Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
2020 Annual Report
April 2021
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Nanjing Putian Telecommunications Co., Ltd. 2020 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 Tang Yiqiao, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2020 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
of investment risks.
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. 2020 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 ............................................................................................................... 38
Section VI Changes in shares and particular about shareholders ...................................................... 78
Section VII Preferred Stock ............................................................................................................... 85
Section VIII Convertible Bonds.........................................................................................................86
Section IX Particulars about Directors, Supervisors and Senior Executives ..................................... 87
Section X Corporate Governance .................................................................................................... 101
Section XI Corporate Bonds.............................................................................................................108
Section XII Financial Report ........................................................................................................... 109
Section XIII Documents available for reference.............................................................................. 208
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Interpretation
Items Refers to Contents
CSRC Refers to China Securities Regulatory Commission
SZ Stock Exchange Refers to Shenzhen Stock Exchange
Potevio Refers to China Potevio (controlling shareholder of the Company)
The Company, Company, Nanjing Putian Refers to Nanjing Putian Telecommunications Co., Ltd.
Nanjing Southern Telecom Co., Ltd(controlling subsidiary of the
Southern Telecom Refers to
Company)
Nanjing Putian Telege Intelligent Building Ltd (controlling subsidiary of
Telege Building Refers to
the Company)
Nanjing Putian Datang Information Electronic Co., Ltd.(controlling
Datang Electronic Refers to
subsidiary of the Company)
Reporting period Refers to Year of 2020
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Nanjing Putian Telecommunications Co., Ltd. 2020 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. 2020 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
Financial adviser engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Not applicable
Office address of the financial
Financial adviser Financial adviser sponsor Continuous supervision period
adviser
North Block, Time Square
Excellence (Phase II), No.8
CITIC Securities Co., Ltd. Zhongxin 3rd Road, Futian Yang Xiao, Yang Zhenrui 2020.12.31-2021.12.31
District, Shenzhen, Guangdong
Province
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √No
Changes (+,-)
2020 2019 compared with the 2018
previous year
Operating revenue (RMB) 1,025,243,815.83 1,338,284,194.21 -23.39% 1,995,627,772.60
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Net profit attributable to
shareholders of the listed 21,964,552.84 -169,088,516.69 112.99% 5,859,214.84
Company(RMB)
Net profit attributable to
shareholders of the listed Company
-154,393,042.76 -171,904,933.41 10.19% -21,461,955.87
after deducting non-recurring gains
and losses(RMB)
Net cash flow arising from
88,145,348.87 22,686,114.91 288.54% -155,418,733.83
operating activities (RMB)
Basic earnings per share
0.10 -0.79 112.66% 0.03
(RMB/Share)
Diluted earnings per share
0.10 -0.79 112.66% 0.03
(RMB/Share)
Weighted average ROE 12.29% -66.55% 78.84% 1.66%
Changes (+,-)
compared with the
Year-end of 2020 Year-end of 2019 Year-end of 2018
year-end of previous
year
Total assets (RMB) 1,167,608,410.82 1,652,005,519.44 -29.32% 2,120,744,292.41
Net assets attributable to
shareholder of listed Company 189,624,160.92 169,543,106.29 11.84% 355,289,728.24
(RMB)
The lower of the company’s net profit before or after deduction of non-recurring profit (gain)/loss for the last three financial years is
negative, and the audit report for the latest year indicates that there is uncertainty about the company’s ability to continue as a going
concern
□Yes √No
The lower of the net profit before or after deduction of non-recurring profit (gain)/loss is negative
√Yes □No
Item 2020 2019 Note
Operating revenue (RMB) 1,025,243,815.83 1,338,284,194.21 -
Deduction amount from
10,262,253.21 9,372,750.09 -
operating revenue (RMB)
Amount after deduction (RMB) 1,014,981,562.62 1,328,911,444.12 -
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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
Q1 Q2 Q3 Q4
Operating revenue 151,862,432.34 253,310,371.28 257,967,139.46 362,103,872.75
Net profit attributable to
-30,609,179.61 -28,247,674.42 -1,190,034.23 82,011,441.10
shareholders of the listed Company
Net profit attributable to
shareholders of the listed Company
-33,044,537.66 -30,562,957.49 -5,633,894.62 -85,151,652.99
after deducting non-recurring gains
and losses
Net cash flow arising from
-19,005,983.54 36,658,701.57 6,656,073.35 63,836,557.49
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 2020 2019 2018 Note
Gains/losses from the disposal of
non-current asset (including the write-off 171,454,257.57 119,033.08 33,483,456.05
that accrued for impairment of assets)
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to 6,456,622.79 4,265,247.47 8,554,841.22
national standards, which are closely
relevant to enterprise’s business)
Other non-operating revenue and
1,135,543.03 -185,497.35 -165,751.16
expenditure except for the aforementioned
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
items
Payable unable to paid 362,546.35 1,332,427.34
Less: impact on revenue tax 122,246.44 154,871.99 5,400,947.05
Impact on minority shareholders’
2,566,581.35 1,590,040.84 10,482,855.69
equity (post-tax)
Total 176,357,595.60 2,816,416.72 27,321,170.71 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
As one of the important product and solution providers in the domestic information and communication field, the
company adheres to the "product + solution + service" strategy, and continuously accelerates product innovation,
industrial structure adjustment, transformation and upgrading. The main business of the company and its
subsidiaries involves optical communication networks, wireless communication networks, data applications,
industrial electric and other fields, including optical distribution networks and communication supporting overall
solutions (ODN overall solutions, optical network intelligent solutions, energy-saving data centre solutions),
multimedia communication and application solutions, building intelligent integrated solutions, industrial
intelligent power distribution systems, solar street light control systems, etc. Customers include domestic telecom
operators, China Tower and industry customers in government, finance, power, medical and other fields.
The company’s optical distribution network and communication supporting overall solutions can be used for
domestic communication network construction, broadcasting and television network transformation, high-speed
rail communication construction, urban metro construction, e-commerce industry, etc.; and the data center
products are widely used in data center construction projects of operators, internet and other enterprises; the
subsidiary Nanjing Southern Telecom Co., Ltd. can provide remote collaboration application solutions for the
large and medium-sized industry customers in the fields of government, finance, medical care, and education, and
so on; the subsidiary Nanjing Putian Telege Intelligent Building Ltd. mainly provides customers with
mid-to-high-end integrated wiring and intelligent application solutions; subsidiary Nanjing Nanman Electrics Co., Ltd.
is oriented towards rail transit, airports, ports and other industrial sites and provides industrial intelligent power
distribution products; the subsidiary Nanjing Putian Datang Information Electronic Co., Ltd. mainly provides
customers with solar street lamp controllers and Internet of Things street lamp monitoring systems, etc.
The company mainly obtains business opportunities by participating in project bidding, designs plans, produces or
purchases equipment required by customers according to project requirements, and is responsible for installation
and debugging, and realizes profits after deducting costs in accordance with the contract price. The company's
operating results are mainly affected by factors such as capital expenditures by telecom operators and industry
customers, information input and bidding results, fluctuations in raw material prices and other cost changes.
The company has a complete industrial chain structure, has good R&D, production, and marketing capabilities,
and has established good brand strength and influence in the industry market and the operator market. The
company is now a member unit of the Jiangsu Information Innovation Industry Alliance and a member unit of the
Information Technology Application Innovation Working Committee of the China Electronics Standardization
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Association, and has the qualification of Huawei intelligent collaboration first-level distributor. During the
reporting period, Telege Building participated in the formulation and revision of six industry standards, including
the national standard for generic cabling of IEC11801 and the "Data Center Infrastructure Construction and
Acceptance Specification", and was awarded the "Top Ten Generic Cabling Brands" for the sixteenth consecutive
year; "e Cloud. e Horizon Mo-Cloud" of Southern Telecom won the "Outstanding Innovation Application
Industry Leadership Award" selected by the Posts and Telecommunications News in 2019. During the reporting
period, the company actively deployed Huawei videoconferencing business and strengthened the cultivation of
new businesses such as independent management software.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
The 49.64% equity of joint stock corporation-Putian High-Tech Co., Ltd. and the 100%
Equity assets equity of controlling subsidiary -Nanjing Putian Information Technology Co., Ltd were
transferred by the Company in the reporting period.
Fixed assets at the end of the reporting period were 100.16 million Yuan, a decrease of
Fixed assets 10.56 million Yuan from the beginning of the period, and mainly due to the disposal of
the No.1 Putian Road and Beijing property during the reporting period.
Amount at the end of the reporting period was 21.26 million Yuan, a decrease of 7.12
Intangible assets million Yuan from the beginning of the period, mainly due to the land use right of No.1
Putian Road was transferred by the Company during the reporting period.
Amount at the end of the reporting period was 22.45 million Yuan, an increase of 9.41
Construction in progress million Yuan from the beginning of the period, mainly due to the input for construction
project of R&D center from subsidiary Datang Electronic during the reporting period.
Amount at the end of the reporting period was 17.03 million Yuan, a decrease of 42.62
Note receivable million Yuan from the beginning of the period, mainly due to the transfer of endorsement
of bill during the reporting period.
Amount at the end of the reporting period was 32.59 million Yuan, an increase of 28.77
Receivable financing million Yuan from the beginning of the period, mainly due to the bank acceptance
received during the reporting period.
Advance payment at the end of the reporting period was 19.62 million Yuan, a decrease
Advance payment of 14.14 million Yuan from the beginning of the period. Due to the strengthened control
over advance payment, the purchases with advance payment declined in the Period.
Amount at the end of the reporting period was 4.27 million Yuan, a decrease of 3.54
Investment real estate
million Yuan from the beginning of the period, mainly declined for combination.
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
As a state-owned holding information and communication device manufacturer, the company attaches great
importance to industrial development, continues to carry out market expansion and product innovation, has a
complete industrial chain and mature market network, has strong R&D, production, and marketing capabilities,
and has strong comprehensive competitiveness.
1. Marketing ability
The company has mature market networks, serves the operators and industry customers in the government, rail
transit, finance, medical, power, internet companies and others over a long period of time, and has rich industry
experience.
2. Product competitiveness
The company insists on being market-oriented, strengthening and optimizing its leading products, actively
developing new products, and constantly improving its innovation capabilities.
The company has high technology and product advantages in wiring products. It has developed a series of optical
network connection products that have obtained a number of national invention patents, and is a supplier of strong
brand influence in the field of domestic optical fiber communication network connection products. Prefabricated
steel structure data center products can quickly build data center modules for use in the construction of data center
computer rooms, and perform on-site integration of various equipment in the production area to achieve integrated
delivery. Access products have good performance in wired access networks, optical transmission networks,
wireless access networks, etc., and are ranked among the "Top Ten Most Competitive Enterprises in China's
Optical Transmission and Network Access Equipment" throughout the year. The company's computing industry
products are produced and developed based on Huawei Kunpeng platform, and the performance indicators have
reached the high-end level of imported products, and have been recognized by the country, the Ministry of
Industry and Information Technology, multiple provinces and cities, telecom operators, and finance and other
industries. The subsidiary, Southern Telecom, has focused on video communication applications for more than 20
years, and has accumulated rich market channels and customer resources, as well as differentiated product and
program design capabilities, its self-developed products have been recognized by large industry customers. The
complete set of electrical products of the subsidiary, Nanman Company, are widely used in airports, wharves, rail
transit and other industries, and has accumulated rich customer resources and industry experience, and can
provide customers with complete sets of products and solutions for individual needs. Telege Building is
positioned in the high-end market for cabling system, and its products serve the Beijing Winter Olympics,
domestically produced large aircraft and other key projects, and it is actively developing new products such as a
new generation of intelligent cabling systems and integrated cabling management platforms.
3. Brand influence
The company is an information and communication enterprise under the central state-owned enterprise, and
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
communication products with Putian brand have a strong brand influence in the field of domestic optical fiber
communication network connection products. The integrated cabling products of Telege Building are well-known
brand products in Jiangsu Province, a famous trademark of the province, and have been ranked among the top ten
domestic cabling system brands for more than ten consecutive years. The video conferencing product series of
Southern Telecom have a high reputation in China.
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Section IV Discussion and Analysis of Operation
1. Introduction
In 2020, due to the comprehensive impact of the COVID-19 epidemic and market competition, the company’s
operations faced severe challenges. The company focused on its annual operating tasks, adhered to ―pragmatic,
trustworthy, service, and win-win‖, and focused on ―transformation and reform‖. When preventing and
controlling the epidemic, we adhered to the general keynote of seeking progress while maintaining stability,
adhered to customer-centric, market-oriented, and centered on the main business of the industry, focused on gross
profit margin and cash flow management, deepened reform and innovation, and increased inventory revitalization.
The company's overall operation has been stable. In 2020, the Company achieved an operating revenue of 1.025
billion Yuan with 23.39% down on a y-o-y basis, the net profit attributable to shareholder of listed company
amounted to 21.9646 million Yuan.
In terms of industrial development, the company adhered to the business philosophy of "being practical", with the
primary goal of improving gross profit margin and improving operating cash flow, relied on industry, focused on
main business and unswervingly make the industry more solid, stronger and better.
The company focused on the main business of communications, paid close attention to the key industries, and
actively explored the transformation of traditional industries into data center businesses. In the early stage of the
epidemic, the company overcame numerous difficulties and cooperated with partners to build Tencent Dongsheng
Cloud Computing Data Center, completed the rapid assembly of multiple T-blocks, and realized the modular
prefabrication of the entire data center. The data center product successfully won the bid for the cabinet
supporting project of the second phase of the cloud computing base of China Telecom Chongqing Branch, and
supplied the micro-module data room of Henan Zhongtian Group and the module room of the Commission for
Discipline Inspection of Qingshan District, Baotou. Participated in the construction of Nanjing Telecom,
Changzhou International Data Center, machine room of Qixia Broadcasting and Television, machine room of
Taizhou Broadcasting and Television and other projects, and won praise from customers. Traditional wiring
products have won bids in many operator projects such as telecommunications, broadcasting and television, and
towers. The new product "Intelligent Manhole Cover Based on NB IoT" won the bid for the Beijing Unicom
project and completed the prototype pilot. In addition, the company has completed the upgrading and
transformation of some processing equipment, which has improved its independent production and manufacturing
capabilities.
During the reporting period, the COVID-19 epidemic forced the development of remote office systems, and
competition in the domestic video conferencing industry further intensified. The company strived to promote the
diversified development of its video business and actively deployed Huawei video business. The company became
the first-level distributor of Huawei's intelligent safeguard system, and Southern Telecom obtained the gold
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
distributor qualification for Huawei's smart screen in Jiangsu area. Ruijing Information Release System passed the
compatibility test of Huawei Taishan server. Ruizhi video conference management system has become a joint
solution of Huawei ISV, which can support single Huawei platform and POLY+Huawei platform. At the same
time, by strengthening cooperation with business platform manufacturers, the company promoted independent
products, and strived to seek business breakthroughs in advantageous industries such as government, medical
treatment, and finance.
According to market demand, the company accelerated the upgrading of cabling products. Telege Building has
got the certification of "Nanjing Enterprise Technology Engineering Center", completed the research and
development of a new generation of intelligent cabling system and integrated cabling management platform and
small batch trial production, and completed the research and development of optical cabling products such as
Siemens data modules. Kept up with the military, transportation, finance, urban exhibition halls and other industry
markets, six types of unshielded cables won the bids of Huaqiang Group, China Construction Bank Shenzhen
Branch and other projects; optical products won the bids of China Railway Main Data Center Computer Room
and National Convention and Exhibition Center projects; intelligent display products won the bids of Nari Group,
Lukou Convention and Exhibition Center and other projects.
Electrical complete sets of products continued to deepen the rail transit industry. Nanman Company successfully
signed Nanjing Metro Line 7, Tianjin Metro Line 4, Hefei Metro Line 4, Changzhou Metro Line 2 and other
projects, and strived to expand the social project market, and completed the construction of the integrated pipe
gallery project in the hub area of Xiong’an Station and the pipe gallery project of Malaysian aluminum plant,
which was of positive significance to Nanman Electric's brand building and market development of "intelligent
power distribution integrated solutions".
Datang Electronics has been striving to carry out the strategic transformation to an "Internet of Things
technology-based enterprise", and on the premise of stabilizing the existing OEM business and the sales of solar
street light controllers, it has launched mains supply single light controllers, smart power supplies, smart cruise
terminals, and a series of IoT products. The mains supply smart street light management cloud platform and the
solar smart street light management cloud platform have entered the testing and verification stage.
In order to expand the company's business coverage and further optimize the industrial layout, the company
established a wholly-owned subsidiary Puhua Company in Chongqing. The company undertakes the computing
business authorized by Potevio, and at the same time serves as the southwestern market expansion unit of Nanjing
Putian's data center, video conferencing and other existing products. At the same time, it carries out the
Chongqing government cloud project in cooperation with Huawei. Under the authorization of Potevio, it has
gradually entered the information technology application innovation market and actively cultivated new economic
growth points for the company. In September, Potevio's "Pusheng" series of Kunpeng server products were
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
officially released at the Smart China Expo. During the reporting period, integrators have been connected to
promote the implementation of the information technology application innovation project.
During the epidemic, Southern Telecom and its partners opened some free video conference rooms at appropriate
times to help medical institutions, government agencies, enterprises and public institutions quickly carry out
remote real-time collaboration. After resumption of work, it has further focused on customer needs, and increased
the flow of customers on the "cloud" and the secondary development, gave full play to the advantages of
differentiation, and strived to make the business bigger and stronger.
In terms of business management, in the face of the complex and changeable business situation in 2020 and
unprecedented operating pressures, while doing a good job in the prevention and control of the epidemic, the
company adhered to the business philosophy of leading a thrifty life and leading a hard life, insisted on problem
orientation, increased the collection of the two funds, speeded up the revitalization of resources, and improved
internal control management by doing a good job in deepening reform and adjustment. The company continued to
increase the reform and adjustment of operating entities; speeded up asset revitalization, improved operating
resources, and released operating cash flow; strengthened financial management and gave full play to the core role
of financial management in operating activities; adhered to the rule of law to prevent legal risks; deepened the
management of losses, promoted the improvement of quality and efficiency; solidly promoted the governance of
loss-making entities, and actively carried out the work of turning losses and increasing profits by adjusting the
industrial structure and strengthening operation management; consolidated basic management and improved the
level of lean management.
During the reporting period, the COVID-19 epidemic and macro market environment had a certain adverse impact
on the Company’s business. In addition, in order to adapt to the market changes, the company took the initiative to
adjust the industrial structure, sales revenue declined form a year earlier.During the reporting period, the net profit
attributable to shareholder of listed company amounted to 21.9646 million Yuan, the impact of non-recurring
gains/losses on net income was 176.3576 million Yuan, mainly includes the income from disposal of non-current
assets of 171.4543 million Yuan, that is transfer the subordinate enterprise’s equity and land properties.
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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
2020 2019
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y (+,-)
revenue revenue
Total operation
1,025,243,815.83 100% 1,338,284,194.21 100% -23.39%
revenue
Industries
Communication
industry -Main 904,601,845.11 88.23% 1,191,168,506.75 89.01% -24.06%
business revenue
Communication
industry -Other 21,885,890.12 2.13% 19,282,451.91 1.44% 13.50%
business revenue
Electrical industry
-Main business 96,477,794.59 9.41% 125,526,053.59 9.38% -23.14%
revenue
Electrical industry
-Other business 2,278,286.01 0.22% 2,307,181.96 0.17% -1.25%
revenue
Products
Video conference
products- main 314,877,571.26 30.71% 365,004,501.66 27.27% -13.73%
business revenue
General cabling
products- main 357,130,844.30 34.83% 359,232,741.86 26.84% -0.59%
business revenue
Low-voltage
distribution
96,477,794.59 9.41% 125,526,053.59 9.38% -23.14%
products-main
business revenue
Private network
communication
186,594,827.60 13.94% -100.00%
products -main
business revenue
Wiring and other
products-main 287,776,479.36 28.07% 316,048,396.10 23.62% -8.95%
business revenue
Interior offset -55,183,049.81 -5.38% -35,711,960.47 -2.67% -54.52%
Other business
24,164,176.13 2.36% 21,589,633.87 1.61% 11.92%
revenue
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Regions
Domestic area-main
1,001,079,639.70 97.64% 1,316,427,546.22 98.37% -23.95%
business revenue
Domestic area
-Other business 24,164,176.13 2.36% 21,589,633.87 1.61% 11.92%
revenue
Abroad -main
267,014.12 0.02% -100.00%
business revenue
Note: Reasons on declined of the main business revenue from private network communication: settlement mode of the business has
changed. In the previous year, according to clients requirements, the Company was responsible for all procurement and production,
and collected payments for selling product to the customers, resulting in a main business revenue; during the reporting period, only
processing fees were used for settlement, resulting in other business revenue of 2.88 million Yuan.
(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
Communication
industry -Main 904,601,845.11 752,689,972.46 16.79% -24.06% -22.43% -1.75%
business revenue
Communication
industry -Other 21,885,890.12 21,097,941.35 3.60% 13.50% 34.56% -15.09%
business revenue
Electrical
industry -Main 96,477,794.59 71,403,862.96 25.99% -23.14% -28.68% 5.75%
business revenue
Electrical
industry -Other 2,278,286.01 1,714,165.72 24.76% -1.25% 7.32% -6.01%
business revenue
Products
Main business
revenue-Video
314,877,571.26 260,805,089.88 17.17% -13.73% -9.15% -4.18%
conference
products
Main business 357,130,844.30 277,322,277.49 22.35% -0.59% 3.64% -3.16%
18
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
revenue-General
cabling products
Main business
revenue-Low-volt
96,477,794.59 71,403,862.96 25.99% -23.14% -28.68% 5.75%
age distribution
products
Main business
revenue-Wiring
287,776,479.36 268,702,106.80 6.63% -8.95% 0.69% -8.93%
and other
products
Interior offset -55,183,049.81 -54,139,501.71 1.89% -54.52% -56.32% -1.13%
other business
24,164,176.13 22,812,107.07 5.60% 11.92% 32.04% -14.38%
revenue
Regions
Domestic
area-main 1,001,079,639.70 824,093,835.42 17.68% -23.95% -23.01% -1.01%
business revenue
Domestic
area-other 24,164,176.13 22,812,107.07 5.60% 11.92% 32.04% -14.38%
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 2020 2019
y-o-y (+,-)
Sales volume Yuan 926,487,735.23 1,210,450,958.66 -23.46%
Communication
Production volume Yuan 911,308,352.71 1,133,076,301.85 -26.42%
industry
Inventory Yuan 150,760,796.17 165,940,178.69 -9.15%
Sales volume Yuan 98,756,080.6 127,833,235.55 -22.75%
Electrical industry Production volume Yuan 104,180,149.27 127,632,545.94 -18.37%
Inventory Yuan 48,881,176.15 43,457,107.48 12.48%
Note: due to the variety of products, the measurement unit is difficult to unify, the sales volume, production volume and inventory are
expressed by the amount.
Reasons for y-o-y relevant data with over 30% changes
19
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
□ Applicable √ Not applicable
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Industry classification
In RMB
2020 2019
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 694,748,624.13 82.03% 900,740,417.31 82.81% -22.87%
industry
(procurement
cost)
Communication Main business
57,941,348.33 6.84% 69,633,948.53 6.40% -16.79%
industry cost- other
Communication Other business
21,097,941.35 2.49% 15,679,501.63 1.44% 34.56%
industry cost
Main business
cost-Cost of raw
Electrical
material 63,426,773.23 7.49% 89,556,252.70 8.23% -29.18%
industry
(procurement
cost)
Electrical Main business
7,977,089.73 0.94% 10,567,001.31 0.97% -24.51%
industry cost- other
Electrical Other business
1,714,165.72 0.20% 1,597,245.18 0.15% 7.32%
industry cost
Total Operation cost 846,905,942.49 100.00% 1,087,774,366.66 100.00% -22.14%
Explanation
-
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
Found more in the part of ―Change of Consolidation Scope‖ carried in Notes to Financial Statements in the full-text of the annual
report.
20
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(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) 107,212,081.24
Proportion in total annual sales volume for top five clients 10.46%
Sales of related parties in annual sales from top five
0.00%
clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 No.1 31,127,043.42 3.04%
2 No.2 20,589,728.71 2.01%
3 No.3 19,144,261.54 1.87%
4 No.4 18,648,861.29 1.82%
5 No.5 17,702,186.29 1.73%
Total -- 107,212,081.24 10.46%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 209,490,067.16
Proportion in total annual purchase amount for top five
27.63%
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 56,196,018.53 7.41%
2 No.2 48,057,599.10 6.34%
3 No.3 45,246,191.76 5.97%
4 No.4 34,022,889.05 4.49%
5 No.5 25,967,368.72 3.42%
21
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Total -- 209,490,067.16 27.63%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decrease
2020 2019 Note of major changes
y-o-y (+,-)
Main reasons for major declined from a
year earlier: implemented new revenue
standards in the year, the ―freight‖ are
no longer included under the item of
―Sales expenses‖; sales scale declined
Sales expense 101,208,835.79 146,879,432.92 -31.09% on a y-o-y basis, the staff reduced, and
at the same time, employees enjoyed
the national social insurance
preferential policies due to the the
epidemic, their salaries declined from a
year earlier.
Management expense 75,477,706.26 87,447,829.68 -13.69%
Financial expense 27,074,088.99 30,575,151.90 -11.45%
The staff reduced, and at the same
time, employees enjoyed the national
R&D expenses 46,319,505.38 71,178,941.51 -34.93% social insurance preferential policies
due to the the epidemic, their salaries
declined from a year earlier.
4. Investment in R&D
√ Applicable □ Not applicable
The company insisted on being market-oriented, actively developed new products and improved its technical level. During the
reporting period, the company newly increased 8 invention patents and 13 utility models; 5 scientific and technological research and
development projects passed the evaluation by experts of the municipal government, and were confirmed by the Nanjing Municipal
Government to enjoy relevant tax policies. During the reporting period, the company carried out the development of intelligent
precision monitoring units for distribution equipment for communications, outdoor shelter for FRP communication systems, outdoor
integrated water quality monitoring stations, 8 categories of cabling systems, 400G optical fiber cabling systems and other products.
R&D investment of the Company
2020 2019 Change ratio(+/-)
Number of R&D (people) 332 381 -12.86%
22
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Ratio of number of R&D 28.97% 28.18% 0.79%
R&D investment (Yuan) 46,319,505.38 71,178,941.51 -34.93%
R&D investment accounted for
4.52% 5.32% -0.80%
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 2020 2019 Y-o-y changes (+,-)
Subtotal of cash in-flow from
1,207,247,116.07 1,349,310,377.01 -10.53%
operation activity
Subtotal of cash out-flow from
1,119,101,767.20 1,326,624,262.10 -15.64%
operation activity
Net cash flow arising from
88,145,348.87 22,686,114.91 288.54%
operating activities
Subtotal of cash in-flow from
360,865,263.81 2,081,423.80 17,237.42%
investment activity
Subtotal of cash out-flow from
15,963,551.12 14,544,973.78 9.75%
investment activity
Net cash flow from investment
344,901,712.69 -12,463,549.98 2,867.28%
activity
Subtotal of cash in-flow from
188,998,007.80 547,594,317.72 -65.49%
financing activity
Subtotal of cash out-flow from
660,669,001.36 550,423,917.30 20.03%
financing activity
Net cash flow from financing
-471,670,993.56 -2,829,599.58 -16,569.18%
activity
Net increased amount of cash
-38,721,119.73 7,414,549.18 -622.23%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
23
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
√ Applicable □ Not applicable
During the reporting period, the net cash flow arising from operating activities has a significant y-o-y increase, mainly because the
Company strive to overcome the adverse impact of epidemic, strengthen the management of fund collection, strictly controls all
expenses and expenditures to reducing the costs and increasing efficiency.
Cash in-flow from investment activities and the net cash flow from investment activity are increased from a year earlier with major
amount, mainly because during the reporting period, the cash received from land property and subordinate enterprise disposal have
a significant increased on a y-o-y basis.
Cash in-flow from financing activities and net cash flow from financing activity are declined from a year earlier with major amount,
mainly because the loans in the reporting period declined from a year earlier and repayment of bank loans in the Period.
