been properly
presented and disclosed in the financial statements;
IV. Other Information
Management is responsible for the other information. The other information comprises the
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
information included in the Company’s annual report, but does not include the financial statements
and our auditor’s report.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the Financial
Statements
The Management is responsible for preparing and presenting fairly the financial statements in
accordance with China Accounting Standards for Business Enterprises, as well as designing,
implementing and maintaining internal control relevant to the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and use the going concern basis of accounting unless the Management either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
VI. Certified Public Accountants’ Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with China Standards on Auditing will always detect a
material misstatement when it exists. Misstatement can arise from fraud or error and are considered
98
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
We exercise professional judgement and maintain professional skepticism throughout the audit
performed in accordance with China Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
schedule and significant audit findings, including any deficiencies in internal control of concern that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: He Jiangxing
Hangzhou China Chinese Certified Public Accountant: Jin Jingyu
Date of Report: April 19, 2019
The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’s report and
statutory financial statements prepared under accounting principles and practices generally accepted in the People’s Republic of
China. These financial statements are not intended to present the financial position and results of operations and cash flows in
accordance with accounting principles and practices generally accepted in other countries and jurisdictions. In case the English
version does not conform to the Chinese version, the Chinese version prevails.
II. Financial Statement
Units in Notes of Financial Statements is RMB (CNY)
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Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2018
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 1 261,938,068.72 327,477,701.36
Settlement funds
Loans to other banks
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable and accounts receivable 2 987,544,115.36 812,567,071.00
Advances paid 3 188,848,712.69 53,821,937.79
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 4 33,734,948.67 29,325,423.73
Reverse-REPO financial assets
Inventories 5 286,972,632.59 489,898,057.36
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets 6 13,497,540.69 45,282,892.44
Total current assets 1,772,536,018.72 1,758,373,083.68
Non-current assets:
Loans and advances paid
Available-for-sale financial assets 7 741,953.00 741,953.00
Held-to-maturity investments
Long-term receivable
Long-term equity investments 8 183,244,080.23 186,977,506.23
Investment property 9 8,397,113.98 12,802,485.28
Fixed assets 10 112,504,807.11 119,741,921.78
Construction in progress 11 9,472,383.76 2,163,267.89
Productive biological assets
Oil & gas assets
Intangible assets 12 30,285,598.77 30,736,816.88
Development expenditures
Goodwill
Long-term prepayments 13 3,562,336.84 2,795,194.76
Deferred tax assets
Other non-current assets
Total non-current assets 348,208,273.69 355,959,145.82
Total assets 2,120,744,292.41 2,114,332,229.50
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2018 (continued)
Liabilities & Equity Note No. Closing balance Opening balance
Current liabilities:
Short-term borrowings 14 445,010,000.00 387,550,000.00
Central bank loans
Absorbing deposit and interbank deposit
Loans from other banks
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable and accounts payable 15 827,403,870.61 826,833,861.31
Advances received 16 259,545,648.66 317,197,824.66
Proceeds from sale of repurchase financial assets
Handling fee and commission payable
Employee benefits payable 17 21,132,336.19 21,033,311.73
Taxes and rates payable 18 17,230,159.02 18,883,017.18
Other payables 19 55,128,492.65 63,027,802.63
Reinsurance accounts payable
Insurance policy reserve
Deposit for agency security transaction
Deposit for agency security underwriting
Liabilities classified as held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,625,450,507.13 1,634,525,817.51
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term employee benefits payable
Special payables
Provisions
Deferred income 20 7,296,315.00 8,664,102.90
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 7,296,315.00 8,664,102.90
Total liabilities 1,632,746,822.13 1,643,189,920.41
Equity:
Share capital 21 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 22 185,374,533.85 185,374,533.85
Less: Treasury shares
Other comprehensive income 23 -4,947,588.58 -4,129,619.45
Special reserve
Surplus reserve 24 589,559.77 589,559.77
General risk reserve
Undistributed profit 25 -40,726,776.80 -46,585,991.64
Total equity attributable to the parent company 355,289,728.24 350,248,482.53
Non-controlling interest 132,707,742.04 120,893,826.56
Total equity 487,997,470.28 471,142,309.09
Total liabilities & equity 2,120,744,292.41 2,114,332,229.50
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2018
(Expressed in Renminbi Yuan)
Note Closing balance Opening balance
Assets
No.
Current assets:
Cash and bank balances 80,553,208.65 124,709,891.97
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable and accounts receivable 1 593,256,056.62 434,748,479.96
Advances paid 155,717,638.43 22,368,455.10
Other receivables 2 31,077,389.58 41,195,020.22
Inventories 143,432,315.11 349,450,010.57
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets 6,222,172.75 38,624,058.06
Total current assets 1,010,258,781.14 1,011,095,915.88
Non-current assets:
Available-for-sale financial assets 741,953.00 741,953.00
Held-to-maturity investments
Long-term receivable
Long-term equity investments 3 333,367,967.90 355,814,155.43
Investment property
Fixed assets 50,769,872.87 56,349,626.12
Construction in progress 5,839,892.88 1,830,131.25
Productive biological assets
Oil & gas assets
Intangible assets 12,305,246.69 12,676,942.23
Development expenditures
Goodwill
Long-term prepayments 3,403,376.01 2,580,098.76
Deferred tax assets
Other non-current assets
Total non-current assets 406,428,309.35 429,992,906.79
Total assets 1,416,687,090.49 1,441,088,822.67
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2018(continued)
(Expressed in Renminbi Yuan)
Liabilities & Equity Note No. Closing balance Opening balance
Current liabilities:
Short-term borrowings 355,000,000.00 309,000,000.00
Financial liabilities at fair value through profit
or loss
Derivative financial liabilities
Notes payable and accounts payable 421,165,578.08 406,799,442.90
Advances received 227,951,168.81 290,793,176.69
Employee benefits payable 7,854,213.23 7,816,724.35
Taxes and rates payable 8,674,579.20 4,595,540.32
Other payables 187,172,612.82 214,064,398.45
Liabilities classified as held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,207,818,152.14 1,233,069,282.71
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term employee benefits payable
Special payables
Provisions
Deferred income 1,000,000.00 1,770,926.90
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 1,000,000.00 1,770,926.90
Total liabilities 1,208,818,152.14 1,234,840,209.61
Equity:
Share capital 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 172,417,299.81 172,417,299.81
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 589,559.76 589,559.76
Undistributed profit -180,137,921.22 -181,758,246.51
Total equity 207,868,938.35 206,248,613.06
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Total liabilities & equity 1,416,687,090.49 1,441,088,822.67
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended December 31, 2018
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 1,995,627,772.60 2,254,399,406.04
Including: operating revenue 1 1,995,627,772.60 2,254,399,406.04
Interest proceeds
Premium earned
Revenue from handling charges and commission
II. Total operating cost 2,013,476,293.44 2,230,277,628.20
Including: Operating cost 1 1,643,115,522.38 1,880,588,070.75
Interest expenses
Handling charges and commission expenditures
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes & surcharge for operations 2 10,920,639.19 12,757,598.28
Selling expenses 3 153,522,328.27 159,627,776.44
Administrative expenses 4 86,503,114.41 76,037,302.46
R&D expenses 5 76,275,133.26 67,887,029.53
Financial expense 6 22,540,260.58 16,288,251.03
Including: Interest expenses 23,694,841.52 17,476,700.08
Interest income 2,665,279.32 1,936,342.59
Assets impairment loss 7 20,599,295.35 17,091,599.71
Add: Other income 8 13,702,488.41 7,848,445.31
Investment income (or less: losses) 9 -3,085,858.80 339,423.07
Including: Investment income from associates and joint ventures -3,085,858.80 339,423.07
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Gains on asset disposal (or less: losses) 10 33,522,820.90 -481,922.28
Gains on foreign exchange (or less: losses)
III. Operating profit (or less: losses) 26,290,929.67 31,827,723.94
Add: Non-operating revenue 11 2,988,810.42 3,698,387.13
Less: Non-operating expenditures 12 372,499.09 353,388.50
IV. Profit before tax (or less: total loss) 28,907,241.00 35,172,722.57
Less: Income tax 13 4,793,925.22 10,462,423.88
V. Net profit (or less: net loss) 24,113,315.78 24,710,298.69
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 24,113,315.78 24,710,298.69
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company (or less: net loss) 5,859,214.84 8,982,857.76
2. Non-controlling interest (or less: net loss) 18,254,100.94 15,727,440.93
VI. Other comprehensive income after tax -908,854.59 561,095.61
Items attributable to the owners of the parent company -817,969.13 504,986.05
(I) Not reclassified subsequently to profit or loss
1.Changes in re-measurement on the net defined benefit liability/asset
2. Items attributable to investees under equity method that will not reclassified to profit or
loss
(II) To be reclassified subsequently to profit or loss -817,969.13 504,986.05
1. Items attributable to investees under equity method that may be reclassified to profit or
2.lossProfit or loss from changes in fair value of available-for-sale financial assets
3. Profit or loss from reclassification of held-to-maturity investments as available-for-sale
4.financialorassets on cash flow hedging
Profit loss
5. Translation reserve -817,969.13 504,986.05
Items attributable to non-controlling shareholders -90,885.46 56,109.56
VII. Total comprehensive income 23,204,461.19 25,271,394.30
Items attributable to the owners of the parent company 5,041,245.71 9,487,843.81
Items attributable to non-controlling shareholders 18,163,215.48 15,783,550.49
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.03 0.04
(II) Diluted EPS (yuan per share) 0.03 0.04
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended December 31, 2018
(Expressed in Renminbi Yuan)
Current period Preceding period
Items Note No.
cumulative comparative
I. Operating revenue 1 1,005,618,954.77 1,149,882,076.74
Less: Operating cost 1 879,422,579.08 1,009,471,690.52
Taxes & surcharge for operations 4,045,978.34 5,436,025.44
Selling expenses 63,547,170.31 71,732,907.18
Administrative expenses 41,683,221.44 39,353,899.91
R&D expenses 20,833,986.09 19,218,627.53
Financial expense 21,327,399.26 15,303,143.73
Including: Interest expenses 20,350,309.17 17,781,593.38
Interest income 339,683.88 914,493.95
Assets impairment loss 16,723,520.48 9,758,175.28
Add: Other income 2,257,355.96 44,991.45
Investment income (or less: losses) 2 22,697,079.67 25,937,027.85
Including: investment income from associates and
-1,679,620.33 360,327.85
joint ventures
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Gains on asset disposal (or less: losses) 17,375,709.64 105,464.90
II. Operating profit (or less: losses) 365,245.04 5,695,091.35
Add: Non-operating revenue 1,488,857.87 2,441,273.80
Less: Non-operating expenditures 233,777.62 344,877.30
III. Profit before tax (or less: total loss) 1,620,325.29 7,791,487.85
Less: Income tax
IV. Net profit (or less: net loss) 1,620,325.29 7,791,487.85
(I) Net profit from continuing operations (or less: net loss) 1,620,325.29 7,791,487.85
(II) Net profit from discontinued operations (or less: net
loss)
V. Other comprehensive income after tax
(I) Not reclassified subsequently to profit or loss
1. Changes in re-measurement on the net defined
benefit liability/asset
2. Items attributable to investees under equity method
that will not reclassified to profit or loss
(II) To be reclassified subsequently to profit or loss
1. Items attributable to investees under equity method
that may be reclassified to profit or loss
2. Profit or loss from changes in fair value of
available-for-sale financial assets
3. Profit or loss from reclassification of
held-to-maturity investments as available-for-sale
financial assets
4. Profit or loss on cash flow hedging
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
5. Translation reserve
6. Others
VI. Total comprehensive income 1,620,325.29 7,791,487.85
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2018
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 1,645,891,322.05 1,911,479,191.10
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial institutions
Cash receipts from original insurance contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and investment
Net increase from disposal of financial assets at fair value through profit or loss
Cash receipts from interest, handling charges and commission
Net increase of loans from others
Net increase of repurchase
Receipts of tax refund 4,667,521.81 5,675,665.48
Other cash receipts related to operating activities 1 34,938,316.44 78,965,011.44
Subtotal of cash inflows from operating activities 1,685,497,160.30 1,996,119,868.02
Cash payments for goods purchased and services received 1,333,326,749.70 1,532,813,633.94
Net increase of loans and advances to clients
Net increase of central bank deposit and interbank deposit
Cash payments for insurance indemnities of original insurance contracts
Cash payments for interest, handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 253,307,248.13 245,012,685.14
Cash payments for taxes and rates 84,108,218.81 111,403,246.49
Other cash payments related to operating activities 2 170,173,677.49 154,111,072.03
Subtotal of cash outflows from operating activities 1,840,915,894.13 2,043,340,637.60
Net cash flows from operating activities -155,418,733.83 -47,220,769.58
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 647,567.20 444,774.40
Net cash receipts from the disposal of fixed assets, intangible assets and other
40,365,822.52 439,848.55
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 41,013,389.72 884,622.95
Cash payments for the acquisition of fixed assets, intangible assets and other
17,752,720.09 15,350,838.65
long-term assets
Cash payments for investments
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other business units
Other cash payments related to investing activities
Subtotal of cash outflows from investing activities 17,752,720.09 15,350,838.65
Net cash flows from investing activities 23,260,669.63 -14,466,215.70
III. Cash flows from financing activities:
Cash receipts from absorbing investments
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Note Current period Preceding period
Items
No. cumulative comparative
Including: Cash received by subsidiaries from non-controlling shareholders as
investments
Cash receipts from borrowings 455,510,000.00 482,500,000.00
Cash receipts from issuing of bonds
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 455,510,000.00 482,500,000.00
Cash payments for the repayment of borrowings 402,050,000.00 568,450,000.00
Cash payments for distribution of dividends or profits and for interest expenses 29,795,475.55 28,781,500.28
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend
6,023,300.00 8,149,300.00
or profit
Other cash payments related to financing activities 840,754.71
Subtotal of cash outflows from financing activities 432,686,230.26 597,231,500.28
Net cash flows from financing activities 22,823,769.74 -114,731,500.28
IV. Effect of foreign exchange rate changes on cash & cash equivalents -353,307.29 2,791,423.77
V. Net increase in cash and cash equivalents -109,687,601.75 -173,627,061.79
Add: Opening balance of cash and cash equivalents 311,056,919.17 484,683,980.96
VI. Closing balance of cash and cash equivalents 201,369,317.42 311,056,919.17
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2018
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 596,822,761.48 741,103,540.01
Receipts of tax refund 232,835.32 47,333.61
Other cash receipts related to operating activities 43,490,459.56 77,605,361.99
Subtotal of cash inflows from operating activities 640,546,056.36 818,756,235.61
Cash payments for goods purchased and services received 569,778,580.54 660,412,117.17
Cash paid to and on behalf of employees 100,282,989.10 105,895,483.90
Cash payments for taxes and rates 24,563,084.92 45,330,877.54
Other cash payments related to operating activities 64,030,303.24 56,697,024.80
Subtotal of cash outflows from operating activities 758,654,957.80 868,335,503.41
Net cash flows from operating activities -118,108,901.44 -49,579,267.80
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 197,567.20 64,821,474.40
Net cash receipts from the disposal of fixed assets, intangible 21,918,919.67 331,631.08
assets and other long-term assets
Net cash receipts from the disposal of subsidiaries & other
business units
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 22,116,486.87 65,153,105.48
Cash payments for the acquisition of fixed assets, intangible assets 11,043,203.93 12,730,476.73
and other long-term assets
Cash payments for investments
Net cash payments for the acquisition of subsidiaries & other
business units
Other cash payments related to investing activities
Subtotal of cash outflows from investing activities 11,043,203.93 12,730,476.73
Net cash flows from investing activities 11,073,282.94 52,422,628.75
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 351,000,000.00 369,000,000.00
Other cash receipts related to financing activities
Subtotal of cash inflows from financing activities 351,000,000.00 369,000,000.00
Cash payments for the repayment of borrowings 309,000,000.00 410,000,000.00
Cash payments for distribution of dividends or profits and for 20,350,309.17 15,761,925.59
interest expenses
Other cash payments related to financing activities 840,754.71
Subtotal of cash outflows from financing activities 330,191,063.88 425,761,925.59
Net cash flows from financing activities 20,808,936.12 -56,761,925.59
IV. Effect of foreign exchange rate changes on cash and cash 287,252.28 -420,300.63
equivalents
V. Net increase in cash and cash equivalents -85,939,430.10 -54,338,865.27
Add: Opening balance of cash and cash equivalents 109,752,099.29 164,090,964.56
VI. Closing balance of cash and cash equivalents 23,812,669.19 109,752,099.29
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2018
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus interest
Share capital Preferred Perpetual Others
Capital reserve treasury comprehensive reserve risk Undistributed profit
income reserve reserve
shares bonds shares
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.77 -44,605,902.63 120,893,826.56 473,122,398.10
Add: Cumulative changes of accounting policies
Error correction of prior period -1,980,089.01 -1,980,089.01
Business combination under common control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.77 -46,585,991.64 120,893,826.56 471,142,309.09
III. Current period increase (or less: decrease) -817,969.13 5,859,214.84 11,813,915.48 16,855,161.19
(I) Total comprehensive income -817,969.13 5,859,214.84 18,163,215.48 23,204,461.19
(II) Capital contributed or withdrawn by owners 2,169,320.00 2,169,320.00
1. Capital contributed by owners 2,169,320.00 2,169,320.00
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution -8,518,620.00 -8,518,620.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -8,518,620.00 -8,518,620.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Others
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus interest
Share capital Capital reserve treasury comprehensive reserve risk Undistributed profit
Preferred Perpetual Others reserve
shares income reserve
shares bonds
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -4,947,588.58 589,559.77 -40,726,776.80 132,707,742.04 487,997,470.28
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2018 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus Undistributed interest
Share capital Preferred Perpetual Others
Capital reserve treasury comprehensive reserve risk
profit
income reserve reserve
shares bonds shares
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,634,605.50 589,559.77 -56,491,072.91 112,578,132.06 452,416,547.27
Add: Cumulative changes of accounting policies
Error correction of prior period 922,223.51 681,444.01 1,603,667.52
