Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Zhejiang Sanhua Intelligent Controls Co., Ltd.
2020 Semi-Annual Report
August 2020
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior Management
of Zhejiang Sanhua Intelligent Controls Co., Ltd. (hereinafter referred to as the “Company”) hereby
guarantee that the information presented in this report shall be authentic, accurate, complete and
free from material misstatement whether due to false record, misleading statement or significant
omission, and they will bear both individual and joint legal liabilities.
Zhang Yabo, the Company's legal representative, Yu Yingkui, the person in charge of the
accounting work, and Sheng Xiaofeng, the person in charge of accounting department (Accounting
Officer) hereby declare and warrant that the financial statements in this report are authentic,
accurate and complete.
All directors attended the board meeting to review this report.
The Company describes in detail concerning the possible risks and countermeasures in Section
X " Risks of the Company and Countermeasures" under Section IV " Management’s Discussion and
Analysis of Operations". Please pay particular attention to relevant contents.
The profit distribution proposal approved by the board of directors is as follows: With
3,582,258,682 as the base number, cash dividend of RMB 1.00 (including tax) will be distributed to
all shareholders for every 10 shares. The Company will not distribute bonus shares or convert
capital reserves to share capital.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
CONTENTS
Section I Important Notes, Contents and Definitions................................................................................................................................ 2
Section II Corporate Profile and Key Financial Indicators........................................................................................................................5
Section III Corporate Business Overview................................................................................................................................................. 8
Section IV Management’s Discussion and Analysis of Operations.........................................................................................................12
Section V Significant Events................................................................................................................................................................... 34
Section VI Changes in Shares and Information about Shareholders....................................................................................................... 63
Section VII Information of Preferred Shares........................................................................................................................................... 73
Section VIII Information about Convertible Bonds.................................................................................................................................74
Section IX Information about Directors, Supervisors, Senior Management........................................................................................... 75
Section X Corporate Bonds..................................................................................................................................................................... 77
Section XI Financial Report.................................................................................................................................................................... 78
Section XII Documents Available for Inspection.................................................................................................................................. 191
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Definitions
Items Refers to Definition
The Company, Company Refers to Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Articles of Associations Refers to Articles of Associations for Zhejiang Sanhua Intelligent Controls Co., Ltd.
The CSRC Refers to China Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
Refers to Zhejiang Securities Regulatory Bureau of China Securities Regulatory
Zhejiang Securities Regulatory Bureau
Commission
General Meeting Refers to General Meeting of Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Board of Directors Refers to The Board of Directors of Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Board of Supervisors Refers to The Board of Supervisors of Zhejiang Sanhua Intelligent Controls Co., Ltd.
Yuan Refers to RMB
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section II Corporate Profile and Key Financial Indicators
I. Corporate Information
Stock abbreviation Sanhua Intelligent Controls Stock code 002050
Stock Exchange where the
shares of the Company are Shenzhen Stock Exchange
listed
Name of the Company in
浙江三花智能控制股份有限公司
Chinese
Abbr. of the Company name
三花智控
in Chinese (if any)
Name of the Company in
ZHEJIANG SANHUA INTELLIGENT CONTROLS CO., LTD.
English (if any)
Abbr. of the Company name
SANHUA
in English (if any)
Legal Representative Zhang Yabo
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Hu Kaicheng Wang Yutong
No. 12 St., No. 289 Xiasha Economic No. 219, Woxi Avenue, Meizhu Town,
Address
Development, Hangzhou, Zhejiang, China. Xinchang County, Zhejiang, China.
Tel. 0571-28020008 0575-86255360
Fax 0571-28876605 0575-86563888-8288
E-mail shc@zjshc.com shc@zjshc.com
III. Other Relevant Information
1. Company’s contact information
Whether there is any change in the Company’s registered address, office address, zip code, website or email
address during the reporting period.
□Applicable √Not applicable
There are no changes in the Company’s registered address, office address, zip code, website or Company email
address during the reporting period. Please refer to 2019 Annual Report for details.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
2. Information disclosure and place of the report
Whether there is any change in information disclosure and place of the report during the reporting period.
□ Applicable √ Not applicable
There are no changes in the newspaper designated by the Company for information disclosure, website specified
by CSRC for release of the report and place for report preparation during the reporting period. Please refer to 2019
Annual Report for details.
IV. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √No
Corresponding Period of
Current Reporting Period YoY Change (%)
Last Year
Operating Revenue (RMB) 5,318,178,626.77 5,831,107,028.08 -8.80%
Net Profit Attributable to Shareholders
643,481,717.35 692,968,498.78 -7.14%
of the Listed Company (RMB)
Net Profit Attributable to Shareholders
of the Listed Company after Deducting 582,191,161.67 641,841,146.76 -9.29%
Non-recurring Gains and Losses (RMB)
Net Cash Flow Generated by
1,104,651,449.42 830,554,910.93 33.00%
Operational Activities (RMB)
Basic Earnings per Share (RMB/Share) 0.18 0.19 -5.26%
Diluted Earnings per Share (RMB/Share) 0.18 0.19 -5.26%
Weighted Average ROE 6.74% 7.99% -1.25%
At the End of the Current
At the End of Last Year YoY Change (%)
Reporting Period
Total Assets (RMB) 15,540,725,156.74 14,790,190,170.64 5.07%
Net Assets Attributable to Shareholders
9,528,973,610.48 9,291,632,928.45 2.55%
of the Listed Company (RMB)
V. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the financial report of net profits and net assets according to the disclosure of
International Financial Reporting Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets according to the disclosure of
International Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
2. Difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Items Amount Note
Gains or Losses from Disposal of Non-current Assets
-1,403,295.52
(Including the Write-off for the Accrued Impairment of Assets)
The Government Subsidies Included in the Current Gains and
Losses (Excluding the Government Subsidies Closely Related
93,590,286.21
to Regular Businesses of the Company and Issued in the Quota
or Quantity Based on the National Standards)
Gains or Losses Attributed to the Changes in Fair Value for
Holding Held-for-trading financial assets, Derivative Financial
Assets, Trading Financial Liabilities, Derivative Financial
Liabilities and Investment Income from Disposal of
-23,409,775.96
Held-for-trading financial assets, Derivative Financial Assets,
Trading Financial Liabilities, Derivative Financial Liabilities
and Other Debt Investment, Excluding Hedging Businesses
Related to the Regular Business Operation of the Company
Non-operating Income and Expenditures Other Than the Above 1,196,846.18
Other Gains and Losses Items that Fit in the Definition of
1,113,187.32
Non-recurring Gains and Losses
Less: Impact of Income Tax 9,222,107.32
Impact of Minority Equity (after tax) 574,585.23
Total 61,290,555.68 --
The reasons for the non-recurring gains and losses items defined or listed in the Explanatory Announcement No. 1
of Information Disclosure of Listed Companies – Non-recurring Gains and Losses are defined as recurring gains
and losses items
□Applicable √ Not applicable
In the reporting period, the Company did not define any non-recurring gains and losses items defined and listed in
the Explanatory Announcement No. 1 of Information Disclosure of Listed Companies – Non-recurring Gains and
Losses, as recurring gains and losses items.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section III Corporate Business Overview
I. The Principal Business of the Company during the Reporting Period
1. Main business
The Company adheres to the "focus on leading" business path, focusing on the research and application of heat
pump inverter control technology and thermal management system products, focusing on the development of
environmental thermal management solutions for heat exchange and intelligent control, and is committed to the
professional operation in the fields of building HVAC, electrical equipment and automobile thermal management.
According to the different stages, needs and characteristics of strategic business and their development, the
Company's business is mainly divided into refrigeration and air conditioning electrical components business and
automotive components business, to further clarify customer orientation and quickly respond to the market.
The main purpose of the Company is to produce and market components and parts for refrigeration A/C and
refrigerator, automobile A/C and thermal management of new energy vehicles, coffee maker, dishwasher and
washing machine. The main products of refrigeration and A/C electrical parts business include Four-way
Reversing Valve, Electronic Expansion Valve, Solenoid Valve, Microchannel Heat Exchanger, Omega Pump, etc.,
which are widely used in A/C, refrigerator, cold chain logistics, dishwasher and other fields; the main products of
automotive components business include Thermal Expansion Valve, Receiver Drier, Electronic Expansion Valve,
Electronic Water Pump, etc., which are widely used in both traditional fuel vehicles and new energy vehicle
thermal management field.
During the reporting period, the Company's main business and its business model have not changed.
2. Industry development
（1） Refrigeration and air conditioning electrical components industry
China is the largest manufacturing base of A/C and refrigerators in the world, and its production and sales volume
ranks first globally. In line with the trend of environmental protection in the world, energy-saving inverter and
intelligent technology have become the trend, which puts forward a series of new requirements for the market of
control components, and also brings new development opportunities. As a leading enterprise in the refrigeration
control components industry, the Company will follow the trend, firmly seize this opportunity and develop
steadily.
（2） Automotive components industry
The global automobile industry has been developing rapidly, which also drives the market demand of automotive
A/C and thermal management products to continue to grow substantially. In recent years, the development of new
energy vehicles has become a relatively certain trend, which puts forward higher and more updated requirements
for A/C and thermal management products. Focusing on the in-depth research on A/C and thermal management
system of new energy vehicles, the Company has gradually developed from components to module and
subsystems, and has become the supplier of Valeo, Mahler, Volkswagen, Mercedes Benz, BMW, Volvo, Toyota,
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
GM, Geely, BYD, SAIC and other customers.
3. Industry status
The Company is the world's largest manufacturer of refrigeration control components and the world's leading
manufacturer of automotive A/C and thermal management system control components. "Sanhua" brand
refrigeration intelligent control components have become a world-famous brand, and a strategic partner of many
automobile enterprises and air-conditioning refrigeration appliance manufacturers in the world. After more than
30 years of development, the Company has established a leading position in the global market of refrigeration and
air conditioning intelligent control components. The market share of the Company's Electronic Expansion Valve,
Four-way Reversing Valve, Solenoid Valve, Microchannel Heat Exchanger, Omega Pump ranks first globally.
The market share of the Company's Service Valve, Vehicle Thermal Expansion Valve and Receiver Drier is in the
leading position in the world. At the same time, the Company focuses on the research and development of air
conditioning and thermal management products for new energy vehicles, became the first Chinese enterprise to
win the Pace Award of Automotive News of the United States.
II. Significant Changes in Main Assets
1. Significant changes in main assets
Major asset Explanation on Major Changes
Equity Assets No major changes
Increased by 246.36 million compared with the beginning of the year, mainly due to
Fixed Assets
investment of raised funds and the transformation of automation equipment
Intangible Assets No major changes
Increased by 11.91 million compared with the beginning of the year, mainly due to
Construction in Progress
investment of raised funds and the transformation of automation equipment
Increased by 748.32 million compared with the beginning of the year, mainly due to net
Cash and Bank Balances
cash inflow from operating activities
Increased by 227.90 million compared with the beginning of the year, mainly due to
Held-for-trading financial assets
increase of bank financial products
Increased by 15.39 million compared with the beginning of the year, mainly due to
Derivative Financial Assets
increasing in floating income of future contracts
Increased by 28.31 million compared with the beginning of the year, mainly due to
Prepayments
increasing in prepayment of inventories
2. Major overseas assets
√Applicable □ Not applicable
Content of Formation Size of Location Operation Control Income Proportion Whether
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Assets Assets Mode measures Status of overseas there is
of security assets in significant
assets net assets impairment
of the risk
Company
R&D,
Manufactur
Sanhua Financial
ing,
Internation supervision
Equity 1,198,408, The United Marketing
al Limited and -20,604,13 No
Investment 135.25 States and
(USA) external 8.42
Investment
(merger) audit
Manageme
nt
Manufactur
Sanhua
ing, Financial
Internation
Marketing supervision
al Equity 2,234,799,
Singapore and and 32,301,884 No
Singapore Investment 870.35
Investment external .25
PTE. Ltd.
Manageme audit
(merger)
nt
III. Core Competitiveness Analysis
1. Clear strategic layout
The Company adheres to the "focus on leading" business path, takes the research and application of heat pump
inverter control technology and thermal management system products as the core, firmly grasps the development
theme of energy conservation, environmental protection and intelligent control, upgrades from "mechanical parts
development" to "system control technology solution development of electronic control integration". The
Company’s product series are expanded from household A/C and refrigerator components to the field of
commercial A/C and commercial refrigeration, and extending to the direction of inverter control technology and
system integration and upgrading. Meanwhile, after the injection of automotive business, it will give full play to
the synergy effect with the original business, continue to deepen the research and development of automobile A/C
and new energy vehicle thermal management system components, and actively lay out the deeper application of
thermal management components and subsystems in the automotive field, so as to provide global customers with
competitive environmental intelligent control solutions.
2. Technology leading, customer oriented
As a national high-tech enterprise, the Company has always adhered to the technological route of independent
development and innovation. For decades, it has focused on the field of intelligent control and vigorously
cultivated core technologies with independent intellectual property rights. It has been granted patents both
domestic and abroad, including invention patents. All products, services and quality of the Company are to meet
the needs of customers as the first priority.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
3. Quality assurance, scale economy effect
The Company's products cover refrigeration A/C electrical components and automotive components industry. The
market share of the Company's Electronic Expansion Valve, Four-way Reversing Valve, Solenoid Valve,
Microchannel Heat Exchanger, Automotive Electronic Expansion Valve, Omega Pump ranks first globally. The
market share of Service Valve, Vehicle Thermal Expansion Valve and Receiver Drier is in the leading position in
the world. The Company has established a complete and strict quality assurance system, passed ISO9001,
IATF16949, QC080000 quality system certification. The Company won the National Quality Award, Zhejiang
Quality Award, and won the high comments from JCI, Daikin, Carrier, Gree, Midea, Haier, Toyota, Benz,
Volkswagen, Valeo, Mahler and other well-known enterprises at home and abroad.
4. Advantages of global marketing network and production base
Since the 1990s, the Company has focused on expanding the international market, and has established overseas
subsidiaries in Japan, South Korea, Singapore, the United States, Mexico, Germany and other places to build a
global marketing network. At the same time, it has established overseas production bases in the United States,
Poland, Mexico, Vietnam and other places, and has preliminary ability to cope with globalization. And in practice,
we have trained a number of management talents who can meet the needs of business development in different
countries and regions.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section IV Management’s Discussion and Analysis of Operations
I. Overview
In the first half of 2020, under the influence of the COVID-19, strict epidemic prevention and control measures
were implemented at home and abroad, and the downward pressure on the economy was further increased. In
addition, the economic and trade friction between China and the United States brought adverse effects on the
Company's operation and market expectations. Specific to the industry in which the Company operates, the
Company's refrigeration and air conditioning electrical components business is affected by the epidemic, and the
overall performance is under pressure in the short term. However, with the inventory clearance of the industry and
the release of new energy efficiency standards for air conditioning, the demand has gradually begun to recover,
even reaching a new high point. The automotive components business has been greatly affected by the overall
decline of the automobile industry, but the long-term development trend of new energy vehicles is strong, and the
cumulative positive growth has been achieved.
During the reporting period, the operating revenue is RMB 5.318 billion, a year-on-year decrease of 8.80%; the
operating profit is RMB 740 million, a year-on-year decrease of 10.86%; the net profit attributable to shareholders
of the listed Company is RMB 643 million, a year-on-year decrease of 7.14%. The operating revenue of
refrigeration and air conditioning electrical components business is RMB 4.368 billion, a year-on-year decrease of
13.79%; the operating revenue of automotive components business is RMB 950 million, a year-on-year increase
of 24.34%.
The main works of the Company in the first half of 2020 are as follows:
1. Focus on operation and deepen industrial layout
(1). Refrigeration and air conditioning electrical components business
The Company's refrigeration and air conditioning electrical components business was negatively affected by
the epidemic. Under the pressure of a sharp decline in the first quarter, the Company paid close attention to
the market trend, actively adjusted the market strategy, further strengthened the strategic relationship with
customers externally, seized orders, and steadily increased the market share, of which sales in May and June
increased significantly. Internally, we will continue to sort out the integration of Aweco business, implement
budget management, IE improvement and other measures to promote internal efficiency and cost reduction.
At the same time, with the release of new energy efficiency standards for air conditioning, we will actively
seize market opportunities such as energy efficiency upgrading and refrigerant switching, and continue to
promote more competitive products.
