Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
2017Annual Report
April 2018
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Nanjing Putian Telecommunications Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Li Linzhen, Principal of the Company, Li Linzhen, person in charge of accounting works and Gao Wen, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2017 Annual Report is authentic, accurate and complete.
All the directors are present the meeting of the Board for deliberating the report of the Company in person.
Concerning the forward-looking statements with development strategy, operation plans and targets involved in the Report, they do not constitute a substantial commitment for investors. Investors are advised to exercise caution when investment risks exist.
The Company required the investors to read the full text of this annual report carefully and pay special attention to the following risk factors:
1. As the net profit attributable to the shareholders for the three consecutive years in 2014, 2015 and 2016 was a negative value, stock of the Company suspended since 11 May 2017 on Shenzhen Stock Exchange. According to the audit report issued by Pan-China Certified Public Accountants (LLP), the audited net profit attributable to shareholders of the listed companies for 2017 of the Company was RMB 11,885,170.28. The Company planned to submit an application for resumption of listing to the Shenzhen Stock Exchange within five
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report trading days after the disclosure of the 2017 Annual Report. According to the relevant provisions of the “Stock Listing Rules of Shenzhen Stock Exchange”, Shenzhen Stock Exchange would make a decision on whether to approve the application for the resumption of the listing of shares of the Company based on the review. The Company is subject to the risk of termination of listing as stipulated in the “Stock Listing Rules of Shenzhen Stock Exchange”.
2. The Company has analyzed the risk factors that the Company may face in the future in the “Section 4 Business Situation Discussion and Analysis” of this report, investors are advised to check the information.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2 Section II Company Profile and Main Finnaical Indexes ............................................................. 6 Section III Summary of Company Business ................................................................................ 10 Section IV Discussion and Analysis of Operation ....................................................................... 14 Section V Important Events .......................................................................................................... 33 Section VI Changes in shares and particular about shareholders ............................................... 55 Section VII PreferredStock……………………………………………………………………..61 Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 62 Section IX Corporate Governance ................................................................................................. 75 Section X Corporate Bonds ........................................................................................................... 80 Section XI Financial Report .......................................................................................................... 81 Section XII Documents available for reference ......................................................................... 172
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|CSRC|Refers to|China Securities Regulatory Commission|
|SZ Stock Exchange|Refers to|Shenzhen Stock Exchange|
|||China Potevio Company Limited (controlling shareholder of the|
|China Potevio|Refers to||
|||Company)|
|The Company, Company, Nanjing Putian|Refers to|Nanjing Putian Telecommunications Co., Ltd.|
|||Nanjing Southern Telecom Co., Ltd. (controlling subsidiary of the|
|Southern Telecom|Refers to||
|||Company)|
|||Nanjing Putian Telege Intelligent Building Co., Ltd. (controlling|
|Telege Building|Refers to||
|||subsidiary of the Company)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section II Company Profile and Main Finnaical Indexes
I. Company information
|||||
|-|-|-|-|
|Short form of the stock|*ST NJ TEL B|Stock code|200468|
|Short form of the stock after||||
||N/A|||
|changing (if applicable)||||
|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|Li Linzhen|||
||No. 58 Qinhuai Road, Jiangning Economics and Technology Development Zone, Nanjing, Jiangsu|||
|Registrations add.||||
||Province|||
|Code for registrations add|211100|||
|Offices add.|No. 1 Putian Road, Qinhuai District Nanjing, Jiangsu Province|||
|Codes for office add.|210012|||
|Company’s Internet Web Site|www.postel.com.cn|||
|E-mail|securities@postel.com.cn|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Li Jing|Xiao Hong|
||No. 1 Putian Road, Qinhuai District|No. 1 Putian Road, Qinhuai District|
|Contact address|||
||Nanjing, Jiangsu Province|Nanjing, Jiangsu Province|
|Tel.|86-25-58962308|86-25-58962072|
|Fax.|86-25-52409954|86-25-52409954|
|E-mail|lijing@postel.com.cn|xiaohong@postel.com.cn|

III. Information disclosure and preparation place
|||
|-|-|
|Newspaper appointed for information disclosure|Securities Times; Hong Kong Commercial Daily|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Website for annual report publish appointed by CSRC|w ww.cninfo.com.cn|
|Preparation place for annual report|Office of the Board|

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)|Co., Ltd. The controlling shareholder of the Company changed to China Potevio Co.,|
||Ltd.|

V. Other relevant information
CPA engaged by the Company
|||
|-|-|
|Name of CPA|Pan-China Certifier Public Accountants (LLP)|
||17/F, Tower B, Beijing International Building, No. 18, Nandajie Jia, ZOL, Haidian District,|
|Offices add. for CPA||
||Beijing|
|Signing Accountants|He Jiangxing, Jin Jingyu|

Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable√ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable√ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes√ No
||||||
|-|-|-|-|-|
||2017|2016|Changes over last year|2015|
|Operating income (RMB)|2,254,399,406.04|1,853,911,278.83|21.60%|1,893,212,218.81|
|Net profit attributable to|11,885,170.28|-6,434,558.27|||
|shareholders of the listed|||284.71%|-16,590,830.26|
|Company(RMB)|||||
|Net profit attributable to|||||
|shareholders of the listed Company|||||
||9,156,761.14|-11,286,693.14|181.13%|-30,429,390.88|
|after deducting non-recurring gains|||||
|and losses(RMB)|||||
|Net cash flow arising from|-47,217,136.32|109,145,940.57|-143.26%|15,972,428.63|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
|operating activities(RMB)|||||
|Basic earnings per share|0.06|-0.03|||
||||300.00%|-0.08|
|(RMB/Share)|||||
|Diluted earnings per share|0.06|-0.03|||
||||300.00%|-0.08|
|(RMB/Share)|||||
|Weighted average ROE|3.43%|-1.87%|5.30%|-4.67%|
||||Changes over end of||
||End of 2017|End of 2016||End of 2015|
||||last year||
|Total assets (RMB)|2,116,312,318.51|2,304,519,167.54|-8.17%|2,093,670,119.65|
|Net assets attributable to|352,228,571.54|339,838,415.21|||
|shareholder of listed Company|||3.65%|346,684,394.29|
|(RMB)|||||

VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
||||||
|-|-|-|-|-|
||First quarter|Second quarter|Third quarter|Fourth quarter|
|Operating income|356,684,098.74|655,712,308.65|521,084,332.49|720,918,666.16|
|Net profit attributable to|||||
|shareholders of the listed|-20,717,596.23|7,470,872.60|13,585,613.61|11,546,280.30|
|Company|||||
|Net profit attributable to|||||
|shareholders of the listed|||||
||-20,711,454.82|6,427,681.24|11,614,103.91|11,826,430.81|
|Company after deducting|||||
|non-recurring gains and losses|||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
|Net cash flow arising from|||||
||-197,146,881.56|60,982,287.75|-60,373,106.84|149,320,564.33|
|operating activities|||||

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in theCompany’s quarterly report and semi-annual report
□Yes√ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Item|2017|2016|2015|Note|
|Gains/losses from the disposal of|-481,922.28||||
|non-current asset (including the write-off||210,219.85|92,545.87||
|that accrued for impairment of assets)|||||
|Governmental subsidy reckoned into current|5,534,839.79||||
|gains/losses (not including the subsidy|||||
|enjoyed in quota or ration according to||6,572,800.76|12,644,912.02||
|national standards, which are closely|||||
|relevant to enterprise’s business)|||||
|Gains/losses of debt restructuring|-34,865.18||||
|Other non-operating income and expenditure|49,304.02||||
|||1,094,096.82|1,539,116.41||
|except for the aforementioned items|||||
|Less: impact on income tax|1,150,984.62|133,851.87|379,452.44||
|Impact on minority shareholders’|1,187,962.59||||
|||2,891,130.69|58,561.24||
|equity (post-tax)|||||
|Total|2,728,409.14|4,852,134.87|13,838,560.62|--|

Concerning the extraordinary profit (gain)/loss defined byQ&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 inQ&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 inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with the disclosure requirement of the special industry
No
1. Principal Business and Products of the Company
The Company is a state-controlled communications equipment manufacturing Company, of which the main business isR&D, production and sales of information communication equipment. After years of continuous industrial restructuring and transformation and upgrading, at present, the products of the Company and its subsidiaries cover optical communication networks, wireless communication networks, data applications, industrial electric and other fields, form the information communication industry sector, data application industry sector, integrated access and electrical complete set industry sector, and smart city and emerging industry segment. The main products include wiring connection equipment, special network communication products, multimedia communication equipment, building intelligent products, and integrated solutions for smart city construction. Customers include domestic telecom operators and governments, and industry customers in financial, medical, education fields, the products cover all provinces and cities in the country and are exported to foreign countries. In 2017, the Company won the “Top Ten Most Influential Enterprises of Optical Transmission and Network Access Equipment in China” for the 10th consecutive years. The Company has mastered a number of core patented technologies in the information communication field, as of December 31, 2017, the Company and its subsidiaries have had 173 patents (including 48 patents for inventions) and 42 software copyrights.
At present, theCompany’s headquarters has set up wiring system department, southern branch, system integration division, cloud network digital communication division, international business department and other operating entities directly subordinated to the Company, the products include wiring connection equipment, special network communication products, and integrated solutions for smart city construction. There are various kinds of wiring products, such as distribution frames, outdoor communication products, power supply products for communication rooms, indoor fiber optic cables, and IODN (intelligent optical distribution network), among which the IODN based on two-dimensional code electronic tags was rated as a new high-tech product of Jiangsu Province, mainly used for the domestic communication networks construction, radio and television networks, high-speed railway communications, and urban subway construction. Since 2016, the Company has introduced the processing, production and supporting services of special network communication products.
At present, the Company has a total of 11 subsidiaries. The conditions of main subsidiaries are as follows:
The subsidiary South Telecom Co., Ltd. is a service provider providing multimedia communication and application solutions, it is the general agent of Polycom, Inc. in China, and independently developed the “Ruizhi” conference integrated management system and “Ruijing” multimedia information distribution /video live broadcast systems and other products which can be targeted at industry customers in government, finance, medical treatment, education, energy, transportation, and other fields, and can provide multimedia communication and application solutions forcustomers’ personalized needs.
The subsidiary Nanjing Putian Telege Intelligent Building Co., Ltd. is mainly engaged in the development, production and sales of cabling system and intelligent building series products, its products include copper cabling, fiber optic cabling, home cabling, intelligent building systems, etc., and it provides physical connections and intelligent application solutions for users, such as 4G communications, optical communication, data center, building intelligence, etc.
The main business of Nanjing Mennekes Electric Appliances Co. Ltd., a subsidiary Company, is the manufacturing of industrial intelligent power distribution products, the main products include low-voltage distribution boxes, socket boxes, switch cabinets, and maintenance boxes, etc., which are used in various types of industrial sites such as rail transit, steel, chemical industry, electric power, and electronics, etc., of which the low-voltage distribution boxes with switch-disconnector contact on-off visualization and the 6300A
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report intelligent high-security low-voltage drawer-type switch cabinet has been rated as high-tech products of Jiangsu Province.
The subsidiary Nanjing Putian Datang Information Electronics Co., Ltd. is mainly engaged in the research, development, production, and sales of solar energy controllers and the production and processing business of electronic products. The products include solar energy controllers, street-light monitoring systems for the internet of things, etc. TheCompany’s solar control research center has been identified as “Nanjing Engineering Technology Research Center”, and the boost constant current solar energy controller has been rated as a high-tech product of Jiangsu Province.
2. TheCompany’s business model
At present, the management department of theCompany’s headquarters mainly assumes the functional management and decision-making service function, and the procurement, production, and sales of raw material are distributed among the business divisions and subsidiaries.
Procurement model
The fixed assets of the Company are uniformly purchased by the headquarters purchasing center. The production materials are purchased by each operating entity according to the production plan, and the headquarters purchasing center supervises and administers the procurement process, and invites bids for bulk materials.
Production model
As a manufacturing enterprise, theCompany’s production model is mainly to design and manufacture products required by customers according to thecustomer’s orders, plan for production and purchase raw materials according to the products specified in the orders, the Company can manufacture the desired products according to the special requirements of customers and use information management measures to reduce inventory to a safe and controllable range.
Sales model
The Company has a market network covering all parts of the country, and its main customers include domestic telecom operators and customers in various industries. The Company mainly participates in project bidding through direct sales to obtain business opportunities; designs scheme, produces or purchases the equipment required by customers according to the project requirements, and takes responsible for installation and debugging, and achieves profits in accordance with the contract price after deducting the costs. 3. TheCompany’s performance drivers
As a communications equipment manufacturing Company, the Company mainly achieves revenue and profit by winning the bid for customer projects and formulating solutions, providing products and supporting services for customers. The main factors affecting theCompany’s performance include the signing of orders, fluctuations in raw material prices, and changes in taxes, fees and other costs. 4. The status of industry development and the industry status of the Company during the reporting period
The year 2017 was a year of deepening the structural reform of thecountry’s supply side.China’s economy has shifted from a high-speed growth phase to a high-quality development phase. With the in-depth implementation of strategies such as “Internet+”, “Broadband China”, and “Made in China 2025”, the information communications industry as a whole is showing a steady and positive development tendency.
As a domestic communications equipment manufacturing enterprise with long history, the Company has established a good brand strength and influence in the industry market. The Company is one of the major manufacturing enterprises in the domestic cabling field which provides communication guarantees for national key projects. Its subsidiary South Telecom is a major global distributor of video conference products of Polycom, it has continued to strengthen independent research and development, expand multimedia integration, and expand the scale of its own products, and it won the National“Internet+” Outstanding Achievement Gold Award in 2017 for three consecutive years. The subsidiary Nanjing Putian Telege Intelligent Building Co., Ltd. has good channel resources for the integrated cabling products, it has focused on the independent innovation and continued to improve the brand awareness, its high-density fiber cabling system won the “2016 China Data Center Innovation Award”. In 2017, the Company was rated as a contract-worthy and credit-worthy enterprise by Nanjing City, its subsidiary Nanjing Mennekes Electric Appliances Co. Ltd. won the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report title of “Nanjing Four-Star Level Digital Enterprise”, and Nanjing Putian Datang Information Electronics Co., Ltd. was awarded the title of “Special, Excellent, Extraordinary and New Small and Medium-Sized Enterprises of Nanjing City”.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Equity assets|No major changes in the period|
|Fixed assets|No major changes in the period|
|Intangible assets|No major changes in the period|
|Construction in progress|No major changes in the period|
||Monetary fund has 328 million Yuan at end of the Year, decreased 192 million Yuan over|
|Monetary fund|that of year-beginning, mainly because: bank loans decreased in the period and account|
||payable declined|
||Note receivable has 32.48 million Yuan at end of the Year, decreased 27.27 million Yuan|
|Note receivable|over that of year-beginning, mainly because the bank acceptance and trade acceptance|
||are maturity acceptance at beginning of the year.|

2. Main overseas assets
□ Applicable√ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with the disclosure requirement of the special industry
No
As a subsidiary of Potevio a large-scale enterprise directly under the Central Government, the Company has developed into a manufacturing enterprise of communication equipments with diversified product structures after years of effort. The primary business of the Company is divided into sectors including information communication industry sector, data application industry sector, integrated access and electrical complete set industry sector smart city and emerging industry sector, falls within the fields to be developed and supported with national focus and having greater market demand and promising development prospect. With a complete industry chains and good capacity inR&D, production and marketing, the Company has established good brand power and influence in the industry market and operators market. In recent years, the Company has continued to accelerate the structural adjustment and upgrading of the enterprise and gradually transformed from a single product manufacturer to an integrated solution provider so as to further ensure the industrial competitiveness and enhance
the ability of sustainable development.
The Company has a mature marketing network and good product promotion and marketing capabilities, and has
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report established long-term cooperation relations with the operators, it has a wide range of wiring products, and has won many awards related to wiring products. Its subsidiary South Telecom is the major global distributor of video conference products of Polycom, in recent years, it has strengthened the independent innovation, the proportion of independent product management has gradually increased, and the sustainable development capacity has further promoted. The integrated cabling products have stable and good channel resources, focus on independent innovation, and the brand awareness continues to be improved, the low-voltage electrical appliances have a high market share in the rail transit, the products have high profession degree and strong competitiveness; the Company is accelerating the transformation and upgrading from “manufacturing” to “intelligent manufacturing” so as to comprehensively enhance the industrial competitiveness.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section IV Discussion and Analysis of Operation
1. Introduction
In 2017, the Company adhered to the guiding principles of “innovation, integration, and capital”, focused on annual budgets, deepened enterprise reforms, accelerated structural adjustments, improved operational quality, strictly controlled operating risks, increased operating profits, further improved asset quality and operating efficiency, and realized theCompany’s overall profits making. In 2017, the Company achieved operation revenue of 2254 million Yuan, an increase of 400 million Yuan on a y-o-y basis with21.60% up; funds withdrawal amounted as 2344 million Yuan which has 900 million Yuan over that of operation revenue; total profit amounted as 39.6651 million Yuan, an increase of 20.6985 million Yuan on a y-o-y basis with109.13% up, the net profit attributable to shareholder of the listed Company amounted as 11.8852 million Yuan, an increase of 18.3197 million Yuan on a y-o-y basis.
(I) Industry operation
In 2017, the Company conscientiously implemented the “Five Development Ideas”, centered on the “products+ solutions+ services” transformation and upgrade strategy, gave full play to the industry advantages, and strived to create a new situation for the development of main businesses; at the same time, it closely followed the pace of national economic development strategy, actively planned the emerging industries, focused on creating new engines for Company development, and continuously enhanced theCompany’s overall profitability and overall competitiveness by promoting the industrial transformation and upgrading.
In the information communication industry sector, gave full play to the operator market advantage, four major types of cabling products received group-buying orders of more than 100 million Yuan from China Unicom and were successfully selected as a part of multi-provincial group-buying projects of Tieta Company, and maintained the dominant position in the same industry of Jiangsu market. At the same time, vigorously expanded the power, radio and television and other industrial markets, and strived to increase the space for profit. The “Intelligent Optical Distribution Network” (IODN) was successfully applied to the China Southern Power Grid (Guizhou) intelligent fiber management system project, and participated in the intelligent reconstruction of power grid in many places. The new product fusing type quick connection successfully won the bid for the ten-million object contract of Guizhou radio and television market, at the same time, it was on batch trials in Fujian and Shandong. The special network communication product project was put into operation smoothly and achieved sales revenue of 513 million Yuan for the whole year.
In the data application industry sector, South Telecom continued to increase the proportion of multimedia integration and independentR&D products, further optimized its business structure, and strived to achieve transformation and upgrading. The Potevio Ruijing series products have successfully realized the pure independent research and development of the video conference function which could provide users with multimedia communication and application solutions integrating video conferencing, multimedia information distribution and live video on demand. The telemedicine solution landed on the headline of CCTV Xinwen Lianbo on February 11, the video diagnosis and treatment system was applied to the Sun Jiatuan Hospital and gainedusers’ praises.
In the integrated access and electrical complete set industry sector, the super category 6 generic cabling system of Telege Company has been applied to the domestic large-scale aircraft C919, and “Telege Cabling” has served for the thirteenth national games as a supplier product. The server cabinet used in data center and free cooling channel system were smoothly promoted to the market as new products. Telege MTP pre-cut cabling products have passed the POC field test of China Minsheng Banking Corp. in full score. Nanjing Mennekes Company successfully signed major projects such as Tianjin Metro and China Railway Electrification Bureau, and maintained its leading position in the rail transit field industry; vigorously expanded social projects, and won the bid in Baotou Aluminium and Wuhan Cigarette Factory.
In terms of smart city and emerging industry sector, Putian Datang newly launched three models of 6A controllers that achieved good market response; theCompany’s solar energy control and research center was identified as the “Engineering Technology Research Center of Nanjing City”; initially completed the construction of Yuhua Smart Park, and strived to gradually realize the organic
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report integration of all business units of the Company through the construction of the park based on the interconnection of data resources; through the introduction of “thousand experts” and other methods, actively introduced the “third party” resources to accelerate the cultivation of new industries such as the Internet of Things industry, optical communications network products, and smart parks; successfully signed the ALTERED Intelligent Project, the Sino Grain Intelligent Grain Depot Construction Project, Jilin Smart City, and Dongtai Smart City Data Center Project, which effectively improved theCompany’s operating dynamism and comprehensive competitiveness.
(II) Business Management
In 2017, the Company carried out special work such as “reform and adjustment”, “loss governance”, and “cost reduction and efficiency increase” around the operating budget to promote quality and efficiency improvement, increase operational capability and risk control level, and accelerate theCompany’s transformation and upgrading.
Conscientiously sort out the problems existing in the operation and management, solidly promote the rectification of key issues, constantly improve the operating quality, and promote the business management through the establishment of long-term mechanisms. Deepen enterprise reform and improve management efficiency. Through reform and adjustment, integrate relevant industries with weaker competitiveness, increase the reorganization efforts of similar businesses, coordinate operations and management, reduce redundancy, improve efficiency, optimize resource allocation, and promote the development of leading industries; speed up the system reform, explore business entity reform programs and inspire creativity.
Continue to intensify the loss management and enhance overall profitability; continue to promote the special loss managements and the work of “treating impasses”. Through the analysis of the causes of loss, formulate “one enterprise and one policy” plans for stopping losses, gradually help loss-making enterprises to realize reform and get rid of poverty so as to achieve a significant decrease in the scale of losses and amount of loss.
Optimize asset structure and enhance risk control capabilities. Increase the clean-up efforts of “two funds”, speed up the flow of assets, and take various measures simultaneously to ensure the stability of cash flow.
Strengthen basic management and improve lean management level. Promote the establishment of institutional systems, comprehensively review theCompany’s systems, and provide institutional guarantees for managing enterprises according to law. Establish procurement centers to further strengthen centralized procurement. Strengthen cost and expense management, and the three terms of expenses have decreased by 7.26 million Yuan on a year-on-year basis. Adhere to the review of major policy decisions, contracts, and system law. Improve the information disclosure system and strengthen public opinion management. Persist in performance orientation, strengthen labor cost control, highlight key performance indicators, and give full play to performance assessment guidance.
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
||||||
|-|-|-|-|-|
|2017||2016|||
|||||Increase/decrease|
||Ratio in operation||Ratio in operation||
|Amount||Amount||y-o-y|
||revenue||revenue||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Total operation|2,254,399,406.04||1,853,911,278.83|||
|||100%||100%|21.60%|
|revenue||||||
|Industries||||||
|Communication||||||
|industry -Main|2,046,250,382.47|90.77%|1,649,922,827.75|89.00%|24.02%|
|business income||||||
|Communication||||||
|industry -Other|43,554,406.50|1.93%|73,958,580.15|3.99%|-41.11%|
|business income||||||
|Electrical industry||||||
|-Main business|163,553,620.33|7.25%|129,144,035.10|6.97%|26.64%|
|income||||||
|Electrical industry||||||
|-Other business|1,040,996.74|0.05%|885,835.83|0.05%|17.52%|
|income||||||
|Products||||||
|Video conference||||||
||502,964,251.00|22.31%|550,349,437.57|29.69%|-8.61%|
|products||||||
|Cabling products|353,100,631.57|15.66%|344,575,635.28|18.59%|2.47%|
|Low-voltage||||||
||163,553,620.33|7.25%|129,144,035.10|6.97%|26.64%|
|distribution products||||||
|Private network||||||
|communication|512,809,145.60|22.75%|0.00|0.00%|100.00%|
|products||||||
|Wiring and other||||||
||773,769,849.91|34.32%|892,025,057.13|48.12%|-13.26%|
|products||||||
|Interior offset|-96,393,495.61|-4.28%|-137,027,302.23|-7.39%|29.65%|
|Other business|44,595,403.24|1.98%|74,844,415.98|4.04%|-40.42%|
|Regions||||||
|Domestic area -Main||||||
||2,209,400,566.06|98.00%|1,773,545,839.06|95.67%|24.58%|
|business income||||||
|Domestic area||||||
|-Other business|44,595,403.24|1.98%|74,844,415.98|4.04%|-40.42%|
|income||||||
|Abroad area -Main||||||
||403,436.74|0.02%|5,521,023.79|0.30%|-92.69%|
|business income||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report (2) About the industries, products, or regions accounting for over10% of theCompany’s operating income or operating profit
√Applicable□ Not applicable
Does the Company need to comply with the disclosure requirement of the special industry
No
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|2,046,250,382.47|1,730,057,601.56|15.45%|24.02%|26.75%|-1.82%|
|business income|||||||
|Communication|||||||
|industry -Other|43,554,406.50|31,769,953.88|27.06%|-41.11%|-41.29%|0.23%|
|business income|||||||
|Electrical|||||||
|industry -Main|163,553,620.33|122,126,106.83|25.33%|26.64%|30.85%|-2.40%|
|business income|||||||
|Electrical|||||||
|industry -Other|1,040,996.74|599,107.33|42.45%|17.52%|44.93%|-10.88%|
|business income|||||||
|Products|||||||
|Video conference|||||||
||502,964,251.00|412,947,270.20|17.90%|-8.61%|-11.03%|2.24%|
|products|||||||
|Cabling products|353,100,631.57|278,512,156.60|21.12%|2.47%|1.71%|0.59%|
|Low-voltage|||||||
|distribution|163,553,620.33|122,126,106.83|25.33%|26.64%|30.85%|-2.40%|
|products|||||||
|Private network|||||||
|communication|512,809,145.60|489,336,940.11|4.58%|100.00%|100.00%||
|products|||||||
|Wiring and other|||||||
||773,769,849.91|645,654,730.26|16.56%|-13.26%|-15.74%|2.47%|
|products|||||||
|Interior offset|-96,393,495.61|-96,393,495.61|0.00%|29.65%|30.82%|-1.68%|
|Other business|44,595,403.24|32,369,061.21|27.42%|-40.42%|-40.64%|0.28%|
|Regions|||||||
|Domestic area|2,209,400,566.06|1,851,807,606.08|16.19%|24.58%|27.30%|-1.79%|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|-Main business|||||||
|income|||||||
|Domestic area|||||||
|-Other business|44,595,403.24|32,369,061.21|27.42%|-40.42%|-40.64%|0.28%|
|income|||||||
|Abroad area|||||||
|-Main business|403,436.74|376,102.31|6.78%|-92.69%|-89.41%|-28.91%|
|income|||||||

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest oneyear’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|2017|2016||
||||||y-o-y|
||Sales volume|Yuan|2,089,804,788.97|1,723,881,407.9|21.23%|
|Communication||||||
||Output|Yuan|2,044,981,746.26|1,841,055,153.39|11.08%|
|industry||||||
||Storage|Yuan|432,588,221.92|477,411,264.63|-9.39%|
||Sales volume|Yuan|164,594,617.07|130,029,870.93|26.58%|
|Electrical industry|Output|Yuan|173,089,551.31|150,286,553.75|15.17%|
||Storage|Yuan|59,015,559.08|50,520,624.84|16.81%|

 Reasons for y-o-y relevant data with over30% changes
□Applicable√Not applicable
Note: as the company has a wide range of products with the unit of measurement being difficult to unify, the sales volume, production, and inventory in the above table was expressed by amount of money.
(4) Fulfillment of theCompany’s signed significant sales contracts up to this reporting period
□ Applicable√ Not applicable
(5) Constitute of operation cost
Industry classification
Industry classification
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2017||2016|||
|||||||Increase/decrease|
|Industries|Item||Ratio in operation||Ratio in operation||
|||Amount||Amount||y-o-y|
||||cost||cost||
|Communication|Cost of raw|1,601,919,525.89|85.00%|1,264,061,430.83|83.56%|26.73%|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|industry|material||||||
||(procurement||||||
||cost)||||||
|Communication|||||||
||Labor cost|58,358,356.28|3.10%|61,872,070.54|4.09%|-5.68%|
|industry|||||||
|Communication|Depreciation||||||
|||4,348,175.64|0.23%|6,362,181.18|0.42%|-31.66%|
|industry|cost||||||
|Communication|Other business||||||
|||31,769,953.88|1.69%|54,115,536.15|3.58%|-41.29%|
|industry|cost||||||
||Cost of raw||||||
|Electrical|material||||||
|||109,286,043.68|5.80%|82,853,885.08|5.48%|31.90%|
|industry|(procurement||||||
||cost)||||||
|Electrical|||||||
||Labor cost|4,713,481.46|0.25%|5,189,231.53|0.34%|-9.17%|
|industry|||||||
|Electrical|Depreciation||||||
|||304,478.21|0.02%|322,485.09|0.02%|-5.58%|
|industry|cost||||||
|Electrical|Other business||||||
|||599,107.33|0.03%|413,387.50|0.03%|44.93%|
|industry|cost||||||

Explanation
(6) Whether the changes in the scope of consolidation in Reporting Period
□ Yes√ No
(7)Major changes or adjustment in business, product or service of the Company in Reporting Period√Applicable□ Not applicable
In reporting period,, the priduction& processing project as private network communicatqion products introduced by the Company has revenue in sales of 513 million Yuan.
(8) Major sales and main suppliers
Major sales client of the Company
|||
|-|-|
|Total top five clients in sales (RMB)|805,308,206.30|
|Proportion in total annual sales volume for top five clients|35.72%|
|Sales of related parties in annual sales from top five||
||14.31%|
|clients||

Information of top five clients of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
|1|China Potevio and other enterprise with the|322,656,468.43|14.31%|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
||same controller|||
||Shanghai Electric Communication Tech.|||
|2||192,666,324.79|8.55%|
||Co., Ltd.|||
||China Telecom Corporation and the|||
|3||157,319,886.78|6.98%|
||subordinate enterprises controlled|||
||China United Network Communications|||
|4|Group Co.,Ltd and the subordinate|70,622,269.81|3.13%|
||enterprises controlled|||
|5|China Tower Co., Ltd.|62,043,256.49|2.75%|
|Total|--|805,308,206.30|35.72%|

 Other situation of main clients
√Applicable□ Not applicable
Among the top five clients, China Potevio is the controlling shareholder of the Company
Main suppliers of the Company
|||
|-|-|
|Total purchase amount from top five suppliers (RMB)|948,887,393.69|
|Proportion in total annual purchase amount for top five||
||58.52%|
|suppliers||
|Purchase of related parties in annual amount from top five||
||0.00%|
|suppliers||