Business combination under common control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -4,634,605.50 589,559.77 -55,568,849.40 113,259,576.07 454,020,214.79
III. Current period increase (or less: decrease) 504,986.05 8,982,857.76 7,634,250.49 17,122,094.30
(I) Total comprehensive income 504,986.05 8,982,857.76 15,783,550.49 25,271,394.30
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution -8,149,300.00 -8,149,300.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -8,149,300.00 -8,149,300.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
4. Others
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Special Surplus Undistributed interest
Share capital Preferred Perpetual Others
Capital reserve treasury comprehensive reserve risk
profit
income reserve reserve
shares bonds shares
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -4,129,619.45 589,559.77 -46,585,991.64 120,893,826.56 471,142,309.09
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2018
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments
Items Other
Less: treasury Special Undistributed
Share capital Preferred Perpetual Others Capital reserve comprehensive Surplus reserve Total equity
shares reserve profit
shares bonds income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -179,778,157.50 208,228,702.07
Add: Cumulative changes of accounting policies
Error correction of prior period -1,980,089.01 -1,980,089.01
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -181,758,246.51 206,248,613.06
III. Current period increase (or less: decrease) 1,620,325.29 1,620,325.29
(I) Total comprehensive income 1,620,325.29 1,620,325.29
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
1. Appropriation of surplus reserve
2. Appropriation of profit to owners
3. Others
(IV) Internal carry-over within equity
1.Transfer of capital reserve to capital
2.Transfer of surplus reserve to capital
3.Surplus reserve to cover losses
4.Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 172,417,299.81 589,559.76 -180,137,921.22 207,868,938.35
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2018 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments
Items Less: Other
Special
Share capital Preferred Perpetual Others Capital reserve treasury comprehensive Surplus reserve Undistributed profit Total equity
reserve
shares bonds shares income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -188,427,625.86 199,579,233.71
Add: Cumulative changes of accounting policies
Error correction of prior period -1,122,108.50 -1,122,108.50
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -189,549,734.36 198,457,125.21
III. Current period increase (or less: decrease) 7,791,487.85 7,791,487.85
(I) Total comprehensive income 7,791,487.85 7,791,487.85
(II) Capital contributed or withdrawn by owners
1. Capital contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amount of share-based payment included in
equity
4. Others
(III) Profit distribution
1. Appropriation of surplus reserve
2. Appropriation of profit to owners
3. Others
(IV) Internal carry-over within equity
1.Transfer of capital reserve to capital
2.Transfer of surplus reserve to capital
3.Surplus reserve to cover losses
4.Others
(V) Special reserve
1. Appropriation of current period
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 172,417,299.81 589,559.76 -181,758,246.51 206,248,613.06
[Wang Wen Kui] [Cao Xu Rong] [Guan Xiao Jian]
[Legal representative] [Officer in charge of accounting] [Head of accounting department]
(Signature and stamp) (Signature and stamp) (Signature and stamp)
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
for the year ended December 31, 2018
Monetary unit: RMB Yuan
I. Company profile
Nanjing Putian Telecommunications Co., Ltd. (the “Company”), whose predecessor is Nanjing Telecommunication Facility
Factory, was established as a limited liability company (by shares) through financing under the approval of National Economic
Institutional Reform Commission with document of approval numbered TGS [1997] 28 dated March 21, 1997. The Company
is headquartered in Nanjing City, Jiangsu Province. Currently it holds a business license with unified social credit code of
91320000134878054G, with registered capital of 215,000,000.00 yuan, total share of 215,000,000.00 shares, with par value of
1 yuan per share. Among them, 115,000,000 shares are state-owned legal person shares, and 100,000,000 shares are B shares.
The Company was listed on the Shenzhen Stock Exchange on May 22, 1997.
The Company belongs to telecommunication equipment manufacture industry and is mainly engaged in R&D, production, and
sale of data, wire and wireless telecommunication equipment, distribution and allocation of layout of telecommunication
product, multimedia computer, digital television, vehicle electronics and conference video system. The main services rendered
by the Company include installation and maintenance equipment, communication information network and computer
information system projects design, and systems integration and related consultancy service.
The financial statements have been deliberated and approved for issue by the Board of Directors dated April 12, 2019.
The Company has brought 11 subsidiaries including Nanjing South Telecommunications Company Limited, Nanjing Putian
Telege Intelligent Building Ltd. and Nanjing Mennekes Electrics Co., Ltd. etc. into the consolidated scope. Please refer to notes
to changes in the consolidated scope and interest in other entities for details.
II. Preparation basis of the financial statements
(I) Preparation basis
The financial statements have been prepared on the basis of going concern.
(II) Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going
concern within the 12 months after the balance sheet date.
III. Significant accounting policies and estimates
Important note:
The Company has set up accounting policies and estimates on transactions or events such as provision for bad debts of
receivables, depreciation of fixed assets, amortization of intangible assets, and revenue recognition, etc. based on the
Company’s actual production and operation features.
(I) Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business
Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the
Company.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(II) Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
(III) Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected
to be realized or due within 12 months.
(IV) Functional currency
The Company’s functional currency is RMB Yuan.
(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in the
consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount
of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that
of the combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital
reserve is insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date,
the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the
measurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into its consolidation scope. The consolidated
financial statements are compiled by the parent company according to “CASBE 33 - Consolidated Financial
Statements”, based on relevant information and the financial statements of the parent company and its
subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes in relation to its interest in a joint
operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
subject to an insignificant risk of changes in value.
(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the
transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign
currency are translated at the spot exchange rate at the balance sheet date with difference, except for those
arising from the principal and interest of exclusive borrowings eligible for capitalization, included in profit or
loss; non-cash items carried at historical costs are translated at the spot exchange rate at the transaction date,
with its RMB amount unchanged; non-cash items carried at fair value in foreign currency are translated at the
spot exchange rate at the date when the fair value was determined, with difference included in profit or loss
or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet
date; the equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the
revenues and expenses in the income statement are translated into RMB at the spot exchange rate at the
transaction date. The difference arising from foreign currency translation is included in other comprehensive
income.
(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following four categories when initially recognized: financial assets at
fair value through profit or loss (including held-for-trading financial assets and financial assets designated at
initial recognition as at fair value through profit or loss), held-to-maturity investments, loans and receivables,
and available-for-sale financial assets.
Financial liabilities are classified into the following two categories when initially recognized: financial
liabilities at fair value through profit or loss (including held-for-trading financial liabilities and financial
liabilities designated at initial recognition as at fair value through profit or loss), and other financial
liabilities.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or
financial liability. The financial assets and financial liabilities initially recognized by the Company are
measured at fair value; for the financial assets and liabilities at fair value through profit or loss, the
transaction expenses thereof are directly included in profit or loss; for other categories of financial assets and
financial liabilities, the transaction expenses thereof are included into the initially recognized amount.
The Company measures its financial assets at fair value subsequent to initial recognition, and does not deduct
the transaction expenses that may occur when it disposes of the said financial asset in the future. However,
those under the following circumstances are excluded: (1) the held-to-maturity investments, loans and
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
receivables are measured at amortized costs using effective interest method; (2) the equity instrument
investments for which there is no quotation in the active market and whose fair value cannot be measured
reliably, and the derivative financial assets which are connected with the said equity instrument and must be
settled by the delivery of the said equity instrument are measured at their costs.
The Company measures its financial liabilities at the amortized costs using effective interest method, with
the exception of those under the following circumstances: (1) for the financial liabilities at fair value through
profit or loss, they are measured at fair value, and none of the transaction expenses may be deducted, which
may occur when the financial liabilities are settled in the future; (2) for the derivative financial liabilities,
which are connected to the equity instrument for which there is no quotation in the active market and whose
fair value cannot be reliably measured, and which must be settled by the delivery of the equity instrument,
they are measured at their costs; (3) for the financial guarantee contracts which are not designated as a
financial liability at fair value through profit or loss, and for the commitments to grant loans which are not
designated as at fair value through profit or loss and which will enjoy an interest rate lower than that of the
market, they are measured subsequent to initial recognition at the higher of the following two items 1) The
amount as determined according to “CASBE13 - Contingencies”; 2) the surplus after accumulative
amortization as determined according to “CASBE14 - Revenues”.
The gains or losses arising from changes in fair value of financial assets or financial liabilities, if not related
to hedging, are measured with the following methods: (1) Gains or losses, arising from the changes in fair
value of financial asset or liability at its fair value through profit or loss, is included in gains or losses on
changes in fair value; interests or cash dividends gained during the asset-holding period are recognized as
investment income; when disposing of the assets, investment income is recognized at the difference between
the actual amount received and the initial recorded amount, at the same time, gains or losses on changes in
fair value are adjusted accordingly. (2) For available-for-sale financial asset, changes in fair value are
recorded as other comprehensive income during the holding period, interests measured at effective interest
method are recorded as investment income; cash dividends from available-for-sale equity instrument
investment are recognized as investment income at the date of dividend declaration; when disposing of the
assets, investment income is recognized at the difference between the actual amount received and the book
value deducting the accumulative amount of changes in fair value originally included in other
comprehensive.
Financial assets are derecognized when the contractual rights for collecting the cash flow of the said financial assets expire or
substantially all risks and rewards related to the said financial assets have been transferred. Only when the underlying present
obligations of a financial liability are relieved totally or partly may the financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset to the transferee, it derecognizes the financial asset. If it retained substantially all of the risks
and rewards related to the ownership of the financial asset, it continues recognizing the financial asset, and
the consideration received is recognized as a financial liability. Where the Company does not transfer or
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt with
according to the circumstances as follows respectively: (1) if the Company gives up its control over the
financial asset, it derecognizes the financial asset; (2) if the Company does not give up its control over the
financial asset, according to the extent of its continuing involvement in the transferred financial asset, it
recognizes the related financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the book value of the transferred
financial asset; (2) the sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally included in equity. If the transfer of financial asset partially satisfies the
conditions to derecognition, the entire book value of the transferred financial asset is, between the portion
which is derecognized and the portion which is not, apportioned according to their respective relative fair
value, and the difference between the amounts of the following two items are included into profit or loss: (1)
the book value of the portion which is derecognized; (2) the sum of consideration of the portion which is
derecognized, and the portion of the accumulative amount of the changes in the fair value originally included
in equity which is corresponding to the portion which is derecognized.
4. Fair value determination method of financial assets and liabilities
The Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy and
used accordingly:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access
at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for
identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the
asset or liability, for example, interest rates and yield curves observable at commonly quoted intervals; market-corroborated
inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and
cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be
paid to fulfill the disposal obligation assumed in business combination, and financial forecast developed using the Company’s
own data, etc.
5. Impairment test and provision for impairment loss of financial assets
(1) An impairment test is carried out at the balance sheet date on the financial assets other than those at fair
value through profit or loss, and provisions for impairment loss should be made if there is objective evidence
indicating impairment loss.
(2) For held-to-maturity investments, borrowings, and receivables, an impairment test is made on an
individual basis on financial assets of individually significant amount; with regard to the financial assets of
individually insignificant amount, they may be included in a portfolio of financial assets with similar credit
risk features so as to carry out an impairment-related test; where, upon the impairment test on an individual
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
basis, the financial asset (including those financial assets of individually significant amount and of
individually insignificant amount) is not impaired, it is included in a portfolio of financial assets with similar
credit risk features so as to conduct further impairment test. Where a financial asset is impaired, the carrying
amount of the said financial asset is written down to the present value of the predicted future cash flow.
(3) Available-for-sale financial assets
1) Objective evidence indicating that available-for-sale debt instrument investments may be impaired includes:
a. significant financial difficulties in the debtor;
b. breach of contract by the debtor, such as principal or interest past due or default;
c. concessions made to debtors with financial difficulties considering economic and legal factors;
d. it is highly probable that the debtor is going to dissolve or going through other terms of financial
restructuring;
e. owing to significant financial difficulties occurred to the debtor, the debt instrument is discontinued to
trade in active market; or
f. Other circumstances indicating that available-for-sale debt instrument may be impaired.
2) Evidence indicating that available-for-sale equity instrument investment may be impaired includes the fair value of equity
instrument investment is suffered from significant or non-temporary decline and the technical, market, economic, or legal
environment in which the investee operates has significant adverse changes under which the Company may not be able to
recover its investment cost.
The Company performs review on available-for-sale equity instrument investment on an individual basis at the balance sheet
date. For equity instrument investment at fair value, if the balance sheet date fair value is 50% or above lower than the cost, or
the balance sheet date fair value has been lower than the cost for a consecutive of 12 months or longer, it is determined that
such equity instrument investment is impaired; if the balance sheet date fair value is 20% or above but not exceeding 50%
lower than the cost, or the balance sheet date fair value has been lower than the cost for a consecutive of 6 months or longer but
not exceeding 12 months, the Company may take other factors such as price volatility into consideration in determining
whether such equity instrument investment is impaired. For equity instrument investment at cost, the Company considers
whether the technical, market, economic, or legal environment in which the investee operates has significant adverse changes
to determine whether such equity instrument is impaired.
When an available-for-sale financial asset at fair value is impaired, the cumulative loss arising from decline
in fair value that has been recognized directly in other comprehensive income is reclassified to impairment
loss. If, after an impairment loss has been recognized on available-for-sale debt instrument investment, there
is objective evidence of a recovery in value of the financial asset which can be related objectively to an event
occurring after the impairment was recognized, the previously recognized impairment loss is reversed
through profit or loss. Subsequent fair value increase in available-for-sale debt instrument investment whose
impairment loss has been recognized is directly recognized in other comprehensive income.
When an available-for-sale equity instrument at cost is impaired, impairment loss on such equity instrument investment is
recognized at any excess of its carrying amount over the present value of future cash flows, and such impairment loss is not
reversed upon recognition.
(XI) Receivables
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
1. Receivables of individually significant amount and with provision made on an individual basis
Judgment basis or amount criteria of Receivables amounting to more than 10 million yuan
individually significant amount
Provision method for receivables of Provisions are made on the difference between the
individually significant amount and lower of present value of future cash flow and their
with provision made on an individual carrying amount based on impairment testing on an
basis individual basis.
2. Receivables with provision made on a collective basis using portfolios with similar credit risk features
(1) Specific portfolios and provision method
Provision method of provision being made on collective basis using portfolios with similar
credit risk features:
Portfolio 1 Grouped with related party balances within the consolidation
scope
Portfolio 2 Grouped with age
Portfolios and provision method
Provisions are made on the difference between the lower of
Portfolio 1 present value of future cash flow and their carrying amount
based on impairment testing on an individual basis.