(2). Automotive components business
In the first half of 2020, the global economy was affected by the epidemic at home and abroad in succession,
and the automobile industry as a whole was greatly affected. On the premise of epidemic prevention and
control, the automotive components business deal with the order delivery of overseas customers; at the same
time, it actively promote the integrated module project among existing customers, so as to make the thermal
management products more standardized, integrated and platform-based. At the same time of striving for the
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
new project of existing customers, we actively develop new customers, realized the ice breaking of Japanese
customers, and successfully entered the Toyota supplier system.
2. Unite as one and fight against the epidemic together
After the outbreak of the epidemic, under guidance of government departments, the Company focused on the
prevention and control of the epidemic on one hand and the resumption of production on the other hand. In each
subsidiary company around the world, timely implement the anti-epidemic material reserve, overcome plenty of
difficulties, implement of resumption of work in batches, provide timely product service for customers, and ensure
the normal operation and production.
3. Pay attention to the construction of talent team and establish sustained and long-term incentive mechanism
The Company continues to deepen the work of "strengthening the talents, streamlining and high efficiency",
promoting each business unit to optimize the talent development and elimination mechanism, and
comprehensively apply the talent review results. At the same time, during the reporting period, the Company
implemented the second restricted stock incentive plan for directors, senior managers and other core talents, and
further established and improved the Company's long-term incentive mechanism.
II. Main Business Analysis
Overview
Please refer to details in “I. Overview” of “Section IV Management’s Discussion and Analysis of Operation”
Changes in key financial data over the corresponding period of last year
Unit: RMB
Corresponding Period of
Current Reporting Period YoY Change (%) Note of Change
Last Year
Operating Revenue 5,318,178,626.77 5,831,107,028.08 -8.80%
Operating Cost 3,839,626,004.70 4,179,915,713.98 -8.14%
Selling Expenses 257,442,500.54 263,730,876.93 -2.38%
Administrative Expenses 315,350,745.15 304,294,733.96 3.63%
Mainly due to gains on
Financial Expenses -29,893,397.04 12,364,734.89 -341.76%
exchange rate fluctuation
Mainly due to decrease
Income Tax Expenses 99,017,348.37 142,881,546.88 -30.70%
in operating revenue
R&D Investments 240,012,928.38 248,506,405.93 -3.42%
Mainly due to decrease
Net Cash Flows from in cash payment for
1,104,651,449.42 830,554,910.93 33.00%
Operating Activities goods and services in the
current period
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Mainly due to increase in
Net Cash Flows from
-679,392,344.66 227,848,099.26 -398.18% purchase of financial
Investment Activities
products in this period
Net Cash Flows from Mainly due to increase in
310,293,217.58 -646,477,650.98 148.00%
Financing Activities bank loan
Net Increase in Cash and
709,896,200.36 408,595,409.47 73.74%
Cash Equivalents
Whether there is significant change in Company’s profit structure or profit source during the reporting
period
□ Applicable √ Not applicable
There is no such case during the reporting period
Operating income structure
Unit: RMB
Current Reporting Period Corresponding Period of Last Year
Proportion to Proportion to YoY Change (%)
Amount Amount
operating income operating income
Total Revenue 5,318,178,626.77 100% 5,831,107,028.08 100% -8.80%
Classified by Industry
General
Equipment
5,318,178,626.77 100.00% 5,831,107,028.08 100.00% -8.80%
Manufacturing
Industry
Classified by Products
Refrigeration A/C
Electrical 4,367,942,431.64 82.13% 5,066,906,018.45 86.89% -13.79%
Components
Automotive
950,236,195.13 17.87% 764,201,009.63 13.11% 24.34%
Components
Classified by Region
Domestic 2,479,768,382.72 46.63% 2,932,950,932.66 50.30% -15.45%
Overseas 2,838,410,244.05 53.37% 2,898,156,095.42 49.70% -2.06%
Industries, products or regions accounting for more than 10% of the Company’s operating income or
operating profit
√ Applicable □ Not applicable
Unit: RMB
YoY Change (%) YoY Change (%) YoY Change (%)
Operating income Operating cost Gross margin
of operating of operating cost of gross margin
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
income
Classified by industry
General
Equipment
5,318,178,626.77 3,839,626,004.70 27.80% -8.80% -8.14% -0.52%
Manufacturing
Industry
Classified by product
Refrigeration A/C
Electrical 4,367,942,431.64 3,164,066,988.85 27.56% -13.79% -13.65% -0.12%
Components
Automotive
950,236,195.13 675,559,015.85 28.91% 24.34% 31.03% -3.63%
Components
Classified by region
Domestic 2,479,768,382.72 1,745,269,588.31 29.62% -15.45% -16.96% 1.28%
Overseas 2,838,410,244.05 2,094,356,416.39 26.21% -2.06% 0.77% -2.08%
In the case that the Company's main business data statistics are adjusted during the reporting period, the
Company's main business data of the latest reporting period were adjusted according to the statistics at the
end of the last reporting period
□ Applicable √ Not applicable
Explanations on relevant data changed for more than 30% on a year-over-year base
√Applicable □Not applicable
The operating cost of auto parts increased by 31.03% over the same period of last year, mainly due to the increase
of 24.34% in operating revenue.
III. Non-Core Business Analysis
√Applicable □Not applicable
Unit: RMB
Proportion to net
Amount Note of Change Sustainability
profit
Gains and losses of futures
contract settlement, foreign
Investment
-8,109,921.96 -1.10% exchange forward contract No
Income
settlement, bank financial
product, etc.
Floating income of futures
Gains and Losses
contracts, foreign exchange
from Change of 6,520,045.96 0.88% No
forward contracts, bank
Fair Value
financial products, etc.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Failure to pay,
Non-operating
1,466,984.81 0.20% compensation and penalty No
Revenue
income, etc.
Non-operating Loss on scrapping of fixed
1,354,079.15 0.18% No
Expenditures assets, etc.
The government grants of
VAT refund of civil welfare
enterprises and software
Other Gains 101,528,141.23 13.72% Government grants, etc. product VAT exceeding tax
burden are sustainable,
while the rest are not
sustainable
Credit
-12,874,290.80 -1.74% Bad debt loss, etc. No
Impairment Loss
Assets Loss on impairment of
-6,302,857.17 -0.85% No
Impairment Loss inventories
Gains on
Gains on disposal of fixed
Disposal of -319,355.00 -0.04% No
assets
Properties
IV. Analysis of Assets and Liabilities
1. Material changes of assets
Unit: RMB
At the End of Current At the End of Corresponding
YoY
Reporting Period Period of Last Year
Change Note of significant change
Percentage of Percentage of
Amount Amount (%)
total assets total assets
Mainly due to the increase of net cash
Cash and Bank 3,412,040,819. 1,688,352,692.
21.96% 12.13% 9.83% flow generated by the Company's
Balances 22 35
operating activities
Account 2,130,607,685. 2,187,524,138.
13.71% 15.71% -2.00%
Receivable 90 75
1,902,896,386. 1,804,997,672.
Inventories 12.24% 12.96% -0.72%
17 73
Investment
26,263,000.26 0.17% 76,238,924.18 0.55% -0.38%
property
Long-term Equity
14,348,933.44 0.09% 11,813,021.01 0.08% 0.01%
Investment
Fixed Assets 3,625,967,658. 23.33% 3,040,588,886. 21.84% 1.49%
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
09 33
Construction in 492,864,704.9
3.17% 640,806,251.81 4.60% -1.43%
Progress 4
Short-term 1,267,378,241. 1,408,757,665.
8.16% 10.12% -1.96%
borrowings 24 49
Mainly due to increased bank loans for
Long-term 1,259,113,765.
8.10% 2,000,000.00 0.01% 8.09% project construction and automation
borrowings 14
equipment transformation,
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Profit and Cumulative
loss of fair changes in Impairment Current
Opening Current sale Other Closing
Items value change fair value accrued in the purchase
balance amount changes balance
in the current included in current period amount
period equity
Financial Assets
1.
Held-for-tradi
ng financial
assets 993,634,433.3 228,200,957. 1,221,535,2
-300,099.30
(Excluding 1 00 91.01
Derivative
Financial
Assets)
2.Derivative
15,393,725.5 23,708,126.
Financial 8,314,400.73
9 32
Assets
1,001,948,834 15,093,626.2 228,200,957. 1,245,243,4
Total
.04 9 00 17.33
Financial 8,449,613.0
126,364.40 8,323,248.69
Liabilities 9
Whether there were any material changes on the measurement attributes of major assets of the Company
during the reporting period:
□ Yes √ No
17
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
3. Assets right restrictions as of the end of reporting period
Items Closing Book value Reasons for being restricted
Cash and Bank Balances 148,361,603.85 Deposits and investment deposits
Note Receivable 1,264,550,094.76 Pledge for financing
Total 1,412,911,698.61 -
V. Analysis of Investments
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Period Investment over the Corresponding Period
Fluctuation Rate (%)
(RMB) of Last Year (RMB)
0.00 9,238,318.85 -100.00%
2. Significant equity investment during the reporting period
□Applicable √Not applicable
3. Significant non-equity investment during the reporting period
□Applicable √ Not applicable
4. Financial asset portfolio
（1）Securities Investments
□ Applicable √ Not applicable
No such case in the reporting period.
（2）Derivatives Investments
√Applicable □ Not applicable
18
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Unit: RMB in 10 thousand
Proportion
of closing
investment
Actual
amount to
Initial Purchased Sold gain or
Operation Impairmen the
Whether Whether Type of investment Opening amount amount Closing loss
party of Terminatio t Company’
Related related derivatives amount of Initial date investment during the during the investment during
derivatives n date provisions s net
party transaction investment derivatives amount reporting reporting amount the
investment (if any) assets at
investment period period reporting
the end of
period
the
reporting
period
Futures
contracts,
Futures foreign
Company, No No exchange
Bank forward
contracts,
etc.
Total -- --
Capital source of derivatives investment Company’s self-fund
Prosecution (if applicable) Not applicable
Announcement date for approvals of derivatives
investment from the board of directors (if any)
Announcement date for approvals of derivatives
investment from the general meeting (if any)
Risk analysis and control measures (including but not In order to avoid the price risk of raw materials and exchange rate risk, the Company and its subsidiaries have carried out derivative
19
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
limited to, market risk, liquidity risk, credit risk, business, including futures contracts and foreign exchange forward contracts. The Company and its subsidiaries strictly implement the
operational risk, legal risk, etc.) of holding relevant provisions listed in the Management measures for operation of futures hedging business and Management institution for foreign
derivatives during the reporting period exchange hedging business.
Change of market price or fair value of invested
derivatives during the reporting period; specific
At the beginning of the reporting period, the floating income of invested derivatives at fair value was RMB 8.188 million, and that of
methods, related assumptions and parameter setting
derivatives at the end of the reporting period was RMB 15.2585 million.
of the derivatives’ fair value analysis should be
disclosed
During the current reporting period, whether there
was significant changes of accounting policies and
Not applicable
accounting principles of the Company’s derivatives
comparing to the prior reporting period
Specific opinions on the Company’s derivatives
investments and risk control from independent Not applicable
directors
20
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
5. Usage of raised funds
√Applicable □Not applicable
（1）Overall usage of raised fund
√Applicable □Not applicable
Unit: RMB in 10 thousand
Total Amount of Raised Funds 171,631
Total Amount of Raised Funds Invested in the Report
24,588.33
Period
Accumulated Amount of Fund Raised 141,274.52
Total Amount of Raised Funds with Use Alteration
0
during the Reporting Period
Accumulated Amount of Raised Funds with Use
11,471.76
Alteration
Proportion of Accumulated Amount of Raised Funds
with Use Alteration to the Total Amount of Raised 6.68%
Funds
Description of Overall Usage of Raised Funds
The information in the above table includes the raised funds issued by the Company in 2015 and 2017.
(1) Year 2015
1. The actual amount of raised fund and date of transfer in
Approved by China Securities Regulatory Commission (CSRC) [2015] No. 1454, the Company non-public offered 46,349,942
common shares, with a total raised fund of RMB 399,999,999.46. After deducting the issuance expenses of RMB 5,999,999.47,
the net amount of raised funds is RMB 393,999,999.99. The raised funds were transferred in on December 21st, 2015, and it has
been verified by Tianjian accounting firm, which has issued the Capital Verification Report (TJY [2015] No. 531).
As the principal body of the project is Hangzhou Sanhua Microchannel Heat Exchanger Co., Ltd. (hereinafter referred to as
Sanhua Microchannel) and its subsidiary Sanhua Mexico Industry s. de.r.l.de C.V. (hereinafter referred to as Mexico
Microchannel), the Company allocated RMB 393,999,999.99 of raised funds to Sanhua Microchannel in the form of capital
increase on December 29th, 2015.
2. Usage and balance of raised funds
The Company has used RMB 345.6904 million of raised funds in previous years. The amount of bank deposit interest and
financial income net of bank charges received in previous years was RMB 12.2878 million. The surplus balance of raised funds
amounted to RMB 26,100, all of which has been used to permanently replenish the Company's working capital. From January to
June 2020, the actual use of raised funds is RMB 5.3660 million, the amount of bank deposit interest and financial income after
deducting bank charges is RMB 444,100. The surplus balance of raised funds amounted to RMB 55.6494 million, all of which
21
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
has been used to permanently replenish the Company's working capital. The accumulated amount of used raised funds was RMB
351.0564 million, the accumulated amount of bank deposits interest and financial income after deducting bank charges is RMB
12.7319 million. The accumulated surplus balance of raised funds amounted to RMB 55.6755 million, all of which has been used
to permanently replenish the Company's working capital.
As of June 30th, 2020, the balance of raised funds is RMB 0.000 (including the net amount of accumulated bank deposit interest
and financial income net of bank charges, etc.).
(1) Year 2017
1. The actual amount of raised fund and date of transfer in
With the approval of China Securities Regulatory Commission (CSRC) [2017] No. 1392, the Company non-public issued
88,154,000 common shares (A shares), with a total raised capital of RMB 1,322,310,000.00. After deducting the issuance
expenses of RMB 13,078,480.00, the net amount of raised funds is RMB 1,309,231,520.00. The above-mentioned raised funds
were transferred in on September 1st, 2017, and it has been verified by Tianjian accounting firm, which has issued the Capital
Verification Report (TJY [2017] No. 327).
Since Zhejiang Sanhua Automotive Components Co., Ltd. (hereinafter referred to as Sanhua Automotive) and its subsidiary
Shaoxing Sanhua New Energy Automotive Components Co., Ltd. (hereinafter referred to as Shaoxing Automotive), the Company
has allocated the raised funds of RMB 1,301,310,000.00 to Sanhua Automotive in the form of capital increase. Sanhua
Automotive synchronously allocated the raised fund of RMB 503,620,000.00 to Shaoxing Automotive in the form of capital
increase.
2. Usage and balance of raised funds
The Company has used RMB 821.1715 million of the raised funds in previous years, and the amount of bank deposit interest and
financial income net of bank charges received in previous years was RMB 77.6239 million. From January to June 2020, the
actual usage of raised funds is RMB 240.5173 million, and the amount of bank deposit interest and financial income net of bank
charges is RMB 10.4168 million. The accumulated amount of used raised funds was RMB 1,061.6888 million, the accumulated
amount of bank deposits interest and financial income after deducting bank charges is RMB 88.0407 million.
As of June 30th, 2020, the balance of raised funds is RMB 48.6619 million (including the net amount of accumulated bank
deposit interest and financial income deducting bank charges, etc.), and the balance of raised funds actually used by the Company
to purchase financial products is RMB 300 million.
（2）Statement of Committed Investment Projects of Raised Funds
√Applicable □Not applicable
Unit: RMB in 10 thousand
Committed Wheth Total Total Invest Accum Invest Date of Benefit Whethe Whethe
investment projects er commit invest ment in ulative ment asset s r r
and allocation of project ted ment the invest progres ready achieve expecte feasibil
over-raised funds has invest after current ment at s at the for d in the d ity of
22
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
been ment of alterati year the end end of intende current benefit project
(or raised on (a) of the the d use year s have has
partiall funds period period been change
y) (b) (%) achieve d
altered (d)=(b) d signific
/(a) antly
Committed investment projects
Construction of
Decem
Microchannel Heat
11,739. ber
Exchanger Yes 22,755 11,760 99.83% N/A Yes
6 31st,
production line in
2017
Mexico
Technical N/A No
transformation
project of heat June
100.00
exchanger with an No 7,996 7,996 7,996 30th,
%
annual output of 2017
additional 800,000
units
Replenish working N/A No
No 9,249 9,249 8,649 93.51%
capital
Automatic technical N/A No
transformation
Decem
project of heat
11,471. 6,721.0 ber
exchanger with an No 536.6 58.59%
76 4 31st,
annual output of
2019
additional 700,000
units
New energy auto N/A No
Decem
parts construction
13,539. 42,101. ber
project with annual No 50,362 50,362 83.60%
96 14 31st,
output of 11.5
2021
million sets
Technical N/A No
transformation
project of
Automotive thermal January
9,638.2 34,866.
management system No 45,495 45,495 76.64% 31st,
5 02
module with an 2021
annual output of
additional 7.3
million units
23
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Technical N/A No
transformation
project of
March
Automotive A/C 18,614.