Net increased amount of cash and cash equivalent has a significant decrease from a year earlier, mainly because the net cash flow
from financing activity declined on a y-o-y basis dramatically.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √ Not applicable
III. Analysis of the non-main business
√ Applicable □ Not applicable
In RMB
Amount Ratio in total profit Cause of formation Whether be sustainable (N/Y)
Income from disposal of
long-term equity investment
and transferred the equity of
Investment income 93,175,109.94 206.23% N
joint stock companies and
controlling subsidiaries
during the reporting period
The bad debt loss of account
Credit impairment
-41,615,815.85 -92.11% receivable and other N
loss
receivables
Assets impairment
-14,421,937.22 -31.92% Loss on inventory valuation N
loss
The income from disposal of
Income from assets fixed assets and intangible
72,556,988.01 160.60% N
disposal assets from land and real
estate disposal
IV. Analysis of assets and liability
1. Major changes of assets composition
24
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Implement the new revenue standards or new lease standards for the first time since 2020, and adjusted relevant items of financial
statement at beginning of the year
Applicable
In RMB
Year-end of 2020 Year-begin of 2020 Ratio
Ratio in total Ratio in total changes Notes of major changes
Amount Amount
assets assets (+,-)
209,849,710.9
Monetary fund 17.97% 261,270,033.28 15.82% 2.15%
6
Account 493,992,403.4
42.31% 697,656,063.96 42.23% 0.08%
receivable 9
199,641,972.3
Inventory 17.10% 209,397,286.17 12.68% 4.42%
2
Investment real
4,267,013.35 0.37% 7,810,210.00 0.47% -0.10%
estate
Long-term equity
10,422,056.96 0.89% 181,762,383.50 11.00% -10.11%
investment
100,158,063.5
Fix assets 8.58% 110,722,102.52 6.70% 1.88%
8
Construction in
22,454,792.27 1.92% 13,048,701.59 0.79% 1.13%
process
Repay the loans during the reporting
Short-term loans 65,000,000.00 5.57% 451,915,948.50 27.36% -21.79%
period
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 32,594,702.
3,821,550.77
financing 60
2.Other equity 741,953.00 741,953.00
25
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
instrument
investment
33,336,655.
Total 4,563,503.77
60
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 39,647,679.34 Note margin and guarantee margin
Monetary funds 139,284.75 Bank freeze involving litigation
Fixed assets 10,352,538.63 Mortgage loan
Intangible assets 3,665,962.99 Mortgage loan
Total 53,805,465.71
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., and stock rights of 7.8 million Yuan (78% equity in total) in Nanjing Putian Network Co.,
Ltd pledge 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. Transfer of the stock rights of the aforesaid subsidiaries are restricted before the pledge being lifted.
V. Investment
1. Overall situation
√ Applicable □ Not applicable
Investment in the same period of last year
Investment in the reporting (RMB) Changes
( RMB)
15,508,722.61 12,710,363.19 22.02%
2. The major equity investment obtained in the reporting period
√ Applicable □ Not applicable
In RMB
26
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Progres Profit/l Whethe
Investe Amoun s as of Expecte oss on r Disclos
Main Shareh Investm Disclos
d Investm t Capital Product the d investm involve ure
busines olding Partner ent ure date
enterpri ent way investe source type balance earning ent for d in a index
s ratio term (If any)
se d sheet s the lawsuit (If any)
date period (Y/N)
Establis
hed in The
July ―Annou
Informa 2020 ncemen
tion with a t on
Chongq
system subscri Investm
ing
integrat bed ent in
Puhua
ion capital the
Inform Newly
services 2,000,0 100.00 Own of 50 8,539.5 2020-0 Establis
ation establis N/A 10-year - N
and 00.00 % funds million 4 7-09 hment
Technol hed
cloud Yuan, of a
ogy
comput and the Wholly
Co.,
ing paid-in -owned
Ltd.
busines capital Subsidi
s etc. of 2 ary‖ on
million Juchao
Yuan in Website
2020.
2,000,0 8,539.5
Total -- -- -- -- -- -- -- -- 0.00 -- -- --
00.00 4
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
27
Nanjing Putian Telecommunications Co., Ltd. 2020 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
Whethe
Net
r the
profit
implem
contrib
Ratio entation
uted by
of net is on
the Whethe Whethe
profit Associa schedul
assets r the r all the
contrib tion e, and
to the propert claims
Impact uted by with if not,
listed Whethe y rights and
Trading of the asset the the
compan r it is a of the debts
price sale on sales to Pricing counter reasons Disclos
Counter Dispose Selling y from related asses involve
(10 the the principl -party and Disclos ure
-party d assets date the transact involve d have
thousan compan total es (applica measur ure date index
beginni ion d have been
d Yuan) y (Note net ble to es
ng of (Y/N) all been fully
3) profit related taken
the transfer transfer
of transact by the
period red red
listed ions) compan
to the (Y/N) (Y/N)
compan y shall
date of
ies be
sale (10
explain
thousan
ed
d Yuan)
(Y/N)
The
Inco ―Propos
Putian
me al of
Innovat
from Listed Have Major
ion and Land
asset for the Assets
Entrepr propert
s transfer same Sale‖pu
eneursh y of the 2020.1 11,038. 273.94 2020-1
0 dispo based Y controll Y Y Y blished
ip No. 1 2.24 36 % 0-14
sal on ing on
Manag Putian
are apprais shareho Juchao
ement Road
recog al value lder Website
Co.,
nized ;
Ltd.
as ―Major
60.1 Assets
28
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
703 Sale
milli and
on Report
yuan on
Related
Transac
tions
(Draft)‖
dated
27
Novem
ber
2020
‖Annou
Income ncemen
from t on the
Listed
Lianyu assets Assets
for
ngang disposa Transfe
Propert transfer
Yihan 2020.1 l are 2020-0 r by
y in 1,172.4 0 26.71% based N N/A Y Y Y
Service 2.28 recogni 1-18 Listing
Beijing on
Co., zed as ‖
apprais
Ltd. 5.8669 publish
al value
million ed on
Yuan Juchao
Website
‖Annou
Income ncemen
from t on the
Listed
assets Assets
for
disposa Transfe
Propert transfer
2020.7. l are 2020-0 r by
Jin Xu y in 1,170 0 30.92% based N N/A Y Y Y
27 recogni 1-18 Listing
Beijing on
zed as ‖
apprais
6.7923 publish
al value
million ed on
Yuan Juchao
Website
2. Sales of major equity
√ Applicable □ Not applicable
Counter Dispose Selling Trading Net Impact Ratio of Pricing Whether Associat Whether Whether Disclos Disclos
-party d equity date price profit of the net principl it is a ion with the the ure date ure
29
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(10 contribu sale on profit es related the equity implem index
thousan ted by the contribu transacti counter- involve entation
d Yuan) the compan ted by on party d have is on
equity y equity (Y/N) all been schedul
to the sales to transferr e, and if
listed the total ed not, the
compan net (Y/N) reasons
y from profit of and
the listed measure
beginni compani s taken
ng of es by the
the compan
period y shall
to the be
date of explaine
sale (10 d
thousan
d Yuan)
The
―Propos
al of
Major
Assets
49.64% Sale‖pu
equity blished
Putian Incomes
of the on
Innovati from Listed Have
joint Juchao
on and investm for the
stock Website;
Entrepre ent are transfer same
enterpri 2020-12 22,749. 277.87 2020-10 ―Major
neurship -960.91 recogniz based Y controlli Y Y
se - -28 22 % -14 Assets
Manage ed as on ng
Putian Sale and
ment 61.0321 appraisa sharehol
High-te Report
Co., million l value der
ch on
Ltd. yuan
Industry Related
Co., Ltd Transact
ions
(Draft)‖
dated 27
Novemb
er 2020
Putian 100% Incomes Have ‖Annou
Innovati equity 2020-12 4,343.1 from 192.97 Assesse the 2020-12 ncement
-167.55 Y Y Y
on and of the -25 6 investm % d value same -10 on the
Entrepre subsidia ent are controlli Related
30
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
neurship ry - recogniz ng Transact
Manage Nanjing ed as sharehol ions of
ment Putian 42.3852 der Subsidia
Co., Informa million ry’s
Ltd. tion yuan Equity
Technol Transfer
ogy Co., ‖
Ltd. publishe
d on
Juchao
Website
VII. Analysis of main holding Company and joint stock 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 267,796,243. 87,455,194.4 315,258,523.
Subsidiary on and 34.20 million 7,284,552.26 7,996,426.60
Telecom Co., 51 9 64
application
Ltd
solutions
General
cabling,
Nanjing development,
Putian Telege production 258,488,425. 88,697,524.0 360,582,564. 30,942,511.8 22,815,831.9
Subsidiary 20 million
Intelligent and sales of 79 8 08 8 0
Building Ltd the building
intelligent
products
R&D,
manufacture
and sales of
Nanjing the software
Putian of 25,252,856.6 23,140,748.0
Subsidiary 10 million 697,647.49 415,312.45 415,312.45
Network Co., communicati 1 3
Ltd. on, network
and
electronic
equipment
31
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Out-door
patch,
sub-line
equipment,
Nanjing
network
Putian
box(cube)of
Changle
out-door and 54,297,323.1 31,962,497.1 45,193,624.5
Telecommuni Subsidiary 10 million 159,435.36 159,435.36
machinery 4 1 4
cations
office,
Equipment
manufacture
Co., Ltd.
and sales of
communicati
on electrical
products
Export and
import of
telecommuni
Putian
cation
Telecommuni
equipment, HKD 2 -18,180,366.
cations Subsidiary 3,873,042.82 0.00 -45,645.63 -45,645.63
Hi-tech R & million 48
(H.K.) Co.,
D and
Ltd.
transfer,
technology
trade
R & D and
sales of the
Nanjing
electronic
Putian
components
Telecommuni
assembly, -2,476,948.6
cation Subsidiary 5 million 4,565,803.72 4,000.01 -429,435.40 -429,435.40
electronic 0
Technology
products and
Company
telecommuni
Ltd.
cation
equipment
Manufacture
Nanjing and sales of
Nanman industrial 195,003,137. 51,849,735.6 98,756,080.6
Subsidiary 41.14 million 1,912,256.52 1,908,368.07
Electrics Co., intelligent 30 8 0
Ltd. distribution
products
Nanjing R&D,
51,899,779.4 31,295,272.0 36,384,724.2
Putian Subsidiary manufacture 10 million 1,832,744.82 2,182,392.18
7 8 0
Datang and sales of
32
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Information solar
Electronic controller,
Co., Ltd. and
production &
processing
business of
electronic
products
Information
system
integration
service,
computer
software and
hardware and
peripherals
manufacturin
Chongqing
g,
Puhua
manufacture 10,627,133.6 18,462,941.7
Information Subsidiary 50 million 2,008,539.54 28,539.54 8,539.54
of the cloud 6 1
Technology
computing
Co., Ltd.
devices,
telecommuni
cation
equipment
and internet
devices, big
data services
and software
development
Particular about subsidiaries acquired or disposed in reporting period
√ Applicable □ Not applicable
Method of acquisition and disposal during Impact on overall production operations
Name
the reporting period and results
Nanjing Bada Telecommunications
Closed for liquidation No significant impact
Equipment Co., Ltd.
Nanjing Putian Wangzhi Electronic Co.,
Merger by absorption No significant impact
Ltd
Nanjing Putian Information Technology Incomes from investment are recognized as
100% equity transferred
Co., Ltd. 42,385,183.68 Yuan
Chongqing Puhua Information Technology Achieved net profit of 8,539.54 Yuan in the
Newly established
Co., Ltd. Year
33
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Information note
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
From the perspective of industry policy, our country has always attached great importance to the development of
the communications industry, and the communications industry has been strongly supported and encouraged.
Relevant government departments have issued a series of policies to encourage industry and policies to support
regional development, which have a positive impact on the development of the industry. In May 2020, the
"Government Work Report 2020" mentioned strengthening the construction of new infrastructure, developing a
new generation of information networks, expanding 5G applications, building charging piles, promoting new
energy vehicles, stimulating new consumer demand, and assisting industrial upgrading. In March 2020, the
Ministry of Industry and Information Technology issued a notice on accelerating the development of 5G. It is
required to comprehensively promote 5G network construction, application promotion, technological development
and security assurance, and give full play to the scale effect and leading role of the new 5G infrastructure to
support high-quality economic development, speed up the deployment of 5G network construction and speed up
the progress of 5G network construction. Industry policies provide an important guarantee for the future
development of the company's communications industry.
From the perspective of the company’s product development trend, traditional wiring products need to focus on
the main communications industry, focus on key industries, and actively explore the transformation of traditional
wiring industry to data center business. The wiring industry will focus on participating in rail transit, data center
construction, and military, power, aerospace, government and other industry users. In the future, access products
will focus on participating in projects for users in the power, public security, and transportation and other
industries. As the basis of network transmission, cabling products are necessary infrastructure for the construction
of various industries. In the future, our country's guidance on 5G, manufacturing upgrades, new infrastructure,
artificial intelligence and other policies will have a huge impact on the development of cabling. The complete set
of electrical products will adhere to a market strategy that runs through the track, realize value transfer around
general contractors, design institutes and strategic partners, and create a win-win situation. Computing products
will rely on rich R&D and adaptation capabilities to focus on gathering applications, integrating industries,
creating a complete Putian Kunpeng business ecosystem, and strive to provide users with a full range of domestic
product solutions. In the future, video conferencing products can fully integrate and innovate with business
systems according to the needs of enterprises.
Business plan for the next year:
34
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
2021 is the first year of the "14th Five-Year Plan". Under the leadership of the board of directors, the company
will continue to deepen reform and innovation, prevent and resolve risks, focus on key industries, and seek
development.
In terms of industrial development, the company will adhere to the customer-centered and market-oriented
business philosophy, with a three-year rolling strategic plan as the starting point, further clarify development ideas,
focus on industry, focus on the main business, and clarify the positioning goals and key tasks of industrial
development; formulate tasks and measures that can be implemented, evaluated, and assessed, so as to plan for the
future development of the company and lead the direction.
The company will rely on the existing industrial foundation, actively integrate relevant advantageous resources
within the company, seize the development opportunities of 5G and "new infrastructure", actively integrate and
take active actions. In terms of information and communication, we will deepen the construction of data centers,
pay attention to data room construction projects and personalized overall solutions, make every effort to focus on
the construction of key markets and major projects, and strive to enter the procurement directory of well-known
companies such as Ali, Tencent, and Huawei; continue to improve independent production and manufacturing
capacity. Keep up with the new networking requirements of 5G, continue to optimize traditional products such as
outdoor communication cabinets and outdoor communication equipment rooms, and enrich the IoT series
products, and strive to complete the design and development of FRP outdoor mini cabinets and other products. In
terms of video conferencing business, it focuses on tracking the upgrade business needs of original superior
customers, pays close attention on key projects, and strives to form model cases of Potevio products that break
through the industry. In terms of integrated cabling products, we will strive to seize the development opportunities
of high-end cabling localization, increase the research and development of new products, complete the market
launch of a new generation of intelligent cabling systems and integrated cabling management platforms, the
approval of cloud cabling system products, and the solutions for copper cables fast line-tracking system. In terms
of complete electrical products, we will continue to penetrate the rail transit field, do in-depth marketing, maintain
the market share of low-voltage distribution boxes (cabinet), and increase tracking in the field of socket boxes,
and strive to seek breakthroughs in fields other than airports, ports, pipe gallery and other rail transits. Continue to
improve new products such as mains smart power supplies and smart cruise ships, and actively promote
solar/mains smart street lighting systems and smart cruise cloud platforms. Strive to achieve new breakthroughs in
new businesses. Puhua Company will actively participate in government localization substitution and government
cloud projects, and strive to achieve a certain scale of project implementation of server products in the
government and non-government markets. At the same time, it also plans to vigorously expand other businesses
such as multimedia and data centers in Chongqing to enrich project cases and increase sales revenue.
In terms of operation and management, the company will focus on the main channel business and explore "new
increment". Continue to increase reform and adjustment efforts, release accumulated resources, and at the same
time strive to explore the future main business and incremental development direction, promote the optimization
of the company's industrial structure, and make new breakthroughs in business development. The company will
35
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
continue to adhere to the financial-centric operating activities management, adhere to the management and control
of capital use, actively strive for resources from all parties, and strive to ensure the stability of the company’s
operating cash flow; optimize the accounting and evaluation mechanism of the business unit; continue to increase
the design optimization of the company’s internal control system, and strengthen the execution and verification;
continue to carry out loss management work, and solve problems in development. Continue to advance the work
of improving quality and efficiency. Strengthen budget control, further strengthen cost and expense management,
and effectively promote cost reduction and efficiency enhancement. Strengthen risk prevention and take strict
precautions against various business risks. Intensify the reform of the assessment and incentive system, strengthen
the training of talents, and improve per capital benefits.
Maintain the current business and complete the capital needs of the investment project under construction:
In 2021, 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 250 million Yuan in 2021.
Risks the Company may face in the future development:
1. Cycle risk of communication industry
The Company is mainly engaged in the manufacture and sales of communications products, customers include
several major telecom operators in China. The establishment and adjustment of network construction period and
investment plan of the operators have a significant impact on the operation of the Company and bring the industry
cycle risk.
The Company will continue to further integrate quality resources, accelerate industry upgrade, expand industry
market and improve industry profitability.
2.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.
3.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
36
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
4. 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
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
37
Nanjing Putian Telecommunications Co., Ltd. 2020 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
2020 0.00 21,964,552.84 0.00% 0.00 0.00% 0.00 0.00%
-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%
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.
38
Nanjing Putian Telecommunications Co., Ltd. 2020 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
Commitment Type of Content of Commitment Commitment Implementatio
Commitments
party commitments commitments date term n
Commitments for share merger
reform
Commitments in report of
acquisition or equity change
Content of
China
Commitments commitments
Potevio ;Chin
on horizontal see ―2.
a Putian
competition, Specific In normal
Information 13 Oct. 2020 Long-term
related commitments‖ performance
Industry
transactions . See
Group Co.,
and fund ―Commitment
Ltd.
occupation 1‖
China
Commitments
Potevio ;Chin
on horizontal
a Putian See
competition, In normal
Information ―Commitment 13 Oct. 2020 Long-term
related performance
Industry 2‖
transactions
Group Co.,
and fund
Ltd.
Commitments in assets reorganization occupation
China
Potevio ;Chin
a Putian See
Other In normal
Information ―Commitment 13 Oct. 2020 Long-term
commitment performance
Industry 3‖
Group Co.,
Ltd.
Xu Qian;
Wang Wenkui;
Li Tong; Liu
See
Yun; Wang Other In normal
―Commitment 25 Nov. 2020 Long-term
Jinfeng; Qin commitment performance
4‖
Zhen; Tang
Fuxin; Xie
Manlin; Du
39
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Xiaorong; Jia
Haowen; Lei
Xu; Liu
Xiaodong;
Wang Huilin;
Li Jing
China
Potevio ;Chin
a Putian See
Other In normal
Information ―Commitment 25 Nov. 2020 Long-term
commitment performance
Industry 5‖
Group Co.,
Ltd.
Until the
See
Other completion of
China Potevio ―Commitment 13 Oct. 2020 Completed
commitment this
6‖
transaction
Xu Qian;
Wang Wenkui;
Li Tong; Liu
Yun; Wang
Jinfeng; Qin
Zhen; Tang
Fuxin; Xie
Until the
Manlin; Du See
Other completion of
Xiaorong; Jia ―Commitment 13 Oct. 2020 Completed
commitment this
Haowen; Lei 7‖
transaction
Xu; Liu
Xiaodong;
Wang Huilin;
Li Jing; Lv
Dong; Qiu
Huizhen; Wei
Jie
Commitments make in initial public
offering or re-financing
Equity incentive commitment
Commitments See
Other commitments for medium and In normal
China Potevio on horizontal ―Commitment 8 April 2018 Long-term
small shareholders performance
competition, 8‖
related
40
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
transactions
and fund
occupation
Commitments
on horizontal
See
competition, In normal
China Potevio ―Commitment 8 April 2018 Long-term
related performance
9‖
transactions
and fund
occupation
Commitments
on horizontal
See
competition, In normal
China Potevio ―Commitment 8 April 2018 Long-term
related performance
10‖
transactions
and fund
occupation
Commitments
on horizontal
See
China Putian competition, In normal
―Commitment 8 April 2018 Long-term
Corporation related performance
11‖
transactions
and fund
occupation
Commitments
on horizontal
See
China Putian competition, In normal
―Commitment 8 April 2018 Long-term
Corporation related performance
12‖
transactions
and fund
occupation
Commitments
on horizontal
See
China Putian competition, In normal
―Commitment 8 April 2018 Long-term
Corporation related performance
13‖
transactions
and fund
occupation
41
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
See
China Putian Other In normal
―Commitment 19 June 2018 Long-term
Corporation commitment performance
14‖
Share keeping
See commitment:
Other
China Potevio ―Commitment 8 July 2015 within six Completed
commitment
15‖ months since
8 July 2015
Completed on time(Y/N) Y
If the commitment is overdue and not
fully fulfilled, it shall explain the
specific reasons for the incomplete Not applicable
performance and the work plan for the
next step
2. Specific commitments
Commitment 1:
Committed party: China Potevio ; China Putian Information Industry Group Co., Ltd.
Content of commitments:
1. The Company or the companies controlled by the Company will try to minimize the related transactions with Nanjing Putian
Telecommunications Co., Ltd. (hereinafter referred to as "Nanjing Putian") and its subsidiaries and branches.
2. Related transactions that cannot be avoided or exist with reasonable grounds will be conducted on an equal and voluntary basis
and in accordance with the principles of fairness, justice, and compensation of equal value. The Company or the companies
controlled by the Company will sign standardized related transaction agreements with Nanjing Putian or its subsidiaries in
accordance with the law, and the transaction prices will be determined at a reasonable price recognized in the market to ensure that
the related transaction price is fair; and perform fair procedures such as related transaction decision-making, vote avoidance, and
disclose information in a timely manner in accordance with relevant laws, rules, regulations, other normative documents and the
articles of association of Nanjing Putian or its subsidiaries, so as to ensure that the legitimate rights and interests of Nanjing Putian or
its subsidiaries and other shareholders of Nanjing Putian will not be harmed through related transactions. .
3. It is guaranteed that it will not require or accept Nanjing Putian or its subsidiaries or branches in any fair market transaction to
provide the Company or the companies controlled by the Company with better conditions than third parties.
4. It is guaranteed that it will exercise corresponding rights and assume corresponding obligations in accordance with the articles of
association of Nanjing Putian and its subsidiaries, and will not use the identity of the controlling shareholder/actual controller to seek
illegitimate interests, or use related transactions to illegally transfer funds and profits of Nanjing Putian or its subsidiaries, and
guarantee not to damage the legitimate rights and interests of other shareholders of Nanjing Putian.
5. If the company violates the above commitments, it will be willing to assume all the responsibilities arising therefrom, and fully
compensate for all direct or indirect losses caused to Nanjing Putian.
Commitment 2:
Committed party: China Potevio ;China Putian Information Industry Group Co., Ltd.
Content of commitments:
42
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
1. During the period when the Company directly or indirectly holds shares of Nanjing Putian Telecommunications Co., Ltd.
(hereinafter referred to as "Nanjing Putian"), it guarantees that it will not use its control relationship over Nanjing Putian to engage in
or participate in activities that harm the interests of Nanjing Putian and its small and medium shareholders.
2. In addition to the above disclosures, in the future, the Company and other companies controlled by the Company will not directly
or indirectly own, manage, control, invest, or engage in any other businesses or projects that are the same as or similar to those
currently carried out or planned in the future by Nanjing Putian and its subsidiaries and branches at home and abroad, nor participate
in the ownership, management, control, or investment of any businesses or projects that are the same as or similar to those currently
carried out or planned in the future by Nanjing Putian and its subsidiaries and branches, nor seek to directly or indirectly engage in
any businesses constitute competition to the businesses currently carried out or planned in the future by Nanjing Putian and its
subsidiaries and branches through joint ventures, cooperation, joint operations with any third party, or lease operations, contract
operations, entrusted management, etc., nor have interests in the above activities. If the Company and other companies controlled by
the Company discover any new business opportunities that constitute or may constitute a direct or indirect competitive relationship
with Nanjing Putian or its holding company’s main business, it will immediately notify Nanjing Putian in writing and urge the
business opportunity to be first provided to Nanjing Putian or its holding company on reasonable and fair terms and conditions.
3. If Nanjing Putian or its holding companies abandon such competitive new business opportunities and the Company and other
companies controlled by the Company engage in such competitive business, Nanjing Putian or its holding companies will have the
right to acquire any equity, assets and other rights and interests in the above-mentioned competitive business from the
above-mentioned entities at any time at one time or in multiples.
4.When the Company and other companies controlled by the Company intend to transfer, sell, lease, license or otherwise transfer or
allow the use of assets and businesses that constitute or may constitute a direct or indirect competitive relationship with the main
business of Nanjing Putian or its holding companies, the Company and other companies controlled by the Company will provide
Nanjing Putian or its holding companies with the right of first refusal, and promise to do its utmost to urge the Company’s
shareholding companies to provide Nanjing Putian or its holding company with the right of first refusal under the above-mentioned
circumstances.
5. If the Company violates the above commitments, it shall make a total, timely and full compensation for the losses suffered by
Nanjing Putian; all the benefits obtained by the Company due to the violation of the above commitments shall be attributed to
Nanjing Putian.
6. The above commitments will continue to be valid during the period when the Company is the controlling shareholder/actual
controller of the listed company.
Commitment 3:
Committed party: China Potevio ；China Putian Information Industry Group Co., Ltd.
After the completion of this transaction, the Company will strictly abide by the "Company Law", "Securities Law", and relevant
regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange and the articles of association to
ensure that Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as the "listed company") ") shall continue to be
completely separated from the Company and other companies that the Company controls or exerts significant influence in terms of
personnel, assets, finance, organization and business, and maintain the independence of the listed company in terms of personnel,
assets, finance, organization and business. In particular, after the completion of this transaction, the Company will comply with the
regulations of the "Notice on Regulating Fund Transactions between Listed Companies and Related Parties and Issues Concerning
the External Guarantees of Listed Companies" (ZJF (2003) No. 56) and the "Notice of China Securities Regulatory Commission and
China Banking Regulatory Commission on Regulating the External Guarantee Behavior of Listed Companies (ZJF [2005] No. 120),
standardize the external guarantee behavior of the listed company and its subsidiaries, and do not illegally occupy the funds of the
listed company and its subsidiaries.
43
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
The Company guarantees to strictly fulfill the above-mentioned commitments. In the event that the Company or other companies that
the Company controls or exerts significant influence violate the above-mentioned commitments and cause damage to the rights and
interests of the listed company, the Company will bear the corresponding compensation liabilities in accordance with the law.
Commitment 4:
Committed party: Xu Qian; Wang Wenkui; Li Tong; Liu Yun; Wang Jinfeng; Qin Zhen; Tang Fuxin; Xie Manlin; Du Xiaorong; Jia
Haowen; Lei Xu; Liu Xiaodong; Wang Huilin; Li Jing
Content of commitments:
In order to ensure that the company's measures to fill the diluted immediate returns can be effectively implemented, all directors and
senior managers of the company have made the following commitments:
(i) I promise not to convey benefits to other units or individuals without compensation or on unfair terms, nor to harm the interests of
the listed company by other means;
(ii) I promise to restrain my position-related consumption behavior;
(iii) I promise not to use the assets of the listed company to engage in investment and consumption activities that have nothing to do
with the performance of my duties;
(iv) I promise to make every effort to urge the remuneration system formulated by the board of directors or the remuneration
committee to be linked to the implementation of the listed company's compensation measures within the scope of my own duties and
powers;
(v) If the listed company plans to implement equity incentives in the future, I promise to make every effort to urge the listed
company's planned equity incentive vesting conditions to be linked to the implementation of the compensation measures within the
scope of my own duties and powers;
(vi) From the time when this commitment is issued to the time before the completion of the transaction, if the China Securities
Regulatory Commission makes other new regulatory requirements on the replenishment measures and its commitments, and the
above commitments cannot meet the requirements of the China Securities Regulatory Commission, I promise that the supplementary
commitments will be issued in accordance with the latest regulations of the China Securities Regulatory Commission;
(vii) I promise to fulfill the relevant fill-up and return measures formulated by the listed company and any promises made by me
regarding the fill-up and return measures. If I violate these promises and cause losses to the listed company or investors, I am willing
to bear the liability of indemnity in accordance with the law to the listed company or investors.
Commitment 5:
Committed party: China Potevio ;China Putian Information Industry Group Co., Ltd.
