Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
2019 Annual Report
April 2020
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section I. Important Notice, Contents and Interpretation
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, Wang Huilin, person in charge of
accounting works and Wang Huailin, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2019 Annual
Report is authentic, accurate and complete.
All directors are attend the 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.
Investors’ attention is requested to see the risk factors that the Company may be
faced in its future development which has been analyzed in the “Section IV
Discussion and Analysis of Operation” in this report.
The Company has no plans of cash dividend distributed, no bonus shares and
has no share converted from capital reserve either.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Contents
Section I Important Notice, Contents and Interpretation ..................................................................... 2
Section II Company Profile and Main Financial 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 ...................................................... 61
Section VII Preferred Stock ............................................................................................................... 68
Section VIII Convertible Bonds.........................................................................................................69
Section IX Particulars about Directors, Supervisors and Senior Executives ..................................... 70
Section X Corporate Governance ...................................................................................................... 86
Section XI Corporate Bonds...............................................................................................................93
Section XII Financial Report ............................................................................................................. 94
Section XIII Documents available for reference.............................................................................. 196
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Interpretation
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
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. (controlling
Datang Company Refers to
subsidiary of the Company)
Reporting period Refers to Year of 2019
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Nanjing Putian Telecommunications Co., Ltd. 2019 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
Putian Technology Pioneer Park, No.8 Fenghui Avenue, Yuhuatai District, Nanjing, Jiangsu
Offices add.
Province
Codes for office add. 210039
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
Putian Technology Pioneer Park, No.8 Putian Technology Pioneer Park, No.8
Contact address Fenghui Avenue, Yuhuatai District, Fenghui Avenue, Yuhuatai District,
Nanjing, Jiangsu Province Nanjing, Jiangsu Province
Tel. 86-25-69675809 86-25-69675865
Fax. 86-25-52416518 86-25-52416518
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Website for annual report publish appointed by CSRC www.cninfo.com.cn
Preparation place for annual report Office of the BOD
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)
The controlling shareholder of the Company changed to China Potevio.
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
Signing accountant Jin Jingyu, Zhang Jinghui
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 Wang Min, Zhao Fengbin 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
Changes (+,-)
2019 2018 compared with the 2017
previous year
Operating revenue (RMB) 1,338,284,194.21 1,995,627,772.60 -32.94% 2,254,399,406.04
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Net profit attributable to
shareholders of the listed -169,088,516.69 5,859,214.84 -2,985.86% 8,982,857.76
Company(RMB)
Net profit attributable to
shareholders of the listed Company
-171,904,933.41 -21,461,955.87 -700.98% 6,254,448.62
after deducting non-recurring gains
and losses(RMB)
Net cash flow arising from
22,686,114.91 -155,418,733.83 114.60% -47,220,769.58
operating activities(RMB)
Basic earnings per share
-0.79 0.03 -2,733.33% 0.04
(RMB/Share)
Diluted earnings per share
-0.79 0.03 -2,733.33% 0.04
(RMB/Share)
Weighted average ROE -66.55% 1.66% -68.21% 2.60%
Changes (+,-)
compared with the
Year-end of 2019 Year-end of 2018 Year-end of 2017
year-end of previous
year
Total assets (RMB) 1,652,005,519.44 2,120,744,292.41 -22.10% 2,114,332,229.50
Net assets attributable to
shareholder of listed Company 169,543,106.29 355,289,728.24 -52.28% 350,248,482.53
(RMB)
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.
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Q1 Q2 Q3 Q4
Operating revenue 489,849,942.04 267,347,429.76 277,519,139.93 303,567,682.48
Net profit attributable to
-36,835,612.35 -20,692,912.53 -16,033,203.08 -95,526,788.73
shareholders of the listed Company
Net profit attributable to
shareholders of the listed Company
-37,608,907.37 -21,251,648.24 -17,529,611.58 -95,514,766.22
after deducting non-recurring gains
and losses
Net cash flow arising from
-196,430,725.42 32,333,994.68 -10,104,059.42 196,886,905.07
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 2019 2018 2017 Note
Gains/losses from the disposal of
non-current asset (including the write-off 119,033.08 33,483,456.05 -481,922.28
that accrued for impairment of assets)
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 4,265,247.47 8,554,841.22 5,534,839.79
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 -185,497.35 -165,751.16 49,304.02
items
Payable unable to paid 362,546.35 1,332,427.34
Less: impact on revenue tax 154,871.99 5,400,947.05 1,150,984.62
Impact on minority shareholders’
1,590,040.84 10,482,855.69 1,187,962.59
equity (post-tax)
Total 2,816,416.72 27,321,170.71 2,728,409.14 --
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
□ 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. 2019 Annual Report
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
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 involved 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 and building
intelligent products etc., customers include domestic telecom operators, tower companies and industry customers in
the government, finance, electric power, medical, rail transit 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 etc. 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 and e-commerce industry etc. 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 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 Electronic Co., Ltd. mainly provides solar street lamp
controllers and IOT street lamp monitoring systems. .
The company has market networks covering all parts of the country, and its main customers include domestic
telecom operators and customers in various industries. The company mainly obtains business opportunities by
participating in project bidding, designs schemes according to the project requirements, produces or purchases the
equipment required by the customer, and takes responsible for the installation and debugging, and realizes the profit
after deducting the cost from the contract price. The company’s operating results are mainly affected by factors such
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
as capital expenditures, informatization investment and bidding results, fluctuations in raw material prices and
changes in other costs of telecom operators and industry customers.
During the reporting period, the situation at home and aboard was complex and severe, the downward pressure on
domestic economy increased. In terms of industry environment, 4G construction has been basically completed,
operator capital investment has slowed, competition in the communications equipment industry has intensified,
and the company’s operating pressure has further increased. On the other hand, the promotion of industrial
policies such as 5G construction, smart grid construction, and domestic informatization in the telecom industry
has also brought new development opportunities to the company. As a state-owned communications equipment
manufacturing company, the company will continue to strengthen its technological innovation capabilities,
increase the cultivation and development of independent products, and further enhance its market competitiveness
by relying on the established brand strength and influence in the industry market.
In 2019, the company became a member unit of the Jiangsu Information Technology Application Innovation
Industry Alliance, and joined the Information Technology Application Innovation Working Committee of the
China Electronics Standardization Association, and became a member unit of the Information Technology
Application Innovation Working Committee, which helped the company to improve the technical research,
product adaptation, and industrial collaboration capabilities of basic hardware products, and provided users with
safer and more reliable products and solutions. At the same time, the company has obtained first-level dealer
qualification of Huawei’s intelligent security systems (machine vision), and expanded the channel scale for the
further development.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major changes in the period
Fixed assets No major changes in the period
Intangible assets No major changes in the period
Ending balance amounted to 13.05 million yuan, an increased of 3.58 million yuan
compared with that of period-beginning, main changes: construction in progress
increased in the period with 10.26 million yuan for the product development center
Construction in progress
construction by subsidiary Putian Datang; relevant construction projects in Technology
Pioneer Park of the Company was completed in the period and transferred to fixed assets,
the construction in progress has 5.78 million yuan reduced.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Ending balance amounted to 33.76 million yuan, a decreased of 155.09 million yuan
compared with that of period-beginning, mainly due to the receipt of purchase invoices
Account paid in advance
from account paid in advance to suppliers during the reporting period, and the account
paid in advance is charged.
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
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’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. In 2019, the company
became a member unit of the Jiangsu Information Technology Application Innovation Industry Alliance, and
joined the Information Technology Application Innovation Working Committee of the China Electronics
Standardization Association, and became a member unit of the Information Technology Application Innovation
Working Committee, which helped the company to improve the technical research, product adaptation, and
industrial collaboration capabilities of basic hardware products, and provided users with safer and more reliable
products and solutions. At the same time, the company has obtained first-level dealer qualification of Huawei’s
intelligent security systems (machine vision), and expanded the channel scale for the further development. In 2019,
the company’s distributed storage software was selected into the big data excellent product and application
solution case set of the Ministry of Industry and Information Technology (2019), and was awarded the title of
“Hundred Big Data Excellent Case”. The subsidiary Southern Telecom has rich professional experience in the
field of video conferencing. In recent years, it has increased independent innovation, the proportion of
independent product operations has gradually increased, and its sustainable development capacity has been further
improved. It obtained the “2019 Chinese Government Informatization Solution Case Innovation Award” issued by
the China Information Association, and the government affairs cloud video application won the Government
Informatization Solution Innovation Award. The subsidiary Telege Building had stable and good channel
resources in integrated cabling products, paid attention to independent innovation, won the top ten brands of
integrated cabling for many years, and participated in the preparation of “Data Center 400G Network Cabling
Technology White Paper” in 2019, and “China Data Center Development Blue Paper” and other standards,
cabling products won the China Data Center Expert Recommendation Award, optical fiber pre-termination
products were recommended by experts of the Data Center Association. The industrial intelligent power
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
distribution products of the subsidiary Nanjing Mennekes had a high market share in the rail transit market
segment with high professionalism and strong competitiveness. The solar street lighting control system of the
subsidiary Putian Datang ranked ahead 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. 2019 Annual Report
Section IV Discussion and Analysis of Operation
1. Introduction
During the reporting period, the situation at home and abroad was complicated and severe, Sino-US trade frictions
continued, the downward pressure on domestic economy increased, the industry in which the company was
located was fiercely competitive, and the company faced great operating pressure and difficulties. The company
focused on the four key aspects of opening up sources, reducing expenditures, innovation, and assessment,
continuously improved the company’s development quality, strive to strengthen the company’s business
foundation, and spared no efforts in “compensating for shortcomings, strengthening the weaknesses” through
resource focus and optimized allocation, improved the basic situation of the company’s development and
promoted the company’s healthy operation.
In terms of industrial operation, we make use of the existing resources to operate, concentrate on strengthening
and deepening the leading industry, cultivate and enhance the core competitiveness of the Company in the future.
1. Focused on main business and gave full play to advantages
The company cancelled some long-term loss-making operating entities and further focused on its main business,
gave full play to its own advantages in technology, industry and customers, strengthened the foundation and
stabilized the main business development. The company’s outdoor integrated cabinets and other five types of
products participated in the selection of iron tower and were shortlisted in many provinces. It successfully entered
the project cooperation directories of Ali, Tencent, Huawei and other well-known enterprises, took advantage of
independent design and implementation, and participated in the construction of data centers such as Wuxi Mobile
Baidu Project and Nanjing Telecom Tencent Project. It participated in the informatization infrastructure
construction of the main stadium of the 7th World Military Games, and provided communication support.
Telege Building actively followed the development of the military, medical, education and other industries,
successfully completed the supply of integrated cabling products for No. 92 project of a command center, and
successfully served the venue construction of the Winter Olympics in Beijing; Southern Telecom’s Putian product
business line completed the sweeping work of insurance, county-level medical treatment and other industries, and
cooperated with Polycom manufacturers to successfully be selected as an equipment supplier of the State Taxation
Administration, and won the bid for the single-source procurement project of the Agricultural Bank’s “new
generation” video conference system transformation, the sales of independent products have increased
significantly over the same period last year. Nanjing Mennekes continued to deepen its efforts in the field of rail
transportation and successfully signed contracts for subway projects in Ningbo, Shenzhen, Beijing and other
cities.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
2.Strengthen innovation & Restore confidence
Adhere to the market-oriented, customer demand as the foothold and constantly strengthen technological
innovation, concentrate on independent R&D, and strive to achieve key application of technological innovation.
Cabling products launched high-performance flame-retardant 3A cables, eight types of cabling systems passed the
inspection of the Ministry of Industry and Information Technology, “Fengshang” new series increased two
products and low-smoke halogen-free cables, and has completed small batch production. For video conference
products, the development and small-batch trial production of Ruijing hardware dual-stream box products have
been completed and stabilized for commercial use; the software and hardware development of the new generation
of Ruijing video conference terminals has been completed, and trial prototypes have been launched; the
construction and preliminary trial of demonstration cloud platform and conference management system and test
cloud platform have been completed; the low-voltage electrical products completed the production design and
commissioning tasks of the environmental control cabinet, and were first applied to the main line of the subway.
Smart city products based on NB-IoT smart manhole covers have been successfully selected as a bidder for the
“Beijing Unicom Smart Manhole Cover” bidding and procurement project. The product research of new product
“optoelectronic integrated box for base station” has been completed and achieved sales. Datang Company further
stabilized and expanded the development of solar street lighting control system, actively explored the addition of
Internet of Things functions in products, and further improved the IoT street lighting antenna and other products.
New products such as smart power supplies, mains single-light controllers, and smart cruise ship terminal
products have all been produced in small batches.
In 2019, the company became a member unit of the Jiangsu Information Technology Application Innovation
Industry Alliance, and joined the Information Technology Application Innovation Working Committee of the
China Electronics Standardization Association, and became a member unit of the Information Technology
Application Innovation Working Committee, which helped the company to improve the technical research,
product adaptation, and industrial collaboration capabilities of basic hardware products, and provided users with
safer and more reliable products and solutions. At the same time, the company has obtained first-level dealer
qualification of Huawei’s intelligent security systems (machine vision), and expanded the channel scale for the
further development.
In terms of operation and management, the company actively promoted the establishment of rules and regulations,
improved internal control and management processes, carefully sorted out operating resources, conducted
business analysis, and controlled operating risks. During the reporting period, the company continued to sort out
and improve the internal control system and implementation, deepened reform and innovation, completed the
organization and function adjustment of the company’s management department, increased internal reorganization
of similar businesses, continued to promote procurement cost reduction, and further standardized the management
for the use of funds, persisted in carrying out business analysis, continued to promote the loss management, the
clean-up efforts of receivables and stocks, the information construction, etc., and ensured the enterprise’s healthy
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
development in various aspects.
In 2019, the company achieved operating income of 1.338 billion yuan, a year-on-year decrease of 32.94%, and
the net profit attributable to shareholders of listed companies was -169,088,500 yuan. The main reasons for the
decline in revenue and negative net profit during the reporting period were that the company further adjusted its
industrial structure, contracted old industries, and cultivated new industries, at the same time, due to the impact of
the macroeconomic situation and investment in the communications equipment industry, its operating
performance declined; the company carried out site relocation for further resource integration during the reporting
period, the current business development was affected to a certain extent, and the operation and management costs
increased. The extraordinary gains/losses of the Company for 2018 was 27.32 million yuan and there was no
extraordinary gains/losses with major amount occurred in the year; according to relevant regulation of the
accounting standards, the assets impairment provision accrual in the period was 7,3035,900 yuan.
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
2019 2018
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
Total operation
1,338,284,194.21 100% 1,995,627,772.60 100% -32.94%
revenue
Industries
Communication
industry -Main 1,191,168,506.75 89.01% 1,767,327,767.31 88.56% -32.60%
business revenue
Communication
industry -Other 19,282,451.91 1.44% 64,642,486.98 3.24% -70.17%
business revenue
Electrical industry
-Main business 125,526,053.59 9.38% 159,936,978.03 8.01% -21.52%
revenue
Electrical industry
-Other business 2,307,181.96 0.17% 3,720,540.28 0.19% -37.99%
revenue
Products
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Video conference
products- main 365,004,501.66 27.27% 438,095,192.19 21.95% -16.68%
business revenue
General cabling
products- main 359,232,741.86 26.84% 329,431,898.41 16.51% 9.05%
business revenue
Low-voltage
distribution
125,526,053.59 9.38% 159,936,978.03 8.01% -21.52%
products-main
business revenue
Private network
communication
186,594,827.60 13.94% 329,938,045.09 16.53% -43.45%
products -main
business revenue
Wiring and other
products-main 316,048,396.10 23.62% 741,819,481.65 37.17% -57.40%
business revenue
Interior offset -35,711,960.47 -2.67% -71,956,850.03 -3.61% 50.37%
Other business
21,589,633.87 1.61% 68,363,027.26 3.43% -68.42%
revenue
Regions
Domestic area-main
1,316,427,546.22 98.37% 1,907,330,806.93 95.58% -30.98%
business revenue
Domestic area
-Other business 21,589,633.87 1.61% 68,363,027.26 3.43% -68.42%
revenue
Abroad -main
267,014.12 0.02% 19,933,938.41 1.00% -98.66%
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
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Communication
industry -Main 1,191,168,506.75 970,374,365.84 18.54% -32.60% -33.77% 1.44%
business revenue
Communication
industry -Other 19,282,451.91 15,679,501.63 18.69% -70.17% -65.61% -10.77%
business revenue
Electrical
industry -Main 125,526,053.59 100,123,254.01 20.24% -21.52% -22.79% 1.32%
business revenue
Electrical
industry -Other 2,307,181.96 1,597,245.18 30.77% -37.99% -42.57% 5.52%
business revenue
Products
Main business
revenue-Video
365,004,501.66 287,063,662.67 21.35% -16.68% -18.00% 1.26%
conference
products
Main business
revenue-General 359,232,741.86 267,592,840.27 25.51% 9.05% 6.25% 1.96%
cabling products
Main business
revenue-Low-volt
125,526,053.59 100,123,254.01 20.24% -21.52% -22.79% 1.32%
age distribution
products
Main business
revenue-Private
network 186,594,827.60 183,479,607.25 1.67% -43.45% -43.02% -0.74%
communication
products
Main business
revenue-Wiring
316,048,396.10 266,872,934.55 15.56% -57.40% -56.52% -1.70%
and other
products
Interior offset -35,711,960.47 -34,634,678.90 3.02% 50.37% 52.34% 4.01%
other business
21,589,633.87 17,276,746.81 19.98% -68.42% -64.29% -9.26%
revenue
Regions
Domestic
area-main 1,316,427,546.22 1,070,337,411.38 18.69% -30.98% -32.31% 1.59%
business revenue
18
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Domestic
area-other 21,589,633.87 17,276,746.81 19.98% -68.42% -64.29% -9.26%
business revenue
Abroad -main
267,014.12 160,208.47 40.00% -98.66% -98.82% 8.05%
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 2019 2018
y-o-y
Sales volume Yuan 1,210,450,958.66 1,831,970,254.29 -33.93%
Communication
Production volume Yuan 1,133,076,301.85 1,603,585,767.76 -29.34%
industry
Inventory Yuan 165,940,178.69 243,314,835.5 -31.80%
Sales volume Yuan 127,833,235.55 163,657,518.31 -21.89%
Electrical industry Production volume Yuan 127,632,545.94 148,299,756.32 -13.94%
Inventory Yuan 43,457,107.48 43,657,797.09 -0.46%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
The main reasons why the sales volume of products in the communications industry dropped significantly on a year-on-year basis
were that the company further adjusted its industrial structure, contracted old industries, and cultivated new industries during the
reporting period, at the same time, due to the impact of the macroeconomic situation and investment in the communications
equipment industry, the sales volume decreased; the company carried out site relocation for further resource integration during the
reporting period, the current business development was affected to a certain extent.
The main reasons for the large decline in the inventory of products in the communications industry compared with the beginning of
the year were that the sales volume declined, and the production and inventory correspondingly reduced; in addition, the private
network communications products in the inventory at the beginning of the year were sold externally, and the inventory at the end of
the year decreased.
Note: Due to the wide variety of products of the company, it is difficult to unify the unit of measurement, so the sales volume,
production volume, and inventory are all expressed in amounts.
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
19
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(5) Constitute of operation cost
Industry classification
In RMB
2019 2018
Increase/decrease
Industries Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Main business
cost-Cost of raw
Communication
material 900,740,417.31 82.81% 1,374,600,698.15 83.66% -34.47%
industry
(procurement
cost)
Communication Main business
69,633,948.53 6.40% 90,456,023.59 5.51% -23.02%
industry cost- other
Communication Other business
15,679,501.63 1.44% 45,595,608.35 2.77% -65.61%
industry cost
Main business
cost-Cost of raw
Electrical
material 89,556,252.70 8.23% 120,718,703.99 7.35% -25.81%
industry
(procurement
cost)
Electrical Main business
10,567,001.31 0.97% 8,963,387.08 0.55% 17.89%
industry cost- other
Electrical Other business
1,597,245.18 0.15% 2,781,101.22 0.17% -42.57%
industry cost
Total Operation cost 1,087,774,366.66 100.00% 1,643,115,522.38 100.00% -33.80%
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) 322,579,266.98
Proportion in total annual sales volume for top five clients 24.10%
20
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Sales of related parties in annual sales from top five
15.10%
clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 No. 1 202,107,711.69 15.10%
2 No. 2 61,321,611.19 4.58%
3 No. 3 21,706,765.73 1.62%
4 No. 4 18,931,161.02 1.41%
5 No. 5 18,512,017.35 1.38%
Total -- 322,579,266.98 24.10%
Other situation of main clients
√Applicable □ Not applicable
Among the top five clients, client No. 1 is the Company’s controlling shareholder, China Potevio,and other companies that are also
controlled by China Putian Corporation.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 370,536,389.86
Proportion in total annual purchase amount for top five
36.66%
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
1 No. 1 132,165,318.10 13.08%
2 No. 2 82,511,396.00 8.16%
3 No. 3 74,048,009.58 7.33%
4 No. 4 47,065,872.95 4.66%
5 No. 5 34,745,793.22 3.44%
Total -- 370,536,389.86 36.66%
Other notes of main suppliers of the Company
□Applicable √Not applicable
3. Expenses
In RMB
21
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Increase/decrease
2019 2018 Note of major changes
y-o-y
Sales expense 146,879,432.92 153,522,328.27 -4.33%
Management expense 87,447,829.68 86,503,114.41 1.09%
Financing interest and expenses
Financial expense 30,575,151.90 22,540,260.58 35.65%
increased on a y-o-y basis in the Period
R&D expenses 71,178,941.51 76,275,133.26 -6.68%
4. Investment in R&D
√ Applicable □ Not applicable
During the reporting period, the company adhered to market orientation, based on customer needs, continuously strengthened
technological innovation, and concentrated on independent research and development. The products and projects developed during
the reporting period included Ruijing hardware dual-stream box products and the new generation of Ruijing video conference
terminal hardware and software, demo cloud platform and conference management system, test cloud platform, NB-IoT smart
manhole cover, etc. During the reporting period, the company added 13 patent authorizations and 7 software copyright registrations.
R&D investment of the Company
2019 2018 Change ratio(+/-)
Number of R&D (people) 381 438 -13.01%
Ratio of number of R&D 28.18% 28.72% -0.54%
R&D investment (Yuan) 71,178,941.51 76,275,133.26 -6.68%
R&D investment accounted for
5.32% 3.82% 1.50%
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
5. Cash flow
In RMB
Item 2019 2018 Y-o-y changes
22
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Subtotal of cash in-flow from
1,349,310,377.01 1,685,497,160.30 -19.95%
operation activity
Subtotal of cash out-flow from
1,326,624,262.10 1,840,915,894.13 -27.94%
operation activity
Net cash flow arising from
22,686,114.91 -155,418,733.83 114.60%
operating activities
Subtotal of cash in-flow from
2,081,423.80 41,013,389.72 -94.93%
investment activity
Subtotal of cash out-flow from
14,544,973.78 17,752,720.09 -18.07%
investment activity
Net cash flow from investment
-12,463,549.98 23,260,669.63 -153.58%
activity
Subtotal of cash in-flow from
547,594,317.72 455,510,000.00 20.22%
financing activity
Subtotal of cash out-flow from
550,423,917.30 432,686,230.26 27.21%
financing activity
Net cash flow from financing
-2,829,599.58 22,823,769.74 -112.40%
activity
Net increased amount of cash
7,414,549.18 -109,687,601.75 106.76%
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 growth from a year earlier: during the reporting period, the Company
actively collecting the accounts receivable, and the cash paid for raw material purchases decreased on a y-o-y basis at the same time.
Cash in-flow from investment activity and net cash flow arising from investment activity have major declined from a year earlier: the
Company received compensation for house expropriation in the previous year, and there were no major assets disposals in the current
period.
Net cash flow arising from financing activities has major declined over that of last year: the loans repayments due this year increased
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 from operation activities are
increased from a year earlier.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable □Not applicable
In reporting period, the net cash flow from operation activities was higher than net profit due to the aggressive collection of
receivables and the decrease in cash paid for raw materials.