No 20,874 20,874 754.82 89.18% 31st,
control components 65
2020
with an annual
output of additional
12.70 million units
Expansion of N/A No
product testing room January
8,529.2
and auxiliary No 13,400 13,400 118.7 63.65% 31st,
2
production room 2019
project
Payment of agents’ 2,057.8 N/A No
No 2,100 2,100 97.99%
fees 5
Subtotal of
172,23 172,70 24,588. 141,27
committed -- -- -- -- --
1 7.76 33 4.52
investment projects
Investment of excess proceeds
--
172,23 172,70 24,588. 141,27
Total -- -- -- 0 -- --
1 7.76 33 4.52
Funds raised in 2015:
After deliberation and approval of the board of directors on August 6th, 2016, the date of asset ready for
intended use of " Technical transformation project of heat exchanger with an annual output of additional
800,000 units " was extended from June 2016 to June 2017, and other contents of the project remained
unchanged. This project has been completed.
After deliberation and approval of the board of directors on November 30th, 2017, the Company made
The situation and
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
reasons of not
production line in Mexico", and transferred the remaining raised funds into " Automatic technical
reaching the planned
transformation project of heat exchanger with an annual output of additional 700,000 units". The new
schedule or expected
project plans to use RMB 114.7176 million of raised funds (including RMB 4.7676 million of bank
income (by specific
deposit interest and financing income of raised funds), accounting for 29.12% of the net amount of funds
project)
raised in 2015. Reasons for the change: In order to accelerate the development of Microchannel business,
improve the level of technical equipment, realize the adjustment and upgrading of product structure, and
give full play to the resource advantages of Sanhua Microchannel Hangzhou factory in R&D,
technology, equipment, and improve the utilization efficiency of raised funds. The Company postponed
the investment in the third production line and other related supporting facilities of Mexico project. The
investment of the third production line and other supporting facilities in Mexico project shall be arranged
by the Company with own funding.
24
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Funds raised in 2017:
(1) After deliberation and approval by the board of directors of the Company on April 1st, 2019, the date
of asset ready for intended use of " Technical transformation project of Automotive thermal management
system module with an annual output of additional 7.3 million units " and " Technical transformation
project of Automotive A/C control components with an annual output of additional 12.70 million units "
was extended from January 2019 to January 2021, the other contents of the project will remain
unchanged. Reasons for the change: Combined with the existing product structure and market trend, the
Company adopts the strategy of prudent use and reasonable investment for the raised funds. As the new
equipment tends to be more intelligent and systematic, the Company selects the equipment according to
the latest technical requirements and product models, so that the investment progress of new equipment
of the project is later than expected. On March 31st, 2020, " Technical transformation project of
Automotive A/C control components with an annual output of additional 12.70 million units " has been
completed.
(2) After deliberation and approval by the board of directors on April 27th, 2020, the date of asset ready
for intended use of " New energy auto parts construction project with annual output of 11.5 million sets"
was extended from December 2019 to December 2021, and other contents of the project remained
unchanged. Reasons for the change: Combined with the existing product structure and market trend, the
Company adopts the strategy of prudent use and reasonable investment for the raised funds. In
combination with customer feedback and production scheduling plan, the Company will gradually
release the production capacity according to the actual customer demand. In order to ensure that the
investment progress can meet the actual production demand, the Company will adjust the equipment
procurement timing of the raised fund investment project according to the customer's actual
requirements, thus extend the investment period of the raised fund investment project.
Funds raised in 2015:
1. Basic information about the change of projects invested by raising funds
After deliberation and approval of the board of directors on November 30th, 2017, the Company made
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
production line in Mexico", and transferred the remaining raised funds into " Automatic technical
transformation project of heat exchanger with an annual output of additional 700,000 units". The new
project plans to use RMB 114.7176 million of raised funds (including RMB 4.7676 million of bank
Significant changes deposit interest and financing income of raised funds), accounting for 29.12% of the net amount of funds
in the feasibility of raised in 2015.
projects
2. Reasons for the change of the project invested by raising funds
In order to accelerate the development of Microchannel business, improve the level of technical
equipment, realize the adjustment and upgrading of product structure, and give full play to the resource
advantages of Sanhua Microchannel Hangzhou factory in R&D, technology, equipment, and improve the
utilization efficiency of raised funds. The Company postponed the investment in the third production line
and other related supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own funding.
25
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
3. Decision making procedures for the change of projects invested by raising funds
The change of raised investment project was approved by the board of directors of the Company on
November 30th, 2017.
4. Information disclosure of changes in projects invested by raised funds
On December 2nd, 2017, the Company disclosed the Announcement on Changing the Usage of Part
Raised Funds (Announcement No.: 2017-078).
Amount, usage and Not applicable
use progress of
over-raised Funds
Change in Not applicable
implementation
location of
investment projects
of Raised Funds
Adjustment to Not applicable
implementation
method of
investment projects
of Raised Funds
Applicable
Advance investment
Raised funds in 2015: In 2016, the Company replaced the initial investment amount with raised funds of
and replacement of
RMB 72.6453 million.
projects invested
Funds raised in 2017: In 2017, the Company replaced the initial investment amount by raised funds of
with raised funds
RMB 140.5585 million.
Temporary Not applicable
supplement of
working capital with
idle raised funds
Applicable
After deliberation and approval of the board of directors on November 30th, 2017, the Company made
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
The amount and production line in Mexico", and transferred the remaining raised funds into " Automatic technical
reasons of the transformation project of heat exchanger with an annual output of additional 700,000 units". The new
balance of raised project plans to use RMB 114.7176 million of raised funds (including RMB 4.7676 million of bank
funds in the project deposit interest and financing income of raised funds), accounting for 29.12% of the net amount of funds
implementation raised in 2015.
In order to accelerate the development of Microchannel business, improve the level of technical
equipment, realize the adjustment and upgrading of product structure, and give full play to the resource
26
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
advantages of Sanhua Microchannel Hangzhou factory in R&D, technology, equipment, and improve the
utilization efficiency of raised funds. The Company postponed the investment in the third production line
and other related supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own funding.
In April 2020, with the approval of the board of directors of the Company, the " Expansion of product
testing room and auxiliary production room project " and " Technical transformation project of
Automotive A/C control components with an annual output of additional 12.70 million units "
implemented by Sanhua Automotive and the " Automatic technical transformation project of heat
exchanger with an annual output of additional 700,000 units " implemented by Microchannel were
completed.
Among them, " Expansion of product testing room and auxiliary production room project " and "
Automatic technical transformation project of heat exchanger with an annual output of additional
700,000 units " were completed on December 31st, 2019, and the " Technical transformation project of
Automotive A/C control components with an annual output of additional 12.70 million units " was
complete on March 31st, 2020.
On March 31st, 2020, the final payment of " Expansion of product testing room and auxiliary production
room project " is about RMB 17.1548 million, which is to be paid by the raised funds according to the
contract. The ending balance of the project is about RMB 32.74 million. The usage will be determined
after performing the relevant approval procedures.
On March 31st, 2020, the final payment of " Technical transformation project of Automotive A/C control
components with an annual output of additional 12.70 million units " is about RMB 20.1527 million,
which is to be paid with raised funds according to the contract, and the ending balance of the project is
about RMB 19.9369 million (including the net amount of accumulated bank deposit interest and
financial income deducting bank charges). The usage shall be determined after relevant approval
procedures.
On March 31, 2020, the ending balance of " Automatic technical transformation project of heat
exchanger with an annual output of additional 700,000 units " was RMB 55.8663 million (including the
net amount of accumulated bank deposit interest and financial income net of bank charges, and the
unpaid balance of equipment of RMB 21.5949 million. The actual amount shall be subject to the balance
of the special account on the day when the fund is transferred out.). According to the resolution of the
board of directors on April 27, 2020, the ending balance of the project is proposed to replenish working
capital, and the remaining equipment balance to be paid shall be paid with its own funds. As of June 30th,
2020, the actual balance of RMB 55.6494 million has been used to replenish the working capital
permanently.
Use of unused raised
It is deposited in the special account of raised funds and used to purchase bank financial products.
funds
Problems or other No
27
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
situations in the use
and disclosure of
raised funds
（3）Statement of Altered Investment Projects of Raised Funds
√Applicable □Not applicable
Unit: RMB in 10 thousand
Total
Raised
Whether
Funds to Investme
Actual Actual Date of Benefits Whether feasibility
be nt
Project Project investmen accumulat asset achieved expected of project
invested progress
after before t in the ive ready for in the benefits has
to the (%)
alteration alteration current investmen intended current have been changed
project (c)=(b)/(a
year t (b) use year achieved significan
after )
tly
alteration
(a)
Automati
c
technical
Construct
transform
ion of
ation
Microcha
project of
nnel Heat
heat December Not
Exchange 11,471.76 536.6 6,721.04 58.59% No
exchanger 31st, 2019 applicable
r
with an
productio
annual
n line in
output of
Mexico
additional
700,000
units
Total -- 11,471.76 536.6 6,721.04 -- -- 0 -- --
1. Basic information about the change of projects invested by raising funds
After deliberation and approval of the board of directors on November 30th, 2017, the
Company made some changes to the purpose of the raised funds for the " Construction of
Alteration reason, decision making
Microchannel Heat Exchanger production line in Mexico", and transferred the remaining
progress and information disclosure
raised funds into " Automatic technical transformation project of heat exchanger with an
(of a specific project)
annual output of additional 700,000 units". The new project plans to use RMB 114.7176
million of raised funds (including RMB 4.7676 million of bank deposit interest and
financing income of raised funds), accounting for 29.12% of the net amount of funds
28
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
raised in 2015.
2. Reasons for the change of the project invested by raising funds
In order to accelerate the development of Microchannel business, improve the level of
technical equipment, realize the adjustment and upgrading of product structure, and give
full play to the resource advantages of Sanhua Microchannel Hangzhou factory in R&D,
technology, equipment, and improve the utilization efficiency of raised funds. The
Company postponed the investment in the third production line and other related
supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own
funding.
3. Decision making procedures for the change of projects invested by raising funds
The change of raised investment project was approved by the board of directors of the
Company on November 30th, 2017.
4. Information disclosure of changes in projects invested by raised funds
On December 2nd, 2017, the Company disclosed the Announcement on Changing the
Usage of Part Raised Funds (Announcement No.: 2017-078).
The situation and reasons of not
reaching the planned schedule or
Not applicable
expected income (by specific
project)
Description of significant changes in
Not applicable
the feasibility of the changed project
6. Non-fundraising investment in significant projects during the reporting period
√Applicable □Not applicable
Unit: RMB in 10 thousand
Accumulated
Investment actual
Benefits
amount in investment Disclosure
Total planned Investment achieved in Disclosure
Project the amount as of index (if
investment progress the current date (if any)
reporting the end of any)
year
period the report
period
Not
Vietnam applicable
38 million U
Industrial 2,115.78 11,026.38 40.99% (only
SD
Plant Project production
function,
29
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
material
supply and
product sales
are
undertaken
by related
parties, and
project
benefits
cannot be
calculated
separately)
Not
Construction applicable
project of (the sales of
commercial the products
refrigeration are
and air undertaken
conditioning by the
178,055 655.5 5,860.96 3.29%
intelligent related
control parties, and
components the benefits
with annual of the project
output of 65 cannot be
million sets calculated
separately)
Total - 2,771.28 16,887.34 -- -- -- --
VI. Disposal of Significant Assets and Equity
1. Disposal of significant assets
□ Applicable √ Not applicable
During the reporting period, there was no disposal of significant assets
2. Sale of significant equity
□ Applicable √ Not applicable
VII. Analysis of Major Subsidiaries and Investees
√ Applicable □ Not applicable
Information about major subsidiaries, and investees that contribute above 10% of the Company’s net Profit
30
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Unit：RMB
Company Company Principal Registered Total Operating Operating
Net assets Net profit
name type business capital assets revenue profit
Refrigerati
Zhejiang
on and A/C
Sanhua
electrical
Climate &
component 250 3,232,488, 3,058,812, 508,458,01 95,872,764 81,926,735
Appliance Subsidiary
s million 916.03 324.23 4.81 .44 .08
Controls
manufactur
Group Co.,
ing and
Ltd.
marketing
Refrigerati
Hangzhou on and A/C
Sanhua electrical
Microchan component 360 1,555,917, 1,080,336, 606,537,10 93,943,423 78,791,505
Subsidiary
nel Heat s million 273.38 030.91 5.77 .10 .08
Exchanger manufactur
Co., Ltd. ing and
marketing
Refrigerati
Zhejiang on and A/C
Sanhua electrical 2,991,565, 89,744,313 1,629,816, -20,435,66 -17,443,43
Subsidiary 50 million
Trading component 951.62 .32 923.74 3.09 8.09
Co., Ltd. s
marketing
Automotiv
Zhejiang
e
Sanhua
component
Automotiv 1,460 3,522,572, 2,789,986, 950,236,19 196,052,90 170,228,21
Subsidiary s
e million 484.15 415.80 5.13 2.07 7.65
manufactur
Componen
ing and
ts Co., Ltd
marketing
Refrigerati
on and A/C
electrical
Sanhua
component
Internation 37.55
s 1,198,408, 202,888,64 1,104,653, -20,221,40 -20,604,13
al Limited Subsidiary million
manufactur 135.25 0.33 615.62 9.40 8.42
(USA) USD
ing
(merger)
marketing
and
investment
31
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
manageme
nt
Refrigerati
on and A/C
electrical
Sanhua component
Internation s
75.58
al manufactur 2,234,799, 574,784,67 1,527,163, 43,520,582 32,301,884
Subsidiary million
Singapore ing 870.35 7.46 374.13 .16 .25
USD
PTE. Ltd. marketing
(merger) and
investment
manageme
nt
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Equity acquisition and disposal method Impact on overall production results
Company name
during the reporting period Hangzhou
AWECO Electric Equipment (Shanghai)
Liquidation cancellation No significant impact
Co., Ltd.
Hangzhou Sanhua Household Thermal
Liquidation cancellation No significant impact
Management System Co., Ltd.
VIII. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
IX. Guidance on the Company’s Operational Result from January 1st 2020 to September 30th
2020
□ Applicable √ Not applicable
X. Risks of the Company and Countermeasures
1. Risk of raw material price fluctuation
The raw materials required by the Company are copper, aluminum, etc., which account for a large proportion in
the product cost composition. Therefore, the fluctuation of the market price of raw materials will bring greater
cost pressure to the Company. The Company will reduce the adverse impact of raw material price fluctuation by
establishing linkage pricing mechanism and bulk commodity future hedging operations.
2. Risk of rising labor costs
The Company's labor cost has been increasing annually, which has compressed the Company's profit space to a
32
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
certain extent. In the future, the Company will continue to promote lean production, process improvement,
technical transformation, etc. to improve the degree of automation and labor production efficiency.
3. Risk of trade and exchange rate
The Company's foreign trade export volume is large, involving North America, Europe, Japan, Southeast Asia and
other regions. The changes of the interregional trade policy have an impact to the Company's operation on a daily
basis. The Company can cope with the risk of interregional trade by means of overseas transfer of production
capacity. The fluctuation of exchange rate will have a certain impact on the Company's profits. According to the
actual situation, the Company can cope with and reduce the risk of exchange rate fluctuation by means of
long-term settlement of foreign exchange and the establishment of overseas production bases in the United States,
Poland, Mexico, India, etc.
4. Risk of the impact of infectious diseases
The COVID-19 has spread worldwide since the beginning of 2020. The Company's refrigeration, A/C and
electrical components, and auto parts business also suffer from the disease, since it affected production, supply
and sales. The Company estimates that the uncertainty of the pandemic pneumonia will continue to affect the
Company's revenues and profits. On the premise of meeting the requirements of epidemic prevention and control,
the Company timely adjusted relevant business strategies and actively organized the resumption of work and
production.