Information of top five suppliers of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
||Jiangsu Sainty International Group|||
|1||400,921,325.89|24.72%|
||Machinery Imp.&Exp. Co., Ltd.|||
||Shanghai Xingditong Communication|||
|2||301,262,000.00|18.58%|
||Technology Co., Ltd.|||
||POLYCOM communications technology|||
|3||132,709,455.97|8.18%|
||(Beijing) co., LTD|||
|4|Hongan Group Co., Ltd.|64,941,455.19|4.00%|
|5|Jiangsu Dongqiang Co., Ltd.|49,053,156.64|3.03%|
|Total|--|948,887,393.69|58.52%|

 Other notes of main suppliers of the Company
□Applicable√Not applicable
3. Expenses
In RMB
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
||||Increase/decrease||
||2017|2016||Note of major changes|
||||y-o-y||
|Sales expense|151,174,362.31|155,259,273.42|-2.63%||
|Management expense|143,924,331.99|142,084,507.80|1.29%||
|Financial expense|16,284,617.77|21,304,324.40|-23.56%||

4. Investment inR&D
√ Applicable□ Not applicable
In 2017, the Company and its subsidiaries adhered to market-oriented principle, constantly insisted on independent innovation, improved product technology, and strengthened new product development. The newly developed products mainly include intelligent cabling and integrated cabling management platforms, 240V DC power distribution system, beautification mobile base station cabinets, and outdoor optical-electricity integrated optical fiber cable transfer boxes for smart city applications, etc., of which the infrastructure integrated solution of data center has been designed and achieved sales, the products are used in education, operators, hospitals, government and other departments. TheR&D work of Ruijing converged communication terminal has been completed and applied to Yunnan Postal Savings Bank of China, Sichuan Life Insurance, China Everbright Bank, etc., and has achieved sales of approximately 20 million Yuan with good feedback from users.
In 2017, the Company obtained 4 invention patents, and 27 technical research and development projects of the Company have been appraised by the municipal government experts, obtained the project approval of Nanjing City and enjoyed relevant tax policies. The optical network intelligent management system developed and continuously improved over the years has successfully achieved the industrialization ofR&D achievements, and has won favorable comments in many provinces and cities such as Yunnan.
R&D investment of the Company
|||||
|-|-|-|-|
||2017|2016|Change ratio(+/-)|
|Number of R&D (people)|383|395|-3.04%|
|Ratio of number of R&D|26.27%|25.45%|0.82%|
|R&D investment (Yuan)|67,887,029.53|62,009,010.47|9.48%|
|R&D investment accounted for||||
||3.01%|3.34%|-0.33%|
|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 totalR&D investment accounted for operation income than last year
□ Applicable√ Not applicable
Reason for the great change inR&D investment capitalization rate and rational description
□ Applicable√ Not applicable
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 5. Cash flow
In RMB
|||||
|-|-|-|-|
|Item|2017|2016|Y-o-y changes|
|Subtotal of cash in-flow from|1,996,123,501.28|2,621,010,949.61||
||||-23.84%|
|operation activity||||
|Subtotal of cash out-flow from|2,043,340,637.60|2,511,865,009.04||
||||-18.65%|
|operation activity||||
|Net cash flow from operation|-47,217,136.32|109,145,940.57||
||||-143.26%|
|activity||||
|Subtotal of cash in-flow from|884,622.95|695,330.41||
||||27.22%|
|investment activity||||
|Subtotal of cash out-flow from|15,350,838.65|8,911,023.15||
||||72.27%|
|investment activity||||
|Net cash flow from investment|-14,466,215.70|-8,215,692.74||
||||-76.08%|
|activity||||
|Subtotal of cash in-flow from|482,500,000.00|543,500,000.00||
||||-11.22%|
|financing activity||||
|Subtotal of cash out-flow from|597,231,500.28|565,741,511.06||
||||5.57%|
|financing activity||||
|Net cash flow from financing|-114,731,500.28|-22,241,511.06||
||||-415.84%|
|activity||||
|Net increased amount of cash|-173,623,428.53|79,033,769.39||
||||-319.68%|
|and cash equivalent||||

Main reasons for y-o-y major changes in aspect of relevant data
√ Applicable□ Not applicable
Net cash flow from operation activity has major declined from a year earlier: cash received from goods sales and providing labor service are decreased in the period, and the cash paid for other operation activities increased;
Cash out-flow from investment activity has increased over that of last year, mainly because cash paid for equipment purchasement in the year increased over that of last year;
Net cash flow from investment activity has major declined over that of last year mainly because cash paid for equipment purchasement in the year increased over that of last year;
Net cash flow from financing activity has major declined over that of last year: loans from the bank decreased in the year and bank loans repayment at term increased;
Net increased amount of cash and cash equivalent has major declined over that of last year: the cash flow arising respectively from operation activity, investment activity and financing activity are declined from a year earlier
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable□Not applicable
The net cash flow from operation activity in the year amounted as (47,217,100) Yuan, net profit was 28,294,100 Yuan, reasons form
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report major difference are as: some of the clinets are settled the account by notes in the period, than the cash received from goods sales and providing labor service are declined over that of last year
III. Analysis of the non-main business
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
||Amount|Ratio in total profit|Note|Whether be sustainable (N/Y)|
||||Bad debt losses and loss on||
|Asset impairment|17,091,599.71|43.09%||N|
||||inventory||

IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2017||End of 2016||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
||327,752,066.73||519,683,411.72|||Bank loans declined in the period and|
|Monetary fund||15.49%||22.55%|-7.06%||
|||||||payables decreased|
|Account|780,089,607.41||761,252,410.36||||
|||36.86%||33.03%|3.83%||
|receivable|||||||
||491,603,781.00||527,931,889.47||||
|Inventory||23.23%||22.91%|0.32%||
|Investment real|12,802,485.28||13,533,631.71||||
|||0.60%||0.59%|0.01%||
|estate|||||||
|Long-term equity|186,977,506.23||187,082,857.56||||
|||8.84%||8.12%|0.72%||
|investment|||||||
||119,741,921.78||124,281,522.14||||
|Fix assets||5.66%||5.39%|0.27%||
|Construction in|2,163,267.89||||||
|||0.10%||0.00%|0.10%||
|process|||||||
||387,550,000.00||473,500,000.00||||
|Short-term loans||18.31%||20.55%|-2.24%||
|Long-term loans||0.00%||0.00%|0.00%||

2. Assets and liability measured by fair value
□ Applicable√ Not applicable
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 3. The assets rights restricted till end of the period
Assts with ownership or usage rigths restricted:
|||
|-|-|
|Item|Book value at period –end|
|Moneray fund|16,420,782.19|
|Fixed assets|38,083,247.45|
|Intangible assets|12,458,001.41|
|Investment real estate|6,273,122.45|
|Total|73,235,153.50|

Saved as disclosed above, the Company pledged its stock rights of 4.8 million Yuan in the subsidiary Southern Telecom Co., Ltd., stock rights of 5.07 million Yuan in the subsidiary Nanjing Putian Changle Communication Equipment Co., Ltd., and its stock rights of 60,427,300 Yuan in the subsidiary Nanjing Putian Wangzhi Electronics Co., Ltd., and its stock rights of 7.8 million Yuan in the subsidiary Nanjing Putian Network Co., Ltd. to the parent Company for entrusting the parent Company to loan from Bank of Beijing Jiangning Branch, and handled the Company's equity registration at Nanjing Jiangning Market Supervision Administration. 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)||
|14,617,352.43|11,296,039.10|29.40%|

 2. The major equity investment obtained in the reporting period
□ Applicable√ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 5. Application of raised proceeds
□ Applicable√ Not applicable
The Company had no application of raised proceeds in the reporting period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable√ Not applicable
3. Other explanation
The property of the Company in Beijing are not for sale ended as the reproting period
VII. Analysis of main holding Company and stock-jointly companies
√ Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Main|Register|||Operating|Operating||
||Type|||Total assets|Net Assets|||Net profit|
|name||business|capital|||revenue|profit||
|||Manufacture|||||||
|Nanjing|||||||||
|||and sales of|||||||
|Southern|||34,205,147.8|323,129,989.|111,721,606.|503,230,917.|15,481,389.9|11,370,431.5|
||Subsidiary|data|||||||
|Telecom Co.,|||3|94|91|67|8|5|
|||communicati|||||||
|Ltd.|||||||||
|||on equipment|||||||
|Nanjing||Manufacture|||||||
|Putian Telege||and sales of|||||||
||||12,000,000.0|296,328,910.|115,895,464.|357,455,410.|25,652,600.0|21,294,286.1|
|Intelligent|Subsidiary|intelligent|||||||
||||0|53|89|15|8|8|
|Building Co.,||building|||||||
|Ltd.||system|||||||
|||Manufacture|||||||
|Nanjing|||||||||
|||and sales of|||||||
|Putian|||||||||
|||software of|10,000,000.0|30,467,636.4|25,662,002.2|30,663,453.7|||
|Network|Subsidiary||||||777,540.47|857,812.17|
|||telecommuni|0|4|4|3|||
|Company|||||||||
|||cations,|||||||
|Ltd.|||||||||
|||network and|||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||electronic|||||||
|||equipment|||||||
|||Out-door|||||||
|||patch,|||||||
|||sub-line|||||||
|||equipment,|||||||
|Nanjing|||||||||
|||network|||||||
|Putian|||||||||
|||box(cube)of|||||||
|Changle|||||||||
|||out-door and|10,000,000.0|74,945,211.8|31,062,931.8|52,403,392.7|||
|Telecommun|Subsidiary||||||-939,854.90|-924,844.63|
|||machinery|0|9|2|1|||
|ications|||||||||
|||office,|||||||
|Equipment|||||||||
|||manufacture|||||||
|Co., Ltd.|||||||||
|||and sales of|||||||
|||communicati|||||||
|||on electrical|||||||
|||products|||||||
|Nanjing Bada||manufacture|||||||
|Telecommun||of|||||||
||||11,301,400.0|13,984,810.2|-14,709,275.||||
|ications|Subsidiary|card-terminal||||2,217,602.81|1,007,447.37|1,065,464.51|
||||0|5|59||||
|Equipment||communicati|||||||
|Co., Ltd.||on equipment|||||||
|||Export and|||||||
|||import of|||||||
|||telecommuni|||||||
|Putian|||||||||
|||cation|||||||
|Telecommun|||||||||
|||equipment,|HK$ 2||-17,102,587.||||
|ications|Subsidiary|||5,617,606.95||87,649.59|92,994.49|92,994.49|
|||Hi-tech R &|million||01||||
|(H.K.) Co.,|||||||||
|||D and|||||||
|Ltd.|||||||||
|||transfer,|||||||
|||technology|||||||
|||trade|||||||
|Nanjing|||||||||
|||Production,|||||||
|Postel|||||||||
|||sales and|||||||
|Wongzhi|||90,190,000.0|51,883,283.5|40,018,814.1|15,678,602.7|||
||Subsidiary|processing of|||||917,875.74|893,181.29|
|Telecommun|||0|4|9|3|||
|||electrical|||||||
|ications Co.,|||||||||
|||products|||||||
|Ltd.|||||||||
|Nanjing||Manufacture|||||||
|Putian||and sales of|||||||
|Information||electrical and|14,000,000.0|11,278,905.1|||||
||Subsidiary||||6,053,383.12|5,075,035.27|191,963.00|10,374.19|
|Technology||telecommuni|0|5|||||
|Company||cation|||||||
|Ltd.||products|||||||
|Nanjing|Subsidiary|Electronic|5,000,000.00|19,423,105.4|1,812,141.12|25,912,240.5|157,552.28|2,206.60|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Putian||components||4||2|||
|Telecommun||assembly,|||||||
|ication||electronic|||||||
|Technology||products,|||||||
|Company||telecommuni|||||||
|Ltd.||cation|||||||
|||equipment,|||||||
|||Hi-tech R &|||||||
|||D and sales|||||||
|||Manufacture|||||||
|Nanjing||and sales of|||||||
|Mennekes||plug &|USD520万|202,023,535.|93,729,360.5|164,594,617.|||
||Subsidiary||||||8,377,103.41|6,748,763.80|
|Electrics Co.,||socket of|元|98|6|07|||
|Ltd.||industrial-use|||||||
|||d|||||||
|||Development|||||||
|||, production,|||||||
|||sale,|||||||
|||engineering|||||||
|Nanjing|||||||||
|||technical|||||||
|Putian|||||||||
|||service of|||||||
|Datang|||10,000,000.0|41,378,044.8|22,173,523.2|45,851,070.2|||
||Subsidiary|electronic|||||4,921,540.21|5,105,068.22|
|Information|||0|1|5|3|||
|||product;|||||||
|Electronic|||||||||
|||processing|||||||
|Co., Ltd.|||||||||
|||service of|||||||
|||surface|||||||
|||mounting and|||||||
|||welding|||||||
|||Development|||||||
|||and|||||||
|||manufacture|||||||
|SEI-Nanjing||of ODN|||||||
|Putian|Joint-stock|products,|37,088,800.0|35,519,576.7|26,592,185.6|15,470,007.7|-1,053,972.1|-1,031,574.6|
|Optical|Company|optical|0|4|8|6|5|0|
|Network||communicati|||||||
|||on|||||||
|||components|||||||
|||and RFTS|||||||
|||R&D of|||||||
|Potevio||communicati|||||||
|Hi-tech|Joint-stock|on|337,548,141.|351,287,258.|343,757,792.|14,951,512.0|||
||||||||2,192,339.51|1,765,051.64|
|Industry Co.,|Company|technology|29|25|98|4|||
|Ltd.||products,|||||||
|||sales,|||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|network|
|system|
|integration,|
|rental of|
|industrial|
|park venue|
|and property|
|management|
|etc.|

Particular about subsidiaries obtained or disposed in report period
□ Applicable√ Not applicable
Notes of holding and shareholding companies
In 2017, the Company increased its industrial structure adjustments, continued to strengthen their special governance work to loss-making enterprises such as Nanjing Putian Network Co., Ltd. (hereinafter referred to as “Network Company”), Nanjing Putian Wangzhi Communication Co., Ltd. (hereinafter referred to as “Wangzhi Communication”) and Nanjing Bada Communication Equipment Co., Ltd. (hereinafter referred to as “Bada Communication”), and turned losses into gains by adopting business integration, organizational restructuring, and personnel diversion and resettlement and other measures.
1. Network Company
Due to the declining market demand for traditional transmission business and the sharp decrease in profits caused by theoperator’s group purchase, the Network Company suffered a loss of RMB 1,338,400 in 2016.
In 2017, the Company divided the traditional transmission services and personnel of the Network Company to the system integration department and concentrated on the development of integrated services, at the same time, actively introduced the expert team of National Thousand Talents Program. Through the cooperation with the expert team of National Thousand Talents Program and Potevio Designing Institute, focused on the development of ALTERED intelligent buildings and wireless Jiangcheng of Jilin Smart City projects, and achieved profits of 857,800 Yuan.
2. Wangzhi Communication
The main reasons for losses of Wangzhi Communication in recent years were equipment aging, high maintenance costs, inability to invest in new equipment, the year-by-year accelerated degradation of the competitiveness of production and processing led to operating losses, in 2016, Wangzhi Communication lost 808,600 Yuan.
According to NanjingPutian’s industrial development planning and the “zombie enterprise handling” program, Wangzhi Communication withdrew from the electronic processing business, placed the staff, and introduced conference room integration services through its own platform, which achieved good business results, and realized profits of 893,200 Yuan.
2. Bada Communication
The main business of Bada Communication is to provide supporting processing for theCompany’s MDF (Main Distribution Frame). In recent years, due to the evolution and transformation of “optical replacing copper”, Bada Communication has been in a sustained loss state, with a loss of RMB 3,833,500 in 2016.
The Company actively promoted the structural optimization and resource reorganization, centralized and merged the original businesses into the distribution system department for overall operation and management, and actively strived for the support and subsidy of the zombie enterprise handling policy. According to the special governance requirements to handle “zombie enterprise” of
the deepening reform of the central enterprises of the SASAC of the State Council, in 2017, the Company arranged the personnel of
Bada Communication, revitalized the land and housing resources, the operating loss was significantly reduced from RMB 4,127,200 in
2016 to RMB 1.2 million, and the Company received subsidies for zombie enterprises of RMB 2.2 million, so the profit for the year was
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report RMB 1,065,500.
VIII. Structured vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Future Development Prospects
1. Analysis of industry competition pattern and development trend
From the perspective of macro industrial policies, with the in-depth implementation of strategies such as “Internet+”, “Broadband China”, and “Made in China 2025”, the construction of information infrastructure will become a new growth point for the national economy. It will be an overlay of 5G technology upgrade cycle and communication device investment and construction cycle in the next few years,China’s communications network will experience a wave of comprehensive construction cycles from fixed network to wireless network, and telecom operators will continue to conduct high capital input, for the communications equipment manufacturing industry, the market demand will be huge. In terms of “Internet+”, mobile internet, cloud computing, big data, and the internet of things will be deeply integrated with various industries and continue to promote the restructuring and upgrading of traditional industries. Multimedia communications and videoconferencing, as an important tool of “Internet+”, are also continuously applied to all walks of life and promote the improvement of production efficiency in all walks of life, the application of multimedia communications and videoconferencing will also usher in a new round of rapid growth opportunities in the industrial transformation market..
From the perspective of industry competition, the enterprises in the communications equipment manufacturing industry are numerous and the competition is fierce, which raised higher level requirements for the comprehensive strength of enterprises, the highly centralized procurement of products by major operators makes price competition more intense, and the profit margins are compressed, the small-sized and less competitive manufacturers are constantly being eliminated.
2. TheCompany’s development strategy
Guiding ideology: Taking steady progress as the overall tone of development, fulfilling the “Five Concepts”, implementing the “Five Tasks”, adhering to the guiding principles of “innovation, integration, and capital”, and firmly grasping the “One Belt and One Road” and “Made in China 2025” and BroadbandChina’s construction and development opportunities, actively following up the “Internet+” and industry sector development, based on the two “trinity” management systems, innovating management ideas, improving development quality and efficiency, deepening Company reform, increasing investment in innovation, accelerating the structural adjustment and transformation and upgrading of enterprises, coordinating the promotion of production and management and party building, and ensuring the Company to achieve its strategic goals on time.
The overall thinking of business operation planning: Insist on the principles of “innovation, integration, and capital”, adhere to the intensive and overall operations of industrial development, park release, and capital operation, accelerate the enterprise restructuring and transformation, strengthen the business resource integration, increase the technological innovation, actively expand the market, promote the institutional mechanism reform, promote the continuous improvement of business quality, operating results and comprehensive value, and realize theCompany’s new development.
3. Business plan of the next year
In 2018, the Company will adhere to the principle of striving for steady progress, firmly establish and implement the new development concept under the guidance principles of “innovation, integration, and capital”, centre on the structural reform requirements of the supply side, focus on the high-quality development, promote the quality change, efficiency reform, and power change, advance the five major tasks, deepen the reforms and innovations, make efforts to improve quality and efficiency, and endeavor to promote the transformation and development of Nanjing Putian to reach a new level.
In 2018, theCompany’s main business objectives are to achieve an operating income of 2.25 billion Yuan, continuously optimize the asset structure, steadily improve the quality of operations, fully complete the budget targets, and welcome the sixtieth anniversary of
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report establishment with outstanding results. (The above business objectives do not represent the profit forecast of the listed companies to 2018, whether the objectives can be achieved depends on a variety of factors such as changes in market conditions, and there is great uncertainty. Please pay special attention!).
In order to ensure the realization of business tasks in the next year, the Company plans to take the following major measures: (1) Strengthen the leading industry, cultivate new momentum for development
Focus on the development guidelines for the national strategic emerging industries and the enterprise development program, speed up the structural adjustment, promote the transformation and upgrading, gather various types of resources, and highlight the development of main industry. Further increase investment inR&D, accelerate the research and development and marketization of new products, deepen the industry-university- research cooperation and “thousand experts” cooperation, cultivate and introduce the leading talents inR&D, form new growth points as quickly as possible, and cultivate new momentum for development.
1) Keep a foothold on industry advantages, and highlight the main industry
Innovate the thinking, increase the development of new markets and new businesses, increase the assessment of business benefits in the traditional market, do a good job of large customers, large projects, and large orders, and take profit as the guide to deepen cultivation, refinement, and detailed marketing.
In the information communication industry sector, we will attach great importance to the collective purchase of operators and ensure the key products to be selected; actively expand the industry market and the private networks market, and accelerate the adjustment of market structure. Actively participate in the pilot and construction of smart ODN of the three major operators, and strive to achieve an increase in the sales scale of smart ODN accessory products. Private network communication products will continue to be produced and sold with quality and quantity.
In the data application industry sector, South Company will continue to focus on the development of multimedia integration services, focus on the “Rui” series independent innovation products and form core competitiveness at the application layer and software layer. Actively explore new and deeper market areas, and take financial and medical customer industries as key objectives. In the aspect of government informatization construction, we will establish sample projects through own products and seize opportunities to promote the industry to extend to thegovernment’s peripheral networks. The cloud network digital communication division will dig deep into the industry market, actively establish partnerships with customers with scale and industry influence, complete a batch of representative projects, and achieve market breakthrough as soon as possible.
In the integrated access and electrical appliance complete set industry sector, Telege Company actively expands the data center proprietary market while stabilizing the integrated cabling operations scale, especially the research and development of passive all-optical networks, and strives to achieve new breakthroughs; increases the new product research and development, integration, and integration efforts; strengthens the independent brand image-building, enhances the marketing of high-end pre-terminated products, and consolidates the leading position in the industry. Nanjing Mennekes Company adheres to the development strategy of running through the rail transit industry, and pays attention to the development of social customers while maintaining the growth of the traditional advantaged industries. It also strengthens cooperation with the general contractors of the designing institute and the general contractors of rail and power industries to increase the success rate of projects; raises the influence of independent brands such as “Nanman” and “Nanman Annuo”, and fully utilizes the resources of the central enterprises to actively explore the international market. In terms of smart city and emerging industry sector, Datang Company will continue to increase investment inR&D and actively explore new technologies such as the convergence of IoT technology and the electric supply street lamp products; establish a foreign sales team and strive to achieve new sales breakthroughs. The system integration division will strengthen the cooperation with high-quality customers such as the military and medical services, and follow up the development of Nan Bu Xin Cheng project; vigorously develop the electricity market, increase the market share of PCM products, and actively promote the sales of equipment such as industrial-grade fiber optical transceivers in the broadcasting and TV market.
2) Make great efforts to cultivate new growth points
The Company will strengthen product research and development management, improve theR&D evaluation and evaluation system,
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report concentrate theR&D resources on key projects, increase the proportion ofR&D investment, accelerate the achievement transformation, and enhance the strength of independent innovation. It is planned to develop a series of marketable new products, such as an intelligent optical fiber distribution frame, a new generation of intelligent cabling system, and an integrated cabling management platform, which will create new growth points for the Company.
Keep up with the national strategy and actively deploy emerging industries. Try to combine the 5G new technologies such as OPM cognitive network brought by the “thousand experts” with the stable and efficient wireless network technologies. Actively strive for government project support, promote the deep integration of industry, university and research, and actively participate in the construction of smart city by deepening the cooperation with “thousand experts”. Launch the e-commerce helping the disabled assistance activities by participating in the “Nanjing Action Plan for Helping the Disabled of Thousands of Caregivers”, explore the business model innovation, strengthen the cooperation with local governments, and promote theCompany’s transformation and upgrading from a communications equipment manufacturer to an integrated service provider.
(2) Deepen reforms and innovations and improve business quality
In 2018, the Company will deepen reforms and adjustments, accelerate the innovation of institutional mechanisms, and enhance the development quality and effectiveness. Thoroughly do a good job of special work such as “loss management”, “two-funds control”, improve the operations quality and management level, strictly control the operational risks, and promote the sustainable and healthy development of the Company.
4. Maintain the current businesses and complete the capital requirements for the investment projects under construction
In 2018, the Company will meet the liquidity requirements for its own operations and project construction mainly via reasonable dispatch of its own funds and bank financing. According to theCompany’s operating budget, it is estimated that the annual bank financing scale will be within 530 million Yuan.
5. Risks the Company may face in the future development
Policy risk
The communications equipment manufacturing industry is vulnerable to the impacts of macroeconomic performance, economic cycles and industrial policies. line with the 13th Five-Year Plan of the country, in later years, China will continue to accelerate the construction of a high-speed, mobile, and safe new generation of information infrastructure. If China's economic growth slows down in the future or the country adopts the constrictive macro-control policies to infrastructure investment, theCompany’s operating conditions will face negative effects.
Communications industry cycle risk
The Company is mainly engaged in the manufacture and sales of communications products, customers include several major telecom operators in China. The establishment and adjustment of network construction period and investment plan of the operators have a significant impact on the operation of the Company and bring the industry cycle risk.
The Company will continue to further integrate quality resources, accelerate industry upgrade, expand industry market and improve industry profitability.
TechnologyR&D risk
The telecommunication industry is experiencing rapid change of technology development and product upgrade. Therefore, theCompany’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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report on market requirements, focus on organization, planning and management of product development and expand development of new products, aiming to maintaining the leading position in terms of technology.
Market competition risk
The industry in which the Company operates is highly competitive with substantial market players. Besides, customers, such as various operators, continue to adopt centralized procurement policy which led to very furious market competition. Benefiting from long-term operation, the Company has accumulated certain competitive advantages in terms of brand, technology, quality and marketing. If our products fail to cater for the market variation in future, we may lose the existing advantages in market competition. The Company will continue to capitalize on the existing advantages to consolidate traditional market while expanding special network and industry markets actively. Through continuous cost control and scientific innovation, it continues to improve production and research capability, which leads to rapid development of the new products and enables the Company to maintain and improve profitability.
Cash flow shortage risk
Cash flow is essential for our survival and development. Insufficient provision of cash flow makes it difficult to meet capital requirements for technology upgrade and business development, thus limit our business expansion and long-term development to certain extent.
The Company implements capital budget management, prepare capital collection plan and capital payment budget to ensure dynamic balance of cash flow. Besides, it increases management on inventory and trade receivables, reinforces performance assessment, urges prompt collection of goods payment, strengthens inventory management and decreases capital occupation. Cooperation with banks and active seek for Group supports enable the Company to diversify financing channels. And it also conducts stringent capital management by insisting on the principle based on appropriate balance between income and expense.
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
Nanjing Putian Telecommunications Co., Ltd. 2017 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
|||||||
|-|-|-|-|-|-|
|||Net profit|Ratio in net profit|||
|||attributable to|attributable to|||
|||common stock|common stock|||
|Year for bonus|Amount for cash|shareholders of|shareholders of|Amount for cash|Proportion for cash|
|shares|bonus (tax included)|listed Company in|listed Company|bonus by other ways|bonus by other ways|
|||consolidation|contained in|||
|||statement for bonus|consolidation|||
|||year|statement|||
|2017|0.00|11,885,170.28|0.00%|0.00|0.00%|
|2016|0.00|-6,434,558.27|0.00%|0.00|0.00%|
|2015|0.00|-16,590,830.26|0.00%|0.00|0.00%|