Content of commitments:
1. The Company promises not to exceed its authority to interfere with the operation and management activities of Nanjing Putian
Telecommunications Co., Ltd. (hereinafter referred to as "Nanjing Putian"), nor infringe on the interests of Nanjing Putian;
2. From the issuance date of this commitment to the time before the completion of the transaction, if the China Securities Regulatory
Commission makes clear provisions on the fill-up and return measures and its commitments, and the above commitments cannot
meet the requirements of the China Securities Regulatory Commission, the Company promises to issue a supplementary
commitment in accordance with the regulations of the China Securities Regulatory Commission;
The Company promises to strictly perform the above-mentioned commitments made by it to ensure that the measures for fill-up and
return can be effectively implemented. If the Company violates the above commitments and causes losses to Nanjing Putian or
investors, the Company is willing to bear the compensation responsibilities for Nanjing Putian or investors and the corresponding
penalties imposed by the regulatory authorities in accordance with the law.
44
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Commitment 6:
Committed party: China Potevio
Content of commitments: The Company promises that during the period from the issuance of this letter of commitment to the
completion of the transaction, the Company has no intention or plan to reduce its holdings of Nanjing Putian Telecommunications
Co., Ltd. (hereinafter referred to as "Nanjing Putian"), nor reduce its holdings by any means. If the Company violates this
commitment and causes losses to Nanjing Putian or other investors, the Company promises to assume liability for compensation to
Nanjing Putian or other investors in accordance with the law.
Commitment 7:
Committed party: Xu Qian; Wang Wenkui; Li Tong; Liu Yun; Wang Jinfeng; Qin Zhen; Tang Fuxin; Xie Manlin; Du Xiaorong; Jia
Haowen; Lei Xu; Liu Xiaodong; Wang Huilin; Li Jing; Lv Dong; Qiu Huizhen; Wei Jie
Content of commitments:
I promise that during the period from the issuance of this letter of commitment to the completion of the transaction, the Company has
no intention or plan to reduce its holdings of Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as "Nanjing
Putian"), nor reduce its holdings by any means. If I violates this commitment and causes losses to Nanjing Putian or other investors, I
promises to assume liability for compensation to Nanjing Putian or other investors in accordance with the law.
Commitment 8:
Committed party: China Potevio
Content of commitments: In view of 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. 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 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.
II. 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.
III. Ensure the business independence of Nanjing Putian.
45
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(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.
IV. 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 official powers in accordance with laws, regulations, and articles of
association.
V. 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
Commitment 9:
Committed party: China Potevio
Content of commitments:
In view of 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:
46
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(1) do not influence and require Nanjing Putian and its subsidiaries to give rights superior to the third parties in the market in
business cooperation, nor engage in any acts to damage the interests of Nanjing Putian and its subsidiaries by using its controlling
shareholder status at Nanjing Putian.
(2) Do not influence and require preferential rights to make deals with Nanjing Putian and its subsidiaries by using its controlling
shareholder status at Nanjing Putian.
(3) when conducting necessary and inevitable related transactions, guarantee to conduct according to the principle of marketization
and fair price, and perform the transaction procedures and information disclosure obligations in strict accordance 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.
Commitment 10:
Committed party: China Potevio
Content of commitments: In view of 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.
iii. If the Company or any related enterprise obtains any business opportunity from any third party that has substantial competition
with the business of Nanjing Putian or may have substantial competition in the future, the Company will immediately notify Nanjing
Putian, and transfers the 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 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.
47
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Commitment 11:
Committed party: China Putian Corporation
Content of commitments: In view of 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:
I. 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 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.
II. 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.
III. 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.
IV. 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
48
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
V. 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.
Commitment 12:
Committed party: China Putian Corporation
Content of commitments:
In view of 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 business
cooperation, nor engage in any acts to damage the interests of Nanjing Putian and its subsidiaries by using its actual controller status
at Nanjing Putian;
2.do not influence and require preferential rights to make deals with Nanjing Putian and its subsidiaries by using its actual controller
status at Nanjing Putian;
3. when conducting necessary and inevitable related transactions, guarantee to conduct according to the principle of marketization
and fair price, and perform the transaction procedures and information disclosure obligations in strict accordance 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 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.
Commitment 13:
Committed party: China Putian Corporation
Content of commitments:in view of 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.the Company and other related enterprise controlled by the Company have not engaged in any production and business operations
49
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
2. 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.
3. if the Company or any related enterprise obtains any business opportunity from any third party that has substantial competition
with the business of Nanjing Putian or may have substantial competition in the future, the Company will immediately notify Nanjing
Putian, and transfers the business opportunity to Nanjing Putian after obtaining the promise from the third party.
4. 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 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.
Commitment 14:
Committed party: China Putian Corporation
Content of commitments:The Group makes statements and commitments regarding the business condition and future development
planning of the private network communications business of Nanjing Putian, and the operations of the Group and other enterprises
controlled by the Group (other than Nanjing Putian and its controlled enterprises) as follows:
In order to optimize the internal resources allocation of the group, make full use of the business capability of Nanjing Putian, starting
from 2016, the Group will convert the private network communication products originally purchased by China Potevio (hereinafter
referred to as ―Potevio‖), a wholly-owned subsidiary of the Group, into commissioning Nanjing Putian for production. The Group’s
private network communication business which was originally a trade-oriented business and was purchased by Potevio from external
suppliers to sell has successfully transformed into an independent processing and production business in 2016, and the current
business model is that Potevio obtains orders from customers, and then signs entrusted production contracts with Nanjing Putian and
its subsidiary Nanfang branch, and Nanjing Putian is responsible for the specific production. At present, the customer of Potevio is
Fushen Industrial Co., Ltd., and the annual order amount of the existing model products remains above 500 million Yuan, and it is
predicted that there will be a stable demand period of 3 to 5 years.
The Group promises to take Nanjing Putian as the business entity of the private network communication services, including but not
limited to:
1. Nanjing Putian is the military-civilian integration industrial base of the Group, and is the only production entity of the existing
product multi-mesh cloud data processing communication 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
50
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
Commitment 15:
Committed party: China Potevio
Content of commitments:In order to protect the legitimate rights and interests of all types of investors, China Potevio (hereinafter
referred to as ―Potevio‖), as the controlling shareholder of NJ TEL B (200468), now makes the following commitments:
i. Potevio, as a responsible controlling shareholder, starting from July 8, 2015, will not reduce the company’s stock within the next
six months.
ii. At present, NJ TEL B has stable operations and its main business is running normally. Potevio will continue to promote the
transformation and upgrading and structural adjustment of listed companies by asset restructuring and optimizing allocation of
resources so as to vigorously improve the quality of listed companies.
iii. Potevio will accelerate the long-term mechanism of improving the return of investors in listed companies, and improve the
operation quality and profitability of listed companies so as to continuously improve investor returns.
3. 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
51
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Changes in accounting policies caused by changes in Accounting Standards for Business Enterprise
1. The Company implemented the Accounting Standards for Business Enterprise No.14- Revenue (hereinafter referred to as New
Revenue Standard) that revised by Ministry of Finance since 1 Jan. 2020. According to the provisions of the relevant old and new
standards, the information of comparable periods is not adjusted. The cumulative impact of the implementation of new standards on
the first implementation date is retrospectively adjusted to the amount of retained earnings at the beginning of the reporting period
and other related items in the financial statement.
Main impact of the implementation of new revenue standards on the Company’s financial statement dated 1 Jan.
2020:
Item Balance Sheet
2019-12-31 Impact of new revenue standard 2020-1-1
adjustments
Account received in advance 22,148,080.67 -22,148,080.67
Contract liability 19,600,071.39 19,600,071.39
Other current liability 2,548,009.28 2,548,009.28
2. Since 1 Jan. 2020, the company has implemented the Interpretation of Accounting Standards for Business Enterprise No.13 issued
by the Ministry of Finance in 2019, and change of the accounting policy is accounted for using the future application method.
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
(i) Disposal of subsidiaries
Loss of control upon a single disposal of an investment in a subsidiary
The difference between the
Basis for
Share ratio disposal price and share of the
Equity determining the
Equity disposal with equity Time-point of net assets of the subsidiary at
Subsidiary disposal time-point at
price disposed the control lost the consolidated financial
method which the control
(%) statement corresponding to the
is lost
disposal of the investment
Nanjing Putian 43,431,600.00 100.00 Transfer 2020-12-25 Completed 42,385,183.68
Information industrial &
Technology Co., commercial
Ltd. changes
(ii) Change in consolidation scope for other reasons
1. Increase in scope of consolidation
52
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Company Way of the equity Time-point of the equity Contribution amount Contribution ratio
acquired acquired
Chongqing Puhua Establishment 2020-7-10 2,000,000.00 100.00%
Information Technology
Co., Ltd.
2.Decrease in scope of consolidation
Company Way of the equity Time-point of the equity Net assets on disposal Net profit from the
disposed disposed date beginning of the period to
the date of disposal
Nanjing Putian Wangzhi Cancel for liquidation 2020-12-31 754,205.54
Electronic Co., Ltd
Nanjing Bada Cancel for liquidation 2020-12-31 4,301,547.02
Telecommunications
Equipment Co., Ltd.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm Pan-China Certified Public Accountants (LLP)
Remuneration for domestic accounting firm (in 10 thousand
101
Yuan)
Continuous life of auditing service for domestic accounting firm 7
Name of domestic CPA Jin Jingyu, Zhang Jinghui
Continuous service years from domestic CPA 5 years, 2 years
Re-appointed accounting firms in this period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
Pan-China Certified Public Accountants (LLP) was engaged as audit institute of internal control for the Company of 2020, auditing
fee for internal control was 0.32 million Yuan.
During the reporting period, the company engaged CITIC Securities Co., Ltd as an independent financial adviser due to the major
assets restructuring, the financial adviser fee was 1.5 million Yuan.
53
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
X. Particular about 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
Amount Outcome and
Whether a
Lawsuits involved (10 impact of Judgment Disclosure Disclosure
accrual liability Progress
(arbitration) thousand litigation enforcement date index
resulted (Y/N)
Yuan) (arbitration)
Juchao
website
―Notice on
Material
Nanjing Putian
No significant Lawsuits‖
Telecommunications
impact on the and Progress
Co., Ltd bring a suit Settlement
5,343.58 N current profit or - 2020-01-14 of the
against Beijing withdrawal
profit after the Material
UniStrong Co., Ltd
period Lawsuits
for contract dispute
(Notice No.:
2020-001,
2020-005) on
23 Jan. 2020.
Other lawsuits and
arbitration: 3,946.73 - - - - -
Case of Sale and
purchase contract
dispute- Nanjing
No significant ―Announcem
Putian
impact on the ent on
Telecommunications Settlement
238.04 N current profit or - 2020-08-12 Cumulative
Co., Ltd bring a suit withdrawal
profit after the Litigation‖
against Jiangsu
period (Notice No.:
Xinxin Jiayuan
2020-043)
Network Tech. Co.,
Ltd.
Case of Sale and 12.58 N Settlement No significant - 2020-08-12
54
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
purchase contract withdrawal impact on the ―Announcem
dispute- Nanjing current profit or ent on
Putian profit after the Cumulative
Communications period Litigation‖
Co., Ltd. bring a suit (Notice No.:
against Great Wall 2020-043)
Broadband Network
Service Co., Ltd.
Shantou Branch
Case of
Construction
contract dispute -
Jiangsu Huichuang
Science and No significant ―Announcem
Education impact on the ent on
Not
Development Co., 46.52 N Judged current profit or 2020-08-12 Cumulative
implemented
Ltd. bring a suit profit after the Litigation‖
against Nanjing period (Notice No.:
Putian 2020-043)
Telecommunication
Technology
Company Ltd
Case of Sale and
purchase contract
No significant ―Announcem
dispute- Huaxun
impact on the ent on
Ark Co., Ltd. bring Execution
218.07 N Judged current profit or 2020-08-12 Cumulative
a suit against completed
profit after the Litigation‖
Nanjing Putian
period (Notice No.:
Communications
2020-043)
Co., Ltd.
Case of Labor No significant ―Announcem
dispute- Gu Ming'e impact on the ent on
Mediated Execution
bring a suit against 7.6 N current profit or 2020-08-12 Cumulative
case closure completed
Nanjing Putian profit after the Litigation‖
Network Co., Ltd. period (Notice No.:
2020-043)
Case of Sale and
No significant
purchase contract ―Announcem
impact on the
dispute-Nanjing Mediated Execution ent on
57.12 N current profit or 2020-08-12
Caiqian Technology case closure completed Cumulative
profit after the
Co., Ltd. bring a suit Litigation‖
period
against Nanjing (Notice No.:
55
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Putian 2020-043)
Communications
Co., Ltd.
Case of Unjust
enrichment dispute-
―Announcem
Nanjing Putian
ent on
Telege Intelligent Trial in
3.38 N Pending - 2020-08-12 Cumulative
Building Ltd bring a progress
Litigation‖
suit against
(Notice No.:
Wenzhou Dayao
2020-043)
Hardware Co., Ltd
Case of Sale and
purchase contract
dispute- Nanjing
Putian No significant ―Announcem
Telecommunication impact on the ent on
Mediated Execution
Technology 60.16 N current profit or 2020-08-12 Cumulative
case closure completed
Company Ltd. bring profit after the Litigation‖
a suit against period (Notice No.:
Guangzhou Jingxin 2020-043)
Communication
Equipment Co., Ltd.
Case of Sale and
purchase contract
No significant ―Announcem
dispute- Jiangsu
impact on the ent on
Huaqiang Power Mediated Execution
103.99 N current profit or 2020-08-12 Cumulative
Equipment Co., Ltd. case closure completed
profit after the Litigation‖
bring a suit against
period (Notice No.:
Nanjing Mennekes
2020-043)
Electric Co., Ltd.
Case of Sale and
purchase contract
dispute- Zhejiang No significant ―Announcem
Dahua Technology impact on the ent on
Mediated Execution
Co., Ltd. bring a suit 183.3 N current profit or 2020-08-12 Cumulative
case closure completed
against Nanjing profit after the Litigation‖
Putian period (Notice No.:
Communications 2020-043)
Co., Ltd.
Case of Sale and No significant
purchase contract Mediated impact on the Execution ―Announcem
280.05 N 2020-08-12
dispute- Nanjing case closure current profit or completed ent on
Shengping profit after the Cumulative
56
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Communication period Litigation‖
Equipment Co., Ltd. (Notice No.:
bring a suit against 2020-043)
Nanjing Putian
Communications
Co., Ltd.
Case of Project
contract dispute -
Nanjing Southern No significant ―Announcem
Telecom Co., Ltd impact on the ent on
Settlement
bring a suit against 151.83 N current profit or - 2020-08-12 Cumulative
withdrawal
Chongqing New profit after the Litigation‖
Oupeng Education period (Notice No.:
City Management 2020-043)
Co., Ltd.
Case of Sale and
purchase contract
dispute- Nanjing
Gerong No significant ―Announcem
Optoelectronics impact on the ent on
Mediated Execution
Technology Co., 8.34 N current profit or 2020-08-12 Cumulative
case closure completed
Ltd. bring a suit profit after the Litigation‖
against Nanjing period (Notice No.:
Putian 2020-043)
Communications
Co., Ltd.
Case of Sale and
purchase contract
dispute- Nanjing No significant ―Announcem
Southern Telecom impact on the ent on
Mediated Execution
Co., Ltd bring a suit 180.46 N current profit or 2020-08-12 Cumulative
case closure completed
against Guangzhou profit after the Litigation‖
Futeng Information period (Notice No.:
Technology Co., 2020-043)
Ltd.
Case of Sale and
purchase contract
No significant ―Announcem
dispute- Nanjing
impact on the ent on
Putian Telege Mediated Execution
3.98 N current profit or 2020-08-12 Cumulative
Intelligent Building case closure completed
profit after the Litigation‖
Ltd. bring a suit
period (Notice No.:
against Shanghai
2020-043)
Zhuibo Electric Co.,
57
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Ltd.
Case of Sale and
purchase contract
dispute- Nanjing
Putian Telege No significant ―Announcem
Intelligent Building impact on the ent on
Settlement
Ltd. bring a suit 4.98 N current profit or - 2020-08-12 Cumulative
withdrawal
against Anqing City profit after the Litigation‖
Guangcai Market period (Notice No.:
Changshun 2020-043)
Plumbing
Equipment Firm
Case of Sale and
purchase contract
dispute- Shanghai
No significant ―Announcem
Mingyi
impact on the ent on
Optical-Electrical Mediated Execution
42.23 N current profit or 2020-08-12 Cumulative
Technology Co., Ltd case closure completed
profit after the Litigation‖
bring a suit against
period (Notice No.:
Nanjing Putian
2020-043)
Communications
Co., Ltd.
Case of Sale and
purchase contract
dispute- Nanjing
No significant ―Announcem
Great Road Optics
impact on the ent on
Electronics Tech. Mediated Execution
29.58 N current profit or 2020-08-12 Cumulative
Co., Ltd. bring a suit case closure completed
profit after the Litigation‖
against Nanjing
period (Notice No.:
Putian
2020-043)
Communications
Co., Ltd.
Case of Sale and
purchase contract
dispute- Nanjing
No significant ―Announcem
Putian
impact on the ent on
Communications Settlement
28.09 N current profit or - 2020-08-12 Cumulative
Co., Ltd. bring a suit withdrawal
profit after the Litigation‖
against Great Wall
period (Notice No.:
Broadband Network
2020-043)
Service Co., Ltd.
Suzhou Branch
Case of Sale and 26.8 N Settlement No significant - 2020-08-12
58
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
purchase contract withdrawal impact on the ―Announcem
dispute- Nanjing current profit or ent on
Putian profit after the Cumulative
Communications period Litigation‖
Co., Ltd. bring a suit (Notice No.:
against Great Wall 2020-043)
Broadband Network
Service Co., Ltd.
Luoyang Branch
Case of Sale and
purchase contract
dispute- Nanjing
No significant ―Announcem
Lianshengda
impact on the ent on
Electrical Settlement
10 N current profit or - 2020-08-12 Cumulative
Equipment Co., Ltd withdrawal
profit after the Litigation‖
bring a suit against
period (Notice No.:
Nanjing Putian
2020-043)
Communications
Co., Ltd.
Case of Sale and
purchase contract
dispute- Nanjing No significant ―Announcem
Chuanggan impact on the ent on
Settlement
Technology Co., Ltd 9.75 N current profit or - 2020-08-12 Cumulative
withdrawal
bring a suit against profit after the Litigation‖
Nanjing Putian period (Notice No.:
Communications 2020-043)
Co., Ltd.
Dispute cases that
damage the interest
―Announcem
of creditors-
ent on
Nanjing Putian
Trial in Cumulative
Communications 263.72 N Pending - 2020-12-30
progress Litigation‖
Co., Ltd. bring a suit
(Notice No.:
against Yu Yumei,
2020-080)
Peng Xiong and
Peng Shikui
Case of Sale and ―Announcem
No significant
purchase contract ent on
impact on the
dispute- Beijing Settlement Cumulative
142.05 N current profit or - 2020-12-30
Xinjie Zhonghe withdrawal Litigation‖
profit after the
Intelligent (Notice No.:
period
Technology Co., 2020-080)
59
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Ltd. bring a suit
against Nanjing
Putian
Communications
Co., Ltd
Labor dispute case-
―Announcem
Wu Yunfei bring a
ent on
suit against Nanjing
Trial in Cumulative
Putian 10.89 N Pending - 2020-12-30
progress Litigation‖
Telecommunication
(Notice No.:
Technology
2020-080)
Company Ltd.
Case of Labor ―Announcem
dispute- Zhang Wei ent on
bring a suit against Trial in Cumulative
52.96 N Pending - 2020-12-30
Nanjing Putian progress Litigation‖
Communications (Notice No.:
Co., Ltd 2020-080)
Case of Labor ―Announcem
No significant
dispute- Ma Wenbin ent on
impact on the
bring a suit against Settlement Cumulative
5.07 N current profit or - 2020-12-30
Nanjing Putian withdrawal Litigation‖
profit after the
Communications (Notice No.:
period
Co., Ltd 2020-080)
Case of Sale and
purchase contract ―Announcem
No significant
dispute- Nanjing ent on
impact on the
Mennekes Co., Ltd. Mediated Execution Cumulative
213.22 N current profit or 2020-12-30
bring a suit against case closure completed Litigation‖
profit after the
Xi’an Tongrui (Notice No.:
period
Electron Mechanical 2020-080)
Equipment Co., Ltd.
Case of Sale and
purchase contract
―Announcem
dispute- Hubei No significant
ent on
Jassonfiber Tech. impact on the
Mediated Execution Cumulative
Co., Ltd bring a suit 81.93 N current profit or 2020-12-30
case closure completed Litigation‖
against Nanjing profit after the
(Notice No.:
Putian period
2020-080)
Communications
Co., Ltd
Case of Labor 23.95 N Trial in Pending - 2020-12-30 ―Announcem
60
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
dispute- Chen progress ent on
Yumei bring a suit Cumulative
against Nanjing Litigation‖
Putian (Notice No.:
Communications 2020-080)
Co., Ltd
Contracting dispute
case - Zheng Qiang, ―Announcem
Wu Wengao and ent on
Jiang Mingwei bring Trial in Cumulative
184.54 N Pending - 2020-12-30
a suit against progress Litigation‖
Nanjing Putian (Notice No.:
Communications 2020-080)
Co., Ltd
Case of Labor ―Announcem
dispute- Li Qi bring ent on
a suit against Trial in Cumulative
480.73 N Pending - 2020-12-30
Nanjing Putian progress Litigation‖
Communications (Notice No.:
Co., Ltd 2020-080)
Case of Sale and
purchase contract
dispute- Nanjing
Southern Telecom
―Announcem
Co., Ltd bring a suit No significant
ent on
against the Geju impact on the
Mediated Execution Cumulative
Business Education 691.58 N current profit or 2020-12-30
case closure completed Litigation‖
Technology profit after the
(Notice No.:
(Shenzhen) Co., Ltd period
2020-080)
and Beijing Geju
Business Online
Technology Co.,
Ltd.
Case of Sale and
purchase contract
dispute- Shanghai ―Announcem
No significant
Haiheng Intelligent ent on
impact on the
Culture Technology Mediated Execution Cumulative
21.95 N current profit or 2020-12-30
Co., Ltd bring a suit case closure completed Litigation‖
profit after the
against Nanjing (Notice No.:
period
Putian 2020-080)
Telecommunications
Co., Ltd.
61
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Case of Sale and
purchase contract
―Announcem
dispute- Jiangsu
ent on
Datang Electric
Trial in Cumulative
Technology Co., Ltd 67.29 N Pending - 2020-12-30
progress Litigation‖
bring a suit against
(Notice No.:
Nanjing Putian
2020-080)
Telecommunications
Co., Ltd.
XIII. Penalty and rectification
□ Applicable √ Not applicable
There are no penalty and rectification in the reporting period
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
Related Related Pricing amount amount exceed similar Disclos
transacti transacti Dealing on of Disclos
transactio relations principl (in 10 of the the transacti ure
on on price amount paymen ure date
n parties hip e thousan same approve on index
type content (in 10 ts
d Yuan) transacti d availabl
thousan
on amount e
d Yuan)
Controll Purchas Notice
China ing e of Telecom Market Bank 2020-04 on
0.00 0 0.00% 10,800 N 0.00
Potevio sharehol products product price transfer -28 Forecas
der and t of
62
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
receipt Routine
of Related
services Transac
from tion for
related 2020
parties publish
ed on
Juchao
Website
Other Other Purchas
enterprise subsidia e of
controlled ry products
by China enterpri and
The
Putian se receipt Telecom Market Bank 2020-04
171.99 171.99 0.23% 500 N 171.99 same as
Informati controll of product price transfer -28
above
on ed by services
Industry actual from
Group controll related
Co., Ltd. er parties
Purchas
-Includin Subsidia e of
g: ry products
Nanjing enterpri and
The
Putian se of receipt Telecom Market Bank 2020-04
165.13 165.13 0.22% N 165.13 same as
Honyar controlli of product price transfer -28
above
Electrics ng services
Tech. Co., sharehol from
Ltd der related
parties
Purchas
Subsidia e of
-Includin
ry products
g: Potevio
enterpri and
Informati The
se of receipt Telecom Market Bank 2020-04
on 6.86 6.86 0.01% N 6.86 same as
controlli of product price transfer -28
Technolo above
ng services
gy Co.,
sharehol from
Ltd.
der related
parties
Controll Sales of
The
China ing products Telecom Market Bank 2020-04
175.96 175.96 0.17% 2,500 N 175.96 same as
Potevio sharehol and product price transfer -28
above
der provisio
63
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
n of
services
to
related
parties
Sales of
Subsidia
products
ry
and
Putian enterpri
provisio The
Communi se of Telecom Market Bank 2020-04
n of 104.07 104.07 0.10% 2,000 N 104.07 same as
cations controlli product price transfer -28
services above
Co., Ltd. ng
to
sharehol
related
der
parties
Other
Sales of
enterprise Other
products
controlled subsidia
and
by China ry
provisio The
Putian enterpri Telecom Market Bank 2020-04
n of 289.15 289.15 0.28% 800 N 289.15 same as
Informati se of product price transfer -28
services above
on actual
to
Industry controll
related
Group er
parties
Co., Ltd.
Sales of
-Includin
Subsidia products
g: Beijing
ry and
Putian
enterpri provisio The
Desheng Telecom Market Bank 2020-04
se of n of 192.32 192.32 0.19% N 192.32 same as
Technolo product price transfer -28
actual services above
gy
controll to
Incubator
er related
Co., ltd
parties
Sales of
Subsidia
-Includin products
ry
g: Potevio and
enterpri
Informati provisio The
se of Telecom Market Bank 2020-04
on n of 33.2 33.2 0.03% N 33.2 same as
controlli product price transfer -28
Technolo services above
ng
gy Co., to
sharehol
Ltd. related
der
parties
-Includin Subsidia Sales of Telecom Market 4.13 4.13 0.00% N Bank 4.13 2020-04 The
64
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
g: Putian ry products product price transfer -28 same as
Kechuang enterpri and above
Industry se of provisio
Co., Ltd actual n of
controll services
er to
related
parties
Sales of
Subsidia
products
ry
and
enterpri
-Includin provisio The
se of Telecom Market Bank 2020-04
g: n of 27.35 27.35 0.03% N 27.35 same as
controlli product price transfer -28
Eastcom services above
ng
to
sharehol
related
der
parties
-Includin Sales of
Subsidia
g: Beijing products
ry
Potian and
enterpri
Taili provisio The
se of Telecom Market Bank 2020-04
Communi n of 0.17 0.17 0.00% N 0.17 same as
controlli product price transfer -28
cation services above
ng
Technolo to
sharehol
gy Co., related
der
ltd. parties
Sales of
Subsidia
-Includin products
ry
g: Putian and
enterpri
Eastern provisio The
se of Telecom Market Bank 2020-04
Communi n of 2.26 2.26 0.00% N 2.26 same as
controlli product price transfer -28
cations services above
ng
Group to
sharehol
Co., Ltd. related
der
parties
Subsidia Sales of
ry products
-Includin
enterpri and
g: Potevio The
se of provisio Telecom Market Bank 2020-04
New 29.72 29.72 0.03% N 29.72 same as
controlli n of product price transfer -28
Energy above
ng services
Co., Ltd.
sharehol to
der related
65
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
parties
Lease of
related
Subsidia
party
ry
Putian properti
enterpri Rent and The
Hi-Tech es and Market Bank 2020-04
se of Property 79.61 79.61 33.66% 100 N 79.61 same as
Industry receipt price transfer -28
actual Fee above
Co., Ltd of
controll
related
er
party
services
Total -- -- 820.78 -- 16,700 -- -- -- -- --
Details of major sold-out order sent
-
back
It is estimated that routine related transactions occurred in 2020 will not exceed 167 million
Yuan (of which, the amount purchase of products and receipt of services from related
The actual implementation of routine parties will not be more than 113 million Yuan, sales of products and provision of services
related transactions that is about to to related parties will not be more than 53 million Yuan, paying rentals and relevant service
occurred in the Period with total costs to related party will not be more than one million Yuan); the related transaction
amount estimated by category (if actually occurred amounted as 8.2078 million Yuan (of which, 1.7199 million Yuan from
applicable) purchasing goods and receiving labor service, 5.6918 million Yuan from sales of product
and provide labor services, rental and property expenses amounted as 0.7961 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
Carrying Appraised
value of value of Trading
Type of Content Transfer
the assets the assets gains/loss
Related Associati related of related Pricing price (10 Settlemen Disclosur Disclosur
transferre transferre es (10
party on transactio transactio principle thousand t e date e index
d (10 d (10 thousand
n n Yuan)
thousand thousand Yuan)
Yuan) Yuan)
Putian Subsidiar 49.64% Listed for The
Innovatio y of the equity of transfer ―Proposal
Sale of 2020-10-
n and controllin the joint based on 16,860.48 22,749.22 22,749.22 In cash 6,103.21 of Major
equity 14
Entrepren g stock appraisal Assets
eurship sharehold enterprise value Sale‖publ
66
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Managem er - Putian ished on
ent Co., High-tech Juchao
Ltd. Industry Website;
Co., Ltd ―Major
Assets
Sale and
Report on
Related
Transacti
ons
(Draft)‖
dated 27
Novembe
r 2020
‖Announ
100%
cement
equity of
Putian on the
the
Innovatio Subsidiar Related
subsidiary
n and y of the Transacti
- Nanjing Base on
Entrepren controllin Sale of 2020-12- ons of
Putian appraised 150.67 4,343.16 4,343.16 In cash 4,238.52
eurship g equity 10 Subsidiar
Informati value
Managem sharehold y’s Equity
on
ent Co., er Transfer ‖
Technolo
Ltd. published
gy Co.,
on Juchao
Ltd.