33
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section V Significant Events
I. Annual General Meeting and Extraordinary General Meetings Convened During the
Reporting Period
1. Annual General Meeting convened during the current reporting period
Proportion of
Meeting Nature participating Convened Date Disclosure Date Disclosure Index
investors
The announcement
of the resolution of
the first
extraordinary
First Extraordinary general meeting of
Extraordinary
General Meeting in 11.86% February 10th 2020 February 11st 2020 shareholders in 2020
General Meeting
2020 No. 2020-014 was
published in
Securities Times,
Shanghai Securities
News and CNINFO
The announcement
on the resolution of
the annual general
meeting of
2019 Annual Annual General
shareholders in 2019
General Meeting of Meeting of 15.23% May 19th 2020 May 20th 2020
(2020-045) was
Shareholders Shareholders
published in
Securities Times,
Shanghai Securities
News and CNINFO.
The announcement
on the resolution of
the second
Second extraordinary
Extraordinary Extraordinary general meeting of
15.21% June 22nd 2020 June 23rd 2020
General Meeting in General Meeting shareholders in 2020
2020 (2020-055) was
published in
Securities Times,
Shanghai Securities
34
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
News and CNINFO.
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights
□ Applicable √ Not applicable
II. Profit distribution and conversion of capital reserve to share capital during the reporting
period
√ Applicable □Not applicable
Bonus share issued per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
1
inclusive)
Additional shares converted from capital reserves
0
for 10 shares (share)
Total capital share basis for the distribution
3,582,258,682
proposal (share)
Total cash dividend (RMB) (tax inclusive) 358,225,868.20
Cash dividend amount in other ways (such as
0.00
share repurchase) (RMB)
Total cash dividends (including other ways)
358,225,868.20
(RMB)
Distributable profits (RMB) 1,082,646,144.47
Percentage of cash dividends of the total
33.09%
distributed profit (%)
Cash dividends
Other
Detailed description of profit distribution or capital reserves conversion plan
With 3,582,258,682 as the base number, cash dividend of RMB 1.00 (including tax) will be distributed to all shareholders for every
10 shares. A total of RMB 358,225,868.20 will be distributed.
III. Complete and Incomplete Commitments of the Company and Its Actual Controller,
Shareholders, Related parties, Acquirers, and Other Related Parties by the End of the
Reporting Period
√ Applicable □ Not applicable
Giver of Date of Term of
Commitments Nature Details of commitments Performance
commitments commitments commitments
Commitment Zhang Yabo, Other When the number of shares sold through listing November 21st Long term Strict
35
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
from controlling commi and trading in Shenzhen Stock Exchange 2005 performance
reformation of shareholder tment reaches 1% of the total number of shares of the
shareholding Sanhua Company, it shall make an announcement
Holding within two working days from the date of the
Group Co., occurrence of the fact.
Ltd.
Comm
itment
on
horizo
Zhang Daocai, ntal
controlling compe Zhang Daocai and Sanhua holding group, the
shareholder tition, controlling shareholder of the Company,
January 5th, Strict
Sanhua related promise that there will not be any competition Long term
2009 performance
Holding party with Sanhua intelligent controls in the business
Group Co., transac scope being or already carried out in the future.
Ltd. tions
and
capital
occupa
tion
Sanhua Holding Group promises: after the
Comm
completion of this transaction, Sanhua Holding
itment
Group and Sanhua intelligent controls will sign
on
an agreement according to law, perform legal
horizo
procedures, fulfill the obligation of information
Zhang Daocai, ntal
disclosure and handle significant matters for
controlling compe
approval in accordance with relevant laws,
shareholder tition,
regulations, articles of association of Sanhua January 5th, Strict
Sanhua related Long term
intelligent controls. In the process of 2009 performance
Holding party
implementation of related party transactions, we
Group Co., transac
will follow the principle of legality and
Ltd. tions
reasonableness, ensure the fairness of prices and
and
procedures, and make certain that the legitimate
capital
interests of Sanhua intelligent controls and
occupa
other shareholders will not be damaged through
tion
related party transactions.
Zhang Daocai, Comm
In order to avoid horizontal competition with
Zhang Yabo, itment
Sanhua intelligent controls, Zhang Daocai,
Zhang on
Zhang Yabo, Zhang Shaobo, Sanhua Holding Strict
Shaobo, horizo July 24th, 2015 Long term
Group the controlling shareholder of the performance
controlling ntal
Company, and Sanhua Lvneng Industry, the
shareholder compe
trading partner made the following
Sanhua tition,
36
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Holding related commitments:
Group Co., party 1. I (or the Company) will not directly or
Ltd., Zhejiang transac indirectly engage in or participate in the
Sanhua tions business that constitutes potential direct or
Lvneng and indirect competition with Sanhua Intelligent
Industrial capital Controls and its subordinate enterprises;
Group Co., occupa guarantee that legal and effective measures shall
Ltd. tion be taken to urge other enterprises controlled by
me (or the Company) not to engage in or
participate in any business competing with
Sanhua Intelligent Controls and its subordinate
enterprises.
2. If Sanhua Intelligent Controls further
expands its business scope, I (or the Company)
and other controlled enterprises will not
compete with Sanhua Intelligent Controls'
expanded business; if it is possible to compete
with Sanhua Intelligent Controls' business after
expansion, I (or the Company) and other
controlled enterprises will withdraw from
Sanhua Intelligent Controls in the following
ways of competition: A. Stop the businesses
that compete or may compete with Sanhua
Intelligent Controls; B. Inject the competitive
business into Sanhua Intelligent Controls; C.
Transfer the competitive business to an
unrelated third party.
3. If I (or the Company) and other enterprises
controlled by me (or the Company) have any
business opportunities to engage in and
participate in any activities that may compete
with Sanhua Intelligent Controls' business
operation, they shall immediately inform
Sanhua Intelligent Controls of the above
business opportunities. If Sanhua Intelligent
Controls makes an affirmative reply to take
advantage of the business opportunity within a
reasonable period specified in the notice, it shall
do its best to give the business opportunity to
Sanhua Intelligent Controls.
4. In case of breach of the above commitment, I
(or the Company) is willing to bear all
responsibilities arising therefrom and fully
compensate all direct or indirect losses caused
37
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
to Sanhua Intelligent Controls.
In order to standardize the related party
transactions with Sanhua Intelligent Controls,
Zhang Daocai, Zhang Yabo, Zhang Shaobo,
Sanhua Holding Group the controlling
shareholder of the Company and Sanhua
Lvneng Industrial the trading partner made the
following commitments:
1. I (or the Company) and the controlled
enterprises will reduce the related party
transactions with Sanhua intelligent controls as
far as possible, and will not use their own status
Zhang Daocai, Comm as shareholders of Sanhua intelligent controls to
Zhang Yabo, itment seek for superior rights in terms of business
Zhang on cooperation and other aspects compared with
Shaobo, horizo other third parties;
controlling ntal 2. I (or the Company) will not take advantage of
shareholder compe the right to enter into a transaction with Sanhua
Sanhua tition, intellectual controls using the position as a
Strict
Holding related shareholder. July 24th, 2015 Long term
performance
Group Co., party 3. If there are necessary and unavoidable related
Ltd., Zhejiang transac party transactions, I (or the Company) and the
Sanhua tions controlled enterprises will sign agreements with
Lvneng and Sanhua intelligent controls in accordance with
Industrial capital the principles of fairness, follow legal
Group Co., occupa procedures, and perform the information
Ltd. tion disclosure obligations in accordance with the
requirements of relevant laws, regulatory
documents and the articles of association. It
shall also perform relevant internal
decision-making and approval procedures to
ensure that it will not conduct transactions with
Sanhua intelligent controls on terms that are
obviously unfair compared with the market
price, and will not use such transactions to
engage in any behavior that damages the
legitimate rights and interests of Sanhua
intelligent controls and other shareholders.
Zhang Daocai, Zhang Daocai, Zhang Yabo, Zhang Shaobo and
Zhang Yabo, Other Sanhua holding Group, the controlling
Strict
Zhang Comm shareholder of the Company, made the July 24th, 2015 Long term
performance
Shaobo, itment following commitments: after the completion of
controlling the transaction, Sanhua intelligent controls will
38
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
shareholder continue to improve the corporate governance
Sanhua structure and independent operation of the
Holding Company management system in accordance
Group Co., with the requirements of relevant laws and
Ltd. regulations and the articles of Association, and
continue to maintain the independence of
Sanhua intelligent controls in business, assets,
finance, institutions, personnel, etc. to protect
the interests of all shareholders.
The shares acquired in this transaction shall not
be transferred within 36 months from the listing
date of new shares after the completion of the
issuance; within 6 months after the completion
Zhejiang Comm
of the transaction, if the closing price of the
Sanhua itment
shares of the listed Company is lower than the
Lvneng of September September Strict
issue price of the shares to purchase assets for
Industrial restrict 20 , 2017
th
19 , 2020
th
performance
20 consecutive trading days, or if the closing
Group Co., ed
price at the end of 6th month is lower than the
Ltd. shares
issue price of the shares to purchase assets, the
locking period of the shares acquired by the
Company due to this transaction will be
automatically extended for at least 6 months.
1. I (or the Company) and the controlled
enterprises will reduce the related party
transactions with Sanhua intelligent controls as
Zhang Daocai, Comm far as possible, and will not use the position as a
Zhang Yabo, itment shareholder of Sanhua intellectual controls to
Zhang on seek the superior rights for business cooperation
Shaobo, horizo with Sanhua intelligent controls compared with
controlling ntal other third parties;
shareholder compe 2. I (or the Company) will not use my position
Sanhua tition, as a shareholder of Sanhua intellectual controls
September Strict
Holding related to seek for the priority right to cooperate with Long term
18 , 2017
th
performance
Group Co., party Sanhua intellectual controls;
Ltd., Zhejiang transac 3. If there are necessary and unavoidable related
Sanhua tions party transactions, I (or the Company) and the
Lvneng and controlled enterprises will sign agreements with
Industrial capital Sanhua intelligent controls in accordance with
Group Co., occupa the principles of fairness, follow legal
Ltd. tion procedures, and perform the information
disclosure obligations in accordance with the
requirements of relevant laws, regulatory
documents and the articles of association. It
39
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
shall also perform relevant internal
decision-making and approval procedures to
ensure that it will not conduct transactions with
Sanhua intelligent controls on terms that are
obviously unfair compared with the market
price, and will not use such transactions to
engage in any behavior that damages the
legitimate rights and interests of Sanhua
intelligent controls and other shareholders.
1. I (or the Company) will not directly or
indirectly engage in or participate in any
business that may constitute potential direct or
indirect competition with Sanhua intelligent
controls and its subordinate enterprises;
guaranteed that legal and effective measures
will be taken to urge other enterprises
controlled by me (or the Company) not to
engage in or participate in any business that is
competitive with Sanhua intelligent controls
Zhang Daocai, Comm and its subordinate enterprises Business.
Zhang Yabo, itment 2. If Sanhua intelligent controls further expands
Zhang on its business scope, I (or the Company) and other
Shaobo, horizo enterprises controlled by me (or the Company)
controlling ntal will not compete with Sanhua intelligent
shareholder compe controls' expanded business; if it is possible to
Sanhua tition, compete with Sanhua intelligent controls'
September Strict
Holding related business after expansion, I (or the Company) Long term
18 , 2017
th
performance
Group Co., party and other enterprises controlled by me (or the
Ltd., Zhejiang transac Company) will withdraw from Sanhua
Sanhua tions intelligent controls in the following ways of
Lvneng and competition: A. stop the businesses that
Industrial capital compete or may compete with Sanhua
Group Co., occupa intelligent controls; B. inject the competitive
Ltd. tion business into Sanhua intelligent controls; C.
transfer the competitive business to an unrelated
third party.
3. If I (or the Company) and other enterprises
controlled by me (or the Company) have any
business opportunities to engage in and
participate in any activities that may compete
with Sanhua intelligent controls' business
operation, they shall immediately inform
Sanhua intelligent controls of the above
business opportunities. If Sanhua intelligent
40
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
controls makes an affirmative reply to take
advantage of the business opportunity within a
reasonable period specified in the notice, it shall
do its best to give the business opportunity to
Sanhua intelligent controls.
4. In case of breach of the above commitment, I
(or the Company) is willing to bear all
responsibilities arising therefrom and fully
compensate all direct or indirect losses caused
to Sanhua intelligent controls.
Zhang Daocai,
Zhang Yabo,
Zhang After the completion of the transaction, the
Shaobo, listed Company will continue to improve the
controlling corporate governance structure and independent
shareholder operation of the Company management system
Sanhua Other in accordance with the requirements of relevant
September Strict
Holding commi laws and regulations and the articles of Long term
18th, 2017 performance
Group Co., tment association, continue to maintain the
Ltd., Zhejiang independence of the listed Company in
Sanhua business, assets, finance, institutions, personnel
Lvneng and other aspects, and effectively protect the
Industrial interests of all shareholders.
Group Co.,
Ltd.
Comm
itment
on The commitment made at the time of IPO, it
horizo shall not engage in the same production,
Zhang Daocai, ntal operation or business as the Company in the
controlling compe future. In order to avoid business competition
shareholder tition, with the Company and clarify the
Strict
Sanhua related non-competition obligations, Sanhua Holding June 7th 2005 Long term
performance
Holding party Group, on behalf of itself and its subsidiaries
Group Co., transac with more than 50% equity, makes a
Ltd. tions commitment to Sanhua intelligent controls to
and avoid possible horizontal competition.
capital
occupa
tion
Are the
commitments Yes
fulfilled on
41
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
time
IV. Engagement and Dismissal of the CPA firm
Whether the half year report was audited
□Yes √No
The Company’s report was not audited.
V. Explanation Given by the Board of Directors and Supervisory Committee Regarding the
“Non-standard Auditor’s Report” Issued by the CPA Firm for the Reporting Period
□ Applicable √ Not applicable
VI. Explanation Given by the Board of Directors Regarding the “Non-standard Auditor’s
Report” Issued by the CPA Firm for the Prior Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case during the reporting period.
VIII. Material Litigation and Arbitration
Material Litigation and Arbitration
□ Applicable √ Not applicable
No such case during the reporting period.
Other litigations
□ Applicable √ Not applicable
IX. Media Queries
□ Applicable √ Not applicable
There was no prevalent media query during the reporting period.
X. Punishments and Rectifications
□ Applicable √ Not applicable
No such case during the reporting period.
42
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
XI. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XII. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or
Other Incentive Plans
√Applicable □Not applicable
1. During the reporting period, the Company has completed the repurchase and cancellation of 291,200 shares of
all or part of the restricted shares held by 33 incentive objects (28 resigned and 5 failed to meet the personal
performance assessment requirements during the first release period) involved in the incentive plan for
restricted shares in 2018.
Important issues Disclosure Date Disclosure Index
Announcement on the completion of
repurchase and cancellation of some restricted March 3rd 2020 http://www.cninfo.com.cn
stocks
2. During the reporting period, the Company launched the incentive plan for restricted stock in 2020, granting
12.045 million shares of restricted stock to 914 incentive objects. The grant date of the equity incentive plan
is February 24, 2020, and the grant price is RMB 9.85 per share. The listing date of the restricted shares
granted this time is March 20, 2020.
Important issues Disclosure Date Disclosure Index
Announcement on the resolution of the 7th
January 22nd 2020 http://www.cninfo.com.cn
interim meeting of the 6th board of directors
Announcement on the resolution of the 7th
January 22nd 2020 http://www.cninfo.com.cn
interim meeting of the 6th board of supervisors
Restricted stock incentive plan 2020 (Draft) January 22nd 2020 http://www.cninfo.com.cn
Management measures for the implementation
January 22nd 2020 http://www.cninfo.com.cn
of restricted stock incentive plan in 2020
List of incentive objects of restricted stock in
January 22nd 2020 http://www.cninfo.com.cn
2020
Examination and verification opinions of the
board of supervisors on the publicity of the list
February 4th 2020 http://www.cninfo.com.cn
of incentive objects of the equity incentive plan
in 2020
Announcement of the resolution of the first
extraordinary general meeting of shareholders February 11st 2020 http://www.cninfo.com.cn
in 2020
Announcement on the resolution of the 8th
February 25th 2020 http://www.cninfo.com.cn
interim meeting of the 6th board of directors
43
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Announcement on the resolution of the 8th
February 25th 2020 http://www.cninfo.com.cn
interim meeting of the 6th board of supervisors
Announcement on adjustment of incentive plan
February 25th 2020 http://www.cninfo.com.cn
for restricted stock in 2020
Announcement on granting restricted shares to
incentive objects of restricted stock incentive February 25th 2020 http://www.cninfo.com.cn
plan in 2020
Announcement on completion of grant
registration of restricted stock incentive plan March 23rd 2020 http://www.cninfo.com.cn
in 2020
XIII. Significant Related-party Transaction
1. Significant related-party transactions arising from routine operation
□Applicable √Not applicable
No such case in the reporting period.