Portfolio 2 Age analysis method
(2) Age analysis method
Ages Proportion of provision for Proportion of provision for
accounts receivable (%) other receivables (%)
Within 1 year (inclusive, the 0.00 0.00
same hereinafter)
1-2 years 0.00 0.00
2-3 years 10.00 10.00
3-4 years 30.00 30.00
4-5 years 40.00 40.00
5-6 years 80.00 80.00
Over 6 years 100.00 100.00
3. Receivables of individually insignificant amount but with provision made on an individual basis
Reasons for provision made on an Impairment test on an individual basis with objective
individual basis evidence indicating that the receivable is impaired
Provision method Provision method made on an individual basis
For other receivables such as notes receivable, interest receivable and long-term receivable, etc., provision
for bad debts is made at the difference between the present value of future cash flow and the carrying
amount.
(XII) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of
production, and materials or suppliers etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value; provisions for inventory
write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale
is determined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and
surcharges in the ordinary course of business; the net realizable value of materials to be processed is determined based on the
amount of the estimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges
in the ordinary course of business; at the balance sheet date, when only part of the same item of inventories have agreed price,
their net realizable value is determined separately and is compared with their costs to set the provision for inventory
write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XIII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: (1)the asset
must be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such
assets or disposal groups; (2)its sales must be highly probable, i.e., the Company has made a decision on the sale plan and has
obtained a firm purchase commitment, and the sale is expected to be completed within one year.
When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the non-current asset
or disposal group as held for sale at the acquisition date only if the requirement of “expected to be completed within one year”
is met at that date and it is highly probable that other criteria for held for sale will be met within a short period (usually within
three months).
An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its plan to sell the
asset or disposal group in the circumstance that non-related party transactions fail to be completed within one year due to one
of the following reasons: (1) a buyer or others unexpectedly set conditions that will extend the sale period, while the Company
has taken timely actions to respond to the conditions and expects a favorable resolution of the delaying factors within one year
since the setting; (2) a non-current asset or disposal group classified as held for sale fails to be sold within one year due to rare
cases, and the Company has taken action necessary to respond to the circumstances during the initial one-year period and the
criteria for held for sale are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and remeasurement
For initial measurement and remeasurement as at the balance sheet date of a non-current asset or disposal group as held for sale,
where the carrying amount is higher than the fair value less costs to sell, the carrying amount is written down to the fair value
less costs to sell, and the write-down is recognized in profit or loss as assets impairment loss, meanwhile, provision for
impairment of assets as held for sale shall be made.
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For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposal group is
measured on initial recognition at the lower of its initial measurement amount had it not been so classified and fair value less
costs to sell. Apart from the non-current asset or disposal group acquired through business combination, the difference arising
from the initial recognition of a non-current asset or disposal group at the fair value less costs to sell shall be included into
profit or loss.
The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount of goodwill in the
disposal group first, and then reduce its carrying amount based on the proportion of each non-current asset’s carrying amount in
the disposal group.
No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-current assets in
disposal groups as held for sale, while interest and other expenses attributable to the liabilities of a disposal group as held for
sale shall continue to be recognized.
(2) Reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the balance sheet
date, the write-down shall be recovered, and shall be reversed not in excess of the impairment loss that has been recognized
after the non-current asset was classified as held for sale. The reversal shall be included into profit or loss. Assets impairment
loss that has been recognized before the classification is not reserved.
When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the balance sheet date,
the write-down shall be recovered, and shall be reversed not in excess of the non-current assets impairment loss that has been
recognized after the disposal group was classified as held for sale. The reversal shall be included into profit or loss. The
reduced carrying amount of goodwill and non-current assets impairment loss that has been recognized before the classification
is not reserved.
The subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale, the carrying
amount is increased based on the proportion of carrying amount of each non-current assets (excluding goodwill) in the disposal
group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held for sale, or a
non-current asset that removed from a disposal group as held for sale shall be measured at the lower of: a. its carrying amount
before it was classified as held for sale, adjusted for any depreciation. Amortization or impairment that would have been
recognized had it not been classified as held for sale; and b. its recoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or losses shall be
included into profit or loss.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate
in the financial and operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in
cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share
of the carrying amount of the equity of the combined party included the consolidated financial statements of the ultimate
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controlling party as the initial cost of the investment. The difference between the initial cost of the long-term equity investment
and the carrying value of the combination consideration paid or the par value of shares issued offsets capital reserve; if the
balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in stages, the
Company determines whether it is a “bundled transaction”.If it is a “bundled transaction”, stages as a whole are considered as
one transaction in accounting treatment. If it is not a “bundled transaction”, investment cost is initially recognized at the share
of the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate
controlling party. The difference between the acquisition-date investment cost of long-term equity investments and the carrying
amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly
acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to
retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair
value of considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages,
the Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting
treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the
previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a
“bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled
transaction”, the carrying value of the acquirer’s previously held equity interest in the acquire is re-measured at the
acquisition-date fair value, and the difference between the fair value and the carrying amount is recognized in investment
income; when the acquirer’s previously held equity interest in the acquire involves other comprehensive income under equity
method, the related other comprehensive income is reclassified as income for the acquisition period, excluding other
comprehensive income arising from changes in net liabilities or assets from re-measurement of defined benefit plan of the
acquiree.
(3) Long-term equity investment obtained through ways other than business combination: the initial cost of a long-term equity
investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of
issuing equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined
according to “CASBE12 - Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to
“CASBE7 - Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investment with control relationship, it is accounted for with cost method; for long-term equity investment
with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in
profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity
is accounted for with equity method; however, if the disposal results in the Company’s loss of control, joint control, or
significant influence, the remained equity is reclassified as available-for-sale financial assets, and accounted for according to
CASBE 22 –Financial Instruments: Recognition and Measurement.
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(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net
assets in the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve
(capital premium), if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
When the Company loses control, the remained equity is re-measured at the loss-of-control-date fair value. The aggregated
value of disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary
held before the disposal from the acquisition date or combination date to the disposal date is recognized in investment income
in the period when the Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other
comprehensive income related to equity investments in former subsidiary is reclassified as investment income upon the
Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting
treatment. Before the Company loses control, the difference between the disposal consideration at each stage and the
proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated
financial statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
(XV) Investment property
1. Investment property includes land use right of rent-out property and of property held for capital appreciation and buildings
that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using the cost
model, the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and
only if, it is probable that future economic benefits associated with the assets will flow to the Company and the cost of the
assets can be measured reliably.
2. Depreciation method of different categories of fixed assets
Estimated residual Annual
Categories Depreciation method Useful life
value proportion depreciation
(years)
(%) rate (%)
Buildings and structures Straight-line method 15-35 3.00 2.77-6.47
Machinery Straight-line method 10-15 3.00 6.47-9.70
Transport facilities Straight-line method 6-8 3.00 12.13-16.17
Electronic equipment Straight-line method 4-11 3.00 2.2-24.25
Office equipment and others Straight-line method 4-11 3.00 2.2-24.25
3. Recognition and pricing principles of fixed assets rented-in under finance lease
Finance lease is determined when one or a combination of the following conditions are satisfied: (1) the ownership has been
transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchase the leasing asset at a price that is
much lower than its fair value, so it can be reasonably determined that the lessee will take the option at the very beginning of
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the lease; (3) the leasing term accounts for most time of the useful life (ordinarily accounting for 75% or higher) even if the
ownership does not transfer to the lessee; (4) the present value of the minimum amount of rent that the lessee has to pay at the
first day of the lease amounts to 90% or higher of its fair value at the same date; or the present value of the minimum amount of
rent that the lessor collects at the first day of the lease amounts to 90% or higher of its fair value at the same date; and/or (5) the
leased assets are of such a specialized nature that only the lessee can use them without major modifications.
Fixed assets rented-in under finance lease are recorded at the lower of fair value and the present value of the minimum lease
payment at the inception of the lease, and are depreciated following the depreciation policy for self-owned fixed assets.
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item
will flow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual
cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches its designed usable conditions.
When the construction completion cost reaches final estimating and auditing of the construction in progress was not finished
while it reaching the designed usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted
accordingly when the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it is capitalized and included in the costs of
relevant assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred,
and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless they following requirements are all met: 1) the asset
disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition
and construction or production activities which are necessary to prepare the asset for its intended use or sale
have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses,
and are included in profit or loss, till the acquisition and construction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is
ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for
capitalization, the to-be-capitalized amount of interests is determined in light of the actual interest expenses
incurred (including amortization of premium or discount based on effective interest method) of the special
borrowings at the present period minus the income of interests earned on the unused borrowings as a deposit
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in the bank or as a temporary investment; where a general borrowing is used for the acquisition and
construction or production of assets eligible for capitalization, the Company calculates and determines the
to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset
disbursement of the part of the accumulative asset disbursements minus the general borrowing by the
capitalization rate of the general borrowing used.
(XIX) Intangible assets
1. Intangible asset includes land use right, patent right and non-patented technology etc. The initial measurement of intangible
asset is based its cost.
2. For intangible assets with finite useful lives, its amortization amount is amortized within its useful lives systematically and
reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the
straight-line method with details as follows:
Items Amortization period (years)
Software 3-10
Patent right and non-patented technology 5-10
Land use right 40-50
3. Expenditures on the research phase of an internal project are recognized as profit or loss when it is incurred. An intangible
asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of the
following: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its
intention to complete the intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic
benefits. Among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or
the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequate
technical, financial and other resources to complete the development and to use or sell the intangible asset; and (5) its ability to
measure reliably the expenditure attributable to the intangible asset during its development.
(XX) Impairment of part of non-current assets
For non-current assets such as long-term equity investments, investment property at cost model, fixed assets,
construction in progress, intangible assets with finite useful life, etc., if at the balance sheet date there is
indication of impairment, the recoverable amount is estimated. For goodwill recognized in business
combination and intangible assets with indefinite useful life, no matter whether there is indication of
impairment, impairment test is performed annually. Impairment test on goodwill is performed on related
group of assets or a portfolio of groups of assets.
When the recoverable amount of such non-current assets is lower than their carrying amount, the difference is recognized as
assets impairment loss through profit or loss.
(XXI) Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one
year). They are recorded with actual cost, and evenly amortized within its beneficiary period or stipulated period. If items of
long-term prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in
profit or loss.
(XXII) Employee benefits
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1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other
long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits
actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a
defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to
estimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and
determine the periods to which the obligations are attributed. The Company discounts obligations under the defined benefit
plan using the discount rate to determine the present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the present value of the
defined benefit plan obligation from the fair value of defined benefit plan assets as a net defined benefit plan liability or net
defined benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset
at the lower of the surplus in the defined benefit plan and the asset ceiling;
3) At the end of reporting period, the Company recognizes the following components of employee benefits cost arising from
defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. Changes as a result of
re-measurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a
relevant asset. Item c is recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss.
However, the Company may transfer those amounts recognized in other comprehensive income within equity.
4. Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a
corresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw
the offer of termination benefits because of an employment termination plan or a curtailment proposal; or b. when the
Company recognizes cost or expenses related to a restructuring that involves the payment of termination benefits.
5. Other long-term employee benefits
When other long-term employee benefits provided by the Company to the employees satisfied the conditions for classifying as
a defined contribution plan, those benefits are accounted for in accordance with the requirements relating to defined
contribution plan. The Company recognizes and measures the net liability or net asset of other long-term employee benefits in
accordance with the requirements relation to defined benefit plan. At the end of the reporting period, the Company recognizes
the components of cost of employee benefits arising from other long-term employee benefits as the followings: a. service cost;
b. net interest on the net liability or net assets of other long-term employee benefits; and c. changes as a result of
re-measurement of the net liability or net assets of other long-term employee benefits. As a practical expedient, the net total of
the aforesaid amounts are recognized in profit or loss or included in the cost of a relevant asset.
(XXIII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
providing guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause
the outflow of the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the
present obligations, and its carrying amount is reviewed at the balance sheet date.
(XXIV) Revenue
1. Revenue recognition principles
(1) Sale of goods
Revenue from sale of goods is recognized if, and only if, the following conditions are all satisfied: a)
significant risks and rewards of ownership of the goods is transferred to the buyer; b) the Company retains
neither continuing managerial involvement of ownership nor effective control over the goods sold; c) the
amount of revenue can be measured reliably; d) it is probable that the economic benefits of the transaction
will flow to the Company; and e) the costs of the transaction incurred and to be incurred can be measured
reliably.
(2) Rendering of services
When the outcome of the transaction can be estimated reliably (the amount of revenue can be measured
reliably, it is probable that the economic benefits will flow to the Company, the percentage of completion of
the transaction can be determined reliably, and the costs of the transaction incurred and to be incurred can be
measured reliably), revenue from rendering of services is recognized using the percentage of completion
method, and the stage of completion is determined at the proportion of costs incurred to the estimated total
costs. When the outcome of the transaction cannot be estimated reliably at the balance sheet date, revenue is
recognized based on the amount of the costs incurred and the costs incurred are charged off at the same
amount when the costs incurred are expected to be recoverable; and no revenue is recognized and the costs
incurred are charged off as an expense of the period when the costs incurred are not expected to be
recovered.
(3) Revenue arising from use by others of assets
Revenue arising from use by others of assets is recognized if, and only if, it is probable that economic
benefits associated with the transaction will flow to the Company and the amount of the revenue can be
measured reliably. Interest income is recognized based on the length of time for which the Company’s cash
is used by others and the effective interest rate; and royalties are recognized according to the period and
method of charging as specified in relevant contract or agreement.
2. Revenue recognition method adopted by the Company
The Company’s main product is the telecommunication product. Revenue is recognized if, and only if, the
following conditions are all met: the Company has delivered goods to the purchaser based on contractual
agreements; customers have accepted goods and settled the payment; goods payment has been collected or
the Company has obtained receipts invoices and it is probable that economic benefits associated with the
transaction will flow to the Company; and the costs of the transaction incurred and to be incurred can be
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measured reliably.
(XXV) Government grants
1. Government grants related to assets
Government grants related to assets are government grants, with which the Company purchase, construct or otherwise acquire
non-current assets. They are recognized as deferred income, and amortized on a straight-line method over the useful lives of the
relevant assets, and included in profit or loss. However, those measured at notional amount is directly included into profit or
loss.
2. Government grants related to income
Government grants related to income are government grants other than those related to assets. Government grants related to
income if used for compensating the related future expenses or losses of the Company are recognized as deferred income and
are included in profit or loss during the period when the relevant expenses are recognized; if used for compensating the related
expenses or losses incurred to the Company are directly included in profit or loss.
(XXVI) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference
between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount
and tax base of items not recognized as assets and liabilities but with their tax base being able to be
determined according to tax laws) and in accordance with the tax rate applicable to the period during which
the assets are expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely
to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if
there is any exact evidence that it is probable that future taxable profits will be available against which
deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are
recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed
to the extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss, excluding those arising from the following circumstances: (a) business combination; and (b) the
transactions or items directly recognized in equity.
(XXVII) Leases
1. Operating leases
When the Company is the lessee, lease payments are recognized as cost or profit or loss with straight-line
method/unit-of-production method over the lease term. Initial expenses are recognized directly into profit or
loss. Contingent rents are charged as profit or loss in the periods in which they are incurred.
When the Company is the lessor, lease income is recognized as profit or loss with straight-line
method/unit-of-production method over the lease term. Initial expenses, other than those with material
amount and eligible for capitalization which are recognized as profit or loss by installments, are recognized
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directly as profit or loss. Contingent rents are charged as profit or loss in the periods in which they are
incurred.
2. Finance leases
When the Company is the lessee, at the commencement of the lease term, lessees recognize finance leases as
assets and liabilities in their balance sheets at amounts equal to the lower of fair value of the leased property
and the present value of the minimum lease payments, each determined at the inception of the lease, and
recognize the minimum lease payments as the entering value of long-term payable, and treat the difference of
the two as unrecognized finance expense. Any initial direct costs of the lessee are added to the amount
recognized as an asset. The effective interest method is used to recognize finance expense of the period
during the lease term.