23
Nanjing Putian Telecommunications Co., Ltd. 2019 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)
Investment income -297,833.76 0.19% N
Gain/loss of fair
0.00% N
value changes
Asset impairment -19,577,005.54 12.42% Loss on inventory valuation N
Non-operation
1,900,048.84 -1.21% N
revenue
Non-operation
368,099.84 -0.23% N
expenditure
Credit impairment
-53,458,859.20 33.91% Bad debt loss of receivable N
loss
IV. Assets and liability
1. Major changes of assets composition
Implement the new financial instrument standards, new revenue standards or new lease standards for the first time since 2019, and
adjusted relevant items of financial statement at beginning of the year
√ Applicable □ Not applicable
In RMB
Year-end of 2019 Year-begin of 2019
Ratio
Ratio in total Ratio in total Notes of major changes
Amount Amount changes
assets assets
261,270,033.2
Monetary fund 15.82% 261,938,068.72 12.46% 3.36%
8
Account 697,656,063.9
42.23% 925,277,650.11 44.01% -1.78%
receivable 6
209,397,286.1
Inventory 12.68% 286,972,632.59 13.65% -0.97%
7
Investment real
7,810,210.00 0.47% 8,397,113.98 0.40% 0.07%
estate
Long-term equity 181,762,383.5
11.00% 183,244,080.23 8.72% 2.28%
investment 0
24
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
110,722,102.5
Fix assets 6.70% 112,504,807.11 5.35% 1.35%
2
Construction in
13,048,701.59 0.79% 9,472,383.76 0.45% 0.34%
process
451,915,948.5
Short-term loans 27.36% 445,464,333.33 21.19% 6.17%
0
Long-term loans 0.00% 0.00% 0.00%
2. Assets and liability measured by fair value
√ Applicable □ Not applicable
In RMB
Accumulated
Gains/losses
fair value Impairment Amount Sales amount
Opening of fair value Other Ending
Item changes accrued in purchased in in current
number changes in the changes number
included in current period current period period
period
equity
Financial
assets
1. Receivable 3,821,550.7
12,824,200.80
financing 7
2. Other
equity
741,953.00 741,953.00
instrument
investment
4,563,503.7
Total 13,566,153.80
7
Financial
0.00 0.00
liability
Other changes
Whether there are significant changes in the measurement attributes of the major assets during the reporting period
□Yes √No
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 52,477,961.78 Note margin and guarantee margin
Monetary funds 8,204.90 Bank freeze involving litigation
Account receivable 52,167,500.00 Secured borrowings
25
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Fixed assets 32,664,415.64 Mortgage loan
Intangible assets 1,898,216.30 Mortgage loan
Total 139,216,298.62
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 transferring 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)
12,710,363.19 12,596,188.70 0.91%
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
26
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
communicati
Southern 34,205,147.8 310,221,665. 108,264,451. 365,385,454.
Subsidiary on and 5,126,391.98 7,879,081.95
Telecom Co., 3 29 89 04
application
Ltd
solutions
General
cabling,
Nanjing development,
Putian Telege production 20,000,000.0 307,977,820. 125,881,692. 362,262,442. 27,147,183.4 23,336,955.0
Subsidiary
Intelligent and sales of 0 71 18 89 5 5
Building Ltd. the building
intelligent
products
27
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Manufacture
and sales of
Nanjing software of
Putian telecommuni 10,000,000.0 38,135,813.1 22,725,435.5 -3,666,354.5 -3,667,501.1
Subsidiary 2,875,752.29
Network Co., cations, 0 0 8 9 7
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 68,946,280.3 31,803,061.7 38,539,284.7
Telecommuni Subsidiary -214,115.49 35,884.51
machinery 0 4 5 9
cations
office,
Equipment
manufacture
Co., Ltd.
and sales of
communicati
on electrical
products
Nanjing Bada Manufacture
Telecommuni of
11,301,400.0 -4,301,547.0 -1,201,200.9 -1,201,200.9
cations Subsidiary card-terminal 616,638.98 39,751.62
0 2 0 0
Equipment communicati
Co., Ltd. on equipment
Export and
import of
telecommuni
Putian
cation
Telecommuni
equipment, HK$ 2 -18,056,914.
cations Subsidiary 4,169,839.09 0.00 -51,324.68 -51,324.68
Hi-tech R & million 05
(H.K.) Co.,
D and
Ltd.
transfer,
technology
trade
Nanjing Production,
Putian sales and
59,490,000.0 24,314,269.4
Wangzhi Subsidiary processing of 9,533,485.99 0.00 -505,438.51 -505,438.51
0 4
Electronic electrical
Co., Ltd products
28
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Manufacture
Putian and sales of
Information electrical and 14,000,000.0 40,128,132.5 -2,498,671.2 -2,477,548.0
Subsidiary 2,721,928.93 635,167.16
Technology telecommuni 0 2 1 3
Company cation
Ltd. products
Electronic
components
Nanjing
assembly,
Putian
electronic
Telecommun
products, -2,047,513.2 -2,680,150.0 -2,681,059.4
ication Subsidiary 5,000,000.00 7,145,054.34 411,674.22
telecommuni 0 0 5
Technology
cation
Company
equipment,
Ltd.
Hi-tech R &
D and sales
Manufacture
Nanjing and sales of
Mennekes industrial US$ 5.2 204,517,276. 84,831,367.6 127,833,235. -6,811,839.6 -6,944,198.0
Subsidiary
Electrics Co., intelligent million 03 1 55 2 4
Ltd. distribution
products
R&D,
manufacture
and sales of
Nanjing
solar
Putian
controller,
Datang 10,000,000.0 44,664,511.7 29,112,879.9 42,349,432.3
Subsidiary and 1,856,438.02 2,457,589.12
Information 0 9 0 2
production &
Electronic
processing
Co., Ltd.
business of
electronic
products
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Notes of holding and shareholding companies
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
From the perspective of the industry environment, China’s information and communication industry was affected
29
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
by the international trade situation and business development cycle in 2019, and the growth rate of revenue
slowed. With the new generation of information technology such as 5G stimulating new market demand, it is
expected that the information and communication industry will start a new round of growth cycle in 2020.
The company will stick to its main business, actively grasp the development opportunities of the information and
communication industry, be market-oriented, optimize the company’s industrial structure, improve the core
competitiveness of its own products, and continue to promote the company to transform from traditional
communication equipment manufacturers to informatization solution providers and service providers.
Business plan of the next year
In 2020, the company will fully enter the period of industrial adjustment and system sorting, and the problems of
transformation and development will be further exacerbated. At the same time, the company’s operation will also
face greater uncertainty due to the impact of the novel coronavirus pneumonia epidemic at home and abroad. The
company will continue to adhere to the problem-oriented, strengthen the implementation of reform, and actively
meet future challenges.
Industry development
Focus on its own superior technologies, industries and customers, continue to explore technological innovations in
key applications, and strive to form unique products and solutions with distinctive characteristics. In 2020, the
company will focus on the development opportunities of localization of high-end cabling, and plan to launch a
new generation of “Yunshang” cabling system, intelligent cabling system, fiber cabling system to gain more
market shares according to user needs; combine with new automated production methods, research and develop
and launch the New Yishang series cabling system; complete the research and development of a new generation of
electronic distribution frame system and integrated cabling management platform; continue to deepen the data
center solutions, and strengthen the independent products in the data center construction. Conduct
specially-assigned persons for special projects, do a good job in marketing of key projects, and promote win-win
cooperation among internal entities based on the projects. The company will closely follow the operators’ 5G
access network and social information infrastructure construction, and dig deeper into the operators’ own 5G
construction needs. Focus on business transformation to meet the district fragmentation needs of operators. At the
same time, actively participate in the centralized procurement of the operator group, and ensure that more regular
products are shortlisted and more integration projects win the bidding. In terms of video conferencing products,
we will actively promote the diversified businesses development of the videoconferencing segment, focus on
customer needs, focus on project-type large customers to access the Internet, drain customers on the “cloud”,
increase secondary development, strive to take advantage of differentiation, and make businesses bigger.
The company will seize a new round of opportunities in scientific and technological revolution and industrial
transformation, continue to strengthen independent innovation and independent research and development
capabilities, and cultivate and enhance the company’s future core competitiveness. Develop new products such as
30
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
data centers, Putian video cloud platforms, etc.; actively explore the application of magnetic connectors, label
connectors, and light-emitting optical fiber link technologies in cabling products; accelerate the project approval
and research and development of products such as environmental monitoring cabinets, non-metallic assembled
energy-saving equipment rooms, and second-generation polycarbonate socket box, industrial plugs and sockets,
solar IoT street lighting control system, mains IoT smart power supply and other products.
In terms of operation and management, the company will continue to promote strategic adjustments in the new era,
further make reformation and adjustments, and further improve units with many historical operating problems and
poor results, strive to promote the concentration of operating resources and focus on the steady development of
main business, and actively explore the future main business and the direction of incremental development, make
efforts to promote the continuous optimization of the company’s industrial structure and have new breakthroughs
in business development. Adhere to financial-centric management of business activities, insist on regularly
holding business management analysis meetings, continue to pay close attention to the cleanup of the receivables
and stocks, and do a good job of improving the asset structure. Stabilize operating cash flow, actively explore
market, grab revenue, revitalize inventory, and improve quality. Continue to reduce costs and increase efficiency,
and strictly control all types of controllable expenses. Strengthen risk prevention and do a good job in information
construction. Continue to strengthen itself and improve quality and efficiency, and carry out work to reduce
redundant staff. Efforts should be made to revitalize inefficient and ineffective stock assets and to maximize the
resources needed for operations. Improve the personnel training system and strive to build a competitive cadre
team.
Maintain the current business and complete the capital needs of the investment project under construction:
In 2020, the company will mainly obtain the required circulating funds by dispatching its own funds and financing
to financial institutions. It is estimated that the financing scale will be around 520 million Yuan in 2020.
Risks the Company may face in the future development:
1. Risks of being affected by the epidemic
The world-wide outbreak of novel coronavirus pneumonia in 2020 will have a certain impact on the overall
market demand and industrial ecology.
In response to the sudden epidemic situation, the company strictly follows the requirements of governments at all
levels to do a good job in internal epidemic prevention and control work, while actively responding to government
requirements to organize resumption of work and production, collaborate with upstream and downstream
customers to ensure the orderly production and operation, and at the same time, actively accelerate the product
transformation and upgrading to adapt to changes in market demand, and do our best to mitigate the adverse
impacts of the epidemic on the company.
2.Cycle risk of communication industry
The Company is mainly engaged in the manufacture and sales of communications products, customers include
31
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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.
3.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.
4.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, and accelerate the transformation and upgrading of
industries and foster strategic emerging industries. 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.
5. Cash flow shortage risk
Products of the Company are used in operator network construction, subway construction and other projects.
Affected by project completion cycle and long approval process, sales return cycle is longer and the cash flow
pressure is greater.
The Company insists on budget management of funds, 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
32
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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. 2019 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.
Cash dividend of common stock in latest three years (including the reporting period)
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
-169,088,516.6
2019 0.00 0.00% 0.00 0.00% 0.00 0.00%
9
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%
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.
34
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
√Applicable □Not applicable
35
Nanjing Putian Telecommunications Co., Ltd. 2019 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. 2019 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. 2019 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
transactio
Limited and 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. 2019 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. 2019 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. 2019 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. 2019 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. 2019 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 Putian Corporation
convert the private network communication products originally purchased by China Potevio has transferred the
Information Industry Co., Ltd. (hereinafter referred to as “Potevio Shares”), a wholly-owned resources related to
subsidiary of the Group, into commissioning Nanjing Putian for production. The Group’s private downstream
Other network communication business which was originally a trade-oriented business and was purchased customers to our
China Putian
commitme by Potevio Shares from external suppliers to sell has successfully transformed into an independent 19 June 2018 Long-term company, which
Corporation
nt processing and production business in 2016, and the current business model is that Potevio Shares independently
obtains orders from customers, and then signs entrusted production contracts with Nanjing Putian operates the private
and its subsidiary Nanfang Company, and Nanjing Putian is responsible for the specific production. network
At present, the customer of Potevio Shares is Fushen Industrial Co., Ltd., and the annual order
communication
amount of the existing model products remains above 500 million Yuan, and it is predicted that there
business.
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. 2019 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.”
“In order to protect the legitimate rights and interests of all types of investors, China Potevio
Company Limited (hereinafter referred to as “Potevio Company”), as the controlling shareholder of
Completed. Found
NJ TEL B (200468), now makes the following commitments: (i) Potevio Company, as a responsible Share
more in the Progress
controlling shareholder, starting from July 8, 2015, will not reduce the company’s stock within the keeping
China in Fulfilling the
Other next six months. (ii) at present, NJ TEL B has stable operations and its main business is running commitmen
Potevio Commitments by the
commitme normally. Potevio Company will continue to promote the transformation and upgrading and 8 July 2015 t: within six
Company Controlling
nt structural adjustment of listed companies by asset restructuring and optimizing allocation of months
Limited
resources so as to vigorously improve the quality of listed companies. (iii) Potevio Company will since 8 July Shareholder
accelerate the long-term mechanism of improving the return of investors in listed companies, and 2015 released on 7 May
improve the operation quality and profitability of listed companies so as to continuously improve 2018.
investor returns.”
Completed on
Y
time(Y/N)
44
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
As for the
commitment
out of the
commitment
-
time, explain
the specific
reasons and
further plans
45
Nanjing Putian Telecommunications Co., Ltd. 2019 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
In reporting period, according to requirement of the relevant accounting standards, accounting policy has been changed by the
Company.
1. In accordance with the Notice of Ministry of Finance on Revising and Issuing the Format of General Enterprise Financial
Statement for 2019 (CK [2019] No.6), Notice of Ministry of Finance on Revising and Issuing the Format of Consolidated Financial
Statement for 2019 (CK [2019] No.16) and interpretation for the Notice, the Company prepared the financial statement of 2019 in
line with the requirement of Accounting Standards,
2. The Company implemented the Accounting Standards for Business Enterprise No.22- Recognition and Measurement of Financial
Instrument, Accounting Standards for Business Enterprise No.23- Transfer of Financial Assets, Accounting Standards for Business
Enterprise No.24- Hedging and Accounting Standards for Business Enterprise No.37-Presentation of Financial Instrument that
revised by Ministry of Finance since 1 Jan. 2019.
3.The Company implemented the revised Accounting Standards for Business Enterprise No.7- Non-monetary Assets Exchange since
10 June 2019 and the revised Accounting Standards for Business Enterprise No.12- Debt restructuring since 17 June 2019.
For details, please refer to section XII Financial Report - Significant accounting policies and estimates -27 changes of important
accounting policies and accounting estimates in the full text of the annual report.
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
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
46
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
121
Yuan)
Continuous life of auditing service for domestic accounting firm 6
Name of domestic CPA Jin Jingyu, Zhang Jinghui
Continuous service years from domestic CPA 4 years, 1 year
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 2019, auditing
fee for internal control was 0.32 million Yuan.
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.
XIII. Penalty and rectification
√ Applicable □Not applicable
Types of
Conclusion (if
Item/name Type Cause investigation Disclosure date Disclosure index
applicable)
penalty
Received a Investigated on As a chairman of
Decision on file or the Shanghai
Xu Qian Director Administrative administrative Potevio, he is the
Punishment from punishment by directly
China Securities CSRC supervisor for the
47
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Regulatory illegal acts of
Commission information
disclosure of
Shanghai Potevio.
Warned and fined
50,000 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
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)
48
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Enterpri
se with
share
particip
ated by
the
Compan
y, Notice
director Purchasi on
and ng Forecas
SEI-Nanji
senior goods t of
ng Putian Telecom Market Bank 2019-01
executiv and 0.00 0 0.00% 1,050 N 0.00 Routine
Optical product price transfer -26
e of the receivin Related
Network
Compan g Transac
y has services tion for
hold a 2019
concurr
ent post
as
director
in the
enterpri
se
Purchasi
Subsidia
ng
ry of
PutianTon goods The
controlli Telecom Market Bank 2019-01
gxin Co., and 0.00 0 0.00% 500 N 0.00 same as
ng product price transfer -26
Ltd receivin above
sharehol
g
der
services
Purchasi
Putian Subsidia
ng
Oriental ry of
goods The
Communi controlli Telecom Market Bank 2019-01
and 0.00 0 0.00% 1,000 N 0.00 same as
cations ng product price transfer -26
receivin above
Group sharehol
g
Co., Ltd. der
services
49
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Other Other Purchasi
Enterprise subsidia ng
s ries of goods The
Telecom Market Bank 2019-01
Controlle the and 15.70 15.70 0.02% 2,000 N 15.70 same as
product price transfer -26
d by actual receivin above
China controll g
Potevio er services
-Includin Other Purchasi
g:Nanjing subsidia ng
Putian ries of goods The
Telecom Market Bank 2019-01
Honyar the and 13.49 13.49 0.01% N 13.49 same as
product price transfer -26
Electrics actual receivin above
Tech. Co., controll g
Ltd er services
-Includin Other Purchasi
g:Potevio subsidia ng
Informati ries of goods The
Telecom Market Bank 2019-01
on the and 2.21 2.21 0.00% N 2.21 same as
product price transfer -26
Technolo actual receivin above
gy Co., controll g
Ltd. er services
Sale of
China Controll goods
The
Potevio ing and Telecom Market 19168.8 19,168. Bank 19168.8 2019-01
14.32% 30,480 N same as
Company sharehol provisio product price 2 82 transfer 2 -26
above
Limited der n of
services
Putian Subsidia Sale of
Informati ry of goods
The
on controlli and Telecom Market Bank 2019-01
547.55 547.55 0.41% 4,550 N 547.55 same as
Technolo ng provisio product price transfer -26
above
gy Co., sharehol n of
Ltd. der services
Subsidia Sale of
Putian ry of goods
The
Communi controlli and Telecom Market Bank 2019-01
427.87 427.87 0.32% 2,000 N 427.87 same as
cations ng provisio product price transfer -26
above
Co., Ltd. sharehol n of
der services
50
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Other
Sale of
subsidia
Actual goods
ries of The
control is and Telecom Market Bank 2019-01
the 66.52 66.52 0.05% 1,200 N 66.52 same as
China provisio product price transfer -26
actual above
Potevio n of
controll
services
er
-Includin
g:Beijig Other
Sale of
Putian subsidia
goods
Taili ries of The
and Telecom Market Bank 2019-01
Communi the 3.13 3.13 0.00% N 3.13 same as
provisio product price transfer -26
cation actual above
n of
Technolo controll
services
gy Co., er
Ltd.
Other
-Includin Sale of
subsidia
g: goods
ries of The
Hangzhou and Telecom Market Bank 2019-01
the 0.02 0.02 0.00% N 0.02 same as
Honyar provisio product price transfer -26
actual above
Electrics n of
controll
Co., Ltd services
er
Other
Sale of
subsidia
-Includin goods
ries of The
g:Eastco and Telecom Market Bank 2019-01
the 1.46 1.46 0.00% N 1.46 same as
m Co., provisio product price transfer -26
actual above
Ltd n of
controll
services
er
-Includin Other
Sale of
g:Putian subsidia
goods
Eastern ries of The
and Telecom Market Bank 2019-01
Communi the 1.63 1.63 0.00% N 1.63 same as
provisio product price transfer -26
cations actual above
n of
Group controll
services
Co., Ltd. er
51
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Other
Sale of
-Includin subsidia
goods
g: Putian ries of The
and Telecom Market Bank 2019-01
Kechuang the 60.27 60.27 0.05% N 60.27 same as
provisio product price transfer -26
Industry actual above
n of
Co., Ltd. controll
services
er
Subsidia
Putian ry of
Rent and The
Hi-Tech controlli Leased Market Bank 2019-01
Property 217.02 217.02 69.29% 500 N 217.02 same as
Industry ng property price transfer -26
Fee above
Co., Ltd sharehol
der
20,443.
Total -- -- -- 43,280 -- -- -- -- --
48
Details of major sold-out order sent
-
back
It is estimated that routine related transactions occurred in 2019 will not exceed 432.80
million Yuan (of which, the amount purchase product and received labor services from
The actual implementation of routine related party will not be more than 45.5 million Yuan, sales of product and provide labor
related transactions that is about to services to related party will not be more than 382.30 million Yuan, paying rentals and
occurred in the Period with total relevant service costs to related party will not be more than 5 million Yuan); the related
amount estimated by category (if transaction actually occurred amounted as 204.4348 million Yuan (of which, 0.157 million
applicable) Yuan from purchasing goods and receiving labor service, 202.1076 million Yuan from sales
of product and provide labor services, rental and property expenses amounted as 2.1702
million Yuan) in total that not more than expected at beginning of the year.
Reason for the great difference
between trade price and market -
reference price (if applicable)
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in 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
52
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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 applied for entrusted loan from controlling shareholder China Putian Information Industry Co., Ltd. in the reporting
period, see the relevant interim announcement for details. At the end of 2019, the balance of entrusted loans provided by the
controlling shareholders was 262 million yuan.
Website for temporary disclosure of the major connected transaction
Announcement Date of disclosure Website for disclosure
Relation Transaction of Applying Entrust Loan
2019-04-23 Juchao Website
from Controlling Shareholder
Relation Transaction of Applying Entrust Loan
2019-12-14 Juchao Website
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 subsidiaries incurred rental fees of 3.13 million yuan, and recognized rental income of
2.15 million yuan for renting out properties.
Items that bringing gain/loss to the Company more than 10% of the total profits in reporting period
□ Applicable √ Not applicable
No items generated over 10% gains/losses in total profit in reporting period for the Company
53
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
party
date
(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
party
date
(Y/N)
Jointly
Nanjing Southern 2019.6.14-20
2018-04-24 6,000 2019-06-14 2,000 liability N N
Telecom Co., Ltd. 20.6.14
guaranty
Jointly
Nanjing Southern 2019.6.21-20
2019-05-30 7,500 2019-06-21 1,000 liability Y N
Telecom Co., Ltd. 20.3.19
guaranty
Jointly
Nanjing Southern 2019.9.19-20
2019-05-30 7,500 2019-09-19 1,000 liability N N
Telecom Co., Ltd. 20.9.27
guaranty
Jointly
Nanjing Southern 2019.9.27-20
2019-05-30 7,500 2019-09-27 1,000 liability N N
Telecom Co., Ltd. 20.6.24
guaranty
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 11,900 5,000
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 11,900 5,000
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of the subsidiary for subsidiaries
Related Guarante
Announce Actual Implemen e for
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee
guaranteed limit happening type term ted (Y/N) related
disclosure limit
date party
54
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(Y/N)
Total amount of guarantee of the Company( total of three above mentioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 11,900 occurred guarantee in report 5,000
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 11,900 guarantee at the end of 5,000
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
29.49%
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
(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.
55
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
Based on the communications industry, the company adheres to independent innovation, continuously promotes
the sustainable development of itself and society, and fulfills its responsibilities and obligations to society,
shareholders, employees and other interested parties.
The company continuously improves and optimizes corporate governance, earnestly fulfills its obligation of
information disclosure, ensures shareholders’ right to know, right to participate and right to vote on major matters
of the company, and guarantees the legitimate rights and interests of all shareholders.
The company attaches great importance to quality, environment and occupational safety and health management.
It has passed GB/T19001-2016 quality management system certification, GB/T24001-2016 environmental
management system certification, and GB/T28001-2011 occupational health and safety management system
certification, and constantly strives to promote environmental protection and sustainable development.
The company strictly abides by the Labor Law, Labor Contract Law and other laws and regulations, always
adheres to the people-oriented core values, attaches great importance to the value of employees, cares about the
work, life, health and safety of employees, effectively protects the rights and interests of employees, enhances the
cohesion of the company, devotes to the realization of the joint development vision of the company and its
employees.
The company has always kept in mind the mission and responsibility of the central enterprise and is enthusiastic
about devoting itself to social welfare undertakings. Do a good job in targeted poverty alleviation, and have
participated in the “Spring Bud Project” of China Children and Teenagers’ Fund, Nanjing City Charity “One Day
Donation” and other charitable assistance and donations and public welfare activities for many years. The
company’s youth commonweal organization “Blue Dandelion” volunteer service team was rated as “Top Ten
Volunteer Organizations” by the Nanjing Youth League Committee.
The company has always been honest and trustworthy, operating in accordance with the law, actively building
partnerships with suppliers, customers, banks and other relevant stakeholders, respecting the legitimate rights and
interests of stakeholders, focusing on communication and coordination with various stakeholders, and achieving a
win-win situation of the company and stakeholders, and promoting the company’s sustained and steady
development.
56
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
2. Precise poverty alleviation social responsibility
(1) Precise poverty alleviation plan
In 2019, Nanjing Putian insisted on its own operation and participated in targeted poverty alleviation work. There
were two main aspects, the first was to continue to provide assistance to Molihua Village of Liuhe District
according to the requirements of the Party Committee of Nanjing Municipal Bureau of Industry and Information
Technology; the second was to participate in the assistance of Dari County of Qinghai Province according to the
group company’s poverty alleviation linkage requirements.
I Overall goal
Guided by the spirit of the 19th National Congress of the Party and the spirit of General Secretary Xi Jinping’s
series of important speeches, we adhere to the basic policy of targeted poverty alleviation, focus on “producing
blood” to increase the income of poor households, focus on “transfusing blood” to improve the lives of poor
households, and aim at helping poor households get rid of poverty and become better off, and adhere to the
combination of “transfusing blood” and “producing blood” to effectively help poor households.
II Main tasks
1. Adhere to overall planning and poverty alleviation through differences. In the process of assistance, strictly
implement the annual budget in accordance with the company’s actual situation.
2. Adhere to self-reliance and address both the symptoms and the root cause. Assist the village committee of
Molihua Village to improve the collective economic strength of the village; strengthen the leadership of party
building and help Jianse Township, Dari County.
III Safeguards
1. Funding assistance: strengthen communication and coordination with the village committee of Molihua Village,
and provide financial assistance within the annual budget.
2. Emotional assistance: normalize visits and condolences, strengthen liaison with low-income farmers, go
door-to-door to communicate feelings, and understand the hardships of the masses. On traditional festivals such as
the Spring Festival, pay visits to the poor households who have sudden incidents in their homes and have
difficulties in life, and make condolences in time.
3. Party construction assistance: adhere to the guidance of party construction and sign the “Party Construction
Co-construction Agreement” with the party committee of Jianshe Township, Dari County, Qinghai.