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Not applicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Not applicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √Not applicable
No such case in the reporting period.
5. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.
XIV. Non-operating Capital Occupation of Listed Companies by Controlling Shareholders
and Their Related Parties
□ Applicable √ Not applicable
No such case in the reporting period.
44
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
XV.Significant Contracts and Their Execution
1. Matters on trusteeship, contracting, and leasing
（1）Trusteeship
□ Applicable √ Not applicable
No such case in the reporting period.
（2）Contracting
□ Applicable √ Not applicable
No such case in the reporting period.
（3）Leasing
√Applicable □ Not applicable
Illustration of lease
Aweco Polskas Appliance sp.z.o.o sp.k, a wholly-owned subsidiary of the Company, acquired 2 buildings through
leasing.
Items with profit and loss exceeding 10% of the total profit of the Company in the report period
□ Applicable √ Not applicable
During the reporting period, there is no leasing project with profit and loss of more than 10% of the total profit of
the Company during the reporting period.
2. Significant guarantees
√Applicable □ Not applicable
(1) Guarantees
Unit: RMB in 10 thousand
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Announce
ment Guarant
Date of Actual Actual ee for
Guarante Type of Term of Due or
Guaranteed Party Disclosur Occurrence Guarantee Related
e Amount Guarantee Guarantee Not
e of the Date Amount Parties
Guarantee or Not
Amount
Company's Guarantees to Subsidiaries
Announc Guarante Actual Actual Type of Term of Due or Guarant
Guaranteed Party
ement e Amount Occurrence Guarantee Guarantee Guarantee Not ee for
45
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Date of Date Amount Related
Disclosur Parties
e of the or Not
Guarante
e Amount
Sanhua AWECO Joint 2018.11.05
April 16, November 5,
Appliance 35,000 18,310.3 liability -2021.11.0 Yes Yes
2018 2018
Systems GmbH guarantee 4
Sanhua AWECO Joint 2020.04.0
April 3,
Appliance 41,000 April 8, 2020 12,737.6 liability 8-2021.11. No Yes
2019
Systems GmbH guarantee 04
Sanhua AWECO Joint 2020.06.0
April 29,
Appliance 52,000 June 5, 2020 8,757.1 liability 5-2021.11. No Yes
2020
Systems GmbH guarantee 04
SANHUA
INTERNATION Joint 2018.09.1
April 16, September
AL 132,000 13,135.65 liability 7-2022.09. Yes Yes
2019 17, 2018
SINGAPORE guarantee 16
PTE. LTD.
SANHUA
INTERNATION Joint 2019.07.2
April 3,
AL 132,000 July 29, 2019 9,203.35 liability 9-2020.01. Yes Yes
2019
SINGAPORE guarantee 30
PTE. LTD.
SANHUA
INTERNATION Joint 2019.09.2
April 3, September
AL 132,000 7,079.5 liability 3-2020.09. No Yes
2019 23, 2019
SINGAPORE guarantee 23
PTE. LTD.
SANHUA
INTERNATION Joint 2019.07.0
April 3,
AL 132,000 July 5, 2019 11,941.5 liability 5-2022.06. No Yes
2019
SINGAPORE guarantee 20
PTE. LTD.
SANHUA Joint 2019.12.0
April 3, December 9,
INTERNATION 30,000 21,946.45 liability 9-2022.12. No Yes
2019 2019
AL, INC. guarantee 09
SANHUA Joint 2019.01.1
April 16, January 18,
INTERNATION 30,000 10,619.25 liability 8-2020.01. Yes Yes
2018 2019
AL, INC. guarantee 21
SANHUA April 3, 30,000 January 21, 10,619.25 Joint 2020.01.2 No Yes
46
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
INTERNATION 2019 2020 liability 1-2020.07.
AL, INC. guarantee 09
SANHUA
INTERNATION Joint 2020.06.1
April 29,
AL 150,000 June 12, 2020 7,500 liability 2-2022.12. No Yes
2019
SINGAPORE guarantee 25
PTE. LTD.
SANHUA
INTERNATION Joint 2020.02.1
April 3, February 10,
AL 132,000 10,349.3 liability 0-2021.02. No Yes
2019 2020
SINGAPORE guarantee 09
PTE. LTD.
Total Amount of Guarantees Total Amount of Guarantees
to Subsidiaries Approved to Subsidiaries Actually
310,000 49,963.25
during the Reporting Period Occurred during the
(B1) Reporting Period (B2)
Total Amount of Guarantees Total Balance of Guarantees
to Subsidiaries Approved by Actually Paid to
384,673.6 90,930.7
the End of the Reporting Subsidiaries at the End of
Period (B3) the Reporting Period (B4)
Subsidiaries' Guarantees to Subsidiaries
Announc
ement Guarant
Date of Actual Actual ee for
Guarante Type of Term of Due or
Guaranteed Party Disclosur Occurrence Guarantee Related
e Amount Guarantee Guarantee Not
e of the Date Amount Parties
Guarante or Not
e Amount
The total amount of the Company's guarantees (the total of the above three items)
Total Amount of Guarantees Total Amount of Guarantees
Approved during the Actually Occurred during
310,000 49,963.25
Reporting Period the Reporting Period
(A1+B1+C1) (A2+B2+C2)
Total Amount of Guarantees Total Balance of Guarantees
Approved by the End of the Actually Paid at the End of
384,673.6 90,930.7
Reporting Period the Reporting Period
(A3+B3+C3) (A4+B4+C4)
Total Amount of Actual Guarantees (A4+B4+C4) as a
9.54%
Percentage of the Company's Net Assets
Of which：
Balance of Debt Guarantees Directly or Indirectly Offered to
Guaranteed Objects with Asset-liability Ratio Exceeding 90,930.7
70% (E)
47
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Total Amount of the Above Three Guarantees (D+E+F) 90,930.7
(2) Illegal external guarantees
□ Applicable √ Not applicable
No illegal external guarantees during the reporting period.
3. Entrusted wealth management
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Balance before Overdue uncollected
Specific types Capital source Amount
maturity amount
Bank financial The Company’s owned
238,982.3 120,930.9 0
products funds and raised funds
Total 238,982.3 120,930.9 0
Specific situation of high-risk entrusted financial management with large single amount or low security, poor
liquidity and without guarantee of principal
√Applicable □ Not applicable
48
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Unit: RMB in 10 thousand
Future
Actual
Amount entruste
Referen Actual recover Event
of Throug d
Determi ce profit y of overvie
Type Termina Capital Expecte provisio h legal financia
Name of Product Amoun Capital Start nation annualiz and loss profit w and
of tion investm d return n for procedu l
trustee type t source date of ed rate in the and loss relevant
trustee date ent (if any) impair res or manage
return of reportin in the index
ment (if not ment
return g period reportin (if any)
any) plan or
g period
not
Shaoxing
Floating
Xinchang
Bank income
sub Cash
Decemb January financia without
branch of deposit Self-fun
Bank 19,500 er 31, 15, l guarant 3.24% 25.99 25.99 Yes -
Bank of (Company ds
2019 2020 product ee of
Communi )
s principa
cations
l
Co., Ltd
Shaoxing
Floating
Xinchang
Bank income
sub Cash
January January financia without
branch of deposit Self-fun
Bank 10,000 15, 21, l guarant 3.39% 5.56 5.56 Yes -
Bank of (Company ds
2020 2020 product ee of
Communi )
s principa
cations
l
Co., Ltd
Bank of "Tianlibao Self-fun January April Bank Floating
Bank 10,000 4.00% 99.73 99.73 Yes -
Hangzhou " ds 21, 21, financia income
49
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Xinchang structured 2020 2020 l with
sub deposit product guarant
branch products s ee of
principa
l
Shaoxing
Floating
Xinchang
Bank income
sub Cash
March financia without
branch of deposit Self-fun March
Bank 5,000 16, l guarant 3.09% 5.50 5.50 Yes -
Bank of (Company ds 6, 2020
2020 product ee of
Communi )
s principa
cations
l
Co., Ltd
Shaoxing
Floating
Xinchang
Bank income
sub
Structured March Septem financia with
branch of Self-fun
Bank deposits 7,000 31, ber 23, l guarant 3.75% 126.23 0 0 Yes -
Bank of ds
176 days 2020 2020 product ee of
Communi
s principa
cations
l
Co., Ltd
Floating
Bank of "Tianlibao Bank income
Hangzhou " March financia with
Self-fun May 26,
Xinchang Bank structured 20,000 26, l guarant 3.80% 127.01 127.01 Yes -
ds 2020
sub deposit 2020 product ee of
branch products s principa
l
ABC Bank Huilifeng 10,000 Self-fun April Decemb Bank Floating 3.70% 252.73 0 0 Yes -
50
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Xinchang issue ds 22, er 28, financia income
sub 4840 of 2020 2020 l with
branch 2020 product guarant
customize s ee of
d RMB principa
structured l
deposit
products
(250
days)
Floating
Bank of Bank income
China Linked April financia with
Self-fun May 29,
Xinchang Bank structured 10,000 27, l guarant 3.60% 31.56 31.56 Yes -
ds 2020
sub deposits 2020 product ee of
branch s principa
l
Floating
Bank of Bank income
China Linked April financia with
Self-fun May 29,
Xinchang Bank structured 10,000 27, l guarant 3.60% 31.56 31.56 Yes -
ds 2020
sub deposits 2020 product ee of
branch s principa
l
Huilifeng Bank Floating
ABC
no.4917 April Decemb financia income
Xinchang Self-fun
Bank customize 10,000 29, er 28, l with 3.70% 245.66 0 0 Yes -
sub ds
d RMB 2020 2020 product guarant
branch
structured s ee of
51
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
deposit principa
products l
in 2020
(243
days)
97 days of
Shaoxing
Bank of Floating
Xinchang
Communi Bank income
sub
cations Septem financia with
branch of Self-fun June 5,
Bank Yuntong 10,000 ber 10, l guarant 3.27% 86.66 0 0 Yes -
Bank of ds 2020
wealth 2020 product ee of
Communi
fixed term s principa
cations
structured l
Co., Ltd
deposit
Huilifeng
no.5371
Floating
customize
Bank income
ABC d RMB
Decemb financia with
Xinchang structured Self-fun June 5,
Bank 10,000 er 18, l guarant 3.40% 182.08 0 0 Yes -
sub deposit ds 2020
2020 product ee of
branch products
s principa
in 2020
l
(196
days)
Shaoxing Bank Floating
Cash
Xinchang financia income
deposit Self-fun May 26, June 15,
sub Bank 6,000 l without 3.16% 10.37 10.37 Yes -
(Company ds 2020 2020
branch of product guarant
)
Bank of s ee of
52
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Communi principa
cations l
Co., Ltd
Floating
Heng Bank income
Seng financia with
Hengliyin Self-fun April 4, January
Bank Bank 6,000 l guarant 4.10% 176.64 176.64 Yes -
g ds 2019 3, 2020
Hangzhou product ee of
Branch s principa
l
Floating
ICBC Bank income
economic January financia without
Self-fun January
developm Bank Tianlibao 5,000 22, l guarant 3.30% 6.12 6.12 Yes -
ds 3, 2020
ent sub 2020 product ee of
branch s principa
l
Guangzho
u
Floating
Developm
Bank income
ent Bank Xinjiaxin
October January financia with
Hangzhou No.16 Raised
Bank 5,500 28, 13, l guarant 3.95% 43.24 43.24 Yes -
Xiaoshan structured funds
2019 2020 product ee of
sub deposit
s principa
branch
l
(Shaoxing
)
ICBC Self-fun Februar Februar Bank Floating
Bank Tianlibao 5,000 3.13% 0.85 0.85 Yes -
economic ds y 24, y 26, financia income
53
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
developm 2020 2020 l without
ent sub product guarant
branch s ee of
principa
l
Floating
Hangzhou
Bank income
Xiaoshan Xinjiaxin
April Februar financia with
sub No.16 Self-fun
Bank 5,000 30, y 24, l guarant 4.10% 158.96 158.96 Yes -
branch of structured ds
2019 2020 product ee of
Guangfa deposit
s principa
bank
l
Floating
ICBC Bank income
economic March March financia without
Self-fun
developm Bank Tianlibao 5,000 26, 27, l guarant 3.13% 0.25 0.25 Yes -
ds
ent sub 2020 2020 product ee of
branch s principa
l
Floating
Hangzhou
Bank income
Xiaoshan Xinjiaxin
April financia with
sub No.16 Self-fun January
Bank 5,500 20, l guarant 3.90% 59.88 59.88 Yes -
branch of structured ds 3, 2020
2020 product ee of
Guangfa deposit
s principa
bank
l
Hangzhou Xinjiaxin January Bank Floating
Raised July 13,
Xiaoshan Bank No.16 5,500 14, financia income 3.95% 107.44 0 0 Yes -
funds 2020
sub structured 2020 l with
54
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
branch of deposit product guarant
Guangfa s ee of
bank principa
(Shaoxing l
)
Floating
Hangzhou
Bank income
Xiaoshan
April April financia with
sub Xinjiaxin Raised
Bank 7,000 29, 27, l guarant 2.69% 270.01 270.01 Yes -
branch of No.16 funds
2019 2020 product ee of
Guangfa
s principa
bank
l
Floating
Hangzhou
Bank income
Xiaoshan
financia with
sub Xinjiaxin Raised July 30, July 29,
Bank 8,000 l guarant 4.05% 324 0 0 Yes -
branch of No.16 funds 2019 2020
product ee of
Guangfa
s principa
bank
l
Floating
Hangzhou
Bank income
Xiaoshan
October October financia with
sub Xinjiaxin Self-fun
Bank 7,500 25, 25, l guarant 3.95% 297.06 0 0 Yes -
branch of No.16 ds
2019 2020 product ee of
Guangfa
s principa
bank
l
Hangzhou April April Bank Floating
Xinjiaxin Raised
Xiaoshan Bank 10,000 29, 27, financia income 4.10% 385.73 385.73 Yes -
No.16 funds
sub 2019 2020 l with
55
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
branch of product guarant
Guangfa s ee of
bank principa
(Shaoxing l
)
Hangzhou
Floating
Xiaoshan
Bank income
sub
financia with
branch of Xinjiaxin Raised July 30, July 29,
Bank 5,500 l guarant 4.05% 222.75 0 0 Yes -
Guangfa No.16 funds 2019 2020
product ee of
bank
s principa
(Shaoxing
l
)
Floating
Hangzhou
Bank income
Xiaoshan
April October financia with
sub Xinjiaxin Self-fun
Bank 5,500 21, 21, l guarant 3.90% 107.25 0 0 Yes -
branch of No.16 ds
2020 2020 product ee of
Guangfa
s principa
bank
l
Floating
Hangzhou
Bank income
Xiaoshan
April financia with
sub Xinjiaxin Raised June 2,
Bank 7,000 27, l guarant 3.55% 23.43 23.43 Yes -
branch of No.16 funds 2020
2020 product ee of
Guangfa
s principa
bank
l
ICBC Tianlibao Self-fun June 9, June 10, Bank Floating
Bank 6,000 3.00% 0.39 0.39 Yes -
economic (without ds 2020 2020 financia income
56
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
developm guarantee l without
ent sub of product guarant
branch principal) s ee of
principa
l
Floating
ICBC Tianlibao Bank income
economic (without financia without
Self-fun June 10, June 24,
developm Bank guarantee 8,000 l guarant 3.00% 8.42 8.42 Yes -
ds 2020 2020
ent sub of product ee of
branch principal) s principa
l
Win win
interest Floating
China
rate Bank income
CITIC
structure January January financia with
Bank Raised
Bank 31784 5,000 15, 31, l guarant 2.60% 5.38 5.38 Yes -
Fengqi funds
RMB 2020 2020 product ee of
sub
structured s principa
branch
deposit l
products
249,50 1,951.8 1,476.5
Total -- -- -- -- -- -- -- -- -- --
0[1]
6 8
57
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Note: [1] During the reporting period, the accumulated financial management amount of the Company is RMB
3,258.7019 million, and the above information are the details of the Company's single significant financial
management (single amount of more than RMB 50 million).
Entrusted financial management is expected to be unable to recover the principal or there are other situations that
may lead to impairment
□ Applicable √ Not applicable
4. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.