 The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company is positive but no plan of cash dividend proposed of common stock
□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the year.
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyer and the Company have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□Applicable√Not applicable
There are no 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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 2. Concerning assts 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
1. The Company begun to adopt the “Business Accounting Standards No.42 - Non-current assets held for sale, disposal group and discontinued operation” issued by the Ministry of Finance on 28 May 2017, and the amended “Business Accounting Standards No.16 - Government grant” since 12 June 2017. this change of accounting policies is accounted for under prospective application method. 2. The Company adopts the Notice of the Ministry of Finance in relation to Amending and Printing General Forms for Business Financial Statements(CK[2017]No.30) for preparation of its financial statements for 2017, under which, the gains and losses arising from disposal of non-current assets and gains and losses arising from exchange of non-monetary assets are reported as “gains arising from assets disposal” instead of the previous accounting, namely reported as “non-operating income” and “non-operating expense”, respectively. This change of accounting policy is accounted for under retrospective adjustment method, with decrease of non-operating income and expense of RMB235,215.25 and RMB24,995.40 respectively and an increase of gains arising from assets disposal of RMB210,219.85.
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 lastyear’s financial report; explain changes in consolidationstatement’s scope
□ Applicable√ Not applicable
New established subsidiary: Sinopharm Holding Guangzhou Medical Management Co., Ltd.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
|||
|-|-|
|Name of domestic accounting firm|Pan-China Certifier Public Accountants (LLP)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Remuneration for domestic accounting firm (in 10 thousand||
||111|
|Yuan)||
|Continuous life of auditing service for domestic accounting firm|4|
|Name of domestic CPA|He Jiangxing, Jin Jingyu|
|Continuous service years from domestic CPA|4 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 in this year, auditing fee for internal control was RMB 0.32 million.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable√Not applicable
XI. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
√Applicable□ Not applicable
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||||Advances|The results and||||
|The basic situation|money||||Execution of the|||
|||Predicted|in litigation|effects of||Disclosure|Disclosure|
|of litigation|involved (in||||litigation|||
|||liabilities (Y/N)|(Arbitration|litigation||date|index|
|(Arbitration)|10 thousand||||(Arbitration)|||
||||)|(Arbitration)||||
||Yuan)|||||||
|Case of Disputes||||||||
|over Contracts-||||||||
||||||||Notice of|
|Nanjing Haomen||||||||
||||||||Cumulative|
|Tech. Co., Ltd. bring|||Claim|||||
||2.9|N||-|-|2017-09-06|Litigation on|
|a suit against|||withdrawn|||||
||||||||Juchao|
|Nanjing Putian||||||||
||||||||Website|
|Telecommunication||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
||||||||Notice of|
|over Contracts-||||||||
||||Claim||||Cumulative|
|Nanjing Haomen|130.03|N||-|-|2017-09-06||
||||withdrawn||||Litigation on|
|Tech. Co., Ltd. bring||||||||
||||||||Juchao|
|a suit against||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
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|Telecommunication||||||||
|Co., Ltd.||||||||
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|over Contracts-||||||||
||||||||Notice of|
|Nanjing Haomen||||||||
||||||||Cumulative|
|Tech. Co., Ltd. bring|||Claim|||||
||12.34|N||-|-|2017-09-06|Litigation on|
|a suit against|||withdrawn|||||
||||||||Juchao|
|Nanjing Putian||||||||
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|Telecommunication||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian|||||||Notice of|
|Telecommunication|||||||Cumulative|
||||||Arrears are paid|||
|Co., Ltd. bring a suit|99.33|N|Case closed|-||2017-09-06|Litigation on|
||||||by defendant|||
|against Nanjing|||||||Juchao|
|Tongxi Real Estate|||||||Website|
|Development Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Fujian Zhongtong|||||||Notice of|
|Communication|||Conciliator||||Cumulative|
|Logistics Co., Ltd.|2,548.94|N|y|-|-|2017-09-06|Litigation on|
|bring a suit against|||withdrawal||||Juchao|
|Nanjing Putian|||||||Website|
|Telecommunication||||||||
|Co., Ltd||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Jiangsu Yilian|||||||Notice of|
|Communication|||Conciliator||||Cumulative|
|Equipment Co., Ltd.|16.26|N|y|-|-|2017-09-06|Litigation on|
|bring a suit against|||withdrawal||||Juchao|
|Nanjing Putian|||||||Website|
|Telecommunication||||||||
|Co., Ltd||||||||
|Labor dispute case-|||||||Notice of|
|Ren Xiaoqing bring|||||||Cumulative|
|a suit against|79.27|N|In the trial|-|-|2017-09-06|Litigation on|
|Nanjing Putian|||||||Juchao|
|Telecommunication|||||||Website|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
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|Co., Ltd||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
||||||||Notice of|
|Nanjing Putian||||||||
|||||Purpose of|Installment||Cumulative|
|Telecommunication||||||||
||57.28|N|Case closed|litigation|payment by the|2017-09-06|Litigation on|
|Co., Ltd. bring a suit||||||||
|||||achieved|defendant||Juchao|
|against Bengbu||||||||
||||||||Website|
|Hengtai Industry &||||||||
|Commerce Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-|||||||Notice of|
|Nanjing Putian||||Purpose of|Installment||Cumulative|
|Telecommunication|260.05|N|Case closed|litigation|payment by the|2017-09-06|Litigation on|
|Co., Ltd. bring a suit||||achieved|defendant||Juchao|
|against Hubei Hukai|||||||Website|
|Electric Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
||||||||Notice of|
|Nanjing Southern||||||||
||||||||Cumulative|
|Telecom Co., Ltd|||Win a|||||
||54.88|N||-|Executing|2017-09-06|Litigation on|
|bring a suit against|||lawsuit|||||
||||||||Juchao|
|Chengdu Taijie||||||||
||||||||Website|
|System Engineering||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
||||||||Notice of|
|Nanjing Southern||||||||
|||||Purpose of|The defendant||Cumulative|
|Telecom Co., Ltd.||||||||
||10.36|N|Withdraw|litigation|has completed|2017-09-06|Litigation on|
|bring a suit against||||||||
|||||achieved|the payment||Juchao|
|Hangzhou Yinding||||||||
||||||||Website|
|Technology Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-|||||||Notice of|
|Nanjing Southern||||Purpose of|The defendant||Cumulative|
|Telecom Co., Ltd.|16.48|N|Case closed|litigation|has completed|2017-09-06|Litigation on|
|bring a suit against||||achieved|the payment||Juchao|
|Hefei Buihui IT Co.,|||||||Website|
|Ltd.||||||||
|Case of Disputes||||Purpose of|The defendant||Notice of|
|over Contracts-|31.2|N|Withdraw|litigation|has completed|2017-09-06|Cumulative|
|Nanjing Southern||||achieved|the payment||Litigation on|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
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|Telecom Co., Ltd.|||||||Juchao|
|bring a suit against|||||||Website|
|Zunyi Boaoda||||||||
|Technology Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian||||||||
||||||||Notice of|
|Telege Intelligent||||||||
|||||Purpose of|The defendant||Cumulative|
|Building Co., Ltd.||||||||
||6.65|N|Case closed|litigation|has completed|2017-09-06|Litigation on|
|bring a suit against||||||||
|||||achieved|the payment||Juchao|
|Xi’an Meige||||||||
||||||||Website|
|Optronics||||||||
|Technology Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
||||||||Notice of|
|Nanjing Putian||||||||
||||Mediation|Purpose of|Installment||Cumulative|
|Wangzhi Electronic||||||||
||38.88|N|and case|litigation|payment by the|2017-09-06|Litigation on|
|Co., Ltd. bring a suit||||||||
||||closed|achieved|defendant||Juchao|
|against Nanjing||||||||
||||||||Website|
|Tiansu ACS Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian||||||||
||||Win a||||Notice of|
|Telege Intelligent||||||||
||||suitcase in||||Cumulative|
|Building Co., Ltd||||||||
||46.57|N|the first|-|-|2017-09-06|Litigation on|
|bring a suit against||||||||
||||trial and in||||Juchao|
|Harbin Bohang||||||||
||||notification||||Website|
|Intelligent Network||||||||
|Engineering Co.,||||||||
|Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian||||||||
||||||||Notice of|
|Telege Intelligent||||||||
||||||||Cumulative|
|Building Co., Ltd.||||||||
||14.8|N|In the trial|-|-|2017-09-06|Litigation on|
|bring a suit against||||||||
||||||||Juchao|
|Anhui Zhibang||||||||
||||||||Website|
|Network||||||||
|Technology Co.,||||||||
|Ltd.||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
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|-|-|-|-|-|-|-|-|
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian|||||||Notice of|
|Telege Intelligent||||Purpose of|The defendant||Cumulative|
|Building Co., Ltd.|9.94|N|Withdraw|litigation|has completed|2017-09-06|Litigation on|
|bring a suit against||||achieved|the payment||Juchao|
|Haikou SGE|||||||Website|
|Century Technology||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian|||||||Notice of|
|Telege Intelligent|||||||Cumulative|
||||Win a|||||
|Building Co., Ltd.|7.49|N||-|In processing|2017-09-06|Litigation on|
||||lawsuit|||||
|bring a suit against|||||||Juchao|
|Anhui Haihe|||||||Website|
|Electric Engineering||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian|||||||Notice of|
|Telege Intelligent|||||||Cumulative|
|Building Co., Ltd.|3.11|N|In the trial|-|-|2017-09-06|Litigation on|
|bring a suit against|||||||Juchao|
|Shandong Honglin|||||||Website|
|Electric Technology||||||||
|Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian||||||||
|Telege Intelligent|||Win a|||||
||7.76|N||-|In processing|||
|Building Co., Ltd.|||lawsuit|||||
|bring a suit against||||||||
|Changzhou AEN||||||||
|Commerce Co., Ltd.||||||||
|Case of Disputes||||||||
|over Contracts-||||||||
|Nanjing Putian||||||||
|Telege Intelligent||||||||
||11.7|N|In the trial|-|-|||
|Building Co., Ltd.||||||||
|bring a suit against||||||||
|Beijing Hanxing||||||||
|Technology Co.,||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Ltd.||||||
|Case of Disputes||||||
|over Contracts-||||||
|Nanjing Southern|||Conciliator|Purpose of|The defendant|
|Telecom Co., Ltd|27|N|y|litigation|has completed|
|bring a suit against|||withdrawal|achieved|the payment|
|Suirui Technology||||||
|Co., Ltd.||||||
|Case of Disputes||||||
|over Contracts-||||||
|Nanjing Southern||||||
|Telecom Co., Ltd||||||
||63|N|In the trial|-|-|
|bring a suit against||||||
|Henan Jieyida||||||
|Technology Co.,||||||
|Ltd.||||||
|Case of Disputes||||||
|over Contracts-||||||
|Nanjing Southern|||Mediation|Purpose of|The defendant|
|Telecom Co., Ltd|92|N|and case|litigation|has completed|
|bring a suit against|||closed|achieved|the payment|
|Changsha Yingping||||||
|IT Co., Ltd.||||||
|Case of Disputes||||||
|over Contracts-||||||
|Qinghong||||||
|Technology||||||
||||Claim|||
|(Nanjing) Co., Ltd|696.19|N||-|-|
||||withdrawn|||
|bring a suit against||||||
|Nanjing Putian||||||
|Telecommunication||||||
|Co., Ltd.||||||
|Case of Disputes||||||
|Arbitration over||||||
|Contracts- Nanjing||||||
|Jianye Baisheng||||||
|Economy and|||Mediation|||
|Information|25|N|and case|-|-|
|Consultant Center|||closed|||
|Co., Ltd bring a suit||||||
|against Nanjing||||||
|Putian||||||
|Telecommunication||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Co., Ltd.|

XIII. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable√ Not applicable
XV. Implementation of theCompany’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
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Approve|Wheth|||||
||||||||Proporti||||Market|||
|||||||||d|er to|||||
|Related||Related|Related|||Trading|on in the||||price of|||
|||||Pricin||||transacti|exceed|Means||||
||Related|||||amount|amount||||similar|Date of||
|trans||transacti|transacti|g|Dealing|||on|the|of|||Index of|
||relationshi|||||(in 10|of the||||transacti|disclosur||
|action||on|on|princip|price|||amount|approv|payme|||disclosure|
||p|||||thousan|same||||on|e||
|parties||type|content|le||||(in 10|ed|nts||||
|||||||d Yuan)|t ransacti||||availabl|||
|||||||||thousan|amoun|||||
||||||||on||||e|||
|||||||||d Yuan)|t|||||
||A|||||||||||||
||Company|||||||||||||
||with|||||||||||||
||shares||||||||||||“Estimate|
||owed by|Purchase|||||||||||d Routine|
|SEI-Nanji|the|product|||||||||||Related|
|ng Putian|Company,|and|Telecom|Marke||||||Bank||2017-04-|Transacti|
||||||689.28|689.28|0.43%|2,100|N||689.28|||
|Optical|Director|receive|product|t price||||||transfer||29|ons for|
|Network|of the|labor|||||||||||year of|
||Company|services|||||||||||2017”|
||hold||||||||||||Juchao|
||additional||||||||||||website》|
||post as|||||||||||||
||Director|||||||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Purchase||||||||||||
|China|Controllin|product||||||||||||
|Potevio|g|and|Telecom|Marke||||||Bank||2017-04-|The same|
||||||29.71|29.71|0.02%|2,000|N||29.71|||
|Company|sharehold|receive|product|t price||||||transfer||29|as above|
|Limited|er|labor||||||||||||
|||services||||||||||||
|||Purchase||||||||||||
|Nanjing|Controllin|||||||||||||
|||product||||||||||||
|Potevio|g|||||||||||||
|||and|Telecom|Marke||||||Bank||2017-04-|The same|
|Hongyan|sharehold||||39.57|39.57|0.02%|100|N||39.57|||
|||receive|product|t price||||||transfer||29|as above|
|Electric|er’s|||||||||||||
|||labor||||||||||||
|Co., Ltd.|subsidiary|||||||||||||
|||services||||||||||||
|Potevio||Purchase||||||||||||
||Controllin|||||||||||||
|Informati||product||||||||||||
||g|||||||||||||
|on||and|Telecom|Marke||||||Bank||2017-04-|The same|
||sharehold||||102.20|102.2|0.06%|150|N||102.20|||
|Technolo||receive|product|t price||||||transfer||29|as above|
||er’s|||||||||||||
|gy Co.,||labor||||||||||||
||subsidiary|||||||||||||
|Ltd.||services||||||||||||
|Potevio||Sales of||||||||||||
||Controllin|||||||||||||
|Informati||product||||||||||||
||g|||||||||||||
|on||and|Telecom|Marke|2,805.2|2,805.2||||Bank||2017-04-|The same|
||sharehold||||||1.24%|8,500|N||2,805.27|||
|Technolo||provide|product|t price|7|7||||transfer||29|as above|
||er’s|||||||||||||
|gy Co.,||labor||||||||||||
||subsidiary|||||||||||||
|Ltd.||services||||||||||||
|||Sales of||||||||||||
|China|Controllin|product||||||||||||
|Potevio|g|and|Telecom|Marke|29,365.|29,365.||||Bank|29,365.8|2017-04-|The same|
||||||||13.03%|89,300|N|||||
|Company|sharehold|provide|product|t price|89|89||||transfer|9|29|as above|
|Limited|er|labor||||||||||||
|||services||||||||||||
|||Sales of||||||||||||
|Putian|Controllin|||||||||||||
|||product||||||||||||
|Heping|g|||||||||||||
|||and|Telecom|Marke||||||Bank||2017-04-|The same|
|Technolo|sharehold||||3.08|3.08|0.00%|50|N||3.08|||
|||provide|product|t price||||||transfer||29|as above|
|gy Co.,|er’s|||||||||||||
|||labor||||||||||||
|Ltd.|subsidiary|||||||||||||
|||services||||||||||||
||Controllin|Sales of||||||||||||
|Putian|g|product||||||||||||
|Hi-Tech|sharehold|and|Telecom|Marke||||||Bank||2017-04-|The same|
||||||25.19|25.19|0.01%|50|N||25.19|||
|Industrial|er’s|provide|product|t price||||||transfer||29|as above|
|Co., Ltd.|subsidiary|labor||||||||||||
||; A|services||||||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Company|||||||||||||
||with|||||||||||||
||shares|||||||||||||
||owed by|||||||||||||
||the|||||||||||||
||Company,|||||||||||||
||Director|||||||||||||
||and|||||||||||||
||Executive|||||||||||||
||of the|||||||||||||
||Company|||||||||||||
||hold|||||||||||||
||additional|||||||||||||
||post as|||||||||||||
||Director|||||||||||||
||A|||||||||||||
||Company|||||||||||||
||with|||||||||||||
||shares|||||||||||||
||owed by|||||||||||||
||the|Sales of||||||||||||
|SEI-Nanji|Company,|product||||||||||||
|ng Putian|Director|and|Telecom|Marke||||||Bank||2017-04-|The same|
||||||53.24|53.24|0.02%|200|N||53.24|||
|Optical|and|provide|product|t price||||||transfer||29|as above|
|Network|Executive|labor||||||||||||
||of the|services||||||||||||
||Company|||||||||||||
||hold|||||||||||||
||additional|||||||||||||
||post as|||||||||||||
||Director|||||||||||||
|||Sales of||||||||||||
|Putian|Controllin|||||||||||||
|||product||||||||||||
|Internatio|g|||||||||||||
|||and|Telecom|Marke||||||Bank||2017-04-|The same|
|nal|sharehold||||42.88|42.88|0.02%|100|N||42.88|||
|||provide|product|t price||||||transfer||29|as above|
|Trading|er’s|||||||||||||
|||labor||||||||||||
|Co., Ltd.|subsidiary|||||||||||||
|||services||||||||||||
|||Sales of||||||||||||
|Nanjing|Controllin|||||||||||||
|||product||||||||||||
|Putian|g|||||||||||||
|||and|Telecom|Marke||||||Bank||2017-04-|The same|
|Hongyan|sharehold||||23.34|23.34|0.01%|100|N||23.34|||
|||provide|product|t price||||||transfer||29|as above|
|Electric|er’s|||||||||||||
|||labor||||||||||||
|Co., Ltd.|subsidiary|||||||||||||
|||services||||||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||A|||||||||||||
||Company|||||||||||||
||with|||||||||||||
||shares|||||||||||||
||owed by|||||||||||||
||the|||||||||||||
|SEI-Nanji|||House|||||||||||
||Company,|||||||||||||
|ng Putian|||&|Marke||||||Bank||2017-04-|The same|
||Senior|Lease|||60.79|60.79|30.01%|100|N||60.79|||
|Optical|||building|t price||||||transfer||29|as above|
||Executive|||||||||||||
|Network|||s|||||||||||
||of the|||||||||||||
||Company|||||||||||||
||hold|||||||||||||
||additional|||||||||||||
||post as|||||||||||||
||Director|||||||||||||
||||House|||||||||||
||Controllin|Leasinga|&|||||||||||
|Putian||||||||||||||
||g|nd|building|||||||||||
|Hi-Tech||||Marke||||||Bank||2017-04-|The same|
||sharehold|propert|s;||387.65|387.65|81.52%|1,000|N||387.65|||
|Industrial||||t price||||||transfer||9|as above|
||er’s|y|property|||||||||||
|Co., Ltd.||||||||||||||
||subsidiary|charge|service|||||||||||
||||charge|||||||||||
|||||||33,628.||||||||
|Total||||--|--||--|103,750|--|--|--|--|--|
|||||||09||||||||
|Details of major sold-out order sent back||||-||||||||||
|||||According to the prediction made at the beginning of 2017 on the total amount of related||||||||||
|||||transactions throughout the year and the supplemental prediction made during the year, the||||||||||
|||||total amount of related transactions with related parties throughout the year will not exceed||||||||||
|||||RMB1,065 million, among which, the amount related to products procurement and||||||||||
|||||products sales will not be more than RMB58 million and RMB996 million, amount related||||||||||
|||||to rental and property management fee will not be more than RMB10 million and the||||||||||
|||||amount related to property rental income will not be more than RMB1.0 million. In fact,||||||||||
|The actual implementation of routine||||the actual total amount of related transactions of the Company in 2017 amounted to||||||||||
|related transactions that is about to||||RMB336,280,900, among which, the amount related to procurement of products from||||||||||
|occurred in the Period with total amount||||related parties was RMB8,607,600, amount related to sales of products to related parties||||||||||
|estimated by category (if any)||||was RMB323,188,800, amount related to rental and property management fee was||||||||||
|||||RMB3,876,500 and the amount related to property rental income was RMB607,900. the||||||||||
|||||difference between the actual amount and predicted amount of related transactions is||||||||||
|||||mainly attributable to: (1)certain related transactions were arranged between the Company||||||||||
|||||and its related parties to fully capitalize on the Group’s advantages to carry out cooperation||||||||||
|||||concerning provision of product service to customers. Due to the uncertainty in market||||||||||
|||||conditions, customers’ demands and bidding, it is hard to make accurate prediction on||||||||||
|||||specific amount; (2)some operating entities of the Company relocated to other production||||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
||premises during the reporting period, which led to decrease of leased area from related|
||parties. Thus, though the various operating entities made prediction on daily related|
||transactions based on the production and sale plans at the beginning of the year, there is|
||difference between the predicted and actual amount due to the aforesaid factors.|
|Reason for the great difference between||
|trade price and market reference price (if|-|
|any)||

2. Related transactions by assets acquisition and sold
□ Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable√ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
√ Applicable□ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Yes√ No
The Company had no non-operating contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable□ Not applicable
(1) In reporting period, the Company applying entrust loans from controlling shareholder- China Potevio Company Limited with 164 million Yuan;
(2) Providing guarantee of 2.55 million Yuan for joint venture SEI-Nanjing Putian Optical Network in the period.
Found more in 2. major guarantee in Section V -17
Website for temporary disclosure of the major connected transaction
||||
|-|-|-|
|Announcement|Date of disclosure|Website for disclosure|
|Relation Transaction of Applying Entrust Loanfrom Controlling Shareholder|||
||2017-07-07|Juchao Website|
|Relation Transaction of Applying Entrust Loanfrom Controlling Shareholder|||
||2017-08-05|Juchao Website|
|Relation Transaction of Applying Entrust Loanfrom Controlling Shareholder|||
||2017-10-14|Juchao Website|
|Notice of Guarantee Offer to Joint-stockCompany|||
||2016-03-29|Juchao Website|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable√ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√ Not applicable
No leasing condition in the period
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||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|
||||||Jointly||||
|SEI-Nanjing Putian||||||2017.1.16-20|||
||2016-03-29|600|2017-01-16|135|liability||Y|Y|
|Optical Network||||||17.7.15|||
||||||guaranty||||
||||||Jointly||||
|SEI-Nanjing Putian||||||2017.4.25-20|||
||2016-03-29|600|2017-04-25|120|liability||Y|Y|
|Optical Network||||||17.8.19|||
||||||guaranty||||
|||||Total actual occurred|||||
|Total approving external guarantee||600||||255|||
|||||external guarantee in report|||||
|in report period (A1)|||||||||
|||||period (A2)|||||
|||||Total actual balance of|||||
|Total approved external guarantee||600||||0|||
|||||external guarantee at the|||||
|at the end of report period ( A3)|||||||||
|||||end of report period (A4)|||||
|Guarantee of the Company for the subsidiaries|||||||||
|||||||||Guarante|
||Related||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Jointly||||
|Nanjing Southern||||||2017.3.1-201|||
||2016-03-29|6,000|2017-03-01|2,000|liability||Y|N|
|Telecom Co., Ltd.||||||7.12.1|||
||||||guaranty||||
||||||Jointly||||
|Nanjing Southern||||||2017.5.25-20|||
||2017-04-29|6,400|2017-05-25|1,000|liability||N|N|
|Telecom Co., Ltd.||||||18.5.25|||
||||||guaranty||||
||||||Jointly||||
|Nanjing Southern||||||2017.10.1-20|||
||2017-04-29|6,400|2017-10-01|1,000|liability||N|N|
|Telecom Co., Ltd.||||||18.9.1|||
||||||guaranty||||
|Nanjing Putian Telege|||||Jointly||||
|||||||2017.10.1-20|||
|Intelligent Building|2017-04-29|2,500|2017-10-01|500|liability||N|N|
|||||||18.9.7|||
|Co., Ltd.|||||guaranty||||
|Nanjing Putian Telege|||||Jointly||||
|||||||2017.8.25-20|||
|Intelligent Building|2017-04-29|2,500|2017-08-25|1,000|liability||N|N|
|||||||18.8.20|||
|Co., Ltd.|||||guaranty||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||8,900||occurred guarantee for||5,500|||
|guarantee for subsidiaries in report|||||||||
|||||subsidiaries in report period|||||
|period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||8,900||guarantee for subsidiaries at||3,500|||
|guarantee for subsidiaries at the|||||||||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the subsidiary for subsidiaries|||||||||
|||||||||Guarante|
||Related||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|
|Total amount of guarantee of the Company( total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|||9,500||||5,755|||
|guarantee in report period||||occurred guarantee in report|||||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|||9,500||||3,500|||
|guarantee at the end of report||||guarantee at the end of|||||
|period (A3+B3+C3)||||report period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the net|||||||||
|||||9.94%|||||
|assets of the Company (that is A4+ B4+C4)|||||||||
|Including:|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|related parties(D)|||||||||
|The debts guarantee amount provided for the guaranteed parties|||||||||
|||||0|||||
|whose assets-liability ratio exceed 70% directly or indirectly(E)|||||||||
|Proportion of total amount of guarantee in net assets of the||||0|||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Company exceed 50%(F)||
|Total amount of the aforesaid three guarantees(D+E+F)|0|
|Explanations on possibly bearing joint and several liquidating||
||Not applicable|
|responsibilities for undue guarantees (if applicable)||
|Explanations on external guarantee against regulated procedures||
||Not applicable|
|(if applicable)||

Explanation on guarantee with composite way
(2)Guarantee outside against the regulation
□Applicable√Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable√ Not applicable
The Company had no trust financing in the reporting period.
(2) Entrusted loans
□ Applicable√ Not applicable
The Company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable√ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Performance of social responsibility
The Company consolidates its position in telecommunication industry by continuously improving its operating quality and core competitiveness under the principle of integrity and by law, performs social responsibility actively, maintains all thestakeholders’ legal interests and builds a harmonious company, so as to achieve win-win benefits among shareholders, employees, the Company and the society.
The Company has established the standardized corporate governance structure, and formed the operating mechanism that the shareholders, the board of directors, and the managers perform their own functions, mutually check and balance, and operate and coordinate. The Company standardized the gathering, convening and voting procedures of the shareholders 'general meeting in strict accordance with the provisions and requirements of the Articles of Association and the Rules of Procedure of the Shareholders'
General Meeting, ensured theshareholders’ rights to know, participate and vote in theCompany’s major issues; earnestly fulfilled the
obligation of information disclosure, ensured the information disclosure to be real, accurate, timely, complete and fair, and
guaranteed the legitimate rights and interests of all shareholders, especially the medium and small shareholders.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Over the years, the Company has been adhering to the high-tech development strategy, strengthening the quality management, paying attention to the environment, safety and health management, promoting the integration of effective management, and has passed the GB / T19001-2000 quality system certification, GB / T24001-2004 environmental management system certification, GB / T28001 -2001 occupational safety and health system certification, and has been constantly striving to promote the environmental protection and sustainable development.
The Company strictly followed various laws and regulations, including but not limited to the Law of Employment of the PRC and the Law of Employment Contract of the PRC, established considerable human resource management system and remuneration and welfare system. It attached great importance toemployees’ value, adhered to people-oriented operation, built a corporate culture focusing on communication, execution and performance, and it also emphasized talent cultivation by carrying out diversified staff training, improving their general quality, establishing comprehensive staff representative system, staff representative conference assessment system and petition letter working system to protectemployees’ legal interest and endeavor to realize growth of the Company and its employees.
The Company has actively built cooperation with suppliers and customers, complied with commercial rules during operating activities, guaranteed right for suppliers to participate and compete in a fair and equal basis through reasonable systems, upgraded products quality catering for market needs, provided better post-sale service and ensured protection ofcustomers’ legal interests. The Company made active participation in social public welfare undertakings, including numbers of charity donation an other social public activities in Nanjing: participated in the activity named “Integrity People Power Station” and granted the honor of “Integrity People Power Station” by the Civilization Office of Nanjing, carried out the citizen convenience voluntary activity of “study Lei Feng and welcome the festival ofWomen’s Day”, and the theme service activity of “drive the seven-colors of wagon to provide voluntary services for communities”, etc, which demonstrated its commitment of social responsibility by actual activities.
2. Precise poverty alleviation social responsibility
(1) Precise poverty alleviation plan
According to the collective arrangement by the Nanjing Municipal Commission of Economy& Information Technology, the Company will provide assistance to Molihua village in Liuhe district during the 13th Five-Year Plan.
Basic policy: to adhere to the basic policy of accurate poverty alleviation under the guidance of the spirit of the 19th meeting of the Party and the important series of speaking spirit of the General Secretary of the Party Mr. Xi Jinping.
Overall target: to increase thepoor’s income as the core target like blood making, to improve their living quality as the important target like blood transfusion and to help them get rid of the poverty and achieve richness as the final target. To insist combination of blood transfusion and blood making, which is an effective assistance for the poor.
Major tasks: to insist on general planning and different poverty alleviation. During the poverty assistance procedure in the 13th Five-Year Plan, the Company has implemented the same with thoughtful consideration of its actual conditions and strict execution of its annual budget. Those residents in the village who are lonely or disabled are particularly paid with much care.
Measured adopted:
1)Capital assistance: through effective communication with the village commission of Molihua village and careful inspection of the list of the poor, the Company made appropriate capital assistance to the certain poor residents of the village in particular time of point, subject to compliance with its annual budget.
2)Emotion assistance: to make frequent warm visits and contact with those farmers earning low income, and communicate with them to know their difficulty. In the traditional holidays like the Spring Festival, the Company would make further and prompt visit to the poor who experiences emergency and living difficulty.
3)Entrepreneurship assistance: to set pilot projects to carry out one-to-one assistance with the poor farmers taking into account the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report diversified and considerable production of chicken, duck, agricultural products. Based on its own needs, the Company helps the poor farmers to get rid of poverty and become rich by means of procurement of green agricultural products.
(2) Summary of annual precise poverty alleviation
In 2017, according to the collective arrangement by the Nanjing Municipal Commission of Economy& Information Technology, the Company continued to propel poverty alleviation works. In particular, it make numerous site visits to Molihua village, and is in the process of preparing the appropriate poverty alleviation plan for the village based on its understanding on the village and its actual conditions.
(3) Results of the poverty
||||
|-|-|-|
|Target|Measurement unit|Numbers/ implementation|
|i. Overall|——|——|
|ii. Invested by specific project|——|——|
|1. Industrial development poverty|——|——|
|2. Transfer employment|——|——|
|3.Relocation the poor|——|——|
|4.Education poverty|——|——|
|5.Health poverty alleviation|——|——|
|6.Ecological protection and poverty|||
||——|——|
|alleviation|||
|7.Fallback protection|——|——|
|8.Social poverty alleviation|——|——|
|9. Other|——|——|
|iii. Awards (content and grade)|——|——|