(2) Summary of annual precise poverty alleviation
In 2019, the company continued to promote targeted poverty alleviation. For the paired assistance work with
Molihua Village in Liuhe District, mainly during traditional festivals such as the Spring Festival, the company’s
leadership team led the team to go to the village and pay door-to-door visits to the low-income farmers, especially
poor households who had difficulties in life or had sudden incidents in their homes, sent the care of the party and
enterprises to the low income families, investing 10,000 yuan in condolences throughout the year, and the
condolences materials were worth about 5,000 yuan. For the joint work of poverty alleviation in Dari County,
57
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Qinghai Province, signed the “Party Construction Co-construction Agreement” with the party committee of
Jianshe Township, Dari County.
(3) Results of the poverty
Target Measurement unit Numbers/ implementation
i. Overall —— ——
In 10 thousand
Including: 1. Capital 1.0
Yuan
In 10 thousand
2. Material discount 0.5
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
1.5
alleviation work Yuan
9. Other —— ——
iii. Awards (content and grade) —— ——
(4) Follow-up of precise poverty alleviation
In 2020, Nanjing Putian’s targeted poverty alleviation work will strictly abide by the principle of living within the
means, make reasonable use of assistance funds, make full use of the advantages of industrial products, do a good
job in the local counterpart assistance to the Molihua Village of Liuhe District, and actively participate in the
poverty alleviation linkage work of targeted poverty alleviation in Dari County, Qinghai Province.
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
58
Nanjing Putian Telecommunications Co., Ltd. 2019 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 Progress of Housing Expropriation 2019.1.2 Juchao Website (www.cninfo.com.cn)
Notice on obtain Government Subsidies 2019.1.3 Juchao Website (www.cninfo.com.cn)
Notice on Resignation of Directors 2019.1.5 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 18 Session of 7 BOD 2019.1.5 Juchao Website (www.cninfo.com.cn)
st
Notice on Convening the 1 Extraordinary 2019.1.5 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
Notice on Resolution of 1st Extraordinary 2019.1.22 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
Notice on Resolution of 19th Session of 7th BOD 2019.1.26 Juchao Website (www.cninfo.com.cn)
Notice of the Forecast for Routine Related 2019.1.26 Juchao Website (www.cninfo.com.cn)
Transaction for year of 2019
Notice on Resolution of 20th Session of 7th BOD 2019.1.29 Juchao Website (www.cninfo.com.cn)
Notice on Carry Out Accounts Receivable Factoring 2019.1.29 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 21st Session of 7th BOD 2019.3.13 Juchao Website (www.cninfo.com.cn)
Notice on Carry out Financial Leasing Business 2019.3.13 Juchao Website (www.cninfo.com.cn)
Notice on Change the Continuous Supervision 2019.3.27 Juchao Website (www.cninfo.com.cn)
Sponsor Representative
Notice on obtain Government Subsidies 2019.4.4 Juchao Website (www.cninfo.com.cn)
Preliminary Earnings Estimate for 2018 2019.4.13 Juchao Website (www.cninfo.com.cn)
Performance Forecast for Q1 of 2019 2019.4.15 Juchao Website (www.cninfo.com.cn)
Notice of Director Resignation 2019.4.19 Juchao Website (www.cninfo.com.cn)
nd th
Notice on Resolution of 22 Session of 7 BOD 2019.4.23 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 9th Session of 7th 2019.4.23 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Summary of Annual Report 2018 2019.4.23 Juchao Website (www.cninfo.com.cn)
Notice on Provision for Impairment of Assets for 2019.4.23 Juchao Website (www.cninfo.com.cn)
2018
Notice on Change of Accounting Policy 2019.4.23 Juchao Website (www.cninfo.com.cn)
Notice on Related Transaction of Applying for 2019.4.23 Juchao Website (www.cninfo.com.cn)
Entrust Loans to Controlling Shareholder
Text of First Quarterly Report 2019 2019.4.30 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 24 Session of 7 BOD 2019.5.30 Juchao Website (www.cninfo.com.cn)
Notice on Guarantee for Controlling Subsidiary 2019.5.30 Juchao Website (www.cninfo.com.cn)
Notice on Convening the AGM of 2018 2019.5.30 Juchao Website (www.cninfo.com.cn)
Progress of Guarantee for Controlling Subsidiary 2019.6.18 Juchao Website (www.cninfo.com.cn)
59
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Notice on Resolution of AGM of 2018 2019.6.20 Juchao Website (www.cninfo.com.cn)
Progress of Guarantee for Controlling Subsidiary 2019.6.25 Juchao Website (www.cninfo.com.cn)
Performance Forecast for Semi-Annual of 2019 2019.7.13 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 25 Session of 7 BOD 2019.8.10 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 11th Session of 7th 2019.8.10 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Notice on Convening the 2nd Extraordinary 2019.8.10 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
Notice on Resolution of 2nd Extraordinary 2019.8.28 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
Notice on Resolution of 26th Session of 7th BOD 2019.8.30 Juchao Website (www.cninfo.com.cn)
Summary of Semi-Annual Report of 2019 2019.8.30 Juchao Website (www.cninfo.com.cn)
Notice on Change of Accounting Policy 2019.8.30 Juchao Website (www.cninfo.com.cn)
th th
Notice on Resolution of 12 Session of 7 2019.8.30 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Notice on Resolution of 27th Session of 7th BOD 2019.8.31 Juchao Website (www.cninfo.com.cn)
Progress of Guarantee for Controlling Subsidiary 2019.9.24 Juchao Website (www.cninfo.com.cn)
Notice on change of office address and contact 2019.10.8 Juchao Website (www.cninfo.com.cn)
information
Progress of Guarantee for Controlling Subsidiary 2019.10.11 Juchao Website (www.cninfo.com.cn)
Performance Forecast of 3Q of 2019 2019.10.15 Juchao Website (www.cninfo.com.cn)
Text of 3Q report of 2019 2019.10.31 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 29th Session of 7th BOD 2019.12.14 Juchao Website (www.cninfo.com.cn)
Notice on the related transaction of applying for 2019.12.14 Juchao Website (www.cninfo.com.cn)
entrusted loans from the controlling shareholder
Notice on Convening the 3rd Extraordinary 2019.12.14 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
Suggestive notice on assets to be transferred 2019.12.14 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 3rd Extraordinary 2019.12.31 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2019
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
60
Nanjing Putian Telecommunications Co., Ltd. 2019 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
61
Nanjing Putian Telecommunications Co., Ltd. 2019 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 8,918 8,861 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 note 8) applicable) (see
note 8)
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 lock-up
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,
53.49% - 0
Company Limited corporation 000 000
62
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Shenwan
Foreign 5,646,50
HongYuan (H.K.) 2.63% - 0 5,646,500
corporation 0
Limited
GUOTAI JUNAN
SECURITIES(H Foreign 5,480,11 -1,469,98
2.55% 0 5,480,114
ONGKONG) corporation 41
LIMITED
Domestic nature 2,449,73
Zheng Enyue 1.14% 5,800 0 2,449,739
person 9
Domestic nature 2,007,11
Sun Huiming 0.93% - 0 2,007,110
person 0
Guosen Securities
Foreign 1,901,88
(H.K.) Broker 0.88% 40,000 0 1,901,882
corporation 2
Co., Ltd.
Domestic nature 1,871,37
Gu Jinhua 0.87% 9,000 0 1,871,371
person 1
BOCI
Foreign 1,466,94
SECURITIES 0.68% -250,000 0 1,466,945
corporation 5
LIMITED
Domestic nature
Xiang Yan 0.42% 910,602 - 0 910,602
person
Domestic nature
Zhen Hongquan 0.39% 849,200 14,300 0 849,200
person
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
Domestically
Shenwan HongYuan (H.K.) Limited 5,646,500 listed foreign
shares
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 5,480,114 listed foreign
LIMITED shares
63
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Domestically
Zheng Enyue 2,449,739 listed foreign
shares
Domestically
Sun Huiming 2,007,110 listed foreign
shares
Domestically
Guosen Securities (H.K.) Broker
1,901,882 listed foreign
Co., Ltd.
shares
Domestically
Gu Jinhua 1,871,371 listed foreign
shares
Domestically
BOCI SECURITIES LIMITED 1,466,945 listed foreign
shares
Domestically
Xiang Yan 910,602 listed foreign
shares
Domestically
Zhen Hongquan 849,200 listed foreign
shares
Domestically
Liang Wei 772,800 listed foreign
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.
64
Nanjing Putian Telecommunications Co., Ltd. 2019 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
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 person/person in Date of foundation Organization code Main operation business
charge of the unit
65
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
66
Nanjing Putian Telecommunications Co., Ltd. 2019 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
67
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
68
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period.
69
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section IX. 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 2013-08-
Xu Qian (President M 57 0 0 0 0 0
in office 23
)
Wang Currently 2019-01-
Director M 45 0 0 0 0 0
Wenkui in office 21
Wang Deputy Currently 2019-04-
M 45 0 0 0 0 0
Wenkui President in office 19
Currently 2019-08-
Li Tong Director M 49 0 0 0 0 0
in office 27
Currently 2019-08-
Liu Yun Director F 46 0 0 0 0 0
in office 27
Currently 2017-08-
Qin Zhen Director M 51 0 0 0 0 0
in office 23
Wang Currently 2017-08-
Director F 49 0 0 0 0 0
Jinfeng in office 23
Independ
Tang Currently 2017-08-
ent F 63 0 0 0 0 0
Fuxin in office 23
Director
Independ
Xie Currently 2017-08-
ent M 56 0 0 0 0 0
Manlin in office 23
Director
Independ
Du Currently 2017-08-
ent F 51 0 0 0 0 0
Xiaorong in office 23
Director
Superviso Currently 2019-08-
Lv Dong M 48 0 0 0 0 0
r in office 27
70
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Chairman
of the
Superviso Currently 2019-08-
Lv Dong M 48 0 0 0 0 0
ry in office 28
Committe
e
Superviso Currently 2019-08-
Wei Jie F 42 0 0 0 0 0
r in office 27
Qiu Superviso Currently 2017-08-
F 46 0 0 0 0 0
Huizhen r in office 23
Wang Currently 2019-01-
GM M 45 0 0 0 0 0
Wenkui in office 04
Deputy Currently 2016-08-
Qin Zhen M 51 0 0 0 0 0
GM in office 26
Jia Deputy Currently 2018-06-
F 39 0 0 0 0 0
Haowen GM in office 29
Deputy Currently 2019-05-
Lei Xu M 51 0 0 0 0 0
GM in office 29
Chief
Wang Currently 2019-08-
Accounta M 52 0 0 0 0 0
Huailin in office 29
nt
Liu General Currently 2018-04-
F 48 0 0 0 0 0
Xiaodong counsel in office 20
Secretary
Currently 2017-08-
Li Jing of the F 44 0 0 0 0 0
in office 23
Board
Office 2017-08- 2019-01-
Liu Yun Director F 46 0 0 0 0 0
leaving 23 04
Li Office 2016-06- 2019-01-
GM M 48 0 0 0 0 0
Linzhen leaving 15 04
Director
Li (deputy Office 2017-08- 2019-04-
M 48 0 0 0 0 0
Linzhen president leaving 23 18
)
Cheng Office 2017-08- 2019-08-
Director F 49 0 0 0 0 0
Hui leaving 23 27
71
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Superviso
r
(Chairma
Zhao n of the Office 2017-08- 2019-08-
M 53 0 0 0 0 0
Xinping Superviso leaving 23 27
ry
Committe
e)
Zhang Superviso Office 2017-08- 2019-08-
F 46 0 0 0 0 0
Hong r leaving 23 27
Chief
Cao Office 2018-06- 2019-08-
Accounta M 44 0 0 0 0 0
Xurong leaving 29 29
nt
Cao Deputy Office 2019-08- 2020-04-
M 44 0 0 0 0 0
Xurong GM leaving 29 07
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Wang Wenkui Director Newly-appointed 2019-01-21 Election in Shareholder General Meeting
Wang Wenkui Deputy President Newly-appointed 2019-04-19 Election of the board of directors
Li Tong Director Newly-appointed 2019-08-27 Election in Shareholder General Meeting
Liu Yun Director Newly-appointed 2019-08-27 Election in Shareholder General Meeting
Lv Dong Supervisor Newly-appointed 2019-08-27 Election in Shareholder General Meeting
Chairman of the
Lv Dong Supervisory Newly-appointed 2019-08-28 Election of the board of supervisors
Committee
Wei Jie Supervisor Newly-appointed 2019-08-27 Election in Shareholder General Meeting
Wang Wenkui GM Newly-appointed 2019-01-04 Appointment by the Board
Lei Xu Deputy GM Newly-appointed 2019-05-29 Appointment by the Board
Cao Xurong Deputy GM Newly-appointed 2019-08-29 Appointment by the Board
Wang Huailin Chief accountant Newly-appointed 2019-08-29 Appointment by the Board
Liu Yun Director Office leaving 2019-01-04 Resignation
Contract After deliberation and approval by the board of directors,
Li Linzhen GM 2019-01-04
termination no longer serve as general manager
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Director (deputy
Li Linzhen Office leaving 2019-04-18 Resignation
president )
After deliberation and approval by the general meeting of
Cheng Hui Director Office leaving 2019-08-27
shareholders, no longer serve as director
Supervisor
(Chairman of the After deliberation and approval by the general meeting of
Zhao Xinping Office leaving 2019-08-27
Supervisory shareholders, no longer serve as supervisor
Committee)
After deliberation and approval by the general meeting of
Zhang Hong Supervisor Office leaving 2019-08-27
shareholders, no longer serve as supervisor
Appoint and Appointed as deputy general manager after deliberation
Cao Xurong Chief accountant 2019-08-29
dismiss by the board of directors, no longer as chief accountant
Resigned by deputy general manager after approval by
Cao Xurong Deputy GM Office leaving 2020-04-07
the board of directors
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, 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 holds a concurrent post as Director and President of the Company since August 2013.
Wang Wenkui, male, born in 1974, bachelor of 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
73
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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 holds a concurrent post as Director of the Company since January 2019 (serve as vice chairman of t he Company
since April 2019).
Li Tong, male, born in 1970, master of business administration, joined the work in 1993. He worked in the Enterprise Management
Department of China Posts and Telecommunications Industry Corporation from July 1993 to September 1999; he successively served
as Director and deputy general manager of the Enterprise Management Department, deputy director of Corporate Restructuring
Office, and concurrently deputy general manager of Corporate Development Division and manager of Corporate Operations
Department I of China Potevio Information Industry Group Corporation from September 1999 to November 2005; from November
2005 to December 2007, he served as deputy general manager of Corporate Development Division and manager of Corporate
Operations Department I, and deputy general manager of Corporate Development Division of China Potevio Information Industry
Co., Ltd.; from December 2007 to December 2011, he served as general manager of Nanjing Putian Communication Technology
Industrial Park Co., Ltd.; from May 2011 to December 2011, he concurrently served as deputy general manager, deputy secretary of
the Party Committee, and secretary of the Discipline Inspection Committee of Nanjing Putian Communication Co., Ltd. (August
2011); he served as party secretary and deputy general manager (concurrently) of Nanjing Putian Communication Co., Ltd. from
December 2011 to May 2013; and served as general manager of the Audit and Supervision Legal Department of China Potevio
Information Industry Co., Ltd. from May 2013 to May 2014; from May 2014 to March 2015, he served as the deputy leader of the
Discipline Inspection Group of the Leading Party Group of China Potevio Information Industry Group Corporation, and general
manager (concurrently) of the Audit and Supervision Legal Department of China Potevio Information Industry Co., Ltd.; from March
2015 to December 2017, he served as the director of the General Manager Office of China Potevio Information Industry Group
Corporation, the general manager of the General Affairs Department of China Potevio Information Industry Co., Ltd., and the deputy
leader of the Discipline Inspection Group of the Leading Party Group of the Group; from December 2017 to October 2018, he served
as secretary of the Board of Directors, and concurrently director of the General Office and director of the General Manager (President)
Office (Board Office) of China Potevio Information Industry Group Corporation (China Potevio Information Industry Co., Ltd.);
from October 2018 to November 2019, he served as secretary of the Board of Directors, and concurrently director of the General
Office and director of the Board Office of China Potevio Information Industry Group Corporation (China Potevio Information
Industry Co., Ltd.); from November 2019 to the present, he has been serving as secretary of the Board of Directors, and concurrently
general manager of the General Management Department and director of the Board Office of China Potevio Information Industry
Group Corporation (China Potevio Information Industry Co., Ltd.).
Mr. Li Tong holds a concurrent post as Director of the Company from May 2006 to August 2017; holds a concurrent post as Director
of the Company since August 2019.
Liu Yun, female, born in 1973, master of economics, joined work in 1997. She worked in the Office and Finance Department of
China National Textiles Import and Export Corporation from April 1997 to January 2002; she served as assistant general manager of
Investment Department of China National Textiles Import and Export Corporation from January 2002 to June 2004; from June 2004
to October 2006, she served as assistant general manager of Chinatex International Apparel Co., Ltd.; from October 2006 to April
2007, she served as the financial director of the Preparation Office of the Infolex LLc Beijing Office; from April 2007 to October
2013, she successively served as the investment management supervisor and the investment management manager of Enterprise
Development Department of China Potevio Information Industry Co., Ltd.; from October 2013 to October 2018, she successively
served as the assistant general manager and deputy general manager (October 2016) of Enterprise Development Department of China
Potevio Information Industry Co., Ltd.; from October 2018 to June 2019, she served as the deputy general manager of Putian
74
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Innovation and Entrepreneurship Management Co., Ltd.; from June 2019 to the present, she has been the general manager of the
Enterprise Operation Department of China Potevio Information Industry Group Corporation.
Ms. Liu Yun holds a concurrent post as Director of the Company from August 2007 to January 2019; holds a concurrent post as
Director of the Company since August 2019.
Qin Zhen (Male), born in 1969, bachelor of engineering, 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 holds a concurrent post as Director of the Company since August 2017.
Wang Jinfeng (Female), born in 1970, bachelor of economics, 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 holds a concurrent post as Director of the Company since August 2017.
Tang Fuxin (Female), born in 1956, obtaining a master's degree, a senior accountant, 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 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 holds a concurrent post as independent director of the Company since August 2017.
Xie Manlin (Male), born in 1963, Master of 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 holds a concurrent post as independent director of the Company since August 2017.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Du Xiaorong (Female), born in 1968, doctor of management, major in technical 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 holds a concurrent post as independent director of the Company since August 2017.
Supervisor:
Lv Dong, male, born in 1971, master of management, joined the work in 1995. From August 1995 to December 1999, he served as an
accounting accountant of the Finance Office of Beijing Power Equipment Group Co., Ltd.; from December 1999 to October 2000, he
served as the auditor of the Audit Branch of North China Power Bureau; from October 2000 to October 2001, he was seconded to the
13th Office of the Board of Supervisors of the Central Enterprise Work Committee; he acted as the project manager of Tianhua
Certified Public Accountants from October 2001 to February 2002; he acted as the auditor of the Audit Department of China Potevio
Information Industry Group Corporation from February 2002 to April 2006; from April 2006 to September 2011, he served as the
audit business manager and deputy manager (May 2010) of the Audit Department of China Potevio Information Industry Co., Ltd.;
from September 2011 to July 2017, he served as the manager of the Audit Department and the Audit and Supervision Legal
Department of China Potevio Information Industry Co., Ltd.; from July 2017 to October 2018, he served as the deputy general
manager of the Audit and Supervision Legal Department and the manager of the Audit Department (concurrently) of China Potevio
Information Industry Co., Ltd.; from October 2018 to the present , he has been serving as the deputy general manager of the Audit
Department of China Potevio Information Industry Group Corporation.
Mr. Lv Dong holds a concurrent post as supervisor, chairman of the Supervisory Committee in the Company since August 2019
Wei Jie, female, born in 1977, master of law, joined work in 2001. From July 2001 to September 2002, she served as a legal specialist
of Beijing Urban Construction First Construction Engineering Co., Ltd.; from October 2005 to October 2018, he successively served
as a lawyer and chief lawyer of the Legal Affairs Department of the Comprehensive Management Department, and a supervisor
lawyer, senior lawyer, legal manager (June 2016) of the Audit and Supervision Legal Department of China Potevio Information
Industry Co., Ltd.; from October 2018 to November 2019, she served as the director of the Discipline Inspection Case Review Office
of the Legal Risk Control Department of China Potevio Information Industry Group Corporation; from November 2019 to the
present, she has been serving as the legal manager of the Legal Risk Control Department of China Potevio Information Industry
Group Corporation.
Ms. Wei Jie holds a concurrent post as supervisor in the Company since August 2019.
Qiu Huizhen (Female), born in 1973, bachelor of economics. 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
76
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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 holds 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 of 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 Telecommunications Co., Ltd.
Lei Xu, male, born in 1968, Doctor of Engineering, joined work in 1989. He worked in Wuhan Changjiang Transformer Factory from
July 1989 to July 1992, served as a product quality inspector; from July 1995 to October 2005, he worked at Harbin University of
Science and Technology, engaged in teaching and scientific research; from November 2005 to July 2008, he worked at Putian
Information Technology Research Institute, served as a physical layer algorithm research engineer of the Wireless Access Technology
Department of the 4G Project Department; from August 2008 to December 2013, he worked at Putian Information Technology
Research Institute Co., Ltd., and served as the manager of the System Planning Department / Wireless Access Technology
Department; from January 2014 to June 2016, he worked at Putian Information Technology Co., Ltd. and served as the standards and
national special director; from July 2016 to December 2017, he worked at Putian Information Technology Co., Ltd. as the product
director of the 5th Marketing Department (information security product lines); from January 2018 to December 2018, he worked in
Yingtan City, Jiangxi Province as an assistant to the mayor (taking a temporary post); from January 2019 to April 2019, he worked at
Putian Information Technology Co., Ltd. as the product director of the 5 th Marketing Department (information security product lines);
from May 2019 to the present, he has been serving as deputy general manager of Nanjing Putian Telecommunications Co., Ltd.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Wang Huailin, male, born in 1967, master of engineering, senior accountant, started working in 1991. He worked as a teacher at
Funan Normal College in Anhui Province from July 1991 to September 1995; from July 1998 to December 1999, he worked as an
employee of the Finance Department of Eastcom Co., Ltd.; from December 1999 to July 2001, he served as the financial manager of
the Electronic Equipment Department of Eastcom Co., Ltd.; from July 2001 to July 2005, he served as the financial director of
Hangzhou Lingtong Electronic Equipment Co., Ltd.; from July 2005 to March 2011, he served as the financial controller of Hefei
Dongxin Real Estate Development Co., Ltd.; from March 2011 to April 2012, he successively served as deputy general manager of
the Financial Department of Putian Eastcom Group Co., Ltd., and financial director of Hefei Dongxin Real Estate Development Co.,
Ltd.; from March 2012 to April 2012, he served as a committee member of Discipline Inspection Commission and deputy general
manager of Finance Department of Putian Eastcom Group Co., Ltd., and chief financial officer of Hefei Dongxin Real Estate
Development Co., Ltd.; from April 2012 to October 2018, he served as a committee member of Discipline Inspection Commission
and general manager of Finance Department of Putian Eastcom Group Co., Ltd., and concurrently chief financial officer of Hefei
Dongxin Real Estate Development Co., Ltd.; from October 2018 to August 2019, he served as a committee member of Discipline
Inspection Commission and general manager of Finance Department of Putian Eastcom Group Co., Ltd.; from August 2019 to the
present, he has been serving as chief accountant of Nanjing Putian Telecommunications Co., Ltd.
Liu Xiaodong (female) born in 1971, bachelor of economics, 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, master of 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.
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 2016-05-05 Y
78
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Director,
Executive
Director,
Xu Qian China Potevio Company Limited 2011-05-19 Y
member of
the executive
council
Deputy GM
Wang Jinfeng China Potevio Company Limited of Finance 2017-12-13 Y
dept.
Secretary of
the board of
directors,
general
manager of
general
Li Tong China Potevio Company Limited 2019-11-09 N
management
department
and director
of the office
of the board
of directors
Li Tong China Potevio Company Limited Director 2019-12-30 N
Lv Dong China Potevio Company Limited Supervisor 2019-12-30 N
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 China Potevio Company Limited the Party 2017-12-27 N
Committee,
Deputy GM
Director,
Xu Qian Potevio Guomai Networks Ltd 2012-10-23 N
President
Beijig Putian Taili Communication Director,
Xu Qian 2015-06-11 N
Technology Co., Ltd. President
Director,
Xu Qian Shanghai Potevio Co., Ltd. 2015-11-20 N
President
79
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Putian Eastern Communications Group Co., Director,
Xu Qian 2016-05-30 N
Ltd. President
Director,
Xu Qian Hangzhou Honyar Electric Co., Ltd. 2017-06-28 N
President
Executive
Xu Qian Putian International Trade Co., Ltd. 2019-09-30
director
Secretary of
the board of
directors,
general
manager of
general
Li Tong China Potevio Company Limited 2019-11-09 Y
management
department
and director
of the office
of the board
of directors
General
Manager of
Liu Yun China Potevio Company Limited Enterprise 2019-06-28 Y
Operation
Department
Shanghai Putian Kechuang Electronic Co., Director
Liu Yun 2015-07-09 N
Ltd.