XVI. Social Responsibility
1. Significant environmental problems
Whether the Company or the Company’s subsidiaries are critical pollutant enterprises disclosed by National
Environmental Protection Department
Yes
Name of
main
Name of Distribution Emission Approved Over
pollutants Emission Number of Emission Total
Company or of emission concentratio total standard
and mode outlets standards emissions
subsidiary outlets n emission emission
characteristi
c pollutants
The
limitation of
COD in
Zhejiang
GB8978-19
Sanhua Not
96 61.867 T
Intelligent COD Nanotube 1 North ≦500mg/L 17.463 T exceeding
Integrated /year
Controls the standard
Wastewater
Co., Ltd
Emission
Standard is
500mg / L
The
Zhejiang limitation
Sanhua listed in Not
Ammonia 6.186 T
Intelligent Nanotube 1 North ≦35mg/L DB33/887-2 1.746 T exceeding
Nitrogen /year
Controls 013 Indirect the standard
Co., Ltd Emission
Limits of
58
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Nitrogen
and
Phosphorus
Pollutants
from
Industrial
Wastewater
is 35mg / L
The
limitation
listed in
Zhejiang GB13271-2
Sanhua 014 Not
Direct
Intelligent SO2 1 North ≦50mg/m3 Emission 0.37 T 2.15 T /year exceeding
emission
Controls Standard of the standard
Co., Ltd Air
Pollutants
for Boilers
is 50mg/m3
According
to the low
Nitrogen
emission
Zhejiang
requirement
Sanhua Not
Nitrogen Direct s of local 10.06 T
Intelligent 1 North ≦50mg/m3 1.729 T exceeding
Oxide emission government /year
Controls the standard
, the limit
Co., Ltd
value of
gas-fired
boiler is
50mg / m3
Zhejiang
The
Sanhua
limitation
Climate & Not
from 9.205 T
Appliance COD Nanotube 1 South ≦500mg/l 3.206 T exceeding
GB8979-19 /year
Controls the standard
96 is 500mg
Group Co.,
/L
Ltd.
Zhejiang The
Sanhua limitation Not
Total
Climate & Nanotube 1 South ≦2.0mg/l from 0.051 T / exceeding
Copper
Appliance GB8979-19 the standard
Controls 96 is
59
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Group Co., 2.0mg/l
Ltd.
Construction and operation of pollution control facilities
Adhering to the advanced management concept, the Company takes "developing energy-saving and low-carbon
economy, creating a green quality environment" as its own responsibility, constantly surpasses, and becomes an
important creator and contributor of human green quality living environment with limited resources and unlimited
wisdom.
1. In terms of waste water treatment, the Company responded to the construction of "five water treatment",
"eliminating inferior V-type water" and "zero direct discharge of sewage" in the whole province. The
Company renovated the rainwater and sewage outlets in the factory area, implemented the separation of
rainwater and sewage, and installed cut-off valves and video monitoring equipment at the Company's
rainwater discharge outlets, and collected and treated the early rainwater. There are two wastewater treatment
stations in the factory. The sewage treatment stations have been equipped with standardized sewage outlets
and set up discharge outlet signs. Online monitoring device, solenoid valve flowmeter and card swiping
sewage system are installed at the discharge outlet, which has been connected with the environmental
protection department. The monitoring indicators include pH, COD, total copper, total zinc and flow.
Wastewater treatment: The Company has entrusted a third-party professional treatment unit for treatment. The
discharge indicators of the Company's internal control wastewater are stricter than the environmental
discharge standard. The final treated wastewater is discharged into the sewage collection pipe network of the
industrial zone and sent to Shengxin sewage treatment plant for retreatment.
2. Waste gas treatment: The Company has acid pickling, electroplating waste gas, welding dust, ultrasonic
cleaning and other waste gas. All kinds of waste gas discharge cylinders are equipped with corresponding
waste gas treatment devices. The acid pickling and electroplating waste gas absorption and treatment tower is
installed with automatic dosing system, and the waste gas is discharged to air after treatment. At the same
time, in order to win the blue-sky defense activity, the Company carried out low Nitrogen emission
transformation of the Company's gas boilers in accordance with the requirements of relevant official
departments in 2019.
3. Solid waste and soil treatment: all kinds of hazardous waste of the Company are entrusted to the third
qualified party for disposal, the general solid waste with utilization value is recycled, the domestic waste is
cleared and transported by the environmental sanitation station, and the construction waste is cleaned and
transported by the construction unit. In 2019, the Company commissioned a third party to investigate the
current situation of soil and groundwater environment of the production site, and no pollution was found. The
Company also tested the soil and groundwater every year and publicized it on the corresponding website. In
March 2020, Sanhua Refrigeration Group carried out a special site investigation on soil and groundwater in
Xialiquan plant area, and prepared an investigation report. No pollution was found.
4. Noise control: The Company's existing main noise is workshop production noise, air compressor room, waste
gas and waste water treatment equipment noise. Equipment layout is reasonable, and trees are planted around
the workshop. Noise at factory meets the standard.
60
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
5. The "three wastes" pollution control facilities of the Company are in normal and stable operation, the
pollutants are discharged based on the standard, and there is no environmental pollution event.
Environmental Impact Assessment (EIA) of construction projects and other administrative permits for
environmental protection
1. Since 2010, the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang
County, and has obtained 22 EIA replies. All the projects have passed.
2. Zhejiang Sanhua Climate & Appliance Controls Group Co., Ltd. has invested in Xialiquan of Xinchang County
since 2013, and has obtained 6 EIA replies. All the projects have passed.
Emergency Response Plan
1. The Company re-prepared the Emergency Response Plan in November 2017, and filed with Xinchang
Environmental Protection Bureau on January 25, 2018 (Record No. 3306242018001).
2. In order to manage environmental emergencies and reduce the environmental hazards caused by sudden
environmental pollution accidents, Zhejiang Sanhua Climate & Appliance Controls Group Co., Ltd. re-compiled
Emergency Response Plan for Environmental Pollution Accidents of Zhejiang Sanhua Climate & Appliance
Controls Group Co., Ltd. (simplified version) in October 2018, which was filed with Xinchang County
Environmental Protection Bureau on October 29, 2018 (Record No. 3306242018013).
Environmental self-monitoring program
The Company formulated Self-monitoring Scheme of Zhejiang Sanhua Intelligent Control Co., Ltd. according to
the requirements of the superior environmental protection department, combined with the actual production
situation and the actual needs of environmental management of the Company. The sewage station of the Company
is equipped with a laboratory, and the detection is conducted by a specially assigned person. On line automatic
monitoring equipment such as pH, COD, TOC, total copper, total zinc, flow rate etc. are installed at the
Company's total wastewater discharge outlet, so as to achieve the combination of automatic monitoring and
manual testing. For the pollution factors such as suspended matters, total Phosphorus, Ammonia Nitrogen, total
Iron and Petroleum, the Company entrusts a third-party testing agency to carry out regular monitoring. The
monitoring results are published regularly on the enterprise self-monitoring information disclosure platform of
Zhejiang Province.
Zhejiang Sanhua Climate & Appliance Controls Group Co., Ltd. has good pollutant emission monitoring and
management ability, and can timely inform the environmental protection administrative department and the public
of the monitoring information. According to the actual production situation and the actual needs of environmental
management, the environmental protection laboratory of wastewater treatment station is set up, and the detection
is carried out by specially assigned person daily. On line automatic monitoring equipment such as pH, COD, TOC,
total copper and flow rate are installed at the total wastewater discharge outlet of the Company. The combination
of automatic monitoring and manual testing effectively ensures the timeliness and effectiveness of monitoring. At
the same time, a third-party testing Company is entrusted to carry out regular monitoring. The monitoring results
are published regularly on the enterprise self-monitoring information disclosure platform of Zhejiang Province.
61
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Other environmental information that should be disclosed
Not applicable
Other environmental information
Not applicable
2. Fulfillment of the social responsibility of targeted poverty alleviation
Not applicable
XVII. Other Significant Events
□ Applicable √ Not applicable
There were no other significant issues that need to be explained during the current reporting period.
XVIII. Significant Events of the Company’s Subsidiaries
□ Applicable √ Not applicable
62
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section VI Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
Before the change Changes in the period (+, -) After the change
Share
New transferred
Bonus
Shares Ratio Shares from Others Sub-total Shares Ratio
share
Issued capital
reserve
1. Shares subject to 346,976,7 107,619,1 11,753,80 119,372,9 466,349,7
12.55% 12.98%
conditional restriction(s) 85 76 0 76 61
346,976,7 107,619,1 11,753,80 119,372,9 466,349,7
3) Other domestic shares 12.55% 12.98%
85 76 0 76 61
Of which: Shares held by 299,892,7 89,967,81 89,967,81 389,860,5
10.84% 10.85%
domestic legal person 03 1 1 14
Shares held by domestic 47,084,08 17,683,86 11,753,80 29,437,66 76,489,24
1.71% 2.13%
natural person 2 5 0 5 7
2. Shares without 2,418,681, 719,055,9 -12,045,00 707,010,9 3,125,692
87.45% 87.02%
restriction 113 04 0 04 ,017
2,418,681, 719,055,9 -12,045,00 707,010,9 3,125,692
1) RMB ordinary shares 87.45% 87.02%
113 04 0 04 ,017
2,765,657, 826,675,0 826,383,8 3,592,041
3. Total 100.00% -291,200 100.00%
898 80 80 ,778
Reason for the changes in share capital
√ Applicable □ Not applicable
1. On March 2, 2020, the Company has completed the repurchase and cancellation of 0.2912 million shares of all
or part of the restricted shares held by 33 incentive objects who do not meet the requirements of the incentive plan
for restricted shares in 2018 (28 resigned, and 5 failed to meet the individual performance assessment
requirements during the first release period).
2. On February 24, 2020, the Company granted 12.045 million shares of restricted shares to 914 incentive objects
under the Company's restricted stock incentive plan in 2020, and the shares came from the Company's repurchase
account. The listing date of the stock is March 20, 2020.
3. On June 3, 2020, the Company implemented the profit distribution plan for the year of 2019: The plan of
63
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
converting capital reserve into share capital takes 2,755,583,602 shares of capital stock as the base, and distribute
3 shares for every 10 shares of all shareholders, with a total of 826,675,080 shares. After the conversion, the total
share capital increased from 2,765,366,698 to 3,592,041,778 shares.
Approval for changes in share capital
√ Applicable □ Not applicable
1. The proposal on repurchase and cancellation of some restricted shares has been deliberated and approved by the
first extraordinary general meeting of shareholders in 2019. The resolution announcement of the general meeting
of shareholders was published in the Securities Times, Shanghai Securities News and CNINFO
(www.cninfo.com.cn) on November 12, 2019.
2. The granting of 12.045 million restricted shares to the incentive objects of the incentive plan for restricted
shares in 2020 has been deliberated and approved at the eighth interim meeting of the sixth board of directors. The
announcement of the resolution was published in the Securities Times, Shanghai Securities News and CNINFO
(www.cninfo.com.cn) on February 25, 2020.
3. The Company's equity distribution plan for 2019 has been deliberated and approved by the 2019 annual general
meeting of shareholders held on May 19, 2020. The resolution announcement of the general meeting of
shareholders was published in the Securities Times, Shanghai Securities News and CNINFO (www.cninfo.com.cn)
on May 20, 2020.
Transfer of shares
√ Applicable □ Not applicable
1. On February 24, 2020, the Company granted 12.045 million restricted shares to 914 incentive objects under the
Company's restricted stock incentive plan in 2020, and the shares came from the Company's repurchase account.
2. On June 3, 2020, after the implementation of the profit distribution plan in 2019, the Company's share capital
increased from 2,765,366,698 shares to 3,592,041,778 shares.
Information about the implementation of share repurchase
√Applicable □Not applicable
On June 16, 2020, the Announcement about Halfway Through the Buyback Plan is not yet Implemented was
published in Securities Times, Shanghai Securities News and CNINFO (www.cninfo.com.cn).
The progress on reduction of re-purchase shares by means of centralized bidding
□Applicable √Not applicable
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per
share attributable to common shareholders of the Company, and other financial indexes over the last year
and last period
√Applicable □Not applicable
64
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Please refer to the financial report for details.
Other contents that the Company considers necessary or required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Opening balance Closing balance
Name of Vested in current Increased in Note for
of restricted of restricted Date of unlocking
shareholder period current period restricted shares
shares shares
Non public
offering of shares
Due to the
implementation
of the equity
distribution plan
Zhejiang Sanhua in 2019 on June
September 18
Lvneng Industrial 299,892,703 89,967,811 389,860,514 3, 2020, the
2020
Group Co., Ltd capital reserve
was converted to
share capital, and
89,967,811 shares
of restricted
shares were
added.
Executive locked
shares
Due to the
implementation
of the equity
According to the
distribution plan
relevant
in 2019 on June
provisions of
Zhang Yabo 37,518,000 11,255,400 48,773,400 3, 2020, the
executives shares
capital reserve
management
was converted
into share capital,
and the number
of restricted
shares was
increased by
65
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
11,255,400
shares.
Executive locked
shares
Due to the
implementation
of the equity
distribution plan According to the
in 2019 on June relevant
3, 2020, the provisions of
Wang Dayong 6,500 1,950 8,450
capital reserve executives shares
was converted management
into share capital,
and the number
of restricted
shares was
increased by
1,950 shares.
Executive locked
shares
Due to the
implementation
of the equity
distribution plan According to the
in 2019 on June relevant
3, 2020, the provisions of
Ni Xiaoming 6,500 1,950 8,450
capital reserve executives shares
was converted management
into share capital,
and the number
of restricted
shares was
increased by
1,950 shares.
Executive locked
shares
According to the
Due to the
relevant
implementation
provisions of
Chen Yuzhong 6,500 1,950 8,450 of the equity
executives shares
distribution plan
management
in 2019 on June
3, 2020, the
capital reserve
66
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
was converted
into share capital,
and the number
of restricted
shares was
increased by
1,950 shares.
Executive locked
shares
Due to the
implementation
of the equity
distribution plan According to the
in 2019 on June relevant
3, 2020, the provisions of
Hu Kaicheng 6,500 1,950 8,450
capital reserve executives shares
was converted management
into share capital,
and the number
of restricted
shares was
increased by
1,950 shares.
Executive locked
shares
Due to the
implementation
of the equity
distribution plan According to the
in 2019 on June relevant
3, 2020, the provisions of
Yu Yingkui 30,582 9,175 39,757
capital reserve executives shares
was converted management
into share capital,
and the number
of restricted
shares was
increased by
9,175 shares.
Equity incentive For details, please
stock:1. On refer to the
Incentive objects 9,509,500 18,132,790 27,642,290
February 24, Company's draft
2020, 12.045 of restricted stock
67
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
million restricted incentive plan in
shares were 2018 and 2020
granted under the and relevant
restricted stock announcements
incentive plan in
2020. 2.Due to
the
implementation
of the equity
distribution plan
in 2019 on June
3, 2020, the
capital reserve is
converted to
share capital, and
the number of
restricted shares
is increased by
18,132,790.
Total 346,976,785 0 119,372,976 466,349,761 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total Number of Preferred
Shareholders (If Any) (Refer
Total Number of Common
to Note 8) Whose Voting
Shareholders at the End of 56,410 0
Rights Have Been Recovered
the Reporting Period
at the End of the Reporting
Period
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
The Pledged or frozen
Total number of The number
Increase/
Share-holdi shares common of shares
decrease
Name of Nature of ng held at the shares held
during the
shareholder shareholder percentage end of the held with without Status Amount
reporting
(%) reporting trading trading
period
period restriction restrictions
s
68
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Sanhua
Domestic
Holding 1,069,5 172,686,4 1,069,537
non-state-owned 29.78% Pledged 140,270,000
Group Co., 37,580 42 ,580
corporation
Ltd.