When the Company is the lessor, at the commencement of the lease, lessor recognizes the aggregate of
minimum lease receipts and initial direct costs, each determined at the inception of the lease, as the entering
value of finance lease receivables, and recognize the unguaranteed residual value at the same time. The
difference between the aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed
residual value, and the sum of their present values is recognized as unrealized finance income. The effective
interest method is used to recognize finance income of the period during the lease term.
(XXVIII) Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure of the Company’s
internal organization, management requirements and internal reporting system. An operating segment is a component of the
Company that:
1.Engages in business activities from which it may earn revenues and incur expenses;
2.Whose financial performance are regularly reviewed by Management to make decisions about resource to be allocated to the
segment and assess its performance; and
3. For which financial information regarding financial position, financial performance and cash flows is available.
(XXIX) Other significant accounting policies and estimates
1. Recognition criteria and accounting treatment of discontinued operations
A component of the Company that has been disposed of, or is classified as held for sale and can be clearly distinguished is
recognized as a discontinued operation when it fulfills any of the following conditions:
(1) it represents a separate major line of business or a separate geographical area of operations;
(2) it is part of a related plan to dispose of a separate major line of business or a separate geographical area of operations; or
(3) it is a subsidiary acquired exclusively with a review to resale.
(XXX) Significant changes in accounting policies and estimates
1. Significant changes in accounting policies
(1) Changes in accounting policies arising from changes in CASBEs
a. The Company prepared the financial statements for the year ended December 31, 2018 in accordance with “Notice of the
Ministry of Finance on Revising and Issuing Financial Statement Templates for General Enterprises” (numbered Cai Kuai
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
[2018] 15), its interpretations and CASBEs, and changes in accounting policies are applicable to retrospective application
method. Financial statement items and amounts significantly affected are as follows:
Original financial statement items and amounts Revised financial statement items and amounts
Notes receivable 32,477,463.59
Notes receivable and 812,567,071.00
Accounts receivable 780,089,607.41 accounts receivable
Notes payable 20,161,687.14
Notes payable and accounts 826,833,861.31
Accounts payable 806,672,174.17 payable
Interest payable 531,667.36
Dividend payable 1,692,213.38 Other payables 63,027,802.63
Other payables 60,803,921.89
Administrative expenses 76,037,302.46
Administrative expenses 143,924,331.99
R&D expenses 67,887,029.53
Note: Government grants related to assets actually received in amount of XX yuan which was presented under “other cash
receipts related to investing activities” is adjusted to be presented under “other cash receipts related to operating activities”.
b. The Ministry of Finance of PRC has promulgated “Interpretation of the Accounting Standard for Business Enterprises No.9 –
Accounting Treatment of Net Investment Loss under Equity Method”, “Interpretation of the Accounting Standard for Business
Enterprises No.10 – Depreciation Method Based on Income from Fixed Assets”, “Interpretation of the Accounting Standard for
Business Enterprises No.11 – Amortization Method Based on Income from Intangible Assets” and “Interpretation of the
Accounting Standard for Business Enterprises No.12 – About Whether Provider and Receiver of Key Management’s Services
are Related Parties” in 2017, and the Company adopted the above interpretations since January 1, 2018. Adoption of these
interpretations has no significant impact on the Company’s financial data at the beginning of the period.
2. Significant changes in accounting estimates
IV. Taxes
(I) Main taxes and tax rates
Taxes Tax bases Tax rates
Value-added tax (VAT) The taxable revenue from sales of goods or 17%,16%,6%
rendering of services
For housing property levied on the basis of price,
housing property tax is levied at the rate of 1.2%
of the balance after deducting 30% of the cost; for
Housing property tax 1.2%,12%
housing property levied on the basis of rent,
housing property tax is levied at the rate of 12% of
rent revenue.
Urban maintenance and Turnover tax payable 7%
construction tax
Education surcharge Turnover tax payable 3%
Local education surcharge Turnover tax payable 2%
Enterprise income tax Taxable income 15%,16.5%,25%
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
The Company 15%
Nanjing Mennekes Electric Appliances Co., Ltd 15%
Nanjing Putian Telege Intelligent Building Ltd. 15%
Nanjing Putian Changle Telecommunications Equipment Co., Ltd. 15%
Nanjing Putian Datang Information Electronic Co., Ltd. 15%
Nanjing Putian Network Co., Ltd. 15%
Putian Telecommunications (H.K.) Co., Ltd. 16.5%
Taxpayers other than the above-mentioned 25%
The subsidiary, Putian Telecommunications (H.K.) Co., Ltd., was established in Hong Kong on December 1,
2000, and is subject to the enterprise income tax at a rate of 16.5%, according to relevant rules in Hong
Kong.
(II) Tax preferential policies
The Company obtained high-tech enterprise certificate in December, 2018, valid for 3 years. It is subject to the enterprise
income tax at a rate of 15%
The subsidiary, Nanjing Putian Telege Intelligent Building Ltd., obtained high-tech enterprise certificate in December, 2017,
valid for 3 years. It is subject to the enterprise income tax at a rate of 15%.
The subsidiary, Nanjing Mennekes Electric Appliances Co., Ltd obtained high-tech enterprise certificate in October, 2016,
valid for 3 years. It is subject to the enterprise income tax at a rate of 15%.
The subsidiary, Nanjing Putian Changle Telecommunications Equipment Co., Ltd., obtained high-tech enterprise certificate in
October, 2018, valid for 3 years. It is subject to the enterprise income tax at a rate of 15%.
The subsidiary, Nanjing Putian Network Co., Ltd., obtained high-tech enterprise certificate in December, 2017, valid for 3
years. It is subject to the enterprise income tax at a rate of 15%.
The subsidiary, Nanjing Putian Datang Information Electronic Co., Ltd., obtained high-tech enterprise certificate in November,
2018, valid for 3 years. It is subject to the enterprise income tax at a rate of 15%.
The subsidiary, Nanjing Telecommunication Equipment Factory - the Seventh Branch, is a social welfare enterprise.
Accordance to the provisions of Guo Shui Fa [2007] No.067, it enjoys the preferential tax policy of VAT refund upon
collection and plus deduction of wages paid to the disabled employees.
The subsidiaries, Nanjing Putian Datang Information Electronic Co., Ltd. and Nanjing Putian
Telecommunication Technology Co., Ltd., were certified as software enterprises, and some of the software
products produced by Nanjing South Telecommunications Company Limited and Nanjing Putian Network
Co., Ltd. are entitled to enjoy the preferential tax policy of VAT refund upon collection in accordance with
the provisions of Cai Shui [2011] No.100.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
V. Notes to items of consolidated financial statements
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 1,886.33 5,458.17
Cash in bank 201,367,431.09 311,051,461.00
Other cash and bank balances 60,568,751.30 16,420,782.19
Total 261,938,068.72 327,477,701.36
(2) Details of other cash and bank balances
Items Closing balance Opening balance
Bank acceptance deposit 38,442,848.22
deposit for L/G 22,125,903.08 16,420,782.19
Total 60,568,751.30 16,420,782.19
2. Notes receivable and accounts receivable
(1) Details
Items Closing balance Opening balance
Notes receivable 46,475,656.01 32,477,463.59
Accounts receivable 941,068,459.35 780,089,607.41
Total 987,544,115.36 812,567,071.00
(2) Notes receivable
1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
bad debts amount bad debts amount
Bank 37,837,668.81 37,837,668.81 20,715,749.22 20,715,749.22
acceptance
Trade 8,637,987.20 8,637,987.20 11,761,714.37 11,761,714.37
acceptance
Total 46,475,656.01 46,475,656.01 32,477,463.59 32,477,463.59
2) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet
derecognized
Bank acceptance 204,608,629.46
Trade acceptance 4,871,041.97
Subtotal 209,479,671.43
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little
possibility of failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted
138
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
bank acceptance. However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on
such acceptance, according to the China Commercial Instrument Law.
In the current period, trade acceptance is endorsed for goods payment. As it relates to many endorsements and the drawer is
always in good commercial credit level, it is with low default risk and thus derecognized.
3) Translated to accounts receivable due to drawers not redeem the agreement at the balance sheet date
Items Closing balance translated to accounts
receivable
Trade acceptance 448,319.70
Subtotal 448,319.70
(3) Notes receivable
1) Details
a. Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 985,126,409.03 98.78 44,057,949.68 4.47 941,068,459.35
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 985,126,409.03 98.78 44,057,949.68 4.47 941,068,459.35
Receivable of individually
insignificant amount but 12,162,142.76 1.22 12,162,142.76 100.00
with provision made on an
individual basis
Total 997,288,551.79 100.00 56,220,092.44 5.64 941,068,459.35
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 815,282,308.11 98.56 35,192,700.70 4.32 780,089,607.41
using portfolios with similar
credit risk features
Portfolio 1
139
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Portfolio 2 815,282,308.11 98.56 35,192,700.70 4.32 780,089,607.41
Receivable of individually
insignificant amount but 11,901,554.08 1.44 11,901,554.08 100.00
with provision made on an
individual basis
Total 827,183,862.19 100.00 47,094,254.78 5.69 780,089,607.41
b. In portfolios, accounts receivable with provision made on a collective basis with age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 759,064,787.67
1-2 years 116,414,243.85
2-3 years 46,975,564.97 4,697,556.51 10.00
3-4 years 19,701,035.07 5,910,310.52 30.00
4-5 years 14,282,491.27 5,712,996.51 40.00
5-6 years 4,756,000.28 3,804,800.23 80.00
Over 6 years 23,932,285.92 23,932,285.91 100.00
Subtotal 985,126,409.03 44,057,949.68
2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 8,864,988.98 yuan, and provision increased due to fluctuations in
exchange totaled 260,848.68yuan.
3) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Book balance total balance of Provision for
accounts bad debts
receivable (%)
Beijing UniStrong Science & Technology Co., Ltd. 52,167,500.00 5.23
Beijing Zhongrui Haotian Information Technology 30,300,000.00 3.04
Co., Ltd.
China United Network Communications Group Co., 28,936,702.90 2.90
Ltd., Henan Branch
Beijing Transtrue Technology Inc. 28,851,409.75 2.89
Shenzhen PEMT Technology Co., Ltd. 27,766,504.60 2.78
Subtotal 168,022,117.25 16.84 557,462.59
3. Advances paid
(1) Age analysis
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Closing balance
Ages
Book balance % to total Provision for bad Carrying amount
debts
Within 1 year 179,718,854.19 95.17 179,718,854.19
1-2 years 3,256,231.30 1.72 3,256,231.30
2-3 years 1,176,772.69 0.62 1,176,772.69
Over 3 years 4,696,854.51 2.49 4,696,854.51
Total 188,848,712.69 100.00 188,848,712.69
(Continued)
Opening balance
Ages
Book balance % to total Provision for bad Carrying amount
debts
Within 1 year 36,704,841.98 68.20 36,704,841.98
1-2 years 11,206,192.14 20.82 11,206,192.14
2-3 years 1,456,310.44 2.70 1,456,310.44
Over 3 years 4,454,593.23 8.28 4,454,593.23
Total 53,821,937.79 100.00 53,821,937.79
(2) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Closing balance balance of advances paid
(%)
Shanghai Xingditong Communication Technology 97,513,446.00 51.64
Co., Ltd.
Jiangsu Sainty Machinery IMP.&EXP.Co.,Ltd. 43,039,580.69 22.79
Shaanxi Xinjiang Technology Information Co., Ltd. 11,596,000.00 6.14
Zhejiang Xinwang Energy Engineering Co., Ltd. 3,516,413.77 1.86
Jiangsu Xinxin Home Network Technology Co., 2,380,440.00 1.26
Ltd.
Subtotal 158,045,880.46 83.69
4. Other receivables
(1) Details
Items Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 33,734,948.67 29,325,423.73
Total 33,734,948.67 29,325,423.73
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(2) Other receivables
1) Details
a. Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 42.85 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 38,562,293.97 57.15 4,827,345.30 12.52 33,734,948.67
using portfolios with similar
credit risk features
Including: Portfolio 1
Portfolio 2 38,562,293.97 57.15 4,827,345.30 12.52 33,734,948.67
Receivable of individually
insignificant amount but
with provision made on an
individual basis
Total 67,474,416.68 100.00 33,739,468.01 50.00 33,734,948.67
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 45.97 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 33,987,705.89 54.03 4,662,282.16 13.72 29,325,423.73
using portfolios with similar
credit risk features
Including: Portfolio 1
Portfolio 2 33,987,705.89 54.03 4,662,282.16 13.72 29,325,423.73
Receivable of individually
insignificant amount but
with provision made on an
individual basis
Total 62,899,828.60 100.00 33,574,404.87 53.38 29,325,423.73
b. Other receivables of individually significant amount and with provision made on an individual basis
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
With long age
北京立康普通信设备有限公司 28,912,122.71 28,912,122.71 100.00 and hard to
(Beijing Likangpu Communications recover
142
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Debtors Book balance Provision for Provision Reasons for
bad debts proportion (%) provision made
Equipment Co., Ltd.1)
Subtotal 28,912,122.71 28,912,122.71 100.00
c. In portfolios, other receivables with provision made on a collective basis with age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 24,688,722.26
1-2 years 5,852,249.67
2-3 years 2,153,959.22 215,395.92 10.00
3-4 years 1,414,598.00 424,379.40 30.00
4-5 years 310,993.92 124,397.57 40.00
5-6 years 392,992.43 314,393.94 80.00
Over 6 years 3,748,778.47 3,748,778.47 100.00
Subtotal 38,562,293.97 4,827,345.30
2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 206,402.92 yuan, the deduction of write-off of bad debts provision for
this period totaled 42,828.80,and provision increased due to fluctuations in exchange totaled 1,489.02 yuan.
3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 33,879,523.33 27,377,794.22
Deposits 24,126,517.87 21,876,987.95
Petty cash for business traveling 2,652,720.79 2,856,176.36
Others 6,815,654.69 10,788,870.07
Total 67,474,416.68 62,899,828.60
4) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Book balance Ages total balance of Provision for
Nature of receivables
other receivables bad debts
(%)
Beijing Likangpu
Temporary advance 28,912,122.71 42.85 28,912,122.71
Communications Over 6 years
payment receivable
Equipment Co., Ltd.
Ping An
International 4,000,000.00 5.93
Deposits Within 1 year
Financial Leasing
Co., Ltd.
China Potevio Deposits 3,839,000.00 1-3 years 5.69 40,000.00
Information
1
The English name is for identification purpose only.
143
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Proportion to the
Debtors Book balance Ages total balance of Provision for
Nature of receivables
other receivables bad debts
(%)
Industry Inc
Temporary advance 1,972,731.64 2.92
VAT refund Within 1 year
payment receivable
Potevio Hi-tech Temporary advance 1,209,297.25 1.79
Within 1 year
Industry Co., Ltd. payment receivable
Subtotal 39,933,151.60 59.18 28,952,122.71
5. Inventories
(1) Details
Closing balance Opening balance
Items Book
Provision for Carrying amount Book balance Provision for Carrying amount
balance write-down write-down
Raw materials 84,431,224.04 3,401,987.55 81,029,236.49 32,589,471.27 2,938,752.56 29,650,718.71
Work in process 33,004,830.02 33,004,830.02 9,304,009.61 9,304,009.61
Goods on hand 80,895,523.20 7,337,485.59 73,558,037.61 310,378,245.32 3,087,176.10 307,291,069.22
Merchandise shipped 108,005,683.58 13,804,319.56 94,201,364.02 147,425,970.58 7,758,200.35 139,667,770.23
Materials in 5,983,856.44 804,691.99 5,179,164.45 4,789,181.58 804,691.99 3,984,489.59
consignors
Total 312,321,117.28 25,348,484.69 286,972,632.59 504,486,878.36 14,588,821.00 489,898,057.36
(2) Provision for inventory write-down
Increase Decrease
Items Opening balance Closing balance
Provision Others Reversal or Others
written-off
Raw materials 2,938,752.56 536,531.98 73,296.99 3,401,987.55
Goods on hand 3,087,176.10 4,299,904.00 49,594.51 7,337,485.59
Goods dispatched 7,758,200.35 6,691,467.47 645,348.26 13,804,319.56
Materials on consignment for further 804,691.99 804,691.99
processing
Subtotal 14,588,821.00 11,527,903.45 768,239.76 25,348,484.69
6. Other current assets
Items Closing balance Opening balance
Input VAT to be credited 13,497,540.69 45,282,892.44
Total 13,497,540.69 45,282,892.44
7. Available-for-sale financial assets
(1) Details
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
144
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
Available-for-sale
equity instrument
Including: at cost 2,596,863.00 1,854,910.00 741,953.00 2,596,863.00 1,854,910.00 741,953.00
Total 2,596,863.00 1,854,910.00 741,953.00 2,596,863.00 1,854,910.00 741,953.00
(2) Available-for-sale financial assets at cost
Book balance
Investees
Opening Increase Decrease Closing balance
balance
Nanjing Yuhua Electroplating Factory 420,915.00 420,915.00
Hangzhou Honyar Electrical Co., Ltd. 321,038.00 321,038.00
Beijing Likangpu Communications 1,854,910.00 1,854,910.00
Equipment Co., Ltd. [Note]
Subtotal 2,596,863.00 2,596,863.00
(Continue)
Provision for impairment
Holding Cash dividend
Investees proportion in in current
Opening Increase Decrease Closing
investees (%) period
balance balance
Nanjing Yuhua 10.00
Electroplating Factory
Hangzhou Honyar 2.26
Electrical Co., Ltd.