Puxing Mobile Communication Equipment Director
Liu Yun 2015-12-21 2019-12-23 N
Co., Ltd
Liu Yun Hangzhou Honyar Electric Co., Ltd. Director 2016-07-07 N
Liu Yun Chengdu Putian Cable Co., Ltd. Director 2017-01-13 N
Liu Yun Putian Logistics Technology Co., Ltd. Director 2017-02-28 N
Liu Yun Potevio New Energy Co., Ltd Director 2018-04-13 N
Qin Zhen Putian Hi-Tech Industry Co., Ltd Director 2016-12-01 N
Beijig Putian Taili Communication Director
Wang Jinfeng 2015-06-19 N
Technology Co., Ltd.
Wang Jinfeng Puxing Mobile Telecom Equipment Ltd Director 2015-12-21 N
Xie Manlin Jiangsu Xie Manlin Laws Firm Executive 1994-12-01 Y
Independent
Xie Manlin Jiangsu NandaSoft Company Limited 2011-06-10 Y
director
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Professor,
Head of
Du Xiaorong Business School of Hohai University 2013-06-15 Y
Accounting
Dept.
Deputy GM
Lv Dong China Potevio Company Limited 2018-10-29 Y
of Audit Dept.
Lv Dong Wuhan Putian Power Co., Ltd. Supervisor 2016-05-24 N
Lv Dong Jingdezhen Putian Technology Co., Ltd. Supervisor 2015-06-16 N
Puxing Mobile Communication Equipment
Lv Dong Supervisor 2015-12-21 N
Co., Ltd
Putian Information Engineering Design
Lv Dong Supervisor 2016-08-04 N
Service Co., Ltd.
Supervisor,
Chairman of
Beijig Putian Taili Communication
Lv Dong the 2018-07-11 N
Technology Co., Ltd.
Supervisory
Committee
Lv Dong Putian International Trade Co., Ltd. Supervisor 2018-07-11 N
Legal
Manager of
Wei Jie China Potevio Company Limited Legal Risk 2019-11-14 Y
Management
Department
Wei Jie Putian Yintong Payment Co., Ltd. Supervisor 2016-05-17 N
Putian Guomai Network Technology Co.,
Wei Jie Supervisor 2016-12-02 N
Ltd.
Concurrently Hangzhou Dongxin Trading
Wang Huailin Supervisor 2015-04-13 N
Co., Ltd.
Hangzhou Dongxin Venture Capital Co.,
Wang Huailin Supervisor 2015-12-11 N
Ltd.
Wang Huailin Hangzhou Dongxin Industry Co., Ltd. Supervisor 2015-03-30 N
Hangzhou Dongxin Photoelectric
Wang Huailin Supervisor 2015-03-30 N
Technology Co., Ltd.
Liu Xiaodong Putian Hi-Tech Industry Co., Ltd Supervisor 2018-11-09 N
Note of
post-holding in Among the other units mentioned above, China Potevio Company Limited is the actual controller of the Company.
other unit
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
√ Applicable □ Not applicable
In 2018, as a current director of Shanghai Putian, Mr. Li Linzhen was warned and fined 40000 yuan by Shanghai Securities
Regulatory Bureau for the information disclosure of Shanghai Putian.
In 2019, as a current chairman of Shanghai Putian, Mr. Xu Qian was warned and fined 50000 yuan by CSRC for the information
disclosure of Shanghai Putian.
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 Currently in
Xu Qian M 57 Y
(President) office
Director (deputy Currently in
Wang Wenkui M 45 N
president ) office
Currently in
Li Tong Director M 49 Y
office
Currently in
Liu Yun Director F 46 Y
office
Currently in
Qin Zhen Director M 51 N
office
Currently in
Wang Jinfeng Director F 49 Y
office
Independent Currently in
Tang Fuxin F 63 9N
Director office
Independent Currently in
Xie Manlin M 56 9N
Director office
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Independent Currently in
Du Xiaorong F 51 9N
Director office
Supervisor
(Chairman of the Currently in
Lv Dong M 48 Y
Supervisory office
Committee)
Currently in
Wei Jie Supervisor F 42 Y
office
Currently in
Qiu Huizhen Supervisor F 46 19.66 N
office
Currently in
Wang Wenkui GM M 45 36.49 N
office
Currently in
Qin Zhen Deputy GM M 51 23.97 N
office
Currently in
Jia Haowen Deputy GM F 39 22.47 N
office
Currently in
Lei Xu Deputy GM M 51 12.23 N
office
Currently in
Wang Huailin Chief Accountant M 52 8.49 N
office
Currently in
Liu Xiaodong General counsel F 48 22.47 N
office
Secretary of the Currently in
Li Jing F 44 20.98 N
Board office
Director (deputy
Li Linzhen M 48 Office leaving 8.56 Y
president ), GM
Cheng Hui Director F 49 Office leaving Y
Supervisor
(Chairman of the
Zhao Xinping M 53 Office leaving Y
Supervisory
Committee)
Zhang Hong Supervisor F 46 Office leaving N
Deputy GM,
Chief
Cao Xurong M 44 Office leaving 23.97 N
Accountant(Succ
essively)
Total -- -- -- -- 226.29 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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) 479
The number of On-the-job staff of major subsidiaries (people) 873
The total number of on-the-job staff (people) 1,352
Total number of staff receiving remuneration in the current
1,598
period (people)
The number of the retired staff of the parent Company and the
400
major subsidiaries bearing the expenses (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 357
Salesman 460
Technical staff 381
Financial staff 35
Administrative staff 119
Total 1,352
Education background
Category of education Number (people)
Master’s degree above 29
Bachelor 547
Junior college 484
High School and above 292
Total 1,352
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
the staff. At the same time, the company attaches great importance to the improvement of employees' comprehensive capabilities and
closely follows the development trend of the industry, we will continue to innovate talent training methods, 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. 2019 Annual Report
Section X. Corporate Governance
I. Corporate governance of the Company
In reporting period, by strictly followed requirement of relevant laws, regulations and regulatory documents 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, combined with the actual
situation of the company, the Company constantly improve structure of the corporate governance, standardize company operations
and improve corporate governance. The internal governance structure of the company is sound, 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
First Extraordinary First Extraordinary
Extraordinary
Shareholders Shareholders
Shareholders 53.53% 2019-01-21 2019-01-22
General Meeting of General Meeting of
General Meeting
2019 2019 on Juchao
Website
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Resolution Notice of
Annual General
AGM 55.20% 2019-06-19 2019-06-20 AGM of 2018 on
Meeting 2018
Juchao Website
Resolution Notice of
Second Second
Extraordinary Extraordinary Extraordinary
Shareholders Shareholders 53.61% 2019-08-27 2019-08-28 Shareholders
General Meeting of General Meeting General Meeting of
2019 2019 on Juchao
Website
Resolution Notice of
Third
Third Extraordinary
Extraordinary Extraordinary
Shareholders
Shareholders 55.22% 2019-12-30 2019-12-31 Shareholders
General Meeting of
General Meeting General Meeting of
2019
2019 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 1 11 0 0N 0
Du Xiaorong 12 0 12 0 0N 2
Explanation of absent the Board Meeting for the second time in a row
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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 2019, 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 of the board of directors, issued independent opinions on major issues of the company,
maintained communication with the management through on-site inspections, telephone inquiries, etc. to understand and master the
industry development trends and production management information that the company is facing, making out plans and ideas for the
development of the Company, urged the Company to regulate the operations in strict accordance with the requirements of relevant
laws and regulations, it has played the role of independence and professionalism of independent directors and safeguarded the
legitimate rights and interests of the company and shareholders, especially small and medium shareholders.
VI. Duty performance of the special committees under the board during the reporting period
In 2019, the Audit Committee of the Board of Directors deliberated on major events as previous periodic reports and 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
Details of major defects in IC appraisal report that found in reporting period
No major defects in internal control were found during the reporting period.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
2. Appraisal Report of Internal Control
Disclosure date of full internal control
2020-04-28
evaluation report
Disclosure index of full internal control Appraisal report of internal control for year of 2019 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
included in the scope of evaluation
accounting for the operating income on the 100.00%
Company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
89
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Any of the following situations may be
viewed as material defect: potential
misstatement of total profit ≥ 5% of total
profit; potential misstatement of total assets
≥ 1% of total assets; potential misstatement
of operating income ≥ 1% of total operating
income. Any of the following situation may
Major deficiencies: the amount of direct
be viewed as major defect: 3% of total profit
property loss is or more than 10 million
≤ potential misstatement of total profit＜
Yuan; Significant deficiencies: the
5% of total profit; 0.5% of total assets ≤
amount of direct property loss is between
Quantitative standard potential misstatement of total assets ＜ 1%
5 million Yuan and 10 million Yuan (5
of total assets; :0.5% of total operating
million Yuan included); Common
income ≤ potential misstatement of operating
deficiencies: the amount of direct
income ＜ 1% of total operating income.
property loss is less than 5 million Yuan.
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 2019, in all material aspects.
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
2020-04-28
internal control (full-text)
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Index of audit report of internal Audit report of internal control for year of 2019 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. 2019 Annual Report
Section XI. 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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section XII. Financial Report
I. Audit report
Type of audit opinion Standard unqualified
Signing date of audit report 2020-04-24
Name of audit institute Pan-China Certified Public Accountants (LLP)
Document serial of audit report PCCPAAR [2020] No. 1-541
Name of CPA Jin Jingyu, Zhang Jinghui
Auditor’s Report
To the Shareholders of Nanjing Putian Telecommunications Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Nanjing Putian
Telecommunications Co., Ltd. (the “Company”), which comprise the consolidated
and parent company balance sheets as at December 31, 2019, 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 attached financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2019, 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 China Standards on Auditing. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the China Code of Ethics for
Certified Public Accountants, and we have fulfilled other ethical responsibilities. We
believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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) Impairment of accounts receivable
1. Key audit matters
Please refer to section III(X) and V(I)3. of the notes to the financial statements for
details.
As of December 31, 2019, the book balance of accounts receivable amounts to
823,969,327.57 yuan, with provision for bad debts of 126,313,263.61 yuan, and the
carrying amount amounts to 697,656,063.96 yuan.
Based on credit risk features of accounts receivable, the Management measures the
provision for bad debts at the amount of expected credit losses during the whole life,
either on an individual basis or on a collective basis. For accounts receivable with
expected credit losses measured on an individual basis, the Management estimates the
expected cash flows, so as to identify the provision for bad debts to be accrued, based
on a comprehensive consideration of information with reasonableness and evidence,
which is related to the past events, the current situation and the forecast of future
economic conditions. For accounts receivable with expected credit losses measured
on a collective basis, the Management classifies portfolios on the basis of ages,
adjusts them based on historical credit risk loss experience and forward-looking
estimations, prepares the comparison table of ages and expected credit loss rate of
accounts receivable, so as to calculate the provision for bad debts to be accrued.
As the amount of accounts receivable is significant and the impairment involves
significant judgment of the Management, we have identified impairment of accounts
receivable as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of accounts receivable are as follows:
(1) We obtained understandings of key internal controls related to impairment of
95
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
accounts receivable, assessed the design of these controls, determined whether they
have been executed, and tested the effectiveness of their operation;
(2) We reviewed the accounts receivable with provision for bad debts made in
previous periods for their subsequent write-off or reversal, and assessed the adequacy
of historical estimations made by the Management;
(3) We obtained the consideration of the Management on recoverable amount and
objective evidence, and assessed whether the comparison table of ages and expected
credit loss rate of accounts receivable had been appropriately identified by the
Management and whether the calculation of provision for bad debts was accurate;
(4) Implemented confirmation procedures for accounts receivable with a significant
amount, check the confirmation result and implement analytical procedures combined
with post-payment and long-term intercourses. And we evaluate the reasonableness of
the provision of accounts receivable have been disclosed in the notes to the financial
statements.
(5) We checked whether information related to impairment of accounts receivable had
been presented appropriately in the financial statements.
(II) Net realizable value of inventories
1. Key audit matters
Please refer to section III(XI) and V(I) of the notes to the financial statements for
details.
As of December 31, 2019, the book balance of inventories amounts to 251,366,286.12
yuan, with provision for bad debts of 41,968,999.95 yuan, and the carrying amount
amounts to 209,397,286.17 yuan.
At the balance sheet date, inventories are measured at the lower of cost and net
realizable value; provisions for inventory write-down are made on the excess of its
cost over the net realizable value. For inventories held for sale, the estimated selling
price is determined based on historical selling price, actual selling price, contractual
selling price, market price of identical or similar products, future market trend, etc.,
and the net realizable value of these inventories is determined based on the amount of
the estimated selling price less the cost incurred to completion, estimated selling
expenses and relevant taxes and surcharges.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
As the amount of inventories is significant and determination of net realizable value
involves significant judgment of the Management, we have identified net realizable
value of inventories as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for net realizable value of inventories are as follows:
(1) We obtained understandings of key internal controls related to net realizable value
of inventories, assessed the design of these controls, determined whether they have
been executed, and tested the effectiveness of their operation;
(2) Implement supervision procedures for inventories and checked whether there
existed situations. Focusing on the adequacy of provision of obsolete inventories.
(3) Implement confirmation procedures and aging analytical procedures for goods
dispatched. Focusing on the adequacy of provision of closing goods dispatched and
the reasonableness of unsettled goods dispatched.
(4) We assessed the reasonableness of the net realizable value estimated by the
Management according to gross profit margin in few years and existed situations
during supervision process.
(5) We checked whether information related to net realizable value of inventories had
been presented appropriately in the financial statements.
IV. Other Information
The Company’s management (the “Management”) is responsible for the other
information. The other information comprises the information included in the
Company’s annual report, but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
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.
97
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
If, based on the work we have performed, we conclude that there is a material
misstatement of this 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, the 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 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 judgment and maintain professional skepticism throughout
the audit performed in accordance with China Standards on Auditing. We also:
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(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 sole responsibility for our audit
opinion.
We communicate with those charged with governance regarding the planned audit
scope, time 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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
(Engagement Partner) Jing Jingyu
Hangzhou China Chinese Certified Public Accountant
Zhang Jinghui
Date of Report: April 24, 2020
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.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2019
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 1 261,270,033.28 261,938,068.72
Settlement funds
Loans to other banks
Held-for-trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 2 59,653,053.58 46,475,656.01
Accounts receivable 3 697,656,063.96 941,068,459.35
Receivables financing 4 3,821,550.77
Advances paid 5 33,759,523.09 188,848,712.69
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 6 28,110,390.53 33,734,948.67
Financial assets under reverse repo
Inventories 7 209,397,286.17 286,972,632.59
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 8 11,610,245.99 13,497,540.69
Total current assets 1,305,278,147.37 1,772,536,018.72
Non-current assets:
Loans and advances paid
Debt investments
Available-for-sale financial assets 741,953.00
Other debt investments
Held-to-maturity investments
Long-term receivable
Long-term equity investments 9 181,762,383.50 183,244,080.23
Other equity instrument investments 10 741,953.00
Other non-current financial assets
Investment property 11 7,810,210.00 8,397,113.98
Fixed assets 12 110,722,102.52 112,504,807.11
Construction in progress 13 13,048,701.59 9,472,383.76
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 14 28,381,246.28 30,285,598.77
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Development expenditures
Goodwill
Long-term prepayments 15 4,260,775.18 3,562,336.84
Deferred tax assets
Other non-current assets
Total non-current assets 346,727,372.07 348,208,273.69
Total assets 1,652,005,519.44 2,120,744,292.41
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2019 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance Opening balance
No.
Current liabilities:
Short-term borrowings 16 451,915,948.50 445,010,000.00
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 17 81,784,929.91 84,374,916.99
Accounts payable 18 679,428,580.08 743,028,953.62
Advances received 19 22,148,080.67 259,545,648.66
Contract liabilities
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 20 21,602,707.70 21,132,336.19
Taxes and rates payable 21 4,125,566.60 17,230,159.02
Other payables 22 61,246,678.81 55,128,492.65
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 23 10,820,807.35
Other current liabilities
Total current liabilities 1,333,073,299.62 1,625,450,507.13
Non-current liabilities:
Insurance policy reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 24 12,827,205.03
Long-term employee benefits payable
Provisions
Deferred income 25 6,004,873.00 7,296,315.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 18,832,078.03 7,296,315.00
Total liabilities 1,351,905,377.65 1,632,746,822.13
Equity:
Share capital/Paid-in capital 26 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Capital reserve 27 185,374,533.85 185,374,533.85
Less: Treasury shares
Other comprehensive income 28 -6,776,124.85 -4,947,588.58
Special reserve
Surplus reserve 29 589,559.77 589,559.77
General risk reserve
Undistributed profit 30 -224,644,862.48 -40,726,776.80
Total equity attributable to the parent company 169,543,106.29 355,289,728.24
Non-controlling interest 130,557,035.50 132,707,742.04
Total equity 300,100,141.79 487,997,470.28
Total liabilities & equity 1,652,005,519.44 2,120,744,292.41
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2019
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 75,513,546.51 80,553,208.65
Held-for-trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 2,180,607.60 6,620,178.00
Accounts receivable 1 415,997,318.07 586,635,878.62
Receivables financing 2,307,438.00
Advances paid 13,234,147.98 155,717,638.43
Other receivables 2 26,761,817.07 31,077,389.58
Inventories 73,809,627.64 143,432,315.11
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 2,778,241.54 6,222,172.75
Total current assets 612,582,744.41 1,010,258,781.14
Non-current assets:
Debt investments
Available-for-sale financial assets 741,953.00
Other debt investments
Held-to-maturity investments
Long-term receivable
Long-term equity investments 3 333,070,134.14 333,367,967.90
Other equity instrument investments 741,953.00
Other non-current financial assets
Investment property
Fixed assets 52,382,989.60 50,769,872.87
Construction in progress 5,839,892.88
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 11,557,138.68 12,305,246.69
Development expenditures
Goodwill
Long-term prepayments 3,129,023.74 3,403,376.01
Deferred tax assets
Other non-current assets
Total non-current assets 400,881,239.16 406,428,309.35
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Total assets 1,013,463,983.57 1,416,687,090.49
106
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2019 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance Opening balance
No.