Zhejiang
Sanhua
Domestic
Lvneng 742,747 171,403,3 389,860 352,887,4
non-state-owned 20.68%
Industrial ,954 74 ,514 40
corporation
Group Co.,
Ltd
Hong Kong
Central Overseas 239,069 -18,744,5 239,069,5
6.66%
Clearing corporation ,530 65 30
Limited
Domestic 52,031, 48,773,
Zhang Yabo 1.45% 2,007,200 3,257,800
Individual 200 400
Industrial and
Commercial
Bank of
China
Limited-E
fund
emerging 39,181, 39,181,94 39,181,94
Others 1.09%
growth 947 7 7
flexible
allocation
hybrid
securities
investment
fund
China
Construction
Bank
Corporation -
Bank of
Communicati 31,240, 16,904,60 31,240,75
Others 0.87%
ons Schroder 755 9 5
alpha core
hybrid
securities
investment
fund
69
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Industrial and
Commercial
Bank of
China
Limited
30,570, 30,570,32 30,570,32
Huaan media Others 0.85%
328 8 8
Internet
hybrid
securities
investment
fund
National
Domestic
Social 26,883, 26,883,23
state-owned 0.75% 4,595,053
Security 230 0
corporation
Fund-112
National
Domestic
Social 24,651, 24,651,15
state-owned 0.69% 8,586,158
Security 152 2
corporation
Fund-111
CITIC Bank
Co., Ltd. -
Bank of
Communicati
ons
Schroeder
23,734, 23,734,48
new vitality Others 0.66% 8,805,048
481 1
flexible
allocation of
hybrid
securities
investment
funds
Information about Strategic
Investors’ or General Legal
Persons’ Becoming Top Ten
No
Common Shareholders for
Placement of New Shares (If
Any) (Refer to Note 3)
Among the above shareholders, Sanhua Holding Group Co., Ltd., Zhejiang Sanhua Lvneng
Explanation on Associated
Industrial Group Co., Ltd. and Zhang Yabo are the persons acting in concert. The Company
Relationship or Concerted
does not know whether there is any related relationship between other shareholders, or
Actions among the
whether they belong to the persons acting in concert stipulated in the Administrative
Above-Mentioned Shareholders
Measures for the Acquisition of Listed Companies.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Particulars about Shares Held by Top Ten Common Shareholders Holding Shares That Are Not Subject to Trading Restrictions
Number of Common Shares Held without Type of shares
Name of Shareholder
Restrictions at the End of the Reporting Period Type Amount
RMB common
Sanhua Holding Group Co., Ltd. 1,069,537,580 1,069,537,580
stock
Zhejiang Sanhua Lvneng RMB common
352,887,440 352,887,440
Industrial Group Co., Ltd stock
Hong Kong Central Clearing RMB common
239,069,530 239,069,530
Limited stock
Industrial and Commercial Bank
of China Limited-E fund
RMB common
emerging growth flexible 39,181,947 39,181,947
stock
allocation hybrid securities
investment fund
China Construction Bank
Corporation - Bank of
RMB common
Communications Schroder alpha 31,240,755 31,240,755
stock
core hybrid securities investment
fund
Industrial and Commercial Bank
of China Limited Huaan media RMB common
30,570,328 30,570,328
Internet hybrid securities stock
investment fund
National Social Security RMB common
26,883,230 26,883,230
Fund-112 stock
National Social Security RMB common
24,651,152 24,651,152
Fund-111 stock
CITIC Bank Co., Ltd. - Bank of
Communications Schroeder new RMB common
23,734,481 23,734,481
vitality flexible allocation of stock
hybrid securities investment funds
Agricultural Bank of China Ltd.
RMB common
Hua'an intelligent life hybrid 23,251,750 23,251,750
stock
securities investment fund
Explanation of Associated
Relationship or Concerted Among the above shareholders, Sanhua Holding Group Co., Ltd., and Zhejiang Sanhua
Actions among Top Ten Common Lvneng Industrial Group Co., Ltd. are the persons acting in concert. The Company does not
Shareholders without Trading know whether there is any related relationship between other shareholders, or whether they
Restrictions, and among Top Ten belong to the persons acting in concert stipulated in the Administrative Measures for the
Common Shareholders without Acquisition of Listed Companies.
Trading Restrictions and Top Ten
71
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Common Shareholders
Explanation of Top Ten Common
Shareholders’ Participation in
No
Securities Margin Trading (If
Any) (Refer to Note 4)
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any
agreed buy-back in the reporting period?
□ Applicable √ Not applicable
No such cases during the current reporting period.
IV. Changes in Controlling Shareholders and Actual Controllers
Change of the controlling shareholder during the current reporting period
□ Applicable √ Not applicable
No such cases in the reporting period.
Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such cases in the current reporting period.
72
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section VII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.
73
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section VIII Information about Convertible Bonds
□ Applicable √ Not applicable
No existed Convertible bonds for the Company during the current reporting period.
74
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section IX Information about Directors, Supervisors, Senior
Management
I. Shareholding changes of directors, supervisors, senior management
√ Applicable □ Not applicable
Number of
Number of
Shares restricted
Shares Shares Shares restricted
held at the shares held
increased decreased held at the shares Number of restricted
Tenure beginning at the
Name Position during the during the end of the granted shares held at the end
status of the beginning
Period Period Period during the of the period (shares)
Period of the
(shares) (Shares) (Shares) period
(Shares) period
(shares)
(shares)
Zhang Chairman
Incumbent 50,024,000 12,007,200 10,000,000 52,031,200 0 0 0
Yabo 、CEO
Director,
Wang senior
Incumbent 130,000 169,000 299,000 91,000 157,300 248,300
Dayong manageme
nt
Director,
Chen senior
Incumbent 130,000 169,000 299,000 91,000 157,300 248,300
Yuzhong manageme
nt
Ni
Director Incumbent 130,000 169,000 299,000 91,000 157,300 248,300
Xiaoming
Board
Secretary,
Hu
senior Incumbent 130,000 169,000 299,000 91,000 157,300 248,300
Kaicheng
manageme
nt
CFO,
senior
Yu Yingkui Incumbent 154,082 176,225 330,307 91,000 157,300 248,300
manageme
nt
Total -- -- 50,698,082 12,859,425 10,000,000 53,557,507 455,000 786,500 1,241,500
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
II. Changes of Directors, Supervisors and Senior Management
√Applicable □Not applicable
Name Position Type Date Reasons
Leave the
Independent position when
Shen Yuping June 7 2020 Leave the position when six-year term of office expires
Director term of office
expires
Leave the
Independent position when
Zhang Yaping June 7 2020 Leave the position when six-year term of office expires
Director term of office
expires
Independent The number of independent directors is less than one
Shi Jianhui Appointment June 8 2020
Director third of the board members
Independent director with financial major. The number of
Independent
Zhu Hongjun Appointment June 8 2020 independent directors is less than one third of the board
Director
members
76
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Semi-Annual Report
Section X Corporate Bonds
Whether the Company has publicly issued corporate bonds on Stock Exchange, which has not terminated or
terminated but fail to collect the full payment before the half year report authorized disclosure date.
□Yes √No
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Section XI Financial Report
I. Auditor Report
Whether audit has been performed on this interim financial report
□ Yes √ No
The Company’s 2020 Half Year Report has not been audited
II. Financial Statements
Units of financial reports in the notes: RMB
1. Consolidated Balance Sheet
Prepared by: Zhejiang Sanhua Intelligent Controls Co., Ltd.
Unit: RMB
Items June 30, 2020 December 31, 2019
Current Assets:
Cash and Bank Balances 3,412,040,819.22 2,663,719,770.15
Settlement funds
Loans to other banks
Held-for-trading financial assets 1,221,535,291.01 993,634,433.31
Derivative financial assets 23,708,126.32 8,314,400.73
Notes receivable 1,652,911,349.99 2,097,159,908.40
Accounts receivable 2,130,607,685.90 1,871,323,522.82
Receivable financing
Advances paid 91,178,630.33 62,871,924.30
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 66,256,474.54 97,394,782.97
Including: Interest receivable
Dividends receivable
Financial assets under reverse repo
Inventories 1,902,896,386.17 2,180,838,596.07
Contract assets
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Assets classified as held for sale
Non-current assets due within one year
Other current assets 81,420,752.84 75,933,253.28
Total current assets 10,582,555,516.32 10,051,190,592.03
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 2,306,862.76 2,145,963.27
Long-term equity investments 14,348,933.44 14,522,259.80
Other equity instrument investments
Other non-current financial assets
Investment property 26,263,000.26 27,025,974.05
Fixed assets 3,625,967,658.09 3,379,608,199.26
Construction in progress 492,864,704.94 480,959,262.46
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 521,013,723.37 525,867,518.75
Development expenditures
Goodwill 31,959,091.60 31,959,091.60
Long-term prepayments 4,818,348.86 8,720,120.64
Deferred tax assets 84,285,107.91 88,952,931.69
Other non-current assets 154,342,209.19 179,238,257.09
Total non-current assets 4,958,169,640.42 4,738,999,578.61
Total assets 15,540,725,156.74 14,790,190,170.64
Current liabilities:
Short-term borrowings 1,267,378,241.24 1,295,610,572.07
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities 8,449,613.09 126,364.40
Notes payable 973,763,888.02 1,130,668,415.32
Accounts payable 1,565,086,777.42 1,587,763,752.62
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Advances received 31,296,264.17 23,453,218.32
Contract liabilities
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 162,360,168.58 228,997,483.82
Taxes and rates payable 56,961,785.44 58,192,607.75
Other payables 292,885,146.18 161,237,214.88
Including: Interest Payable
Dividends Payable 1,310,000.00 1,772,750.00
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 222,228,097.22
Other current liabilities
Total current liabilities 4,358,181,884.14 4,708,277,726.40
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1,259,113,765.14 392,882,280.09
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 92,435,999.26 94,235,857.77
Long-term employee benefits payable
Provisions
Deferred income 79,093,357.32 82,537,550.43
Deferred tax liabilities 69,319,249.50 65,049,361.71
Other non-current liabilities 82,435,946.79 81,788,928.52
Total non-current liabilities 1,582,398,318.01 716,493,978.52
Total liabilities 5,940,580,202.15 5,424,771,704.92
Equity:
Share capital 3,592,041,778.00 2,765,657,898.00
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 243,740,344.02 1,090,800,022.06
Less: Treasury shares 309,452,726.34 363,781,151.34
Other comprehensive income -65,788,870.48 -39,332,748.50
Special reserve
Surplus reserve 559,896,619.39 559,896,619.39
General risk reserve
Undistributed profit 5,508,536,465.89 5,278,392,288.84
Total equity attributable to the parent Company 9,528,973,610.48 9,291,632,928.45
Non-controlling interest 71,171,344.11 73,785,537.27
Total equity 9,600,144,954.59 9,365,418,465.72
Total liabilities & equity 15,540,725,156.74 14,790,190,170.64
Legal representative: Zhang Yabo Person in charge of accounting: Yu Yingkui Person in charge of the
accounting institution: Sheng Xiaofeng
2. Balance Sheet of the Parent Company
Unit: RMB
Items June 30, 2020 December 31, 2019
Current assets:
Cash and bank balances 1,450,068,513.99 1,039,915,005.31
Held-for-trading financial assets 653,228,000.00 195,000,000.00
Derivative financial assets 11,362,725.00 2,069,850.00
Notes receivable 374,959,009.23 161,946,880.21
Accounts receivable 933,630,950.88 1,135,299,895.98
Receivables financing
Advances paid 15,111,207.68 6,076,163.25
Other receivables 564,793,977.69 603,257,516.95
Including: Interest Receivable 1,789,540.22
Dividends Receivable 14,438,323.76
Inventories 344,463,393.93 519,241,847.99
Contract assets
Assets classified as held for sale
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Non-current assets due within one year
Other current assets 27,796,271.79 21,333,811.35
Total current assets 4,375,414,050.19 3,684,140,971.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4,402,111,834.98 4,256,633,941.06
Other equity instrument investments
Other non-current financial assets
Investment property
Fixed assets 1,497,464,939.91 1,460,855,506.39
Construction in progress 65,263,049.57 44,135,844.65
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 186,236,958.19 189,181,593.94
Development expenditures
Goodwill
Long-term prepayments 312,659.05 625,318.03
Deferred tax assets 8,164,241.86 17,068,063.08
Other non-current assets 67,980,073.91 109,659,279.90
Total non-current assets 6,227,533,757.47 6,078,159,547.05
Total assets 10,602,947,807.66 9,762,300,518.09
Current liabilities:
Short-term borrowings 771,283,865.78 730,799,542.65
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 58,894,261.28
Accounts payable 1,414,719,890.68 1,431,862,681.89
Advances received 216,579.50 92,676.29
Contract liabilities
Employee benefits payable 60,750,804.91 65,680,254.82
Taxes and rates payable 7,918,874.44 1,576,623.72
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Other payables 1,503,361,654.84 1,252,808,472.44
Including: interest payable
Dividends Payable
Liabilities classified as held for sale
Non-current liabilities due within one year 220,225,194.44
Other current liabilities
Total current liabilities 3,817,145,931.43 3,703,045,446.25
Non-current liabilities:
Long-term borrowings 770,756,434.72
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 27,394,542.02 30,895,817.00
Deferred tax liabilities 32,962,814.80 31,296,603.88
Other non-current liabilities
Total non-current liabilities 831,113,791.54 62,192,420.88
Total liabilities 4,648,259,722.97 3,765,237,867.13
Equity:
Share capital 3,592,041,778.00 2,765,657,898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,158,243,441.49 2,005,303,119.53
Less: treasury shares 309,452,726.34 363,781,151.34
Other comprehensive income
Special reserve
Surplus reserve 431,209,447.07 431,209,447.07
Undistributed profit 1,082,646,144.47 1,158,673,337.70
Total equity 5,954,688,084.69 5,997,062,650.96
Total liabilities & equity 10,602,947,807.66 9,762,300,518.09
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
3. Consolidated Income Statement
Unit: RMB
Items 2020 Interim 2019 Interim
I. Total operating revenue 5,318,178,626.77 5,831,107,028.08
Including: Operating revenue 5,318,178,626.77 5,831,107,028.08
Interest income
Premium earned
Revenue from handling charges and
commission
II. Total operating cost 4,658,848,422.13 5,050,671,056.89
Including: Operating cost 3,839,626,004.70 4,179,915,713.98
Interest expenses
Handling charges and commission
expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy
reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 36,309,640.40 41,858,591.20
Selling expenses 257,442,500.54 263,730,876.93
Administrative expenses 315,350,745.15 304,294,733.96
R&D expenses 240,012,928.38 248,506,405.93
Financial expenses -29,893,397.04 12,364,734.89
Including: Interest expenses 32,558,310.10 26,919,773.79
Interest income 19,167,271.27 11,053,538.87
Add: Other income 101,528,141.23 52,433,523.85
Investment income (or less: losses) -8,109,921.96 30,358,255.34
Including: Investment income from
1,826,673.64 508,944.08
associates and joint ventures
Gains from derecognition of financial assets
-114,807.17
at amortized cost
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or
less: losses)
Gains on changes in fair value (or less:
6,520,045.96 8,436,416.96
losses)
Credit impairment loss -12,874,290.80 -19,122,897.76
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Assets impairment loss -6,302,857.17 -22,535,866.59
Gains on asset disposal (or less: losses) -319,355.00 -122,323.66
III. Operating profit (or less: losses) 739,771,966.90 829,883,079.33
Add: Non-operating revenue 1,466,984.81 2,717,783.94
Less: Non-operating expenditures 1,354,079.15 1,257,816.96
IV. Profit before tax (or less: total loss) 739,884,872.56 831,343,046.31
Less: Income tax expense 99,017,348.37 142,881,546.88
V. Net profit (or less: net loss) 640,867,524.19 688,461,499.43
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less:
640,867,524.19 688,461,499.43
net loss)
2. Net profit from discontinued operations (or less:
net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent
643,481,717.35 692,968,498.78
Company (or less: net loss)
2. Net profit attributable to non-controlling
-2,614,193.16 -4,506,999.35
shareholders (or less: net loss)
VI. Other comprehensive income after tax -26,456,121.98 -3,329,949.74
Items attributable to the owners of the parent
-26,456,121.98 -3,329,949.74
Company
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined
benefit plan
2. Items under equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss -26,456,121.98 -3,329,949.74
1. Items under equity method that may be
reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from reclassification of financial
assets into other comprehensive income