Beijing Likangpu
Communications 1,854,910.00 1,854,910.00 51.00
Equipment Co., Ltd.
[Note]
Subtotal 1,854,910.00 1,854,910.00
Note: Up to the end of 2007, Beijing Likangpu Communications Equipment Co., Ltd. was significantly insolvent and was shut
down with no operations since 2008. In October 2007, Beijing Administration for Industry and Commerce issued the decision
on treatment of cancellation of license and required it to carry out liquidation under laws and regulations. Pursuant to “CASBE
33 - Consolidated Financial Statements”, Beijing Likangpu Communications Equipment Co., Ltd. shall no longer be brought
into consolidation scope since 2008 and such event has been reported to China Potevio Information Industry Inc. and
State-owned Assets Supervision and Administration Commission of the State Council.
8. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Carrying Book balance Provision for Carrying
impairment amount impairment amount
Investments in 11,128,318.34 11,128,318.34 13,296,092.84 13,296,092.84
joint ventures
Investments in 172,115,761.89 172,115,761.89 173,681,413.39 173,681,413.39
associates
Total 183,244,080.23 183,244,080.23 186,977,506.23 186,977,506.23
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(2) Details
Increase/decrease
Opening
Investees Adjustment in
Investment income
balance Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Joint ventures
SEI-Nanjing Potevio Optical 13,296,092.84 -2,167,774.50
Network Co., Ltd.
Subtotal 13,296,092.84 -2,167,774.50
Associates
Nanjing Potevio Telege Cable Co., 3,040,101.44 1,406,238.47
Ltd.
Potevio Hi-tech Industry Co., Ltd. 170,641,311.95 488,154.17
173,681,413.3
Subtotal -918,084.30
9
186,977,506.2
Total -3,085,858.80
3
(Continued)
Increase/decrease
Closing balance
Investees Cash Closing balance of provision for
Changes in dividend/profit Provision for Others
impairment
other equity declared for impairment
distribution
Joint ventures
SEI-Nanjing Potevio Optical 11,128,318.34
Network Co., Ltd.
Subtotal 11,128,318.34
Associates
Nanjing Potevio Telege 450,000.00 1,183,862.97
Cable Co., Ltd.
Potevio Hi-tech Industry Co., 197,567.20 170,931,898.92
Ltd.
Subtotal 647,567.20 172,115,761.89
Total 647,567.20 183,244,080.23
9. Investment property
Items Buildings and structures Land use right Total
Cost
Opening balance 23,851,020.30 3,642,147.87 27,493,168.17
Increase
Decrease 5,204,622.95 5,204,622.95
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Buildings and structures Land use right Total
1) Transferred into fixed assets
2) Other transferred 5,204,622.95 5,204,622.95
Closing balance 18,646,397.35 3,642,147.87 22,288,545.22
Accumulated depreciation and
amortization
Opening balance 11,083,691.02 1,764,573.87 12,848,264.89
Increase 611,185.80 119,960.64 731,146.44
1) Accrual or amortization 611,185.80 119,960.64 731,146.44
Decrease 1,530,398.09 1,530,398.09
1) Transferred into fixed assets
2) Other transferred 1,530,398.09 1,530,398.09
Closing balance 10,164,478.73 1,884,534.51 12,049,013.24
Provision for impairment
Opening balance 1,842,418.00 1,842,418.00
Increase
Decrease
Closing balance 1,842,418.00 1,842,418.00
Carrying amount
Closing balance 6,639,500.62 1,757,613.36 8,397,113.98
Opening balance 10,924,911.28 1,877,574.00 12,802,485.28
10. Fixed assets
(1) Details
Office
Items Buildings and Machinery Transport Electronic Total
equipment
structures equipment facilities equipment
and others
Cost
154,660,368.4
Opening balance 58,096,595.23 13,247,627.08 6,659,225.73 50,842,510.16 283,506,326.68
8
Increase 6,052,528.08 1,152,339.25 618,809.35 1,518,943.74 60,802.95 9,403,423.37
1) Acquisition 847,905.13 1,152,339.25 618,809.35 1,518,943.74 60,802.95 4,198,800.42
2) Investment
5,204,622.95 5,204,622.95
property transferred
Decrease 13,978,427.88 11,738,605.66 909,877.95 800,989.49 4,436,772.77 31,864,673.75
1) Disposal/scrap 13,978,427.88 11,738,605.66 909,877.95 800,989.49 4,436,772.77 31,864,673.75
Closing balance 146,734,468.6 47,510,328.82 12,956,558.48 7,377,179.98 46,466,540.34 261,045,076.30
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Office
Items Buildings and Machinery Transport Electronic Total
equipment
structures equipment facilities equipment
and others
8
Accumulated
depreciation
Opening balance 53,189,862.57 47,038,059.99 12,073,510.18 5,875,572.02 44,637,453.40 162,814,458.16
Increase 7,094,290.32 1,443,695.06 414,175.94 717,253.62 2,160,247.91 11,829,662.85
1) Accrual 5,563,892.22 1,443,695.06 414,175.94 717,253.62 2,160,247.91 10,299,264.75
2) Investment
1,530,398.10 1,530,398.10
property transferred
Decrease 9,668,203.42 11,451,668.72 856,463.77 767,685.18 4,096,656.31 26,840,677.40
1) Disposal/scrap 9,668,203.42 11,451,668.72 856,463.77 767,685.18 4,096,656.31 26,840,677.40
Closing balance 50,615,949.47 37,030,086.33 11,631,222.35 5,825,140.46 42,701,045.00 147,803,443.61
Provision for
impairment
Opening balance 539,124.00 10,863.02 103,112.78 296,846.94 949,946.74
Increase
Decrease 92,064.43 121,056.73 213,121.16
Closing balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Carrying amount
Closing balance 95,579,395.21 10,469,379.47 1,325,336.13 1,540,991.17 3,589,705.13 112,504,807.11
100,931,381.9
Opening balance 11,047,672.22 1,174,116.90 680,540.93 5,908,209.82 119,741,921.78
1
(2) Fixed assets temporarily idle
Items Cost Accumulated Provision for
Carrying amount
depreciation impairment
Machinery equipment 208,085.00 192,141.10 11,048.35 4,895.55
Transport facilities 225,000.00 218,250.00 6,750.00
Electronic equipment 36,000.00 34,920.00 1,080.00
Office equipment and others 370,885.18 184,349.93 175,408.71 11,126.54
Subtotal 839,970.18 629,661.03 186,457.06 23,852.09
(3) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Buildings and structures 2,455,263.86 Not applicable for allocated land
Buildings and structures 31,920,799.34 Under procedure
Subtotal 34,376,063.20
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
11. Construction in progress
(1) Details
Closing balance Opening balance
Projects Book
Book Provision for Carrying Provision for Carrying
balance impairment amount balance impairment amount
Nanjing putian science and
technology pioneer park
intelligent park construction 5,781,757.54 5,781,757.54 1,830,131.25 1,830,131.25
related building intelligent
equipment.
Reconstruction of distribution 1,160,141.27 1,160,141.27 333,136.64 333,136.64
building
Nanjing Yiming Litong
Information Technology Co., 58,135.34 58,135.34
Ltd.
Nanjing Putian Datang
Information Electronics Co., 2,472,349.61 2,472,349.61
Ltd. Product Development
Center
Total 9,472,383.76 9,472,383.76 2,163,267.89 2,163,267.89
(2) Changes in significant projects
Projects Budgets Opening Increase Transferred to Other Closing
balance fixed assets decrease balance
Nanjing putian science and technology
pioneer park intelligent park 5,920,000.00 1,830,131.25 3,951,626.29 5,781,757.54
construction related building intelligent
equipment.
Nanjing Putian Datang Information
Electronics Co., Ltd. Product 30,000,000.00 2,472,349.61 2,472,349.61
Development Center
Subtotal 35,920,000.00 1,830,131.25 6,423,975.90 8,254,107.15
(Continued)
Accumulated Amount of
Accumulate Completion Annual
Projects amount of borrowing cost Fund
d investment percentage capitalization
borrowing cost capitalization in source
to budget (%) rate (%)
capitalization current period
Nanjing putian
science and
technology pioneer
97.66 90.00 Self-owned
park intelligent park
fund
construction related
building intelligent
equipment.
Nanjing Putian
Datang Information
8.24 10.00 Self-owned
Electronics Co., Ltd.
fund
Product Development
Center
Subtotal
12. Intangible assets
Items Land use right Software Patent right Non-patent Total
technology
Cost
149
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Land use right Software Patent right Non-patent Total
technology
Opening balance 34,760,072.04 10,889,840.33 607,500.00 4,560,000.00 50,817,412.37
Increase 1,088,272.41 1,088,272.41
1) Acquisition 1,088,272.41 1,088,272.41
Decrease 121,725.35 121,725.35
1) Disposal 121,725.35 121,725.35
Closing balance 34,638,346.69 11,978,112.74 607,500.00 4,560,000.00 51,783,959.43
Accumulated
amortization
Opening balance 6,054,711.03 8,858,384.46 607,500.00 4,560,000.00 20,080,595.49
Increase 862,052.13 606,975.48 1,469,027.61
1) Accrual 862,052.13 606,975.48 1,469,027.61
Decrease 51,262.44 51,262.44
1) Disposal 51,262.44 51,262.44
Closing balance 6,865,500.72 9,465,359.94 607,500.00 4,560,000.00 21,498,360.66
Carrying amount
Closing balance 27,772,845.97 2,512,752.80 30,285,598.77
Opening balance 28,705,361.01 2,031,455.87 30,736,816.88
13. Long-term prepayments
Items Opening balance Increase Amortization Other decreases Closing balance
Reconstruction of 503,316.01 418,181.82 131,736.80 789,761.03
canteen
Reconstruction of 1,181,112.19 3,152,091.25 1,069,728.37 2,001,028.38 1,262,446.69
office building
Others 1,110,766.56 535,723.54 136,360.98 1,510,129.12
Total 2,795,194.76 4,105,996.61 1,337,826.15 2,001,028.38 3,562,336.84
14. Short-term borrowings
Items Closing balance Opening balance
Pledged borrowings 250,000,000.00 164,000,000.00
Mortgaged borrowings 65,010,000.00 78,550,000.00
Secured borrowings 130,000,000.00 145,000,000.00
Total 445,010,000.00 387,550,000.00
15. Notes payable and accounts payable
(1) Details
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Closing balance Opening balance
Notes payable 84,374,916.99 20,161,687.14
Accounts payable 743,028,953.62 806,672,174.17
Total 827,403,870.61 826,833,861.31
(2) Notes payable
Items Closing balance Opening balance
Trade acceptance 15,932,068.77 20,161,687.14
Bank acceptance 68,442,848.22
Total 84,374,916.99 20,161,687.14
(3) Accounts payable
1) Details
Items Closing balance Opening balance
Purchase of materials 742,212,386.80 790,597,232.04
Project payment 816,566.82 16,074,942.13
Total 743,028,953.62 806,672,174.17
2) Significant accounts payable with age over one year
Items Closing balance Reasons for unsettlement
Jiangsu Sainty Machinery 32,819,861.10 Settlement is not completed
IMP.&EXP.Co.,Ltd.
China Potevio Information Industry Inc. 19,466,652.30 Settlement is not completed
SEI-Nanjing Potevio Optical Network 18,533,668.54 Settlement is not completed
Co., Ltd.
POLYCOM Communication Technology 17,737,438.13 Settlement is not completed
(Beijing) Co., Ltd.
LDL Technology Limited 4,917,823.33 Settlement is not completed
Subtotal 93,475,443.40
16. Advances received
Items Closing balance Opening balance
Payment for goods 259,545,648.66 317,197,824.66
Total 259,545,648.66 317,197,824.66
17. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 21,033,311.73 225,416,361.50 225,317,337.04 21,132,336.19
Post-employment benefits - 27,985,490.49 27,985,490.49
defined benefit plan
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Total 21,033,311.73 253,401,851.99 253,302,827.53 21,132,336.19
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance and 11,712,169.62 137,827,939.61 138,285,582.61 11,254,526.62
subsidy
Employee welfare fund 11,740,305.55 11,740,305.55
Social insurance premium 15,288,041.80 15,288,041.80
Including: Medicare premium 13,908,588.54 13,908,588.54
Occupational injuries 537,148.99 537,148.99
premium
Maternity premium 842,304.27 842,304.27
Housing provident fund 119,044.35 11,093,719.95 11,056,231.07 156,533.23
Trade union fund and 9,202,097.76 4,370,615.43 3,851,436.85 9,721,276.34
employee education fund
Short-term paid leave 4,077,923.42 4,077,923.42
Others 41,017,815.74 41,017,815.74
Subtotal 21,033,311.73 225,416,361.50 225,317,337.04 21,132,336.19
(3) Details of defined benefit plan
Items Opening balance Increase Decrease Closing balance
Basic endowment insurance 24,895,411.93 24,895,411.93
premium
Unemployment insurance 853,269.89 853,269.89
premium
Company annuity payment 2,236,808.67 2,236,808.67
Subtotal 27,985,490.49 27,985,490.49
18. Taxes and rates payable
Items Closing balance Opening balance
VAT 11,419,693.22 10,280,548.54
Enterprise income tax 3,685,037.85 6,499,756.88
Individual income tax 233,032.97 237,453.57
Urban maintenance and 900,385.94 864,522.72
construction tax
Housing property tax 248,142.34 275,272.72
Land use tax 83,316.67 81,754.17
Education surcharge 655,635.04 614,539.00
Other taxes 4,914.99 29,169.58
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Closing balance Opening balance
Total 17,230,159.02 18,883,017.18
19. Other payables
(1) Details
Items Closing balance Opening balance
Interest payable 454,333.33 531,667.36
Dividend payable 2,018,213.38 1,692,213.38
Other payables 52,655,945.94 60,803,921.89
Total 55,128,492.65 63,027,802.63
(2) Interest payable
Items Closing balance Opening balance
Short-term borrowings interest 454,333.33 531,667.36
Total 454,333.33 531,667.36
(3) Dividend payable
Items Closing balance Opening balance
Dividend of ordinary shares 2,018,213.38 1,692,213.38
Total 2,018,213.38 1,692,213.38
(4) Other payables
Items Closing balance Opening balance
Temporary receipts payable 23,338,514.42 27,480,668.40
Unsettled installation cost 18,165,474.04 12,669,525.02
Deposits 5,611,697.12 7,451,700.88
Operating expenses 2,899,584.68 6,466,718.07
Others 2,640,675.68 6,735,309.52
Total 52,655,945.94 60,803,921.89
20. Deferred income
(1) Details
Items Opening balance Increase Decrease Closing balance
Government grants 8,664,102.90 2,300,000.00 3,667,787.90 7,296,315.00
Total 8,664,102.90 2,300,000.00 3,667,787.90 7,296,315.00
(2) Other remarks
The condition of government subsidies carried in profit and loss of current period are showed in the explanations of notes to
items of consolidated financial statements as detailed.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
21. Share capital
Movements
Items Opening balance Reserve Closing balance
Issue of Bonus Others Subtotal
transferred to
new shares shares
shares
Total shares 215,000,000.00 215,000,000.00
22. Capital reserve
Items Opening balance Increase Decrease Closing balance
Share/capital premium 139,592,332.04 139,592,332.04
Other capital reserve 45,782,201.81 45,782,201.81
Total 185,374,533.85 185,374,533.85
23. Other comprehensive income (OCI)
Current period cumulative
Closing
Items Opening balance Current period Less: OCI
Less: Attributable to Attributable to
cumulative carried forward balance
income parent non-controlling
before income transferred to
tax company interest
tax profit or loss
Items to be reclassified -4,129,619.45 -908,854.59 -817,969.13 -90,885.46 -4,947,588.58
subsequently to profit or loss
Including: Translation -4,129,619.45 -908,854.59 -817,969.13 -90,885.46 -4,947,588.58
reserve
Total -4,129,619.45 -908,854.59 -817,969.13 -90,885.46 -4,947,588.58
24. Surplus reserve
Items Opening balance Increase Decrease Closing balance
Statutory surplus reserve 589,559.77 589,559.77
Total 589,559.77 589,559.77
25. Undistributed profit
(1) Details
Items Current period Preceding period
cumulative comparative
Balance before adjustment at the end of preceding -44,605,902.63 -56,491,072.91
period
Add: Increase due to adjustment (or less: decrease) -1,980,089.01 922,223.51
Opening balance after adjustment -46,585,991.64 -55,568,849.40
Add: Net profit attributable to owners of the parent 5,859,214.84 8,982,857.76
company
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Current period Preceding period
cumulative comparative
Closing balance -40,726,776.80 -46,585,991.64
(2) Details of increase or decrease due to adjustment
Pursuant to related requirements stipulated in the CASBEs, adjustments of -1,980,089.01 yuan are made on opening balance of
undistributed profit on retroactive basis.