Current liabilities:
Short-term borrowings 371,812,627.72 355,000,000.00
Held-for-trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 81,784,929.91 80,759,989.55
Accounts payable 274,182,241.12 340,405,588.53
Advances received 7,517,427.53 227,951,168.81
Contract liabilities
Employee benefits payable 8,135,211.34 7,854,213.23
Taxes and rates payable 199,408.61 8,674,579.20
Other payables 213,090,147.71 187,172,612.82
Liabilities classified as held for sale
Non-current liabilities due within one year 10,820,807.35
Other current liabilities
Total current liabilities 967,542,801.29 1,207,818,152.14
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 12,827,205.03
Long-term employee benefits payable
Provisions
Deferred income 1,000,000.00 1,000,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 13,827,205.03 1,000,000.00
Total liabilities 981,370,006.32 1,208,818,152.14
Equity:
Share capital/Paid-in capital 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 172,417,299.81 172,417,299.81
Less: treasury shares
Other comprehensive income -1,854,910.00
Special reserve
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Surplus reserve 589,559.76 589,559.76
Undistributed profit -354,057,972.32 -180,137,921.22
Total equity 32,093,977.25 207,868,938.35
Total liabilities & equity 1,013,463,983.57 1,416,687,090.49
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 1,338,284,194.21 1,995,627,772.60
Including: Operating revenue 1 1,338,284,194.21 1,995,627,772.60
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 1,432,157,541.99 1,992,876,998.09
Including: Operating cost 1 1,087,774,366.66 1,643,115,522.38
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 2 8,301,819.32 10,920,639.19
Selling expenses 3 146,879,432.92 153,522,328.27
Administrative expenses 4 87,447,829.68 86,503,114.41
R&D expenses 5 71,178,941.51 76,275,133.26
Financial expenses 6 30,575,151.90 22,540,260.58
Including: Interest expenses 30,200,892.97 23,694,841.52
Interest income 1,475,350.85 2,665,279.32
Add: Other income 7 7,894,918.90 13,702,488.41
Investment income (or less: losses) 8 -297,833.76 -3,085,858.80
Including: Investment income from associates and joint ventures -297,833.76 -3,085,858.80
Gains from derecognition of financial assets at amortized cost
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)
Credit impairment loss 9 -53,458,859.20
Assets impairment loss 10 -19,577,005.54 -20,599,295.35
Gains on asset disposal (or less: losses) 11 119,033.08 33,522,820.90
III. Operating profit (or less: losses) -159,193,094.30 26,290,929.67
Add: Non-operating revenue 12 1,900,048.84 2,988,810.42
Less: Non-operating expenditures 13 368,099.84 372,499.09
IV. Profit before tax (or less: total loss) -157,661,145.30 28,907,241.00
Less: Income tax 14 1,279,314.02 4,793,925.22
V. Net profit (or less: net loss) -158,940,459.32 24,113,315.78
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) -158,940,459.32 24,113,315.78
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) -169,088,516.69 5,859,214.84
2. Net profit attributable to non-controlling shareholders (or less: net loss) 10,148,057.37 18,254,100.94
VI. Other comprehensive income after tax 29,304.15 -908,854.59
Items attributable to the owners of the parent company 26,373.73 -817,969.13
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
3. Changes in fair value of other equity instrument investments
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss 26,373.73 -817,969.13
1. Items under equity method that may be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from changes in fair value of available-for-sale financial assets
4. Profit or loss from reclassification of financial assets into other comprehensive income
5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale
financial assets
6. Provision for credit impairment of other debt investments
7.Cash flow hedging reserve (profit or loss on cash flow hedging)
8. Translation reserve 26,373.73 -817,969.13
9. Others
Items attributable to non-controlling shareholders 2,930.42 -90,885.46
VII. Total comprehensive income -158,911,155.17 23,204,461.19
Items attributable to the owners of the parent company -169,062,142.96 5,041,245.71
Items attributable to non-controlling shareholders 10,150,987.79 18,163,215.48
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) -0.79 0.03
(II) Diluted EPS (yuan per share) -0.79 0.03
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Operating revenue 1 433,903,979.88 1,005,618,954.77
Less: Operating cost 1 397,437,511.55 879,422,579.08
Taxes and surcharges 1,804,317.52 4,045,978.34
Selling expenses 54,675,166.60 63,547,170.31
Administrative expenses 45,037,899.50 41,683,221.44
R&D expenses 14,913,248.49 20,833,986.09
Financial expenses 27,811,135.49 21,327,399.26
Including: Interest expenses 27,271,764.56 20,350,309.17
Interest income 849,413.36 339,683.88
Add: Other income 300,000.00 2,257,355.96
Investment income (or less: losses) 2 8,855,566.24 22,697,079.67
Including: Investment income from associates and joint ventures -297,833.76 -1,679,620.33
Gains from derecognition of financial assets at amortized cost
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) 21,631.63 17,375,709.64
Credit impairment loss -49,787,168.46
Assets impairment loss -17,419,090.93 -16,723,520.48
Gains on foreign exchange (or less: losses)
II. Operating profit (or less: losses) -165,804,360.79 365,245.04
Add: Non-operating revenue 938,797.01 1,488,857.87
Less: Non-operating expenditures 366,483.43 233,777.62
III. Profit before tax (or less: total loss) -165,232,047.21 1,620,325.29
Less: Income tax
IV. Net profit (or less: net loss) -165,232,047.21 1,620,325.29
(I) Net profit from continuing operations (or less: net loss) -165,232,047.21 1,620,325.29
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to profit or loss
3. Changes in fair value of other equity instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
1. Items under equity method that may be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from changes in fair value of available-for-sale financial assets
4. Profit or loss from reclassification of financial assets into other
comprehensive income
5. Profit or loss from reclassification of held-to-maturity investments as
available-for-sale financial assets
6. Provision for credit impairment of other debt investments
7. Cash flow hedging reserve (profit or loss on cash flow hedging)
8. Translation reserve
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
9. Others
VI. Total comprehensive income -165,232,047.21 1,620,325.29
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 1,312,359,448.24 1,645,891,322.05
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
Cash receipts from interest, handling charges and commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security transaction
Receipts of tax refund 12,067,911.19 4,667,521.81
Other cash receipts related to operating activities 1 24,883,017.58 34,938,316.44
Subtotal of cash inflows from operating activities 1,349,310,377.01 1,685,497,160.30
Cash payments for goods purchased and services received 901,941,126.87 1,333,326,749.70
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
Net increase of loans to others
Cash payments for interest, handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 241,604,857.64 253,307,248.13
Cash payments for taxes and rates 70,058,938.01 84,108,218.81
Other cash payments related to operating activities 2 113,019,339.58 170,173,677.49
Subtotal of cash outflows from operating activities 1,326,624,262.10 1,840,915,894.13
Net cash flows from operating activities 22,686,114.91 -155,418,733.83
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 1,183,862.97
Cash receipts from investment income 647,567.20
Net cash receipts from the disposal of fixed assets, intangible assets and other
897,560.83 40,365,822.52
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 2,081,423.80 41,013,389.72
Cash payments for the acquisition of fixed assets, intangible assets and other
14,544,973.78 17,752,720.09
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 14,544,973.78 17,752,720.09
Net cash flows from investing activities -12,463,549.98 23,260,669.63
III. Cash flows from financing activities:
Cash receipts from absorbing investments
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Nanjing Putian Telecommunications Co., Ltd. 2019 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 517,594,317.72 455,510,000.00
Other cash receipts related to financing activities 3 30,000,000.00
Subtotal of cash inflows from financing activities 547,594,317.72 455,510,000.00
Cash payments for the repayment of borrowings 511,267,000.00 402,050,000.00
Cash payments for distribution of dividends or profits and for interest expenses 30,076,595.52 29,795,475.55
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend
6,023,300.00
or profit
Other cash payments related to financing activities 4 9,080,321.78 840,754.71
Subtotal of cash outflows from financing activities 550,423,917.30 432,686,230.26
Net cash flows from financing activities -2,829,599.58 22,823,769.74
IV. Effect of foreign exchange rate changes on cash & cash equivalents 21,583.83 -353,307.29
V. Net increase in cash and cash equivalents 7,414,549.18 -109,687,601.75
Add: Opening balance of cash and cash equivalents 201,369,317.42 311,056,919.17
VI. Closing balance of cash and cash equivalents 208,783,866.60 201,369,317.42
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 343,169,578.37 596,822,761.48
Receipts of tax refund 5,765,754.44 232,835.32
Other cash receipts related to operating activities 39,495,085.12 43,490,459.56
Subtotal of cash inflows from operating activities 388,430,417.93 640,546,056.36
Cash payments for goods purchased and services received 250,742,210.91 569,778,580.54
Cash paid to and on behalf of employees 92,940,344.78 100,282,989.10
Cash payments for taxes and rates 20,457,454.33 24,563,084.92
Other cash payments related to operating activities 39,907,351.71 64,030,303.24
Subtotal of cash outflows from operating activities 404,047,361.73 758,654,957.80
Net cash flows from operating activities -15,616,943.80 -118,108,901.44
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 9,153,400.00 197,567.20
Net cash receipts from the disposal of fixed assets, intangible
398,588.81 21,918,919.67
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 9,551,988.81 22,116,486.87
Cash payments for the acquisition of fixed assets, intangible assets
2,030,956.24 11,043,203.93
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 2,030,956.24 11,043,203.93
Net cash flows from investing activities 7,521,032.57 11,073,282.94
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 417,594,317.72 351,000,000.00
Other cash receipts related to financing activities 30,000,000.00
Subtotal of cash inflows from financing activities 447,594,317.72 351,000,000.00
Cash payments for the repayment of borrowings 401,257,000.00 309,000,000.00
Cash payments for distribution of dividends or profits and for
27,192,787.89 20,350,309.17
interest expenses
Other cash payments related to financing activities 9,080,321.78 840,754.71
Subtotal of cash outflows from financing activities 437,530,109.67 330,191,063.88
Net cash flows from financing activities 10,064,208.05 20,808,936.12
IV. Effect of foreign exchange rate changes on cash and cash
13,777.16 287,252.28
equivalents
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Note Current period Preceding period
Items
No. cumulative comparative
V. Net increase in cash and cash equivalents 1,982,073.98 -85,939,430.10
Add: Opening balance of cash and cash equivalents 23,812,669.19 109,752,099.29
VI. Closing balance of cash and cash equivalents 25,794,743.17 23,812,669.19
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Share capital/ Special Surplus Undistributed interest
Capital reserve treasury comprehensive reserve risk
Paid-in capital Preferred Perpetual Others reserve profit
shares income reserve
shares bonds
I. Balance at the end of prior year 215,000,000.00 185,374,533.85 -4,947,588.58 589,559.77 -40,726,776.80 132,707,742.04 487,997,470.28
Add: Cumulative changes of accounting
-1,854,910.00 -14,829,568.99 -1,781,094.33 -18,465,573.32
policies
Error correction of prior period
Business combination under common
control
Others
II. Balance at the beginning of current year 215,000,000.00 185,374,533.85 -6,802,498.58 589,559.77 -55,556,345.79 130,926,647.71 469,531,896.96
III. Current period increase (or less: decrease) 26,373.73 -169,088,516.69 -369,612.21 -169,431,755.17
(I) Total comprehensive income 26,373.73 -169,088,516.69 10,150,987.79 -158,911,155.17
(II) Capital contributed or withdrawn by
owners
1. Ordinary shares 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 -10,520,600.00 -10,520,600.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -10,520,600.00 -10,520,600.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Share capital/ Special Surplus Undistributed interest
Capital reserve treasury comprehensive reserve risk
Paid-in capital Preferred Perpetual Others reserve profit
shares income reserve
shares bonds
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried
over to retained earnings
5. Other comprehensive income carried over
to retained earnings
6. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -6,776,124.85 589,559.77 -224,644,862.48 130,557,035.50 300,100,141.79
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2019 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Share capital/ Special Surplus Undistributed interest
Capital reserve treasury comprehensive reserve risk
Paid-in capital Preferred Perpetual Others reserve profit
shares income reserve
shares bonds
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
2,169,320.00 2,169,320.00
owners
1. Ordinary shares 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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Preceding period comparative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other General Total equity
Share capital/ Special Surplus Undistributed interest
Capital reserve treasury comprehensive reserve risk
Paid-in capital Preferred Perpetual Others reserve profit
shares income reserve
shares bonds
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried
over to retained earnings
5. Other comprehensive income carried over
to retained earnings
6. Others
(V) Special reserve
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 185,374,533.85 -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. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2019
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments Less: Other
Items Share capital/ Undistributed
Preferred Perpetual Capital reserve treasury comprehensive Special reserve Surplus reserve Total equity
Paid-in capital Others profit
shares bonds shares income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -180,137,921.22 207,868,938.35
Add: Cumulative changes of accounting policies -1,854,910.00 -8,688,003.89 -10,542,913.89
Error correction of prior period
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 -1,854,910.00 589,559.76 -188,825,925.11 197,326,024.46
III. Current period increase (or less: decrease) -165,232,047.21 -165,232,047.21
(I) Total comprehensive income -165,232,047.21 -165,232,047.21
(II) Capital contributed or withdrawn by owners
1. Ordinary shares 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. Changes in defined benefit plan carried over to
retained earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(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 -1,854,910.00 589,559.76 -354,057,972.32 32,093,977.25
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2019 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
Other equity instruments Less: Other
Items Share capital/ Undistributed
Preferred Perpetual Capital reserve treasury comprehensive Special reserve Surplus reserve Total equity
Paid-in capital Others profit
shares bonds shares income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 589,559.76 -179,778,157.50 208,228,702.07
Add: Cumulative changes of accounting policies
Error correction of prior period -1,980,089.01 -1,980,089.01
Others
II. Balance at the beginning of current year 215,000,000.00 172,417,299.81 589,559.76 -181,758,246.51 206,248,613.06
III. Current period increase (or less: decrease) 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. Ordinary shares 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. Changes in defined benefit plan carried over to
retained earnings
5. Other comprehensive income carried over to retained
earnings
6. Others
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(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
[Wang Wenkui] [Wang Huailin] [Wang Huailin]
[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. 2019 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
For the year ended December 31, 2019
Monetary unit: RMB Yuan
I. Company profile
Nanjing Putian Telecommunications Co., Ltd. (the “Company”), whose predecessor is Nanjing Telecommunication Facility Factory,
was established as a limited liability company 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 24, 2019.
The Company has brought 11 subsidiaries including Nanjing South Telecommunications Co., Ltd., and Nanjing Putian Telege
Intelligent Building Co., Ltd. etc. into the consolidated scope. Please refer to notes of VII 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 impairment of financial instruments,
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.
(II) Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
(III) Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected to be
realized or due within 12 months.
(IV) Functional currency
The Company’s functional currency is Renminbi (RMB) Yuan.
(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in the
consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of
the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of the
combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, the
excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the
measurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into its consolidation scope. The consolidated financial
statements are compiled by the parent company according to “CASBE 33 - Consolidated Financial Statements”,
based on relevant information and the financial statements of the parent company and its subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes in relation to its interest in a joint
operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(VIII) Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
to an insignificant risk of changes in value.
(IX) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the
transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency
are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the
principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items
carried at historical costs are translated at the spot exchange rate at the transaction date, with its RMB amount
unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the
date when the fair value was determined, with difference included in profit or loss or other comprehensive
income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the
equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues and
expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date. The
difference arising from foreign currency translation is included in other comprehensive income.
(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at
amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair
value through profit or loss.
Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market
interest rate, which do not fall within the above category (1) ; (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial
liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair
value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are
directly included in profit or loss; for other categories of financial assets and financial liabilities, the transaction
expenses thereof are included into the initially recognized amount. However, at initial recognition, for accounts
receivable that do not contain a significant financing component or contracts in which the financing components
with associated period less than one year are not considered, the Company measures at their transaction price in
accordance with “CASBE14 – Revenues”.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses
on financial assets that are measured at amortized cost and are not part of hedging relationships shall be included
into profit or loss when the financial assets are derecognized, reclassified, through the amortization process or in
order to recognize impairment gains or losses.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and
gains and losses on foreign exchange that calculated using effective interest method shall be included into profit
or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses
that initially recognized as other comprehensive income should be transferred out into profit or loss when the
financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as
part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included into
other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive
income should be transferred out into retained earnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss, except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss.
Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized
as other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE23 – Transfer of Financial Assets”.
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan
at a below-market interest rate, which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in according to
impairment requirements of financial instruments; b. the amount initially recognized less the amount of
accumulated amortization recognized in accordance with “CASBE14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses
on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and through the amortization process.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE23 – Transfer of
Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be
derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset. Where the Company does not
transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt
with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset,
according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related
financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset, and the accumulative amount of the changes of the fair value originally included in other
comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). If the transfer of financial asset
partially satisfies the conditions to derecognition, the entire carry amount of the transferred financial asset is,
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
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion
which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally
included in other comprehensive income which is corresponding to the portion which is derecognized (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy and used
accordingly:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the
measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for
identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset
or liability, for example, interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and
cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to
fulfill the disposal obligation assumed in business combination, and financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrument
investments, contract assets or lease receivable at fair value through other comprehensive income, loan commitments other than
financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value
through profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies.
Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights.
Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract
and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate.
Purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.
On the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since
initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.
For accounts receivable do not contain a significant financing component or contracts in which the financing components with
associated period less than one year are not considered, which result from transactions as regulated in “CASBE14 - Revenues”, the
Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.
For lease receivables, accounts receivable and contract assets that result from transactions as regulated in “CASBE14 - Revenues”
and contain a significant financing component, the Company chooses simplified approach to measure the loss allowance at an
amount equal to lifetime expected credit losses.
For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the
financial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the
financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
increased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial
instrument at an amount equal to 12-month expected credit loss.
Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on the
financial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initial
recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the
financial instrument is determined to have low credit risk on the balance sheet date.
The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When the
Company adopts the collective basis, financial instruments are grouped with similar credit risk features.
The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of loss allowance
arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost,
the loss allowance reduce the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured
at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall
not reduce the carrying amount of such financial asset.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
Items Basis for determination of Method for measuring expected
portfolio credit loss
Other receivables – Portfolio grouped with Based on historical credit loss
consolidated related parties experience, the current situation
Other receivables – Portfolio grouped with and the forecast of future
deposit receivables Nature of receivables economic conditions, calculate
expected credit loss through
Other receivables – Portfolio grouped with
exposure at default and 12-month
export tax rebate
or lifetime expected credit loss
Other receivables – Other portfolio rate.
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring expected credit loss
Items Basis for determination of Method for measuring expected credit loss
portfolio
Bank acceptance receivable Based on historical credit loss experience,
the current situation and the forecast of
Type of notes future economic conditions, calculate
Trade acceptance receivable expected credit loss through exposure at
default and lifetime expected credit loss
rate.
Based on historical credit loss experience,
Accounts receivable –Portfolio the current situation and the forecast of
future economic conditions, prepare the
grouped with consolidated related Consolidated related parties comparison table of overdue ages and
parties lifetime expected credit loss rate of accounts
receivable, so as to calculate expected credit
loss.
Based on historical credit loss experience,
the current situation and the forecast of
Accounts receivable – Portfolio
Aging future economic conditions, calculate
Aging expected credit loss through aging of
receivables and lifetime expected credit loss
rate.
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of aging portfolio
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Ages Expected credit loss rate (%)
Within 1 year (inclusive, the same hereinafter) 1.00
1-2 years 5.00
2-3 years 10.00
3-4 years 30.00
4-5 years 50.00
Over 5 years 100.00
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Company
offsets a financial asset and a financial liability and presents the net amount in the balance sheet when, and only when, the Company:
(a) currently has a legally enforceable right to set off the recognized amounts; and (b) intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred
asset and the associated liability.
(XI) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of
production, and materials or suppliers etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value; provisions for inventory write-down
are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined
based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the
ordinary course of business; the net realizable value of materials to be processed is determined based on the amount of the estimated
selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of
business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value is
determined separately and is compared with their costs to set the provision for inventory write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
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Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: a. the asset must
be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets or
disposal groups; b. its sales must be highly probable, i.e., the Company has made a decision on the sale plan and has obtained a firm
purchase commitment, and the sale is expected to be completed within one year.
When the Company acquires a non-current asset or disposal group with a view to resale, it shall classify the non-current asset or
disposal group as held for sale at the acquisition date only if the requirement of “expected to be completed within one year” is met at
that date and it is highly probable that other criteria for held for sale will be met within a short period (usually within three months).
An asset or a disposal group is still accounted for as held for sale when the Company remains committed to its plan to sell the asset or
disposal group in the circumstance that non-related party transactions fail to be completed within one year due to one of the
following reasons: a. a buyer or others unexpectedly set conditions that will extend the sale period, while the Company has taken
timely actions to respond to the conditions and expects a favorable resolution of the delaying factors within one year since the setting;
(2) a non-current asset or disposal group classified as held for sale fails to be sold within one year due to rare cases, and the Company
has taken action necessary to respond to the circumstances during the initial one-year period and the criteria for held for sale are met.
2. Measurement of non-current assets or disposal groups as held for sale
(1) Initial measurement and remeasurement
For initial measurement and remeasurement as at the balance sheet date of a non-current asset or disposal group as held for sale,
where the carrying amount is higher than the fair value less costs to sell, the carrying amount is written down to the fair value less
costs to sell, and the write-down is recognized in profit or loss as assets impairment loss, meanwhile, provision for impairment of
assets as held for sale shall be made.
For a non-current asset or disposal group classified as held for sale at the acquisition date, the asset or disposal group is measured on
initial recognition at the lower of its initial measurement amount had it not been so classified and fair value less costs to sell. Apart
from the non-current asset or disposal group acquired through business combination, the difference arising from the initial
recognition of a non-current asset or disposal group at the fair value less costs to sell shall be included into profit or loss.
The assets impairment loss recognized for a disposal group as held for sale shall reduce the carrying amount of goodwill in the
disposal group first, and then reduce its carrying amount based on the proportion of each non-current asset’s carrying amount in the
disposal group.
No provision for depreciation or amortization shall be made on non-current assets as held for sale or non-current assets in disposal
groups as held for sale, while interest and other expenses attributable to the liabilities of a disposal group as held for sale shall
continue to be recognized.
(2) Reversal of assets impairment loss
When there is a subsequent increase in fair value less costs to sell of a non-current asset as held for sale at the balance sheet date, the
write-down shall be recovered, and shall be reversed not in excess of the impairment loss that has been recognized after the
non-current asset was classified as held for sale. The reversal shall be included into profit or loss. Assets impairment loss that has
been recognized before the classification is not reserved.
When there is a subsequent increase in fair value less costs to sell of a disposal group as held for sale at the balance sheet date, the
write-down shall be recovered, and shall be reversed not in excess of the non-current assets impairment loss that has been recognized
after the disposal group was classified as held for sale. The reversal shall be included into profit or loss. The reduced carrying amount
of goodwill and non-current assets impairment loss that has been recognized before the classification is not reserved.
The subsequent reversal of the impairment loss that has been recognized in a disposal group as held for sale, the carrying amount is
increased based on the proportion of carrying amount of each non-current assets (excluding goodwill) in the disposal group.
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(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.
(XIII) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash,
transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of the
carrying amount of the equity of the combined party included the consolidated financial statements of the ultimate controlling party
as the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying value
of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in stages, the
Company determines whether it is a “bundled transaction”.
If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled
transaction”, investment cost is initially recognized at the share of the carrying amount of net assets of the combined party included
the consolidated financial statements of the ultimate controlling party. The difference between the acquisition-date investment cost of
long-term equity investments and the carrying amount of the previously held long-term equity investments plus the carrying amount
of the consideration paid for the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to
offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value of
considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages, the
Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously held
long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”.
If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled
transaction”, the carrying value of the acquirer’s previously held equity interest in the acquire is re-measured at the acquisition-date
fair value, and the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s
previously held equity interest in the acquire involves other comprehensive income under equity method, the related other
comprehensive income is reclassified as income for the acquisition period, excluding other comprehensive income arising from
changes in net liabilities or assets from remeasurement of defined benefit plan of the acquiree.
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(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-term equity
investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing
equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to
“CASBE12 - Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE7 -
Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term equity investments
with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit or
loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted
for with equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, the
remained equity is accounted for according to “CASBE 22 - Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control
Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in
the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium),
if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
When the Company loses control, the remained equity is re-measured at the loss-of-control-date fair value. The aggregated value of
disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before the
disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when the
Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related
to equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting
treatment. Before the Company loses control, the difference between the disposal consideration at each stage and the proportionate
share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements
and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
(XIV) Investment property
1. Investment property includes land use right of rent-out property and of property held for capital appreciation and buildings that
have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using the cost model,
the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XV) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production or supply of goods or services, for rental to others, or for administrative
purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable
that future economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably.
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2. Depreciation method of different categories of fixed assets
Estimated residual Annual
Categories Useful life
Depreciation method value proportion depreciation
(years)
(%) rate (%)
Buildings and structures Straight-line method 15-35 3.00 2.77-6.47
Machinery Straight-line method 10-15 3.00 6.47-9.70
Transport facilities Straight-line method 6-8 3.00 12.13-16.17
Electronic equipment Straight-line method 4-11 3.00 8.82-24.25
Other equipment Straight-line method 4-11 3.00 8.82-24.25
(XVI) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will flow
to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to
reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches its designed usable conditions. When the
construction completion cost reaches final estimating and auditing of the construction in progress was not finished while it reaching
the designed usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the
actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
(XVII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant
assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are
included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless they following requirements are all met: 1) the asset
disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and
construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the
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
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amortization of premium or discount based on effective interest method) of the special borrowings at the present
period minus the income of interests earned on the unused borrowings as a deposit in the bank or as a temporary
investment; where a general borrowing is used for the acquisition and construction or production of assets eligible
for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used.
(XVIII) Intangible assets
1. Intangible asset includes land use right, software, 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
5-10
technology
land use right 40-50
3. Expenditures on the research phase of an internal project are recognized as profit or loss when it is incurred. An intangible asset
arising from the development phase of an internal project is recognized if the Company can demonstrate all of the following: (1) the
technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the
intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits. Among other things,
the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to
be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to
the intangible asset during its development.
(XIX) Impairment of part of non-current assets
For non-current assets such as long-term equity investments, investment property at cost model, fixed assets,
construction in progress, intangible assets with finite useful life, etc., if at the balance sheet date there is indication
of impairment, the recoverable amount is estimated. For goodwill recognized in business combination and
intangible assets with indefinite useful life, no matter whether there is indication of impairment, impairment test is
performed annually. Impairment test on goodwill is performed on related group of assets or a portfolio of groups
of assets.
When the recoverable amount of such non-current assets is lower than their carrying amount, the difference is recognized as assets
impairment loss through profit or loss.
(XX) Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year).
They are recorded with actual cost, and evenly amortized within its beneficiary period or stipulated period. If items of long-term
prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.
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(XXI) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-term
employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually
incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a defined
contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimate
related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the
periods to which the obligations are attributed. The Company discounts obligations under the defined benefit plan using the discount
rate to determine the present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the present value of the
defined benefit plan obligation from the fair value of defined benefit plan assets as a net defined benefit plan liability or net defined
benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of
the surplus in the defined benefit plan and the asset ceiling;
3) At the end of reporting period, the Company recognizes the following components of employee benefits cost arising from defined
benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. Changes as a result of
remeasurement 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 remeasurement of the net liability or net assets of
other long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts are recognized in profit or loss or
included in the cost of a relevant asset.
(XXII) Provisions
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1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing
guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of
the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the
present obligations, and its carrying amount is reviewed at the balance sheet date.
(XVIII) Revenue
1. Revenue recognition principles
(1) Sale of goods
Revenue from sale of goods is recognized if, and only if, the following conditions are all satisfied: a) significant
risks and rewards of ownership of the goods is transferred to the buyer; b) the Company retains neither continuing
managerial involvement of ownership nor effective control over the goods sold; c) the amount of revenue can be
measured reliably; d) it is probable that the economic benefits of the transaction will flow to the Company; and e)
the costs of the transaction incurred and to be incurred can be measured reliably.
(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
The Company’s main product is the Video conference products, integrated wiring products, low voltage
distribution products, private network communication products, wiring products and other products. Revenue is
recognized if, and only if, the following conditions are all met: the Company has delivered goods to the purchaser
based on contractual agreements; customers have accepted goods and settled the payment; goods payment has
been collected or the Company has obtained receipts invoices and it is probable that economic benefits associated
with the transaction will flow to the Company; and the costs of the transaction incurred and to be incurred can be
measured reliably.
(XIX) Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with the
conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received
or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the
circumstance that fair value can’t be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company construct or otherwise acquire long-term assets
under requirements of government. In the circumstances that there is no specific government requirement, the Company shall
determine based on the primary condition to acquire the grants and government grants related to assets are government grants whose
primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets or recognized
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as deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of
the relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold, transferred, disposed or
damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the year in which the
disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants that contain
both parts related to assets and parts related to income, in which those two parts are blurred and thus collectively classified as
government grants related to income. For government grants related to income used for compensating the related future cost,
expenses or losses of the Company are recognized as deferred income and are included in profit or loss or offset relevant cost during
the period in which the relevant cost, expenses or losses are recognized; for government grants related to income used for
compensating the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or directly
offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or offset
relevant cost based on business nature, while those not related to the ordinary course of business shall be included
into non-operating revenue or expenditures.
(XXV) 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 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.
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(XXVI) 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.
(XXVII) Significant changes in accounting policies and estimates
1. Significant changes in accounting policies
(1) Changes in accounting policies arising from changes in CASBEs
1) The Company prepared the financial statements for the year ended December 31, 2019 in accordance with “Notice of the Ministry
of Finance on Revising and Issuing Financial Statement Templates for General Enterprises” (numbered Cai Kuai [2019] 6), “Notice
on Revising and Issuing the Format of Consolidated Financial Statements (2019 Edition)” (Cai Kuai [2019] 16), and CASBEs, and
changes in accounting policies are applicable to retrospective application method. Items of financial statement for the year ended
December 31, 2018 significantly affected and their amounts are as follows:
Original financial statement items and amounts Revised financial statement items and amounts
Notes receivable 46,475,656.01
Notes receivable and accounts 987,544,115.36 Accounts receivable 941,068,459.35
receivable
Receivables financing
Notes payable 84,374,916.99
Notes payable and accounts 827,403,870.61
payable Accounts payable 743,028,953.62
2) The Company has adopted “CASBE 23 – Transfer of Financial Assets”, “CASBE 24 - Hedging” and “CASBE 37 - Presentation of
Financial Instruments” (collectively, the “revised financial instrument standard”) revised by Ministry of Finance of PRC since
January 1, 2019. Pursuant to regulations on convergence between old and new standards, no adjustment shall be made on comparable
information, and the difference arising from adoption on the adopting date shall be retrospectively adjusted into retained earnings or
other comprehensive income at the beginning of the reporting period.
The revised financial instrument standard changes classification and measurement method of financial assets, and determines three
major categories of measurement: amortized cost; fair value through other comprehensive income; fair value through profit or loss.
The Company makes the above classification based on its own business model and the contractual cash flow characteristics of the
financial assets. The Company measures equity investments at fair value through profit or loss, but may make an irrevocable election
at initial recognition to measure them at fair value through other comprehensive income (gains or losses on disposal can’t be reversed
into profit or loss, but dividend income can be included into profit or loss).
The revised financial instrument standard requires for a “expected credit loss model” instead of “incurred loss model”, which is
applicable to financial assets at amortized cost, financial assets, lease receivable at fair value through other comprehensive income.