Website
The
―Proposal
The
of Major
5,777.36
Assets
square
Sale‖publ
meters
Putian ished on
land use
Innovatio Subsidiar Juchao
rights and Listed for
n and y of the Sales of Website;
structures transfer
Entrepren controllin land use 2020-10- ―Major
on the based on 1,061.01 11,038.36 11,038.36 In cash 6,017.03
eurship g rights and 14 Assets
ground at appraisal
Managem sharehold buildings Sale and
No.1 value
ent Co., er Report on
Putian
Ltd. Related
Road,
Transacti
Qinghuai
ons
District,
(Draft)‖
Nanjing
dated 27
Novembe
67
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
r 2020
Reasons for large differences between the
transfer price and carrying value or Not applicable
appraisal value (if any)
Impact on operating results and financial The above matters have a gains from assets disposal and investment earnings of
status of the Company 163.5876 million yuan in total.
If relevant transaction involves a
performance agreement, the performance Not applicable
realization during the reporting period
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
√ Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Yes √ No
The Company had no non-operating contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable □ Not applicable
The Company applied for entrusted loan from controlling shareholder- China Potevio in the reporting period
Website for temporary disclosure of the major connected transaction
Announcement Date of disclosure Website for disclosure
Relation Transaction of Applying Entrust Loan
2020-03-28 Juchao Website:www.cninfo.com.cn
from Controlling Shareholder
Relation Transaction of Applying Entrust Loan
2020-05-20 Juchao Website:www.cninfo.com.cn
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
68
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(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 fee and property fee of 2.37 million yuan, and recognized
rental income of 1.52 million yuan.
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
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 May 30, 2020.3.18-20
7,500 March 18, 2020 1,000 liability Y N
Telecom Co., Ltd 2019 20.12.11
guaranty
Jointly
Nanjing Southern May 30, 2020.4.17-20
7,500 April 17, 2020 1,000 liability N N
Telecom Co., Ltd 2019 21.1.8
guaranty
Nanjing Southern May 30, 7,500 April 17, 2020 1,000 Jointly 2020.4.17-20 N N
69
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Telecom Co., Ltd 2019 liability 21.4.17
guaranty
Jointly
Nanjing Southern April 28, 2020.5.12-20
7,500 May 12, 2020 1,000 liability Y N
Telecom Co., Ltd 2020 20.11.12
guaranty
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 11,900 4,000
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 2,000
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of the subsidiary for subsidiaries
Guarante
Related
e for
Announce Actual Implemen
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit
party
date
(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 4,000
(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 2,000
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
10.55%
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
2,000
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) 2,000
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
70
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(2) Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loans in the reporting period.
4. Major contracts for daily operations
□ Applicable √ Not applicable
5. 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
71
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
2. Precise poverty alleviation social responsibility
(1) Precise poverty alleviation plan
The company will implement the work arrangements of the party committee of the group and the party committee of the Nanjing
Municipal Bureau of Industry and Information Technology, earnestly fulfill its social responsibilities, and actively participate in
targeted poverty alleviation.
(2) Summary of annual precise poverty alleviation
During the reporting period, the company further implemented the "Party Building and Joint Construction Agreement" signed with
the Jianshe Township Committee of Dari County, Qinghai in accordance with the deployment of the party committee of the group
company. Continued to effectively assist Molihua Village in Liuhe District, and fulfill the social responsibilities of central enterprises.
Earnestly implemented the work deployment of the group company's party committee on fixed-point poverty alleviation and pairing
assistance, and purchased a total of 60,000 yuan of agricultural products from poverty alleviation areas to help fight poverty.
(3) Results of the poverty
Target Measurement unit Numbers/ implementation
i. Overall —— ——
In 10 thousand
Including: 1. Capital 6
Yuan
ii. Invested by specific project —— ——
1. Industrial development poverty —— ——
2. Transfer employment —— ——
72
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
3.Relocation the poor —— ——
4.Education poverty —— ——
5.Health poverty alleviation —— ——
6.Ecological protection and poverty
—— ——
alleviation
7.Fallback protection —— ——
8.Social poverty alleviation —— ——
9. Other item —— ——
In 10 thousand
9.2. Investment amount 6
Yuan
iii. Awards (content and grade) —— ——
(4) Follow-up of precise poverty alleviation
In 2021, the company will actively fulfill its poverty alleviation responsibilities, maintain normalized assistance cooperation with
Molihua Village, and at the same time actively participate in Putian Group's poverty alleviation linkage and consumption poverty
alleviation work for Dari County, so as to gather intelligence, gather strength, and win the tough battle against poverty.
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□ Yes √ No
No
The listed Company and its subsidiary did not belongs to the key sewage units released from environmental protection department
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 major litigation 2020.1.14 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 30th Session of 7th BOD 2020.1.18 Juchao Website (www.cninfo.com.cn)
Notice on the transfer of assets by listing 2020.1.18 Juchao Website (www.cninfo.com.cn)
Notice on Change the Continuous Supervision 2020.1.22 Juchao Website (www.cninfo.com.cn)
Sponsor Representative
Notice on the progress of major litigation matters 2020.1.23 Juchao Website (www.cninfo.com.cn)
2019 annual performance forecast 2020.1.23 Juchao Website (www.cninfo.com.cn)
73
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Notice on Resolution of 31st Session of 7th BOD 2020.3.10 Juchao Website (www.cninfo.com.cn)
Notice on the progress of listing and transfer of 2020.3.10 Juchao Website (www.cninfo.com.cn)
assets
Notice on liquidation and closure of subsidiaries 2020.3.10 Juchao Website (www.cninfo.com.cn)
Notice on obtain Government Subsidies 2020.3.14 Juchao Website (www.cninfo.com.cn)
Notice on the progress of guarantees for holding 2020.3.18 Juchao Website (www.cninfo.com.cn)
subsidiaries
Notice on Resolution of 32th Session of 7th BOD 2020.3.28 Juchao Website (www.cninfo.com.cn)
Notice on Related Transaction of Applying for 2020.3.28 Juchao Website (www.cninfo.com.cn)
Entrust Loans to Controlling Shareholder
Notice on Resolution of 33th Session of 7th BOD 2020.4.8 Juchao Website (www.cninfo.com.cn)
Notice on the resignation of senior managers 2020.4.8 Juchao Website (www.cninfo.com.cn)
Preliminary Earnings Estimate for 2019 2020.4.15 Juchao Website (www.cninfo.com.cn)
Performance Forecast for Q1 of 2020 2020.4.15 Juchao Website (www.cninfo.com.cn)
Notice on the progress of guarantees for holding 2020.4.22 Juchao Website (www.cninfo.com.cn)
subsidiaries
Notice on Resolution of 34th Session of 7th BOD 2020.4.28 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 14th Session of 7th 2020.4.28 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Summary of Annual Report 2019 2020.4.28 Juchao Website (www.cninfo.com.cn)
Notice on Provision for Impairment of Assets for 2020.4.28 Juchao Website (www.cninfo.com.cn)
2019
Notice on Guarantee for Controlling Subsidiary 2020.4.28 Juchao Website (www.cninfo.com.cn)
Notice of the Forecast for Routine Related 2020.4.28 Juchao Website (www.cninfo.com.cn)
Transaction for year of 2020
Text of First Quarterly Report 2020 2020.4.29 Juchao Website (www.cninfo.com.cn)
Notice on the progress of listing and transfer of 2020.5.9 Juchao Website (www.cninfo.com.cn)
assets
Notice on convening the 2019 annual performance 2020.5.20 Juchao Website (www.cninfo.com.cn)
online briefing
Notice on the progress of guarantees for holding 2020.5.20 Juchao Website (www.cninfo.com.cn)
subsidiaries
Notice on Resolution of 36th Session of 7th BOD 2020.5.20 Juchao Website (www.cninfo.com.cn)
Notice on Related Transaction of Applying for 2020.5.20 Juchao Website (www.cninfo.com.cn)
Entrust Loans to Controlling Shareholder
Notice on Convening the AGM of 2019 2020.5.20 Juchao Website (www.cninfo.com.cn)
Suggestive notice on planning a major asset 2020.6.4 Juchao Website (www.cninfo.com.cn)
reorganization
74
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Notice on Resolution of AGM of 2019 2020.6.11 Juchao Website (www.cninfo.com.cn)
Notice on the progress of planning a major asset 2020.6.18 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on Resolution of 37th Session of 7th BOD 2020.6.29 Juchao Website (www.cninfo.com.cn)
Notice on the progress of planning a major asset 2020.7．6 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on Resolution of 38th Session of 7th BOD 2020.7.9 Juchao Website (www.cninfo.com.cn)
Notice on the establishment of wholly-owned 2020.7.9 Juchao Website (www.cninfo.com.cn)
subsidiaries
Performance Forecast for Semi-Annual of 2020 2020.7.15 Juchao Website (www.cninfo.com.cn)
Notice on the progress of investing in the 2020.7.17 Juchao Website (www.cninfo.com.cn)
establishment of a wholly-owned subsidiary
Notice on the progress of planning a major asset 2020.7.20 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on the progress of planning a major asset 2020.8.3 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on cumulative lawsuits 2020.8.12 Juchao Website (www.cninfo.com.cn)
Notice on the progress of planning a major asset 2020.8.17 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on Resolution of 39th Session of 7th BOD 2020.8.25 Juchao Website (www.cninfo.com.cn)
Summary of Semi-Annual Report of 2020 2020.8.25 Juchao Website (www.cninfo.com.cn)
Notice on Change of Accounting Policy 2020.8.25 Juchao Website (www.cninfo.com.cn)
Notice on the progress of planning a major asset 2020.8.31 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on the progress of planning a major asset 2020.9.14 Juchao Website (www.cninfo.com.cn)
reorganization and adjustments of the reorganization
matters
Notice on Resolution of 40th Session of 7th BOD 2020.9.25 Juchao Website (www.cninfo.com.cn)
Notice on the progress of planning a major asset 2020.9.28 Juchao Website (www.cninfo.com.cn)
reorganization
Notice on Resolution of 41th Session of 7th BOD 2020.10.14 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 17th Session of 7th 2020.10.14 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Plan on Sales of Major Asset (summary) 2020.10.14 Juchao Website (www.cninfo.com.cn)
Notice on the listing and transfer of related assets on 2020.10.14 Juchao Website (www.cninfo.com.cn)
the Beijing Equity Exchange
Notice on general risk warning of major asset 2020.10.14 Juchao Website (www.cninfo.com.cn)
reorganization
75
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Performance Forecast of 3Q of 2020 2020.10.15 Juchao Website (www.cninfo.com.cn)
Text of 3Q report of 2020 2020.10.31 Juchao Website (www.cninfo.com.cn)
Notice on the progress after the disclosure of the 2020.11.13 Juchao Website (www.cninfo.com.cn)
major asset reorganization plan
Notice on Resolution of 43th Session of 7th BOD 2020.11.17 Juchao Website (www.cninfo.com.cn)
Notice on the acquisition of the equity from 2020.11.17 Juchao Website (www.cninfo.com.cn)
subsidiaries and the absorption and merger of
subsidiaries
Notice on Convening the 1st Extraordinary 2020.11.17 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Notice on Resolution of 44th Session of 7th BOD 2020.11.27 Juchao Website (www.cninfo.com.cn)
Notice on Resolution of 19th Session of 7th 2020.11.27 Juchao Website (www.cninfo.com.cn)
Supervisory Committee
Sales of Major Assets and Summary of the Report 2020.11.27 Juchao Website (www.cninfo.com.cn)
(Draft) on Related Party Transactions
Notice on Convening the 2nd Extraordinary 2020.11.27 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Notice on Convening the 1st Extraordinary 2020.12.4 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Self-examination report on the purchase and sale of 2020.12.10 Juchao Website (www.cninfo.com.cn)
the company’s stocks by insiders related to major
asset reorganization
Notice on the reappointment of Certified Public 2020.12.10 Juchao Website (www.cninfo.com.cn)
Accountants
Notice on Resolution of 45th Session of 7th BOD 2020.12.10 Juchao Website (www.cninfo.com.cn)
Notice on Related-Party Transactions on Transfer of 2020.12.10 Juchao Website (www.cninfo.com.cn)
Equity in Subsidiaries
Notice on Convening the 3rd Extraordinary 2020.12.10 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Notice on the postponement of reply to the 2020.12.10 Juchao Website (www.cninfo.com.cn)
reorganization inquiry letter of the Shenzhen Stock
Exchange
Notice on the Reply to the "Inquiry Letter on the 2020.12.12 Juchao Website (www.cninfo.com.cn)
Reorganization of Nanjing Putian
Telecommunications Co., Ltd." by the Shenzhen
Stock Exchange
Sales of Major Assets and Summary of the Report 2020.12.12 Juchao Website (www.cninfo.com.cn)
(Draft) on Related Party Transactions
Notice on the revision of the Sales of Major Assets 2020.12.12 Juchao Website (www.cninfo.com.cn)
and Summary of the Report (Draft) on Related Party
Transactions
76
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Notice on the progress of the transfer of the equity of 2020.12.12 Juchao Website (www.cninfo.com.cn)
the subsidiary
Notice on Convening the 2nd Extraordinary 2020.12.24 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Notice on Resolution of 3rd Extraordinary 2020.12.26 Juchao Website (www.cninfo.com.cn)
Shareholders General Meeting of 2020
Notice on cumulative lawsuits 2020.12.30 Juchao Website (www.cninfo.com.cn)
Notice on the progress of listing and transfer of assets 2020.12.30 Juchao Website (www.cninfo.com.cn)
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
77
Nanjing Putian Telecommunications Co., Ltd. 2020 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
Domestic legal
person’s shares
Overseas legal
person’s shares
Others
2. Recruitment
corporation shares
3. Internal employee
shares
4. Preferred shares or
others
100,000,0 100,000,0
II. Listed tradable shares 46.51% 46.51%
00 00
1. RMB ordinary shares
2. Domestically listed 100,000,0 100,000,0
46.51% 46.51%
foreign shares 00 00
3. Overseas listed foreign
shares
4. Others
III. Total shares 215,000,0 100.00% 215,000,0 100.00%
78
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
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 common Total common Total preference Total preference
8,388 8,346 0 0
stock stock shareholders shareholders
79
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
shareholders in shareholders at with voting with voting
reporting end of last month rights recovered rights recovered
period-end before annual at end of at end of last
report disclosed reporting period month before
(if applicable) annual report
(see note 8) disclosed (if
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
State-owned 115,000, 115,000,
China Potevio 53.49% - 0
corporation 000 000
Shenwan
Foreign 6,386,82
HongYuan (H.K.) 2.97% 740,320 0 6,386,820
corporation 0
Limited
GUOTAI JUNAN
SECURITIES(H Foreign 5,379,11
2.50% -101,000 0 5,379,114
ONGKONG) corporation 4
LIMITED
Domestic nature 2,449,73
Zheng Enyue 1.14% - 0 2,449,739
person 9
Domestic nature 2,007,11
Sun Huiming 0.93% - 0 2,007,110
person 0
Domestic nature 1,871,37
Gu Jinhua 0.87% - 0 1,871,371
person 1
Guosen Securities
Foreign 1,828,68
(H.K.) Broker 0.85% -73,200 0 1,828,682
corporation 2
Co., Ltd.
BOCI
Foreign 1,266,94
SECURITIES 0.59% -200,000 0 1,266,945
corporation 5
LIMITED
Domestic nature
Xiang Yan 0.42% 905,602 -5,000 0 905,602
person
Domestic nature
Zhen Hongquan 0.42% 905,600 56,400 0 905,600
person
80
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Strategy investors or general legal
person becomes top 10 shareholders
N/A
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.
Description of the above
shareholders in relation to
N/A
delegate/entrusted voting rights and
abstention from voting rights
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 6,386,820 listed foreign 6,386,820
shares
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 5,379,114 listed foreign 5,379,114
LIMITED shares
Domestically
Zheng Enyue 2,449,739 listed foreign 2,449,739
shares
Domestically
Sun Huiming 2,007,110 listed foreign 2,007,110
shares
Domestically
Gu Jinhua 1,871,371 listed foreign 1,871,371
shares
Domestically
Guosen Securities (H.K.) Broker
1,828,682 listed foreign 1,828,682
Co., Ltd.
shares
Domestically
BOCI SECURITIES LIMITED 1,266,945 listed foreign 1,266,945
shares
Domestically
Xiang Yan 905,602 listed foreign 905,602
shares
Domestically
Zhen Hongquan 905,600 905,600
listed foreign
81
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
shares
Domestically
Liang Wei 772,800 listed foreign 772,800
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.
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
China Potevio Lv Weiping July 23, 2003 91110000710931555N
manufacture and trading of
information
telecommunication
products, relevant
technology research and
services. The operation
scope covers information
telecommunication,
82
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
Eastcom Peace 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
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 March 29, 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 Nanjing Putian
listed Company control by
Telecommunications Co., Ltd., Chengdu Putian Telecommunications Cable Co., Ltd, Eastern
actual controller in report period
Communications Co., Ltd. and Eastcom Peace 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.
83
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
53.49%
Nanjing Putian Telecommunications Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
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
84
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting
85
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
86
Nanjing Putian Telecommunications Co., Ltd. 2020 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
Sex dated of
Title Age of office period-be changes period-en
Name status (M/F) office in this in this
term
term gin (share) d
period period
(Share) (Share)
(Share) (Share)
Director
Currently August
Xu Qian (President M 58 0 0 0 0 0
in office 23, 2013
)
Wang Currently January
Director M 46 0 0 0 0 0
Wenkui in office 21, 2019
Wang Deputy Currently April 19,
M 46 0 0 0 0 0
Wenkui President in office 2019
Currently August
Li Tong Director M 50 0 0 0 0 0
in office 27, 2019
Currently August
Liu Yun Director F 47 0 0 0 0 0
in office 27, 2019
Currently August
Qin Zhen Director M 52 0 0 0 0 0
in office 23, 2017
Wang Currently August
Director F 50 0 0 0 0 0
Jinfeng in office 23, 2017
Independ
Tang Currently August
ent F 64 0 0 0 0 0
Fuxin in office 23, 2017
Director
Independ
Xie Currently August
ent M 57 0 0 0 0 0
Manlin in office 23, 2017
Director
Independ
Du Currently August
ent F 52 0 0 0 0 0
Xiaorong in office 23, 2017
Director
Superviso Currently August
Lv Dong M 49 0 0 0 0 0
r in office 27, 2019
Chairman Currently August
Lv Dong M 49 0 0 0 0 0
of the in office 28, 2019
87
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Superviso
ry
Committe
e
Superviso Currently August
Wei Jie F 43 0 0 0 0 0
r in office 27, 2019
Qiu Superviso Currently August
F 47 0 0 0 0 0
Huizhen r in office 23, 2017
Wang Currently January 4,
GM M 46 0 0 0 0 0
Wenkui in office 2019
Deputy Currently August
Qin Zhen M 52 0 0 0 0 0
GM in office 26, 2016
Jia Deputy Currently June 29,
F 40 0 0 0 0 0
Haowen GM in office 2018
Deputy Currently May 29,
Lei Xu M 52 0 0 0 0 0
GM in office 2019
Chief
Wang Currently August
Accounta M 53 0 0 0 0 0
Huailin in office 29, 2019
nt
Liu General Currently April 20,
F 49 0 0 0 0 0
Xiaodong counsel in office 2018
Secretary
Currently August
Li Jing of the F 45 0 0 0 0 0
in office 23, 2017
Board
Cao Deputy Office August April 7,
M 45 0 0 0 0 0
Xurong GM leaving 29, 2019 2020
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Resigned by deputy general manager after approval by
Cao Xurong Deputy GM Office leaving April 7, 2020
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
Xu Qian (Male), born in 1962, a senior executive getting a MBA. He joints the work in 1984, and worked as engineer of the
88
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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; he serves as president (concurrently) of China Potevio Company Limited
since May 2016; he serves as Standing committee of the Party Committee and Deputy GM of China Potevio from December 2017 to
December 2020; and he also serves as Standing committee of the Party Committee and Deputy GM of China Potevio since December
2020.
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
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
89
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 September 2020, 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.); from September 2020 to the present, he has been serving
as Assistant to General Manager of China Potevio Information Industry Group Corporation, and 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
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
90
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 to December 2017, she has worked as the
deputy general manager of financial department of China Potevio Company Limited from December 2017 to July 2020; she has
worked as the deputy general manager of financial department of China Potevio Information Industry Group Corporation, and CFO
of Potevio Information Technology (Chongqing) Co., Ltd. from July 2020 to the present.
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.
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
91
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
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
92
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 5th 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.
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,
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 President May 5, 2016 Y
Director,
Executive
Director,
Xu Qian China Potevio May 19, 2011 Y
member of
the executive
council
Deputy GM
December 13,
Wang Jinfeng China Potevio of Finance Y
2017
dept.
Secretary of
the board of
directors,
general
manager of
November 9,
Li Tong China Potevio general N
2019
management
department
and director
of the office
of the board
94
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
of directors
December 30,
Li Tong China Potevio Director N
2019
December 30,
Lv Dong China Potevio Supervisor N
2019
Post-holding in
shareholder’s China Potevio is the company's controlling shareholder.
unit
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)
December 27,
Xu Qian China Potevio Company Limited Deputy GM N
2017
Standing
committee of
December 13,
Xu Qian China Potevio Company Limited the Party N
2020
Committee,
Deputy GM
Director, October 23,
Xu Qian Potevio Guomai Networks Ltd. N
President 2012
Beijig Putian Taili Communication Director,
Xu Qian June 11, 2015 N
Technology Co., Ltd. President
Director, November 20,
Xu Qian Shanghai Potevio Co., Ltd. N
President 2015
Putian Eastern Communications Group Co., Director,
Xu Qian May 30, 2016 N
Ltd. President
Director,
Xu Qian Hangzhou Honyar Electric Co., Ltd. June 28, 2017 March 16, 2021 N
President
Executive December 30,
Xu Qian Putian International Trade Co., Ltd.
director 2019
Secretary of
the board of
directors,
November 09,
Li Tong China Potevio Company Limited general Y
2019
manager of
general
management
95
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
department
and director
of the office
of the board
of directors
Assistant
September 17,
Li Tong China Potevio Company Limited General
2020
Manager
General
Manager of
Liu Yun China Potevio Company Limited Enterprise June 28, 2019 Y
Operation
Department
Shanghai Putian Kechuang Electronic Co., Director
Liu Yun July 9, 2015 N
Ltd.
Liu Yun Hangzhou Honyar Electric Co., Ltd. Director July 7, 2016 N
Director January 13,
Liu Yun Chengdu Putian Cable Co., Ltd. N
2017
Director February 28,
Liu Yun Putian Logistics Technology Co., Ltd. N
2017
Liu Yun Potevio New Energy Co., Ltd Director April 13, 2018 N
Director December 1,
Qin Zhen Putian Hi-Tech Industry Co., Ltd N
2016
Beijig Putian Taili Communication Director
Wang Jinfeng June 19, 2015 N
Technology Co., Ltd.
Director December 21,
Wang Jinfeng Puxing Mobile Telecom Equipment Ltd N
2015
Potevio Information Technology
Wang Jinfeng CFO July 21, 2020 N
(Chongqing) Co., Ltd.
December 1,
Xie Manlin Jiangsu Xie Manlin Laws Firm Executive Y
1994
Independent August 26,
Xie Manlin Saurer Intelligent Technology Co., Ltd. Y
director 2017
Professor,
Head of
Du Xiaorong Business School of Hohai University June 15, 2013 Y
Accounting
Dept.
Deputy GM October 29,
Lv Dong China Potevio Company Limited Y
of Audit Dept. 2018
96
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Lv Dong Wuhan Putian Power Co., Ltd. Supervisor May 24, 2016 N
Lv Dong Jingdezhen Putian Technology Co., Ltd. Supervisor June 16, 2015 N
Puxing Mobile Communication Equipment December 21,
Lv Dong Supervisor N
Co., Ltd 2015
Putian Information Engineering Design
Lv Dong Supervisor August 4, 2016 N
Service Co., Ltd.
Supervisor,
Chairman of
Beijig Putian Taili Communication
Lv Dong the July 11, 2018 N
Technology Co., Ltd.
Supervisory
Committee
Lv Dong Putian International Trade Co., Ltd. Supervisor July 11, 2018 N
Chairman of
the
Lv Dong Chengdu Putian Cable Co., Ltd. June 24, 2020 N
Supervisory
Committee
Legal
Manager of
November 14,
Wei Jie China Potevio Company Limited Legal Risk Y
2019
Management
Department
Wei Jie Putian Yintong Payment Co., Ltd. Supervisor May 17, 2016 N
Putian Guomai Network Technology Co., December 2,
Wei Jie Supervisor N
Ltd. 2016
Potevio Information Technology
Wei Jie Supervisor July 21, 2020 N
(Chongqing) Co., Ltd.
Hangzhou Dongxin Photoelectric December 11,
Wang Huailin Supervisor N
Technology Co., Ltd. 2015
November 9,
Liu Xiaodong Putian Hi-Tech Industry Co., Ltd Supervisor N
2018
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
√ Applicable □ Not applicable
In 2019, as a current chairman of Shanghai Putian, Mr. Xu Qian was warned and fined 50,000 yuan by CSRC for the information
disclosure of Shanghai Putian.
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
The Company has not paid directors and supervisors, the directors and supervisors get paid as the Company's administrative duties.
The independent directors receive the allowance in the Company, while subsidiary standard is determined by the general meeting of
shareholders. Senior management personnel salary standard and assessment methods are decided by the board of directors.
The Company implements performance salary system on senior management, making evaluation and paying compensation according
to the completion of the production and operation as well as performance of the senior management personnel.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Post-holding
Name Title Sex (M/F) Age obtained from the obtained from
status
Company (before related party of
taxes) the Company
Director Currently in
Xu Qian M 58 Y
(President) office
Director (deputy Currently in
Wang Wenkui M 46 N
president ) office
Currently in
Li Tong Director M 50 Y
office
Currently in
Liu Yun Director F 47 Y
office
Currently in
Qin Zhen Director M 52 N
office
Currently in
Wang Jinfeng Director F 50 Y
office
Independent Currently in
Tang Fuxin F 64 9N
Director office
Independent Currently in
Xie Manlin M 57 9N
Director office
Independent Currently in
Du Xiaorong F 52 9N
Director office
Supervisor
(Chairman of the Currently in
Lv Dong M 49 Y
Supervisory office
Committee)
98
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Currently in
Wei Jie Supervisor F 43 Y
office
Currently in
Qiu Huizhen Supervisor F 47 19.16 N
office
Currently in
Wang Wenkui GM M 46 66.5 N
office
Currently in
Qin Zhen Deputy GM M 52 27.49 N
office
Currently in
Jia Haowen Deputy GM F 40 30.16 N
office
Currently in
Lei Xu Deputy GM M 52 24.98 N
office
Currently in
Wang Huailin Chief Accountant M 53 34.87 N
office
Currently in
Liu Xiaodong General counsel F 49 25.66 N
office
Secretary of the Currently in
Li Jing F 45 25.44 N
Board office
Cao Xurong Deputy GM M 45 Office leaving 7.99 N
Total -- -- -- -- 289.25 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of staff, professional composition and education background
The number of On-the-job staff of the parent Company (people) 412
The number of On-the-job staff of major subsidiaries (people) 734
The total number of on-the-job staff (people) 1,146
Total number of staff receiving remuneration in the current
1,352
period (people)
The number of the retired staff of the parent Company and the
385
major subsidiaries bearing the expenses (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 285
Salesman 380
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Technical staff 332
Financial staff 30
Administrative staff 119
Total 1,146
Education background
Category of education Number (people)
Master’s degree above 27
Bachelor 465
Junior college 415
High School and above 239
Total 1,146
2. Remuneration policy
The company strictly implements the national, provincial and municipal laws and regulations, and normatively implemented the
distribution and payment of compensation and benefits. In order to further mobilize the enthusiasm, initiative and creativity of the
employees, the company implements an efficiency-oriented, performance-based compensation distribution mechanism, and formulates
salary and performance appraisal methods for different positions according to their different characteristics, and at the same time, pays
five insurances and one housing fund and enterprise annuities according to relevant national regulations.