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
Current period cumulative Preceding period comparative
Items
Income Cost Income Cost
Revenue from main 1,927,264,745.34 1,594,738,812.81 2,209,804,002.80 1,848,219,009.54
operations
Revenue from other 68,363,027.26 48,376,709.57 44,595,403.24 32,369,061.21
operations
Total 1,995,627,772.60 1,643,115,522.38 2,254,399,406.04 1,880,588,070.75
2. Taxes and surcharge for operations
Items Current period cumulative Preceding period comparative
Urban maintenance and
4,620,799.94 5,390,988.07
construction tax
Education surcharge 3,292,038.83 4,350,866.00
Housing property tax 1,453,355.85 1,602,058.75
Land use tax 589,112.16 614,566.57
Others 965,332.41 799,118.89
Total 10,920,639.19 12,757,598.28
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 70,194,402.37 71,047,508.40
Transport fees and transport
20,909,275.08 22,277,590.51
damages
Business entertainment 20,664,396.74 23,278,939.74
Travelling expenses 15,966,752.60 16,428,798.90
Office expenses 4,199,890.00 6,170,439.90
Sales service charges 2,451,675.69 1,563,427.22
Promotion expenses 1,910,941.70 1,465,821.83
Conference expenses 1,446,273.00 2,719,394.66
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Current period cumulative Preceding period comparative
Equipment maintain fees 616,140.73 785,949.50
Others 15,162,580.36 13,889,905.78
Total 153,522,328.27 159,627,776.44
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 51,771,703.92 46,223,900.45
Consulting, intermediary and legal
6,818,156.63 4,025,123.78
fees
Depreciation and amortization 5,022,564.80 5,342,285.86
Office expenses 3,751,126.94 3,303,069.26
Lease expenses 3,406,740.99 4,745,201.46
Travelling expense 3,185,065.89 2,009,842.84
Business entertainment 2,797,113.99 2,799,167.57
Funding for Party Building 1,060,733.94
Taxes 528,279.47
Others 8,689,907.31 7,060,431.77
Total 86,503,114.41 76,037,302.46
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 55,938,206.12 48,504,130.31
Intermediate test fee 3,785,739.52 2,079,478.97
Travelling expenses 3,667,575.96 3,344,399.48
Material use 3,081,505.47 4,730,882.41
Depreciation and amortization 1,739,684.27 3,526,704.92
Commissioned development 1,221,605.55
Others 6,840,816.37 5,701,433.44
Total 76,275,133.26 67,887,029.53
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenditures 23,694,841.52 17,476,700.08
Less: Interest income 2,665,279.32 1,936,342.59
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Losses on foreign exchange -293,209.60 377,800.03
Financial institution fees 897,134.41 370,093.51
Financing fee 840,754.71
Others 66,018.86
Total 22,540,260.58 16,288,251.03
7. Assets impairment loss
Items Current period cumulative Preceding period comparative
Bad debts 9,071,391.90 10,710,178.97
Inventory write-down 11,527,903.45 6,381,420.74
Total 20,599,295.35 17,091,599.71
8. Other income
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative
loss
Government subsidies 13,702,488.41 7,848,445.31 7,065,841.22
related to income
Total 13,702,488.41 7,848,445.31 7,065,841.22
9. Investment income
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments -3,085,858.80 339,423.07
under equity method
Total -3,085,858.80 339,423.07
10. Gains on disposal of assets
The amount included in
Preceding period
Items Current period cumulative the current non-recurring
comparative
profit and loss.
Gains on disposal of 33,522,820.90 -481,922.28 33,522,820.90
non-current assets
Total 33,522,820.90 -481,922.28 33,522,820.90
11. Non-operating revenue
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Government grants 1,489,000.00 3,330,559.79 1,489,000.00
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Unpayable payables 1,332,427.34 1,332,427.34
Penalty income 65,602.74 65,602.74
Others 101,780.34 367,827.34 101,780.34
Total 2,988,810.42 3,698,387.13 2,988,810.42
12. Non-operating expenditures
Items Current period Preceding period Amount included in
cumulative comparative non-recurring profit or loss
Penalty expense 195,554.97 266,414.61 195,554.97
Donation expenditures 105,000.00 10,000.00 105,000.00
Fixed assets damages 39,364.85 39,364.85
Others 32,579.27 76,973.89 32,579.27
Total 372,499.09 353,388.50 372,499.09
13. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax expenses 4,793,925.22 10,462,423.88
Total 4,793,925.22 10,462,423.88
(2) Reconciliation of accounting profit to income tax expenses
Items Current period cumulative Preceding period comparative
Profit before tax 28,907,241.00 35,172,722.57
Income tax expenses based on
statutory tax rate applicable to the 4,336,086.15 8,793,180.64
parent company
Effect of different tax rate applicable
2,329,261.16 -1,076,036.90
to subsidiaries
Effect of prior income tax
-1,024,603.99 -518,242.07
reconciliation
Effect of non-taxable income 462,878.82 -180,081.96
Effect of non-deductible costs,
2,909,790.78 2,640,736.91
expenses and losses
Effect of deducible losses that
deferred income tax assets not -5,499,920.41
recognized in previous period
Effect of reverse of taxable 184,062.99 184,062.99
temporary differences that deferred
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Current period cumulative Preceding period comparative
income tax liabilities not recognized
in previous period
Effect of deducible temporary
differences or deductible losses not 6,085,709.68 3,216,251.42
recognized
Deduction of R&D expenditures -4,989,339.96 -2,597,447.15
Income tax expenses 4,793,925.22 10,462,423.88
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
Items Current period cumulative Preceding period comparative
Government grants 4,887,053.32 18,243,896.42
Interest income 2,665,279.32 1,936,342.59
Intercourse 14,580,000.00 53,492,754.29
VAT refund 1,674,556.65
Others 11,131,427.15 5,292,018.14
Total 34,938,316.44 78,965,011.44
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Selling and Administrative 136,557,091.67 127,383,298.87
expenses paid in cash
Interest income 22,923,883.09 26,409,249.84
Guaranteed payment 5,705,120.89
Others 4,987,581.84 318,523.32
Total 170,173,677.49 154,111,072.03
3. Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Financing fee 840,754.71
Total 840,754.71
4. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Supplement information Current period Preceding period
cumulative comparative
(1) Reconciliation of net profit to cash flow from operating
activities:
159
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Supplement information Current period Preceding period
cumulative comparative
Net profit 24,113,315.78 24,710,298.69
Add: Provision for assets impairment loss 19,831,055.59 17,091,599.71
Depreciation of fixed assets, oil and gas assets, 11,030,411.19 10,964,949.63
productive biological assets
Amortization of intangible assets 1,469,027.61 1,265,066.10
Amortization of long-term prepayments 1,337,826.15 1,853,316.84
Loss on disposal of fixed assets, intangible assets and -33,522,820.90 481,922.28
other non-current assets (Less: gains)
Fixed assets retirement loss (Less: gains) 39,364.85
Losses on changes in fair value (Less: gains)
Financial expenses (Less: gains) 24,535,596.23 17,854,500.11
Investments losses (Less: gains) 3,085,858.80 -339,423.07
Decrease of deferred tax assets (Less: increase)
Increase of deferred tax liabilities (Less: decrease)
Decrease in inventories (Less: increase) 192,165,761.08 36,587,333.90
Decrease in operating receivables (Less: increase) -318,167,229.87 -141,323,024.96
Increase of operating payables (Less: decrease) -81,336,900.34 -16,367,308.81
Others
Net cash flow from operating activities -155,418,733.83 -47,220,769.58
(2) Significant investing and financing activities not related
to cash receipts and payments:
Conversion of debt into share capital
Convertible bonds due within one year
Fixed assets rented in under finance leases
(3) Net changes in cash and cash equivalents:
Cash at the end of the period 201,369,317.42 311,056,919.17
Less: Cash at the beginning of the period 311,056,919.17 484,683,980.96
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase of cash and cash equivalents -109,687,601.75 -173,627,061.79
(2) Cash and cash equivalents
Items Closing balance Opening balance
1) Cash 201,369,317.42 311,056,919.17
Including: Cash on hand 1,886.33 5,458.17
Cash in bank on demand for payment 201,367,431.09 311,051,461.00
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
2) Cash equivalents
3) Cash and cash equivalents at the end of the period 201,369,317.42 311,056,919.17
Including: Cash and cash equivalents of parent company or 4,129,128.10 4,181,096.54
subsidiaries with use restrictions
(3) The amount of endorsement of a commercial bill that does not involve cash payments
Items Current period cumulative Preceding period comparative
Endorsement of trade acceptance 469,756,030.30 759,242,019.92
Including: For goods payment 469,756,030.30 759,242,019.92
(IV) Others
1. Assets with title or use right restrictions
Items Closing carrying amount Reasons for restrictions
Cash and bank balances 60,568,751.30 Deposit for acceptance and deposit
for L/G
Accounts receivable 52,167,500.00 Pledged borrowings
Fixed assets 31,763,049.94 Providing mortgaged guarantee for
borrowings
Intangible assets 3,393,821.96 Providing mortgaged guarantee for
borrowings
Investment property 2,274,411.81 Providing mortgaged guarantee for
borrowings
Total 150,167,535.01
Note: We remind users of financial statements that, apart from the above assets with title or use right restrictions, in order to
entrust the parent company to apply for loans from Bank of Beijing, Jiangning Sub-branch, the Company pledged its holding
equities to the parent company, which include equity of Nanjing South Telecommunications Co Ltd. 4.80 million yuan, equity
of Nanjing Putian Changle Telecommunications Equipment Co., Ltd. 5.07 million yuan, equity of Nanjing Putian Wangzhi
Electronic Co., Ltd. 60.43 million yuan, equity of Nanjing Putian Network Co., Ltd. 7.80 million yuan. The Company has
registered the equity pledge at Nanjing Jiangning Market Supervision Administration. Those equities are with use restrictions
before released.
2. Monetary items in foreign currencies
Items Closing balance in foreign Exchange rate RMB equivalent
currencies
Cash and bank balances 4,925,077.50
Including: USD 634,859.24 6.8632 4,357,165.94
EUR 522.27 7.8473 4,098.41
HKD 641,407.96 0.8762 562,001.65
GBP 208.79 8.6762 1,811.50
3. Government grants
1. Details
(1) Government grants related to income and used to compensate future relevant costs, expenses or losses
161
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Presented Closing Asset or
Opening Presented
Items under balance of income
balance of Increase under other
non-operating deferred
deferred income income related
revenue income
Government subsidies
on technical
income
development plans and 1,000,000.00 1,000,000.00
related
technical funding
targets.
Zombie enterprise income
6,893,176.00 2,300,000.00 2,896,861.00 6,296,315.00
financial aid. related
Nanjing Qinhuai
district science and
technology income
770,926.90 770,926.90
department’s high-end related
talent team project
funds subsidy
Subtotal 8,664,102.90 2,300,000.00 3,667,787.90 7,296,315.00
(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items Amounts Presented under Remarks
Qinhuai science and technology department’s reward 647,200.00 other income
Hardship enterprise subsidy 1,380,000.00 other income
Stable subsidy from Nanjing Social Insurance
341,853.32 other income
Management Center
Provincial reward of R&D 510,800.00 other income
Jiangning development zone’s intellectual property award 3,800.00 other income
Jiangning development zone’s patents subsidy 8,400.00 other income
Jiangning development zone’s reward 6,000.00 other income
Qinhuai science and technology department’s science and
500,000.00 other income
technology development funding
VAT refund by software company 6,636,647.19 other income
non-operating
Special funds for national services trading 639,000.00
revenue
non-operating
High-tech company reward 750,000.00
revenue
non-operating
Jiangning development zone’s brand reward 100,000.00
revenue
Subtotal 11,523,700.51
VI. Interest in other entities
(I) Interest in significant subsidiaries
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
1. Significant subsidiaries
(1) Basis information
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
Nanjing Putian Changle
Nanjing Nanjing Manufacture 50.70 Set up
Telecommunications
City City
Equipment Co., Ltd.
Nanjing Putian Telege Nanjing Nanjing Manufacture 45.77 Set up
Intelligent Building Ltd. City City
Nanjing South
Nanjing Nanjing Manufacture 96.99 1.38 Set up
Telecommunications
City City
Company Limited
Nanjing Mennekes Nanjing Nanjing Manufacture 75.00 Set up
Electrics Co., Ltd. City City
Nanjing Putian Nanjing Nanjing Manufacture 78.00 Set up
Network Co., Ltd. City City
Nanjing Putian Datang
Nanjing Nanjing Manufacture 40.00 Set up
Information Electronic
City City
Co., Ltd.
(2) Other remarks
1) Remarks on inconsistency between holding proportion owned and voting rights proportion owned in
subsidiaries
The Company holds 40% equity of Nanjing Putian Datang Information Electronic Co., Ltd. The Company signed the
agreement with 严耀明 (Yan Yaoming), a shareholder of Nanjing Putian Datang Information Electronic Co., Ltd., to exercise
his 21% right to vote. The agreement is valid during the period of the existence of Nanjing Putian Datang Information
Electronic Co., Ltd. The Company has 61% of the voting right during the existence period of Nanjing Putian Datang
Information Electronic Co., Ltd.
2) Basis for the control of an investee while holding its half or less than half voting rights, and the
non-control of an investee while holding its more than half voting rights
The Company holds 45.767% of voting rights in Nanjing Putian Telege Intelligent Building Ltd., the other voting rights are
decentralized. The Company has over half member of the Board of Directors, and it not only controls this company but also has
a privileged variable return by taking part in Nanjing Putian Telege Intelligent Building Ltd’s related activity. The Company
has the ability to impact the amount of return and control over Nanjing Putian Telege Intelligent Building Ltd.
2. Significant not wholly-owned subsidiaries
(1) Details
Holding Profit or loss Dividend Closing
Subsidiaries proportion of attributable to declared to balance of
non-controlling non-controlling non-controlling non-controlling
shareholders shareholders shareholders shareholders
Nanjing South
Telecommunications 1.63% 183,596.91 326,000.00 1,678,659.1
Company Limited
Nanjing Putian Telege 54.233% 9,649,164.04 7,592,620.00 67,079,451.5
Intelligent Building Ltd.
3. Main financial information of significant not wholly-owned subsidiaries
163
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(1) Assets and liabilities
Closing balance
Subsidiaries Current
Current assets Non-current Total assets Non-current Total liabilities
assets liabilities liabilities
Nanjing South
Telecommunications 342,548,804.01 4,049,249.40 346,598,053.41 243,612,832.61 243,612,832.61
Company Limited
Nanjing Putian
Telege Intelligent 263,041,060.54 37,450,502.90 300,491,563.44 176,803,061.42 176,803,061.42
Building Ltd.