① Main effects on the financial statements as at January 1, 2019 due to adoption of revised financial instrument standard are as
follows:
Items Balance sheet
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Effect due to revised
Dec. 31, 2018 financial instrument Jan. 1, 2019
standard
Notes receivable 46,475,656.01 -12,824,200.80 33,651,455.21
Receivables financing 12,824,200.80 12,824,200.80
Accounts receivable 941,068,459.35
Other receivables 33,734,948.67
Assets as held for sale 741,953.00 -741,953.00
Other equity instrument
741,953.00 741,953.00
investments
Short-term borrowings 445,010,000.00 454,333.33 445,464,333.33
Other payables 55,128,492.65 -454,333.33 54,674,159.32
Other comprehensive
-4,947,588.58 -1,854,910.00 -6,802,498.58
income (OCI)
Undistributed profit -40,726,776.80 -14,829,568.99 -55,556,345.79
Minority equity 132,707,742.04 -1,781,094.33 130,926,647.71
② On January 1, 2019, the comparison table of categories and measuring result of the Company’s financial assets under revised and
old financial instrument standards is as follows:
Old standard Revised standard
Items
Category Carrying amount Category Carrying amount
Cash and bank Financial
261,938,068.72 Amortized cost 261,938,068.72
balances assets
Amortized cost 33,651,455.21
Notes Financial fair value through
46,475,656.01
receivable assets other comprehensiv 12,824,200.80
e income
Accounts Financial
941,068,459.35 Amortized cost 925,277,650.11
receivable assets
Other Financial
33,734,948.67 Amortized cost 31,060,184.59
receivables assets
Other equity fair value through
Financial
instrument 741,953.00 other comprehensiv 741,953.00
assets
investments e income
Short-term Financial
445,010,000.00 Amortized cost 445,464,333.33
borrowings liabilities
Financial
Notes payable 84,374,916.99 Amortized cost 84,374,916.99
liabilities
Accounts Financial 743,028,953.62 Amortized cost 743,028,953.62
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payable liabilities
Financial
Other payables 55,128,492.65 Amortized cost 54,674,159.32
liabilities
③ On January 1, 2019, the reconciliation statement on the carrying amount of the financial assets and financial liabilities under
revised financial instrument standard is as follows:
Carrying amount
Carrying amount
Items Reclassification Remeasurement under revised
under old standard
standard (Jan. 1,
(Dec. 31, 2018)
2019)
A. Financial assets
a. Measured at amortized cost
Cash and bank
261,938,068.72 261,938,068.72
balances
Notes receivable
Presented as original
46,475,656.01
CAS22
Less: transfer to fair
value through other
-12,824,200.80
comprehensive
income(new CAS22)
Presented as new
33,651,455.21
CAS22
Accounts receivable
Presented as original
941,068,459.35
CAS22
Remeasurement:
-15,790,809.24
expected credit loss
Presented as new
925,277,650.11
CAS22
Other receivable
Presented as original
33,734,948.67
CAS22
Remeasurement:
-2,674,764.08
expected credit loss
Presented as new
31,060,184.59
CAS22
143
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Carrying amount
Carrying amount
Items Reclassification Remeasurement under revised
under old standard
standard (Jan. 1,
(Dec. 31, 2018)
2019)
Total financial assets 1,283,217,132.75 -12,824,200.80 -18,465,573.32 1,251,927,358.63
at amortized cost
b. Measured at fair value through other comprehensive income
Receivables financing
Presented as original
CAS22
Less: transfer from
amortized cost 12,824,200.80
(original CAS22)
Presented as new
12,824,200.80
CAS22
Available-for-sale
financial assets
Presented as original
741,953.00
CAS22
Less: transfer to fair
value through other
comprehensive
income-other equity -741,953.00
instrument
investments (new
CAS22)
Presented as new
CAS22
Other equity
instrument
investments
Presented as original
CAS22
Add: transfer from
Available-for-sale
741,953.00
financial assets (new
CAS22)
Presented as new 741,953.00
144
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Carrying amount
Carrying amount
Items Reclassification Remeasurement under revised
under old standard
standard (Jan. 1,
(Dec. 31, 2018)
2019)
CAS22
Total financial assets
at fair value through 741,953.00 12,824,200.80 13,566,153.80
other comprehensive
income
B. Financial liabilities
a. Measured at amortized cost
Short-term
borrowings
Presented as original
445,010,000.00
CAS22
Add: transfer from
other payables 454,333.33
(interest payable)
Presented as new
445,464,333.33
CAS22
Notes payable 84,374,916.99 84,374,916.99
Accounts payable 743,028,953.62 743,028,953.62
Other payables
Presented as original
55,128,492.65
CAS22
Less: transfer to
short-term borrowings -454,333.33
(interest payable)
Presented as new
54,674,159.32
CAS22
Total financial
liabilities at amortized 1,327,542,363.26 1,327,542,363.26
cost
④ On January 1, 2019, the reconciliation statement on the provision for impairment of the financial assets under revised financial
instrument standard is as follows:
145
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Provision for impairment made under old Provision for
Items financial instrument standard/provisions Remeasurement impairment under
recognized under the contingencies standard revised standard (Jan. 1,
(Dec. 31, 2018) 2019)
Accounts receivable 56,220,092.44 15,790,809.24 72,010,901.68
Other receivable 33,739,468.01 2,674,764.08 36,414,232.09
3) The Company has adopted “CASBE 7 – Non-cash Assets Exchange” since June 10, 2019, and “CASBE 12 – Debt Restructuring”
since June 17, 2019, and changes in accounting policies are applicable to prospective application method.
2. Significant changes in accounting estimates
None
IV. Taxes
(I) Main taxes and tax rates
Taxes Tax bases Tax rates
17%、16%、13%、6%、
Value-added tax (VAT) The taxable revenue from sales of goods or
rendering of services 3%
For housing property levied on the basis of price,
housing property tax is levied at the rate of 1.2% of
Housing property tax the balance after deducting 30% of the cost; for 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%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
The Company 15%
Nanjing Putian Telege Intelligent Building Co., Ltd. 15%
Nanjing Putian Changle Telecommunications
15%
Equipment Co., Ltd.
Nanjing Putian Datang Information Electronic Co.,
15%
Ltd.
Nanjing Putian Network Co., Ltd. 15%
Putian Telecommunications (H.K.) Co., Ltd. 16.5%
Taxpayers other than the above-mentioned 25%
(II) Tax preferential policies
146
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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 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.
V. Notes to items of consolidated financial statements
Remarks: “Opening balance” in this report refers to balances as at January 1, 2019, while “closing balance” refers
to balances as at December 31, 2019; and “current period” refers to the year of 2019, while “preceding period”
refers to the year of 2018. This is also applicable to that of the parent company.
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 2,273.88 1,886.33
Cash in bank 208,781,592.72 201,367,431.09
Other cash and bank balances 52,486,166.68 60,568,751.30
Total 261,270,033.28 261,938,068.72
(2) Details of other cash and bank balances
Items Closing balance Opening balance
Bank acceptance deposit 36,000,000.00 38,442,848.22
147
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
deposit for L/G 16,477,961.78 22,125,903.08
Others 8,204.90
Total 52,486,166.68 60,568,751.30
Other cash and bank balances are restricted funds.
2. Notes receivable
(1) Details
1) Details of different categories
Closing balance
Book balance Provision for bad debts
Categories
% to Provision Carrying
Amount Amount proportion amount
total
(%)
Receivables with provision for bad
debts made on an individual basis
Including: Bank acceptance
Trade acceptance
Receivables with provision for bad
59,976,824.10 100.00 323,770.52 0.54 59,653,053.58
debts made on a collective basis
Including: Bank acceptance 53,501,413.64 89.20 53,501,413.64
Trade acceptance 6,475,410.46 10.80 323,770.52 5.00 6,151,639.94
Total 59,976,824.10 100.00 323,770.52 0.54 59,653,053.58
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount proportion
(%)
Receivables with provision for bad
debts made on an individual basis
Including: Bank acceptance
Trade acceptance
Receivables with provision for bad
33,651,455.21 100.00 33,651,455.21
debts made on a collective basis
Including: Bank acceptance 25,013,468.01 74.33 25,013,468.01
Trade acceptance 8,637,987.20 25.67 8,637,987.20
Total 33,651,455.21 100.00 33,651,455.21
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Written-of Others balance
148
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
f
individual
basis
collective 323,770.52 323,770.52
basis
Subtotal 323,770.52 323,770.52
(3) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 59,625,961.74
Trade acceptance 8,346,281.81
Subtotal 67,972,243.55
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.
However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance,
according to the China Commercial Instrument Law.
3. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Book balance Provision for bad debts
Categories
% to Provision Carrying amount
Amount Amount proportion
total
(%)
Receivables with provision
31,829,378.66 3.86 31,411,610.66 98.69 417,768.00
made on an individual basis
Receivables with provision
792,139,948.91 96.14 94,901,652.95 11.98 697,238,295.96
made on a collective basis
Total 823,969,327.57 100.00 126,313,263.61 15.33 697,656,063.96
(Continued)
Opening balance
Book balance Provision for bad debts
Categories
Provision Carrying amount
Amount % to total Amount proportion
(%)
Receivables with provision
made on an individual basis
Receivables with provision 997,288,551.79 100.00 72,010,901.68 7.22 925,277,650.11
made on a collective basis
Total 997,288,551.79 100.00 72,010,901.68 7.22 925,277,650.11
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
2) Accounts receivable with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons
debts proportion (%)
149
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Debtors Book balance Provision for bad Provision Reasons
debts proportion (%)
Mr. Xu 17,591,683.74 17,591,683.74 100.00 Unable to recover
China Tower
14,237,694.92 13,819,926.92 97.07 Unable to recover
Corporation Ltd.
Subtotal 31,829,378.66 31,411,610.66 98.69 Unable to recover
3) Accounts receivable with provision for bad debts made on age analysis
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 337,560,793.39 3,375,607.92 1.00
1-2 years 303,529,497.26 15,176,474.87 5.00
2-3 years 57,050,674.38 5,705,067.44 10.00
3-4 years 26,698,408.08 8,009,522.43 30.00
4-5 years 9,331,191.04 4,665,595.53 50.00
Over 5 years 57,969,384.76 57,969,384.76 100.00
Subtotal 792,139,948.91 94,901,652.95 11.98%
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Recov Reve Other
Written Closing balance
balance Accrual Others
ery rsal off s
Receivables with
provision made on an 31,411,610.66 31,411,610.66
individual basis
Receivables with
provision made on a 72,010,901.68 22,772,948.64 117,802.63 94,901,652.95
collective basis
Subtotal 72,010,901.68 54,184,559.30 117,802.63 126,313,263.61
(3) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Book balance Provision for
balance of accounts
bad debts
receivable (%)
Beijing UniStrong Science & Technology
52,167,500.00 6.33 2,608,375.00
Co., Ltd.
Beijing Zhongrui Haotian Information
25,499,700.00 3.09 1,274,985.00
Technology Co., Ltd.
Beidou navigation technology Co., Ltd. 21,589,232.00 2.62 1,079,461.60
Shenzhen Zhongchuang Electric
21,513,968.79 2.61 1,075,698.44
Measurement Technology Co., Ltd.
Dongpo Xi Laos Co., Ltd. 19,708,086.54 2.39 985,404.33
Subtotal 140,478,487.33 17.04 7,023,924.37
4. Receivables financing
(1) Details
150
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
1) Details on categories
Closing balance
Items
Interest Interest Changes in Carrying Provision for
Initial cost
adjustment accrued fair value amount impairment
Bank acceptance 3,821,550.77 3,821,550.77
Total 3,821,550.77 3,821,550.77
(Continued)
Opening balance
Items
Interest Interest Changes in fair Provision for
Initial cost Carrying amount
adjustment accrued value impairment
Bank acceptance 12,824,200.80 12,824,200.80
Total 12,824,200.80 12,824,200.80
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
2) Receivables financing with provision for impairment made on a collective basis
Closing balance
Items
Book balance Provision
Provision for impairment
proportion (%)
Bank acceptance 3,821,550.77
portfolio
Subtotal 3,821,550.77
(2) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 15,206,972.07
Subtotal 15,206,972.07
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility of
failure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.
However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance,
according to the China Commercial Instrument Law.
5. Advances paid
(1) Age analysis
Closing balance Opening balance
Ages Provision Provision
% to for % to for
Book balance Carrying amount Book balance Carrying amount
total impairmen total impairmen
t t
Within
22,726,145.30 67.32 22,726,145.30 179,718,854.19 95.17 179,718,854.19
1 year
1-2 7,774,347.45 23.03 7,774,347.45 3,256,231.30 1.72 3,256,231.30
151
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing balance Opening balance
Ages Provision Provision
% to for % to for
Book balance Carrying amount Book balance Carrying amount
total impairmen total impairmen
t t
years
2-3
1,297,653.28 3.84 1,297,653.28 1,176,772.69 0.62 1,176,772.69
years
Over 3
1,961,377.06 5.81 1,961,377.06 4,696,854.51 2.49 4,696,854.51
years
Total 33,759,523.09 100.00 33,759,523.09 188,848,712.69 100.00 188,848,712.69
(2) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Book balance balance of advances
paid (%)
Jiangsu Sainty Machinery IMP.&Co.,Ltd. 3,640,549.11 10.78
Jiangsu Xinxin Jiayuan Network Technology Co.,Ltd. 2,380,440.00 7.05
Guizhou Tianguang Shian Technology Co., Ltd. 2,239,090.77 6.63
Fuzhou Yunfeng Communication Technology Co., Ltd. 1,547,169.75 4.58
Brillview technology Inc. 1,422,420.00 4.21
Subtotal 11,229,669.63 33.26
6. Other receivables
(1) Details
1) Details on categories
Closing balance
Book balance Provision for bad debts
Categories
Carrying
Provision
Amount % to Amount amount
proportion
total
(%)
Receivables with provision made
28,912,122.71 45.55 28,912,122.71 100.00
on an individual basis
Including: Interest receivable
Dividend receivable
Other receivables 28,912,122.71 45.55 28,912,122.71 100.00
Receivables with provision made
34,563,137.22 54.45 6,452,746.69 18.67 28,110,390.53
on a collective basis
Including: Interest receivable
Dividend receivable
Other receivables 34,563,137.22 54.45 6,452,746.69 18.67 28,110,390.53
Total 63,475,259.93 100.00 35,364,869.40 55.71 28,110,390.53
(Continued)
152
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Opening balance
Book balance Provision for bad debts
Categories
Carrying
Provision
Amount % to Amount amount
proportion
total
(%)
Receivables with provision made
28,912,122.71 42.85 28,912,122.71 100.00
on an individual basis
Including: Interest receivable
Dividend receivable
Other receivables 28,912,122.71 42.85 28,912,122.71 100.00
Receivables with provision made
38,562,293.97 57.15 7,502,109.38 19.45 31,060,184.59
on a collective basis
Including: Interest receivable
Dividend receivable
Other receivables 38,562,293.97 57.15 7,502,109.38 19.45 31,060,184.59
Total 67,474,416.68 100.00 36,414,232.09 53.97 31,060,184.59
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
2) Other receivables with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for
debts proportion (%) provision made
Beijing Likong
Communication 28,912,122.71 28,912,122.71 100.00 Unable to recover
Equipment Co., Ltd.
Subtotal 28,912,122.71 28,912,122.71 100.00
3) Other receivables with provision made on a collective basis
Closing balance
Portfolios
Book balance Provision for bad debts Provision proportion (%)
Portfolio-Financing margin 5,578,947.37
Portfolio-Others 28,984,189.85 6,452,746.69 22.26
Subtotal 34,563,137.22 6,452,746.69 18.67
(2) Age analysis
Items Closing book balance
Within 1 year 17,480,990.19
1-2 years 9,297,587.45
2-3 years 2,517,678.34
3-4 years 1,673,457.97
153
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
4-5 years 733,113.00
Over 5 years 31,772,432.98
Subtotal 63,475,259.93
(3) Changes in provision for bad debts
1) Details
Phase I Phase II Phase III
Lifetime
Items 12 month Lifetime expected Total
expected credit
expected credit losses
losses (credit
credit losses (credit impaired)
not impaired)
Opening balance 1,634,746.56 34,779,485.53 36,414,232.09
Opening balance in the
current period
--Transferred to phase II
--Transferred to phase III -83,672.90 83,672.90
--Reversed to phase II
--Reversed to phase I
Provision made in the
-365,208.21 -684,262.41 -1,049,470.62
current period
Provision recovered in
current period
Provision reversed in
current period
Provision written-off in
current period
Other changes 107.93 107.93
Closing balance 1,185,865.45 34,179,003.95 35,364,869.40
(4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary payment receivable 36,848,648.68 33,879,523.33
Security deposit 23,681,938.64 24,126,517.87
Imprest 1,499,462.35 2,652,720.79
Others 1,445,210.26 6,815,654.69
Total 63,475,259.93 67,474,416.68
(5) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Ages total balance of Provision for
Book balance
receivables other receivables bad debts
(%)
Beijing Likong Communication Temporary Over 5
28,912,122.71 45.55 28,912,122.71
Equipment Co., Ltd. payment years
154
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Proportion to the
Debtors Nature of Ages total balance of Provision for
Book balance
receivables other receivables bad debts
(%)
receivable
Ping An International Financial Security 1-2 yea
4,000,000.00 6.30
Leasing Co., Ltd. deposit rs
China Potevio Information Security 1-5 yea
1,958,000.00 3.08 496,900.00
Industry Inc. deposit rs
Far East International Leasing Security Within
1,578,947.37 2.49
Co.,Ltd. deposit 1 year
Shenzhen Metro Group Co., Security Within
1,490,768.10 2.35 74,538.41
Ltd. Construction Headquarters deposit 1 year
Subtotal 37,939,838.18 59.77 29,483,561.12
7. Inventories
(1) Details
Closing balance Opening balance
Items
Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
write-down write-down
Raw materials 33,932,185.24 3,232,000.61 30,742,039.05 84,431,224.04 3,401,987.55 81,029,236.49
Work in
11,050,997.83 11,050,997.83 33,004,830.02 33,004,830.02
process
Goods on hand 74,186,943.04 17,585,934.82 56,559,153.80 80,895,523.20 7,337,485.59 73,558,037.61
Goods
129,012,025.69 20,346,372.53 108,665,653.16 108,005,683.58 13,804,319.56 94,201,364.02
dispatched
Materials on
consignment
3,184,134.32 804,691.99 2,379,442.33 5,983,856.44 804,691.99 5,179,164.45
for further
processing
Total 251,366,286.12 41,968,999.95 209,397,286.17 312,321,117.28 25,348,484.69 286,972,632.59
(2) Provision for inventory write-down
1) Details
Increase Decrease
Items Opening Closing
balance Provision Others Reversal or Others balance
written-off
Raw materials 3,401,987.55 2,151,256.43 2,321,243.37 3,232,000.61
Goods on hand 7,337,485.59 10,883,696.14 635,246.91 17,585,934.82
Goods dispatched 13,804,319.56 6,542,052.97 20,346,372.53
Materials on
consignment for 804,691.99 804,691.99
further processing
Subtotal 25,348,484.69 19,577,005.54 2,956,490.28 41,968,999.95
8. Other current assets
155
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Closing balance Opening balance
Input VAT to be credited 10,632,374.23 13,497,540.69
Prepaid income tax 977,871.76
Total 11,610,245.99 13,497,540.69
9. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items Provision Provision
for for
Book balance Carrying amount Book balance Carrying amount
impairmen impairmen
t t
Investmen
ts in 10,422,067.61 10,422,067.61 11,128,318.34 11,128,318.34
associates
Investmen
ts in joint 171,340,315.89 171,340,315.89 172,115,761.89 172,115,761.89
ventures
Total 181,762,383.50 181,762,383.50 183,244,080.23 183,244,080.23
(2) Details
Increase/Decrease
Investees Opening Adjustment in
Investment income
balance Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Joint ventures
SEI-Nanjing Potevio
Optical Network Co., 11,128,318.34 -706,250.73
Ltd.
Subtotal 11,128,318.34 -706,250.73
Associates
Nanjing Putian Telege
1,183,862.97 1,183,862.97
Cable Co., Ltd.
Potevio Hi-tech
170,931,898.92 408,416.97
Industry Co., Ltd.
Subtotal 172,115,761.89 1,183,862.97 408,416.97
Total 183,244,080.23 1,183,862.97 -297,833.76
(Continued)
Increase/Decrease Closing
Investees balance of
Closing balance
Changes in Cash dividend/profit Provision for Others provision for
other equity declared for distribution impairment impairment
Joint ventures
156
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Increase/Decrease Closing
Investees balance of
Closing balance
Changes in Cash dividend/profit Provision for Others provision for
other equity declared for distribution impairment impairment
SEI-Nanjing
Potevio Optical 10,422,067.61
Network Co., Ltd.
Subtotal 10,422,067.61
Associates
Nanjing Putian
Telege Cable Co.,
Ltd.
Potevio Hi-tech
171,340,315.89
Industry Co., Ltd.
Subtotal 171,340,315.89
Total 181,762,383.50
10. Other equity instrument investments
Accumulated amount of gains or
losses transferred from other
Items Closing Opening Dividend comprehensive income to
balance balance income retained earnings
Amount Reasons
Nanjing Yuhua
420,915.00 420,915.00
Electroplating Factory
Hangzhou Honyar
321,038.00 321,038.00
Electrical Co.,Ltd.
Beijing Likong
Communication
Equipment Co., Ltd.
Subtotal 741,953.00 741,953.00
Note: Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
The investment in Nanjing Yuhua Electroplating Factory, Hangzhou Honyar Electrical Co.,Ltd. and Beijing Likong Communication
Equipment Co., Ltd. are classified as other equity instrument investments, the Company measured it at fair value through other
comprehensive income.
11. Investment property
Items Buildings and structures Land use right Total
Cost
Opening balance 18,646,397.35 3,642,147.87 22,288,545.22
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Items Buildings and structures Land use right Total
Increase
1) Acquisition
Decrease
1) Disposal
Closing balance 18,646,397.35 3,642,147.87 22,288,545.22
Accumulated depreciation and amortization
Opening balance 10,164,478.73 1,884,534.51 12,049,013.24
Increase 466,943.34 119,960.64 586,903.98
1) Accrual 466,943.34 119,960.64 586,903.98
Decrease
1) Disposal
Closing balance 10,631,422.07 2,004,495.15 12,635,917.22
Provision for impairment
Opening balance 1,842,418.00 1,842,418.00
Increase
1) Provision made
Decrease
1) Disposal
Closing balance 1,842,418.00 1,842,418.00
Carrying amount
Closing balance 6,172,557.28 1,637,652.72 7,810,210.00
Opening balance 6,639,500.62 1,757,613.36 8,397,113.98
12. Fixed assets
(1) Details
Buildings and Machinery Transport Electronic Subtotal/
Items Others
structures equipment facilities equipment Total
Cost
Opening balance 146,734,468.68 47,510,328.82 12,956,558.48 7,377,179.98 46,466,540.34 261,045,076.30
Increase 5,839,892.88 1,831,334.40 18,498.61 134,723.49 537,267.92 8,361,717.30
1) Acquisition 1,831,334.40 18,498.61 134,472.61 460,203.70 2,444,509.32
2) Transferred in from
5,839,892.88 77,064.22 5,916,957.10
construction in progress
3) Retranslation 250.88 250.88
Decrease 11,402,316.05 2,490,947.33 1,314,061.76 1,170,280.46 16,377,605.60
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Buildings and Machinery Transport Electronic Subtotal/
Items Others
structures equipment facilities equipment Total
1) Disposal/scrap 11,402,316.05 2,490,947.33 1,314,061.76 1,170,280.46 16,377,605.60
Closing balance 152,574,361.56 37,939,347.17 10,484,109.76 6,197,841.71 45,833,527.80 253,029,188.00
Accumulated depreciation
Opening balance 50,615,949.47 37,030,086.33 11,631,222.35 5,825,140.46 42,701,045.00 147,803,443.61
Increase 5,049,237.14 2,137,363.36 293,256.32 1,458,792.71 427,244.61 9,365,894.14
1) Accrual 5,049,237.14 2,137,363.36 293,256.32 1,458,541.83 427,244.61 9,365,643.26
2) Retranslation 250.88 250.88
Decrease 10,828,547.47 2,415,391.10 1,294,096.56 1,061,042.72 15,599,077.85
1) Disposal/scrap 10,828,547.47 2,415,391.10 1,294,096.56 1,061,042.72 15,599,077.85
Closing balance 55,665,186.61 28,338,902.22 9,509,087.57 5,989,836.61 42,067,246.89 141,570,259.90
Provision for impairment
Opening balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Increase
Decrease
Closing balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Carrying amount
Closing balance 96,370,050.95 9,589,581.93 975,022.19 196,956.75 3,590,490.70 110,722,102.52
Opening balance 95,579,395.21 10,469,379.47 1,325,336.13 1,540,991.17 3,589,705.13 112,504,807.11
2) Fixed assets temporarily idle
Items Cost Accumulated Provision for Note
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
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 32,787,161.70 Unable to handle
Subtotal 32,787,161.70
22. Construction in progress
(1) Details
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing balance Opening balance
Projects Provision Provision
Book balance for Carrying amount Book balance for Carrying amount
impairment impairment
Nanjing Putian Datang
Information Electronics
12,738,203.48 12,738,203.48 2,472,349.61 2,472,349.61
Co., Ltd. Product
Development Center
Nanjing putian science
and technology pioneer
park intelligent park
5,781,757.54 5,781,757.54
construction related
building intelligent
equipment.
Others 310,498.11 310,498.11 1,218,276.61 1,218,276.61
Total 13,048,701.59 13,048,701.59 9,472,383.76 9,472,383.76
2) Changes in significant projects
Projects Budgets Increase Transferred to Closing balance
Opening balance
fixed assets
Nanjing Putian Datang Information Electronics Co., Ltd.