(4) Follow-up of precise poverty alleviation
The Company will making use of the poverty alleviation funds reasonablly in line with the alleviation plan, implemented the precise poverty alleviation
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No
The listed Company and its subsidiary did not belongs to the key sewage units released from environmental protection department
The company and its subsidiaries did not belong to the key sewage units released from environmental protection department. No
administrative penalty for environmental protection was imposed during the reporting period.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Environmental impact assessment of the construction project and other environmental protection administrative licensing conditions: the first phase of the project of Nanjing Putian Science and Technology Innovation Park in the reporting period obtained the pollutant discharge permit.
Emergency plan for environmental emergencies: the company has formulated the QG/NJA08.027 emergency preparedness and response control procedures.
Environmental self-monitoring scheme: the company regularly monitors noise.
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|
|Performance Forcast for year of 2016|2017.1.25|Juchao Website: www.cninfo.com.cn|
|Resolution of 38th session of 6th BOD|2017.3.1|Juchao Website: www.cninfo.com.cn|
|Performance Forecast for 1Q of 2017|2017.4.15|Juchao Website: www.cninfo.com.cn|
|Correction on Performance Forcast for year of 2016|2017.4.24|Juchao Website: www.cninfo.com.cn|
|Risks Warning on Stock Suspension Probably|2017.4.24|Juchao Website: www.cninfo.com.cn|
|Annual Report 2016 Disclosure Postponed|2017.4.24|Juchao Website: www.cninfo.com.cn|
|The Seond Risks Warning on Stock SuspensionProbably|2017.4.25|Juchao Website: www.cninfo.com.cn|
|The Third Risks Warning on Stock SuspensionProbably|2017.4.26|Juchao Website: www.cninfo.com.cn|
|Abnormal Flectuations on Stock Trading|2017.4.26|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE Posponed|2017.4.26|Juchao Website: www.cninfo.com.cn|
|The Forth Risks Warning on Stock SuspensionProbably|2017.4.27|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE Posponed|2017.4.27|Juchao Website: www.cninfo.com.cn|
|The Fifth Risks Warning on Stock SuspensionProbably|2017.4.28|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE|2017.4.28|Juchao Website: www.cninfo.com.cn|
|Resolution of 39th session of 6th BOD|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Resolution of 21st session of 6th SupervisoryCommittee|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Summary of Annual Report 2016|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Provision for Impairment of Assets for year of 2016|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Estimation of the Routine Related Transaction foryear of 2017|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Providing Guarantee for Controlling Subsidiary|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Providing Guarantee for Stock-Jointly Enterprise|2017.4.29|Juchao Website: www.cninfo.com.cn|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Convening AGM 2016|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Risk Warniing on Stock Suspension and DelistingProbably|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Suspension Notice Before Stock Suspended|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Texe of First Quarterly Report 2017|2017.4.29|Juchao Website: www.cninfo.com.cn|
|Explaination on Property Disposal|2017.5.3|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE Posponed|2017.5.5|Juchao Website: www.cninfo.com.cn|
|告Notice of Stock Suspension|2017.5.9|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE Posponed|2017.5.10|Juchao Website: www.cninfo.com.cn|
|Reply on Attention Letters from SSE|2017.5.11|Juchao Website: www.cninfo.com.cn|
|Correction on Reply on Attention Letters from SSE|2017.5.11|Juchao Website: www.cninfo.com.cn|
|Notice of Government Grant Received|2017.5.17|Juchao Website: www.cninfo.com.cn|
|Resolution of AGM 2016|2017.5.24|Juchao Website: www.cninfo.com.cn|
|Resolution of 41th session of 6th BOD|2017.5.25|Juchao Website: www.cninfo.com.cn|
|Resognation of Senior Executives|2017.5.25|Juchao Website: www.cninfo.com.cn|
|Progress on Engagement of the Spnsors for StocksReturn to the Market|2017.6.3|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.6.7|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.7.7|Juchao Website: www.cninfo.com.cn|
|Resolution of 42th session of 6th BOD|2017.7.7|Juchao Website: www.cninfo.com.cn|
|Related Transaction on Applying Entrust Loans toControlling Shareholder|2017.7.7|Juchao Website: www.cninfo.com.cn|
|Performance Forcast for First Half of 2017|2017.7.15|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Resolution of 43th session of 6th BOD|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Resolution of 23th session of 6th supervisorycommittee|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Related Transaction on Applying Entrust Loans toControlling Shareholder|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Convening the First Extraordinary Shareholder’General Meeting for year of 2017|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Letter of Warning from Jiangsu SecuritySupervision Bureau|2017.8.5|Juchao Website: www.cninfo.com.cn|
|Resolution of the First Extraordinary Shareholder’|2017.8.24|Juchao Website: www.cninfo.com.cn|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|General Meeting for year of 2017|||
|Resolution of 1st session of 7th BOD|2017.8.24|Juchao Website: www.cninfo.com.cn|
|Resolution of 1st session of 7th supervisorycommittee|2017.8.24|Juchao Website: www.cninfo.com.cn|
|Resolution of 2nd session of 7th BOD|2017.8.26|Juchao Website: www.cninfo.com.cn|
|Resolution of 2nd session of 7th supervisorycommittee|2017.8.26|Juchao Website: www.cninfo.com.cn|
|Summary of Semi-Annual Report|2017.8.26|Juchao Website: www.cninfo.com.cn|
|Change of the Accounting Policy|2017.8.26|Juchao Website: www.cninfo.com.cn|
|Notice of Cumulative Litigation|2017.9.6|Juchao Website: www.cninfo.com.cn|
|Notice of the Project Winning Bid|2017.9.7|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.9.7|Juchao Website: www.cninfo.com.cn|
|Singing the Recommenedation Agreement on StockReturn to the Market|2017.9.23|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.10.13|Juchao Website: www.cninfo.com.cn|
|Performance Forcast of 3Q of 2017|2017.10.14|Juchao Website: www.cninfo.com.cn|
|Resolution of 3rd session of 7th BOD|2017.10.14|Juchao Website: www.cninfo.com.cn|
|Related Transaction on Applying Entrust Loans toControlling Shareholder|2017.10.14|Juchao Website: www.cninfo.com.cn|
|Text of 3Q report of 2017|2017.10.28|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.11.7|Juchao Website: www.cninfo.com.cn|
|Resolution of 5th session of 7th BOD|2017.11.30|Juchao Website: www.cninfo.com.cn|
|Notice on Increasing the Related TransactionAmount for 2017|2017.11.30|Juchao Website: www.cninfo.com.cn|
|Estimation of the Routine Related Transaction foryear of 2018|2017.11.30|Juchao Website: www.cninfo.com.cn|
|Convening the Second Extraordinary Shareholder’General Meeting for year of 2017|2017.11.30|Juchao Website: www.cninfo.com.cn|
|Countermeasures for Stock Return to the Marketand progress of relevant works|2017.12.7|Juchao Website: www.cninfo.com.cn|
|Resolution of the Second ExtraordinaryShareholder’ General Meeting for year of 2017|2017.12.16|Juchao Website: www.cninfo.com.cn|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report XX. Significant event of subsidiary of the Company
□ Applicable√ Not applicable
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
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||
||||issued|shares|public||||n|
||||||reserve|||||
||115,000,0|||||||115,000,0||
|I. Unlisted shares||53.49%|||||||53.49%|
||00|||||||00||
||115,000,0|||||||115,000,0||
|1. Sponsor’s shares||53.49%|||||||53.49%|
||00|||||||00||
|Including: state-owned|115,000,0|||||||115,000,0||
|||53.49%|||||||53.49%|
|shares|00|||||||00||
||100,000,0|||||||100,000,0||
|II. Listed shares||46.51%|||||||46.51%|
||00|||||||00||
|2. Domestically listed|100,000,0|||||||100,000,0||
|||46.51%|||||||46.51%|
|foreign shares|00|||||||00||
||215,000,0|||||||215,000,0||
|III. Total shares||100.00%|||||||100.00%|
||00|||||||00||

Reasons for share changed
□ Applicable√ Not applicable
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changes
□ Applicable√ Not applicable
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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 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. Existing internal staff shares
□ Applicable√ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Total preference|||
||||||||Total preference||||shareholders|||
|||Total common|||||shareholders||||with voting|||
|Total common||||||||||||||
|||stock|||||with voting||||rights recovered|||
|stock||||||||||||||
|||shareholders at|||||rights recovered||||at end of last|||
|shareholders in|8,326||||8,326||||0||||0|
|||end of last month|||||at end of||||month before|||
|reporting||||||||||||||
|||before annual|||||reporting period||||annual report|||
|period-end||||||||||||||
|||report disclosed|||||(if applicable)||||disclosed (if|||
||||||||(found in note8)||||applicable)|||
||||||||||||(found in note8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders||||||||||||||
|||||Total||||||Number of share pledged/frozen||||
||||||||Amount|||||||
|||||sharehol||||Amount||||||
||||Proportio|||Changes|of|||||||
|||||ders at||||of listed||||||
|Full name of|Nature of||n of|||in report|un-listed|||||||
|Shareholders|shareholder||shares|the end||||shares||State of share||Amount||
||||held|||period|shares|||||||
|||||of report||||held||||||
||||||||held|||||||
|||||period||||||||||
|China PotevioCompany Limited|State-ownedc orporation||53.49%|115,000,000||0|115,000,000|0||||||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation||4.46%|9,596,527||5,770,023|0|9,596,527||||||
|ShenwanHongYuan (H.K.)Limited|Foreigncorporation||4.46%|9,587,925||1,760,000|0|9,587,925||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Zhang Huaian|Domestic natureperson|1.31%|2,807,000|0|0|2,807,000|||
|Zheng Enyue|Domestic natureperson|1.12%|2,405,739|0|0|2,405,739|||
|Sun Huiming|Domestic natureperson|0.93%|2,007,110|0|0|2,007,110|||
|Guosen Securities(H.K.) BrokerCo., Ltd.|Domestic natureperson|0.87%|1,861,882|-1,137,373|0|1,861,882|||
|Gu Jinhua|Domestic natureperson|0.83%|1,783,771|0|0|1,783,771|||
|BOCISECURITIESLIMITED|Foreigncorporation|0.80%|1,716,945|-669,583|0|1,716,945|||
|LI SHERYNZHAN MING|Foreign natureperson|0.53%|1,145,000|430,600|0|1,145,000|||
|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 is neither a related party nor a person acting|||||||
|relationship among the aforesaid||in concert with the others. It’s unknown by the Company whether there are related parties or|||||||
|shareholders||persons acting in concert among the other shareholders.|||||||
|Top 10 shareholders with circulation shares held|||||||||
||||||||Type of shares||
|Shareholders’ name||Amount of listed shares held at end of the Period|||||||
||||||||Type|Amount|
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||9,596,527|||||Domestically||
||||||||listed foreign|9,596,527|
||||||||shares||
|Shenwan HongYuan (H.K.) Limited||9,587,925|||||Domestically||
||||||||listed foreign|9,587,925|
||||||||shares||
|Zhang Huaian||2,807,000|||||Domestically||
||||||||listed foreign|2,807,000|
||||||||shares||
|Zheng Enyue||2,405,739|||||Domestically||
||||||||listed foreign|2,405,739|
||||||||shares||
|Sun Huiming||2,007,110|||||Domestically|2,007,110|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|||listed foreign||
|||shares||
|Guosen Securities (H.K.) BrokerCo., Ltd.|1,861,882|Domestically||
|||listed foreign|1,861,882|
|||shares||
|Gu Jinhua|1,783,771|Domestically||
|||listed foreign|1,783,771|
|||shares||
|BOCI SECURITIES LIMITED|1,716,945|Domestically||
|||listed foreign|1,716,945|
|||shares||
|LI SHERYN ZHAN MING|1,145,000|Domestically||
|||listed foreign|1,145,000|
|||shares||
|Jin Yunhua|950,162|Domestically||
|||listed foreign|950,162|
|||shares||
|Expiation on associated relationship||||
|or consistent actors within the top 10||||
||It’s unknown by the Company whether there are related parties or persons acting in concert|||
|un-restrict shareholders and between||||
||among the above mentioned shareholders.|||
|top 10 un-restrict shareholders and||||
|top 10 shareholders||||
|Explanation on shareholders||||
|involving margin business about top||||
|ten common stock shareholders with|N/A|||
|un-restrict shares held(if applicable)||||
|(see note4)||||

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: central state-owned holding
Type of controlling shareholders: legal person
||||||
|-|-|-|-|-|
||Legal person/person||||
|Controlling shareholder||Date of foundation|Organization code|Main operation business|
||in charge of the unit||||
|China Potevio Company||||China Potevio is a large|
||Xing Wei|2003-07-23|91110000710931555N||
|Limited||||central enterprise under|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|||direct administration of|
|||State-owned Assets|
|||Supervision and|
|||Administration|
|||Commission of the State|
|||Council, focusing on|
|||manufacture and trading of|
|||information|
|||telecommunication|
|||products, relevant|
|||technology research and|
|||services. The operation|
|||scope covers information|
|||telecommunication,|
|||broadcasting, industrial|
|||information, financial|
|||electrics and new energy.|
|Equity of other|||
||Domestic and overseas listed companies directly controlled includes Shanghai Potevio Youtong||
|domestic/oversea listed|||
||Technology Co., Ltd., Nanjing Putian Telecommunications Co., Ltd., Chengdu Potevio Cable Co.,||
|Company control by|||
||Ltd.; Domestic and overseas listed companies indirectly controlled includes Eastern||
|controlling shareholder as|||
||Communications Co., Ltd., Eastcompeace Smart Card Co., Ltd., the Company takes no stake in||
|well as stock-joint in report|||
||domestic and overseas listed 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 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|
|China Putian Corporation|Xing Wei|1980-03-29|9111000010000157XE|of the State Council, focusing on|
|||||manufacture and trading of|
|||||information telecommunication|
|||||products, relevant technology|
|||||research and services. The|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|||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 Stock includes Shanghai||
|listed Company control by|Potevio Youtong Technology Co., Ltd, Nanjing Putian Telecommunications Co., Ltd., Chengdu||
|actual controller in report period|Putian Telecommunications Cable Co., Ltd, Eastern Communications Co., Ltd. and Eastcompeace||
||Smart Card Co., Ltd.||

Changes of actual controller in reporting period
□ Applicable√ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
State-owned Assets Supervision and Administration Commission of the State Council
100%
China Putian Corporation
100%
China Potevio Company Limited
53.49%
Nanjing Putian Telecommunications Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable√ Not applicable
4. Particulars about other legal person shareholders with over10% 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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the reporting.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares||||Shares|
|||||||||of shares|of shares|||
||||||Start||held at|||Other|held at|
|||W o r k i n g||||End date||increased|decreased|||
||Title||Sex|Age|dated of|of office|period-be|||changes|period-en|
|Name||status|||office|||in this|in this|||
||||||term|term|gin|||(share)|d|
|||||||||period|period|||
||||||||(Share)||||(Share)|
|||||||||(Share)|(Share)|||
||Director|||||||||||
|||Currently|||2013-08-|||||||
|Xu Qian|(Chairma||M|55|||0|0|0|0|0|
|||in office|||23|||||||
||n)|||||||||||
||Director,|||||||||||
|Li||Currently|||2017-08-|||||||
||deputy||M|46|||0|0|0|0|0|
|Linzhen||in office|||23|||||||
||Chairman|||||||||||
|Cheng||Currently|||2017-08-|||||||
||Director||F|47|||0|0|0|0|0|
|Wei||in office|||23|||||||
|||Currently|||2017-08-|||||||
|Liu Yun|Director||F|44|||0|0|0|0|0|
|||in office|||23|||||||
|||Currently|||2017-08-|||||||
|Qin Zhen|Director||M|49|||0|0|0|0|0|
|||in office|||23|||||||
|Wang||Currently|||2017-08-|||||||
||Director||F|47|||0|0|0|0|0|
|Jinfeng||in office|||23|||||||
||Independ|||||||||||
|Tang||Currently|||2017-08-|||||||
||ent||F|61|||0|0|0|0|0|
|Fuxin||in office|||23|||||||
||director|||||||||||
||Independ|||||||||||
|Xie||Currently|||2017-08-|||||||
||ent||M|54|||0|0|0|0|0|
|Manlin||in office|||23|||||||
||director|||||||||||
||Independ|||||||||||
|Du||Currently|||2017-08-|||||||
||ent||F|49|||0|0|0|0|0|
|Xiaorong||in office|||23|||||||
||director|||||||||||
||Superviso|||||||||||
||r ,|||||||||||
|Zhao||Currently|||2017-08-|||||||
||Chairman||M|51|||0|0|0|0|0|
|Xinping||in office|||23|||||||
||of the|||||||||||
||Superviso|||||||||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||ry|||||||||||
||Committe|||||||||||
||e|||||||||||
|Zhang|Superviso|Currently|||2017-08-|||||||
||||F|44|||0|0|0|0|0|
|Hong|r|in office|||23|||||||
|Qiu|Superviso|Currently|||2017-08-|||||||
||||F|44|||0|0|0|0|0|
|Huizhen|r|in office|||23|||||||
|Li||Currently|||2016-06-|||||||
||GM||M|46|||0|0|0|0|0|
|Linzhen||in office|||15|||||||
||Deputy|Currently|||2016-08-|||||||
|Qin Zhen|||M|49|||0|0|0|0|0|
||GM|in office|||26|||||||
||Secretary|||||||||||
|||Currently|||2017-08-|||||||
|Li Jing|of the||F|42|||0|0|0|0|0|
|||in office|||23|||||||
||Board|||||||||||
|||Office|||2006-05-|2017-08-||||||
|Li Tong|Director||M|47|||0|0|0|0|0|
|||leaving|||11|23||||||
|||Office|||2009-05-|2017-08-||||||
|Han Shu|Director||M|54|||0|0|0|0|0|
|||leaving|||22|23||||||
|||Office|||2011-06-|2017-08-||||||
|Li Yin|Director||F|51|||0|0|0|0|0|
|||leaving|||17|23||||||
|Huang||Office|||2009-05-|2017-08-||||||
||Director||M|44|||0|0|0|0|0|
|Haodong||leaving|||22|23||||||
||Independ|||||||||||
|Zhang||Office|||2009-05-|2017-08-||||||
||ent||M|73|||0|0|0|0|0|
|Shunyi||leaving|||22|23||||||
||director|||||||||||
||Independ|||||||||||
|Zheng||Office|||2009-05-|2017-08-||||||
||ent||F|70|||0|0|0|0|0|
|Aimei||leaving|||22|23||||||
||director|||||||||||
||Independ|||||||||||
|Ding||Office|||2009-08-|2017-08-||||||
||ent||M|61|||0|0|0|0|0|
|Haiyan||leaving|||07|23||||||
||director|||||||||||
||Superviso|||||||||||
||r,|||||||||||
||(Chairma|||||||||||
|Yang|n of the|Office|||2011-06-|2017-08-||||||
||||M|65|||0|0|0|0|0|
|Zhihe|Superviso|leaving|||17|23||||||
||ry|||||||||||
||Committe|||||||||||
||e)|||||||||||
|Tang Di|Superviso|Office|F|41|2012-05-|2017-08-|0|0|0|0|0|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||r|leaving|||17|23||||||
|Liu|Superviso|Office|||2009-05-|2017-08-||||||
||||F|46|||0|0|0|0|0|
|Xiaodong|r|leaving|||22|23||||||
||Chief|||||||||||
|||Office|||2008-09-|2017-05-||||||
|Shi Lian|Accounta||M|45|||0|0|0|0|0|
|||leaving|||25|24||||||
||nt|||||||||||
||Secretary|||||||||||
|Zhong||Office|||2017-02-|2017-08-||||||
||of the||M|47|||0|0|0|0|0|
|Shengwu||leaving|||28|23||||||
||Board|||||||||||
|Total|--|--|--|--|--|--|0|0|0|0|0|

 II. Changes of directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
|Li Tong|Director|Office leaving for terms end|2017-08-23||
|Han Shu|Director|Office leaving for terms end|2017-08-23||
|Li Yin|Director|Office leaving for terms end|2017-08-23||
|Huang Haodong|Director|Office leaving for terms end|2017-08-23||
||Independent||||
|Zhang Shunyi||Office leaving for terms end|2017-08-23||
||director||||
||Independent||||
|Zheng Aimei||Office leaving for terms end|2017-08-23||
||director||||
||Independent||||
|Ding Haiyan||Office leaving for terms end|2017-08-23||
||director||||
||Supervisor||||
||(Chairman of||||
|Yang Zhihe||Office leaving for terms end|2017-08-23||
||the Supervisory||||
||Committee)||||
|Tang Di|Supervisor|Office leaving for terms end|2017-08-23||
|Liu Xiaodong|Supervisor|Office leaving for terms end|2017-08-23||
||Secretary of the||||
|Zhong Shengwu||Office leaving for terms end|2017-08-23||
||Board||||
|Shi Lian|Chief Accountant|Resignation|2017-05-24||

III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and
senior executive at the present
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Director:
Xu Qian (Male), born in 1962, owes a graduate degree, a senior executive getting a MBA. He joints the work in 1984, and worked as engineer of the communication equipment dept. in ChinaP&T Appliances from August 1984 to July 1993; a deputy GM of communication device department in ChinaP&T Appliances from July 1993 to July 1994; deputy GM of ChinaP&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 ChinaP&T Appliances from March 1999 to August 2000; deputy GM of ChinaP&T Appliances from August 2000 to February 2002 and deputy GM of ChinaP&T Appliances Group from February 2002 to June 2003; Party members and deputy GM in ChinaP&T Appliances Group from June 2003 to April 2009; Party members and deputy GM of the China Potevio since April 2009; senior vice president (concurrently) of China Potevio Company Limited and GM (concurrently) of communications industry business from June 2009 to May 2016; party secretary of the Company from May 2013 to June 2016; and servers as president (concurrently) of China Potevio Company Limited since May 2016
Position in the Board and supervisory committee: Director and Chariman of Beijing Capitel Co., Ltd. since October 2010; Director and Chariman of Puxing Mobile Communication Equipment Co., Ltd. from March 2011 to December 2015; Director, executive director and executive committee member of China Potevio Company Limited since May 2011; the director, chairman (legal representative) of the Putian Faersheng guang Commnication Co., Ltd. from June 2012 to November 2015; the director, chairman (legal representative) of the Putian Guomei Network Tech. Co., Ltd. since October 2012; the director and chairman of the Company since August 2013; director and chairman of the Beijing PuTian TaiLi Telecommunications Technology Co.,Ltd. since June 2015; director and chairman of the Shanghai Potevio Youtong Technology Co., Ltd. since November 2015; director of the Putian New Energy Co., Ltd .from July 2015 to June 2017; director and chairman of the PutianEastern Communication Group Co., Ltd. since June 2016 and serves as director and chariman of Putian Heping Technology Co., Ltd. from June 2016 to June 2017
Li Linzhen (Male), born in 1971, having the same educational level as a postgraduate with major in international trade, started his career in 1995. Mr Li successively worked as the workshop supervisor, power battery project manager and engineer of the automation institute affiliated to General Institute of Beijing Non-ferrous Metal and Beijing Youzi Electrical and Electronic Development Co.,Ltd. from July 1995 to February 2002; Mr. Li held the position of quality management specialist in technical quality department of China Putian Corporation from March 2002 to September 2003; he worked at the labor union and league of party work department of China Putian Corporation from September 2003 to March 2006; Mr. Li served as the secretary of youth league committee directly under Potevio Group from April 2004 to September 2014; he successively held the position of business supervisor and senior business supervisor of labor union and league of party work department of Potevio Company Limited from March 2006 to April 2009 (During this period, Mr. Li was temporarily transferred to work at the office of advancement education activities at State-owned Assets Supervision and Administration Commission from January 2005 to December 2005 ); Mr. Li served as the deputy director of party work department of Potevio Company Limited from April 2009 to September 2014; he successively held the post of deputy secretary of party committee, secretary of committee for discipline inspection, deputy general manager and union leader of Nanjing Putian Telecommunications Co., Ltd. from September 2014 to June 2016; Mr. Li has served as the general manager and secretary of the party committee of Nanjing Putian Telecommunications Co., Ltd. since June 2016 until now.
Position in the Board and supervisory committee: Director of Shanghai Potevio Youtong Technology Co., Ltd. from June 2012 to November 2015; Director of Wuhan Putian Power Co., Ltd. from October 2012 to Febuary 2017; Supervisor of Putian Hi-Tech Industrial Co., Ltd. since October 2015; Chairman of the Supervisory Committee in Shanghai Potevio Youtong Technology Co., Ltd. since November 2015 and director and deputy chariman of the Company since August 2017
Cheng Wei (Female), born in 1970, obtaining amaster’s degree with major in fluid power transmission and control, started her career
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report in 1992. Mr. Cheng was engaged in theR&D work at the institute affiliated to Hubei Yichang Machine-tool Industry Company from August 1992 to April 1994; she took on technical development work at the equipment department of No. 57619 Troops ofChina’sPeople’s Liberation Army from May 1994 to August 1995; Ms. Cheng successively served as the director of new technology institute and deputy chief engineer of Beijing Post and Telephone Equipment Factory from June 1998 to May 2002; She held the position of vice factory manager of Beijing Post and Telephone Equipment Factory from June 2002 to December 2005; Ms. Cheng successively worked as the general manager of system business unit and the third department of marketing of communications industry business unit of Potevio Company Limited from January 2006 to October 2010; she held the position of deputy general manager of communications industry business unit as well as held a concurrent post of general manger of third department of marketing of Potevio Company Limited from October 2010 to September 2014; Ms. Cheng has served as the general manager of the third business unit of Potevio Company Limited from September 2014 until now.
Position in the Board and supervisory committee: Director of the Estearn Communication Co., Ltd. from May 2012 to June 2015; Director of the Beijing Capitel Co., Ltd. From October 2013 to July 2017; the Director of Shanghai Potevio Youtong Technology Co., Ltd. since November 2015 and director of the Company since August 2017
Liu Yun (Female), born in 1973, obtaining amaster’s degree with major in investment and economy, started her career in 1997. Ms. Liu first worked at the office and financial department of China National Textiles Import and Export Corporation from April 1997 to January 2002; She served as the assistant of general manager of the investment headquarter of China National Textile Import and Export Corporation from January 2002 to June 2004; she served as the assistant of general manager of Chinatex International Apparel Co., Ltd from June 2004 to October 2006; Ms. Liu held the position of financial supervisor of preparatory office at Beijing for Infolex LLc from October 2006 to April 2007; she successively worked as investment management supervisor and manger of enterprise development department of Potevio Company Limited from April 2007 to October 2013; Ms. Liu held the position of general manger assistant of enterprise development department of Potevio Company Limited from October 2013 to October 2016; she has worked as the vice general manger of enterprise development department of Potevio Company Limited from October 2016 until now.
Position in the Board and supervisory committee: Director of Putian Heping Technology Co., Ltd. from Febuary 2012 to November 2013; director of Shanghai Putian Kechuang Electronic Co., Ltd. since July 2015; Director of Puxing Mobile Communication Equipment Co., Ltd. since December 2015; director of Hangzhou Hongyan Electric Co., Ltd. since June 2016; director of Chengdu Putian Cable Co., Ltd. since January 2017, the director of Putian Logistic Technology since Febuary 2017 and director of the Company since August 2017
Qin Zhen (Male), born in 1969, bachelor degree, major in administrative engineering. He worked in 1990 and successively worked as the production office scheduling and department assistant in Nanjing Communication Equipment Plant from August 1990 to January 1999; he worked as the deputy GM and deptuy secretary of the Party branch in wiring Company of Nanjing Putian Telecommunication Co., Ltd. from January 1999 to March 2001; and serverd 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 werved as GM in Putian manufactruing 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 assitant from March 2013 to September 2016; now he serves sa deputy GM of the Company since September 2016; a director of the Company
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report since August 2017.
Position in the Board and supervisory committee: director of the Putian Hi-Tech Industrial Co., Ltd. since December 2016
Wang Jinfeng (Female), born in 1970, obtaining abachelor’s degree with major in accounting, started her career in 1993. Ms. Wang worked as the accountant of the financial department of Beijing Posts and Telecommunications Equipment Factory from August 1993 to April 1995; she served as the accounting officer of the marketing center of Beijing Posts and Telecommunications Equipment Factory from April 1995 to February 2002; she held the position of financial accounting manager of Beijing Capitek Co. Ltd. from March 2002 to April 2005; Ms. Wang successively served as the financial manager of terminal services, agency services, agency and telecommunications services of Potevio Company Limited from April 2005 to November 2013; she has worked as the assistant of the general manager of financial department of Potevio Company Limited from November 2013 until now.
Position in the Board and supervisory committee: Director of Beijing PuTian TaiLi Telecommunications Technology Co.,Ltd. since June 2015; Director of Puxing Mobile Communication Equipment Co., Ltd. since December 2015 and director of the Company since August 2017
Tang Fuxin (Female), born in 1956, obtaining amaster’s degree with major in business administration, started her career in 1975. Ms. Tang worked at the countryside in Shunyi Beijing from March 1975 to December 1976; she successively served as an accountant of financial division and the deputy director of inspection division of the original ministry of posts and telecommunications from September 1976 to October 1998; she served as the manager of planning financial department of the original Guoxin Paging Co.,Ltd. from October 1998 to July 2000; she worked as the vice general manager of financial department of China United Communications 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.
Concurrent posts in the board of directors and board of supervisors: she held a concurrent post as the supervisor of China United Communications Limited from March 2002 to April 2011; she concurrently served as the supervisor of the board of supervisors of the State-owned Assets Supervision and Administration Commission at China United Communications Limited from March 2006 to April 2011; she took up a concurrent post as the independent director of Shanghai Zhenhua Heavy Industries (Group) Co.,Ltd. from May 2011 to December 2013; Ms. Tang has held a concurrent post as the independent director of the Company from August 2017 until now.
Xie Manlin (Male), born in 1963, bachelor degree major in the laws. He worked in 1986, and in the Nanjing Second Laws Firm from August 1986 to September 1989; 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
Position in the Board and supervisory committee: independent director of Nanjing Bank from May 2005 to May 2011; independent director of Jiangsu Nanda Soft Company Limited since June 2011 and independent director of of the Company since August 2017 Du Xiaorong (Female), born in 1968, holding adoctor’s degree with major in technological economy and management, started her career in 1989. Ms. Du worked as an assistant teacher at the management department of Hohai University from July 1989 to March 1995; she served as a lecturer of International Business School of Hohai University from April 1995 to March 2001; Ms. Du worked as an associate professor of Business School of Hohai University from April 2001 to March 2002; Ms. Du was put on field practice at Taihu Basin Administration and worked as the assistant of the director of planning department from April 2002 to April 2003; She
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 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 Hohai University from October 2010 to May 2013; She has served as a professor and the director of Accounting department of Hohai University from June 2013 until now; Ms. Du has also held the position of independent director of the Company from August 2017 until now.
Supervisor:
Zhao Xinping(Male), born in 1966, holding adoctor’s and amaster’s degree with major in international trade, started his career 1989. Mr. Zhao worked at the rural development research center of state council from July 1989 to September 1989; he successively served as the senior accountant of financial department, deputy general manager of investment management department and general manager of investment department of China Posts and Telecommunications Industries Co.,Ltd. from September 1989 to September 1999; he successively held the post of as the general manager of investment management department and general manager of business financial department, assistant general manager, deputy chief accountant (a concurrent post) and chief accountant of Potevio Company Limited from September 1999 to December 2006; he worked as the financial director of Potevio Company Limited from July 2003 to February 2005; Mr. Zhao held the position of secretary of the board of directors of Potevio Company Limited from February 2005 to August 2014; he concurrently worked as the general manager of purchasing center of Potevio Company Limited from January 2003 to December 2014; he held a concurrent post of the general manager of in investment and financing development department of Potevio Company Limited from March 2011 to January 2013; Mr. Zhao has worked as the chairman of the board of supervisors of Potevio Company Limited from September 2014 until now; he also held a concurrent post of general manager of the legal department of auditing and supervision of Potevio Company Limited as well as the deputy supervisor of party group and discipline group of China Putian Corporation from March 2015 until now.
Concurrent posts in the board of directors and board of supervisors: Mr.Zhao has successively held a concurrent post of director, chairman of the board (legal representative), vice chairman of the board and director of Junlong Information Technology Co.,Ltd from November 2011 until now; he has also concurrently worked as the director and vice chairman of the board of Potevio International Fund Management Co.,Ltd. from July 2003 until now; he concurrently worked as the director and vice chairman of the board of Beijing Potevio Lianchuang Investment Management Co.,Ltd. from August 2003 to June 2016; Mr. Zhao worked as the director and chairman of the board of Nanjing Putian Telecommunications Co., Ltd.from March 2006 to May 2011; he has held a concurrent post of director of Beijing Capitek Co. Ltd from October 2010 until now; he concurrently served as the director of Potevio New Energy Co.,Ltd. from February 2011 to June 2015; he took up a concurrent post of the director of Puxing Mobile Telecom Equipment Limited from March 2011 to December 2015 ; he concurrently worked as the director of Tianjin Lisheng Battery Co.,Ltd, from May 2011 to June 2014; he also concurrently served as the director and the chairman of the board of Hangzhou Hongyan Electrical Appliance Co.,Ltd from May 2011 to October 2013; he held a concurrent post of director of Orient Communications Co.,Ltd from May 2012 to June 2015; he has still concurrently worked as the supervisor of the Potevio Innovation and Entrepreneurship Co.,Ltd from January 2016 until now; Mr. Zhao has concurrently served as the supervisor (employee representative) of China Putian Corporation from December 2016 until now and he has also held a concurrent post of the chairman of the board of supervisors of the company form August 2017 until now.
Zhang Hong(Female), born in 1973 with bachelor degree of law. She commenced to work in 1994, with details as follows: acted as a lawyer in Jiangxi Jingde Law Office during the period from September 1994 to December 2000; a lawyer in Beijing Hechuan Law
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Office during the period from January 2001 to December 2003; legal manager in Beijing Shouxin Co., Ltd. during the period from December 2003 to July 2014; a senior solicitor in the department of audit, supervision and law of Potevio Telecommunication Industry Co., Ltd. from July 2014 till now and the supervisor of the Company from August 2017 till now.
Qi Huizhen(Female), born in 1973 with bachelor degree of accounting. She commenced to work in 1997, with details as follows: successively served as the female director and secretary of the Youth League Committee in Shaokou Village Government,Wan’an County, Jiangxi Province from July 1997 to January 2000; successively served as the cost accountant and the CFO in the finance department of Nanjing Potevio Telecommunication Co., Ltd. from February 2000 to October 2004; the deputy director of the HR department of Nanjing Potevio Telecommunication Co., Ltd. from November 2004 to November 2005; successively served as the deputy director and director of the finance department of Nanjing Potevio Telecommunication Co., Ltd from December 2005 to September 2016, and the director of the department of audit, supervision and law of Nanjing Potevio Telecommunication Co., Ltd from October 2016 till now.
Ms. Qiu Huizhen serves sa the staff representative supervisor of the Company since August 2017
Senior Executives:
Li Linzhen (Male), born in 1971, graduate equivalency, major in international trade, worked in 1995. He worked in the instute of automation under the name of GRINM and Beijing Youzi Electric Development Company from July 1995 to Feburary 2002; and successively worked as workshop director, manager and engineer of the power battery project; he also served as the technical management commisioner in technical quality dept. of China Potevio from March 2002 to September 2003; worked in dept. of the Party andparty’s Mission Work of China Potecio from September 2003 to March 2006 and served as secretary of the Youth League Committee of Potevio Group from April 2004 to September 2014; from March 2006 to April 2009, he successively wokred as the chief ofParty’s mission of the dept. of Party Group and senior executieve inParty’s Mission (temporarily transfer to office of the advanced education activities of the SASAC from January 2005 to December 2005 ); worked as deputy director of the Dept. of Party Work in China Potevio Company Limited from April 2009 to September 2014; the deputy secretary of the Party Commission, discipline inspection commission and deputy GM as well as person in charge of the labor union in the Company from September 2014 to June 2016; he serves as GM and secretary of the Party Committee of the Company from June 2015
Position in the Board and supervisory committee: he worked as director of the Shanghai Potevio Youtong Technology Co., Ltd.from June 2012 to November 2015; director of the Wuhan Putian Power Co., Ltd. from October 2012 to Febuarry 2017; supervisor of Putian Hi-Tech Industrial Co., Ltd. since October 2015; And the Chairman of the Supervisory Committee in Shanghai Potevio Youtong Technology Co., Ltd. since November 2015
Qin Zhen (Male), born in 1968, bachelor degree, major in administrative engineering. He worked in 1990 and successively worked as the production office scheduling and department assistant in Nanjing Communication Equipment Plant from August 1990 to January 1999; he worked as the deputy GM and deptuy secretary of the Party branch in wiring Company of Nanjing Putian Telecommunication Co., Ltd. from January 1999 to March 2001; and serverd 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 werved as GM in Putian manufactruing 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 assitant from March 2013 to September 2016; now he serves sa deputy GM of the Company since September 2016
Position in the Board and supervisory committee: holds director of the Putian Hi-Tech Industrial Co., Ltd. since December 2016
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Li Jing (Female), born in 1975 with equivalent master degree of business administration. 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 Potevio Telecommunication Co., Ltd from August 2001 to August 2015; serves as the director of the strategic investment department of Nanjing Potevio Telecommunication Co., Ltd from August 2015 till now and the secretary to the Board of the Company since August 2017.Position in the Board and supervisory committee: holds director of the SEI-Nanjing Putian Optical Network from July 2013 to November 2017.
Post-holding inshareholder’s unit
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Received|
|||Position in||||
||||||remuneration from|
|Name|Name of shareholder’s unit|shareholder’s|Start dated of|End date of||
||||office term|office term|shareholder’s unit|
|||unit n||||
||||||(Y/N)|
|Xu Qian|China Potevio Company Limited|President|2016-05-05||Y|
|||GM of||||
|Cheng Wei|China Potevio Company Limited|Business|2014-09-22||Y|
|||Dept. III||||
|||Deputy GM||||
|||of enterprise||||
|Liu Yun|China Potevio Company Limited||2016-10-17||Y|
|||development||||
|||dept.||||
|||GM assistant||||
|Wang Jinfeng|China Potevio Company Limited|of financial|2017-12-13||Y|
|||dept.||||
|||Chairman of||||
|||the||||
|Zhao Xinping|China Potevio Company Limited||2014-09-24||Y|
|||Supervisory||||
|||Committee||||
|||GM of audit||||
|Zhao Xinping|China Potevio Company Limited|supervision &|2015-03- 31||Y|
|||laws dept.||||
|||Senior lawyer||||
|||of audit||||
|Zhang Hong|China Potevio Company Limited||2014-07-14||Y|
|||supervision &||||
|||laws dept.||||