(Continued)
Opening balance
Subsidiaries Current
Current assets Non-current Total assets Non-current Total liabilities
assets liabilities liabilities
Nanjing South
Telecommunications 309,537,813.81 13,592,176.13 323,129,989.94 211,408,383.03 211,408,383.03
Company Limited
Nanjing Putian
Telege Intelligent 256,432,695.75 39,896,214.78 296,328,910.53 180,433,445.64 180,433,445.64
Building Ltd.
(2) Profit or loss and cash flows
Current period cumulative
Subsidiaries Total Cash flows from
Operating Net profit comprehensive operating
revenue
income activities
Nanjing South
Telecommunications 438,495,192.19 11,263,613.89 11,263,613.89 52,316,402.25
Company Limited
Nanjing Putian Telege 332,950,645.89 17,793,037.13 17,793,037.13 13,930,731.99
Intelligent Building Ltd.
(Continued)
Preceding period comparative
Subsidiaries Total Cash flows from
Operating Net profit comprehensive operating
revenue
income activities
Nanjing South
Telecommunications 503,230,917.67 11,370,431.55 11,370,431.55 -17,569,028.23
Company Limited
Nanjing Putian Telege 357,455,410.15 21,294,286.18 21,294,286.18 23,855,136.08
Intelligent Building Ltd.
(II) Interest in joint venture or associates
1. Significant joint ventures or associates
Main Holding
Joint ventures or Place of Business nature proportion (%) Accounting
operating
associates registration Direct Indirect treatment
place
Potevio Hi-tech Nanjing Nanjing Industrial park venue 49.64 Equity
Industry Co., Ltd. City City rental management etc. method
2. Main financial information of significant associates
164
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
Current assets 161,743,478.51 190,785,584.52
Non-current assets 190,882,106.08 160,501,673.73
Total assets 352,625,584.59 351,287,258.25
Current liabilities 8,282,339.46 7,529,465.27
Non-current liabilities
Total liabilities 8,282,339.46 7,529,465.27
Non-controlling interest
Equity attributable to owners of 344,343,245.13 343,757,792.98
parent company
Proportionate share in net assets 170,931,898.92 170,641,311.95
Adjustments
Goodwill
Unrealized profit in internal
trading
Others
Carrying amount of investments 170,931,898.92 170,641,311.95
in associates
Fair value of equity investments
in associates in association with
quoted price
Operating revenue 21,089,902.43 14,951,512.04
Net profit 983,452.15 1,765,051.64
Net profit of discontinued
operations
Other comprehensive income
Total comprehensive income 983,452.15 1,765,051.64
Dividend from associates 197,567.20 444,774.40
received in current period
3. Aggregated financial information of insignificant joint ventures and associates
Opening
Items Closing balance/current
balance/preceding period
period cumulative
comparative
Joint ventures
Total carrying amount of investments 11,128,318.34 13,296,092.84
Proportionate shares in the following
items
Net profit -2,167,774.50 -515,787.30
Total comprehensive income -2,167,774.50 -515,787.30
Associates
165
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Opening
Items Closing balance/current
balance/preceding period
period cumulative
comparative
Total carrying amount of investments 1,183,862.97 3,040,101.44
Proportionate shares in the following
items
Net profit -1,406,238.47 -20,904.78
Total comprehensive income -1,406,238.47 -20,904.78
Cash dividend 450,000.00
VII. Risks related to financial instruments
The Company aims to seek the appropriate balance between the risks and benefits from its use of financial instruments and to
mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance. Based on such
objectives, the Company’s risk management policies are established to identify and analyze the risks faced by the Company, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits.
The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk,
liquidity risk, and market risk. Management have deliberated and approved policies concerning such risks, and details are:
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to
discharge an obligation.
The Company’s credit risk is primarily attributable to bank balances and receivables. In order to control such risks, the
Company has taken the following measures:
1. Bank balances
The Company deposits its bank balances in financial institutions with relatively high credit levels, hence, its credit risk is
relatively low.
2. Receivables
The Company performs credit assessment on customers who uses credit settlement on a regular basis. The Company selects
credible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on receivables, to
avoid significant risks in bad debts.
As the Company’s credit risks fall into several business partners and customers, as of December 31, 2017, 11.25% (December 31,
2016: 17.49%) of the total accounts receivable was due from the five largest customers of the Company. The Company has no
significant central credit risk.
(1) Analysis of receivables neither past due nor impaired and receivables past due but not impaired are as follows:
Closing balance
Items Past due but not impaired
Neither past due Total
nor impaired Within 1 1-2 years Over 2
year years
Notes and
accounts 805,540,443.68 116,414,243.85 921,954,687.53
receivable
166
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Closing balance
Items Past due but not impaired
Neither past due Total
nor impaired Within 1 1-2 years Over 2
year years
Other 24,688,722.26 5,852,249.67 30,540,971.93
receivables
Subtotal 830,229,165.94 122,266,493.52 952,495,659.46
(Continued)
Opening balance
Items Past due but not impaired
Neither past due Total
nor impaired Within 1 1-2 years Over 2
year years
Notes and
accounts 664,788,771.21 91,179,774.98 755,968,546.19
receivable
Other 21,000,423.00 4,758,360.87 25,758,783.87
receivables
Subtotal 685,789,194.21 95,938,135.85 781,727,330.06
(2) Please refer to notes to receivables for receivables with provision for impairment made on individual
basis.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or
other financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely
basis, or failure in collecting liabilities from counterparts of contracts, or early redemption of debts, or failure in achieving
estimated cash flows.
In order to control such risk, the Company utilized financing tools such as notes settlement and bank borrowings, etc. to
optimizing financing structures, and finally maintains a balance between financing sustainability and flexibility. The Company
has obtained credit limit from several commercial banks to meet working capital requirements and expenditures.
Financial instruments classified based on remaining time period till maturity
Closing balance
Items
Carrying amount Contract amount not Within 1 year 1-3 years Over 3 years
yet discounted
Bank 445,010,000.00 456,135,250.00 456,135,250.00
borrowings
Notes and
accounts 827,403,870.61 827,403,870.61 827,403,870.61
payable
Other 2,472,546.71 2,472,546.71 780,333.33 1,692,213.38
payable
Subtotal 1,274,886,417.32 1,286,011,667.32 1,284,319,453.94 1,692,213.38
(Continued)
Items Opening balance
167
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Carrying amount Contract amount Within one year 1-3 years Over 3 years
not yet discounted
Bank 387,550,000.00 394,339,062.52 394,339,062.52
borrowings
Notes and
accounts 826,833,861.31 826,833,861.31 826,833,861.31
payable
Other 2,223,880.74 2,223,880.74 531,667.36 1,692,213.38
payable
Subtotal 1,216,607,742.05 1,223,396,804.57 1,221,704,591.19 1,692,213.38
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value of financial instruments or
future cash flows due to changes in market price.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value of financial instruments or future cash flows
due to changes in market interest. The Company’s interest risk relates mainly to borrowings with floating interest rate.
As of December 31, 2018, balance of borrowings with interest accrued at floating interest rate totaled 445,010,000.00 yuan
(December 31, 2017: 387,550,000.00 yuan). If interest rates had been 50 basis points higher/lower and all other variables were
held constant, financial effect on the Company would be insignificantly.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in exchange rate. The Company is mainly operated in mainland China,
with a small amount of imports and exports, and its main activities are denominated in RMB, hence, the Company bears
insignificant market risk arising from foreign exchange changes.
Please refer to notes to foreign currency monetary items for details in foreign currency financial assets and liabilities at the end
of the period.
VIII. Related party relationships and transactions
(I) Related party relationships
1. Details of parent company
(1) Parent company
Registered Holding Voting right
Parent company Business capital
Place of registration proportion over proportion over
nature
(in million) the Company the Company
No.2 Tudi 2 Road,
China Potevio Information
Zhongguan Village 1,903,05 53.49% 53.49%
Information
Economy Zone, Haidian industry
Industry Inc
District, Beijing
The Company’s ultimate controlling party is China POTEVIO Corporation Limited.
2. The details of the company's important subsidiaries are illustrated in the notes to the financial statements
in other subjects.
3. Joint ventures and associates of the Company
168
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Please refer to notes to interest in other entities for details on the Company’s significant joint ventures and associates. Details of
other joint ventures or associates carrying out related party transactions with the Company in current period or in preceding
period but with balance in current period are as follows:
Joint ventures or associates Relationships with the Company
Potevio Hi-tech Industry Co., Ltd. Associates
Nanjing Potevio Telege Cable Co., Ltd. Associates
SEI-Nanjing Potevio Optical Network Co., Ltd. Joint ventures
4. Other related parties of the Company
Related parties Relationships with the Company
An affiliated company of the ultimate
Nanjing Honyar Electrical Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Nanjing Honyar Electrical Co., Ltd.
controlling party
Shanghai Potevio Post and Telecommunications Technology Co., An affiliated company of the ultimate
Ltd. controlling party
An affiliated company of the ultimate
Beijing Potevio Taili Communications Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Hangzhou Honyar Dongbei Photoelectric Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Shanghai Potevio Network Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
POTEVIO Telecommunications Co., Ltd.
controlling party
An affiliated company of the ultimate
Potevio Information Technology Co., Ltd.
controlling party
Beijing Picom Telecommunications Equipment Co., Ltd. An affiliated company of the Company
Non-controlling shareholder of the
Mennekes Electric Industrial Co., Ltd. (China)
Company’s subsidiary
An affiliated company of the ultimate
Potevio Heping Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Hangzhou Honyar Electrical Co., Ltd.
controlling party
An affiliated company of the ultimate
Potevio International Trading Co., Ltd.
controlling party
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving services
(1) Purchase of goods and receiving of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
SEI-Nanjing Potevio Optical Telecommunication 1,957,326.89 6,892,761.28
Network Co., Ltd. products
Nanjing Potevio Telege Cable Co., Telecommunication 488,838.48 29,130,281.06
Ltd. products
Nanjing Honyar Electrical Telecommunication 194,401.64
Technology Co., Ltd. products
Nanjing Honyar Electrical Co., Ltd. Telecommunication 395,742.40
169
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Related parties Content of transaction Current period Preceding period
cumulative comparative
products
China Potevio Information Industry Telecommunication 297,092.82
Inc products
Potevio Telecommunications Co., Telecommunication 1,297,363.25 1,021,988.46
Ltd. products
Mennekes Electric Industrial Co., Telecommunication 4,684,031.63 4,412,289.93
Ltd. (China) products
(2) Sale of goods and rendering of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Potevio Information Technology Telecommunication 19,354,250.44 28,052,650.90
Co., Ltd. products
China Potevio Information Industry Telecommunication 336,575,675.56 293,658,926.93
Inc products
Beijing Potevio Taili
Telecommunication 11,992.64
Communications Technology Co.,
products
Ltd.
Potevio Heping Technology Co., Telecommunication 30,769.23
Ltd. products
Telecommunication 251,865.98
Potevio Hi-tech Industry Co., Ltd.
products
SEI-Nanjing Potevio Optical Telecommunication 532,374.48
Network Co., Ltd. products
Potevio International Trading Co., Telecommunication 27,349.06 428,827.16
Ltd. products
Telecommunication 10,017.24 233,428.23
Nanjing Honyar Electrical Co., Ltd.
products
Telecommunication 61,500.00
Chengdu Putian Cable Co., Ltd.
products
Telecommunication 178,100.00
Eastern Communications Co., Ltd.
products
Putian Eastern Communication Telecommunication 1,238,450.81
Group Co., Ltd. products
Putian Science & Technology Telecommunication 1,371,335.80
Industrial Co., Ltd. products
Telecommunication 1,524,198.32
Putian Communication Co., Ltd.
products
Tianjin Putian Innovation and Telecommunication 130,639.66
Entrepreneur Technology Co., Ltd. products
2. Related party leases
(1) The Company as the lessor
Lessees Lease income for Lease income for the
Types of asset leased
current period preceding period
SEI-Nanjing Potevio Optical Buildings and 655,524.56 607,946.68
Network Co., Ltd. structures
(2) The Company as the lessee
Lease expenses Property
Lease expenses Property
Lessors Types of asset for the services for the
for current services for
leased preceding preceding
period current period
period period
170
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Lease expenses Property
Lease expenses Property
Lessors Types of asset for the services for the
for current services for
leased preceding preceding
period current period
period period
Potevio Hi-tech Buildings and 1,874,351.66 1,825,502.57 1,901,756.27 2,051,001.23
Industry Co., Ltd. structures
3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
Whether the
Guarantors Amount Commence-m
Maturity date guarantee is
guaranteed ent date
mature
China Potevio Information Industry Inc 20,000,000.00 2017/3/31 2018/1/15 YES
China Potevio Information Industry Inc 20,000,000.00 2017/3/31 2018/1/15 YES
China Potevio Information Industry Inc 30,000,000.00 2017/11/30 2018/11/30 YES
China Potevio Information Industry Inc 30,000,000.00 2017/10/9 2018/1/12 YES
China Potevio Information Industry Inc 10,000,000.00 2017/7/28 2018/1/12 YES
China Potevio Information Industry Inc 40,000,000.00 2018/10/10 2019/7/9 No
China Potevio Information Industry Inc 30,000,000.00 2018/3/9 2019/3/8 No
4. Related party entrusted loan and interest expenditure
Entrusted loans and interest expenses
with China Potevio Information Current period cumulative Preceding period comparative
Industry Inc
Entrusted loans 207,000,000.00 164,000,000.00
Entrusted interest expenses 9,459,773.88 7,624,099.99
5. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 2,310,164.00 1,390,684.00
(III) Balance due to or from related parties
1. Balance due from related parties
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Notes and
accounts
receivable
Potevio International 3,987,403.60
Trading Co., Ltd.
China Potevio 20,981,660.73 709,020.78 16,718,161.88 557,462.59
Information Industry Inc
Potevio Information 12,941,118.68 20,991,047.20
Technology Co., Ltd.
171
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Shanghai Potevio
Network Technology Co., 536,319.70 429,055.76 984,639.40 83,060.00
Ltd.
Shanghai Potevio Post 8,755,534.00 8,755,534.00 8,755,534.00 7,004,427.20
Technology Co., Ltd.
Potevio Hi-tech Industry 14,455.30
Co., Ltd.
Potevio Heping 333,706.00 333,706.00
Technology Co., Ltd.
Potevio Eastern
Communications Group 206,596.00
Co.Ltd.
SEI-Nanjing Potevio 199,000.00
Optical Network Co., Ltd.
Potevio Eastern
Communication Group 941,969.60
Co., Ltd.
Potevio Communication 1,768,070.00
Co., Ltd.
Tianjin Potevio
Innovation and 4,546.26
Technology Co., Ltd.
China Potevio
Information Industry 629,899.32 186,044.64
Group Co., Ltd.
Mannecos Industrial 12,709.44
Electric (China) Co., Ltd.
Subtotal 47,311,129.73 10,079,655.18 51,784,947.38 7,644,949.79
Advances
paid
Potevio Heping 436,294.00 436,294.00
Technology Co., Ltd.
Subtotal 436,294.00 436,294.00
Other
receivables
China Potevio 3,839,000.00 400,000.00 1,020,000.00 2,000.00
Information Industry Inc
Potevio Hi-tech Industry 1,209,297.25 255,238.96
Co., Ltd.
Potevio Eastern 30,000.00
Communications Group
Co.Ltd.
Putian Information 1,300.00
Engineering Design
Service Co., Ltd.
Potevio Information 1,203,052.00
Technology Co., Ltd.
Subtotal 6,282,649.25 400,000.00 1,275,238.96 2,000.00
2. Balance due to related parties
172
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Related parties Closing balance Opening balance
Notes and accounts
payable
SEI-Nanjing Potevio Optical Network 20,819,725.66 22,584,894.54
Co., Ltd.
China Potevio Information Industry Inc 19,641,228.50 19,466,652.30
Nanjing Putian Hongyan Electric Co., 242,595.99 266,805.30
Ltd.
Shanghai Potevio Network Technology 11,685.00 11,685.00
Co., Ltd.
Mennekes Electric Industrial Co., Ltd. 5,433,476.69 3,149,290.03
(China)
Potevio Information Technology Co., 69,950.00 845,976.50
Ltd.