3. Training programs
The company always adheres to the people-oriented development concept, continuously carries out employee training, and establishes
and continuously improves the matching training system according to the company’s development needs, and improves the quality of
the staff. 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. 2020 Annual Report
Section X. Corporate Governance
I. Corporate governance of the Company
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 company has constructed a "three meetings and one management" governance structure composed of the general meeting of
shareholders, the board of directors, the board of supervisors and the management, which clearly defines powers and responsibilities,
performs their own duties and coordinates operations. The company has established a set of reasonable internal systems and has been
continuously improving to improve the company's standard operation level.
The company convenes the general meeting of shareholders by strictly abiding by the requirements of "Company Law", "Stock
Listing Rules of the Shenzhen Stock Exchange", "General Meeting Rules of the Listed Company", and "Articles of Association",
provides all shareholders with an online voting method to ensure that all shareholders have the right to participate in and make
decisions on major decision-making matters of the company.
The number and staff composition of the company’s board of directors comply with the requirements of laws and regulations.
Directors can abide by laws, regulations and relevant provisions of the articles of association, perform their duties faithfully,
diligently, and cautiously, attend the board meetings seriously, pay attention to the company’s production and operations, and express
opinions on matters under discussion, ensure the efficient operation and scientific decision-making of the board of directors, directors
can actively participate in relevant training and understand the rights, obligations and responsibilities of directors. The convening of
the board meetings has been legal and standardized.
The company’s board of supervisors has a reasonable staff structure, and the supervisors have corresponding professional knowledge
and work experience. The board of supervisors is able to operate independently and earnestly perform its duties in an attitude of
being responsible to all shareholders, and supervise the legality and compliance of major matters such as the duty performance of the
company’s directors and senior managers, the internal control of the company, and related transactions in accordance with the law,
and safeguard the legitimate rights and interests of the company and all shareholders.
The company and the controlling shareholder are independent in terms of personnel, assets, finance, organization, and business, with
independent accounting and independent responsibility and risk. The controlling shareholders follow the code of conduct, and do not
directly or indirectly interfere with the company’s decision-making and business activities beyond the general meeting of
shareholders. There is no such case that company provides guarantees for controlling shareholders and their affiliates, or the
controlling shareholders occupy the company's funds for non-operating purposes.
The company is able to disclose information in a true, accurate, complete, timely and fair manner in strict accordance with the
"Securities Law" and the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange to
101
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
protect investors' right to know.
The company respects and safeguards the legitimate rights and interests of banks and other stakeholders such as creditors, employees,
customers, suppliers, etc.,, attaches importance to active cooperation with relevant stakeholders, and jointly promotes the company's
sustainable and healthy development. The company actively implements the concept of green development, attaches importance to
pollution prevention and resource conservation, actively participates in public welfare undertakings, earnestly carries out poverty
alleviation work, and fulfills social responsibilities.
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
Personnel: The company’s personnel are independent of the controlling shareholders, and the senior executives do not hold any
administrative positions other than directors and supervisors in the controlling shareholders.
Assets: The company’s assets are independent with clear ownership, and are independent of controlling shareholders, actual
controllers and other related parties.
Finance: The company has an independent financial department, and has established a sound financial and accounting management
system for independent account opening, independent taxation, and independent financial decision-making and independent
management.
Institution: The company's board of directors, board of supervisors and other internal institutions operate independently and exercise
their powers independently.
Business: The company has a complete system of production, supply, and sales. The business is independent of the controlling
shareholder and actual controller, and it has an independent and complete business system and independent operation capabilities.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held AGM and extraordinary shareholders’ general
meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor
Session of meeting Type Meeting date Date of disclosure Index of disclosure
participation
Resolution Notice of
Annual General
AGM 53.91% June 10, 2020 June 11, 2020 AGM of 2019 on
Meeting 2019
Juchao Website
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Resolution Notice of
First Extraordinary First Extraordinary
Extraordinary
Shareholders Shareholders
Shareholders 54.08% December 3, 2020 December 4, 2020
General Meeting of General Meeting of
General Meeting
2020 2020 on Juchao
Website
Resolution Notice of
Second Second
Extraordinary Extraordinary Extraordinary
Shareholders Shareholders 54.01% December 23, 2020 December 24, 2020 Shareholders
General Meeting of General Meeting General Meeting of
2020 2020 on Juchao
Website
Resolution Notice of
Third
Third Extraordinary
Extraordinary Extraordinary
Shareholders
Shareholders 54.10% December 25, 2020 December 26, 2020 Shareholders
General Meeting of
General Meeting General Meeting of
2020
2020 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 16 0 16 0 0N 0
Xie Manlin 16 0 16 0 0N 0
Du Xiaorong 16 0 16 0 0N 3
Explanation of absent the Board Meeting for the second time in a row-
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period, the company’s independent directors conscientiously performed their duties as independent directors in
strict accordance with the China Securities Regulatory Commission’s "Guidelines for the Governance of Listed Companies", the
Shenzhen Stock Exchange’s "Guidelines for the Normative Operation of Listed Companies" and other relevant laws and regulations,
and the relevant provisions of the "Articles of Association", attended the company’s board meetings and shareholders’ meetings on
time, carefully reviewed various proposals, actively strengthened communication with the company’s management, paid attention to
the company’s operations, used their own professional knowledge and participated in major business decisions, issued independent
directors’ opinions on major matters such as the company’s related transactions, engagement of audit institutions, and senior
management changes, etc., and put forward professional suggestions on the company’s business strategy and standardized operation,
which played an active role in the standardized operation and scientific decision-making of the board of directors, and safeguarded
the overall interests of the company and all shareholders, especially the legitimate rights and interests of small and medium
shareholders.
VI. Duty performance of the special committees under the board during the reporting period
In 2020, the Audit Committee of the Board of Directors deliberated on major events as previous periodic reports and the appointment
of audit institution as well as submit the proposal to the Board; in accordance with the relevant provisions of Annual Report Working
Rules of the Audit Committee, actively performed their duties in the annual report auditing process, made audit opinions on the
financial statements, supervised and urged the accounting firm to complete the auditing work.
The Remuneration and Appraisal Committee of the Board of Directors reviewed and made audit opinions on the remuneration of the
directors, supervisors and senior executives disclosed in the annual report in accordance with relevant provisions.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
The Company exercise performance year-income system for senior executives carries on appraisals and paying remuneration to
senior executives based on operation target and performance of target implementation of senior executives.
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IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
April 20, 2021
evaluation report
Disclosure index of full internal control Appraisal report of internal control for year of 2020 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
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
Qualitative criteria
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
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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
corresponding compensation control in rectified; other situations that would
connection with accounting for abnormal or relatively materially and adversely affect
special transactions; one or more defects the Company. Indicators for general
exist in control of ending financial reports defect of internal control in non-financial
and there is no assurance that financial report: low efficiency of
statement prepared correspondingly is decision-making procedures; defects
truthful and accurate. General defect: other exist in general business systems; serious
internal control defects that do not constitute loss of general staff; general defects are
material or major defects. not rectified.
Any of the following situations may be
viewed as material defect: potential
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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 2020, in all material aspects.
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
April 20, 2021
internal control (full-text)
Index of audit report of internal Audit report of internal control for year of 2020 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. 2020 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. 2020 Annual Report
Section XII. Financial Report
I. Audit report
Type of audit opinion Standard unqualified
Signing date of audit report April 16, 2021
Name of audit institute Pan-China Certified Public Accountants (LLP)
Serial of Auditing Report Pan-China Shen (2021) No.1-914
Name of CPA Jin Jingyu, Zhang Jinghui
Auditor’s Report
Auditor’s Report
PCCPAAR [2021] No. 1-914
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, 2020, 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, 2020, 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 Certified Public
Accountant’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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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. 2020 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) Revenue recognition
1. Key audit matters
Please refer to section III(XXIV) and V(II) of the notes to the financial statements for
details.
The Company is mainly engaged in telecommunication equipment manufacture. In
2020, the operating revenue amounted to 1,019,906,425.58 yuan, of which,
995,742,249.45 yuan was from telecommunication equipment manufacture,
accounting for 97.63%.
As operating revenue is one of the key performance indicators of the Company, there
might be inherent risks that the Company’s management (the ―Management‖) adopts
inappropriate revenue recognition to achieve specific goals or expectations, and
revenue recognition involves complicated information system and significant
judgment of the Management, we have identified revenue recognition as a key audit
matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition,
assessed the design of these controls, determined whether they had been executed, and
tested the effectiveness of the operation;
(2) We tested the general control of information system and application control related
to revenue recognition process;
(3) We checked sale contracts, obtained understandings of main contractual terms or
conditions, and assessed whether the revenue recognition method was appropriate;
(4) We performed analysis procedure on operating revenue and gross margin by
month, product, client, etc., so as to identify whether there are significant or abnormal
fluctuations and find out the reason of fluctuations;
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(5) For revenue from domestic sales, we checked supporting documents related to
revenue recognition by sampling method, including sales contracts, orders, sales
invoices, delivery lists, delivery orders, client acceptance receipts, etc.;
(6) We performed confirmation procedures on current sales amount by sampling
method in combination with confirmation procedure of accounts receivable;
(7) We performed cut-off tests on the operating revenue recognized around the
balance sheet date, and assessed whether the operating revenue was recognized in the
appropriate period;
(8) We obtained sales return records subsequent to the balance sheet date and checked
whether there was revenue not eligible for recognition at the balance sheet date;
(9) We checked whether information related to operating revenue had been presented
appropriately in the financial statements.
(II) Impairment of accounts receivable
1. Key audit matters
Please refer to section III(X) and V(I) of the notes to the financial statements for
details.
As of December 31, 2020, the book balance of accounts receivable amounted to
650,115,822.75 yuan, with provision for bad debts of 173,255,619.73 yuan, and the
carrying amount amounted to 476,860,203.02 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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
accounts receivable, assessed the design of these controls, determined whether they
had 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 accuracy
of historical estimations made by the Management;
(3) We reviewed the consideration of the Management on credit risk assessment and
objective evidence, and assessed whether the credit risk features of accounts
receivable had been appropriately identified by the Management;
(4) For accounts receivable with expected credit losses measured on an individual
basis, we obtained and checked the Management’s estimations on the expected future
cash flows, assessed the reasonableness of key assumptions and the accuracy of data
adopted in the estimations and checked them with acquired external evidence;
(5) For accounts receivable with expected credit losses measured on a collective basis,
we assessed the reasonableness of portfolio classification on the basis of credit risk
features; we assessed the reasonableness of the comparison table of ages and expected
credit loss rate of accounts receivable prepared by the Management based on the
historical credit loss experience of portfolios with similar credit risk features and
forward-looking estimations; we tested the accuracy and completeness of data used by
the Management (including ages, historical loss rate, migration rate, etc.) and whether
the calculation of provision for bad debts was accurate;
(6) We checked the subsequent collection of accounts receivable and assessed the
reasonableness of provision for bad debts made by the Management;
(7) We checked whether information related to impairment of accounts receivable had
been presented appropriately in the financial statements.
(IV) 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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
details.
As of December 31, 2020, the book balance of inventories amounted to
257,175,833.90 yuan, with provision for bad debts of 54,413,314.47 yuan, and the
carrying amount amounted to 202,762,519.43 yuan.
At the balance sheet date, inventories are measured at the lower of cost and net
realizable value, with provisions for inventory write-down made on the excess of its
cost over the net realizable value on a collective basis/on an individual basis. Based
on the Management’s consideration over purposes that the inventories were held for,
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 to be
incurred upon completion, estimated selling expenses and relevant taxes and
surcharges.
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 had
been executed, and tested the effectiveness of their operation;
(2) We reviewed the net realizable value estimated by the Management in previous
years and the actual operating results, and assessed the accuracy of the Management’s
historical estimations;
(3) We reviewed the estimation on selling price made by the Management by
sampling method and compared the estimated selling price with historical data,
subsequent situation, market information, etc.;
(4) We assessed the reasonableness of estimation on cost to be incurred upon
completion, selling expenses and relevant taxes and surcharges made by the
Management;
(5) We tested whether the calculation of net realizable value of inventories made by
114
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
the Management was accurate;
(6) We checked whether there existed situations such as inventories with long stock
age and obsolete model, decline in production, fluctuation of production cost or
selling price, change in technology or market needs, etc. in combination with
stocktaking, and assessed whether the net realizable value of inventories was
reasonably estimated by the Management;
(7) 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.
If, based on the work we have performed, we conclude that there is a material
misstatement of the 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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
Management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s
financial reporting process.
VI. Certified Public Accountant’s Responsibilities 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:
(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 the 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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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,
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
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 CPA: Jin Jingyu
(Special General Partnership)
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
ChinaHangzhou Chinese CPA: Zhang Jinghui
16 April 2021
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
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. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2020
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 1 209,849,710.96 261,270,033.28
Settlement funds
Loans to other banks
Held-for-trading financial assets
Derivative financial assets
Notes receivable 2 17,029,051.04 59,653,053.58
Accounts receivable 3 493,992,403.49 697,656,063.96
Receivables financing 4 32,594,702.60 3,821,550.77
Advances paid 5 19,616,348.65 33,759,523.09
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 6 16,911,790.31 28,110,390.53
Financial assets under reverse repo
Inventories 7 199,641,972.32 209,397,286.17
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 8 13,126,022.08 11,610,245.99
Total current assets 1,002,762,001.45 1,305,278,147.37
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 9 10,422,056.96 181,762,383.50
Other equity instrument investments 10 741,953.00 741,953.00
Other non-current financial assets
Investment property 11 4,267,013.35 7,810,210.00
Fixed assets 12 100,158,063.58 110,722,102.52
Construction in progress 13 22,454,792.27 13,048,701.59
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 14 21,261,119.40 28,381,246.28
Development expenditures
Goodwill
Long-term prepayments 15 5,541,410.81 4,260,775.18
Deferred tax assets 16
Other non-current assets
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Total non-current assets 164,846,409.37 346,727,372.07
Total assets 1,167,608,410.82 1,652,005,519.44
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance Opening balance
No.
Current liabilities:
Short-term borrowings 17 65,000,000.00 451,915,948.50
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 18 76,135,010.10 81,784,929.91
Accounts payable 19 604,765,586.00 679,428,580.08
Advances received 20 22,148,080.67
Contract liabilities 21 28,518,252.40
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 22 17,362,878.28 21,602,707.70
Taxes and rates payable 23 8,707,248.67 4,125,566.60
Other payables 24 53,759,120.63 61,246,678.81
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 25 9,181,720.08 10,820,807.35
Other current liabilities 26 3,707,372.81
Total current liabilities 867,137,188.97 1,333,073,299.62
Non-current liabilities:
Insurance policy reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 27 4,036,160.05 12,827,205.03
Long-term employee benefits payable
Provisions
Deferred income 28 6,004,873.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 4,036,160.05 18,832,078.03
Total liabilities 871,173,349.02 1,351,905,377.65
Equity:
Share capital/Paid-in capital 29 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 30 183,568,842.44 185,374,533.85
Less: Treasury shares
Other comprehensive income 31 -6,853,931.65 -6,776,124.85
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Special reserve
Surplus reserve 32 589,559.77 589,559.77
General risk reserve
Undistributed profit 33 -202,680,309.64 -224,644,862.48
Total equity attributable to the parent company 189,624,160.92 169,543,106.29
Non-controlling interest 106,810,900.88 130,557,035.50
Total equity 296,435,061.80 300,100,141.79
Total liabilities & equity 1,167,608,410.82 1,652,005,519.44
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2020
(Expressed in Renminbi Yuan)
Note
Assets Closing balance Opening balance
No.
Current assets:
Cash and bank balances 57,345,349.24 75,513,546.51
Held-for-trading financial assets
Derivative financial assets
Notes receivable 1,190,734.45 2,180,607.60
Accounts receivable 1 218,887,318.18 415,997,318.07
Receivables financing 2,307,438.00
Advances paid 10,138,293.79 13,234,147.98
Other receivables 2 50,275,151.96 26,761,817.07
Inventories 80,454,321.56 73,809,627.64
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 7,516,579.06 2,778,241.54
Total current assets 425,807,748.24 612,582,744.41
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 3 123,831,124.60 333,070,134.14
Other equity instrument investments 741,953.00 741,953.00
Other non-current financial assets
Investment property
Fixed assets 45,117,637.57 52,382,989.60
Construction in progress
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 5,006,099.13 11,557,138.68
Development expenditures
Goodwill
Long-term prepayments 4,461,404.63 3,129,023.74
Deferred tax assets
Other non-current assets
Total non-current assets 179,158,218.93 400,881,239.16
Total assets 604,965,967.17 1,013,463,983.57
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2020 (continued)
(Expressed in Renminbi Yuan)
Note
Liabilities & Equity Closing balance Opening balance
No.
Current liabilities:
Short-term borrowings 30,000,000.00 371,812,627.72
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 76,135,010.10 81,784,929.91
Accounts payable 214,453,536.53 274,182,241.12
Advances received 7,517,427.53
Contract liabilities 14,109,283.43
Employee benefits payable 7,931,673.97 8,135,211.34
Taxes and rates payable 115,233.85 199,408.61
Other payables 164,586,605.64 213,090,147.71
Liabilities classified as held for sale
Non-current liabilities due within one year 9,181,720.08 10,820,807.35
Other current liabilities 1,834,206.85
Total current liabilities 518,347,270.45 967,542,801.29
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 4,036,160.05 12,827,205.03
Long-term employee benefits payable
Provisions
Deferred income 1,000,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 4,036,160.05 13,827,205.03
Total liabilities 522,383,430.50 981,370,006.32
Equity:
Share capital/Paid-in capital 215,000,000.00 215,000,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 158,864,042.34 172,417,299.81
Less: Treasury shares
Other comprehensive income -1,854,910.00 -1,854,910.00
Special reserve
Surplus reserve 589,559.76 589,559.76
Undistributed profit -290,016,155.43 -354,057,972.32
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Total equity 82,582,536.67 32,093,977.25
Total liabilities & equity 604,965,967.17 1,013,463,983.57
125
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Total operating revenue 1,025,243,815.83 1,338,284,194.21
Including: Operating revenue 1 1,025,243,815.83 1,338,284,194.21
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 1,099,375,113.92 1,432,157,541.99
Including: Operating cost 1 846,905,942.49 1,087,774,366.66
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 5,849,160.81 8,301,819.32
Selling expenses 3 101,208,835.79 146,879,432.92
Administrative expenses 4 75,477,706.26 87,447,829.68
R&D expenses 5 46,319,505.38 71,178,941.51
Financial expenses 6 27,074,088.99 30,575,151.90
Including: Interest expenses 28,568,012.81 30,200,892.97
Interest income 1,758,180.41 1,475,350.85
Add: Other income 7 10,988,973.73 7,894,918.90
Investment income (or less: losses) 8 93,175,109.94 -297,833.76
Including: Investment income from associates and joint ventures -4,769,983.62 -297,833.76
Gains from derecognition of financial assets at amortized cost -952,176.00
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 -41,615,815.85 -53,458,859.20
Assets impairment loss 10 -14,421,937.22 -19,577,005.54
Gains on asset disposal (or less: losses) 11 72,556,988.01 119,033.08
III. Operating profit (or less: losses) 43,091,894.72 -159,193,094.30
Add: Non-operating revenue 12 4,301,614.63 1,900,048.84
Less: Non-operating expenditures 13 2,213,895.60 368,099.84
IV. Profit before tax (or less: total loss) 45,179,613.75 -157,661,145.30
Less: Income tax 14 7,504,586.94 1,279,314.02
V. Net profit (or less: net loss) 37,675,026.81 -158,940,459.32
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 37,675,026.81 -158,940,459.32
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) 21,964,552.84 -169,088,516.69
2. Net profit attributable to non-controlling shareholders (or less: net loss) 15,710,473.97 10,148,057.37
VI. Other comprehensive income after tax -77,806.80 29,304.15
Items attributable to the owners of the parent company -77,806.80 26,373.73
(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
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(II) To be reclassified subsequently to profit or loss -77,806.80 26,373.73
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 reclassification of financial assets into other comprehensive income
4. Provision for credit impairment of other debt investments
5. Cash flow hedging reserve
6. Translation reserve -77,806.80 26,373.73
7. Others
Items attributable to non-controlling shareholders 2,930.42
VII. Total comprehensive income 37,597,220.01 -158,911,155.17
Items attributable to the owners of the parent company 21,886,746.04 -169,062,142.96
Items attributable to non-controlling shareholders 15,710,473.97 10,150,987.79
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.10 -0.79
(II) Diluted EPS (yuan per share) 0.10 -0.79
127
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Note Current period Preceding period
Items
No. cumulative comparative
I. Operating revenue 1 204,317,900.56 433,903,979.88
Less: Operating cost 1 199,201,858.68 397,437,511.55
Taxes and surcharges 902,601.86 1,804,317.52
Selling expenses 39,753,159.16 54,675,166.60
Administrative expenses 44,093,681.35 45,037,899.50
R&D expenses 6,647,759.39 14,913,248.49
Financial expenses 29,762,090.06 27,811,135.49
Including: Interest expenses 31,156,701.57 27,271,764.56
Interest income 1,497,839.93 849,413.36
Add: Other income 2,360,474.80 300,000.00
Investment income (or less: losses) 2 156,256,067.52 8,855,566.24
Including: Investment income from associates and joint ventures -4,769,983.62 -297,833.76
Gains from derecognition of financial assets at amortized cost -952,176.00
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Credit impairment loss -35,754,696.75 -49,787,168.46
Assets impairment loss -13,427,856.98 -17,419,090.93
Gains on asset disposal (or less: losses) 72,730,654.86 21,631.63
II. Operating profit (or less: losses) 66,121,393.51 -165,804,360.79
Add: Non-operating revenue 100,621.81 938,797.01
Less: Non-operating expenditures 2,180,198.43 366,483.43
III. Profit before tax (or less: total loss) 64,041,816.89 -165,232,047.21
Less: Income tax
IV. Net profit (or less: net loss) 64,041,816.89 -165,232,047.21
(I) Net profit from continuing operations (or less: net loss) 64,041,816.89 -165,232,047.21
(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 reclassification of financial assets into other
comprehensive income
4. Provision for credit impairment of other debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income 64,041,816.89 -165,232,047.21
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
128
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2020
(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 1,186,849,798.95 1,312,359,448.24
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 4,611,350.90 12,067,911.19
Other cash receipts related to operating activities 1 15,785,966.22 24,883,017.58
Subtotal of cash inflows from operating activities 1,207,247,116.07 1,349,310,377.01
Cash payments for goods purchased and services received 819,268,501.77 901,941,126.87
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 177,936,827.34 241,604,857.64
Cash payments for taxes and rates 44,630,285.36 70,058,938.01
Other cash payments related to operating activities 2 77,266,152.73 113,019,339.58
Subtotal of cash outflows from operating activities 1,119,101,767.20 1,326,624,262.10
Net cash flows from operating activities 88,145,348.87 22,686,114.91
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 227,492,228.00 1,183,862.97
Cash receipts from investment income
Net cash receipts from the disposal of fixed assets, intangible assets and other
90,389,036.16 897,560.83
long-term assets
Net cash receipts from the disposal of subsidiaries & other business units 42,983,999.65
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 360,865,263.81 2,081,423.80
Cash payments for the acquisition of fixed assets, intangible assets and other
15,963,551.12 14,544,973.78
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 15,963,551.12 14,544,973.78
Net cash flows from investing activities 344,901,712.69 -12,463,549.98
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Including: Cash received by subsidiaries from non-controlling shareholders as
investments
Cash receipts from borrowings 184,998,007.80 517,594,317.72
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Note Current period Preceding period
Items
No. cumulative comparative
Other cash receipts related to financing activities 3 4,000,000.00 30,000,000.00
Subtotal of cash inflows from financing activities 188,998,007.80 547,594,317.72
Cash payments for the repayment of borrowings 571,395,742.19 511,267,000.00
Cash payments for distribution of dividends or profits and for interest expenses 78,843,126.92 30,076,595.52
Including: Cash paid by subsidiaries to non-controlling shareholders as dividend
49,756,900.00
or profit
Other cash payments related to financing activities 4 10,430,132.25 9,080,321.78
Subtotal of cash outflows from financing activities 660,669,001.36 550,423,917.30
Net cash flows from financing activities -471,670,993.56 -2,829,599.58
IV. Effect of foreign exchange rate changes on cash & cash equivalents -97,187.73 21,583.83
V. Net increase in cash and cash equivalents -38,721,119.73 7,414,549.18
Add: Opening balance of cash and cash equivalents 208,783,866.60 201,369,317.42
VI. Closing balance of cash and cash equivalents 170,062,746.87 208,783,866.60
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2020
(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 354,206,107.38 343,169,578.37
Receipts of tax refund 97,559.18 5,765,754.44
Other cash receipts related to operating activities 21,367,785.41 39,495,085.12
Subtotal of cash inflows from operating activities 375,671,451.97 388,430,417.93
Cash payments for goods purchased and services received 244,301,702.01 250,742,210.91
Cash paid to and on behalf of employees 61,739,154.02 92,940,344.78
Cash payments for taxes and rates 7,181,904.61 20,457,454.33
Other cash payments related to operating activities 118,640,184.23 39,907,351.71
Subtotal of cash outflows from operating activities 431,862,944.88 404,047,361.73
Net cash flows from operating activities -56,191,492.91 -15,616,943.80
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 266,658,637.16
Cash receipts from investment income 82,727,700.00 9,153,400.00
Net cash receipts from the disposal of fixed assets, intangible
90,196,791.73 398,588.81
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 439,583,128.89 9,551,988.81
Cash payments for the acquisition of fixed assets, intangible assets
3,437,576.27 2,030,956.24
and other long-term assets
Cash payments for investments 2,000,000.00
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 5,437,576.27 2,030,956.24
Net cash flows from investing activities 434,145,552.62 7,521,032.57
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 109,998,007.80 417,594,317.72
Other cash receipts related to financing activities 4,000,000.00 30,000,000.00
Subtotal of cash inflows from financing activities 113,998,007.80 447,594,317.72
Cash payments for the repayment of borrowings 451,335,325.52 401,257,000.00
Cash payments for distribution of dividends or profits and for
31,632,011.57 27,192,787.89
interest expenses
Other cash payments related to financing activities 10,430,132.25 9,080,321.78
Subtotal of cash outflows from financing activities 493,397,469.34 437,530,109.67
Net cash flows from financing activities -379,399,461.54 10,064,208.05
IV. Effect of foreign exchange rate changes on cash and cash
13,777.16
equivalents
V. Net increase in cash and cash equivalents -1,445,401.83 1,982,073.98
Add: Opening balance of cash and cash equivalents 25,794,743.17 23,812,669.19
131
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Note Current period Preceding period
Items
No. cumulative comparative
VI. Closing balance of cash and cash equivalents 24,349,341.34 25,794,743.17
132
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other Total equity
Share capital/ Special Surplus General risk Undistributed interest
Preferred Perpetual
Capital reserve Treasury comprehensive reserve reserve profit
Paid-in capital Others income reserve
shares bonds shares
I. Balance at the end of prior year 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
Add: Cumulative changes of accounting
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 -6,776,124.85 589,559.77 -224,644,862.48 130,557,035.50 300,100,141.79
III. Current period increase (or less: decrease) -1,805,691.41 -77,806.80 21,964,552.84 -23,746,134.62 -3,665,079.99
(I) Total comprehensive income -77,806.80 21,964,552.84 15,710,473.97 37,597,220.01
(II) Capital contributed or withdrawn by
-1,805,691.41 1,805,691.41
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 -1,805,691.41 1,805,691.41
(III) Profit distribution -41,262,300.00 -41,262,300.00
1. Appropriation of surplus reserve
2. Appropriation of general risk reserve
3. Appropriation of profit to owners -41,262,300.00 -41,262,300.00
4. Others
(IV) Internal carry-over within equity
1. Transfer of capital reserve to capital
2. Transfer of surplus reserve to capital
3. Surplus reserve to cover losses
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Current period cumulative
Equity attributable to parent company
Items Other equity instruments Non-controlling
Less: Other Total equity
Share capital/ Special Surplus General risk Undistributed interest
Capital reserve Treasury comprehensive reserve
Paid-in capital Preferred Perpetual Others reserve reserve profit
shares income
shares bonds
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 215,000,000.00 183,568,842.44 -6,853,931.65 589,559.77 -202,680,309.64 106,810,900.88 296,435,061.80
134
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2020 (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
Preferred Perpetual
Capital reserve Treasury comprehensive reserve risk
profit
Paid-in capital Others income reserve reserve
shares bonds shares
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 policies -1,854,910.00 -14,829,568.99 -1,781,094.33 -18,465,573.32
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
3. Surplus reserve to cover losses
4. Changes in defined benefit plan carried over to
retained earnings
5. Other comprehensive income carried over to
135
Nanjing Putian Telecommunications Co., Ltd. 2020 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
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
136
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2020
(Expressed in Renminbi Yuan)
Current period cumulative
Other equity instruments Less: Other
Items Share capital/ Special Undistributed
Preferred Perpetual Capital reserve Treasury comprehensive Surplus reserve Total equity
Paid-in capital Others reserve profit
shares bonds shares income
I. Balance at the end of prior year 215,000,000.00 172,417,299.81 -1,854,910.00 589,559.76 -354,057,972.32 32,093,977.25
Add: Cumulative changes of accounting policies
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 -354,057,972.32 32,093,977.25
III. Current period increase (or less: decrease) -13,553,257.47 64,041,816.89 50,488,559.42
(I) Total comprehensive income 64,041,816.89 64,041,816.89
(II) Capital contributed or withdrawn by owners -13,553,257.47 -13,553,257.47
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
(V) Special reserve
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
1. Appropriation of current period
2. Application of current period
(VI) Others
IV. Balance at the end of current period 215,000,000.00 158,864,042.34 -1,854,910.00 589,559.76 -290,016,155.43 82,582,536.67
138
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2020 (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 -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
(V) Special reserve
139
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
[Wang Wenkui] [Wang Huailin] [Tang Yiqiao]
[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. 2020 Annual Report
Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
For the year ended December 31, 2020
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 16, 2021.