30,000,000.00 2,472,349.61 10,265,853.87 12,738,203.48
Product Development Center
Nanjing putian science and technology pioneer park
intelligent park construction related building intelligent 5,920,000.00 5,781,757.54 5,781,757.54
equipment.
Subtotal 35,920,000.00 8,254,107.15 10,265,853.87 5,781,757.54 12,738,203.48
(Continued)
Completio
Accumulated n Accumulated amount Amount of borrowing Annual
Projects investment to percentage of borrowing cost cost capitalization in capitalizati Fund source
budget capitalization current period on rate (%)
(%)
Nanjing Putian Datang
Information Electronics Co., Self-owned
42.46 42.46
Ltd. Product Development fund
Center
Nanjing putian science and
technology pioneer park
Self-owned
intelligent park construction 97.66 100.00
fund
related building intelligent
equipment.
Subtotal
14. Intangible assets
Items Land use right Software Patent right Non-patent Total
technology
Cost
Opening balance 34,638,346.69 11,978,112.74 607,500.00 4,560,000.00 51,783,959.43
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Items Land use right Software Patent right Non-patent Total
technology
Increase
1) Acquisition
2) Internal research and development
Decrease 607,500.00 4,560,000.00 5,167,500.00
1) Disposal 607,500.00 4,560,000.00 5,167,500.00
Closing balance 34,638,346.69 11,978,112.74 46,616,459.43
Accumulated amortization
Opening balance 6,865,500.72 9,465,359.94 607,500.00 4,560,000.00 21,498,360.66
Increase 862,457.85 1,041,894.64 1,904,352.49
1) Accrual 862,457.85 1,041,894.64 1,904,352.49
Decrease 607,500.00 4,560,000.00 5,167,500.00
1) Disposal 607,500.00 4,560,000.00 5,167,500.00
Closing balance 7,727,958.57 10,507,254.58 18,235,213.15
Carrying amount
Closing balance 26,910,388.12 1,470,858.16 28,381,246.28
Opening balance 27,772,845.97 2,512,752.80 30,285,598.77
15. Long-term prepayments
Items Opening balance Increase Amortization Closing balance
Reconstruction of canteen 789,761.03 229,357.80 224,517.83 794,601.00
Reconstruction of office building 1,262,446.69 2,143,855.16 1,219,977.37 2,186,324.48
Others 1,510,129.12 59,433.96 289,713.38 1,279,849.70
Total 3,562,336.84 2,432,646.92 1,734,208.58 4,260,775.18
16. Short-term borrowings
Items Closing balance Opening balance
Pledge borrowings 276,812,627.72 250,396,333.33
Mortgage borrowings 65,042,904.11 65,010,000.00
Secured borrowings 110,060,416.67 130,058,000.00
Total 451,915,948.50 445,464,333.33
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
17. Notes payable
Items Closing balance Opening balance
161
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Closing balance Opening balance
Bank acceptance 72,000,000.00 68,442,848.22
Trade acceptance 9,784,929.91 15,932,068.77
Total 81,784,929.91 84,374,916.99
18. Accounts payable
(1) Details
Items Closing balance Opening balance
Procurement of materials 679,428,580.08 742,212,386.80
Project payment 816,566.82
Total 679,428,580.08 743,028,953.62
(2) Significant accounts payable with age over one year
Items Closing balance Reasons for unsettlement
Nanjing Featchina Electric Co., Ltd. 21,963,551.71 Not yet settled
SEI-Nanjing Potevio Optical Network Co., Ltd. 20,530,725.66 Not yet settled
China Potevio Information Industry Inc. 19,641,228.50 Not yet settled
Jiangsu Sainty Machinery IMP.&Co.,Ltd. 18,799,670.60 Not yet settled
POLYCOM communications technology
17,737,438.13 Not yet settled
(Beijing) Co.,Ltd.
Subtotal 98,672,614.60
19. Advances received
Items Closing balance Opening balance
Payment for goods 22,148,080.67 259,545,648.66
Total 22,148,080.67 259,545,648.66
20. Employee benefits payable
(1) Details
Items Opening balance Increase Decrease Closing balance
Short-term employee benefits 21,132,336.19 211,945,155.91 211,474,784.40 21,602,707.70
Post-employment benefits -
29,987,049.94 29,987,049.94
defined contribution plan
Total 21,132,336.19 241,932,205.85 241,461,834.34 21,602,707.70
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
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Items Opening balance Increase Decrease Closing balance
Wage, bonus, allowance and
11,254,526.62 150,842,449.91 150,887,038.91 11,209,937.62
subsidy
Employee welfare fund 10,842,623.28 10,842,623.28
Social insurance premium 15,537,946.52 15,537,946.52
Including: Medicare premium 14,220,642.06 14,220,642.06
Occupational injuries
301,393.45 301,393.45
premium
Maternity premium 1,015,911.01 1,015,911.01
Housing provident fund 156,533.23 12,964,736.67 12,964,736.67 156,533.23
Trade union fund and employee
9,721,276.34 3,274,713.28 2,780,429.53 10,215,560.09
education fund
Compensation for termination
6,590,904.35 6,590,904.35
of labor relations
Others 11,891,781.90 11,871,105.14 20,676.76
Subtotal 21,132,336.19 211,945,155.91 211,474,784.40 21,602,707.70
(3) Details of defined contribution plan
Items Opening balance Increase Decrease Closing balance
Basic endowment insurance
25,736,048.20 25,736,048.20
premium
Unemployment insurance
1,168,522.03 1,168,522.03
premium
Company annuity payment 3,082,479.71 3,082,479.71
Subtotal 29,987,049.94 29,987,049.94
21. Taxes and rates payable
Items Closing balance Opening balance
VAT 1,385,203.91 11,419,693.22
Enterprise income tax 1,605,203.32 3,685,037.85
Individual income tax 90,009.67 233,032.97
Urban maintenance and construction tax 446,279.63 900,385.94
Housing property tax 222,050.55 248,142.34
Land use tax 83,316.67 83,316.67
Education surcharge 287,880.75 655,635.04
Other tax 5,622.10 4,914.99
Total 4,125,566.60 17,230,159.02
22. Other payables
(1) Details
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Closing balance Opening balance
Dividend payable 12,538,813.38 2,018,213.38
Other payables 48,707,865.43 52,655,945.94
Total 61,246,678.81 54,674,159.32
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
(2) Dividend payable
Items Closing balance Opening balance
Dividend of ordinary shares 12,538,813.38 2,018,213.38
Subtotal 12,538,813.38 2,018,213.38
(3) Other payables
Items Closing balance Opening balance
Temporary receipts payable 28,413,293.97 23,338,514.42
Unsettled installation cost 6,405,205.17 18,165,474.04
Deposits 6,942,844.36 5,611,697.12
Unpaid employee reimbursement 2,184,841.28 2,899,584.68
Others 4,761,680.65 2,640,675.68
Total 48,707,865.43 52,655,945.94
23. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term payables due within one year 10,820,807.35
Total 10,820,807.35
24. Long-term borrowings
Items Closing balance Opening balance
Finance lease 12,827,205.03
Total 12,827,205.03
25. Deferred income
Items Opening balance Increase Decrease Closing balance
Government grants 7,296,315.00 7,958,376.90 9,249,818.90 6,004,873.00
Total 7,296,315.00 7,958,376.90 9,249,818.90 6,004,873.00
Note: Please refer to section V (IV) 3 of notes to financial statements for details on grants included into profit or loss.
164
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
26. Share capital
Movements
Items Opening
Issue of Reserve Closing balance
balance Bonus
new transferred Others Subtotal
shares
shares to shares
Total shares 215,000,000.00 215,000,000.00
27. Capital reserve
Items Opening balance Increase Decrease Closing balance
Share 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
28. Other comprehensive income (OCI)
Current period cumulative
Less: OCI
Current
Items Opening carried Closing
period Less: Attributable Attributable to
balance forward balance
cumulative income to parent non-controllin
transferred
before tax company g shareholders
to profit or
income tax
loss
Items to be
reclassified
-6,802,498.58 29,304.15 26,373.73 2,930.42 -6,776,124.85
subsequently to profit
or loss
Including: Translation
-4,947,588.58 29,304.15 26,373.73 2,930.42 -4,921,214.85
reserves
Reclassified
financial assets to -1,854,910.00 -1,854,910.00
OCI
Total -6,802,498.58 29,304.15 26,373.73 2,930.42 -6,776,124.85
Note: Differences between the opening amount and the end amount of the previous year (December 31, 2018) are presented as
III(XXVII) for details.
29. 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
30. Undistributed profit
(1) Details
Items Current period Preceding period
cumulative comparative
165
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Current period Preceding period
cumulative comparative
Balance before adjustment at the end of preceding period -40,726,776.80 -44,605,902.63
Add: Increase due to adjustment (or less: decrease) -14,829,568.99 -1,980,089.01
Opening balance after adjustment -55,556,345.79 -46,585,991.64
Add: Net profit attributable to owners of the parent
-169,088,516.69 5,859,214.84
company
Less: Appropriation of statutory surplus reserve
Dividend payable on ordinary shares
Closing balance -224,644,862.48 -40,726,776.80
(2) Details of increase or decrease due to adjustment
Adjustments of -14,829,568.99 yuan are made on opening balance of undistributed profit due to changes in accounting policies.
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 1,316,694,560.34 1,070,497,619.85 1,927,264,745.34 1,594,738,812.81
Other
21,589,633.87 17,276,746.81 68,363,027.26 48,376,709.57
operations
Total 1,338,284,194.21 1,087,774,366.66 1,995,627,772.60 1,643,115,522.38
2. Taxes and surcharges
Items Current period cumulative Preceding period comparative
Urban maintenance and
3,276,155.79 4,620,799.94
construction tax
Education surcharge 2,311,072.67 3,292,038.83
Housing property tax 1,462,422.80 1,453,355.85
Land use tax 547,177.81 589,112.16
Other tax 704,990.25 965,332.41
Total 8,301,819.32 10,920,639.19
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 77,048,927.73 70,194,402.37
Transport fees and transport
19,665,748.31 20,909,275.08
damages
166
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Current period cumulative Preceding period comparative
Business entertainment 17,114,142.33 20,664,396.74
Travelling expenses 13,819,057.87 15,966,752.60
Office expenses 5,560,856.53 4,199,890.00
Conference expenses 1,525,458.07 1,446,273.00
Promotion expenses 1,155,792.65 1,910,941.70
Sales service charges 1,038,155.51 2,451,675.69
Equipment maintain fees 53,959.44 616,140.73
Others 9,897,334.48 15,162,580.36
Total 146,879,432.92 153,522,328.27
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 55,926,241.69 51,771,703.92
Depreciation and amortization 6,887,635.80 5,022,564.80
Consulting, intermediary and legal
5,448,016.21 6,818,156.63
fees
Office expenses 4,275,357.00 3,751,126.94
Lease expenses 3,131,821.43 3,406,740.99
Business entertainment 2,253,298.18 2,797,113.99
Travelling expense 1,461,187.42 3,185,065.89
Funding for Party Building 1,213,551.34 1,060,733.94
Others 6,850,720.61 8,689,907.31
Total 87,447,829.68 86,503,114.41
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 55,575,661.68 55,938,206.12
Intermediate test fee 600,097.91 3,785,739.52
Travelling expenses 3,433,025.78 3,667,575.96
Material use 3,270,507.03 3,081,505.47
Depreciation and amortization 1,555,336.33 1,739,684.27
Commissioned development 841,669.70 1,221,605.55
Others 5,902,643.08 6,840,816.37
Total 71,178,941.51 76,275,133.26
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenditures 30,200,892.97 23,694,841.52
Less: Interest income 1,475,350.85 2,665,279.32
Losses on foreign exchange 7,720.32 -293,209.60
Financial institution fees 692,502.67 897,134.41
Financing fee 1,149,386.79 840,754.71
Others 66,018.86
Total 30,575,151.90 22,540,260.58
7. Other income
Items Current period Preceding period Amount included in
cumulative comparative non-recurring profit or loss
Government grants
7,894,918.90 13,702,488.41 2,910,347.47
related to income [Note]
Total 7,894,918.90 13,702,488.41 2,910,347.47
Note: Please refer to notes V(IV)3. to government grants for details on grants included into other income.
8. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term
equity investments under equity -297,833.76 -3,085,858.80
method
Total -297,833.76 -3,085,858.80
9. Credit impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -53,458,859.20
Total -53,458,859.20
10. Assets impairment loss
Items Current period cumulative Preceding period comparative
Bad debts -9,071,391.90
Inventory write-down loss -19,577,005.54 -11,527,903.45
Total -19,577,005.54 -20,599,295.35
11. Gains on asset disposal
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative
loss
Gains on disposal of fixed assets 119,033.08 33,522,820.90 119,033.08
Total 119,033.08 33,522,820.90 119,033.08
12. Non-operating revenue
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Government grants 1,354,900.00 1,489,000.00 1,354,900.00
Unpaid payables 362,546.35 1,332,427.34 362,546.35
Penalty income 63,385.71 65,602.74 63,385.71
Others 119,216.78 101,780.34 119,216.78
Total 1,900,048.84 2,988,810.42 1,900,048.84
13. Non-operating expenditures
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Penalty expenditures 343,083.03 195,554.97 343,083.03
Donation expenditures 105,000.00
Losses on damage or
retirement of non-current 39,364.85
assets
Others 25,016.81 32,579.27 25,016.81
Total 368,099.84 372,499.09 368,099.84
14. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax
1,279,314.02 4,793,925.22
expenses
Total 1,279,314.02 4,793,925.22
(2) Reconciliation of accounting profit to income tax expenses
Items Current period Preceding period
cumulative comparative
Profit before tax -157,661,145.30 28,907,241.00
Income tax expenses based on tax rate applicable
-23,649,171.79 4,336,086.15
to the parent company
Effect of different tax rate applicable to
-626,836.21 2,329,261.16
subsidiaries
169
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Current period Preceding period
cumulative comparative
Effect of prior income tax reconciliation 498,379.34 -1,024,603.99
Effect of non-taxable income 462,878.82
Effect of non-deductible costs, expenses and
3,456,216.58 2,909,790.78
losses
Effect of deducible temporary differences or -5,499,920.41
deductible losses not recognized
Effect of reverse of taxable temporary differences that
deferred income tax liabilities not recognized in previous 110,437.79 184,062.99
period
Effect of deducible temporary differences or deductible
31,109,797.60 6,085,709.68
losses not recognized
Deduction of R&D expenditures -9,619,509.29 -4,989,339.96
Income tax expenses 1,279,314.02 4,793,925.22
(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 2,973,805.47 4,887,053.32
Interest income 1,475,350.85 2,665,279.32
Intercourse 14,077,394.69 14,580,000.00
VAT refund 1,674,556.65
Others 6,356,466.57 11,131,427.15
Total 24,883,017.58 34,938,316.44
2. Other cash payments related to operating activities
Items Current period cumulative Preceding period comparative
Selling and Administrative
110,042,009.33 136,557,091.67
expenses paid in cash
Intercourse 2,969,125.35 22,923,883.09
Guaranteed payment 5,705,120.89
Others 8,204.90 4,987,581.84
Total 113,019,339.58 170,173,677.49
3. Other cash receipts related to financing activities
Items Current period cumulative Preceding period comparative
Financial lease payments 30,000,000.00
170
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Current period cumulative Preceding period comparative
received
Total 30,000,000.00
4. Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Installment financing lease
7,930,934.99
payments
Payment of financing handling
1,149,386.79 840,754.71
fees
Total 9,080,321.78 840,754.71
5. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Supplement information Current period Preceding period
cumulative comparative
(1) Reconciliation of net profit to cash flow from operating
activities:
Net profit -158,940,459.32 24,113,315.78
Add: Provision for assets impairment loss 70,079,374.46 19,831,055.59
Depreciation of fixed assets, oil and gas assets,
9,832,586.60 11,030,411.19
productive biological assets
Amortization of intangible assets 2,024,313.13 1,469,027.61
Amortization of long-term prepayments 1,734,208.58 1,337,826.15
Loss on disposal of fixed assets, intangible assets
-119,033.08 -33,522,820.90
and 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) 31,358,000.08 24,535,596.23
Investments losses (Less: gains) 297,833.76 3,085,858.80
Decrease of deferred tax assets (Less: increase)
Increase of deferred tax liabilities (Less: decrease)
Decrease in inventories (Less: increase) 60,954,831.16 192,165,761.08
Decrease in operating receivables (Less: increase) 326,109,564.75 -318,167,229.87
Increase of operating payables (Less: decrease) -320,645,105.21 -81,336,900.34
Others
Net cash flow from operating activities 22,686,114.91 -155,418,733.83
(2) Significant investing and financing activities not related
to cash receipts and payments:
171
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Supplement information Current period Preceding period
cumulative comparative
Conversion of debt into share capital
Convertible bonds due within one year
Fixed assets rented in under finance leases
(3) Net changes in cash and cash equivalents:
Cash at the end of the period 208,783,866.60 201,369,317.42
Less: Cash at the beginning of the period 201,369,317.42 311,056,919.17
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the
period
Net increase of cash and cash equivalents 7,414,549.18 -109,687,601.75
(2) Cash and cash equivalents
Items Closing balance Opening balance
1) Cash 208,783,866.60 201,369,317.42
Including: Cash on hand 2,273.88 1,886.33
Cash in bank on demand for payment 208,781,592.72 201,367,431.09
2) Cash equivalents
3) Cash and cash equivalents at the end of the period 208,783,866.60 201,369,317.42
(3) Amount of endorsed commercial acceptance not involving cash receipts and payments
Items Current period cumulative Preceding period comparative
Amount of endorsed commercial
153,041,789.44 469,756,030.30
acceptance
Including: Payment for goods 152,290,789.44 469,756,030.30
Payment for acquisition of
long-term assets, such as 751,000.00
fixed-assets
(IV) Others
1. Assets with title or use right restrictions
(1) Details
Items Closing carrying amount Reasons for restrictions
Deposit for acceptance and
Cash and bank balances 52,477,961.78
deposit for L/G
Cash and bank balances 8,204.90 Bank freeze due to litigation
Accounts receivable 52,167,500.00 Pledged borrowings
Fixed assets 32,664,415.64 mortgaged borrowings
172
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Closing carrying amount Reasons for restrictions
Intangible assets 1,898,216.30 mortgaged borrowings
Total 139,216,298.62
(2) Other remarks
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 Putian Telege Intelligent Building Co., Ltd. 33.17 million yuan, 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 Exchange rate RMB equivalent
foreign currencies
Cash and bank balances 4,978,695.23
Including: USD 635,339.59 6.9762 4,432,256.05
EUR 522.27 7.8155 4,081.80
HKD 603,312.05 0.8958 540,446.93
GBP 208.79 9.1501 1,910.45
3. Government grants
(1) Government grants related to income and used to compensate future relevant costs, expenses or losses
Opening Closing
Recognized in
Items balance of Increase Recognized in balance of related to
non-operating
deferred other income deferred asset/income
income
income income
Science and
technology
development plan and
related to
1,000,000.00 1,000,000.00
science and technology income
funding target
subsidies
Compensation for
related to
6,296,315.00 1,291,442.00 5,004,873.00
zombie enterprise income
Subtotal 7,296,315.00 1,291,442.00 6,004,873.00
(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items Amounts Presented under Remarks
VAT refund 4,984,571.43 Other income Cai Shui [2011] No.100
173
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Amounts Presented under Remarks
Nanjing Yuhua Development
Management Committee Finance
Institute New Energy Vehicle Key
Special fund 600,000.00 Other income
Technology Breakthrough and
Industrialization Project Award
Fund
Rewards of R&D 368,000.00 Other income
Nanjing Qinhuai District Science
Rewards of technology
300,000.00 Other income and Technology Bureau
development
Technology Development Award
Stable subsidy 149,855.47 Other income
Supporting fund 100,000.00 Other income
Special fund for software 100,000.00 Other income
Vocational training subsidy 1,050.00 Other income
A notice on Nanjing's science and
Reward for High-tech Non-operating technology development plan and
1,354,900.00
Enterprises income science and technology funding
targets, etc.
Subtotal 7,958,376.90
The amount of government subsidies included in the current profits and losses is 9,249,818.90 yuan.
VI. Changes in the consolidation scope
None.
VII. Interest in other entities
(1) Interest in significant subsidiaries
1. Composition of 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 not under
Manufacture 75.00
Electrics Co., Ltd. City City the same
174
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
control
Nanjing Putian Nanjing Nanjing Manufacture 78.00 Set up
Network Co., Ltd. City City
not under
Nanjing Putian Datang
Nanjing Nanjing Manufacture 40.00 the same
Information Electronic
City City
Co., Ltd. control
Nanjing Putian
Nanjing Nanjing Manufacture 70.00 Set up
Communication
City City
Technology Co., Ltd.
Nanjing Putian
Nanjing Nanjing Manufacture 67.00 32.46 Set up
Wangzhi Electronic
City City
Co., Ltd.
Nanjing Bada
Nanjing Nanjing Manufacture 60.00 Set up
Communication
City City
Equipment Co., Ltd.
Nanjing Putian
Nanjing Nanjing Manufacture 99.00 0.98 Set up
Information
City City
Technology Co., Ltd.
Putian Communications Hong Hong Trading 90.00 Set up
(Hong Kong) Co., Ltd. Kong Kong
2) Other remarks
Remarks on inconsistency between holding proportion owned and voting rights proportion owned in subsidiaries
a. 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.
b. The Company holds 40% equity of Nanjing Putian Datang Information Electronic Co., Ltd. The Company
signed the agreement with Yan yaoming, a shareholder of Nanjing Putian Datang Information Electronic Co., Ltd.,
to exercise his 21% right to vote. The agreement is valid during the period of the existence of Nanjing Putian
Datang Information Electronic Co., Ltd. The Company has 61% of the voting right during the existence period of
Nanjing Putian Datang Information Electronic Co., Ltd.
2. Significant not wholly-owned subsidiaries
1) Details
Dividend Closing balance
Holding proportion Non-controlling
declared to of non-controlling
Subsidiaries of non-controlling shareholders’
non-controlling shareholders’
shareholders profit or loss
shareholders profit or loss
Nanjing Putian Telege
54.233% 12,656,330.83 10,846,600.00 68,269,418.12
Intelligent Building Ltd.
175
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
3. Main financial information of significant not wholly-owned subsidiaries
1) Assets and liabilities
Closing balance
Subsidiaries
Current Non-current Total assets Non-current
Current liabilities Total liabilities
assets assets liabilities
Nanjing Putian
Telege Intelligent 272,941,946.26 35,035,874.45 307,977,820.71 182,096,128.53 182,096,128.53
Building Ltd.
(Continued)
Opening balance
Subsidiaries
Current Total assets Non-current
Non-current assets Current liabilities Total liabilities
assets liabilities
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.
2) Profit or loss and cash flows
Current period cumulative Preceding period comparative
Cash flows Cash flows
Subsidiaries Total Total
Operating from Operating from
Net profit comprehensi Net profit comprehensi
revenue operating revenue operating
ve income ve income
activities activities
Nanjing Putian Telege 362,262,4 23,336,95 23,336,95 57,350,65 332,950,6 17,793,03 17,793,03 13,930,
Intelligent Building Ltd. 42.89 5.05 5.05 1.98 45.89 7.13 7.13 731.99
(II) Interest in joint venture or associates
1. Significant joint ventures or associates
(1) Basic information
Main Holding proportion Accountin
Joint ventures or Place of (%)
operating Business nature
associates registration Direct Indirect g treatment
place
Potevio Hi-tech Nanjing Nanjing Industrial park Equity
Industry Co., Ltd. City City venue rental 49.64 method
management etc.
2. Main financial information of significant joint ventures
Closing balance/current period Opening balance/preceding
Items cumulative period comparative
Potevio Hi-tech Industry Co., Ltd.
Current assets 157,263,692.10 161,743,478.51
Non-current assets 195,395,449.73 190,882,106.08
Total assets 352,659,141.83 352,625,584.59
Current liabilities 7,493,085.87 8,282,339.46
Non-current liabilities
176
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing balance/current period Opening balance/preceding
Items cumulative period comparative
Potevio Hi-tech Industry Co., Ltd.
Total liabilities 7,493,085.87 8,282,339.46
Non-controlling interest
Equity attributable to owners of
345,166,055.96 344,343,245.13
parent company
Proportionate share in net assets 171,340,315.89 170,931,898.92
Adjustments
Goodwill
Unrealized profit in
internal trading
Others
Carrying amount of investments
171,340,315.89 170,931,898.92
in joint ventures
Fair value of equity investments
in joint ventures in association
with quoted price
Operating revenue 25,256,483.09 21,089,902.43
Net profit 822,810.83 983,452.15
Net profit of discontinued
operations
Other comprehensive income
Total comprehensive income 822,810.83 983,452.15
Dividend from joint ventures
197,567.20
received in current period
3. Aggregated financial information of insignificant joint ventures and associates
Items Closing balance/current Opening balance/preceding
period cumulative period comparative
Joint ventures
Total carrying amount of investments 10,422,067.61 11,128,318.34
Proportionate shares in the following
items
Net profit -706,250.73 -2,167,774.50
Total comprehensive income -706,250.73 -2,167,774.50
Associates
Total carrying amount of investments 1,183,862.97
Proportionate shares in the following
items
Net profit -1,406,238.47
Total comprehensive income -1,406,238.47
Dividend paid 450,000.00
177
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
VIII. 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.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial
recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes into
account reasonable and supportable information, which is available without undue cost or effort, including qualitative and
quantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determines
the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance
sheet date and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following
qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, on the balance sheet date, the probability of default in the remaining
lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or
expected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s
repayment ability;
(2) Definition of default and credit-impaired asset
A financial asset is credit-impaired when one or more following events have occurred:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposure to
default risk.