Post-holding in other unit
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
|Name|Name of other units|Position in|Start dated of|End date of offic|e Received|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||
|-|-|-|-|-|-|
|||other unit n|office term|term|remuneration|
||||||from other unit|
||||||(Y/N)|
|||Party||||
|Xu Qian|China Potevio|members,|2009-04-09||N|
|||deputy GM||||
|Li Linzhen|Putian Hi-Tech Industrial Co., Ltd.|Supervisor|2015-10-27||N|
|||Chairman of||||
||Shanghai Potevio Youtong Technology Co.,|the||||
|Li Linzhen|||2015-11-20||N|
||Ltd.|Supervisory||||
|||Committee||||
|Cheng Wei|Beijing Capitel Co., Ltd.|Director|2013-10-09||N|
||Shanghai Potevio Youtong Technology Co.,|||||
|Cheng Wei||Director|2015-11-20||N|
||Ltd.|||||
|Qin Zhen|Putian Hi-Tech Industrial Co., Ltd.|Director|2016-12-01||N|
||Beijing PuTian TaiLi Telecommunications|||||
|Wang Jinfeng||Director|2015-06-19||N|
||Technology Co.,Ltd.|||||
||Puxing Mobile Communication Equipment|||||
|Wang Jinfeng||Director|2015-12-21||N|
||Co., Ltd.|||||
|Xie Manlin|Jiangsu Xie Manlin Laws Firm|Director|1994-12-01||Y|
|||Independent||||
|Xie Manlin|Jiangsu Nanda Soft Company Limited||2011-06-10||Y|
|||director||||
|||Professor,||||
|||director of||||
|Du Xiaorong|Business School of Hohai University||2013-06-15||Y|
|||accounting||||
|||department||||
|||Deputy leader||||
|||of the Party||||
|Zhao Xinping|China Potevio|Discipline|2015-03-26||N|
|||Inspection||||
|||Group||||

Punishment of securities regulatory authority in recent three years to theCompany’s current and outgoing directors, supervisors and senior management during the reporting period
□ Applicable√ Not applicable
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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 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|Age||obtained from the|obtained from|
|||||status|||
||||||Company (before|related party of|
||||||taxes)|the Company|
||Director|||Currently in|||
|Xu Qian||M|55|||Y|
||(President)|||office|||
||Director, deputy|||Currently in|||
|Li Linzhen||M|46|||N|
||president|||office|||
|||||Currently in|||
|Cheng Wei|Director|F|47|||Y|
|||||office|||
|||||Currently in|||
|Liu Yun|Director|F|44|||Y|
|||||office|||
|||||Currently in|||
|Qing Zhen|Director|M|49|||N|
|||||office|||
|||||Currently in|||
|Wang Jinfeng|Director|F|47|||Y|
|||||office|||
||Independent|||Currently in|||
|Tang Fuxin||F|61||1.67|N|
||director|||office|||
||Independent|||Currently in|||
|Xie Manlin||M|54||1.67|N|
||director|||office|||
||Independent|||Currently in|||
|Du Xiaorong||F|49||1.67|N|
||director|||office|||
||Supervisor,||||||
||Chairman of the|||Currently in|||
|Zhao Xinping||M|51|||Y|
||Supervisory|||office|||
||Committee||||||
|||||Currently in|||
|Zhang Hong|Supervisor|F|44|||Y|
|||||office|||
|||||Currently in|||
|Qiu Huizhen|Supervisor|F|44||4|N|
|||||office|||
|||||Currently in|||
|Li Linzhen|GM|M|46||37.13|N|
|||||office|||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Currently in|||
|Qin Zhen|Deputy GM|M|49||24.97|N|
|||||office|||
||Secretary of the|||Currently in|||
|Li Jing||F|42||4.4|N|
||Board|||office|||
|Li Tong|Director|M|47|Office leaving||Y|
|Han Shu|Director|M|54|Office leaving||Y|
|Li Yin|Director|F|51|Office leaving||Y|
|Huang Haodong|Director|M|44|Office leaving||N|
||Independent||||||
|Zhang Shunyi||M|73|Office leaving|3.33|N|
||director||||||
||Independent||||||
|Zheng Aimei||F|70|Office leaving|3.33|N|
||director||||||
||Independent||||||
|Ding Haiyan||M|61|Office leaving|3.33|N|
||director||||||
||Supervisor||||||
||(Chairman of the||||||
|Yang Zhihe||M|65|Office leaving||Y|
||Supervisory||||||
||Committee)||||||
|Tang Di|Supervisor|F|41|Office leaving||N|
|Liu Xiaodong|Supervisor|F|46|Office leaving|10.56|N|
|Shi Lian|Chief Accountant|M|45|Office leaving|20.89|N|
||Secretary of the||||||
|Zhong Shengwu||M|47|Office leaving|7.9|N|
||Board||||||
|Total|--|--|--|--|124.85|--|

 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)|675|
|The number of On-the-job staff of major subsidiaries (people)|783|
|The total number of On-the-job staff (people)|1,458|
|Total number of staff receiving remuneration in the current||
||1,976|
|period (people)||
|The number of the retired staff of the parent Company and the||
||428|
|major subsidiaries bearing the expenses (people)||
|Professional composition||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Category of professional composition|Number of professional composition (people)|
|Production staff|425|
|Salesman|483|
|Technical staff|383|
|Financial staff|39|
|Administrative staff|128|
|Total|1,458|
|Education background||
|Category of education|Number (people)|
|Master’s degree above|48|
|Bachelor|569|
|Junior college|460|
|High Scholl and above|381|
|Total|1,458|

 2. Remuneration policy
The Company promotes a performance-oriented remuneration mechanism, formulate remuneration based on characteristics of the different position.Employee’s salary mainly depends on factors of market price, post coefficient, ability level, contribution andCompany’s benefits etc, by means of completing jobs and work performance, carried out qualitative and quantitative evaluation for salary determined. The Company paying five social insurance and enterprise annuity for the staff pursuit to relevant regulations of the State at the same time.
3. Training programs
By adherence to the development strategy and actual requirements, the Company continued to innovate talent cultivation model, strengthen development of study contents, arrange reasonable study means and establish a systematic and comprehensive talent cultivation system to effectively improveemployees’ professional technical capability and management capability.
4. Labor outsourcing
□ Applicable√ Not applicable
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section IX. Corporate Governance
I. Corporate governance of the Company
By strictly followed requirement of laws, regulations of “Company Law”, “Securities Laws”, “Rules of Corporate Governance for Listed Company”, “Rules of Stock Listing in Shenzhen Stock Exchange” as well as requirement of relevant documents from CSRC and Shenzhen Stock Exchange since listing, the Company constantly improve structure of the corporate governance, complete and perfected the internal control system, and strengthen information disclosure in order to improving the operation standards. By the end of reporting period, the Company's internal governance structure is perfect, overall generation of the Company is standard-operated, actual condition of the Company meets the requirements of “Company Law”, “Articles of Association”, other laws, regulations and normative documents.
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. Independency of the Company relative to controllingshareholders’ in aspect of businesses, personnel, assets, organization and finance
The Company owes self-management ability with independence in aspect of business, personnel, assets, institute and finance relative to its controlling shareholder.
III. Horizontal competition
□ Applicable√ Not applicable
IV. In the report period, the Company held annualshareholders’ general meeting and extraordinaryshareholders’ general meeting
1. AnnualShareholders’ General Meeting in the report period
|||||||
|-|-|-|-|-|-|
|||Ratio of investor||||
|Session of meeting|Type||Date|Date of disclosure|Index of disclosure|
|||participation||||
||||||Juchao Website|
|Annual General||||||
||AGM|58.93%|2017-05-23|2017-05-24|(www.cninfo.com.cn|
|Meeting 2016||||||
||||||)|
|First Extraordinary||||||
||Extraordinary||||Juchao Website|
|Shareholders||||||
||Shareholders|53.54%|2017-08-23|2017-08-24|(www.cninfo.com.cn|
|General Meeting of||||||
||General Meeting||||)|
|2017||||||
|Second|Extraordinary||||Juchao Website|
|Extraordinary|Shareholders|54.07%|2017-12-15|2017-12-16|(www.cninfo.com.cn|
|Shareholders|General Meeting||||)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|General Meeting of|
|2017|

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 meetings and general meeting
|||||||||
|-|-|-|-|-|-|-|-|
|The attending of independent directors to Board Meeting and AGM||||||||
||Times of|||||Absent the||
|||Times of|Times of|||||
||Board meeting|||Times of||Meeting for|Times of|
|Independent||Presence on|attending by||Times of|||
||supposed to|||entrusted||the second|presence on|
|director||the Board|communicatio||Absence|||
||attend in the|||presence||time in a row|AGM|
|||Meeting|n|||||
||report period|||||(Y/N)||
|Tang Fuxin|5|1|4|0|0|N|1|
|Xie Manlin|5|0|4|1|0|N|0|
|Du Xiaorong|5|1|4|0|0|N|2|
|Zhang Shunyi|6|1|5|0|0|N|1|
|Zheng Aimei|6|1|5|0|0|N|2|
|Ding Haiyan|6|0|5|1|0|N|0|

 Explanation of absent the Board Meeting for the second time in a row
There are no independent directors absent the Board Meeting for the second time in a row in reporting period
2. Objection for relevant events from independent directors
Independent directors come up with objection aboutCompany’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 period, the independent directors of the Company earnestly exercised the relevant laws and regulations and the various functions and powered conferred by the Articles of Association, actively attended the board of directors and shareholders' meetings of the Company, carefully reviewed the proposals, exercised their rights to vote with cautious attitude; proposed independent
opinions on parts of the material events according to the regulation of supervisory authority; actively promote the scientific
decision-making for the Board, and maintained communication with theCompany’s operating management layer via telephone and
seminars, and other channels, gave counsels to the Company's operation status and information disclosure, making out plans and
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report ideas for the development of the Company by theirowned professional knowledges, urged the Company to regulate the operations in strict accordance with the requirements of relevant laws and regulations, and effectively safeguarded the Company's overall interests and the legitimate rights and interests of the majority of small and medium shareholders.
VI. Duty performance of the special committees under the board during the reporting period In 2017, the Audit Committee of the Board of Directors held four meetings to review and submit significant recommendations on the Company's quarterly, semi-annual, and annual report and the appointment of audit institution for the Company's financial report and the appointment of audit institution for the Company's internal control and other major issues; 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 audit work by on-site communication.
The Remuneration and Appraisal Committee of the Board of Directors reviewed and made audit opinions on the remuneration of the directors, supervisors and senior executives disclosed in the annual report in accordance with relevant provisions.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes√ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
The Company exercise performance year-income system for senior executives carries on appraisals and paying remuneration to senior executives based on operation target and performance of target implementation of senior executives.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes√ No
2. Appraisal Report of Internal Control
|||
|-|-|
|Disclosure date of full internal control||
||24 April 2018|
|evaluation report||
|Disclosure index of full internal control|“Appraisal report of internal control for year of 2017 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||
||100.00%|
|accounting for the operating income on the||
|Company's consolidated financial||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|statements|||
|Defects Evaluation Standards|||
|Category|Financial Reports|Non-financial Reports|
||Indicators for material defect of internal|Indicators for material defect of internal|
||control in financial report: invalid control|control in non-financial report:|
||environment; fraud by our directors,|decision-making procedures lead to|
||supervisors and senior management, which|material faults; lack of system control or|
||brings significant loss and negative|system void for major business, and lack|
||influences to the Company; external auditor|of effective compensation control;|
||finds material misstatement which is not first|serious loss of senior management and|
||found by the Company; the board of|senior technicians; assessment results of|
||directors or the authorized body and internal|internal control, especially material|
||audit department conduct invalid supervision|defects, are not rectified; other situations|
||over our internal control. Indicators for|that would materially and adversely|
||major defect of internal control in financial|affect the Company. Indicators for major|
||report: not select and apply accounting|defect of internal control in non-financial|
|Qualitative criteria|policies under the generally accepted|report: decision-making procedures lead|
||accounting principles; not establish|to general fault; defects exist in major|
||anti-fraud procedures and controlling|business systems; serous loss of key|
||measures; not establish corresponding|staff; assessment results of internal|
||controlling system or not implement|control, especially major defects, are not|
||corresponding compensation control in|rectified; other situations that would|
||connection with accounting for abnormal or|relatively materially and adversely affect|
||special transactions; one or more defects|the Company. Indicators for general|
||exist in control of ending financial reports|defect of internal control in non-financial|
||and there is no assurance that financial|report: low efficiency of|
||statement prepared correspondingly is|decision-making procedures; defects|
||truthful and accurate. General defect: other|exist in general business systems; serious|
||internal control defects that do not constitute|loss of general staff; general defects are|
||material or major defects.|not rectified.|
||Any of the following situations may be||
||viewed as material defect: potential||
||misstatement of total profit ≥ 5% of total||
||profit; potential misstatement of total assets|Major deficiencies: the amount of direct|
||≥ 1% of total assets; potential misstatement|property loss is or more than 10 million|
||of operating income ≥ 1% of total operating|Yuan; Significant deficiencies: the|
|Quantitative standard|income. Any of the following situation may|amount of direct property loss is between|
||be viewed as major defect: potential|5 million and 10 million Yuan; Common|
||misstatement of total profit: 3% of total|deficiencies: the amount of direct|
||profit ≤ misstatement ＜ 5% of total profit;|property loss is less than 5 million Yuan.|
||potential misstatement of total assets: 0.5%||
||of total assets ≤ misstatement ＜ 1% of||
||total assets; potential misstatement of||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
||operating income: 0.5% of total operating|
||income ≤ misstatement ＜ 1% of total|
||operating income. Any of the following|
||situation may be viewed as general defect:|
||potential misstatement of total profit＜3% of|
||total profit; potential misstatement of total|
||assets＜0.5% of total assets; potential|
||misstatement of operating income ＜ 0.5%|
||of total operating income.|
|Amount of significant defects in financial||
||0|
|reports||
|Amount of significant defects in||
||0|
|non-financial reports||
|Amount of important defects in financial||
||0|
|reports||
|Amount of important defects in||
||0|
|non-financial reports||

X. Auditing report of internal control
√ Applicable□ Not applicable
|||
|-|-|
|Deliberations in Internal Control Audit Report||
|We believe that according to relevant regulations and “Basic Norms of Internal Control”, the Company maintained an efficiency||
|internal control of financial report dated 31st December 2017, in all material aspects.||
|Disclosure details of audit report of||
||Disclosed|
|internal control||
|Disclosure date of audit report of||
||24 April 2018|
|internal control (full-text)||
|Index of audit report of internal|“Audit report of internal control for year of 2017 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
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section X Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when annual report approved for released or fail to cash in full on due
No
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section XI. Financial Report
I. Audit report
|||
|-|-|
|Type of audit opinion|Standard unqualified|
|Signing date of audit report|20 April 2018|
|Name of audit institute|Pan-China Certified Public Accountants (LLP)|
|Document serial of audit report|PCCPAAR [2018] No. 1-409|
|Name of CPA|He Jiangxing, Jin Jingyu|

Text of Report
To the Shareholders of Nanjing Putian Telecommunications Co.,Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Nanjing Putian Telecommunications Co.,Ltd. (the “Company”), which comprise the consolidated and parent company balance sheets as at December 31, 2017, the consolidated and parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year then ended, as well as notes to financial statements.
In our opinion, the financial statements present fairly, in all material respects the financial position of the Company as at December 31, 2017, and of its financial performance and its cash flows for the year then ended in accordance with China Accounting Standards for Business Enterprises.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Standards on Auditing for Certified Public Accountants. The auditor's responsibility for the audit of financial statements is
further elaborated by the auditor's responsibility for the audit of financial statements.
According to the code of professional ethics for Certified Public Accountants. We are
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report independent of Nanjing Putian Telecommunications Co.,Ltd. and fulfill other responsibilities of professional ethics. We believe that the audit evidence we have obtained is fair and adequate to provide the basis for the publication of the audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not express a separate opinion on these matters.
(I) Recognition of revenue of wireless network project.
1)Key audit matters
Revenue which is 2,254,399.40 thousand yuan in 2017, rose by21.60%, an increase of 400,488.10 thousand yuan compared with 2016. Revenue of wireless network project in 2017 which gave rise to the increase of 2017 revenue, is 512,809.10 thousand yuan, including 276,520.30 thousand yuan related transactions. Authenticity and fairness of revenue about the wireless network project have a significant impact on the financial statements. Thus we judge the recognition of revenue of wireless network project is regarded as a key audit matter.
2)Respond audit procedures
Our audit procedures mainly include: understanding the project process and evaluating its internal control, covering budget management, cost collection etc. We also perform detailed testing, including but not limited to:
·Check the main clauses of the contract, including objects, taking delivery of goods, acceptance check, payment, quality assurance, etc.
·Check the process documents, including invoices, receiving notes, transportation documents, bank slips etc.
·Observe the production workshop, understand the production process and main technology to verify the commercial essence of the revenue.
·Execute the letter of confirmation and analytical procedures, to verify whether the time of revenue recognition is fair, measured reliably and the transactions is true.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report (II) Provision for inventory
1. Key audit matters
As at December 31, 2017, the book balance of inventory is 506,192.60 thousand yuan with provision of 14,588.80 thousand yuan and its carrying amount totaled 491,603,80 thousand yuan which represent 23.23 percent of total assets. As of 31 December 2017, provision for inventory write-down totaled 6,381.40 thousand yuan, provision for inventory write-down is determined by an estimate of the net realizable value of inventory. The determination of the net realizable value of the inventory requires management to estimate selling ptice and any costs of completion, selling expenses and related taxes.
2. Respond audit procedures
Our audit procedures mainly including:
·understand the process of provision for write-down of inventory and evaluate its internal control.
·Monitor the inventory and paying attention to the identification of defective the inventory is identified.
·Test the inventory age by checking the original certificate.
·Evaluation of the important assumptions involved in the net realizable value made by theCompany’s management (the “Management”), such as checking the sale price any costs of completion, selling expenses the cost of sales and related taxes.
·Analysis of the correctness of provision for write-down of inventory.
IV. Other Information
Management is responsible for the other information. The other information comprises the information included in theCompany’s annual report, but does not include the financial statements and ourauditor’s report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of other information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and use the going concern basis of accounting unless the Management either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing theCompany’s financial reporting process.
VI. Certified PublicAccountants’ Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’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 judgement and maintain professional skepticism throughout the audit performed in accordance with China Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of theManagement’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 theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor’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 ourauditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings, including any deficiencies in internal control of concern that we identify during our audit.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 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 ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant
Hangzhou· China Chinese Certified Public Accountant
Date of Report: April 20, 2018
Theauditor’s report and the accompanying financial statements are English translations of the Chineseauditor’s report and statutory financial statements prepared under accounting principles and practices generally accepted in thePeople’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.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2017
(Expressed in Renminbi Yuan)
|||
|-|-|
|NoteNo.|Closing balance|

Current assets:
Cash and bank balances 1 327,752,066.73 519,683,411.72
Settlement funds
Loans to other banks
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 2 32,477,463.59 59,748,722.91
Accounts receivable 3 780,089,607.41 761,252,410.36
Advances paid 4 53,821,937.79 44,578,182.05
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Interest receivable
Dividend receivable
Other receivables 5 29,325,423.73 30,414,138.94
Reverse-REPO financial assets
Inventories 6 491,603,781.00 527,931,889.47
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets 7 45,282,892.44 6,842,370.71
Total current assets 1,760,353,172.69 1,950,451,126.16
Non-current assets:
Loans and advances paid
Available-for-sale financial assets 8 741,953.00 741,953.00
Held-to-maturity investments
Long-term receivable
Long-term equity investments 9 186,977,506.23 187,082,857.56
Investment property 10 12,802,485.28 13,533,631.71
Fixed assets 11 119,741,921.78 124,281,522.14
Construction in progress 12 2,163,267.89
Construction materials
Fixed assets disposal
Productive biological assets
Oil& gas assets
Intangible assets 13 30,736,816.88 26,163,577.94
Development expenditures
Goodwill
Long-term prepayments 14 2,795,194.76 2,264,499.03
Deferred tax assets
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Other non-current assets
Total non-current assets 355,959,145.82 354,068,041.38
||
|-|
|2,116,312,318.51|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated balance sheet as at December 31, 2017 (continued)
|||
|-|-|
|Note No.|Closing balance|
|151617181920212223242526272829|387,550,000.0020,161,687.14806,672,174.17317,197,824.6621,033,311.7318,883,017.18531,667.361,692,213.3860,803,921.891,634,525,817.518,664,102.908,664,102.901,643,189,920.41215,000,000.00185,374,533.85-4,129,619.45589,559.77-44,605,902.63352,228,571.54120,893,826.56473,122,398.10|
||2,116,312,318.51|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2017
(Expressed in Renminbi Yuan)
||||
|-|-|-|
||NoteNo.|Closing balance|
|Current assets:|123|124,984,257.349,184,642.99425,563,836.9722,368,455.1041,195,020.22351,155,734.2138,624,058.061,013,076,004.89741,953.00355,814,155.4356,349,626.121,830,131.2512,676,942.232,580,098.76429,992,906.79|
|Cash and bank balances|||
|Financial assets at fair value through profit or loss|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable|||
|Advances paid|||
|Interest receivable|||
|Dividend receivable|||
|Other receivables|||
|Inventories|||
|Assets classified as held-for-sale|||
|Non-current assets due within one year|||
|Other current assets|||
|Total current assets|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term receivable|||
|Long-term equity investments|||
|Investment property|||
|Fixed assets|||
|Construction in progress|||
|Construction materials|||
|Fixed assets disposal|||
|Productive biological assets|||
|Oil & gas assets|||
|Intangible assets|||
|Development expenditures|||
|Goodwill|||
|Long-term prepayments|||
|Deferred tax assets|||
|Other non-current assets|||
|Total non-current assets|||
|Total assets||1,443,068,911.68|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company balance sheet as at December 31, 2017(continued)
(Expressed in Renminbi Yuan)
|||
|-|-|
|Note No.|Closing balance|

 Current liabilities:
||
|-|
|Short-term borrowings|
|Financial liabilities at fair value through profit|
|or loss|
|Derivative financial liabilities|
|Notes payable|
|Accounts payable|
|Advances received|
|Employee benefits payable|
|Taxes and rates payable|
|Interest payable|
|Dividend payable|
|Other payables|
|Liabilities classified as held-for-sale|
|Non-current liabilities due within one year|
|Other current liabilities|
|Total current liabilities|

 Non-current liabilities:
||
|-|
|Long-term borrowings|
|Bonds payable|
|Including: Preferred shares|
|Perpetual bonds|
|Long-term payables|
|Long-term employee benefits payable|
|Special payables|
|Provisions|
|Deferred income|
|Deferred tax liabilities|
|Other non-current liabilities|
|Total non-current liabilities|
|Total liabilities|