The Company has brought 9 subsidiaries including Nanjing Southern Telecom 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, depreciation of right-of-use assets, amortization of intangible assets, and revenue recognition, etc. based
on the Company’s actual production and operation features.
(I) Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business
Enterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.
141
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(II) Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
(III) Operating cycle
The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected to be
realized or due within 12 months.
(IV) Functional currency
The Company’s functional currency is 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 the 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 the following items 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 assets 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 to an
insignificant risk of changes in value.
(IX) Foreign currency translation
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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 the RMB amounts 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 the aforementioned 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 ―CASBE 14 –
Revenues‖.
(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, amortized using effective interest method or recognized
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with impairment loss.
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 ―CASBE 23 – Transfer of Financial Assets‖.
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 accordance with
impairment requirements of financial instruments; b. the amount initially recognized less the amount of accumulated
amortization recognized in accordance with ―CASBE 14 – Revenues‖.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on
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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 amortized using effective interest method.
(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 ―CASBE 23 – 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 carrying 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 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 uses 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 unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the
measurement date.
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(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 leases 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.
Among which, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.
At 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 and contract assets that do not contain a significant financing component or financing components in
contracts with associated period less than one year that are not considered by the Company, which result from transactions as
regulated in ―CASBE 14 – 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 ―CASBE 14 – 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
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 relatively low credit risk at 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.
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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 reduces 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 portfolio grouped with ages
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
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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.
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 supplies 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 and 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) Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be recovered.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets or intangible
assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials, manufacturing overhead
cost (or similar cost), cost that are explicitly chargeable to the customer under the contract, and other costs that are only related to the
contract;
2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the future; and
3. The costs are expected to be recovered.
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An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods or services, with
amortization included into profit or loss.
The Company shall make provision for impairment and recognize an impairment loss to the extent that the carrying amount of an
asset related to contract costs exceeds the remaining amount of consideration that the Company expects to receive in exchange for the
goods or services to which the asset relates less the costs expected to be incurred. The Company shall recognize a reversal of an
impairment loss previously recognized in profit or loss when the impairment conditions no longer exist or have improved. The
carrying amount of the asset after the reversal shall not exceed the amount that would have been determined on the reversal date if no
provision for impairment had been made previously.
(XIII) Non-current assets or disposal groups classified as held for sale
1. Classification of non-current assets or disposal groups as held for sale
Non-current assets or disposal groups are accounted for as held for sale when the following conditions are all met: 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 subsequent measurement
For initial measurement and subsequent measurement 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
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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 reversed.
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 reversed.
For 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 asset (excluding goodwill) in the disposal group.
(3) Non-current asset or disposal group that is no longer classified as held for sale and derecognized
A non-current asset or disposal group that does not met criteria for held for sale and no longer classified as held for sale, or a
non-current asset that removed from a disposal group as held for sale shall be measured at the lower of: a. its carrying amount before
it was classified as held for sale, adjusted for any depreciation, amortization or impairment that would have been recognized had it
not been classified as held for sale; and b. its recoverable amount.
When a non-current asset or disposal group classified as held for sale is derecognized, unrecognized gains or losses shall be included
into profit or loss.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash,
transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of the
carrying amount of the equity of the combined party included in 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
amount 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‖, on the date of combination, 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 initial investment cost of long-term equity investments at the acquisition
date 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
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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 amount of the acquirer’s previously held equity interest in the acquiree is remeasured 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 acquiree 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.
(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
―CASBE 12 – Debt Restructuring‖; and that obtained through non-cash assets exchange is determined according to ―CASBE 7 –
Non-cash Assets Exchange‖.
3. Subsequent measurement and recognition method of profit 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 remeasured 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. However, before the Company loses control, the difference between the disposal consideration at each stage and the
proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial
statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
(XV) Investment property
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1. Investment property includes land use right of leased-out property and of property held for capital appreciation and buildings that
have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using the cost model,
the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for
administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it
is probable that future economic benefits associated with the assets will flow to the Company and the cost of the assets can be
measured reliably.
2. Depreciation method of different categories of fixed assets
Estimated residual Annual
Categories 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
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will flow
to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to
reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. When the
auditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixed
assets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is
not to be adjusted retrospectively.
(XVIII) Intangible assets
1. Intangible assets include land use right, patent right and non-patented technology etc. The initial measurement of intangible assets
is based on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their 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 they are incurred. An intangible
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings:
(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 long-term assets
For long-term assets such as long-term equity investments, investment property at cost model, fixed assets, construction
in progress, productive biological assets at cost model, oil and gas assets, right-of-use assets, intangible assets with
finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be
estimated. For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter
whether there is indication of impairment, impairment test is performed annually. Impairment test on goodwill is
performed on related asset group or asset group portfolio.
When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provision
for assets impairment 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 the 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.
(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. Meanwhile, the Company discounts obligations under the defined benefit plan 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 fair value of defined
benefit plan assets from the present value of the defined benefit plan obligation 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;
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3) At the end of the 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 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, while other benefits
are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the 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 is recognized in profit or loss or
included in the cost of a relevant asset.
(XXII) Provisions
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.
(XXIII) Revenue
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the
contracts, and determine whether the performance obligation should be satisfied over time or at a point in time.
The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the
performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the
economic benefits provided by the Company’s performance as the Company performs; (2) the customer can control
goods as they are created by the Company’s performance; (3) goods created during the Company’s performance have
irreplaceable uses and the Company has an enforceable right to receive the payments for performance completed to date
during the whole contract period.
For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the
progress towards complete satisfaction of that performance obligation. In the circumstance that the progress cannot be
measured reasonably, but the costs incurred in satisfying the performance obligation are expected to be recovered, the
Company shall recognize revenue only to the extent of the costs incurred until it can reasonably measure the progress.
For each performance obligation satisfied at a point in time, the Company shall recognize revenue at the time point that
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the client obtains control of relevant goods or services. To determine whether the customer has obtained control of
goods, the Company shall consider the following indications: (1) the Company has a present right to payment for the
goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company has transferred the legal title of the
goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physical
possession of the goods to the client, i.e., the customer has physically possessed the goods; (4) the Company has
transferred significant risks and rewards of ownership of the goods to the client, i.e., the customer has obtained
significant risks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence
indicating the customer has obtained control over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The
transaction price is the amount of consideration to which the Company expects to be entitled in exchange for
transferring goods or services to a customer, excluding amounts collected on behalf of third parties and those expected
to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate
of variable consideration at expected value or the most likely amount. However, the transaction price that includes the
amount of variable consideration only to the extent that it is high probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is
subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the
transaction price based on the price that a customer would have paid for if the customer had paid cash for obtaining
control over those goods or services. The difference between the transaction price and the amount of promised
consideration is amortized under effective interest method over contractual period. The effects of a significant financing
component shall not be considered if the Company expects, at the contract inception, that the period between when the
customer obtains control over goods or services and when the customer pays consideration will be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling
price at contract inception of the distinct good underlying each performance obligation and allocate the transaction price
to each performance obligation on a relative stand-alone selling price basis.
3. 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. The above-mentioned product
sales business of the company belongs to the performance obligation performed at a certain time point, and the revenue
is recognized when the customer collects, has collected the price or obtained the right to collect and the relevant
economic benefits are likely to flow in.
(XXIV) 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 cannot be assessed.
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2. Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwise acquires 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 they are
recognized 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 are 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 period 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, they are 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, they are recognized as deferred income and included in profit or loss or used to 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 used to offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or used to 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) Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance
obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and be
presented on a net basis.
The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the consideration is
due) as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which is
conditional on something other than the passage of time) as a contract asset.
The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the
amount is due) from the customer as a contract liability.
(XXVI) Deferred income tax assets and liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the
carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items
not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in
accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the
liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to obtain
and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact
evidence that it is probable that future taxable income will be available against which deductible temporary differences
can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the
benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes
probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss,
excluding those arising from the following circumstances: (a) business combination; and (b) the transactions or items
directly recognized in equity.
(XXVII) Leases
1. Identification of a lease
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of
time, the Company assesses whether, throughout the period of use, the customer has both of the following: (a) the right
to obtain substantially all of the economic benefits from use of the identified asset; and (b) the right to direct the use of
the identified asset.
2. Identification of separate 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.
(XXVIII) Segment reporting
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Operating segments 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:
(1) that engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the
segment and to assess its performance; and
(3) for which accounting information regarding financial position, financial performance and cash flows is available through analysis.
(XXIX) 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 has adopted the accounting standards for Business Enterprises No. 14 - Revenue (hereinafter referred to as the new
revenue standards) revised by the Ministry of finance from January 1, 2020. According to the relevant provisions on the connection
between the new and old standards, the information of the comparable period will not be adjusted, and the cumulative impact of the
implementation of the new standards on the first implementation date will retroactively adjust the amount of retained earnings and
other related items in the financial statements at the beginning of the reporting period.
①The main impact of the implementation of the new revenue standard on the company's financial statements as of January 1, 2020 is
as follows:
Balance sheet
Items
Effect due to revised financial
Dec. 31, 2019 Jan. 1, 2020
instrument standard
Advance received 22,148,080.67 -22,148,080.67
Contract liabilities 19,600,071.39 19,600,071.39
Other current liabilities 2,548,009.28 2,548,009.28
(2) The Company has adopted ―Interpretation of China Accounting Standards for Business Enterprises No. 13‖ since Jan 1, 2020, and
the change of accounting policy is 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
Value-added tax (VAT) The taxable revenue from sales of goods or
16%、13%、6%、3%
rendering of services
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%
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Taxes Tax bases Tax rates
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 Changle
Telecommunications Equipment Co., 15%
Ltd.
Nanjing Putian Datang Information 15%
Electronic Co., Ltd.
Putian Telecommunications (H.K.) Co., 16.5%
Ltd.
Taxpayers other than the 25%
above-mentioned
(II) Tax preferential policies
The Company obtained high-tech enterprise certificate in December, 2018, valid for 3 years. It is subject to the
enterprise income tax at a rate of 15%
The subsidiary, Nanjing Putian 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 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 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
Southern Telecom Co., Ltd 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 the report refers to the data on January 1, 2020 after the year-end balance of the
financial statements is adjusted according to the new income standard.
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
Items Closing balance Opening balance
Cash on hand 2,229.39 2,273.88
Cash in bank 170,060,517.48 208,781,592.72
Other cash and bank balances 39,786,964.09 52,486,166.68
Total 209,849,710.96 261,270,033.28
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(2) Details of other cash and bank balances
Items Closing balance Opening balance
Bank acceptance deposit 29,219,480.00 36,000,000.00
deposit for L/G 10,428,199.34 16,477,961.78
Others 139,284.75 8,204.90
Total 39,786,964.09 52,486,166.68
Other cash and bank balances are restricted funds.
2. Notes receivable
(1) Details
1) Details on categories
Closing balance
Book balance Provision for bad
debts
Categories
Provisio Carrying
Amount % to total Amount n amount
proporti
on (%)
Receivables with provision
for bad debts made on an
individual basis
Including: Bank acceptance
Trade acceptance
Receivables with provision
for bad debts made on a 17,714,790.57 100.00 685,739.53 3.87 17,029,051.04
collective basis
Including: Bank acceptance 4,000,000.00 22.58 4,000,000.00
Trade acceptance 13,714,790.57 77.42 685,739.53 5.00 13,029,051.04
Total 17,714,790.57 100.00 685,739.53 3.87 17,029,051.04
(Continued)
Opening balance
Book balance Provision for bad
Categories debts
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 debts made on a collective 59,976,824.10 100.00 323,770.52 0.54 59,653,053.58
basis
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Opening balance
Book balance Provision for bad
Categories debts
Provision Carrying amount
Amount % to total Amount proportion
(%)
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
(2) Changes in provision for bad debts
1) Details
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Write-off Others balance
individual
basis
collective 323,770.52 361,969.01 685,739.53
basis
Subtotal 323,770.52 361,969.01 685,739.53
(3) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 3,001,879.22
Trade acceptance 8,555,865.91
Subtotal 11,557,745.13
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
Categories Book balance Provision for bad debts
Carrying
Amount % to total Amount Provision amount
proportion (%)
Receivables with provision 59,944,074.91 9.14 59,944,074.91 100.00
made on an individual basis
595,708,348.2 101,715,944.7 493,992,403.4
Receivables with provision 90.86 17.07
made on a collective basis 4 5 9
655,652,423.1 161,660,019.6 493,992,403.4
Total 100.00 24.66
5 6 9
(Continued)
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Opening 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
792,139,948.9 697,238,295.9
Receivables with provision 96.14 94,901,652.95 11.98
made on a collective basis 1 6
823,969,327.5 126,313,263.6 697,656,063.9
Total 100.00 15.33
7 1 6
2) Accounts receivable with provision made on an individual basis
Provision
Debtors Book balance Provision for Reasons
proportion
bad debts
(%)
Dongpo Xi Laos Co., Ltd. 19,708,086.54 19,708,086.54 100.00 Unable to recover
Mr. Xu 17,591,683.74 17,591,683.74 100.00 Unable to recover
China Tower Corporation Ltd. 13,819,926.92 13,819,926.92 100.00 Unable to recover
Nanjing Zhengqian Communication 5,356,181.55 5,356,181.55 100.00 Unable to recover
Technology Co., Ltd
Nanjing Aerte photoelectric Co., Ltd 3,468,196.16 3,468,196.16 100.00 Unable to recover
Subtotal 59,944,074.91 59,944,074.91 100.00
3) Accounts receivable with provision for bad debts made on age analysis
Closing balance
Ages
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 280,933,599.49 2,809,335.99 1.00
1-2 years 93,801,198.04 4,690,059.91 5.00
2-3 years 105,548,507.89 10,554,850.79 10.00
3-4 years 36,396,131.90 10,918,839.57 30.00
4-5 years 12,572,104.87 6,286,052.44 50.00
Over 5 years 66,456,806.05 66,456,806.05 100.00
Subtotal 595,708,348.24 101,715,944.75 17.07
(2) Changes in provision for bad debts
Increase
Items Opening
balance Accrual Recovery Others
Receivables with provision made 31,411,610.66 28,532,464.25
on an individual basis
Receivables with provision 94,901,652.95 8,225,713.17
made on a collective basis
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Subtotal 126,313,263.61 36,758,177.42
(Continued)
Decrease
Items Closing balance
Reversal Write-off Others
Receivables with provision 59,944,074.91
made on an individual basis
Receivables with provision 1,085,901.45 325,519.92 101,715,944.75
made on a collective basis
Subtotal 1,085,901.45 325,519.92 161,660,019.66
(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 (%)
Dongpo Xi Laos Co., Ltd. 19,708,086.54 3.01 19,708,086.54
Mr. Xu 17,591,683.74 2.68 17,591,683.74
Shenzhen Yunshi Haitong 14,474,552.00 2.21 144,745.52
Technology Co., Ltd
Hegang branch of China Tower 13,819,926.92 2.11 13,819,926.92
Co., Ltd
Nanjing yuanzun
Electromechanical Equipment Co., 12,362,665.79 1.89 2,353,301.27
Ltd
Subtotal 77,956,914.99 11.90 53,617,743.99
4. Receivables financing
(1) Details
1) Details on categories
Closing balance
Items
Interest Interest Changes in Carrying Provision for
Initial cost
adjustment accrued fair value amount impairment
Bank acceptance 32,594,702.60 32,594,702.60
Total 32,594,702.60 32,594,702.60
(Continued)
Opening balance
Items
Interest Interest Changes in fair Carrying Provision for
Initial cost
adjustment accrued value amount impairment
Bank acceptance 3,821,550.77 3,821,550.77
Total 3,821,550.77 3,821,550.77
2) Receivables financing with provision for impairment made on a collective basis
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Closing balance
Items
Book balance Provision for Provision proportion
impairment (%)
Bank acceptance 32,594,702.60
portfolio
Subtotal 32,594,702.60
(2) Endorsed or discounted but undue notes at the balance sheet date
Items Closing balance derecognized
Bank acceptance 53,633,327.45
Subtotal 53,633,327.45
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
1) Details
Closing balance Opening balance
Ages
% to Provision for % to Provision for
Book balance Carrying amount Book balance Carrying amount
total impairment total impairment
Within 1 year 12,509,089.32 63.77 12,509,089.32 22,726,145.30 67.32 22,726,145.30
1-2 years 3,743,667.83 19.08 3,743,667.83 7,774,347.45 23.03 7,774,347.45
2-3 years 2,247,435.21 11.46 2,247,435.21 1,297,653.28 3.84 1,297,653.28
Over 3 years 1,116,156.29 5.69 1,116,156.29 1,961,377.06 5.81 1,961,377.06
100.0 100.0
Total 19,616,348.65 19,616,348.65 33,759,523.09 33,759,523.09
0 0
(2) Details of the top 5 debtors with largest balances
Proportion to the total
Debtors Book balance balance of advances
paid (%)
Hunan Baode Ziqiang Computer Co., Ltd 3,331,422.00 16.98
Huawei Technology Co., Ltd 1,547,169.75 7.89
Nanjing xinju Construction Co., Ltd 720,000.00 3.67
Jiangsu Zhizhen optoelectronics Co., Ltd 683,755.60 3.49
Fuzhou Yunfeng Communication Technology Co., Ltd 584,467.03 2.98
Subtotal 6,866,814.38 35.01
6. Other receivables
(1) Details
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 51.88 28,912,122.71 100.00
on an individual basis
Receivables with provision made
26,817,237.74 48.12 9,905,447.43 36.94 16,911,790.31
on a collective basis
Total 55,729,360.45 100.00 38,817,570.14 69.65 16,911,790.31
(Continued)
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 45.55 28,912,122.71 100.00
on an individual basis
Receivables with provision made
34,563,137.22 54.45 6,452,746.69 18.67 28,110,390.53
on a collective basis
Total 63,475,259.93 100.00 35,364,869.40 55.71 28,110,390.53
2) Other receivables with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for
debts proportion (%) provision made
Beijing Likangpu
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 1,578,947.37
Portfolio-Others 25,238,290.37 9,905,447.43 39.25
Subtotal 26,817,237.74 9,905,447.43 36.94
(2) Age analysis
Ages Closing book balance Opening book balance
Within 1 year 6,470,106.41 17,480,990.19
1-2 years 6,515,139.65 9,297,587.45
2-3 years 4,733,535.99 2,517,678.34
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
3-4 years 3,610,856.13 1,673,457.97
4-5 years 1,448,923.00 733,113.00
Over 5 years 32,950,799.27 31,772,432.98
Subtotal 55,729,360.45 63,475,259.93
(3) Changes in provision for bad debts
1) Details
Phase I Phase II Phase III
Items 12 month Lifetime expected Lifetime expected Subtotal
expected credit losses (credit credit losses (credit
credit losses not impaired) impaired)
Opening balance 1,185,865.45 34,179,003.95 35,364,869.40
Opening balance in the
current period
--Transferred to phase II
--Transferred to phase III -1,937,398.16 1,937,398.16
--Reversed to phase II
--Reversed to phase I
Provision made in the
2,601,194.90 1,894,474.52 4,495,669.42
current period
Provision recovered in
current period
Provision reversed in
current period
Provision written off in
current period
Retranslation 298.23 298.23
Decrease due to business
1,042,670.45 1,042,670.45
combination
Closing balance 806,991.74 38,010,578.40 38,817,570.14
(4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary payment receivable 35,152,407.81 36,848,648.68
Security deposit 16,515,511.45 23,681,938.64
Imprest 1,471,813.99 1,499,462.35
Others 2,589,627.20 1,445,210.26
Total 55,729,360.45 63,475,259.93
(5) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Ages Provision for
Book balance total balance of other
receivables bad debts
receivables (%)
Beijing Likangpu Temporary Over
28,912,122.71 51.88 28,912,122.71
Communication payment 5
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Proportion to the
Debtors Nature of Ages Provision for
Book balance total balance of other
receivables bad debts
receivables (%)
Equipment Co., Ltd. receivable years
China Potevio 2-5
Security deposit 1,958,000.00 3.51 1,046,900.00
Information Industry Inc. years
Security deposit
Far East International 1-2
for financial 1,578,947.37 2.83
Leasing Co.,Ltd. years
leasing
Construction headquarters
1-2
of Shenzhen Metro Group Security deposit 1,490,768.10 2.68 74,538.41
years
Co., Ltd
Potevio Information Security deposit 2-3
1,203,052.00 2.16 60,152.60
Technology Co., Ltd. years
Subtotal 35,142,890.18 63.06 30,093,713.72
7. Inventories
(1) Details
Closing balance Opening balance
Items
Provision for Carrying Provision for Carrying
Book balance Book balance
write-down amount write-down amount
Raw materials 32,804,463.00 5,678,761.14 27,125,701.86 33,932,185.24 3,232,000.61 30,700,184.63
Work in process 13,266,680.85 13,266,680.85 11,050,997.83 11,050,997.83
Goods on hand 86,350,107.31 18,772,268.10 67,577,839.21 74,186,943.04 17,585,934.82 56,601,008.22
Goods dispatched 118,443,146.03 29,157,593.24 89,285,552.79 129,012,025.69 20,346,372.53 108,665,653.16
Products on
3,184,134.32 804,691.99 2,379,442.33
consignment for 3,190,889.60 804,691.99 2,386,197.61
sales
Total 254,055,286.79 54,413,314.47 199,641,972.32 251,366,286.12 41,968,999.95 209,397,286.17
(2) Provision for inventory write-down
1) Details
Increase Decrease
Items Opening
Reversal or Closing balance
balance Accrual Others Others
write-off
Raw materials 3,232,000.61 2,446,760.53 5,678,761.14
Goods on hand 17,585,934.82 2,610,079.84 6,666.66 1,417,079.90 18,772,268.10
Goods dispatched 20,346,372.53 9,365,096.85 527,259.00 26,617.14 29,157,593.24
Products on
804,691.99 804,691.99
consignment for sales
Subtotal 41,968,999.95 14,421,937.22 533,925.66 1,443,697.04 54,413,314.47
2) Specific basis for determining net realizable value and reversal or write off of inventory depreciation reserves in the current period
Reasons for write off of
Items Specific basis for determining net Reasons for reversal of inventory
inventory depreciation
realizable value depreciation reserves
reserves
The estimated selling price of relevant
The NRV of inventory with provision The inventory with
Raw finished products minus the estimated
for inventory depreciation in the provision has been sold
materials cost to completion, estimated selling
previous period increased in the current period
expenses and relevant taxes
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Reasons for write off of
Items Specific basis for determining net Reasons for reversal of inventory
inventory depreciation
realizable value depreciation reserves
reserves
In the normal production and operation
process, the net realizable value of the The NRV of inventory with provision The inventory with
Goods
inventory is determined by the estimated for inventory depreciation in the provision has been sold
dispatched
selling price minus the estimated selling previous period increased in the current period
expenses and relevant taxes
In the normal production and operation
process, the net realizable value of the The NRV of inventory with provision The inventory with
Goods on
inventory is determined by the estimated for inventory depreciation in the provision has been sold
hand
selling price minus the estimated selling previous period increased in the current period
expenses and relevant taxes
8. Other current assets
Items Closing balance Opening balance
Input VAT to be credited 11,568,247.65 10,632,374.23
Prepaid income tax 1,557,774.43 977,871.76
Total 13,126,022.08 11,610,245.99
9. Long-term equity investments
(1) Categories
Closing balance Opening balance
Items
Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Investments
10,422,056.96 10,422,056.96 10,422,067.61 10,422,067.61
in associates
Investments
in joint 171,340,315.89 171,340,315.89
ventures
Total 10,422,056.96 10,422,056.96 181,762,383.50 181,762,383.50
(2) Details
Increase/Decrease
Investees Opening
Investment income
balance Investments Investments Adjustment in other
recognized under
increased decreased comprehensive income
equity method
Joint ventures
SEI-Nanjing
Potevio Optical
10,422,067.61 -10.65
Network Co.,
Ltd.
Subtotal 10,422,067.61 -10.65
Associates
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Increase/Decrease
Investees Opening
Investment income
balance Investments Investments Adjustment in other
recognized under
increased decreased comprehensive income
equity method
Potevio Hi-tech
Industry Co., 171,340,315.89 166,460,142.12 -4,769,972.97
Ltd.
Subtotal 171,340,315.89 166,460,142.12 -4,769,972.97
Total 181,762,383.50 166,460,142.12 -4,769,983.62
(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
SEI-Nanjing
Potevio Optical
10,422,056.96
Network Co.,
Ltd.
Subtotal 10,422,056.96
Associates
Potevio Hi-tech
Industry Co., 110,200.80
Ltd.
Subtotal 110,200.80
Total 110,200.80 10,422,056.96
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 Electroplating Factory 420,915.00 420,915.00
Hangzhou Honyar Electrical Co.,Ltd. 321,038.00 321,038.00
Beijing Likangpu Communication
Equipment Co., Ltd.
Subtotal 741,953.00 741,953.00
Note: 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.