178
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
3. Please refer to notes details on the reconciliation table of opening balance and closing balance of provision for losses of financial
instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the
Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and 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/continuous 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 only conducts business with credible and well-reputed third parties, normally, does not obtain collateral from
customers. Normally, the Group does not obtain collateral from customers. The Company manages credit risk aggregated by
customers. As of December 31, 2019, the Company has certain concentration of credit risk, and 17.05% (December 31, 2018:
16.85%) of the total accounts receivable was due from the five largest customers of the Company. The Company held no collateral or
other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset on the balance sheet.
(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, bank borrowings, etc. and adopts long
and short financing methods 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
Contract amount 1-3 years Over 3
Carrying amount Within 1 year
not yet discounted years
Bank borrowings 451,915,948.50 465,473,426.95 465,473,426.95
Notes payable 81,784,929.91 81,784,929.91 81,784,929.91
Accounts payable 679,428,580.08 679,428,580.08 679,428,580.08
Other payable 48,707,865.43 48,707,865.43 48,707,865.43
Long-term
23,648,012.38 24,357,452.75 11,145,431.57 13,212,021.18
payable
Subtotal 1,285,485,336.30 1,299,752,255.12 1,286,540,233.94 13,212,021.18
(Continued)
179
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Opening balance
Items
Contract amount 1-3 years Over 3
Carrying amount Within 1 year
not yet discounted years
Bank borrowings 445,464,333.33 458,828,263.33 458,828,263.33
Notes payable 84,374,916.99 84,374,916.99 84,374,916.99
Accounts payable 743,028,953.62 743,028,953.62 743,028,953.62
Other payable 52,655,945.94 52,655,945.94 52,655,945.94
Subtotal 1,325,524,149.88 1,338,888,079.88 1,338,888,079.88
(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 fair value interest risks arise from fixed-rate financial instruments, while the cash flow
interest risks arise from floating interest financial instruments. The Company determines the proportion of fixed-rate financial
instruments and floating interest rate financial instruments based on the market environment, and maintains a proper financial
instruments portfolio through regular review and monitoring. The Company’s interest risk relates mainly to bank borrowings with
floating interest rate.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes
in exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities.
Please refer to notes to financial statements for details in foreign currency financial assets and liabilities at the end of the period.
IX. Fair value disclosure
(I) Details of fair value of assets and liabilities at fair value at the balance sheet date
Fair value as of the balance sheet date
Items
Level 1 Level 2 Level 3 Total
Recurring fair value measurement
1.Receivable financing 3,821,550.77 3,821,550.77
2 Other equity instrument
741,953.00 741,953.00
investments
Total assets at recurring fair value
4,563,503.77 4,563,503.77
measurement
(II) Valuation technique(s) and key input(s) for level 3 fair value at recurring and non-recurring fair measurement
1. For notes receivable, measured at par value.
2. For other equity instrument investments including Nanjing Yuhua Electroplating Factory and Hangzhou
Honyar Electrical Co.,Ltd., due to no changes of operating environment and conditions and financial conditions of
the invested enterprises, the Company measured at investment cost.
180
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
3. For other equity instrument investments including Beijing Likangpu Communication Equipment Co., Ltd., due
to deterioration of operating environment and conditions and financial conditions of the invested enterprises, the
Company measured at zero value.
X. Related party relationships and transactions
(I) Related party relationships
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. Please refer to section VII of notes to financial statements for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
(1) Joint ventures and associates of the Company
Please refer to section VII of notes to financial statements 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 controlling
Nanjing Honyar Electrical Technology Co., Ltd.
party
An affiliated company of the ultimate controlling
Nanjing Honyar Electrical Co., Ltd.
party
Shanghai Potevio Post and Telecommunications An affiliated company of the ultimate controlling
Technology Co., Ltd. party
Beijing Potevio Taili Communications Technology Co., An affiliated company of the ultimate controlling
Ltd. party
Hangzhou Honyar Dongbei Photoelectric Technology Co., An affiliated company of the ultimate controlling
Ltd. party
An affiliated company of the ultimate controlling
Shanghai Potevio Network Technology Co., Ltd.
party
An affiliated company of the ultimate controlling
POTEVIO Telecommunications Co., Ltd.
party
181
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Related parties Relationships with the Company
An affiliated company of the ultimate controlling
Potevio Information Technology Co., Ltd.
party
Beijing Picom Telecommunications Equipment Co., Ltd. An affiliated company of the Company
Minority shareholders of subsidiaries of the
Mennekes Electric Industrial(China) Co., Ltd.
company
An affiliated company of the ultimate controlling
Potevio Heping Technology Co., Ltd.
party
An affiliated company of the ultimate controlling
Hangzhou Honyar Electrical Co.,Ltd.
party
An affiliated company of the ultimate controlling
Potevio International Trading Co., Ltd.
party
An affiliated company of the ultimate controlling
Chengdu Putian Telecommunications Cable Co.,Ltd.
party
An affiliated company of the ultimate controlling
Eastern Communications Inc.
party
An affiliated company of the ultimate controlling
Potevio Eastern Communications Co.,Ltd.
party
An affiliated company of the ultimate controlling
Potevio Science & Technology Industrial Co., Ltd.
party
An affiliated company of the ultimate controlling
Guangxi Potevio Post Communication Equipment Co., Ltd.
party
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving services
(1) Details
1) Purchase of goods and receiving of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Telecommunication
SEI-Nanjing Potevio Optical Network Co., Ltd. 1,957,326.89
products
Telecommunication
Nanjing Putian Telege Cable Co., Ltd. 488,838.48
products
Nanjing Potevio Honyar Electrical Technology Telecommunication
134,874.07 194,401.64
Co., Ltd. products
Telecommunication
Potevio Information Technology Co., Ltd. 22,123.89 1,297,363.25
products
2) Sale of goods and rendering of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Potevio Information Technology Telecommunication 5,475,549.68 19,354,250.44
Co., Ltd. products
China Potevio Information Industry Telecommunication 191,688,219.39 336,575,675.56
Inc products
Beijing Potevio Taili
Telecommunication 31,310.35 11,992.64
Communications Technology Co.,
products
Ltd.
182
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Related parties Content of transaction Current period Preceding period
cumulative comparative
Hangzhou Honyar Electrical Telecommunication 241.36
Co.,Ltd. products
Potevio International Trading Co., Telecommunication 27,349.06
Ltd. products
Telecommunication 10,017.24
Nanjing Honyar Electrical Co., Ltd.
products
Telecommunication 61,500.00
Chengdu Putian Cable Co., Ltd.
products
Telecommunication 14,641.59 178,100.00
Eastern Communications Co., Ltd.
products
Putian Eastern Communication Telecommunication 16,300.00 1,238,450.81
Group Co., Ltd. products
Putian Science & Technology Telecommunication 602,734.41 1,371,335.80
Industrial Co., Ltd. products
Telecommunication 4,278,714.91 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) Details
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
Land and buildings 655,524.56
Network Co., Ltd.
2) The Company as the lessee
Lessors Lease expenses for Lease expenses for the
Types of asset leased
current period preceding period
Potevio Hi-tech Industry Co.,
Buildings and structures 2,170,165.03 3,776,107.93
Ltd.
(2) Other remarks
3. Related party guarantees
(1) Details
1) 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 40,000,000.00 2018/10/10 2019/7/9 YES
China Potevio Information Industry Inc 30,000,000.00 2018/3/9 2019/3/8 YES
China Potevio Information Industry Inc 30,000,000.00 2019/6/11 2020/6/11 No
China Potevio Information Industry Inc 30,000,000.00 2019/8/14 2020/5/15 No
183
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
4. Related party entrusted loan and interest expenditure
Entrusted loans and interest expenses
Current period cumulative Preceding period comparative
with parent company
Entrusted loans 262,000,000.00 207,000,000.00
Entrusted interest expenses 13,560,288.33 9,459,773.88
5. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 1,796,209.00 2,310,164.00
(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
China Potevio
Notes
Information Industry 6,120,178.00
receivable
Inc.
Subtotal 6,120,178.00
China Potevio
Accounts
Information Industry 12,500,971.72 2,537,197.33 14,861,482.73 709,020.78
receivable
Inc.
Potevio Information
14,018,807.64 525,759.59 12,941,118.68
Technology Co., Ltd.
Shanghai Potevio
Network Technology 536,319.70 110,415.99 536,319.70 84,960.00
Co., Ltd.
Shanghai Potevio Post
and Technology Co., 8,755,534.00 8,755,534.00 8,755,534.00 8,755,534.00
Ltd.
Potevio Heping
333,706.00
Technology Co., Ltd.
Eastern
20,659.60 371.18 206,596.00
Communications Inc.
SEI-Nanjing Potevio
Optical Network Co., 199,000.00
Ltd.
Potevio Eastern 127,974.15 3,182.80 941,969.60
184
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Communications
Co.,Ltd.
Potevio
Telecommunications 5,193,281.30 84,350.07 1,768,070.00
Co., Ltd.
Tianjin Potevio
Innovation and
4,546.26 227.31 4,546.26
Entrepreneur
Technology Co., Ltd.
Potevio Company
629,899.32 311,049.45 629,899.32 186,044.64
Limited.
Mennekes Electric
Industrial(China) Co., 12,709.44
Ltd.
Subtotal 41,787,993.69 12,328,087.72 41,190,951.73 9,735,559.42
Advances Potevio Heping
436,294.00 436,294.00
paid Technology Co., Ltd.
Subtotal 436,294.00 436,294.00
China Potevio
Other
Information Industry 1,958,000.00 496,900.00 3,839,000.00 400,000.00
receivables
Inc.
Potevio Hi-tech
1,209,297.25
Industry Co., Ltd.
Potevio Eastern
Communications 30,000.00 1,500.00 30,000.00
Co.,Ltd.
Potevio Information
Engineering Design 1,300.00
Service Co., Ltd.
Potevio Information
1,203,052.00 60,152.60 1,203,052.00
Technology Co., Ltd.
Putian New Energy
1,150.06 57.50
(Shenzhen) Co., Ltd.
Subtotal 3,192,202.06 558,610.10 6,282,649.25 400,000.00
2. Balance due to related parties
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing Opening
Items Related parties
balance balance
Accounts
SEI-Nanjing Potevio Optical Network Co., Ltd. 20,530,725.66 20,819,725.66
payable
China Potevio Information Industry Inc. 19,641,228.50 19,641,228.50
Nanjing Potevio Honyar Electrical Technology Co., Ltd. 242,595.99 242,595.99
Shanghai Potevio Network Technology Co., Ltd. 11,685.00 11,685.00
Mennekes Electric Industrial(China) Co., Ltd. 5,508,839.24 5,433,476.69
Potevio Information Technology Co., Ltd. 69,950.00
Potevio Hi-tech Industry Co., Ltd. 25,000.00
Nanjing Potevio Honyar Electrical Technology Co., Ltd. 136,848.85 86,243.30
Subtotal 46,096,923.24 46,304,905.14
Advances
China Potevio Information Industry Inc. 2,708,112.86 223,246,886.73
received
Subtotal 2,708,112.86 223,246,886.73
Other
SEI-Nanjing Potevio Optical Network Co., Ltd. 83,000.00
payables
Potevio Hi-tech Industry Co., Ltd. 3,535,518.07
Potevio Information Technology Co., Ltd. 400,000.00
Potevio Telecommunications Co., Ltd. 200,000.00 200,000.00
China Potevio Information Industry Inc. 475,310.00
Potevio Company Limited. 14,580,000.00 14,580,000.00
Subtotal 19,273,828.07 14,780,000.00
XI. Commitments and contingencies
(I) Significant commitments
None.
(II) Contingencies
None.
XII. Events after the balance sheet date
In 2018, the Company signed a sales contract with Beijing UniStrong Science & Technology Co., Ltd. with a total amount of
52,167,500.00 yuan. The Company took a civil lawsuit at January 14, 2020 against Beijing UniStrong Science & Technology Co.,
Ltd. due to it had financial difficulties and did not pay in due. Then reached a settlement agreement with it on January 16, 2020. As
of April 1, 2020, the Company has received the total amount of 52,167,500.00 yuan and release of creditor's rights.
XIII. Other significant events
(I) Segment information
186
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
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
365,004,501.66 359,232,741.86 125,526,053.59 186,594,827.60 316,048,396.10 -35,711,960.47 1,316,694,560.34
main operations
Cost of main
287,063,662.67 267,592,840.27 100,123,254.01 183,479,607.25 266,872,934.55 -34,634,678.90 1,070,497,619.85
operations
Total assets 310,221,665.29 307,977,820.71 204,517,276.03 39,387,052.48 1,202,197,470.69 -412,295,765.76 1,652,005,519.44
Total liabilities 201,957,213.40 182,096,128.53 119,685,908.42 1,051,969.45 1,136,947,758.59 -289,833,600.74 1,351,905,377.65
XIV. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with provision
31,829,378.66 3.86 31,411,610.66 98.69 417,768.00
made on an individual basis
Receivables with provision
475,258,345.40 96.14 59,678,795.33 12.56 415,579,550.07
made on a collective basis
Total 507,087,724.06 100.00 91,090,405.99 17.96 415,997,318.07
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with provision
made on an individual basis
Receivables with provision
618,514,189.40 100.00 40,551,040.25 6.56 577,963,149.15
made on a collective basis
Total 618,514,189.40 100.00 40,551,040.25 6.56 577,963,149.15
187
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
2) Accounts receivable with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for provision
debts proportion (%) made
Mr. Xu 17,591,683.74 17,591,683.74 100.00 Unable to collect
China Tower
14,237,694.92 13,819,926.92 97.07 Unable to collect
Corporation Ltd.
Subtotal 31,829,378.66 31,411,610.66 98.69
3) Accounts receivable with provision for bad debts made on an age basis
Closing balance
Items
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 143,330,702.41 1,433,307.02 1.00
1-2 years 232,857,468.08 11,642,873.40 5.00
2-3 years 27,576,499.95 2,757,650.00 10.00
3-4 years 15,371,713.22 4,611,513.97 30.00
4-5 years 5,266,896.96 2,633,448.48 50.00
Over 5 years 36,600,002.46 36,600,002.46 100.00
Subtotal 461,003,283.08 59,678,795.33 12.95%
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Recov Othe Rev Othe Closing
balance Accrual Written balance
ery rs ersal off rs
Receivables
with provision
31,411,610.66 31,411,610.66
made on an
individual basis
Receivables
with provision
40,551,040.25 19,127,755.08 59,678,795.33
made on a
collective basis
Subtotal 40,551,040.25 50,539,365.74 91,090,405.99
(3) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Book balance Provision for bad
balance of accounts
debts
receivable (%)
Beijing UniStrong Science & Technology
52,167,500.00 10.29 2,608,375.00
Co., Ltd.
Beijing Zhongrui Haotian Information
25,499,700.00 5.03 1,274,985.00
Technology Co., Ltd.
Shenzhen Zhongchuang Electric
21,513,968.79 4.24 1,075,698.44
Measurement Technology Co., Ltd.
Dongpo Xi Laos Co., Ltd. 19,708,086.54 3.89 985,404.33
Mr. Xu 17,591,683.74 3.47 17,591,683.74
188
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Proportion to the total
Debtors Book balance Provision for bad
balance of accounts
debts
receivable (%)
Subtotal 136,480,939.07 26.92 23,536,146.51
2. Other receivables
(1) Details
1) Details on categories
Closing balance
Categories Book balance Provision for bad debts
Carrying
Amount % to total Amount Provision amount
proportion (%)
Receivables with provision made
33,010,009.04 51.27 33,010,009.04 100.00
on an individual basis
Including: Interest receivable
Dividend receivable
Other receivables 33,010,009.04 51.27 33,010,009.04 100.00
Receivables with provision
31,371,561.56 48.73 4,609,744.49 14.69 26,761,817.07
made on a collective basis
Including: Interest receivable
Dividend receivable
Other receivables 31,371,561.56 48.73 4,609,744.49 14.69 26,761,817.07
Total 64,381,570.60 100.00 37,619,753.53 58.43 26,761,817.07
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying
Amount % to total Amount Provision amount
proportion (%)
Receivables with provision made
33,010,009.04 48.76 33,010,009.04
on an individual basis
Including: Interest receivable
Dividend receivable
Other receivables 33,010,009.04 48.76 33,010,009.04
Receivables with provision
34,683,915.75 51.24 5,476,710.59 15.79 29,207,205.16
made on a collective basis
Including: Interest receivable
Dividend receivable 400,000.00 0.59 400,000.00
Other receivables 34,283,915.75 50.65 5,476,710.59 15.97 28,807,205.16
Total 67,693,924.79 100.00 38,486,719.63 56.85 29,207,205.16
2) Other receivables with provision made on an individual basis
189
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Provision Reasons for
Debtors Book balance Provision for bad
proportion provision
debts
(%) made
Beijing Likangpu Communication Unable to
28,912,122.71 28,912,122.71 100.00
Equipment Co., Ltd. collect
Putian Communications (Hong Unable to
4,097,886.33 4,097,886.33 100.00
Kong) Co., Ltd. collect
Subtotal 33,010,009.04 33,010,009.04 100.00
3) Other receivables with provision made on a collective basis
Closing balance
Portfolios
Provision
Book balance Provision for bad debts
proportion (%)
Portfolio-Financing margin 5,578,947.37
Portfolio-Other 25,792,614.19 4,609,744.49 17.87
Subtotal 31,371,561.56 4,609,744.49 14.69
(2) Ages
Items Closing carrying amount
Within 1 year 16,695,643.58
1-2 years 9,027,575.59
2-3 years 1,742,931.56
3-4 years 1,528,457.97
4-5 years 563,113.00
Over 5 years 34,823,848.90
Subtotal 64,381,570.60
(3) Changes in provision for bad debts
Phase I Phase II Phase III
Items 12 month Lifetime expected Lifetime expected Total
expected credit losses (credit credit losses
credit losses not impaired) (credit impaired)
Opening balance 1,152,310.25 37,334,409.38 38,486,719.63
Opening balance in
current period
--Transferred to phase
II
--Transferred to phase
-76,422.90 76,422.90
III
--Reversed to phase II
--Reversed to phase I
Provision made in
-371,553.70 -495,412.40 -866,966.10
current period
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Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Phase I Phase II Phase III
Items 12 month Lifetime expected Lifetime expected Total
expected credit losses (credit credit losses
credit losses not impaired) (credit impaired)
Provision recovered in
current period
Provision reversed in
current period
Provision written-off
in current period
Other changes
Closing balance 704,333.65 36,915,419.88 37,619,753.53
(4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment
47,366,428.11 46,230,393.22
receivable
Deposit as security 15,794,589.88 18,558,706.28
Travel reserve fund 630,902.93 1,348,181.93
Others 589,649.68 1,156,643.36
Total 64,381,570.60 67,293,924.79
(5) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Book balance Ages Provision for bad
total balance of other
receivables debts
receivables (%)
Beijing Likangpu Over 5
Communication Intercourse 28,912,122.71 years 44.91 28,912,122.71
Equipment Co., Ltd.
Nanjing Putian 0-3
Communication Intercourse 6,664,010.05 years 10.35
Technology Co., Ltd.
Putian Over 5
Telecommunications Intercourse 4,097,886.33 years 6.36 4,097,886.33
(H.K.) Co., Ltd.
Ping An International 1-2
Deposit as
Financial Leasing Co., 4,000,000.00 years 6.21
security
Ltd.
China Potevio Deposit as 1-5
1,958,000.00 3.04 496,900.00
Information Industry Inc. security years
Subtotal 45,632,019.09 70.87 33,506,909.04
3. Long-term equity investments
(1) Categories
191
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Closing balance Opening balance
Items
Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investments in
subsidiaries 153,218,270.64 1,910,520.00 151,307,750.64 153,218,270.64 1,910,520.00 151,307,750.64
Investments in
associates and 181,762,383.50 181,762,383.50 182,060,217.26 182,060,217.26
joint ventures
Total 334,980,654.14 1,910,520.00 333,070,134.14 335,278,487.90 1,910,520.00 333,367,967.90
(2) Investments in subsidiaries
Provision for
Closing balance
Investees Opening balance Increase Decrease Closing balance impairment
of provision for
made in current
impairment
period
Nanjing Mennekes Electrics Co., 57,831,011.71 57,831,011.71
Ltd.
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 13,860,000.00 13,860,000.00
Technology Co., Ltd.*
Nanjing Putian Telege Intelligent 3,320,003.45 3,320,003.45
Building Ltd.
Putian Telecommunications (H.K.) 1,910,520.00 1,910,520.00 1,910,520.00
Co., Ltd.
Nanjing Putian Network Co., Ltd. 7,741,140.41 7,741,140.41
Nanjing Putian Wangzhi Electronic 20,428,683.00 20,428,683.00
Co., 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.
Subtotal 173,787,270.64 153,218,270.64 1,910,520.00
(3) Investments in associates and joint ventures
Increase/Decrease
Investees Adjustment in
Opening balance Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Joint ventures
SEI-Nanjing Potevio
Optical Network Co., 11,128,318.34 -706,250.73
Ltd.
Subtotal 11,128,318.34 -706,250.73
Associates
192
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Increase/Decrease
Investees Adjustment in
Opening balance Investment income
Investments Investments other
recognized under
increased decreased comprehensive
equity method
income
Potevio Hi-tech
170,931,898.92 408,416.97
Industry Co., Ltd.
Subtotal 170,931,898.92 408,416.97
Total 182,060,217.26 -297,833.76
(Continued)
Increase/Decrease
Closing
Investees Cash balance of
Closing balance
Changes in dividend/profit Provision for Others provision for
other equity declared for impairment impairment
distribution
Joint ventures
SEI-Nanjing Potevio
Optical Network Co., 10,422,067.61
Ltd.
Subtotal 10,422,067.61
Associates
Potevio Hi-tech
171,340,315.89
Industry Co., Ltd.
Subtotal 171,340,315.89
Total 181,762,383.50
(II) Notes to items of the parent company income statement
1. Operating revenue/cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 421,674,918.84 386,876,567.34 948,501,070.96 838,026,882.71
Other operations 12,229,061.04 10,560,944.21 57,117,883.81 41,395,696.37
Total 433,903,979.88 397,437,511.55 1,005,618,954.77 879,422,579.08
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term
equity investments under cost 9,153,400.00 24,376,700.00
method
Investment income from long-term
-297,833.76 -1,679,620.33
equity investments under equity
193
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Current period cumulative Preceding period comparative
method
Total 8,855,566.24 22,697,079.67
XV. 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
119,033.08
written-off of provision for impairment
Government grant included in profit or loss (excluding
those closely related to operating activities, or regular 4,265,247.47
government grants)
Other non-operating revenue or expenditures 362,546.35
Other profit or loss satisfying the definition of
-185,497.35
non-recurring profit or loss
Subtotal 4,561,329.55
Less: enterprise income tax affected -154,871.99
Non-controlling interest affected (after tax) -1,590,040.84
Net non-recurring profit or loss attributable to shareholders
2,816,416.72
of the parent company
(II) RONA and EPS
1. Details
EPS (yuan/share)
Profit of the reporting period Weighted average
RONA (%) Basic EPS Diluted EPS
Net profit attributable to
-66.55 -0.7865 -0.7865
shareholders of ordinary shares
Net profit attributable to
shareholders of ordinary shares
-67.66 -0.7996 -0.7996
after deducting 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 -169,088,516.69
Non-recurring profit or loss B 2,816,416.72
Net profit attributable to shareholders of ordinary shares after C=A-B -171,904,933.41
deducting non-recurring profit or loss
Opening balance of net assets attributable to shareholders of D 338,605,249.25
ordinary shares
Net assets attributable to shareholders of ordinary shares
increased due to offering of new shares or conversion of E
debts into shares
194
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Items Symbols Current period
cumulative
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
Retranslation I 26,373.73
Others Number of months counting from the next
month when other net assets were increased J 6.00
or decreased to the end of the reporting
period
Number of months in the reporting period K 12.00
Weighted average net assets L= D+A×1/2+ 254,074,177.77
E×F/K-G×H/K±I×J/K
Weighted average RONA M=A/L -66.55
Weighted average RONA after deducting non-recurring profit N=C/L -67.66
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 -169,088,516.69
Non-recurring profit or loss B 2,816,416.72
Net profit attributable to shareholders of ordinary shares after C=A-B -171,904,933.41
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 or F
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/
215,000,000.00
K-J
Basic EPS M=A/L -0.7865
Basic EPS after deducting non-recurring profit or loss N=C/L -0.7996
Calculation process of diluted EPS is the same as calculation process of basic EPS.
195
Nanjing Putian Telecommunications Co., Ltd. 2019 Annual Report
Section XIII. 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.
28 April 2020
196