 Equity:
||
|-|
|Share capital|
|Other equity instruments|
|Including: Preferred shares|
|Perpetual bonds|
|Capital reserve|
|Less: Treasury shares|
|Other comprehensive income|
|Special reserve|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Surplus reserve||
|Undistributed profit||
|Total equity||
|Total liabilities & equity|1,443,068,911.68|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated income statement for the year ended December 31, 2017 (Expressed in Renminbi Yuan)
||||
|-|-|-|
||NoteNo.|Current periodcumulative|
||11|2,254,399,406.042,254,399,406.042,225,785,279.661,884,552,769.6012,757,598.28151,174,362.31143,924,331.9916,284,617.7717,091,599.71339,423.07339,423.07-481,922.287,848,445.3136,320,072.483,698,387.13353,388.5039,665,071.1111,371,015.8928,294,055.2228,294,055.2211,885,170.2816,408,884.94561,095.61504,986.05504,986.05504,986.0556,109.5628,855,150.8312,390,156.3316,464,994.500.060.06|
|Interest proceeds|||
|Premium earned|||
|Revenue from handling charges and commission|||
||2||
||2||
|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 & surcharge for operations|345678||
|Selling expenses|||
|Administrative expenses|||
|Financial expense|||
|Assets impairment loss|||
|Add: Gains on changes in fair value (or less: losses)|||
|Investment income (or less: losses)|||
|Including: Investment income from associates and joint ventures|||
|Gains on asset disposal (or less: losses)|9||
|Gains on foreign exchange (or less: losses)|||
|Other income|10||
|Add: Non-operating revenue|1112||
|Including: Gains on disposal of non-current assets|||
|Less: Non-operating expenditures|||
|Including: Losses on disposal of fixed assets|||
||14||
|Less: Income tax|||
|1. Net profit attributable to owners of parent company (or less: net loss)|||
|2. Non-controlling interest (or less: net loss)|||
||15||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company income statement for the year ended December 31, 2017
(Expressed in Renminbi Yuan)
|||
|-|-|
|Note No.|Current periodcumulative|
|11||
|2||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share)
(II) Diluted EPS (yuan per share)
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated cash flow statement for the year ended December 31, 2017
|||
|-|-|
|NoteNo.|Current periodcumulative|

I. Cash flows from operating activities:
||
|-|
|Cash receipts from sale of goods or rendering of services|
|Net increase of client deposit and interbank deposit|
|Net increase of central bank loans|
|Net increase of loans from other financial institutions|
|Cash receipts from original insurance contract premium|
|Net cash receipts from reinsurance|
|Net increase of policy-holder deposit and investment|
|Net increase from disposal of financial assets at fair value through profit or loss|
|Cash receipts from interest, handling charges and commission|
|Net increase of loans from others|
|Net increase of repurchase|
|Receipts of tax refund|
|Other cash receipts related to operating activities|
|Subtotal of cash inflows from operating activities|
|Cash payments for goods purchased and services received|
|Net increase of loans and advances to clients|
|Net increase of central bank deposit and interbank deposit|
|Cash payments for insurance indemnities of original insurance contracts|
|Cash payments for interest, handling charges and commission|
|Cash payments for policy bonus|
|Cash paid to and on behalf of employees|
|Cash payments for taxes and rates|
|Other cash payments related to operating activities|
|Subtotal of cash outflows from operating activities|
|Net cash flows from operating activities|

 II. Cash flows from investing activities:
||
|-|
|Cash receipts from withdrawal of investments|
|Cash receipts from investment income|
|Net cash receipts from the disposal of fixed assets, intangible 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|
|Cash payments for the acquisition of fixed assets, intangible assets and other|
|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|
|Net cash flows from investing activities|

III. Cash flows from financing activities:
Cash receipts from absorbing investments
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
||NoteNo.|Current periodcumulative|
|Including: Cash received by subsidiaries from non-controlling shareholders as||482,500,000.00482,500,000.00568,450,000.0028,781,500.288,149,300.00597,231,500.28-114,731,500.282,791,423.77-173,623,428.53484,954,713.07311,331,284.54|
|investments|||
|Cash receipts from borrowings|||
|Cash receipts from issuing of bonds|||
|Other cash receipts related to financing activities|||
|Subtotal of cash inflows from financing activities|||
|Cash payments for the repayment of borrowings|||
|Cash payments for distribution of dividends or profits and for interest expenses|||
|Including: Cash paid by subsidiaries to non-controlling shareholders as dividend|||
|or profit|||
|Other cash payments related to financing activities|||
|Subtotal of cash outflows from financing activities|||
|Net cash flows from financing activities|||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company cash flow statement for the year ended December 31, 2017
(Expressed in Renminbi Yuan)
||||
|-|-|-|
||NoteNo.|Current periodcumulative|
|I. Cash flows from operating activities:|||
|Cash receipts from sale of goods and rendering of services||741,103,540.0147,333.6177,608,995.25818,759,868.87660,412,117.17105,895,483.9045,330,877.5456,697,024.80868,335,503.41-49,575,634.5464,821,474.40331,631.0865,153,105.4812,730,476.7312,730,476.7352,422,628.75369,000,000.00369,000,000.00410,000,000.0015,761,925.59425,761,925.59-56,761,925.59-420,300.63-54,335,232.01164,361,696.67110,026,464.66|
|Receipts of tax refund|||
|Other cash receipts related to operating activities|||
|Subtotal of cash inflows from operating activities|||
|VI. Closing balance of cash and cash equivalents|||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2017
(Expressed in Renminbi Yuan)
Current period cumulative
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Equity attributable to parent company|||||||||||Non-controllinginterest|
|Share capital|Other equity instruments|||Capital reserve|Less:treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Undistributed profit||
||Preferredshares|Perpetualbonds|Others|||||||||
|215,000,000.00||||185,374,533.85||-4,634,605.50||589,559.77||-56,491,072.91|112,578,132.06|
|215,000,000.00||||185,374,533.85||-4,634,605.50||589,559.77||-56,491,072.91|112,578,132.06|
|||||||504,986.05||||11,885,170.28|8,315,694.50|
|||||||504,986.05||||11,885,170.28|16,464,994.50|
||||||||||||-8,149,300.00|
||||||||||||-8,149,300.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Current period cumulative
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Equity attributable to parent company|||||||||||Non-controllinginterest|
|Share capital|Other equity instruments|||Capital reserve|Less:treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Undistributed profit||
||Preferredshares|Perpetualbonds|Others|||||||||
|215,000,000.00||||185,374,533.85||-4,129,619.45||589,559.77||-44,605,902.63|120,893,826.56|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Consolidated statement of changes in equity for the year ended December 31, 2017 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Equity attributable to parent company|||||||||||Non-controllinginterest|
|Share capital|Other equity instruments|||Capital reserve|Less:treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Undistributedprofit||
||Preferredshares|Perpetualbonds|Others|||||||||
|215,000,000.00||||185,374,533.85||-4,223,184.69||589,559.77||-50,056,514.64|106,131,917.02|
|215,000,000.00||||185,374,533.85||-4,223,184.69||589,559.77||-50,056,514.64|106,131,917.02|
|||||||-411,420.81||||-6,434,558.27|6,446,215.04|
|||||||-411,420.81||||-6,434,558.27|14,269,515.04|
||||||||||||-7,823,300.00|
||||||||||||-7,823,300.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Preceding period comparative
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Equity attributable to parent company|||||||||||Non-controllinginterest|
|Share capital|Other equity instruments|||Capital reserve|Less:treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Undistributedprofit||
||Preferredshares|Perpetualbonds|Others|||||||||
|215,000,000.00||||185,374,533.85||-4,634,605.50||589,559.77||-56,491,072.91|112,578,132.06|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2017
(Expressed in Renminbi Yuan)
Current period cumulative
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Share capital|Other equity instruments|||Capital reserve|Less: treasuryshares|Othercomprehensiveincome|Specialreserve|Surplus reserve|Undistributedprofit|
||Preferredshares|Perpetualbonds|Others|||||||
|215,000,000.00||||172,417,299.81||||589,559.76|-188,427,625.86|
|215,000,000.00||||172,417,299.81||||589,559.76|-188,427,625.86|
||||||||||8,649,468.36|
||||||||||8,649,468.36|
|215,000,000.00||||172,417,299.81||||589,559.76|-179,778,157.50|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Parent company statement of changes in equity for the year ended December 31, 2017 (continued)
(Expressed in Renminbi Yuan)
Preceding period comparative
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Share capital|Other equity instruments|||Capital reserve|Less:treasuryshares|Othercomprehensiveincome|Specialreserve|Surplus reserve|Undistributed profit|
||Preferredshares|Perpetualbonds|Others|||||||
|215,000,000.00||||172,417,299.81||||589,559.76|-202,845,587.23|
|215,000,000.00||||172,417,299.81||||589,559.76|-202,845,587.23|
||||||||||14,417,961.37|
||||||||||14,417,961.37|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|215,000,000.00|172,417,299.81|589,559.76|-188,427,625.86|

[LiLinzhen] [LiLinzhen] [GaoWen]
[Legalrepresentative] [Officer in charge ofaccounting] [Head of accountingdepartment]
(Signature and stamp) (Signature and stamp) (Signature and stamp)
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Nanjing Putian Telecommunications Co., Ltd.
Notes to Financial Statements
for the year ended December 31, 2017
Monetary unit: RMB Yuan I. Company profile
Nanjing Putian Telecommunications Co., Ltd. (the “Company”), whose predecessor is邮电部南京通信设备厂 (Nanjing Telecommunication Facility Factory1), was established as a limited liability company (by shares) through financing under the approval of National Economic Institutional Reform Commission with document of approval numbered TGS[1997] 28 dated March 21, 1997. The Company is headquartered in Nanjing City, Jiangsu Province. Currently it holds a business license with unified social credit code of 91320000134878054G, with registered capital of 215,000,000.00 yuan, total share of 215,000,000.00 shares, with par value of 1 yuan per share. Among them, 115,000,000 shares are state-owned legal person shares, and 100,000,000 shares are B shares. The Company was listed on the Shenzhen Stock Exchange on May 22, 1997 and its stocks has been suspended on May 11, 2017 when receiving the decision of the Shenzhen stock exchange to suspend the listing of the shares of Nanjing Putian Telecommunications Co., LTD. (Shenzhen Certificate No. 294, 2017)
The Company belongs to telecommunication equipment manufacture industry and is mainly engaged inR&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 7th meeting of the 6th session of the Board of Directors dated April 20, 2018.
The Company has brought 11 subsidiaries including南京南方电讯有限公司 (Nanjing South Telecommunications CompanyLimited*),南京普天天纪楼宇智能有限公司 (Nanjing Putian Telege Intelligent BuildingLtd.*) and南京曼奈柯斯电器有限公司 (Nanjing Mennekes Electrics Co.,Ltd.*) etc. into the consolidated scope. Please refer to notes to changes in the consolidated scope and interest in other entities for details.
II. Preparation basis of the financial statements
(I) Preparation basis
The financial statements have been prepared on the basis of going concern.
(II) Assessment of the ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon theCompany’s ability to continue as a going concern within the 12 months after the balance sheet date.
III. Significant accounting policies and estimates
Important note:
The Company has set up accounting policies and estimates on transactions or events such as provision for bad debts of receivables,
1
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report depreciation of fixed assets, amortization of intangible assets, and revenue recognition, etc. based on theCompany’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. (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
TheCompany’s functional currency is Renminbi (RMB) Yuan.
(V) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in the consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of the combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
(VI) Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into its consolidation scope. The consolidated financial statements are compiled by the parent company according to “CASBE 33 - Consolidated Financial Statements”, based on relevant information and the financial statements of the parent company and its subsidiaries.
(VII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes in relation to its interest in a joint operation: (1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sales of the output by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report (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
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated at the spot exchange rate at the transaction date, with its RMB amount unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined, with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the equity items, other than undistributed profit, are translated at the spot rate at the transaction date; the revenues and expenses in the income statement are translated into RMB at the spot exchange rate at the transaction date. The difference arising from foreign currency translation is included in other comprehensive income.
(X) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following four categories when initially recognized: financial assets at fair value through profit or loss (including held-for-trading financial assets and financial assets designated at initial recognition as at fair value through profit or loss), held-to-maturity investments, loans and receivables, and available-for-sale financial assets.
Financial liabilities are classified into the following two categories when initially recognized: financial liabilities at fair value through profit or loss (including held-for-trading financial liabilities and financial liabilities designated at initial recognition as at fair value through profit or loss), and other financial liabilities.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount.
The Company measures its financial assets at fair value subsequent to initial recognition, and does not deduct the transaction expenses that may occur when it disposes of the said financial asset in the future. However, those under the following circumstances are excluded: (1) the held-to-maturity investments, loans and receivables are measured at amortized costs using effective interest method; (2) the equity instrument investments for which there is no quotation in
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report the active market and whose fair value cannot be measured reliably, and the derivative financial assets which are connected with the said equity instrument and must be settled by the delivery of the said equity instrument are measured at their costs.
The Company measures its financial liabilities at the amortized costs using effective interest method, with the exception of those under the following circumstances: (1) for the financial liabilities at fair value through profit or loss, they are measured at fair value, and none of the transaction expenses may be deducted, which may occur when the financial liabilities are settled in the future; (2) for the derivative financial liabilities, which are connected to the equity instrument for which there is no quotation in the active market and whose fair value cannot be reliably measured, and which must be settled by the delivery of the equity instrument, they are measured at their costs; (3) for the financial guarantee contracts which are not designated as a financial liability at fair value through profit or loss, and for the commitments to grant loans which are not designated as at fair value through profit or loss and which will enjoy an interest rate lower than that of the market, they are measured subsequent to initial recognition at the higher of the following two items 1) The amount as determined according to “CASBE13 - Contingencies”; 2) the surplus after accumulative amortization as determined according to “CASBE14 - Revenues”.
The gains or losses arising from changes in fair value of financial assets or financial liabilities, if not related to hedging, are measured with the following methods: (1) Gains or losses, arising from the changes in fair value of financial asset or liability at its fair value through profit or loss, is included in gains or losses on changes in fair value; interests or cash dividends gained during the asset-holding period are recognized as investment income; when disposing of the assets, investment income is recognized at the difference between the actual amount received and the initial recorded amount, at the same time, gains or losses on changes in fair value are adjusted accordingly. (2) For available-for-sale financial asset, changes in fair value are recorded as other comprehensive income during the holding period, interests measured at effective interest method are recorded as investment income; cash dividends from available-for-sale equity instrument investment are recognized as investment income at the date of dividend declaration; when disposing of the assets, investment income is recognized at the difference between the actual amount received and the book value deducting the accumulative amount of changes in fair value originally included in other comprehensive.
Financial assets are derecognized when the contractual rights for collecting the cash flow of the said financial assets expire or substantially all risks and rewards related to the said financial assets have been transferred. Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset to the transferee, it derecognizes the financial asset. If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing the financial asset, and the consideration received is recognized as a financial liability. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company gives up its control over the financial asset, it derecognizes the financial asset; (2) if the Company does not give up its control over the financial asset, according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the following two items are included in profit or loss: (1) the book value of the transferred financial asset; (2) the sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally included in equity. If the transfer of financial asset partially satisfies the conditions to derecognition, the entire book value of the transferred financial asset is, between the portion which is derecognized and the portion which is not, apportioned according to their respective relative fair value, and the difference between the amounts of the following two items are included into profit or loss: (1) the book value of the portion which is derecognized; (2) the sum of consideration of the portion which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally included in equity which is corresponding to the portion which is derecognized.
4. Fair value determination method of financial assets and liabilities
The Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy and used accordingly:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example, interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs; (3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, and financial forecast developed using theCompany’s own data, etc. 5. Impairment test and provision for impairment loss of financial assets
(1) An impairment test is carried out at the balance sheet date on the financial assets other than those at fair value through profit or loss, and provisions for impairment loss should be made if there is objective evidence indicating impairment loss.
(2) For held-to-maturity investments, borrowings, and receivables, an impairment test is made on an individual basis on financial assets of individually significant amount; with regard to the financial assets of individually insignificant amount, they may be included in a portfolio of financial assets with similar credit risk features so as to carry out an impairment-related test; where, upon the impairment test on an individual basis, the financial asset (including those financial assets of individually significant amount and of individually insignificant amount) is not impaired, it is included in a portfolio of financial assets with similar credit risk features so as to conduct further impairment test. Where a financial asset is impaired, the carrying amount of the said financial asset is written down to the present value of the predicted future cash flow.
(3) Available-for-sale financial assets
1) Objective evidence indicating that available-for-sale debt instrument investments may be impaired includes:
a. significant financial difficulties in the debtor;
b. breach of contract by the debtor, such as principal or interest past due or default;
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report c. concessions made to debtors with financial difficulties considering economic and legal factors;
d. it is highly probable that the debtor is going to dissolve or going through other terms of financial restructuring; e. owing to significant financial difficulties occurred to the debtor, the debt instrument is discontinued to trade in active market; or
f. Other circumstances indicating that available-for-sale debt instrument may be impaired.
2) Evidence indicating that available-for-sale equity instrument investment may be impaired includes the fair value of equity instrument investment is suffered from significant or non-temporary decline and the technical, market, economic, or legal environment in which the investee operates has significant adverse changes under which the Company may not be able to recover its investment cost.
The Company performs review on available-for-sale equity instrument investment on an individual basis at the balance sheet date. For equity instrument investment at fair value, if the balance sheet date fair value is50% or above lower than the cost, or the balance sheet date fair value has been lower than the cost for a consecutive of 12 months or longer, it is determined that such equity instrument investment is impaired; if the balance sheet date fair value is20% or above but not exceeding50% lower than the cost, or the balance sheet date fair value has been lower than the cost for a consecutive of 6 months or longer but not exceeding 12 months, the Company may take other factors such as price volatility into consideration in determining whether such equity instrument investment is impaired. For equity instrument investment at cost, the Company considers whether the technical, market, economic, or legal environment in which the investee operates has significant adverse changes to determine whether such equity instrument is impaired.
When an available-for-sale financial asset at fair value is impaired, the cumulative loss arising from decline in fair value that has been recognized directly in other comprehensive income is reclassified to impairment loss. If, after an impairment loss has been recognized on available-for-sale debt instrument investment, there is objective evidence of a recovery in value of the financial asset which can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss. Subsequent fair value increase in available-for-sale debt instrument investment whose impairment loss has been recognized is directly recognized in other comprehensive income.
When an available-for-sale equity instrument at cost is impaired, impairment loss on such equity instrument investment is recognized at any excess of its carrying amount over the present value of future cash flows, and such impairment loss is not reversed upon recognition.
(XI) Receivables
1. Receivables of individually significant amount and with provision made on an individual basis
Judgment basis or amount criteria of
Receivables amounting to more than 10 million yuan
individually significant amount
Provisions are made on the difference between the lower
Provision method for receivables of
of present value of future cash flow and their carrying
individually significant amount and with
amount based on impairment testing on an individual
provision made on an individual basis
basis.
2. Receivables with provision made on a collective basis using portfolios with similar credit risk features
(1) Specific portfolios and provision method
Provision method of provision being made on collective basis using portfolios with similar credit risk
features:
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Portfolio 1
Grouped with related party balances within the consolidation scope
Portfolio 2 Grouped with age
Portfolios and provision method
Provisions are made on the difference between the lower of present
Portfolio 1
value of future cash flow and their carrying amount based on
impairment testing on an individual basis.
Portfolio 2 Age analysis method
(2) Age analysis method
||
|-|
|Proportion of provision foraccounts receivable (%)|
|0.00|
|0.00|
|10.00|
|30.00|
|40.00|
|80.00|
|100.00|

3. Receivables of individually insignificant amount but with provision made on an individual basis
Reasons for provision made on an Impairment test on an individual basis with objective
individual basis evidence indicating that the receivable is impaired
Provision method Provision method made on an individual basis
For other receivables such as notes receivable, interest receivable and long-term receivable, etc., provision for bad debts is made at the difference between the present value of future cash flow and the carrying amount.
(XII) Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of production, and materials or suppliers etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
Inventories dispatched from storage are accounted for with weighted average method.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value; provisions for inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of materials to be processed is determined based on the amount of the estimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value is determined separately and is compared with their costs to set the provision for inventory write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 5. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
(XIII) Assets classified as held-for-sale
Non-current assets (excluding financial assets) are accounted for as held-for-sale when the following conditions are all met: a. the component must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such component; b. the Company has made a decision on the disposal of the component; c. the Company has signed an irrevocable transfer agreement with the transferee; and d. the transfer is expected to be completed within one year.
(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of the carrying amount of the equity of the combined party included the consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The difference between the initial cost of the long-term equity investment and the carrying value of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
When long-term equity investments are obtained through business combination under common control achieved in stages, the Company determines whether it is a “bundled transaction”.If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, investment cost is initially recognized at the share of the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controlling party. The difference between the acquisition-date investment cost of long-term equity investments and the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings. (2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value of considerations paid.
When long-term equity investments are obtained through business combination not under common control achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment: 1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, the carrying value of theacquirer’s previously held equity interest in the acquire is re-measured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is recognized in investment income; when theacquirer’s previously held equity interest in the acquire involves other comprehensive income under equity method, the related other comprehensive income is
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report reclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets from re-measurement of defined benefit plan of the acquiree.
(3) Long-term equity investment obtained through ways other than business combination: the initial cost of a long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to “CASBE12 - Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE7 - Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investment with control relationship, it is accounted for with cost method; for long-term equity investment with joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in theCompany’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 theCompany’s loss of significant influence or joint control, the remained equity is accounted for with equity method; however, if the disposal results in theCompany’s loss of control, joint control, or significant influence, the remained equity is reclassified as available-for-sale financial assets, and accounted for according to CASBE 22–Financial Instruments: Recognition and Measurement.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in theCompany’s loss of control
Before theCompany’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
When the Company loses control, the remained equity is re-measured at the loss-of-control-date fair value. The aggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when the Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related to equity investments in former subsidiary is reclassified as investment income upon theCompany’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in theCompany’s loss of control
In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting treatment. Before the Company loses control, the difference between the disposal consideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary.
(XV) Investment property
1. Investment property includes land use right of rent-out property and of property held for capital appreciation and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequent measurement is made using the cost model, the depreciation or amortization method is the same as that of fixed assets and intangible assets.
(XVI) Fixed assets
1. Recognition principles of fixed assets
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Fixed assets are tangible assets held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably. 2. Depreciation method of different categories of fixed assets
||||
|-|-|-|
|Depreciation method|Useful life(years)|Estimated residualvalue proportion(%)|
|Straight-line method|15-35|3.00|
|Straight-line method|10-15|3.00|
|Straight-line method|6-8|3.00|
|Straight-line method|4-11|3.00|
|Straight-line method|4-11|3.00|

(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will flow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches its designed usable conditions. When the construction completion cost reaches final estimating and auditing of the construction in progress was not finished while it reaching the designed usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless they following requirements are all met: 1) the asset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report to-be-capitalized amount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount based on effective interest method) of the special borrowings at the present period minus the income of interests earned on the unused borrowings as a deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used.
(XIX) Intangible assets
1. Intangible asset includes land use right, patent right and non-patented technology etc. The initial measurement of intangible asset is based its cost.
2. For intangible assets with finite useful lives, its amortization amount is amortized within its useful lives systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-line method with details as follows:
Items Amortization period (years)
Software 3-10
Patent right and non-patented technology 5-10
Land use right 40-50
3. Expenditures on the research phase of an internal project are recognized as profit or loss when it is incurred. An intangible asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of the following: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits. Among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
(XX) Impairment of part of non-current assets
For non-current assets such as long-term equity investments, investment property at cost model, fixed assets, construction in progress, intangible assets with finite useful life, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is estimated. For goodwill recognized in business combination and intangible assets with indefinite useful life, no matter whether there is indication of impairment, impairment test is performed annually. Impairment test on goodwill is performed on related group of assets or a portfolio of groups of assets. When the recoverable amount of such non-current assets is lower than their carrying amount, the difference is recognized as assets impairment loss through profit or loss.
(XXI) Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year). They are recorded with actual cost, and evenly amortized within its beneficiary period or stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss. (XXII) Employee benefits
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 1. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periods to which the obligations are attributed. The Company discounts obligations under the defined benefit plan using the discount rate to determine the present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the present value of the defined benefit plan obligation from the fair value of defined benefit plan assets as a net defined benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset ceiling;
3) At the end of reporting period, the Company recognizes the following components of employee benefits cost arising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. Changes as a result of re-measurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the Company may transfer those amounts recognized in other comprehensive income within equity.
4. Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a corresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company recognizes cost or expenses related to a restructuring that involves the payment of termination benefits.
5. Other long-term employee benefits
When other long-term employee benefits provided by the Company to the employees satisfied the conditions for classifying as a defined contribution plan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan. The Company recognizes and measures the net liability or net asset of other long-term employee benefits in accordance with the requirements relation to defined benefit plan. At the end of the reporting period, the Company recognizes the components of cost of employee benefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assets of other long-term employee benefits; and c. changes as a result of re-measurement of the net liability or net assets of other long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts are recognized in profit or loss or included in the cost of a relevant asset.
(XXIII) Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the present obligations, and its carrying amount is reviewed at the balance sheet date.
(XXIV) Revenue
1. Revenue recognition principles
(1) Sale of goods
Revenue from sale of goods is recognized if, and only if, the following conditions are all satisfied: a) significant risks and rewards of ownership of the goods is transferred to the buyer; b) the Company retains neither continuing managerial involvement of ownership nor effective control over the goods sold; c) the amount of revenue can be measured reliably; d) it is probable that the economic benefits of the transaction will flow to the Company; and e) the costs of the transaction incurred and to be incurred can be measured reliably.
(2) Rendering of services
When the outcome of the transaction can be estimated reliably (the amount of revenue can be measured reliably, it is probable that the economic benefits will flow to the Company, the percentage of completion of the transaction can be determined reliably, and the costs of the transaction incurred and to be incurred can be measured reliably), revenue from rendering of services is recognized using the percentage of completion method, and the stage of completion is determined at the proportion of costs incurred to the estimated total costs. When the outcome of the transaction cannot be estimated reliably at the balance sheet date, revenue is recognized based on the amount of the costs incurred and the costs incurred are charged off at the same amount when the costs incurred are expected to be recoverable; and no revenue is recognized and the costs incurred are charged off as an expense of the period when the costs incurred are not expected to be recovered.
(3) Revenue arising from use by others of assets
Revenue arising from use by others of assets is recognized if, and only if, it is probable that economic benefits associated with the transaction will flow to the Company and the amount of the revenue can be measured reliably. Interest income is recognized based on the length of time for which theCompany’s cash is used by others and the effective interest rate; and royalties are recognized according to the period and method of charging as specified in relevant contract or agreement.
2. Revenue recognition method adopted by the Company
TheCompany’s main product is the telecommunication product. Revenue is recognized if, and only if, the following conditions are all met: the Company has delivered goods to the purchaser based on contractual agreements; customers have accepted goods and settled the payment; goods payment has been collected or the Company has obtained receipts invoices and it is probable that economic benefits associated with the transaction will flow to the Company; and the costs of the transaction incurred and to be incurred can be measured reliably.
(XXV) Government grants
1. Government grants related to assets
Government grants related to assets are government grants, with which the Company purchase, construct or otherwise acquire
non-current assets. They are recognized as deferred income, and amortized on a straight-line method over the useful lives of the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report relevant assets, and included in profit or loss. However, those measured at notional amount is directly included into profit or loss. 2. Government grants related to income
Government grants related to income are government grants other than those related to assets. Government grants related to income if used for compensating the related future expenses or losses of the Company are recognized as deferred income and are included in profit or loss during the period when the relevant expenses are recognized; if used for compensating the related expenses or losses incurred to the Company are directly included in profit or loss.
(XXVI) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that future taxable profits will be available against which deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding those arising from the following circumstances: (a) business combination; and (b) the transactions or items directly recognized in equity.
(XXVII) Operating leases
When the Company is the lessee, lease payments are recognized as cost or profit or loss with straight-line 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 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 into profit or loss in the periods in which they are incurred.
(XXVIII) Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure of theCompany’s internal organization, management requirements and internal reporting system. An operating segment is a component of the Company that:
(1) engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance are regularly reviewed by Management to make decisions about resource to be allocated to the
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report segment and assess its performance; and
(3) for which financial information regarding financial position, financial performance and cash flows is available.
(XXIX)Changes in accounting policies
(1) The Company has adopted “CASBE 42 - Non-current Assets and Disposal Groups Held for Sale and Discontinued Operations” promulgated by Ministry of Finance of PRC since May 28, 2017, and has adopted “CASBE 16 - Government Grants” revised by Ministry of Finance of PRC since June 12, 2017. The change is applicable to prospective application method.
(2) The Company prepared the financial statements for the year ended December 31, 2017 in accordance with “Notice of the Ministry of Finance on Revising and Issuing Financial Statement Templates for General Enterprises” (numbered Cai Kuai[2017] 30), and gains and losses on disposal of non-current assets and gains and losses on trading of non-cash assets which originally presented under the items “Non-operating revenue” and “Non-operating expenditures” were presented under the item “Gains on asset disposal”. As this change is applicable to retrospective application method, non-operating revenue and non-operating expenditures of 2016 are respectively decreased by 235,215.25 yuan and 24,995.40 yuan, while gains on asset disposal is increased by 210,219.85 yuan. IV. Taxes
(I) Main taxes and tax rates
||
|-|
|Tax bases|
|The taxable revenue from sales of goods orrendering of services|
|For housing property levied on the basis of price,housing property tax is levied at the rate of 1.2%of the balance after deducting 30% of the cost; forhousing property levied on the basis of rent,housing property tax is levied at the rate of 12% ofrent revenue.|
|Turnover tax payable|
|Turnover tax payable|
|Turnover tax payable|
|Taxable income|

Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Nanjing Mennekes Electric Appliances Co., Ltd 15%
Nanjing Putian Telege Intelligent Building Ltd. 15%
南京普天长乐通信设备有限公司
15%
(Nanjing Putian Changle Telecommunications Equipment Co., Ltd.2)
南京普天大唐信息电子有限公司
15%
(Nanjing Putian Datang Information Electronic Co.,Ltd.*)
南京普天网络有限公司
15%
(Nanjing Putian Network Co.,Ltd.*)
普天通信(香港)股份有限公司 16.5%
2
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Taxpayers Income tax rate
(Putian Telecommunications (H.K.) Co.,Ltd.*)
Taxpayers other than the above-mentioned 25%
The subsidiary, Putian Telecommunications (H.K.) Co., Ltd., was established in Hong Kong on December 1, 2000, and is subject to the enterprise income tax at a rate of16.5%, according to relevant rules in Hong Kong.
(II) Tax preferential policies
The subsidiary, Nanjing Putian Telege Intelligent Building Ltd., obtained high-tech enterprise certificate in December 7, 2017, valid for 3 years. The certificate number is GR201732002774. As a result, it is subject to the enterprise income tax at a rate of15% for 2017 to 2019.
The subsidiary, Nanjing Mennekes Electric Appliances Co., Ltd obtained high-tech enterprise certificate in October 20, 2016, valid for 3 years. The certificate number is GR201632000065. As a result, it is subject to the enterprise income tax at a rate of15% for 2016 to 2018.
The subsidiary, Nanjing Putian Changle Telecommunications Equipment Co., Ltd., obtained high-tech enterprise certificate in October 10, 2015, valid for 3 years. The certificate number is GR201532001302. As a result, it is subject to the enterprise income tax at a rate of15% for 2015 to 2017.
The subsidiary, Nanjing Putian Network Co., Ltd., obtained high-tech enterprise certificate in December 7, 2017, valid for 3 years. The certificate number is GF201732003495. As a result, it is subject to the enterprise income tax at a rate of15% for 2017 to 2019. The subsidiary, Nanjing Putian Datang Information Electronic Co., Ltd., obtained high-tech enterprise certificate in August 24, 2015, valid for 3 years. The certificate number is GF201532000188. As a result, it is subject to the enterprise income tax at a rate of15% for 2015 to 2017.
The subsidiary,南京通信设备厂七分厂 (Nanjing Telecommunication Equipment Factory - the SeventhBranch*), is a social welfare enterprise. Accordance to the provisions of Guo Shui Fa[2007] No.067, it enjoys the preferential tax policy of VAT refund upon collection and plus deduction of wages paid to the disabled employees.
The subsidiaries, Nanjing Putian Datang Information Electronic Co., Ltd. and南京普天通信科技有限公司 (Nanjing Putian Telecommunication Technology Co.,Ltd.*), were certified as software enterprises, and some of the software products produced by Nanjing South Telecommunications Company Limited and Nanjing Putian Network Co., Ltd. are entitled to enjoy the preferential tax policy of VAT refund upon collection in accordance with the provisions of Cai Shui[2011] No.100.
V. Notes to items of consolidated financial statements
(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
||
|-|
|Closing balance|
|5,458.17|
|311,325,826.37|
|16,420,782.19|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Total 327,752,066.73 519,683,411.72
(2) Other remarks
Other cash and bank balances include deposit for acceptance and deposit for L/G, which are with use restrictions. 2. Notes receivable
(1) Details
||||||
|-|-|-|-|-|
|Closing balance|||||
|Book balance|Provision forbad debts|Carryingamount|Book balance|Provision forbad debts|
|20,715,749.22||20,715,749.22|34,605,985.99||
|11,761,714.37||11,761,714.37|25,142,736.92||
|32,477,463.59||32,477,463.59|59,748,722.91||

(2) Endorsed or discounted but undue notes at the balance sheet date
||
|-|
|Closing balance derecognized|
|412,225,718.09|
|7,822,673.91|
|420,048,392.00|

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.
In the current period, trade acceptance is endorsed for goods payment. As it relates to many endorsements and the drawer is always in good commercial credit level, it is with low default risk and thus derecognized.
(3) Translated to accounts receivable due to drawers not redeem the agreement at the balance sheet date
Items Closing balance translated to accounts
receivable
Trade acceptance 448,319.70
Subtotal 448,319.70
3. Accounts receivable
(1) Details
1) Details on categories
Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|815,282,308.11|98.56|35,192,700.70|4.32|
|815,282,308.11|98.56|35,192,700.70|4.32|
|11,901,554.08|1.44|11,901,554.08|100|
|827,183,862.19|100.00|47,094,254.78|5.69|

(Continued)
Opening balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|788,271,210.47|98.81|27,018,800.11|3.43|
|788,271,210.47|98.81|27,018,800.11|3.43|
|9,464,819.50|1.19|9,464,819.50|100.00|
|797,736,029.97|100.00|36,483,619.61|4.57|

2) In portfolios, accounts receivable with provision made on a collective basis with age analysis method
Closing balance
Ages
|||
|-|-|
|Book balance|Provision for bad debts|
|632,311,307.61||
|91,179,774.98||
|38,453,368.50|3,845,336.85|
|20,411,136.90|6,123,341.06|
|8,413,374.39|3,365,349.76|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Closing balance
Ages
|||
|-|-|
|Book balance|Provision for bad debts|
|13,273,363.49|10,618,690.80|
|11,239,982.24|11,239,982.23|
|815,282,308.11|35,192,700.70|

(2) Provisions made, collected or reversed in current period
1) Provision for bad debts made in current period totaled 11,012,419.28 yuan, and provision reversed in current period totaled 238,303.96 yuan, and provision increased due to fluctuations in exchange totaled -163,480.15 yuan.
(2) Details of the top 5 debtors with largest balances
|||
|-|-|
|Book balance|Proportion to thetotal balance ofaccountsreceivable (%)|
|32,114,110.89|3.88|
|22,756,460.84|2.75|
|20,991,047.20|2.54|
|13,879,784.42|1.68|
|13,315,921.88|1.61|
|103,057,325.23|12.46|

4. Advances paid
(1) Age analysis
1) Details
Closing balance
Ages
||||
|-|-|-|
|Book balance|% to total|Provision for baddebts|
|36,704,841.98|68.20||
|11,206,192.14|20.82||
|1,456,310.44|2.70||
|4,454,593.23|8.28||
|53,821,937.79|100.00||

(Continued)
Ages Opening balance
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Book balance|% to total|Provision for baddebts|
|33,863,490.70|75.96||
|3,798,788.14|8.52||
|1,394,603.89|3.13||
|5,521,299.32|12.39||
|44,578,182.05|100.00||

2) Reasons for unsettlement on advances paid with age over one year and significant amount
||
|-|
|Closing balance|
|881,505.00|
|437,910.35|
|481,771.60|
|940,000.00|
|832,580.43|
|1,879,088.03|
|256,000.00|
|5,708,855.41|

(2) Details of the top 5 debtors with largest balances
||
|-|
|Book balance|
|16,578,642.05|
|2,171,231.20|
|1,879,088.03|
|1,830,131.25|
|940,000.00|
|23,399,092.53|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 5. Other receivables
(1) Details
1) Details on categories
Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|28,912,122.71|45.97|28,912,122.71|100.00|
|33,987,705.89|54.03|4,662,282.16|13.72|
|33,987,705.89|54.03|4,662,282.16|13.72|
|62,899,828.60|100.00|33,574,404.87|53.38|

(Continued)
Opening balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|28,912,122.71|45.14|28,912,122.71|100|
|35,141,893.68|54.86|4,727,754.74|13.45|
|35,141,893.68|54.86|4,727,754.74|13.45|
|64,054,016.39|100.00|33,639,877.45|52.52|

2) Other receivables of individually significant amount and with provision made on an individual basis
||||
|-|-|-|
|Book balance|Provision forbad debts|Provisionproportion (%)|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Book balance|Provision forbad debts|Provisionproportion (%)|
|28,912,122.71|28,912,122.71|100.00|
|28,912,122.71|28,912,122.71|100.00|

3) In portfolios, other receivables with provision made on a collective basis with age analysis method
Closing balance
Ages
|||
|-|-|
|Book balance|Provision for bad debts|
|21,000,423.00||
|4,758,360.87||
|2,537,217.98|253,721.80|
|1,101,273.69|330,382.11|
|455,372.43|182,148.97|
|1,195,143.23|956,114.59|
|2,939,914.69|2,939,914.69|
|33,987,705.89|4,662,282.16|

(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled -63,936.35 yuan, and provision increased due to fluctuations in exchange totaled -1,536.23 yuan.
(3) Other receivables categorized by nature
||
|-|
|Closing balance|
|2,856,176.36|
|21,876,987.95|
|27,377,794.22|
|10,788,870.07|
|62,899,828.60|

(4) Details of the top 5 debtors with largest balances
|||||
|-|-|-|-|
|Nature ofreceivables|Book balance|Ages|Proportion to thetotal balance ofother receivables(%)|
|Temporaryadvance paymentreceivable|28,912,122.71|Over 6 years|45.97|
|Temporary|1,000,000.00|Over 6 years|1.59|

3
The English name is for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|Nature ofreceivables|Book balance|Ages|Proportion to thetotal balance ofother receivables(%)|
|advance paymentreceivable||||
|Deposits|800,000.00|Within 1 year|1.27|
|Deposits|500,000.00|Within 1 year|0.79|
|Deposits|300,000.00|Within 1 year|0.48|
||31,512,122.71||50.10|

6. Inventories
(1) Details
||||||
|-|-|-|-|-|
|Closing balance|||||
|Bookbalance|Provision forwrite-down|Carrying amount|Book balance|Provision forwrite-down|
|32,589,471.27|2,938,752.56|29,650,718.71|33,539,824.25|1,125,858.68|
|9,304,009.61||9,304,009.61|16,703,581.54||
|310,378,245.32|3,087,176.10|307,291,069.22|135,915,010.79|4,564,999.07|
|149,131,694.22|7,758,200.35|141,373,493.87|348,220,786.84|4,668,473.40|
|4,789,181.58|804,691.99|3,984,489.59|3,912,017.20||
|506,192,602.00|14,588,821.00|491,603,781.00|538,291,220.62|10,359,331.15|

 (2) Provision for inventory write-down
1) Details
||||||
|-|-|-|-|-|
|Opening balance|Increase||Decrease||
||Provision|Others|Reversal orwritten-off|Others|
|1,125,858.68|2,417,243.15||604,349.27||
|4,564,999.07|69,758.65||1,547,581.62||
|4,668,473.40|3,089,726.95||||
||804,691.99||||
|10,359,331.15|6,381,420.74||2,151,930.89||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 2) Determination basis of net realizable value and reasons for the reversal or written-off of provision for inventory write-down Please refer to XII for determination basis of net realizable value. Reversal of provision for inventory write-down due to the sale of raw materials in the current period, which is with provision for inventory write-down made in prior period, totaled 2,151,930.89 yuan.
7. Other current assets
||
|-|
|Closing balance|
|45,282,892.44|
|45,282,892.44|

8. Available-for-sale financial assets
(1) Details
||||||
|-|-|-|-|-|
|Closing balance|||||
|Book balance|Provision forimpairment|Carryingamount|Book balance|Provision forimpairment|
|2,596,863.00|1,854,910.00|741,953.00|2,596,863.00|1,854,910.00|
|2,596,863.00|1,854,910.00|741,953.00|2,596,863.00|1,854,910.00|

(2) Available-for-sale financial assets at cost
Book balance
Investees
||||
|-|-|-|
|Openingbalance|Increase|Decrease|
|420,915.00|||
|321,038.00|||
|1,854,910.00|||
|2,596,863.00|||

(Continue)
||||||
|-|-|-|-|-|
|Provision for impairment||||Holdingproportion ininvestees (%)|
|Openingbalance|Increase|Decrease|Closingbalance||
|||||10.00|
|||||2.26|
|1,854,910.00|||1,854,910.00|51.00|
|1,854,910.00|||1,854,910.00||

4
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Note: Up to the end of 2007, Beijing Likangpu Communications Equipment Co., Ltd. was significantly insolvent and was shut down with no operations since 2008. In October 2007, Beijing Administration for Industry and Commerce issued the decision on treatment of cancellation of license and required it to carry out liquidation under laws and regulations. Pursuant to “CASBE 33 - Consolidated Financial Statements”, Beijing Likangpu Communications Equipment Co., Ltd. shall no longer be brought into consolidation scope since 2008 and such event has been reported to China Potevio Information Industry Inc. and State-owned Assets Supervision and Administration Commission of the State Council.
9. Long-term equity investments
(1) Categories
||||||
|-|-|-|-|-|
|Closing balance|||||
|Book balance|Provision forimpairment|Carryingamount|Book balance|Provision forimpairment|
|173,681,413.39||173,681,413.39|173,270,977.42||
|13,296,092.84||13,296,092.84|13,811,880.14||
|186,977,506.23||186,977,506.23|187,082,857.56||

(2) Details
|||||
|-|-|-|-|
|Openingbalance||||
||Investmentsincreased|Investmentsdecreased|Investment incomerecognized underequity method|
|13,811,880.14|||-515,787.30|
|13,811,880.14|||-515,787.30|
|3,061,006.22|||-20,904.78|
|170,209,971.20|||876,115.15|
|173,270,977.42|||855,210.37|
|187,082,857.56|||339,423.07|

(Continued)
||||||
|-|-|-|-|-|
|Increase/decrease||||Closing balance|
|Changes inother equity|Cashdividend/profitdeclared fordistribution|Provision forimpairment|Others||

5
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
|Increase/decrease||||Closing balance|
|Changes inother equity|Cashdividend/profitdeclared fordistribution|Provision forimpairment|Others||
|||||13,296,092.84|
|||||13,296,092.84|
|||||3,040,101.44|
||444,774.40|||170,641,311.95|
||444,774.40|||173,681,413.39|
||444,774.40|||186,977,506.23|

10. Investment property
|||
|-|-|
|Buildings and structures|Land use right|
|23,851,020.30|3,642,147.87|
|23,851,020.30|3,642,147.87|
|10,472,505.23|1,644,613.23|
|611,185.79|119,960.64|
|611,185.79|119,960.64|
|11,083,691.02|1,764,573.87|
|1,842,418.00||
|1,842,418.00||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Buildings and structures|Land use right|
|11,536,097.07|1,997,534.64|
|23,851,020.30|3,642,147.87|

11. Fixed assets
(1) Details
||||||
|-|-|-|-|-|
|Buildings andstructures|Machineryequipment|Transportfacilities|Electronicequipment|Officeequipmentand others|
|154,375,202.08|80,943,809.67|13,896,907.27|6,459,832.24|50,996,742.51|
|285,166.40|3,492,828.06|276,916.09|1,481,483.70|1,110,787.49|
|285,166.40|3,492,828.06|276,916.09|1,481,483.70|1,110,787.49|
||26,340,042.50|926,196.28|1,282,090.21|1,265,019.84|
||26,340,042.50|926,196.28|1,282,090.21|1,265,019.84|
|154,660,368.48|58,096,595.23|13,247,627.08|6,659,225.73|50,842,510.16|
|47,989,288.43|70,908,465.92|12,222,463.90|5,443,494.82|43,468,289.90|
|5,200,574.14|1,693,706.48|752,891.10|1,305,743.28|1,400,848.84|
|5,200,574.14|1,693,706.48|752,891.10|1,305,743.28|1,400,848.84|
||25,564,112.41|901,844.82|873,666.08|231,685.34|
||25,564,112.41|901,844.82|873,666.08|231,685.34|
|53,189,862.57|47,038,059.99|12,073,510.18|5,875,572.02|44,637,453.40|
|539,124.00|572,777.78||399,959.72|847,107.16|
||561,914.76||296,846.94|550,260.22|
||561,914.76||296,846.94|550,260.22|
|539,124.00|10,863.02||103,112.78|296,846.94|
|100,931,381.91|11,047,672.22|1,174,116.90|680,540.93|5,908,209.82|
|105,846,789.65|9,462,565.97|1,674,443.37|616,377.70|6,681,345.45|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report (2) Fixed assets temporarily idle
|||||
|-|-|-|-|
|Cost|Accumulateddepreciation|Provision forimpairment|Carryingamount|
|218,700.00|202,437.65||16,262.35|
|225,000.00|218,250.00||6,750.00|
|19,100.00|18,527.00||573.00|
|630,241.55|314,868.89|296,846.94|18,525.72|
|1,093,041.55|754,083.54|296,846.94|42,111.07|

(3) Fixed assets with certificate of titles being unsettled
||
|-|
|Carrying amount|
|8,520,744.64|
|33,024,262.47|
|41,545,007.11|

12. Construction in progress
(1) Details
||||||
|-|-|-|-|-|
|Closing balance|||||
|Bookbalance|Provision forimpairment|Carryingamount|Bookbalance|Provision forimpairment|
|1,830,131.25||1,830,131.25|||
|333,136.64||333,136.64|||
|2,163,267.89||2,163,267.89|||

(2) Changes in significant projects
||||||
|-|-|-|-|-|
|Budgets|Openingbalance|Increase|Transferred to fixedassets|Otherdecrease|
|6,100,437.50||1,830,131.25|||
|600,000.00||333,136.64|||
|6,700,437.50||2,163,267.89|||

 (Continued)
||||||
|-|-|-|-|-|
|Accumulatedinvestment tobudget|Completionpercentage(%)|Accumulatedamount ofborrowing costcapitalization|Amount ofborrowing costcapitalization incurrent period|Annualcapitalizationrate (%)|
|30.00|30.00||||
|55.52|55.52||||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
|Accumulatedinvestment tobudget|Completionpercentage(%)|Accumulatedamount ofborrowing costcapitalization|Amount ofborrowing costcapitalization incurrent period|Annualcapitalizationrate (%)|

13. Intangible assets
|||||
|-|-|-|-|
|Software|Land use right|Patent right|Non-patenttechnology|
|10,006,573.23|29,924,994.74|607,500.00|4,560,000.00|
|883,267.10|4,835,077.30|||
|883,267.10|4,835,077.30|||
|10,889,840.33|34,760,072.04|607,500.00|4,560,000.00|
|8,439,630.51|5,328,359.52|607,500.00|4,560,000.00|
|418,753.95|726,351.51|||
|418,753.95|726,351.51|||
|8,858,384.46|6,054,711.03|607,500.00|4,560,000.00|
|2,031,455.87|28,705,361.01|||
|1,566,942.72|24,596,635.22|||

14. Long-term prepayments
|||||
|-|-|-|-|
|Opening balance|Increase|Amortization|Other decreases|
|576,972.01||73,656.00||
|1,634,036.45|270,270.27|422,082.14|301,112.39|
|53,490.57|2,414,854.69|1,357,578.70||
|2,264,499.03|2,685,124.96|1,853,316.84|301,112.39|

15. Short-term borrowings
||
|-|
|Closing balance|
|164,000,000.00|
|78,550,000.00|
|145,000,000.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Closing balance|
|387,550,000.00|

In the current period, the Company entrusted the parent company to apply for loans from Bank of Beijing, Jiangning Sub-branch, which is the pledged borrowings amounting to 164,000,000.00 yuan. The Company pledged its holding equities to the parent company, which include equity of Nanjing South Telecommunications Co amounting to 4.80 million yuan, equity of Nanjing Putian Changle Telecommunications Equipment Co., Ltd. amounting to 5.07 million yuan, equity of南京普天王之电子有限公司 (Nanjing Putian Wangzhi Electronic Co., Ltd.6) amounting to 60.43 million yuan, equity of Nanjing Putian Network Co., Ltd. amounting to 7.80 million yuan. The Company has registered the equity pledge at Nanjing Jiangning Market Supervision Administration.
16. Notes payable
||
|-|
|Closing balance|
|20,161,687.14|
|20,161,687.14|

17. Accounts payable
(1) Details
||
|-|
|Closing balance|
|790,597,232.04|
|16,074,942.13|
|806,672,174.17|

(2) Significant accounts payable with age over one year
||
|-|
|Closing balance|
|22,584,894.54|
|19,466,652.30|
|2,742,426.91|
|2,560,103.62|
|1,879,639.00|
|1,445,830.36|
|1,307,941.99|

6
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Closing balance|
|1,240,837.17|
|1,080,000.00|
|1,069,084.38|
|1,034,650.30|
|56,412,060.57|

18. Advances received
(1) Details
||
|-|
|Closing balance|
|317,197,824.66|
|317,197,824.66|

(2) Significant advances received with age over one year
||
|-|
|Closing balance|
|282,208,394.21|
|1,973,506.38|
|1,370,340.19|
|285,552,240.78|

19. Employee benefits payable
(1) Details
||||
|-|-|-|
|Opening balance|Increase|Decrease|
|17,476,239.20|219,171,885.23|215,614,812.70|
||26,366,575.69|26,366,575.69|
||2,836,954.87|2,836,954.87|
|17,476,239.20|248,375,415.79|244,818,343.26|

(2) Details of short-term employee benefits
7
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Opening balance|Increase|Decrease|
|11,158,534.74|150,522,121.29|149,968,486.41|
||12,774,655.05|12,774,655.05|
||14,926,504.68|14,926,504.68|
||13,341,384.96|13,341,384.96|
||750,755.48|750,755.48|
||834,364.24|834,364.24|
|104,705.95|10,818,366.92|10,804,028.52|
|6,212,998.51|4,730,588.69|1,741,489.44|
||25,399,648.60|25,399,648.60|
|17,476,239.20|219,171,885.23|215,614,812.70|

(3) Details of defined benefit plan
||||
|-|-|-|
|Opening balance|Increase|Decrease|
||23,528,629.34|23,528,629.34|
||768,093.58|768,093.58|
||2,069,852.77|2,069,852.77|
||26,366,575.69|26,366,575.69|

20. Taxes and rates payable
||
|-|
|Closing balance|
|10,280,548.54|
|6,499,756.88|
|237,453.57|
|864,522.72|
|275,272.72|
|81,754.17|
|414,831.06|
|199,707.94|
|29,169.58|
|18,883,017.18|

21. Interest payable
Items Closing balance Opening balance
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Closing balance|
|531,667.36|
|531,667.36|

22. Dividend payable
(1) Details
||
|-|
|Closing balance|
|1,692,213.38|
|1,692,213.38|

(2) Significant dividend payable with age over one year
||
|-|
|Closing balance|
|253,832.01|
|423,053.34|
|253,832.01|
|84,610.67|
|423,053.34|
|253,832.01|
|1,692,213.38|

23. Other payables
||
|-|
|Closing balance|
|7,451,700.88|
|27,480,668.40|
|12,669,525.02|
|6,466,718.07|
|6,735,309.52|
|60,803,921.89|

24. Deferred income
(1) Details
|||||
|-|-|-|-|
|Opening balance|Increase|Decrease|Closingbalance|
|1,599,211.58|10,097,456.00|3,032,564.68|8,664,102.90|

8
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|Opening balance|Increase|Decrease|Closingbalance|
|1,599,211.58|10,097,456.00|3,032,564.68|8,664,102.90|

(2) Details of government grants
|||||
|-|-|-|-|
|Openingbalance|Increase|Included innon-operating revenuein current period|Closing balance|
|1,599,211.58||828,284.68|770,926.90|
||1,000,000.00||1,000,000.00|
||9,097,456.00|2,204,280.00|6,893,176.00|
|1,599,211.58|10,097,456.00|3,032,564.68|8,664,102.90|

Note: The condition of government subsidies carried in profit and loss of current period are showed in the explanations of notes to items of consolidated financial statements as detailed.
25. Share capital
|||||||
|-|-|-|-|-|-|
|Opening balance|Movements|||||
||Issue ofnew shares|Bonusshares|Reservetransferred toshares|Others|Subtotal|
|215,000,000.00||||||

26. Capital reserve
||||
|-|-|-|
|Opening balance|Increase|Decrease|
|139,592,332.04|||
|45,782,201.81|||
|185,374,533.85|||

27. Other comprehensive income (OCI)
|||||||
|-|-|-|-|-|-|
|Opening balance|Current period cumulative|||||
||Current periodcumulativebefore incometax|Less: OCIcarried forwardtransferred toprofit or loss|Less:incometax|Attributable toparentcompany|Attributable tonon-controllinginterest|
|-4,634,605.50|561,095.61|||504,986.05|56,109.56|
|-4,634,605.50|561,095.61|||504,986.05|56,109.56|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||||
|-|-|-|-|-|-|
|Opening balance|Current period cumulative|||||
||Current periodcumulativebefore incometax|Less: OCIcarried forwardtransferred toprofit or loss|Less:incometax|Attributable toparentcompany|Attributable tonon-controllinginterest|
|-4,634,605.50|561,095.61|||504,986.05|56,109.56|

 28. Surplus reserve
||||
|-|-|-|
|Opening balance|Increase|Decrease|
|589,559.77|||
|589,559.77|||

29. Undistributed profit
(1) Details
||
|-|
|Current periodcumulative|
|-56,491,072.91|
|-56,491,072.91|
|11,885,170.28|
|-44,605,902.63|

(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
||||
|-|-|-|
|Current period cumulative|||
|Income|Cost|Income|
|2,209,804,002.80|1,852,183,708.39|1,779,066,862.85|
|44,595,403.24|32,369,061.21|74,844,415.98|
|2,254,399,406.04|1,884,552,769.60|1,853,911,278.83|

2. Taxes and surcharge for operations
||
|-|
|Current period cumulative|
|5,390,988.07|
|4,350,866.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Current period cumulative|
|703,697.83|
|1,602,058.75|
|614,566.57|
|720.00|
|94,701.06|
|12,757,598.28|

Note: Pursuant to Provisions on Accounting Treatment of Value-Added Tax (numbered Cai Kuai[2016] 22) and Interpretation about Provisions on Accounting Treatment of Value-Added Tax that issued by Ministry of Finance, amounts of housing property tax, vehicle and vessel use tax, land use tax and stamp duty for the period from May to December are listed in “taxes and surcharge for operations”, while those for the period prior to May 2016 are listed in “administrative expenses”.
3. Selling expenses
||
|-|
|Current period cumulative|
|71,047,508.40|
|23,278,939.74|
|16,428,798.90|
|13,824,176.38|
|6,170,439.90|
|2,719,394.66|
|1,563,427.22|
|1,465,821.83|
|785,949.50|
|13,889,905.78|
|151,174,362.31|

4. Administrative expenses
||
|-|
|Current period cumulative|
|46,223,900.45|
|67,887,029.53|
|4,745,201.46|
|5,342,285.86|
|3,303,069.26|
|2,009,842.84|
|2,799,167.57|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Current period cumulative|
|4,025,123.78|
|528,279.47|
|7,060,431.77|
|143,924,331.99|

Note: Showed in the explanation of notes to items for taxes and surcharge for operations.
5. Financial expenses
||
|-|
|Current period cumulative|
|17,476,700.08|
|1,939,975.85|
|421,071.00|
|43,270.97|
|370,093.51|
|16,284,617.77|

6. Assets impairment loss
||
|-|
|Current period cumulative|
|10,710,178.97|
|6,381,420.74|
|17,091,599.71|

7. Investment income
||
|-|
|Current period cumulative|
|339,423.07|
|339,423.07|

8. Gains on disposal of assets
|||
|-|-|
|Current period cumulative|Preceding periodcomparative|
|-481,922.28|210,219.85|
|-481,922.28|210,219.85|

9. Other income
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Current period cumulative|Preceding periodcomparative|
|5,644,165.31||
|2,204,280.00||
|7,848,445.31||

 Note: The amounts carried in current period are showed in the explanations of notes to items of consolidated financial statements as detailed.
10. Non-operating revenue
|||
|-|-|
|Current periodcumulative|Preceding periodcomparative|
||568,148.56|
|3,330,559.79|13,136,556.76|
||23,309.36|
||573,765.64|
||261,904.76|
|367,827.34|653,321.70|
|3,698,387.13|15,217,006.78|

(2) Government grants
|||
|-|-|
|Current periodcumulative|Preceding periodcomparative|
||6,563,756.00|
||1,200,000.00|
||2,000.00|
||156,000.00|
||283,074.36|
||2,000,000.00|
||2,926,326.40|
||2,400.00|
||1,000.00|
||2,000.00|
|828,284.68||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Current periodcumulative|Preceding periodcomparative|
|900,000.00||
|400,000.00||
|286,275.11||
|50,000.00||
|4,000.00||
|103,000.00||
|500,000.00||
|259,000.00||
|3,330,559.79|13,136,556.76|

11. Non-operating expenditures
|||
|-|-|
|Current periodcumulative|Preceding periodcomparative|
|34,865.18||
|10,000.00|32,400.00|
|266,414.61|120,937.57|
||246,975.91|
||491,234.50|
|42,108.71|94,805.22|
|353,388.50|986,353.20|

12. Income tax expenses
(1) Details
||
|-|
|Current period cumulative|
|11,371,015.89|
|11,371,015.89|

(2) Reconciliation of accounting profit to income tax expenses
||
|-|
|Current period cumulative|
|39,665,071.11|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Current period cumulative|
|9,916,267.78|
|-1,076,036.90|
|-518,242.07|
|-180,081.96|
|2,640,736.91|
|3,001,756.29|
|184,062.99|
|-2,597,447.15|
|11,371,015.89|

 13. Other comprehensive income, net of income tax
Please refer to notes to items of the consolidated balance sheet - other comprehensive income for details.
(III) Notes to items of the consolidated cash flow statement
1. Other cash receipts related to operating activities
||
|-|
|Current period cumulative|
|18,243,896.42|
|1,939,975.85|
|53,492,754.29|
|5,292,018.14|
|78,968,644.70|

2. Other cash payments related to operating activities
||
|-|
|Current period cumulative|
|26,409,249.84|
|127,383,298.87|
|318,523.32|
|154,111,072.03|

3. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Current periodcumulative|
|28,294,055.22|
|17,091,599.71|
|10,964,949.63|
|1,265,066.10|
|1,853,316.84|
|481,922.28|
|17,854,500.11|
|-339,423.07|
|29,946,687.73|
|-141,323,024.96|
|-13,306,785.91|
|-47,217,136.32|
|311,331,284.54|
|484,954,713.07|
|-173,623,428.53|

(2) Cash and cash equivalents
||
|-|
|Closing balance|
|311,331,284.54|
|5,458.17|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|311,325,826.37|
|311,331,284.54|

(3) The amount of endorsement of a commercial bill that does not involve cash payments
||
|-|
|Current period cumulative|
|759,242,019.92|
|759,242,019.92|