Nanjing Putian Hongyan Electric 86,243.30
Technology Co., Ltd.
Subtotal 46,304,905.14 46,325,303.67
Advances received
China Potevio Information Industry Inc 223,246,886.73 282,208,394.21
Nanjing Honyar Electrical Technology 82,000.00
Co., Ltd.
Subtotal 223,246,886.73 282,290,394.21
Other payables
SEI-Nanjing Potevio Optical Network 31,165.00
Co., Ltd.
POTEVIO Telecommunications Co., 200,000.00
Ltd.
China Potevio Information Industry Inc 14,580,000.00 18,260,000.00
Subtotal 14,780,000.00 18,291,165.00
IX. Commitments and contingencies
None
X. Events after balance sheet day
None
XI. Other significant events
(I) Corrections of prior period errors
Retroactive restatement method
Financial statement
Contents of error Correction process Cumulative effects
items affected in
corrections
comparative periods
Correction of Deliberated and approved by the Cash and bank balances -274,365.37
10th meeting of the No.7
transportation Inventories -1,705,723.64
session of the Board of
173
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
costs, cost errors,Directors, errors are corrected Undistributed profit -1,980,089.01
based on retroactive restatement
bank accounts and Operating cost -3,964,698.85
method.
statements not in Selling expenses 8,453,414.13
2017 and prior
Financial expenses 3,633.26
years
Income tax expenses -908,592.01
Net profit attributable to
shareholders of the -2,902,312.52
parent company
Net asset attributable to
shareholders of the -1,980,089.01
parent company
(II) Segment information
1. Identification basis for reportable segments
Reportable segments are identified based on operating segments which are determined based on the structure of the Company’s
internal organization, management requirements and internal reporting system. The Company identified reportable segments
based on products, which include video conferencing products, generic cable products, electrical products, wiring products, and
other products. Assets and liabilities shared by different segments are allocated pro rata among segments.
The Company identified reportable segments based on products, assets and liabilities of each segment are the actual amount of
its proportion in assets and liabilities, and revenue from main operations and cost of main operations are those generated or
incurred by each product segment.
2. Financial information of reportable segments
Products segment
Video Special network
Items Generic cable Electrical Wiring products Inter-segment Total
conferencing communication
products products offsetting
products products
Revenue from 438,095,192.19 329,431,898.41 159,936,978.03 329,938,045.09 741,819,481.65 -71,956,850.03 1,927,264,745.34
main operations
Cost of main 350,079,260.49 251,844,898.81 129,682,091.07 322,000,131.86 613,799,045.44 -72,666,614.86 1,594,738,812.81
operations
-371,684,455.5
Total assets 346,598,053.41 300,491,563.44 215,685,611.14 269,942,160.40 1,359,711,359.54 2,120,744,292.41
2
-249,632,542.4
Total liabilities 243,612,832.61 176,803,061.42 120,682,709.01 232,380,621.51 1,108,900,140.04 1,632,746,822.13
6
XII. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Notes and accounts receivable
(1) Details
Items Closing balance Opening balance
174
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Notes receivable 6,620,178.00 9,184,642.99
Accounts receivable 586,635,878.62 425,563,836.97
Total 593,256,056.62 434,748,479.96
(2) Notes receivable
Closing balance Opening balance
Book balance Provision Carrying Book balance Provision Carrying
Items
for bad amount for bad amount
debts debts
Bank
6,620,178.00 6,620,178.00 5,197,239.39 5,197,239.39
acceptance
Trade
3,987,403.60 3,987,403.60
acceptance
Total 6,620,178.00 6,620,178.00 9,184,642.99 9,184,642.99
(3) Accounts receivable
1) Details
a. Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
Receivables with provision
made on a collective basis 616,632,950.89 99.70 29,997,072.27 4.86 586,635,878.62
using portfolios with similar
credit risk features
Portfolio 1 14,042,487.00 2.27 14,042,487.00
Portfolio 2 602,590,463.89 97.43 29,997,072.27 4.98 572,593,391.62
Receivable of individually
insignificant amount but 1,881,238.51 0.30 1,881,238.51 100.00
with provision made on an
individual basis
Total 618,514,189.40 100.00 31,878,310.78 5.15 586,635,878.62
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with
provision made on an
individual basis
175
Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables with provision
made on a collective basis 447,892,760.42 99.58 22,328,923.45 4.99 425,563,836.97
using portfolios with similar
credit risk features
Portfolio 1
Portfolio 2 447,892,760.42 99.58 22,328,923.45 4.99 425,563,836.97
Receivable of individually
insignificant amount but 1,881,238.51 0.42 1,881,238.51 100.00
with provision made on an
individual basis
Total 449,773,998.93 100.00 24,210,161.96 5.38 425,563,836.97
c. In portfolios, accounts receivable with provision made on a collective basis with age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 483,268,462.37
1-2 years 54,168,955.54
2-3 years 25,002,443.25 2,500,244.33 10.00
3-4 years 12,365,997.38 3,709,799.21 30.00
4-5 years 5,731,959.09 2,292,783.64 40.00
5-6 years 2,792,005.87 2,233,604.70 80.00
Over 6 years 19,260,640.39 19,260,640.39 100.00
Subtotal 602,590,463.89 29,997,072.27
2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 7,668,148.82 yuan.
3) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Book balance total balance of Provision for bad
accounts receivable debts
(%)
Beijing UniStrong Science & Technology Co., 52,167,500.00 8.43
Ltd.
Beijing Zhongrui Haotian Information 30,300,000.00 4.90
Technology Co., Ltd.
China United Network Communications Group 28,936,702.90 4.68
Co., Ltd., Henan Branch
Shenzhen PEMT Technology Co., Ltd. 27,766,504.60 4.49
Guizhou Radio and Television Information 25,728,336.70 4.16
Network Co., Ltd.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Proportion to the
Debtors Book balance total balance of Provision for bad
accounts receivable debts
(%)
Subtotal 164,899,044.20 26.66
2. Other receivables
(1) Details
Items Closing balance Opening balance
Interest receivable
Dividend receivable 400,000.00
Other receivables 30,677,389.58 41,195,020.22
Total 31,077,389.58 41,195,020.22
(2) Other receivables
1)Details
a. Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 37.21 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision
made on a collective basis 34,283,915.75 50.95 3,606,526.17 10.52 30,677,389.58
using portfolios with similar
credit risk features
Portfolio 1 6,913,310.33 10.27 6,913,310.33
Portfolio 2 27,370,605.42 40.68 3,606,526.17 13.18 23,764,079.25
Receivable of individually
insignificant amount but 4,097,886.33 6.09 4,097,886.33 100.00
with provision made on an
individual basis
Total 67,293,924.79 100.00 36,616,535.21 54.41 30,677,389.58
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
Receivables of individually
significant amount and with 28,912,122.71 37.21 28,912,122.71 100.00
provision made on an
individual basis
Receivables with provision 44,691,252.14 57.52 3,496,231.92 7.82 41,195,020.22
made on a collective basis
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount Amount Provision
% to total
proportion (%)
using portfolios with similar
credit risk features
Portfolio 1 23,644,138.80 30.43 23,644,138.80
Portfolio 2 21,047,113.34 27.09 3,496,231.92 16.61 17,550,881.42
Receivable of individually
insignificant amount but 4,097,886.33 5.27 4,097,886.33 100.00
with provision made on an
individual basis
Total 77,701,261.18 100.00 36,506,240.96 46.98 41,195,020.22
b. Other receivables of individually significant amount and with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for
debts proportion (%) provision made
Beijing Likangpu With long age
Communications Equipment 28,912,122.71 28,912,122.71 100.00 and hard to
Co., Ltd. recover
Subtotal 28,912,122.71 28,912,122.71
c. In portfolios, other receivables with provision made on a collective basis with age analysis method
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 16,702,512.55
1-2 years 4,434,733.31
2-3 years 1,908,959.22 190,895.92 10.00
3-4 years 977,998.00 293,399.40 30.00
4-5 years 285,955.00 114,382.00 40.00
5-6 years 262,992.43 210,393.94 80.00
Over 6 years 2,797,454.91 2,797,454.91 100.00
Subtotal 27,370,605.42 3,606,526.17
2) Provisions for bad debts made in current period totaled 110,294.25 yuan.
3) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 46,230,393.22 60,415,760.57
Deposits 18,558,706.28 14,639,263.54
Petty cash for business traveling 1,348,181.93 1,210,331.33
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Nature of receivables Closing balance Opening balance
Others 1,156,643.36 1,435,905.74
Total 67,293,924.79 77,701,261.18
4) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Book balance Ages total balance of Provision for
receivables other receivables bad debts
(%)
Beijing Likangpu Temporary
Communications advance payment 28,912,122.71 Over 6 years 42.96 28,912,122.71
Equipment Co., Ltd. receivable
Putian Temporary 4,097,886.33
Telecommunications advance payment Over 6 years 6.09 4,097,886.33
(H.K.) Co., Ltd. receivable
Ping An International 4,000,000.00
Financial Leasing Co., Deposits Within 1 year 5.94
Ltd.
China Potevio 3,834,000.00
Information Industry Deposits 1-3 years 5.70 46,000.00
Inc
Potevio Hi-tech Temporary 1,209,297.25
Industry Co., Ltd. advance payment Within 1 year 1.80
receivable
Subtotal 42,053,306.29 62.49 33,056,009.04
3. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Investments in 153,218,270.64 1,910,520.00 151,307,750.64 173,787,270.64 1,910,520.00 171,876,750.64
subsidiaries
Investments in associates 182,060,217.26 182,060,217.26 183,937,404.79 183,937,404.79
and joint ventures
Total 335,278,487.90 1,910,520.00 333,367,967.90 357,724,675.43 1,910,520.00 355,814,155.43
(2) Investments in subsidiaries
Provision for
Opening Closing balance
Investees Increase Decrease Closing balance impairment
of provision for
balance made in current
impairment
period
Nanjing Mennekes Electrics Co., Ltd. 57,831,011.71 57,831,011.71
Nanjing Bada Communication 5,610,000.00 5,610,000.00
Equipment Co., Ltd.
Nanjing Putian Changle
Telecommunications Equipment Co., 2,610,457.00 2,610,457.00
Ltd.
Nanjing Putian Telecommunication 1,294,510.00 1,294,510.00
Technology Co., Ltd.
Nanjing Putian Information Technology 13,860,000.00 13,860,000.00
Co., Ltd.*
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Provision for
Opening Closing balance
Investees Increase Decrease Closing balance impairment
of provision for
balance made in current
impairment
period
Nanjing Putian Telege Intelligent 3,320,003.45 3,320,003.45
Building Ltd.
Putian Telecommunications (H.K.) Co., 1,910,520.00 1,910,520.00 1,910,520.00
Ltd.
Nanjing Putian Network Co., Ltd. 7,741,140.41 7,741,140.41
Nanjing Putian Wangzhi Electronic Co., 40,997,683.00 20,569,000.00 20,428,683.00
Ltd.
Nanjing South Telecommunications 33,175,148.00 33,175,148.00
Company Limited
Nanjing Putian Datang Information 5,436,797.07 5,436,797.07
Electronic Co., Ltd.
173,787,270.6
Subtotal 20,569,000.00 153,218,270.64 1,910,520.00
4
(3) Investments in associates and joint ventures
Increase/decrease
Investees Opening balance Adjustment in
Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Joint ventures
SEI-Nanjing Potevio Optical 13,296,092.84 -2,167,774.50
Network Co., Ltd.
Subtotal 13,296,092.84 -2,167,774.50
Associates
Potevio Hi-tech Industry 170,641,311.95 488,154.17
Co., Ltd.
Subtotal 170,641,311.95 488,154.17
Total 183,937,404.79 -1,679,620.33
(Continued)
Increase/decrease
Closing
Investees Cash Closing balance balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Joint ventures
SEI-Nanjing Potevio 11,128,318.34
Optical Network Co., Ltd.
Subtotal 11,128,318.34
Associates
Potevio Hi-tech Industry 197,567.20 170,931,898.92
Co., Ltd.
Subtotal 197,567.20 170,931,898.92
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Increase/decrease
Closing
Investees Cash Closing balance balance of
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Total 197,567.20 182,060,217.26
(II) Notes to items of the parent company income statement
1. Operating revenue/ Operating cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Revenue from main 948,501,070.96 838,026,882.71 1,122,674,427.01 988,803,227.94
operations
Revenue from other 57,117,883.81 41,395,696.37 27,207,649.73 20,668,462.58
operations
Total 1,005,618,954.77 879,422,579.08 1,149,882,076.74 1,009,471,690.52
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from
long-term equity investments 24,376,700.00 25,576,700.00
under cost method
Investment income from
long-term equity investments -1,679,620.33 360,327.85
under equity method
Total 22,697,079.67 25,937,027.85
XIII. Other supplementary information
(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss of current period
Items Amount Remarks
Gains on disposal of non-current assets, including 33,483,456.05
written-off of provision for impairment
Government grant included in profit or loss (excluding
those closely related to operating activities, or regular 8,554,841.22
government grants)
Unpayable payables 1,332,427.34
Other non-operating income and expenses other than -165,751.16
the above
Subtotal 43,204,973.45
Less: enterprise income tax affected 5,400,947.05
Non-controlling interest affected (after tax) 10,482,855.69
Net non-recurring profit or loss attributable to 27,321,170.71
shareholders of the parent company
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
(II) RONA and EPS
1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average
RONA (%) Basic EPS Diluted EPS
Net profit attributable to shareholders 1.66 0.0273 0.0273
of ordinary shares
Net profit attributable to shareholders
of ordinary shares after deducting -6.08 -0.0998 -0.0998
non-recurring profit or loss
2. Calculation process of weighted average RONA
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 5,859,214.84
Non-recurring profit or loss B 27,321,170.71
Net profit attributable to shareholders of ordinary shares C=A-B -21,461,955.87
after deducting non-recurring profit or loss
Opening balance of net assets attributable to shareholders D 350,248,482.53
of ordinary shares
Net assets attributable to shareholders of ordinary shares
increased due to offering of new shares or conversion of E
debts into shares
Number of months counting from the next month when the F
net assets were increased to the end of the reporting period
Net assets attributable to shareholders of ordinary shares
decreased due to share repurchase or cash dividends G
appropriation
Number of months counting from the next month when the H
net assets were decreased to the end of the reporting period
Translation reserve I -817,969.13
increased in current period
Number of months counting
Others from the next month when
the net assets were J 6
increased or decreased to
the end of the reporting
period
Number of months in the reporting period K 12
Weighted average net assets L= D+A×1/2 352,769,105.39
+ E×F/K-G×H/K±I×J/K
Weighted average ROE M=A/L 1.66
Weighted average ROE after deducting non-recurring profit N=C/L -6.08
or loss
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 5,859,214.84
Non-recurring profit or loss B 27,321,170.71
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Items Symbols Current period
cumulative
Net profit attributable to shareholders of ordinary shares C=A-B -21,461,955.87
after deducting non-recurring profit or loss
Opening balance of total shares D 215,000,000.00
Number of shares increased due to conversion of reserve to E
share capital or share dividend appropriation
Number of shares increased due to offering of new shares F
or conversion of debts into shares
Number of months counting from the next month when the G
share was increased to the end of the reporting period
Number of shares decreased due to share repurchase H
Number of months counting from the next month when the I
share was decreased to the end of the reporting period
Number of shares decreased in the reporting period J
Number of months in the reporting period K 12.00
Weighted average of outstanding ordinary shares L=D+E+F×G/K-H×I/K-J 215,000,000.00
Basic EPS M=A/L 0.0273
Basic EPS after deducting non-recurring profit or loss N=C/L -0.0998
(2) The calculation process of diluted EPS is the same with that of basic EPS.
.
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Nanjing Putian Telecommunications Co., Ltd. 2018 Annual Report
Section XII. Documents Available for Reference
(i) Accounting statement bearing signature and seal of the legal representative, person in charge of accounting
works and person in charge of accounting institution of the Company
(ii) Original auditing report bearing seal of CPAs and signature and seal of CPA.
(iii) Text of notice and original draft that public on website appointed by CSRC within report period.
Board of Directors of
Nanjing Putian Telecommunications Co., Ltd.
23 April 2019
184