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11. Investment property
(1) Details
Items Buildings and structures Land use right Total
Cost
Opening balance 18,646,397.35 3,642,147.87 22,288,545.22
Increase
1) Acquisition
Decrease 6,390,269.42 3,642,147.87 10,032,417.29
1) Disposal 6,390,269.42 3,642,147.87 10,032,417.29
Closing balance 12,256,127.93 12,256,127.93
Accumulated depreciation and
amortization
Opening balance 10,631,422.07 2,004,495.15 12,635,917.22
Increase 466,943.34 119,960.64 586,903.98
1) Accrual or amortization 466,943.34 119,960.64 586,903.98
Decrease 3,109,250.83 2,124,455.79 5,233,706.62
1) Disposal 3,109,250.83 2,124,455.79 5,233,706.62
Closing balance 7,989,114.58 7,989,114.58
Provision for impairment
Opening balance 1,842,418.00 1,842,418.00
Increase
1) Accrual
Decrease 1,842,418.00 1,842,418.00
1) Disposal 1,842,418.00 1,842,418.00
Closing balance
Carrying amount
Closing balance 4,267,013.35 4,267,013.35
Opening balance 6,172,557.28 1,637,652.72 7,810,210.00
12. Fixed assets
(1) Details
Items Buildings and General Transport Electronic
Other equipment Total
structures equipment facilities equipment
Cost
Opening 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
Increase 288,234.03 2,294,930.67 55,719.34 686,300.79 525,299.84 3,850,484.67
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Items Buildings and General Transport Electronic
Other equipment Total
structures equipment facilities equipment
1) Acquisition 288,234.03 2,294,930.67 55,719.34 686,300.79 525,299.84 3,850,484.67
2) Transferred in from
construction in progress
3) Retranslation
Decrease 18,199,232.22 6,101,859.19 2,652,680.50 4,577,467.96 1,530,030.73 33,061,270.60
1) Disposal/Scrapping 18,199,232.22 6,101,859.19 2,448,994.93 4,526,955.99 1,530,030.73 32,807,073.06
2) Business combination 203,685.57 49,818.72 253,504.29
3) Retranslation 693.25 693.25
Closing balance 134,663,363.37 34,132,418.65 7,887,148.60 2,306,674.54 44,828,796.91 223,818,402.07
Accumulated depreciation
Opening 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
Increase 5,184,316.29 2,208,930.99 134,422.20 587,732.21 264,527.55 8,379,929.24
1) Accrual 5,184,316.29 2,208,930.99 134,422.20 587,732.21 264,527.55 8,379,929.24
2) Retranslation
Decrease 13,000,024.59 5,530,136.72 2,553,862.29 4,460,085.41 1,471,704.20 27,015,813.21
1) Disposal/Scrapping 13,000,024.59 5,530,136.72 2,356,287.09 4,412,056.30 1,471,704.20 26,770,208.90
2) Business combination 197,575.20 47,335.86 244,911.06
3) Retranslation 693.25 693.25
Closing balance 47,849,478.31 25,017,696.49 7,089,647.48 2,117,483.41 40,860,070.24 122,934,375.93
Provision for impairment
Opening balance 539,124.00 10,863.02 11,048.35 175,790.21 736,825.58
Increase
Decrease 10,863.02 10,863.02
Closing balance 539,124.00 11,048.35 175,790.21 725,962.56
Carrying amount
Closing balance 86,274,761.06 9,114,722.16 797,501.12 178,142.78 3,792,936.46 100,158,063.58
Opening balance 96,370,050.95 9,589,581.93 975,022.19 196,956.75 3,590,490.70 110,722,102.52
2) Fixed assets temporarily idle
Items Cost Accumulated Provision for
Carrying amount Remarks
depreciation impairment
General equipment 2,466,884.50 2,265,898.17 11,048.35 189,937.98
Transport facilities 987,277.01 944,682.45 42,594.56
Electronic equipment 433,603.93 413,182.23 20,421.70
Other equipment 1,574,539.55 1,287,852.76 175,408.71 111,278.08
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Items Cost Accumulated Provision for
Carrying amount Remarks
depreciation impairment
Subtotal 5,462,304.99 4,911,615.61 186,457.06 364,232.32
3) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Buildings and structures 31,449,073.42 Unable to handle
Subtotal 31,449,073.42
13. Construction in progress
(1) Details
Closing balance Opening balance
Projects Provision Provision
Carrying for Carrying
Book balance for Book balance
amount impairme amount
impairment
Nanjing Putian nt
Datang Information
Electronics Co.,
21,300,309.31 21,300,309.31 12,738,203.48 12,738,203.48
Ltd. Product
Development
Center
Others 1,154,482.96 1,154,482.96 310,498.11 310,498.11
Total 22,454,792.27 22,454,792.27 13,048,701.59 13,048,701.59
2) Changes in significant projects
Projects Budgets Increase Transferred to Closing balance
Opening balance
fixed assets
Nanjing Putian Datang
Information Electronics
30,000,000.00 12,738,203.48 8,562,105.83 21,300,309.31
Co., Ltd. Product
Development Center
Subtotal 30,000,000.00 12,738,203.48 8,562,105.83 21,300,309.31
(Continued)
Completio Accumulated Amount of
Accumulate n Annual
Projects amount of borrowing cost Fund
d input to percentage capitalization
borrowing cost capitalization in source
budget (%) rate (%)
(%) capitalization current period
Nanjing Putian
Datang Information
Electronics Co., Self-owned
90.00 90.00
Ltd. Product fund
Development
Center
Subtotal 90.00 90.00
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14. Intangible assets
(1) Details
Items Land use right Software Total
Cost
Opening balance 34,638,346.69 11,978,112.74 46,616,459.43
Increase 39,867.26 39,867.26
1) Acquisition 39,867.26 39,867.26
2) Internal research and development
Decrease 7,982,299.86 1,097,822.60 9,080,122.46
1) Disposal 7,982,299.86 1,097,822.60 9,080,122.46
Closing balance 26,656,046.83 10,920,157.40 37,576,204.23
Accumulated amortization
Opening balance 7,727,958.57 10,507,254.58 18,235,213.15
Increase 843,443.88 392,839.28 1,236,283.16
1) Accrual 843,443.88 392,839.28 1,236,283.16
Decrease 2,058,588.88 1,097,822.60 3,156,411.48
1) Disposal 2,058,588.88 1,097,822.60 3,156,411.48
Closing balance 6,512,813.57 9,802,271.26 16,315,084.83
Carrying amount
Closing balance 20,143,233.26 1,117,886.14 21,261,119.40
Opening balance 26,910,388.12 1,470,858.16 28,381,246.28
(1) Land use right with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Land use right 4,525,451.23 Unable to handle
Subtotal 4,525,451.23
15. Long-term prepayments
(1) Details
Items Opening balance Increase Amortization Closing balance
Renovation expenditure 4,260,775.18 3,083,600.09 1,802,964.46 5,541,410.81
Total 4,260,775.18 3,083,600.09 1,802,964.46 5,541,410.81
16. Deferred tax assets and deferred tax liabilities
(1) Details of unrecognized deferred tax assets
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Closing balance Opening balance
Deductible temporary difference 259,762,732.16 212,555,020.06
Deductible losses 145,604,016.49 208,426,046.76
Subtotal 405,366,748.65 420,981,066.82
(2) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years Closing balance Opening balance Remarks
Year 2020 42,593,678.81
Year 2021 5,554,380.47 29,308,451.67
Year 2022 4,443,610.43 4,443,610.43
Year 2023 18,084,226.36 18,084,226.36
Year 2024 113,996,079.49 113,996,079.49
Year 2025 3,525,719.74
Subtotal 145,604,016.49 208,426,046.76
17. Short-term borrowings
(1) Details
Items Closing balance Opening balance
Pledged borrowings 276,812,627.72
Mortgaged borrowings 15,000,000.00 65,042,904.11
Secured borrowings 50,000,000.00 110,060,416.67
Total 65,000,000.00 451,915,948.50
18. Notes payable
(1) Details
Items Closing balance Opening balance
Bank acceptance 57,636,900.00 72,000,000.00
Trade acceptance 18,498,110.10 9,784,929.91
Total 76,135,010.10 81,784,929.91
19. Accounts payable
(1) Details
Items Closing balance Opening balance
Procurement of materials 603,045,038.32 679,428,580.08
Project payment 1,720,547.68
Total 604,765,586.00 679,428,580.08
174
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(2) Significant accounts payable with age over one year
Items Closing balance Reasons for unsettlement
POLYCOM communications technology (Beijing)
24,545,645.78 Not yet settled
Co.,Ltd.
Nanjing Xingping Industrial Co., Ltd 20,868,248.11 Not yet settled
SEI-Nanjing Potevio Optical Network Co., Ltd. 18,899,974.96 Not yet settled
Jiangsu Sainty Machinery IMP.&Co.,Ltd. 16,642,003.33 Not yet settled
China Potevio Information Industry Inc. 16,314,294.20 Not yet settled
Subtotal 97,270,166.38
20. Advances received
(1) Details
Items Closing balance Opening balance[Note]
Payment for goods
Total
Note: Please refer to note III (XXVIII) 1 (1) 1) of the financial statements for the difference between the opening balance and the end
of the previous year.
21. Contract liabilities
(1) Details
Items Closing balance Opening balance[Note]
Payment for goods 28,518,252.40 19,600,071.39
Total 28,518,252.40 19,600,071.39
Note: Please refer to note III (XXVIII) 1 (1) 1) of the financial statements for the difference between the opening balance and the end
of the previous year.
22. Employee benefits payable
(1) Details
Items Opening Increase Decrease Closing balance
balance
Short-term employee benefits 21,602,707.70 170,982,560.73 175,222,390.15 17,362,878.28
Post-employment benefits -
7,033,468.50 7,033,468.50
defined contribution plan
Total 21,602,707.70 178,016,029.23 182,255,858.65 17,362,878.28
(2) Details of short-term employee benefits
Items Opening Increase Decrease Closing balance
balance
Wage, bonus, allowance and
11,209,937.62 122,927,261.78 129,463,399.15 4,673,800.25
subsidy
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Opening Increase Decrease Closing balance
balance
Employee welfare fund 8,595,660.73 8,595,660.73
Social insurance premium 10,725,435.17 10,725,435.17
Including: Medicare premium 9,866,290.18 9,866,290.18
Occupational injuries
40,647.57 40,647.57
premium
Maternity premium 818,497.42 818,497.42
Housing provident fund 156,533.23 12,093,373.14 8,955,350.63 3,294,555.74
Trade union fund and employee
10,215,560.09 522,976.40 1,359,010.73 9,379,525.76
education fund
Compensation for termination of
6,464,311.30 6,464,311.30
labor relations
Others 20,676.76 9,653,542.21 9,659,222.44 14,996.53
Subtotal 21,602,707.70 170,982,560.73 175,222,390.15 17,362,878.28
(3) Details of defined contribution plan
Items Opening Increase Decrease Closing balance
balance
Basic endowment insurance
4,756,406.04 4,756,406.04
premium
Unemployment insurance
513,473.53 513,473.53
premium
Company annuity payment 1,763,588.93 1,763,588.93
Subtotal 7,033,468.50 7,033,468.50
23. Taxes and rates payable
Items Closing balance Opening balance
VAT 2,356,409.61 1,385,203.91
Enterprise income tax 5,300,903.29 1,605,203.32
Individual income tax 167,893.85 90,009.67
Urban maintenance and construction tax 336,089.22 446,279.63
Housing property tax 207,909.01 222,050.55
Land use tax 83,316.67 83,316.67
Education surcharge 237,921.18 287,880.75
Other tax 16,805.84 5,622.10
Total 8,707,248.67 4,125,566.60
24. Other payables
(1) Details
Items Closing balance Opening balance
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Closing balance Opening balance
Dividend payable 4,044,213.38 12,538,813.38
Other payables 49,714,907.25 48,707,865.43
Total 53,759,120.63 61,246,678.81
(2) Dividend payable
Items Closing balance Opening balance
Dividend of ordinary shares 4,044,213.38 12,538,813.38
Subtotal 4,044,213.38 12,538,813.38
(3) Other payables
Items Closing balance Opening balance
Temporary receipts payable 25,326,626.30 28,413,293.97
Unsettled installation cost 6,106,864.43 6,405,205.17
Deposits 6,497,152.88 6,942,844.36
Operating expenses 9,314,827.00 2,184,841.28
Others 2,469,436.64 4,761,680.65
Subtotal/Total 49,714,907.25 48,707,865.43
25. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term payables due within one year 9,181,720.08 10,820,807.35
Total 9,181,720.08 10,820,807.35
26. Other current liabilities
Items Closing balance Opening balance[Note]
VAT collected in advance 3,707,372.81 2,548,009.28
Total 3,707,372.81 2,548,009.28
Note: Please refer to note III (XXVIII) 1 (1) 1) of the financial statements for the difference between the opening balance and the end
of the previous year.
27. Long-term payables
Items Closing balance Opening balance
Finance lease 4,036,160.05 12,827,205.03
Total 4,036,160.05 12,827,205.03
28. Deferred income
177
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Opening balance Increase Decrease Closing balance
Government grants 6,004,873.00 6,004,873.00
Total 6,004,873.00 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.
29. Share capital
Movements
Items Opening
Issue of Reserve Closing balance
balance Bonus Others Subtotal
new transferred
shares
shares to shares
Total shares 215,000,000.00 215,000,000.00
30. Capital reserve
Items Opening balance Increase Decrease Closing balance
Share premium 139,592,332.04 1,805,691.41 137,786,640.63
Other capital reserve 45,782,201.81 45,782,201.81
Total 185,374,533.85 1,805,691.41 183,568,842.44
Note: In this year, the company purchased minority shareholders' equity of the subsidiary Putian Communication (Hong Kong) Co.,
Ltd. The difference between the purchase price and the net assets of the subsidiary offset the capital reserve by 1,805,691.41 yuan.
31. Other comprehensive income (OCI)
Current period cumulative Closing
balance
Items Opening Current period
balance Less: Attributable Attributable to
cumulative
Income to parent non-controllin
before income
tax company g shareholders
tax
Items not to be reclassified
-6,776,124.85 -77,806.80 -77,806.80 -6,853,931.65
subsequently to profit or loss
Including: Translation reserves -4,921,214.85 -77,806.80 -77,806.80 -4,999,021.65
Reclassified financial assets to
-1,854,910.00 -1,854,910.00
OCI
Total -6,776,124.85 -77,806.80 -77,806.80 -6,853,931.65
32. 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
33. Undistributed profit
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(1) Details
Items Current period Preceding period
cumulative comparative
Balance before adjustment at the end of preceding period -224,644,862.48 -40,726,776.80
Add: Increase due to adjustment (or less: decrease) -14,829,568.99
Opening balance after adjustment -224,644,862.48 -55,556,345.79
Add: Net profit attributable to owners of the parent
21,964,552.84 -169,088,516.69
company
Less: Appropriation of statutory surplus reserve
Dividend payable on ordinary shares
Closing balance -202,680,309.64 -224,644,862.48
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
(1) Details
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 1,001,079,639.70 824,093,835.42 1,316,694,560.34 1,070,497,619.85
Other operations 24,164,176.13 22,812,107.07 21,589,633.87 17,276,746.81
Total 1,025,243,815.83 846,905,942.49 1,338,284,194.21 1,087,774,366.66
(2) Breakdown of revenue by main categories
Video Low voltage
Generic
Reportable segments conference distribution Others Subtotal
products
products products
Revenue recognition time
Goods (transferred at a point in
305,265,930.73 355,509,173.22 96,477,794.59 267,990,917.29 1,025,243,815.83
time)
Services (rendered over time)
Total 305,265,930.73 355,509,173.22 96,477,794.59 267,990,917.29 1,025,243,815.83
2. Taxes and surcharges
Items Current period cumulative Preceding period comparative
Urban maintenance and
1,809,453.62 3,276,155.79
construction tax
Education surcharge 1,276,393.76 2,311,072.67
Housing property tax 1,546,447.85 1,462,422.80
Land use tax 568,336.87 547,177.81
Other tax 648,528.71 704,990.25
179
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Current period cumulative Preceding period comparative
Total 5,849,160.81 8,301,819.32
3. Selling expenses
Items Current period cumulative Preceding period comparative
Employee benefits 57,079,555.56 77,048,927.73
Business entertainment 14,810,790.03 17,114,142.33
Travelling expenses 8,320,143.23 13,819,057.87
Office expenses 4,918,392.62 5,560,856.53
Sales service charges 8,246,112.93 1,038,155.51
Equipment maintain fees 626,909.61 53,959.44
Conference expenses 459,420.68 1,525,458.07
Promotion expenses 446,883.59 1,155,792.65
Transport fees 19,665,748.31
Others 6,300,627.54 9,897,334.48
Total 101,208,835.79 146,879,432.92
4. Administrative expenses
Items Current period cumulative Preceding period comparative
Employee benefits 48,670,243.18 55,926,241.69
Depreciation and amortization 6,774,510.66 6,887,635.80
Consulting, intermediary and legal
5,956,557.06 5,448,016.21
fees
Office expenses 3,264,199.44 4,275,357.00
Lease expenses 2,365,498.74 3,131,821.43
Loss from shutdown 1,903,415.67
Business entertainment 1,395,310.80 2,253,298.18
Travelling expense 750,329.40 1,461,187.42
Funding for Party Building 608,575.64 1,213,551.34
Others 3,789,065.67 6,850,720.61
Total 75,477,706.26 87,447,829.68
5. R&D expenses
Items Current period cumulative Preceding period comparative
Employee benefits 36,932,589.17 55,575,661.68
180
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Current period cumulative Preceding period comparative
Travelling expenses 1,764,237.57 3,433,025.78
Depreciation and amortization 1,427,264.34 1,555,336.33
Material use 1,277,981.90 3,270,507.03
Intermediate test fee 224,424.47 600,097.91
Commissioned development 841,669.70
Others 4,693,007.93 5,902,643.08
Total 46,319,505.38 71,178,941.51
6. Financial expenses
Items Current period cumulative Preceding period comparative
Interest expenditures 28,568,012.81 30,200,892.97
Less: Interest income 1,758,180.41 1,475,350.85
Losses on foreign exchange 19,380.93 7,720.32
Financial institution fees 216,787.73 692,502.67
Financing fee 1,149,386.79
Others 28,087.93
Total 27,074,088.99 30,575,151.90
7. Other income
Items Current period Preceding period Amount included in
cumulative comparative non-recurring profit or loss
Government grants
10,953,444.48 7,894,918.90 6,456,622.79
related to income [Note]
Service charge of
35,529.25
personal income tax
Total 10,988,973.73 7,894,918.90 6,456,622.79
Note: Please refer to section V (IV) 3 of the notes to financial statements for details on government grants included into other
income.
8. Investment income
Current period Preceding period
Items
cumulative comparative
Investment income from disposal of long-term equity
98,897,269.56
investments
Investment income from long-term equity investments under
-4,769,983.62 -297,833.76
equity method
Investment income from derecognition of financial assets at
-952,176.00
amortized cost
Total 93,175,109.94 -297,833.76
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9. Credit impairment loss
Items Current period cumulative Preceding period comparative
Bad debt loss of notes receivable -361,969.01 -323,770.52
Bad debt loss of accounts receivable -36,758,177.42 -54,184,559.30
Bad debt loss of other receivables -4,495,669.42 1,049,470.62
Total -41,615,815.85 -53,458,859.20
10. Assets impairment loss
Items Current period cumulative Preceding period comparative
Inventory write-down loss -14,421,937.22 -19,577,005.54
Total -14,421,937.22 -19,577,005.54
11. Gains on asset disposal
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative
loss
Gains on disposal of fixed assets 78,480,698.99 119,033.08 78,480,698.99
Gains on disposal of intangible
-5,923,710.98 -5,923,710.98
assets
Total 72,556,988.01 119,033.08 72,556,988.01
12. Non-operating revenue
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Unpaid employee benefits 3,337,422.56 3,337,422.56
Unpaid payables 436,331.11 362,546.35 436,331.11
Penalty income 164,707.10 63,385.71 164,707.10
Government grants 1,354,900.00
Others 363,153.86 119,216.78 363,153.86
Total 4,301,614.63 1,900,048.84 4,301,614.63
13. Non-operating expenditures
Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Penalty expenditures 2,161,289.87 343,083.03 2,161,289.87
Donation expenditures 2,000.00 2,000.00
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Amount included in
Items Current period Preceding period
non-recurring profit or
cumulative comparative loss
Others 50,605.73 25,016.81 50,605.73
Total 2,213,895.60 368,099.84 2,213,895.60
14. Income tax expenses
(1) Details
Items Current period cumulative Preceding period comparative
Current period income tax
7,504,586.94 1,279,314.02
expenses
Total 7,504,586.94 1,279,314.02
(2) Reconciliation of accounting profit to income tax expenses
Items Current period Preceding period
cumulative comparative
Profit before tax 45,179,613.75 -157,661,145.30
Income tax expenses based on tax rate applicable
6,776,942.06 -23,649,171.79
to the parent company
Effect of different tax rate applicable to
4,607,902.23 -626,836.21
subsidiaries
Effect of prior income tax reconciliation -707,905.89 498,379.34
Effect of non-deductible costs, expenses and
3,650,934.31 3,456,216.58
losses
Utilization of deductible losses not previously
-9,844,171.65
recognized as deferred tax assets
Effect of deducible temporary differences or
deductible losses not recognized as deferred tax 110,437.79 110,437.79
assets
Effect of deducible temporary differences or
9,274,215.07 31,109,797.60
deductible losses not recognized
Deduction of R&D expenditures -6,363,766.98 -9,619,509.29
Income tax expenses 7,504,586.94 1,279,314.02
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
Items Current period cumulative Preceding period comparative
Government grants 4,248,205.97 2,973,805.47
Interest income 1,758,180.41 1,475,350.85
Intercourse 3,166,427.19 14,077,394.69
Others 6,613,152.65 6,356,466.57
Total 15,785,966.22 24,883,017.58
2. Other cash payments related to operating activities
183
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Current period cumulative Preceding period comparative
Selling and Administrative
67,899,682.41 110,042,009.33
expenses paid in cash
Intercourse 9,235,390.47 2,969,125.35
Others 131,079.85 8,204.90
Total 77,266,152.73 113,019,339.58
3. Other cash receipts related to financing activities
Items Current period cumulative Preceding period comparative
Financial lease payments
30,000,000.00
received
Security of finance lease
4,000,000.00
recovered
Total 4,000,000.00 30,000,000.00
4. Other cash payments related to financing activities
Items Current period cumulative Preceding period comparative
Installment financing lease
10,430,132.25 7,930,934.99
payments
Payment of financing handling
1,149,386.79
fees
Total 10,430,132.25 9,080,321.78
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 37,675,026.81 -158,940,459.32
Add: Provision for assets impairment loss 13,888,011.56 16,620,515.26
Provision for credit impairment loss 41,615,815.85 53,458,859.20
Depreciation of fixed assets, oil and gas assets,
8,846,872.58 9,832,586.60
productive biological assets
Amortization of intangible assets 1,356,243.79 2,024,313.13
Amortization of long-term prepayments 1,802,964.46 1,734,208.58
Loss on disposal of fixed assets, intangible assets and
-72,556,988.01 -119,033.08
other long-term assets (Less: gains)
Fixed assets retirement loss (Less: gains)
Gains from derecognition of financial assets at
952,176.00
amortized cost
Losses on changes in fair value (Less: gains)
184
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Supplement information Current period Preceding period
cumulative comparative
Financial expenses (Less: gains) 28,587,393.74 31,358,000.08
Investment losses (Less: gains) -94,127,285.94 297,833.76
Decrease of deferred tax assets (Less: increase)
Increase of deferred tax liabilities (Less: decrease)
Decrease of inventories (Less: increase) -4,132,697.71 60,954,831.16
Decrease of operating receivables (Less: increase) 205,597,222.73 326,109,564.75
Increase of operating payables (Less: decrease) -79,053,430.99 -320,645,105.21
Others -2,305,976.00
Net cash flows from operating activities 88,145,348.87 22,686,114.91
(2) Significant investing and financing activities not related
to cash receipts and payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets leased in under finance leases
(3) Net changes in cash and cash equivalents:
Cash at the end of the period 170,062,746.87 208,783,866.60
Less: Cash at the beginning of the period 208,783,866.60 201,369,317.42
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 -38,721,119.73 7,414,549.18
(2) Composition of cash and cash equivalents
Items Closing balance Opening balance
1) Cash 170,062,746.87 208,783,866.60
Including: Cash on hand 2,229.39 2,273.88
Cash in bank on demand for payment 170,060,517.48 208,781,592.72
2) Cash equivalents
3) Cash and cash equivalents at the end of the period 170,062,746.87 208,783,866.60
(3) Net cash receipts from disposal of subsidiaries in current period
Items Current period cumulative
Cash and cash equivalents received in current period for subsidiary
43,431,600.00
disposal in current period
Including: Nanjing Putian Information Technology Co., Ltd. 43,431,600.00
Less: Cash and cash equivalents held by subsidiaries on which the
447,600.35
Company lost control
Including: Nanjing Putian Information Technology Co., Ltd. 447,600.35
185
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Current period cumulative
Add: Cash and cash equivalents received in current period for subsidiary
disposal in prior periods
Including: Nanjing Putian Information Technology Co., Ltd.
Net cash receipts from disposal of subsidiaries in current period 42,983,999.65
(4) Amount of endorsed commercial acceptance not involving cash receipts and payments
Items Current period cumulative Preceding period comparative
Amount of endorsed commercial
159,593,293.14 153,041,789.44
acceptance
Including: Payment for goods 159,443,293.14 152,290,789.44
Payment for acquisition of
long-term assets, such as 150,000.00 751,000.00
fixed-assets
(IV) Others
1. Assets with title or use right restrictions
Items Closing carrying amount Reasons for restrictions
Deposit for acceptance and
Cash and bank balances 39,647,679.34
deposit for L/G
Cash and bank balances 139,284.75 Bank freeze due to litigation
Fixed assets 10,352,538.63 Mortgaged borrowings
Intangible assets 3,665,962.99 Mortgaged borrowings
Total 53,805,465.71
(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 Southern Telecom Co., Ltd. 33.17 million yuan, equity of Nanjing Putian Telege
Intelligent Building 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 at the
foreign currencies end of the period
Cash and bank balances -- -- --
Including: USD 635,347.49 6.5249 4,145,578.84
EUR 522.27 8.0250 4,191.22
GBP 208.79 8.8903 1,856.21
HKD 567,899.15 0.84164 477,966.64
186
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
3. Government grants
1) Government grants related to income and used to compensate future relevant costs, expenses or losses
Opening Reduction
Recognized
Items balance of Increase caused by Closing balance of Related to
in other
deferred business deferred income asset/income
income
income combination
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 zombie related to
5,004,873.00 1,305,976.00 3,698,897.00
enterprise income
Subtotal 6,004,873.00 2,305,976.00 3,698,897.00
2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Items Amounts Presented under Remarks
VAT refund 4,399,262.51 Other income Cai Shui [2011] No.100
Special fund 2,070,000.00 Other income CZ [2019] No.13
Stable subsidy 667,423.08 Other income Nanjing social insurance management center
Subsidy from Finance Bureau of Qinhuai
Rewards of R&D 572,000.00 Other income District, Nanjing development and Reform
Commission
Subsidies for industrial Government subsidy policy of Zhonghuamen
transformation and 300,000.00 Other income Office of Nanjing Qinhuai District People's
upgrading Government
Rewards of technology Other income Subsidy from Jiangning District Finance
100,000.00
development Bureau of Nanjing
Special fund for industrial Other income Nanjing Yuhua Economic Development Zone
100,000.00
development Management Committee
Others 438,782.89 Other income
Subtotal 8,647,468.48
The amount of government subsidies included in the current profits and losses is 10,953,444.48yuan.
VI. Changes in the consolidation scope
(I) Disposal of subsidiaries
1. One-time disposal involving loss of control over a subsidiary
Difference between
Equity disposal consideration and
Equity Determination
Subsidiaries Equity disposal disposal Loss of control net assets attributable to the
disposal basis for loss of
consideration proportion date Company at the
method control date
(%) consolidated financial
statements level
Nanjing Completion of
December
Putian 43,431,600.00 100.00 transfer business 42,385,183.68
Information 25, 2020 registration
Technology change
187
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Difference between
Equity disposal consideration and
Equity Determination
Subsidiaries Equity disposal disposal Loss of control net assets attributable to the
disposal basis for loss of
consideration proportion date Company at the
method control date
(%) consolidated financial
statements level
Co., Ltd.
(II) Changes in the consolidation scope due to other reasons
1. Entities brought into the consolidation scope
Equity Capital
Entities Equity acquisition Capital
acquisition contribution
date contribution
method proportion (%)
Chongqing Puhua
Information Set up July 10, 2020 2,000,000.00 100.00%
Technology Co., Ltd
2. Entities excluded from the consolidation scope
Net profit from the
Entities Equity disposal Disposal-date
Equity disposal date period beginning to
method net assets
the disposal date
Nanjing Putian
Liquidation and
Wangzhi Electronic
cancellation
December 31, 2020 754,205.54
Co., Ltd.
Nanjing Bada
Liquidation and
Communication
cancellation
December 31, 2020 4,301,547.02
Equipment Co., Ltd.
VII. Interest in other entities
(I) Interest in 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
Telecommunications Set up
City City
Equipment Co., Ltd.
Nanjing Putian Telege Nanjing Nanjing Manufacture 45.77 Set up
Intelligent Building Ltd. City City
Nanjing Southern Nanjing Nanjing Manufacture 96.99 3.01 Set up
Telecom Co., Ltd City City
not under
Nanjing Nanman Nanjing Nanjing Manufacture 75.00 the same
Electrics Co., Ltd. City City
control
Nanjing Putian Nanjing Nanjing Manufacture 78.00 Set up
Network Co., Ltd. City City
Nanjing Putian Datang not under
Nanjing Nanjing Manufacture 40.00
Information Electronic the same
City City
Co., Ltd. control
Nanjing Putian
Nanjing Nanjing Manufacture 70.00
Communication Set up
City City
Technology Co., Ltd.