(4) Remarks on supplement information to the cash flow statement
Cash and cash equivalents with use restrictions are deposit for acceptance and deposit for L/G, of which closing balance amounts totaled 16,420,782.19 yuan and opening balance amounts totaled 34,728,698.65 yuan.
(IV) Others
1. Assets with title or use right restrictions
||
|-|
|Closing carrying amount|
|16,420,782.19|
|38,083,247.45|
|12,458,001.41|
|6,273,122.45|
|73,235,153.50|

Note: We remind users of financial statements that, apart from the above assets with title or use right restrictions, in order to entrust the parent company to apply for loans from Bank of Beijing, Jiangning Sub-branch, the Company pledged its holding equities to the parent company, which include equity of Nanjing South Telecommunications Co Ltd. 4.80 million yuan, equity of Nanjing Putian Changle Telecommunications Equipment Co., Ltd. 5.07 million yuan, equity of Nanjing Putian Wangzhi Electronic Co., Ltd. 60.43 million yuan, equity of Nanjing Putian Network Co., Ltd. 7.80 million yuan. The Company has registered the equity pledge at Nanjing Jiangning Market Supervision Administration. Those equities are with use restrictions before released.
2. Monetary items in foreign currencies
|||
|-|-|
|Closing balance in foreigncurrencies|Exchange rate|
|837,019.88|6.5342|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Closing balance in foreigncurrencies|Exchange rate|
|522.27|7.8023|
|612,022.64|0.8359|
|208.79|8.7792|

3. Government grants
1. Details
(1) Government grants related to income and used to compensate future relevant costs, expenses or losses
||||||
|-|-|-|-|-|
|Opening balanceof deferredincome|Increase|Amountscarriedforward|Closing balanceof deferredincome|Amounts carriedforward presentedunder|
|1,599,211.58||828,284.68|770,926.90|Non-operatingrevenue|
||1,000,000.00||1,000,000.00||
||9,097,456.00|2,204,280.00|6,893,176.00|Other income|
|1,599,211.58|10,097,456.00|3,032,564.68|8,664,102.90||

(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
|||
|-|-|
|Amounts|Presented under|
|5,644,165.31|Other income|
|900,000.00|Non-operating revenue|
|400,000.00|Non-operating revenue|
|286,275.11|Non-operating revenue|
|50,000.00|Non-operating revenue|
|4,000.00|Non-operating revenue|
|103,000.00|Non-operating revenue|
|500,000.00|Non-operating revenue|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|259,000.00|Non-operating revenue|
|8,146,440.42||

2. The amount of government subsidy included in the current profit and loss is included in the current period is 11,179,005.10 yuan. VI. Interest in other entities
(I) Interest in significant subsidiaries
1. Significant subsidiaries
(1) Basis information
||||||
|-|-|-|-|-|
|Mainoperatingplace|Place ofregistration|Businessnature|Holdingproportion (%)||
||||Direct|Indirect|
|NanjingCity|NanjingCity|Manufacture|96.99|1.38|
|NanjingCity|NanjingCity|Manufacture|75.00||
|NanjingCity|NanjingCity|Manufacture|45.767||
|NanjingCity|NanjingCity|Manufacture|50.70||
|NanjingCity|NanjingCity|Manufacture|40.00||

(2) Other remarks
1) Remarks on inconsistency between holding proportion owned and voting rights proportion owned in subsidiaries The Company holds40% equity of Nanjing Putian Datang Information Electronic Co., Ltd. The Company signed the agreement with严耀明 (Yan Yaoming), a shareholder of Nanjing Putian Datang Information Electronic Co., Ltd., to exercise his21% right to vote. The agreement is valid during the period of the existence of Nanjing Putian Datang Information Electronic Co., Ltd. The Company has61% of the voting right during the existence period of Nanjing Putian Datang Information Electronic Co., Ltd.
2) Basis for the control of an investee while holding its half or less than half voting rights, and the non-control of an investee while holding its more than half voting rights
The Company holds45.767% 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 BuildingLtd’s related activity. The Company has the ability to impact the amount of return and control over Nanjing Putian Telege Intelligent Building Ltd.
2. Significant not wholly-owned subsidiaries
(1) Details
||||
|-|-|-|
|Holdingproportion ofnon-controllingshareholders|Profit or lossattributable tonon-controllingshareholders|Dividend declaredto non-controllingshareholders|
|1.630%|185,338.03|326,000.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Holdingproportion ofnon-controllingshareholders|Profit or lossattributable tonon-controllingshareholders|Dividend declaredto non-controllingshareholders|
|25.00%|1,596,811.99||
|54.233%|11,548,530.22|5,423,300.00|
|49.30%|-455,948.40||
|60.00%|2,904,461.94|2,400,000.00|

3. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
Closing balance
||||||
|-|-|-|-|-|
|Current assets|Non-currentassets|Total assets|Currentliabilities|Non-currentliabilities|
|309,537,813.81|13,592,176.13|323,129,989.94|211,408,383.03||
|176,169,023.07|25,854,512.91|202,023,535.98|108,294,175.42||
|256,432,695.75|39,896,214.78|296,328,910.53|180,433,445.64||
|74,309,078.75|636,133.14|74,945,211.89|43,882,280.07||
|30,926,444.05|10,451,600.76|41,378,044.81|19,204,521.56||

(Continued)
Opening balance
||||||
|-|-|-|-|-|
|Current assets|Non-currentassets|Total assets|Currentliabilities|Non-currentliabilities|
|369,198,464.82|13,067,689.53|382,266,154.35|262,217,622.67||
|164,748,368.62|26,063,141.02|190,811,509.64|103,830,912.88||
|258,226,846.80|41,353,498.45|299,580,345.25|194,979,166.54||
|75,621,044.49|664,458.52|76,285,503.01|44,297,726.56||
|29,135,939.82|10,763,217.22|39,899,157.04|18,830,702.01||

(2) Profit or loss and cash flows
Subsidiaries Current period cumulative
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||
|-|-|-|
|Operating revenue|Net profit|Totalcomprehensiveincome|
|503,230,917.67|11,370,431.55|11,370,431.55|
|164,594,617.07|6,748,763.80|6,748,763.80|
|357,455,410.15|21,294,286.18|21,294,286.18|
|52,403,392.71|-924,844.63|-924,844.63|
|45,851,070.23|5,105,068.22|5,105,068.22|

(Continued)
Preceding period comparative
||||
|-|-|-|
|Operating revenue|Net profit|Totalcomprehensiveincome|
|550,673,761.90|12,397,117.57|12,397,117.57|
|130,029,870.93|5,985,741.83|5,985,741.83|
|348,449,223.30|20,406,844.67|20,406,844.67|
|65,905,176.90|958,624.04|958,624.04|
|46,233,927.14|6,310,240.69|6,310,240.69|

(II) Interest in joint venture or associates
1. Significant joint ventures or associates
||||||
|-|-|-|-|-|
|Mainoperatingplace|Place ofregistration|Business nature|Holdingproportion (%)||
||||Direct|Indirect|
|NanjingCity|NanjingCity|Opticalcommunicationproducts productionand sale|50.00||
|NanjingCity|NanjingCity|Industrial park venuerental management etc.|49.64||

2. Main financial information of significant joint ventures
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
SEI-Nanjing Potevio Optical Network Co., Ltd.
||
|-|
|34,428,867.14|
|1,005,127.42|
|1,090,709.60|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
SEI-Nanjing Potevio Optical Network Co., Ltd.
||
|-|
|35,519,576.74|
|8,927,391.06|
|8,927,391.06|
|26,592,185.68|
|13,296,092.84|
|13,296,092.84|
|15,470,007.76|
|-277,518.61|
|-1,031,574.60|
|-1,031,574.60|

3. Main financial information of significant associates
Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
||
|-|
|190,785,584.52|
|160,501,673.73|
|351,287,258.25|
|7,529,465.27|
|7,529,465.27|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Closing balance/ Opening balance/
Items current period cumulative preceding period comparative
Potevio Hi-tech Industry Co., Ltd.
||
|-|
|343,757,792.98|
|170,641,311.95|
|170,641,311.95|
|14,951,512.04|
|1,765,051.64|
|1,765,051.64|
|444,774.40|

4. Aggregated financial information of insignificant joint ventures and associates
||
|-|
|Closing balance/currentperiod cumulative|
|3,040,101.44|
|-46,455.07|
|-46,455.07|

VII. Risks related to financial instruments
The Company aims to seek the appropriate balance between the risks and benefits from its use of financial instruments and to mitigate the adverse effects that the risks of financial instruments have on theCompany’s financial performance. Based on such objectives, theCompany’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:
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report (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.
TheCompany’s credit risk is primarily attributable to bank balances and receivables. In order to control such risks, the Company has taken the following measures:
1. Bank balances
The Company deposits its bank balances in financial institutions with relatively high credit levels, hence, its credit risk is relatively low.
2. Receivables
The Company performs credit assessment on customers who uses credit settlement on a regular basis. The Company selects credible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on receivables, to avoid significant risks in bad debts.
As theCompany’s credit risks fall into several business partners and customers, as of December 31, 2017,11.25% (December 31, 2016:17.49%) of the total accounts receivable was due from the five largest customers of the Company. The Company has no significant central credit risk.
(1) Analysis of receivables neither past due nor impaired and receivables past due but not impaired are as follows:
Closing balance
|||||
|-|-|-|-|
|Neither past duenor impaired|Past due but not impaired|||
||Within 1year|1-2 years|Over 2years|
|32,477,463.59||||
|632,311,307.62||91,179,774.98||
|21,000,423.00||4,758,360.87||
|685,789,194.21||95,938,135.85||

(Continued)
Opening balance
|||||
|-|-|-|-|
|Neither past duenor impaired|Past due but not impaired|||
||Within 1year|1-2 years|Over 2years|
|59,748,722.91||||
|603,015,571.33||106,446,095.08||
|19,094,866.16||5,109,572.54||
|681,859,160.40||111,555,667.62||

(2) Please refer to notes to receivables for receivables with provision for impairment made on individual basis.
(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or other
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure in collecting liabilities from counterparts of contracts, or early redemption of debts, or failure in achieving estimated cash flows. In order to control such risk, the Company utilized financing tools such as notes settlement and bank borrowings, etc. to optimizing financing structures, and finally maintains a balance between financing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working capital requirements and expenditures.
Financial instruments classified based on remaining time period till maturity
Closing balance
Items
|||||
|-|-|-|-|
|Carrying amount|Contract amount notyet discounted|Within 1 year|1-3 years|
|387,550,000.00|394,339,062.52|394,339,062.52||
|20,161,687.14|20,161,687.14|20,161,687.14||
|806,672,174.17|806,672,174.17|806,672,174.17||
|531,667.36|531,667.36|531,667.36||
|1,692,213.38|1,692,213.38|||
|1,216,607,742.05|1,223,396,804.57|1,221,704,591.19||

(Continued)
Opening balance
Items
|||||
|-|-|-|-|
|Carrying amount|Contract amountnot yet discounted|Within one year|1-3 years|
|473,500,000.00|482,540,963.06|482,540,963.06||
|83,071,160.95|83,071,160.95|83,071,160.95||
|897,012,031.63|897,012,031.63|897,012,031.63||
|732,412.79|732,412.79|732,412.79||
|1,692,213.38|1,692,213.38|||
|1,456,007,818.75|1,465,048,781.81|1,463,356,568.43||

(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. TheCompany’s interest risk relates mainly to borrowings with floating interest rate.
As of December 31, 2017, balance of borrowings with interest accrued at floating interest rate totaled 387,550,000.00 yuan
(December 31, 2016: 393,500,000.00 yuan). If interest rates had been 10 basis points higher/lower and all other variables were held
constant, financial effect on the Company would be a/an decrease/increase of 1.68 million yuan (December 31, 2016: a/an
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report decrease/increase of 1.71 million yuan) in equity, a/an decrease/increase of 1.68 million yuan (2016: a/an decrease/increase of 1.71 million yuan) in net profit.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in exchange rate. The Company is mainly operated in mainland China, with a small amount of imports and exports, and its main activities are denominated in RMB, hence, the Company bears insignificant market risk arising from foreign exchange changes.
Please refer to notes to foreign currency monetary items for details in foreign currency financial assets and liabilities at the end of the period.
VIII. Related party relationships and transactions
(I) Related party relationships
1. Details of parent company
(1) Parent company
|||||
|-|-|-|-|
|Place of registration|Businessnature|Registeredcapital(in million)|Holdingproportion overthe Company|
|No.2 Tudi 2 Road,Zhongguan VillageEconomy Zone, HaidianDistrict, Beijing|Informationindustry|1,903,05|53.49%|

TheCompany’s ultimate controlling party is中国普天信息产业集团公司 (China POTEVIO Corporation Limited 9).
2. The details of the company's important subsidiaries are illustrated in the notes to the financial statements in other subjects.
3. Joint ventures and associates of the Company
Please refer to notes to interest in other entities for details on theCompany’s significant joint ventures and associates. Details of other joint ventures or associates carrying out related party transactions with the Company in current period or in preceding period but with balance in current period are as follows:
Joint ventures or associates Relationships with the Company
Potevio Hi-tech Industry Co., Ltd. Associates
Nanjing Potevio Telege Cable Co., Ltd. Associates
SEI-Nanjing Potevio Optical Network Co., Ltd. Joint ventures
4. Other related parties of the Company
Related parties Relationships with the Company
南京普天鸿雁电器科技有限公司 An affiliated company of the ultimate
(Nanjing Honyar Electrical Technology Co.,Ltd.*) controlling party
南京普天鸿雁电器有限公司 An affiliated company of the ultimate
(Nanjing Honyar Electrical Co.,Ltd.*) controlling party
上海普天邮通科技股份有限公司 An affiliated company of the ultimate
(Shanghai Potevio Post and Telecommunications Technology
controlling party
9
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Related parties Relationships with the Company
Co.,Ltd.*)
北京普天太力通信科技有限公司 An affiliated company of the ultimate
(Beijing Potevio Taili Communications Technology Co.,Ltd.*) controlling party
杭州鸿雁东贝光电科技有限公司
An affiliated company of the ultimate
(Hangzhou Honyar Dongbei Photoelectric Technology Co.,
controlling party
Ltd.*)
上海普天网络技术有限公司 An affiliated company of the ultimate
(Shanghai Potevio Network Technology Co.,Ltd.*) controlling party
普天通信有限责任公司 An affiliated company of the ultimate
(POTEVIO Telecommunications Co.,Ltd.*) controlling party
普天信息技术有限公司 An affiliated company of the ultimate
(Potevio Information Technology Co.,Ltd.*) controlling party
北京立康普通信设备有限公司
An affiliated company of the Company
Beijing Picom Telecommunications Equipment Co., Ltd.
曼奈柯斯工业电气（中国）有限公司 Non-controlling shareholder of the
Mennekes Electric Industrial Co., Ltd. (China) Company’s subsidiary
普天和平科技有限公司 An affiliated company of the ultimate
(Potevio Heping Technology Co.,Ltd.*) controlling party
杭州鸿雁电器有限公司 An affiliated company of the ultimate
Hangzhou Honyar Electrical Co., Ltd. controlling party
普天国际贸易有限公司 An affiliated company of the ultimate
(Potevio International Trading Co.,Ltd.*) controlling party
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving services
(1) Purchase of goods and receiving of services
|||
|-|-|
|Content of transaction|Current periodcumulative|
|Telecommunicationproducts|6,892,761.28|
|Telecommunicationproducts|29,130,281.06|
|Telecommunicationproducts||
|Telecommunicationproducts|395,742.40|
|Telecommunicationproducts||
|Telecommunicationproducts|297,092.82|
|Telecommunicationproducts|1,021,988.46|
|Telecommunicationproducts|4,412,289.93|

(2) Sale of goods and rendering of services
|||
|-|-|
|Content of transaction|Current periodcumulative|
|Telecommunicationproducts|28,052,650.90|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Content of transaction|Current periodcumulative|
|Telecommunicationproducts|293,658,926.93|
|Telecommunicationproducts||
|Telecommunicationproducts|30,769.23|
|Telecommunicationproducts||
|Telecommunicationproducts|251,865.98|
|Telecommunicationproducts||
|Telecommunicationproducts||
|Telecommunicationproducts|532,374.48|
|Telecommunicationproducts|428,827.16|
|Telecommunicationproducts|233,428.23|

2. Related party leases
(1) The Company as the lessor
|||
|-|-|
|Types of asset leased|Lease income forcurrent period|
|Buildings andstructures|607,946.68|
|Field||

(2) The Company as the lessee
|||||
|-|-|-|-|
|Types of assetleased|Lease expensesfor currentperiod|Lease expensesfor theprecedingperiod|Propertyservices forcurrent period|
|Buildings andstructures|1,825,502.57|8,553,729.09|2,051,001.23|

3. Related party guarantees
The Company and its subsidiaries as guaranteed parties
||||
|-|-|-|
|Amountguaranteed|Commence-ment date|Maturity date|
|20,000,000.00|31/3/2017|15/1/2018|
|20,000,000.00|31/3/2017|15/1/2018|
|30,000,000.00|30/11/2017|30/11/2018|
|30,000,000.00|9/10/2017|12/1/2018|
|10,000,000.00|28/7/2017|12/1/2018|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 4. Keymanagement’s emoluments
||
|-|
|Current period cumulative|
|1,390,684.00|

5. Interest expenditures
In the current period, the Company paid to China Potevio Information Industry Inc a total of 7,624,099.99 yuan as interest expenditures.
(III) Balance due to or from related parties
1. Balance due from related parties
|||||
|-|-|-|-|
|Related parties|Closing balance|||
||Book balance|Provision forbad debts|Book balance|
|Shanghai PotevioNetwork Technology Co.,Ltd.|||448,319.70|
|China PotevioInformation Industry Inc|3,402,240.00|||
|POTEVIOTelecommunications Co.,Ltd.|3,987,403.60|||
||7,389,643.60||448,319.70|
|China PotevioInformation Industry Inc|13,315,921.88|557,462.59|30,685,856.21|
|Potevio InformationTechnology Co., Ltd.|20,991,047.20||4,972.96|
|Shanghai PotevioNetwork Technology Co.,Ltd.|536,319.70|83,060.00|88,000.00|
|Shanghai Potevio Postand TelecommunicationsTechnology Co., Ltd.|8,755,534.00|7,004,427.20|8,769,964.00|
|Potevio Hi-tech IndustryCo., Ltd.|14,455.30||14,455.30|
|Hangzhou HonyarElectrical Co., Ltd.|||1,075,704.00|
|Potevio HepingTechnology Co., Ltd.|333,706.00||333,706.00|
||43,946,984.08|7,644,949.79|40,972,658.47|
|Potevio HepingTechnology Co., Ltd.|436,294.00||436,294.00|
||436,294.00||436,294.00|
|China PotevioInformation Industry Inc|1,020,000.00|2,000.00|1,570,000.00|
|Beijing PicomTelecommunicationsEquipment Co., Ltd.|28,912,122.71|28,912,122.71|28,912,122.71|
|Potevio Hi-tech IndustryCo., Ltd.|255,238.96|||

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|Related parties|Closing balance|||
||Book balance|Provision forbad debts|Book balance|
||30,187,361.67|28,914,122.71|30,482,122.71|

2. Balance due to related parties
|||
|-|-|
|Related parties|Closing balance|
|SEI-Nanjing Potevio Optical NetworkCo., Ltd.|22,584,894.54|
|China Potevio Information Industry Inc|19,466,652.30|
|Potevio Hi-tech Industry Co., Ltd.||
|Nanjing Potevio Telege Cable Co., Ltd.||
|Nanjing Honyar Electrical TechnologyCo., Ltd.|266,805.30|
|Shanghai Potevio Network TechnologyCo., Ltd.|11,685.00|
|POTEVIO Telecommunications Co.,Ltd.||
|Mennekes Electric Industrial Co., Ltd.(China)|3,149,290.03|
|Potevio Information Technology Co.,Ltd.|845,976.50|
||46,325,303.67|
|China Potevio Information Industry Inc|282,208,394.21|
|Potevio Information Technology Co.,Ltd.||
|Nanjing Honyar Electrical TechnologyCo., Ltd.|82,000.00|
||282,290,394.21|
|Potevio Hi-tech Industry Co., Ltd.||
|SEI-Nanjing Potevio Optical NetworkCo., Ltd.|31,165.00|
|POTEVIO Telecommunications Co.,Ltd.||
|China Potevio Information Industry Inc|18,260,000.00|
||18,291,165.00|

IX. Commitments and contingencies
None
X. Events after balance sheet day
None
XI. Segment information
1. Identification basis for reportable segments
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Reportable segments are identified based on operating segments which are determined based on the structure of theCompany’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 geographic information, revenue from main operations and costs of main operations are allocated between segments based on locations where sales realized, and assets and liabilities are allocated based on locations of operating entities.
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
|||||||
|-|-|-|-|-|-|
|Videoconferencingproducts|Generic cableproducts|Electricalproducts|Special networkcommunicationproducts|Wiring products|Inter-segmentoffsetting|
|502,964,251.00|353,100,631.57|163,553,620.33|512,809,145.60|773,769,849.91|-96,393,495.61|
|412,947,270.20|278,512,156.60|122,126,106.83|489,336,940.11|645,654,730.26|-96,393,495.61|
|323,129,989.94|296,328,910.53|202,023,535.98|260,911,811.85|1,431,135,704.30|-397,217,634.09|
|211,408,383.03|180,433,445.64|108,294,175.42|239,051,894.15|1,149,795,986.79|-245,793,964.62|

XII. Notes to items of parent company financial statements
(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Details
1) Details on categories
Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|447,892,760.42|99.58|22,328,923.45|4.99|
|447,892,760.42|99.58|22,328,923.45|4.99|
|1,881,238.51|0.42|1,881,238.51|100.00|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|449,773,998.93|100.00|24,210,161.96|5.38|

(Continued)
Opening balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|436,305,272.67|99.57|18,149,360.20|4.16|
|207,800.00|0.05|||
|436,097,472.67|99.52|18,149,360.20|4.16|
|1,881,238.51|0.43|1,881,238.51|100.00|
|438,186,511.18|100.00|20,030,598.71|4.57|

2) In portfolios, accounts receivable with provision made on a collective basis with age analysis method
Closing balance
Ages
|||
|-|-|
|Book balance|Provision for bad debts|
|351,573,939.26||
|45,094,711.38||
|23,439,504.42|2,343,950.44|
|5,731,959.09|1,719,587.72|
|2,792,005.87|1,116,802.35|
|10,560,287.32|8,448,229.86|
|8,700,353.08|8,700,353.08|
|447,892,760.42|22,328,923.45|

(2) Provisions made, collected or reversed in current period
Provision for bad debts made in current period totaled 4,179,563.25 yuan.
(3) Details of the top 5 debtors with largest balances
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Book balance|Proportion to the totalbalance of accountsreceivable (%)|
|32,114,110.89|7.14|
|13,879,784.42|3.09|
|12,196,419.25|2.71|
|10,885,072.17|2.42|
|10,534,384.83|2.34|
|79,609,771.56|17.70|

2. Other receivables
(1) Details
1) Details on categories
Closing balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|28,912,122.71|37.21|28,912,122.71|100.00|
|44,691,252.14|57.52|3,496,231.92|7.82|
|23,644,138.80|30.43|||
|21,047,113.34|27.09|3,496,231.92|16.61|
|4,097,886.33|5.27|4,097,886.33|100|
|77,701,261.18|100.00|36,506,240.96|46.98|

(Continued)
Opening balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|32,997,289.04|31.69|32,997,289.04|100.00|

10
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Opening balance
|||||
|-|-|-|-|
|Book balance||Provision for bad debts||
|Amount|% to total|Amount|Provisionproportion (%)|
|71,142,407.39|68.31|3,665,246.30|5.15|
|47,311,606.41|45.43|||
|23,830,800.98|22.88|3,665,246.30|15.38|
|104,139,696.43|100.00|36,662,535.34|35.21|

2) Other receivables of individually significant amount and with provision made on an individual basis
||||
|-|-|-|
|Book balance|Provision for baddebts|Provisionproportion (%)|
|28,912,122.71|28,912,122.71|100.00|
|28,912,122.71|28,912,122.71||

3) In portfolios, other receivables with provision made on other method.
Closing balance
Portfolio
|||
|-|-|
|Book balance|Provision for bad debts|
|23,644,138.80||
|23,644,138.80||

4) In portfolios, other receivables with provision made on a collective basis with age analysis method
Closing balance
Ages
|||
|-|-|
|Book balance|Provision for bad debts|
|11,144,096.83||
|3,926,510.72||
|1,828,033.70|182,803.37|
|616,565.70|184,969.71|
|285,372.43|114,148.97|
|1,161,120.46|928,896.37|
|2,085,413.50|2,085,413.50|
|21,047,113.34|3,496,231.92|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report 5) Other receivables of individually not significant amount and with provision made on an individual basis
||||
|-|-|-|
|Book balance|Provision for baddebts|Provisionproportion (%)|
|4,097,886.33|4,097,886.33|100.00|
|4,097,886.33|4,097,886.33||

(2) Provisions made, collected or reversed in current period
Provisions for bad debts made in current period totaled -156,294.38 yuan.
(3) Other receivables categorized by nature
||
|-|
|Closing balance|
|1,210,331.33|
|14,639,263.54|
|60,415,760.57|
|1,435,905.74|
|77,701,261.18|

(4) Details of the top 5 debtors with largest balances
|||||
|-|-|-|-|
|Nature ofreceivables|Book balance|Ages|Proportion to thetotal balance ofother receivables(%)|
|Temporaryadvance paymentreceivable|1,000,000.00|Over 6 years|1.29|
|Temporaryadvance paymentreceivable|15,468,879.89|Within 1 years|19.91|
|Temporaryadvance paymentreceivable|28,912,122.71|Over 6 years|37.21|
|Temporaryadvance paymentreceivable|8,062,141.16|1-2 years|10.38|
|Temporaryadvance paymentreceivable|4,097,886.33|Within 1 yearsOver 6 years|5.27|
||57,541,030.09||74.06|

3. Long-term equity investments
(1) Categories
Items Closing balance Opening balance
11
The English names are for identification purpose only.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||||||
|-|-|-|-|-|
|Book balance|Provision forimpairment|Carrying amount|Book balance|Provision forimpairment|
|173,787,270.64|1,910,520.00|171,876,750.64|173,787,270.64|1,910,520.00|
|183,937,404.79||183,937,404.79|184,021,851.34||
|357,724,675.43|1,910,520.00|355,814,155.43|357,809,121.98|1,910,520.00|

 (2) Investments in subsidiaries
||||||
|-|-|-|-|-|
|Openingbalance|Increase|Decrease|Closing balance|Provision forimpairment made incurrent period|
|57,831,011.71|||57,831,011.71||
|5,610,000.00|||5,610,000.00||
|2,610,457.00|||2,610,457.00||
|1,294,510.00|||1,294,510.00||
|13,860,000.00|||13,860,000.00||
|3,320,003.45|||3,320,003.45||
|1,910,520.00|||1,910,520.00||
|7,741,140.41|||7,741,140.41||
|40,997,683.00|||40,997,683.00||
|33,175,148.00|||33,175,148.00||
|5,436,797.07|||5,436,797.07||
|173,787,270.64|||173,787,270.64||

(3) Investments in associates and joint ventures
|||||
|-|-|-|-|
|Opening balance||||
||Investmentsincreased|Investmentsdecreased|Investment incomerecognized underequity method|
|13,811,880.14|||-515,787.30|
|13,811,880.14|||-515,787.30|
|170,209,971.20|||876,115.15|
|170,209,971.20|||876,115.15|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||||
|-|-|-|-|
|Opening balance||||
||Investmentsincreased|Investmentsdecreased|Investment incomerecognized underequity method|
|184,021,851.34|||360,327.85|

(Continued)
||||||
|-|-|-|-|-|
|Increase/decrease||||Closing balance|
|Changes inother equity|Cashdividend/profitdeclared fordistribution|Provision forimpairment|Others||
|||||13,296,092.84|
|||||13,296,092.84|
||444,774.40|||170,641,311.95|
||444,774.40|||170,641,311.95|
||444,774.40|||183,937,404.79|

(II) Notes to items of the parent company income statement
1. Operating revenue/ Operating cost
||||
|-|-|-|
|Current period cumulative|||
|Revenue|Cost|Revenue|
|1,122,674,427.01|996,402,294.82|667,842,131.71|
|27,207,649.73|20,668,462.58|61,894,039.52|
|1,149,882,076.74|1,017,070,757.40|729,736,171.23|

2. Investment income
||
|-|
|Current period cumulative|
|25,576,700.00|
|360,327.85|
|25,937,027.85|

XIII. Other supplementary information
(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss of current period
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Amount|
|-481,922.28|
|5,534,839.79|
|-34,865.18|
|49,304.02|
|5,067,356.35|
|1,150,984.62|
|1,187,962.59|
|2,728,409.14|

(II) RONA and EPS
1. Details
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
|||
|-|-|
|Weighted averageRONA (%)||
||Basic EPS|
|3.43|0.06|
|2.65|0.04|

2. Calculation process of weighted average RONA
|||
|-|-|
||Symbols|
||A|
||B|
||C=A-B|
||D|
||E|
||F|
||G|
||H|
|Translation reserveincreased in current period|I|
|Number of months countingfrom the next month whenthe net assets wereincreased or decreased tothe end of the reportingperiod|J|
||K|
||L= D+A×1/2+ E×F/K-G×H/K±I×J/K|
||M=A/L|
||N=C/L|

3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
||
|-|
|Symbols|
|A|
|B|
|C=A-B|
|D|

Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report
||
|-|
|Symbols|
|E|
|F|
|G|
|H|
|I|
|J|
|K|
|L=D+E+F×G/K-H×I/K-J|
|M=A/L|
|N=C/L|

(2) The calculation process of diluted EPS is the same with that of basic EPS.
Nanjing Putian Telecommunications Co., Ltd. 2017 Annual Report Section XII. Documents Available for Reference
(i) Accounting statement bearing signature and seal of the legal representative, person in charge of accounting works and person in charge of accounting institution of the Company
(ii) Original auditing report bearing seal of CPAs and signature and seal of CPA.
(iii) Text of notice and original draft that public on website appointed by CSRC within report period.
Board of Directors of
Nanjing Putian Telecommunications Co., Ltd.
24 April 2018