188
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Main Holding
Subsidiaries Place of Business proportion (%) Acquisition
operating
registration nature Direct Indirect method
place
Putian Communications Hong Hong Trading 100.00 Set up
(Hong Kong) Co., Ltd. Kong Kong
Chongqing Puhua
Chongqi Chongqin Manufacture 100.00
Information Set up
ng City g City
Technology Co., Ltd
(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
Holding proportion Non-controlling Dividend declared Closing balance of
Subsidiaries of non-controlling shareholders’ profit to non-controlling non-controlling
shareholders or loss shareholders interest
Nanjing Putian
Telege 54.23% 12,373,025.64 32,538,000.00 48,100,667.31
Intelligent
Building Ltd.
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 222,552,329.22 35,936,096.57 258,488,425.79 169,790,901.71 169,790,901.71
Building Ltd.
(Continued)
Opening balance
Subsidiaries
Current Non-current Total assets Current Non-current
Total liabilities
assets assets liabilities 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.
(2) Profit or loss and cash flows
189
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Current period cumulative Preceding period comparative
Subsidiaries Total Cash flows from Total Cash flows
Operating Operating
Net profit comprehensive operating Net profit comprehensive from operating
revenue revenue
income activities income activities
Nanjing Putian
Telege 360,582,564.08 22,815,831.90 22,815,831.90 72,157,846.79 362,262,442.89 23,336,955.05 23,336,955.05 57,350,651.98
Intelligent
Building Ltd.
(II) Interest in joint venture or associates
1. 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 10,422,056.96 10,422,067.61
Proportionate shares in the following
items
Net profit -10.65 -706,250.73
Total comprehensive income -10.65 -706,250.73
Associates
Total carrying amount of investments
Proportionate shares in the following
items
Net profit
Total comprehensive income
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.
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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.
3. Please refer to note V(I)2(2)；V(I)3(2); V(I)6(3) 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, 2020, the Company has certain concentration of credit risk, and 11.90% (December 31, 2019:
17.05%) 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.
191
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(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 65,000,000.00 66,950,000.00 66,950,000.00
Notes payable 76,135,010.10 76,135,010.10 76,135,010.10
Accounts payable 604,765,586.00 604,765,586.00 604,765,586.00
Other payable 49,714,907.25 49,714,907.25 49,714,907.25
Long-term payable 13,217,880.13 13,614,416.53 9,457,171.68 4,157,244.85
Subtotal 808,833,383.48 811,179,919.88 807,022,675.03 4,157,244.85
(Continued)
Opening 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 payable 23,648,012.38 24,357,452.75 11,145,431.57 13,212,021.18
Subtotal 1,285,485,336.30 1,299,752,255.12 1,286,540,233.94 13,212,021.18
(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
192
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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 fair Level 2 fair Level 3 fair
value value value Total
measurement measurement measurement
Recurring fair value measurement
1. Receivables financing 32,594,702.60 32,594,702.60
2. Other equity instrument
741,953.00 741,953.00
investments
Total assets at recurring fair value
33,336,655.60 33,336,655.60
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.
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
(1) Details
Holding
Parent Voting right
Business proportion
Place of registration Registered capital proportion over
company nature over the
the Company (%)
Company (%)
No.2 Tudi 2 Road,
China Potevio
Zhongguan Village Information
Information 1,903,050,000.00 53.49 53.49
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
193
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
SEI-Nanjing Potevio Optical Joint ventures
Network Co., Ltd.
4. Other related parties of the Company
(1) Details
Related parties Relationships with the Company
Nanjing Putian Information Technology An affiliated company of the ultimate
Co., Ltd. controlling party
An affiliated company of the ultimate
Potevio Hi-tech Industry Co., Ltd.
controlling party
Potevio innovation and Entrepreneurship An affiliated company of the ultimate
Management Co., Ltd controlling party
Nanjing Honyar Electrical Technology Co., An affiliated company of the ultimate
Ltd. controlling party
An affiliated company of the ultimate
Nanjing Honyar Electrical Co., Ltd.
controlling party
Shanghai Potevio Post and An affiliated company of the ultimate
Telecommunications Technology Co., Ltd. controlling party
Beijing Potevio Taili Communications An affiliated company of the ultimate
Technology Co., Ltd. controlling party
Hangzhou Honyar Dongbei Photoelectric An affiliated company of the ultimate
Technology Co., Ltd. controlling party
Shanghai Potevio Network Technology An affiliated company of the ultimate
Co., Ltd. controlling party
An affiliated company of the ultimate
POTEVIO Telecommunications Co., Ltd.
controlling party
An affiliated company of the ultimate
Potevio Information Technology Co., Ltd.
controlling party
Beijing Likangpu Communication An affiliated company of the ultimate
Equipment Co., Ltd. controlling party
Mennekes Electric Industrial(China) Co., Minority shareholders of subsidiaries of the
Ltd. company
An affiliated company of the ultimate
Potevio Heping Technology Co., Ltd.
controlling party
An affiliated company of the ultimate
Hangzhou Honyar Electrical Co.,Ltd.
controlling party
An affiliated company of the ultimate
Potevio International Trading Co., Ltd.
controlling party
Chengdu Putian Telecommunications An affiliated company of the ultimate
Cable Co.,Ltd. controlling party
An affiliated company of the ultimate
Eastern Communications Inc.
controlling party
An affiliated company of the ultimate
Potevio Eastern Communications Co.,Ltd.
controlling party
Potevio Science & Technology Industrial An affiliated company of the ultimate
Co., Ltd. controlling party
194
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Related parties Relationships with the Company
Tianjin Potevio Innovation and An affiliated company of the ultimate
Entrepreneur Technology Co., Ltd. controlling party
Beijing Potevio Desheng Technology An affiliated company of the ultimate
Incubator Co., Ltd controlling party
An affiliated company of the ultimate
Putian New Energy (Shenzhen) Co., Ltd.
controlling party
An affiliated company of the ultimate
Wuhan Putian New Energy Co., Ltd
controlling party
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Details
1) Purchase of goods and receiving of services
Related parties Content of transaction Preceding period
Current period cumulative
comparative
Nanjing Potevio
Telecommunication
Honyar Electrical 1,651,259.37 134,874.07
products
Technology Co., Ltd.
Potevio Information Telecommunication
68,584.07 22,123.89
Technology Co., Ltd. products
2) Sale of goods and rendering of services
Related parties Content of transaction Current period Preceding period
cumulative comparative
Potevio Information Technology Telecommunication
331,975.44 5,475,549.68
Co., Ltd. products
China Potevio Information Telecommunication
1,759,578.23 191,688,219.39
Industry Inc. products
Beijing Potevio Taili
Telecommunication
Communications Technology Co., 1,725.66 31,310.35
products
Ltd.
Hangzhou Honyar Electrical Telecommunication
241.36
Co.,Ltd. products
Telecommunication
Eastern Communications Inc. 273,476.12 14,641.59
products
Potevio Eastern Communications Telecommunication
22,641.51 16,300.00
Co.,Ltd. products
Potevio Science & Technology Telecommunication
41,299.97 602,734.41
Industrial Co., Ltd. products
Potevio Telecommunications Co., Telecommunication
1,040,734.52 4,278,714.91
Ltd. products
Beijing Potevio Desheng Telecommunication
1,923,178.85
Technology Incubator Co., Ltd products
Wuhan Putian New Energy Co., Telecommunication
297,203.55
Ltd products
2. Related party leases
(1) Details
1) The Company as the lessee
195
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Lessors Lease expenses for Lease expenses for the
Types of asset leased
current period preceding period
Potevio Hi-tech
Land and buildings 796,113.90 2,170,165.03
Industry Co., Ltd.
3. Related party guarantees
(1) Details
1) The Company and its subsidiaries as guarantors
Guaranteed parties Amount Commencement Maturity date Whether the guarantee is
guaranteed date mature
Nanjing Southern 10,000,000.00 2020/4/17 2021/1/8 No
Telecom Co., Ltd
Nanjing Southern 10,000,000.00 2020/4/17 2021/4/17 No
Telecom Co., Ltd
2) The Company and its subsidiaries as guaranteed parties
Guarantors Amount Commencement Maturity date Whether the guarantee is
guaranteed date mature
China Potevio
Information Industry 50,000,000.00 2019/6/5 2020/5/14 Yes
Inc.
China Potevio
Information Industry 30,000,000.00 2020/1/3 2021/1/3 No
Inc.
China Potevio
Information Industry 50,000,000.00 2020/10/19 2021/10/19 No
Inc.
4. Call loans between related parties
Entrusted loans and interest expenses
Current period cumulative Preceding period comparative
with parent company
Entrusted loans 262,000,000.00
Entrusted interest expenses 12,867,202.78 13,560,288.33
5. Assets transfer and debt restructuring of the related parties
Related parties Content of related party Preceding period
Pricing basis Current period cumulative
transactions comparative
Potevio innovation
and Entrepreneurship Equity transfer Evaluation value 227,492,228.00 61,032,085.88
Management Co.,
Ltd
Potevio innovation
and Entrepreneurship Equity transfer Evaluation value 43,431,600.00 42,385,183.68
Management Co.,
Ltd
Potevio innovation
and Entrepreneurship Assets transfer Evaluation value 110,383,600.00 60,170,295.26
Management Co.,
Ltd
(1) The company transferred its 49.64% equity of Potevio Hi-tech Industry Co., Ltd. to Potevio Innovation and Entrepreneur
196
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Technology Co., Ltd. at a price of 227.49 million yuan, and the investment income confirmed in this transaction was 61.03 million
yuan. The transaction was appraised by Beijing zhongtianhua Assets Appraisal Co., Ltd. and the appraisal report of Zhongzi
Pingbaozi [2020] No. 10888 was issued. The 100% equity value of Putian hi tech Industry Co., Ltd. appraised is 458.28 million yuan,
and the corresponding 49.64% equity value is 227.49 million yuan. As of December 23, 2020, the company has received all the
above transfer price.
(2) The company transferred its 100.00% equity of Nanjing Putian Information Technology Co., Ltd. to Potevio Innovation and
Entrepreneur Technology Co., Ltd. at a price of 43.43 million yuan, and the investment income confirmed in this transaction was
42.39 million yuan. The transaction was evaluated by China Capital Asset Appraisal Co., Ltd. and issued the appraisal report of
Zhongzi Pingbaozi [2020] No. 412. The 100.00% equity value of Putian hi tech Industry Co., Ltd. was 43.43 million yuan. As of
December 23, 2020, the company has received all the above transfer price.
(3) The company transferred the land and real estate of No. 1 Putian road held by it to Potevio Innovation and Entrepreneur
Technology Co., Ltd. at a price of 110.38 million yuan, and the asset disposal income of 60.17 million yuan was confirmed in this
transaction. The transaction was evaluated by Beijing Zhongtianhua Assets Appraisal Co., Ltd. and issued the appraisal report of
Zhongzi Pingbaozi [2020] No. 10887. The estimated value of the land and real estate of No. 1 Putian Road is RMB 110.38 million
yuan. As of December 23, 2020, the company has received all the above transfer prices.
6. Key management’s emoluments
Items Current period cumulative Preceding period comparative
Key management’s emoluments 2,430,976.00 1,796,209.00
(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
Accounts
receivable
China Potevio
5,890,775.42 2,761,564.47 12,500,971.72 2,537,197.33
Information Industry Inc.
Potevio Information
6,900,298.36 536,650.66 14,018,807.64 525,759.59
Technology Co., Ltd.
Shanghai Potevio
Network Technology Co., 536,319.70 132,831.97 536,319.70 110,415.99
Ltd.
Shanghai Potevio Post
8,755,534.00 8,755,534.00 8,755,534.00 8,755,534.00
and Technology Co., Ltd.
Eastern Communications
20,659.60 206.60 20,659.60 371.18
Inc.
Potevio Eastern
127,974.15 3,182.80
Communications Co.,Ltd.
Potevio
Telecommunications Co., 4,317,924.00 168,855.00 5,193,281.30 84,350.07
Ltd.
Tianjin Potevio
Innovation and
4,546.26 454.63 4,546.26 227.31
Entrepreneur Technology
Co., Ltd.
Beijing Potevio Desheng
Technology Incubator 107,164.50 1,071.65
Co., Ltd
197
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Closing balance Opening balance
Items Related parties
Book balance Provision for Book balance Provision for
bad debts bad debts
Potevio Company
629,899.32 311,049.45
Limited.
Subtotal 26,533,221.84 12,357,168.98 41,787,993.69 12,328,087.72
Advances
paid
Potevio Heping
436,294.00
Technology Co., Ltd.
China Potevio
420,000.00
Information Industry Inc.
Subtotal 420,000.00 436,294.00
Other
receivables
China Potevio
2,245,100.00 1,062,255.00 1,958,000.00 496,900.00
Information Industry Inc.
Potevio Eastern
30,000.00 1,500.00
Communications Co.,Ltd.
Potevio Information
1,203,052.00 60,152.60 1,203,052.00 60,152.60
Technology Co., Ltd.
Putian New Energy
1,150.06 57.50
(Shenzhen) Co., Ltd.
Subtotal 3,448,152.00 1,122,407.60 3,192,202.06 558,610.10
2. Balance due to related parties
Items Related parties Closing balance Opening balance
Accounts
payable
SEI-Nanjing Potevio Optical Network
20,220,725.66 20,530,725.66
Co., Ltd.
China Potevio Information Industry Inc. 18,332,258.02 19,641,228.50
Nanjing Potevio Honyar Electrical Co.,
242,595.99
Ltd.
Shanghai Potevio Network Technology
11,685.00 11,685.00
Co., Ltd.
Mennekes Electric Industrial(China)
5,508,839.24
Co., Ltd.
Potevio Hi-tech Industry Co., Ltd. 25,000.00 25,000.00
Nanjing Potevio Honyar Electrical
136,848.85
Technology Co., Ltd.
Subtotal 38,589,668.68 46,096,923.24
Advances
received
China Potevio Information Industry Inc. 4,690,537.30 2,708,112.86
Potevio Company Limited. 13,239.48
Wuhan Putian New Energy Co., Ltd 12,120.00
Subtotal 4,715,896.78 2,708,112.86
Other
payables
SEI-Nanjing Potevio Optical Network
83,000.00
Co., Ltd.
Potevio Hi-tech Industry Co., Ltd. 3,588,281.58 3,535,518.07
198
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Related parties Closing balance Opening balance
Potevio Information Technology Co.,
555,000.00 400,000.00
Ltd.
Potevio Telecommunications Co., Ltd. 200,000.00 200,000.00
China Potevio Information Industry Inc. 475,310.00
Potevio Company Limited. 9,580,000.00 14,580,000.00
Subtotal 13,923,281.58 19,273,828.07
XI. Commitments and contingencies
(I) Significant commitments
None.
(II) Contingencies
None.
XII. Events after the balance sheet date
None.
XIII. Other significant events
(I) Segment information
1. Identification basis for reportable segments
Reportable segments are identified based on operating segments which are determined based on the structure of the Company’s
internal organization, management requirements and internal reporting system. The Company identified reportable segments based
on products, which include video conferencing products, generic cable products, electrical products, wiring products, and other
products. Assets and liabilities shared by different segments are allocated pro rata among segments.
The Company identified reportable segments based on products, assets and liabilities of each segment are the actual amount of its
proportion in assets and liabilities, and revenue from main operations and cost of main operations are those generated or incurred by
each product segment.
2. Financial information of reportable segments
Products segment
Video
Items Generic cable Electrical Wiring products Inter-segment Total
conferencing
products products offsetting
products
Revenue from
314,877,571.26 357,130,844.30 96,477,794.59 287,776,479.36 -55,183,049.81 1,001,079,639.70
main operations
Cost of main
260,805,089.88 277,322,277.49 71,403,862.96 268,702,106.80 -54,139,501.71 824,093,835.42
operations
Total assets 267,796,243.51 258,488,425.79 195,003,137.30 755,481,906.59 -309,161,302.37 1,167,608,410.82
Total liabilities 180,341,049.02 169,790,901.71 143,153,401.62 605,149,628.24 -227,261,631.57 871,173,349.02
XIV. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Accounts receivable
199
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(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
59,944,074.91 17.44 59,944,074.91 100.00
made on an individual basis
Receivables with provision
283,799,350.56 82.56 64,912,032.38 22.87 218,887,318.18
made on a collective basis
Total 343,743,425.47 100.00 124,856,107.29 36.32 218,887,318.18
(Continued)
Opening balance
Categories Book balance Provision for bad debts
Carrying amount
Amount % to total Amount Provision
proportion (%)
Receivables with provision
31,829,378.66 6.28 31,411,610.66 98.69 417,768.00
made on an individual basis
Receivables with provision
475,258,345.40 93.72 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
2) Accounts receivable with provision made on an individual basis
Debtors Book balance Provision for bad Provision Reasons for
debts proportion (%) provision made
Dongpo Xi Laos Co., Ltd. 19,708,086.54 19,708,086.54 100.00 Unable to collect
Mr. Xu 17,591,683.74 17,591,683.74 100.00 Unable to collect
China Tower Corporation Unable to collect
13,819,926.92 13,819,926.92 100.00
Ltd.
Nanjing Zhengqian
Communication Technology 5,356,181.55 5,356,181.55 100.00 Unable to collect
Co., Ltd
Nanjing Aerte photoelectric Unable to collect
3,468,196.16 3,468,196.16 100.00
Co., Ltd
Subtotal 59,944,074.91 59,944,074.91 100.00
3) Accounts receivable with provision for bad debts made on an age analysis
Closing balance
Ages
Provision proportion
Book balance Provision for bad debts
(%)
Within 1 year 96,982,273.63 969,822.74 1.00
1-2 years 44,989,354.77 2,249,467.74 5.00
2-3 years 71,183,792.40 7,118,379.24 10.00
3-4 years 17,541,941.61 5,262,582.48 30.00
4-5 years 7,155,905.31 3,577,952.66 50.00
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Closing balance
Ages
Provision proportion
Book balance Provision for bad debts
(%)
Over 5 years 45,733,827.52 45,733,827.52 100.00
Subtotal 283,587,095.24 64,912,032.38 22.89
(2) Changes in provision for bad debts
Increase Decrease
Items Opening Closing
balance Accrual Recovery Others Reversal Write-off Others balance
Receivables
with provision
31,411,610.66 28,532,464.25 59,944,074.91
made on an
individual basis
Receivables
with provision
59,678,795.33 5,233,237.05 64,912,032.38
made on a
collective basis
Subtotal 91,090,405.99 33,765,701.30 124,856,107.29
(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 (%)
Dongpo Xi Laos Co., Ltd. 19,708,086.54 5.73 19,708,086.54
Mr. Xu 17,591,683.74 5.12 17,591,683.74
Hegang branch of China Tower Co.,
13,819,926.92 4.02 13,819,926.92
Ltd
Nanjing yuanzun Electromechanical
12,362,665.79 3.60 2,353,301.27
Equipment Co., Ltd
Shenzhen Zhongchuang Electric
11,171,751.30 3.25 1,117,175.13
Measurement Technology Co., Ltd
Subtotal 74,654,114.29 21.72 54,590,173.60
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 36.68 33,010,009.04 100.00
on an individual basis
Receivables with provision
56,983,224.19 63.32 6,708,072.23 11.77 50,275,151.96
made on a collective basis
Total 89,993,233.23 100.00 39,718,081.27 44.13 50,275,151.96
(Continued)
Categories Opening balance
201
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
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
Receivables with provision
31,371,561.56 48.73 4,609,744.49 14.69 26,761,817.07
made on a collective basis
Total 64,381,570.60 100.00 37,619,753.53 58.43 26,761,817.07
2) Other receivables with provision made on an individual basis
Provision
Debtors Book balance Provision for bad Reasons for
proportion
debts provision made
(%)
Beijing Likangpu
Communication Equipment 28,912,122.71 28,912,122.71 100.00 Unable to collect
Co., Ltd.
Putian Communications Unable to collect
4,097,886.33 4,097,886.33 100.00
(Hong Kong) Co., Ltd.
Subtotal 33,010,009.04 33,010,009.04 100.00
3) Other receivables with provision made on a collective basis
Closing balance
Portfolios
Book balance Provision for bad debts Provision proportion (%)
Portfolio-Financing
1,578,947.37
margin
Portfolio-Other 58,864,402.62 10,168,198.03 17.27
Subtotal 60,443,349.99 10,168,198.03 16.82
(2) Ages
Items Closing book balance Opening book balance
Within 1 year 38,298,614.15 16,695,643.58
1-2 years 5,217,214.31 9,027,575.59
2-3 years 7,373,694.63 1,742,931.56
3-4 years 1,648,262.87 1,528,457.97
4-5 years 1,321,643.00 563,113.00
Over 5 years 36,133,804.27 34,823,848.90
Subtotal/Total 89,993,233.23 64,381,570.60
(3) Changes in provision for bad debts
Phase I Phase II Phase III
Items 12 month Lifetime expected Lifetime expected Subtotal
expected credit losses (credit credit losses (credit
credit losses not impaired) impaired)
Opening balance 704,333.65 36,915,419.88 37,619,753.53
Opening balance in
current period
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Phase I Phase II Phase III
Items 12 month Lifetime expected Lifetime expected Subtotal
expected credit losses (credit credit losses (credit
credit losses not impaired) impaired)
--Transferred to phase II
--Transferred to phase III -119,804.90 119,804.90
--Reversed to phase II
--Reversed to phase I
Provision made in current
-103,624.17 2,201,951.91 2,098,327.74
period
Provision recovered in
current period
Provision reversed in
current period
Provision written off in
current period
Other changes
Closing balance 480,904.58 39,237,176.69 39,718,081.27
(4) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 76,617,770.01 47,366,428.11
Deposit as security 10,992,593.44 15,794,589.88
Travel reserve fund 796,798.91 630,902.93
Others 1,586,070.87 589,649.68
Total 89,993,233.23 64,381,570.60
(5) Details of the top 5 debtors with largest balances
Proportion to the
Debtors Nature of Book balance Ages Provision for
total balance of other
receivables bad debts
receivables (%)
Temporary
Beijing Likangpu
advance Over 5 years
Communication 28,912,122.71 32.13 28,912,122.71
payment
Equipment Co., Ltd.
receivable
China Potevio
Deposit as 2-5 years
Information 1,958,000.00 2.18 1,046,900.00
security
Industry Inc.
Far East
Financing 1-2 years
International 1,578,947.37 1.75 -
deposit
Leasing Co.,Ltd.
Potevio Information
Deposit as 2-3years
Technology Co., 1,203,052.00 1.34 60,152.60
security
Ltd.
Nanjing Putian
Deposit as 1-5 years
Communication 794,451.12 0.88 624,226.14
security
Industry Co., Ltd
Subtotal 34,446,573.20 38.28 30,643,401.45
3. Long-term equity investments
203
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
(1) Details
Closing balance Opening balance
Items
Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Investments in
115,319,587.64 1,910,520.00 113,409,067.64 153,218,270.64 1,910,520.00 151,307,750.64
subsidiaries
Investments in
associates and 10,422,056.96 10,422,056.96 181,762,383.50 181,762,383.50
joint ventures
Total 125,741,644.60 1,910,520.00 123,831,124.60 334,980,654.14 1,910,520.00 333,070,134.14
(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 Putian Changle
Telecommunications 2,610,457.00 2,610,457.00
Equipment Co., Ltd.
Nanjing Putian Telege
3,320,003.45 3,320,003.45
Intelligent Building Ltd.
Nanjing Southern Telecom Co.,
33,175,148.00 33,175,148.00
Ltd
Nanjing Nanman Electrics Co.,
57,831,011.71 57,831,011.71
Ltd.
Nanjing Putian Network Co.,
7,741,140.41 7,741,140.41
Ltd.
Nanjing Putian Datang
Information Electronic Co., 5,436,797.07 5,436,797.07
Ltd.
Nanjing Putian
Telecommunication 1,294,510.00 1,294,510.00
Technology Co., Ltd.
Nanjing Putian Wangzhi
20,428,683.00 3,412,266.00 23,840,949.00
Electronic Co., Ltd.
Nanjing Bada Communication
5,610,000.00 5,610,000.00
Equipment Co., Ltd.
Nanjing Putian Information
13,860,000.00 13,860,000.00
Technology Co., Ltd.*
Putian Telecommunications
1,910,520.00 1,910,520.00 1,910,520.00
(H.K.) Co., Ltd.
Chongqing Puhua Information
2,000,000.00 2,000,000.00
Technology Co., Ltd
Subtotal 153,218,270.64 5,412,266.00 43,310,949.00 115,319,587.64 1,910,520.00
(3) Investments in associates and joint ventures
Increase/Decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
Joint ventures
SEI-Nanjing Potevio
Optical Network Co., 10,422,067.61 -10.65
Ltd.
204
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Increase/Decrease
Investees Opening balance Investment income Adjustment in other
Investments Investments
recognized under comprehensive
increased decreased
equity method income
Subtotal 10,422,067.61 -10.65
Associates
Potevio Hi-tech
171,340,315.89 166,460,142.12 -4,769,972.97
Industry Co., Ltd.
Subtotal 171,340,315.89 166,460,142.12 -4,769,972.97
Total 181,762,383.50 166,460,142.12 -4,769,972.97
(Continued)
Increase/Decrease
Closing
Investees Cash balance of
Closing balance
Changes in dividend/Profit Provision for provision for
Others impairment
other equity declared for impairment
distribution
Joint ventures
SEI-Nanjing
Potevio Optical 10,422,056.96
Network Co., Ltd.
Subtotal 10,422,056.96
Associates
Potevio Hi-tech
110,200.80
Industry Co., Ltd.
Subtotal 110,200.80
Total 110,200.80 10,422,056.96
(II) Notes to items of the parent company income statement
1. Operating revenue/Operating cost
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 189,850,952.52 182,844,309.33 421,674,918.84 386,876,567.34
Other operations 14,466,948.04 16,357,549.35 12,229,061.04 10,560,944.21
Total 204,317,900.56 199,201,858.68 433,903,979.88 397,437,511.55
2. Investment income
Items Current period cumulative Preceding period comparative
Investment income from long-term
equity investments under cost 82,727,700.00 9,153,400.00
method
Investment income from long-term
-4,769,983.62 -297,833.76
equity investments under equity
205
Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Current period cumulative Preceding period comparative
method
Gains on disposal of long-term
79,250,527.14
equity investments
Gains from derecognition of
-952,176.00
financial assets at amortized cost
Total 156,256,067.52 8,855,566.24
XV. Other supplementary information
(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss
(1) Details
Items Amount Remarks
Gains on disposal of non-current assets, including write-off
171,454,257.57
of provision for impairment
Government grants included in profit or loss (excluding
those closely related to operating activities of the
Company, satisfying government policies and 6,456,622.79
regulations, and continuously enjoyed with certain
quantity/quota based on certain standards)
Other non-operating revenue or expenditures 1,135,543.03
Subtotal 179,046,423.39
Less: Enterprise income tax affected 122,246.44
Non-controlling interest affected (after tax) 2,566,581.35
Net non-recurring profit or loss attributable to shareholders
176,357,595.60
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 shareholders
12.29 0.1022 0.1022
of ordinary shares
Net profit attributable to shareholders
of ordinary shares after deducting -86.41 -0.7181 -0.7181
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 21,964,552.84
Non-recurring profit or loss B 176,357,595.60
Net profit attributable to shareholders of ordinary shares after C=A-B -154,393,042.76
deducting non-recurring profit or loss
Opening balance of net assets attributable to shareholders of D
ordinary shares
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Nanjing Putian Telecommunications Co., Ltd. 2020 Annual Report
Items Symbols Current period
cumulative
Net assets attributable to shareholders of ordinary shares
increased due to offering of new shares or conversion of E
debts into shares
Number of months counting from the next month when the F 1,805,691.41
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 12.00
appropriation
Number of months counting from the next month when the H -77,806.80
net assets were decreased to the end of the reporting period
Retranslation J 6.00
Others Number of months counting from the next
month when other net assets were increased K 12.00
or decreased to the end of the reporting
period
Number of months in the reporting period K 178,680,787.90
Weighted average net assets L= D+A/2+
12.29
E×F/K-G×H/K±I×J/K
Weighted average RONA M=A/L -86.41
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 21,964,552.84
Non-recurring profit or loss B 176,357,595.60
Net profit attributable to shareholders of ordinary shares after C=A-B -154,393,042.76
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 0.1022
Basic EPS after deducting non-recurring profit or loss N=C/L -0.7181
Calculation process of diluted EPS is the same as calculation process of basic EPS.
207
Nanjing Putian Telecommunications Co., Ltd. 2020 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.
20 April 2021
208