4. Provision for credit impairment of other debt
investments
5.Cash flow hedging reserve
6. Translation reserve -26,456,121.98 -3,329,949.74
7. Others
Items attributable to non-controlling shareholders
85
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
VII. Total comprehensive income 614,411,402.21 685,131,549.69
Items attributable to the owners of the parent
617,025,595.37 689,638,549.04
Company
Items attributable to non-controlling shareholders -2,614,193.16 -4,506,999.35
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.18 0.19
(II) Diluted EPS (yuan per share) 0.18 0.19
Legal representative: Zhang Yabo Person in charge of accounting: Yu Yingkui Person in charge of the
accounting institution: Sheng Xiaofeng
4. Income Statement of the Parent Company
Unit: RMB
Items 2020 Interim 2019 Interim
I. Operating revenue 2,117,212,102.62 2,495,838,463.84
Less: Operating cost 1,616,751,481.77 1,965,004,672.15
Taxes and surcharges 14,883,710.72 15,997,771.30
Selling expenses 15,130,538.49 18,249,452.87
Administrative expenses 72,140,520.61 69,118,857.63
R&D expenses 88,292,793.63 96,190,250.84
Financial expenses 8,904,811.12 129,571.18
Including: Interest expenses 34,495,598.61 30,358,919.36
Interest income 10,398,609.20 21,885,553.49
Add: Other income 52,824,654.27 21,442,460.57
Investment income (or less: losses) 10,995,316.73 254,931,773.19
Including: Investment income from
1,922,776.38 867,006.32
associates and joint ventures
Gains from derecognition of financial assets
at amortized cost
Gains on net exposure to hedging (or less:
losses)
Gains on changes in fair value (or less:
12,520,875.00 -1,337,748.00
losses)
Credit impairment loss 1,810,314.30 -882,179.01
Assets impairment loss
Gains on asset disposal (or less: losses) 60,000.75 126,257.34
II. Operating profit (or less: losses) 379,319,407.33 605,428,451.96
Add: Non-operating revenue 472,666.13 98,027.21
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Less: Non-operating expenditures 137,009.04 301,568.34
III. Profit before tax (or less: total loss) 379,655,064.42 605,224,910.83
Less: Income tax expense 42,344,717.35 52,218,796.69
IV. Net profit (or less: net loss) 337,310,347.07 553,006,114.14
(I) Net profit from continuing operations (or less: net
337,310,347.07 553,006,114.14
loss)
(II) Net profit from discontinued operations (or less:
net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined
benefit plan
2. Items under equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
1. Items under equity method that may be
reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Profit or loss from reclassification of financial
assets into other comprehensive income
4. Provision for credit impairment of other debt
investments
5. Cash flow hedging reserve (profit or loss on
cash flow hedging)
6. Translation reserve
7. Others
VI. Total comprehensive income 337,310,347.07 553,006,114.14
5. Consolidated Cash Flow Statement
Unit: RMB
Items 2020 Interim 2019 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of
5,669,226,956.30 5,690,456,680.63
services
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial
institutions
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Cash receipts from original insurance contract
premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and
investment
Cash receipts from interest, handling charges and
commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security transaction
Receipts of tax refund 135,301,637.22 139,825,545.01
Other cash receipts related to operating activities 138,981,847.05 121,184,630.63
Subtotal of cash inflows from operating
5,943,510,440.57 5,951,466,856.27
activities
Cash payments for goods purchased and services
3,476,000,876.09 3,742,133,669.66
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
Net increase of loans to others
Cash payments for interest, handling charges and
commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 783,884,263.51 775,495,900.36
Cash payments for taxes and rates 205,682,821.70 239,712,962.89
Other cash payments related to operating activities 373,291,029.85 363,569,412.43
Subtotal of cash outflows from operating
4,838,858,991.15 5,120,911,945.34
activities
Net cash flows from operating activities 1,104,651,449.42 830,554,910.93
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 23,348,369.16 33,755,279.46
Net cash receipts from the disposal of fixed assets,
2,066,447.61 3,718,696.87
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 277,649,043.00 620,914,127.51
Subtotal of cash inflows from investing activities 303,063,859.77 658,388,103.84
Cash payments for the acquisition of fixed assets,
442,252,824.96 402,675,247.21
intangible assets and other long-term assets
Cash payments for investments
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Net increase of pledged borrowings
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing activities 540,203,379.47 27,864,757.37
Subtotal of cash outflows from investing
982,456,204.43 430,540,004.58
activities
Net cash flows from investing activities -679,392,344.66 227,848,099.26
III. Cash flows from financing activities:
Cash receipts from absorbing investments 118,643,250.00 3,609,000.00
Including: Cash received by subsidiaries from
3,609,000.00
non-controlling shareholders as investments
Cash receipts from borrowings 1,379,378,896.06 652,992,773.64
Other cash receipts related to financing activities 26,080,652.17 58,902,676.13
Subtotal of cash inflows from financing
1,524,102,798.23 715,504,449.77
activities
Cash payments for the repayment of borrowings 758,969,786.13 600,819,921.22
Cash payments for distribution of dividends or
451,059,488.63 559,026,654.00
profits and for interest expenses
Including: Cash paid by subsidiaries to
2,680,000.00 11,299,967.32
non-controlling shareholders as dividend or profit
Other cash payments related to financing activities 3,780,305.89 202,135,525.53
Subtotal of cash outflows from financing
1,213,809,580.65 1,361,982,100.75
activities
Net cash flows from financing activities 310,293,217.58 -646,477,650.98
IV. Effect of foreign exchange rate changes on cash
-25,656,121.98 -3,329,949.74
& cash equivalents
V. Net increase in cash and cash equivalents 709,896,200.36 408,595,409.47
Add: Opening balance of cash and cash equivalents 2,553,783,015.01 1,164,542,861.48
VI. Closing balance of cash and cash equivalents 3,263,679,215.37 1,573,138,270.95
6. Cash Flow Statement of the Parent Company
Unit: RMB
Items 2020 Interim 2019 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of
1,582,936,545.48 1,575,934,290.46
services
Receipts of tax refund 45,688,483.71 45,554,541.66
Other cash receipts related to operating activities 59,466,164.51 36,560,819.24
Subtotal of cash inflows from operating activities 1,688,091,193.70 1,658,049,651.36
Cash payments for goods purchased and services
822,533,884.63 927,035,338.75
received
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Cash paid to and on behalf of employees 193,396,299.54 153,147,803.53
Cash payments for taxes and rates 51,272,174.14 42,816,607.59
Other cash payments related to operating activities 79,419,321.52 64,546,685.86
Subtotal of cash outflows from operating activities 1,146,621,679.83 1,187,546,435.73
Net cash flows from operating activities 541,469,513.87 470,503,215.63
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments 3,000,000.00 5,000,000.00
Cash receipts from investment income 6,834,184.92 252,050,133.00
Net cash receipts from the disposal of fixed assets,
174,800.00 2,191,607.40
intangible assets and other long-term assets
Net cash receipts from the disposal of subsidiaries &
3,609,000.00
other business units
Other cash receipts related to investing activities 175,228,503.46 499,884,082.87
Subtotal of cash inflows from investing activities 185,237,488.38 762,734,823.27
Cash payments for the acquisition of fixed assets,
102,274,729.91 145,172,309.32
intangible assets and other long-term assets
Cash payments for investments 140,874,000.00 9,238,318.85
Net cash payments for the acquisition of subsidiaries
& other business units
Other cash payments related to investing activities 472,363,792.38 309,114,325.61
Subtotal of cash outflows from investing activities 715,512,522.29 463,524,953.78
Net cash flows from investing activities -530,275,033.91 299,209,869.49
III. Cash flows from financing activities:
Cash receipts from absorbing investments 118,643,250.00
Cash receipts from borrowings 1,159,811,000.00 350,000,000.00
Other cash receipts related to financing activities 161,770,652.17 77,272,550.00
Subtotal of cash inflows from financing activities 1,440,224,902.17 427,272,550.00
Cash payments for the repayment of borrowings 570,000,000.00 150,000,000.00
Cash payments for distribution of or profits and for
437,223,073.41 538,405,951.79
interest expenses
Other cash payments related to financing activities 12,254,861.11 202,454,564.36
Subtotal of cash outflows from financing activities 1,019,477,934.52 890,860,516.15
Net cash flows from financing activities 420,746,967.65 -463,587,966.15
IV. Effect of foreign exchange rate changes on cash
and cash equivalents
V. Net increase in cash and cash equivalents 431,941,447.61 306,125,118.97
Add: Opening balance of cash and cash equivalents 974,923,339.25 259,366,745.24
VI. Closing balance of cash and cash equivalents 1,406,864,786.86 565,491,864.21
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
2020 Interim
Equity Attributable to parent Company
Other equity
Items Gener
Less: Speci Non-controll
instruments Other Surplus al Total equity
al Undistributed ing interest
Share Capital Capital reserve treasury comprehensiv risk Others Subtotal
Preferr Perpet reser reserve profit
Othe shares e income reserv
ed ual ve
rs e
shares bonds
I. Balance
at the end 2,765,657,898. 1,090,800,022. 363,781,151.3 -39,332,748.5 559,896,619.3 5,278,392,288. 9,291,632, 73,785,537.2 9,365,418,465.
of prior 00 06 4 0 9 84 928.45 7 72
year
Add:
Cumulat
ive
changes
of
accounti
ng
policies
Error
correctio
n of prior
period
Business
combinat
ion under
common
control
Others
II. Balance
at the 2,765,657,898. 1,090,800,022. 363,781,151.3 -39,332,748.5 559,896,619.3 5,278,392,288. 9,291,632, 73,785,537.2 9,365,418,465.
beginning 00 06 4 0 9 84 928.45 7 72
of current
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
year
III. Current
period -847,059,678.0 -54,328,425.0 -26,456,121.9 237,340,6 -2,614,193.1
increase 826,383,880.00 230,144,177.05 234,726,488.87
(or less: 4 0 8 82.03 6
decrease)
(I) Total
comprehen -26,456,121.9 617,025,5 -2,614,193.1
643,481,717.35 614,411,402.21
sive 8 95.37 6
income
(II) Capital
contributed -54,328,425.0 33,652,62
or -291,200.00 -20,384,598.04 33,652,626.96
withdrawn 0 6.96
by owners
1. Ordinary
shares -49,264,050.0
-49,264,050.00
contributed 0
by owners
2. Capital
contributed
by holders
of other
equity
instrument
s
3. Amount
of
share-base 30,463,13
30,463,131.96 30,463,131.96
d payment 1.96
included in
equity
3,189,495.
4. Others -291,200.00 -1,583,680.00 -5,064,375.00 3,189,495.00
00
(III) Profit -413,337,540.3 -413,337, -413,337,540.3
distribution 0 540.30 0
1.
Appropriat
ion of
surplus
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
reserve
2.
Appropriat
ion of
general
risk reserve
3.
Appropriat -413,337,540.3 -413,337, -413,337,540.3
ion of
profit to 0 540.30 0
owners
4. Others
(IV)
Internal -826,675,080.0
carry-over 826,675,080.00
within 0
equity
1. Transfer
of capital -826,675,080.0
826,675,080.00
reserve to 0
capital
2. Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover
losses
4. Changes
in defined
benefit
plan
carried
over to
retained
earnings
5. Other
comprehen
sive
income
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
carried
over to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriat
ion of
current
period
2.
Applicatio
n of
current
period
(VI) Others
IV.
Balance at 3,592,041,778. 309,452,726.3 -65,788,870.4 559,896,619.3 5,508,536,465. 9,528,973, 71,171,344.1 9,600,144,954.
the end of 243,740,344.02
current 00 4 8 9 89 610.48 1 59
period
Amount of Previous Period
Unit: RMB
2019 Interim
Equity Attributable to parent Company
Other equity Other Non-controll
Items Share ing interest Total equity
Capit
instruments Share Other equity al Share equity Other equity
Capital Capital Capital Share Capital
Share Capital Capit
Preferr Perpetu reserve Capital instruments reser Capital instrume reserve instruments reserve
Othe ve al
ed al
rs nts
shares bonds
I. Balance at 2,130,646,835 1,702,234,409 116,457,618. -39,303,906. 448,843,076. 4,488,881,759 8,614,844,555 85,232,116.4 8,700,076,671
the end of
prior year .00 .35 45 65 37 .86 .48 6 .94
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Add:
Cumulati
ve
changes 120,088.18 8,359,634.19 8,479,722.37 8,479,722.37
of
accountin
g policies
Error
correction
of prior
period
Business
combinati
on under
common
control
Others
II. Balance
at the 2,130,646,835 1,702,234,409 116,457,618. -39,303,906. 448,963,164. 4,497,241,394 8,623,324,277 85,232,116.4 8,708,556,394
beginning of .00 .35 45 65 55 .05 .85 6 .31
current year
III. Current
period 635,011,063.0 -625,636,164. 183,524,664. -3,329,949.7 163,792,612.2 -13,687,103.8 -9,687,586.8 -23,374,690.6
increase (or
less: 0 78 63 4 8 7 2 9
decrease)
(I) Total -3,329,949.7 692,968,498.7 689,638,549.0 -4,506,999.3 685,131,549.6
comprehens
ive income 4 8 4 5 9
(II) Capital
contributed 183,524,664. -173,701,035. -5,180,587.4 -178,881,622.
or 9,823,629.60
withdrawn 63 03 7 50
by owners
1. Ordinary
shares -5,180,587.4
-5,180,587.47
contributed 7
by owners
2. Capital
contributed
by holders
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
of other
equity
instruments
3. Amount
of
share-based
9,823,629.60 9,823,629.60 9,823,629.60
payment
included in
equity
183,524,664. -183,524,664. -183,524,664.
4. Others
63 63 63
(III) Profit -529,175,886. -529,175,886. -529,175,886.
distribution 50 50 50
1.
Appropriati
on of
surplus
reserve
2.
Appropriati
on of
general risk
reserve
3.
Appropriati -529,175,886. -529,175,886. -529,175,886.
on of profit 50 50 50
to owners
4. Others
(IV) Internal
carry-over 635,011,063.0 -635,011,063.
within 0 00
equity
1. Transfer
of capital 635,011,063.0 -635,011,063.
reserve to 0 00
capital
2. Transfer
of surplus
reserve to
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
capital
3. Surplus
reserve to
cover losses
4. Changes
in defined
benefit plan
carried over
to retained
earnings
5. Other
comprehens
ive income
carried over
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriati
on of
current
period
2.
Application
of current
period
(VI) Others -448,731.38 -448,731.38 -448,731.38
IV. Balance
at the end of 2,765,657,898 1,076,598,244 299,982,283. -42,633,856. 448,963,164. 4,661,034,006 8,609,637,173 75,544,529.6 8,685,181,703
current .00 .57 08 39 55 .33 .98 4 .62
period
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
2020 Interim
Items Other equity instruments Other
Less: treasury Special Undistributed
Share Capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others Total equity
Others shares reserve profit
shares bonds income
I. Balance at the
2,765,657,898.00 2,005,303,119.53 363,781,151.34 431,209,447.07 1,158,673,337.70 5,997,062,650.96
end of prior year
Add: Cumulative
changes of
accounting
policies
Error
correction of
prior period
Others
II. Balance at the
beginning of 2,765,657,898.00 2,005,303,119.53 363,781,151.34 431,209,447.07 1,158,673,337.70 5,997,062,650.96
current year
III. Current period
increase (or less: 826,383,880.00 -847,059,678.04 -54,328,425.00 -76,027,193.23 -42,374,566.27
decrease)
(I) Total
comprehensive 337,310,347.07 337,310,347.07
income
(II) Capital
contributed or
-291,200.00 -20,384,598.04 -54,328,425.00 33,652,626.96
withdrawn by
owners
1. Ordinary shares
contributed by -49,264,050.00 -49,264,050.00
owners
2. Capital
contributed by
holders of other
equity instruments
3. Amount of
share-based
30,463,131.96 30,463,131.96
payment included
in equity
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
4. Others -291,200.00 -1,583,680.00 -5,064,375.00 3,189,495.00
(III) Profit
-413,337,540.30 -413,337,540.30
distribution
1. Appropriation
of surplus reserve
2. Appropriation
-413,337,540.30 -413,337,540.30
of profit to owners
3. Others
(IV) Internal
carry-over within 826,675,080.00 -826,675,080.00
equity
1.Transfer of
capital reserve to 826,675,080.00 -826,675,080.00
capital
2.Transfer of
surplus reserve to
capital
3.Surplus reserve
to cover losses
4. Changes in
defined benefit
plan carried over
to retained
earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special
reserve
1. Appropriation
of current period
2. Application of
current period
(VI) Others
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
IV. Balance at the
end of current 3,592,041,778.00 1,158,243,441.49 309,452,726.34 431,209,447.07 1,082,646,144.47 5,954,688,084.69
period
Amount of Previous Period
Unit: RMB
2019 Interim
Items Other equity instruments Other
Less: treasury Special Undistributed
Share Capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others Total equity
Others shares reserve profit
shares bonds income
I. Balance at the
2,130,646,835.00 2,621,241,593.01 116,457,618.45 320,155,904.05 688,311,336.98 5,643,898,050.59
end of prior year
Add: Cumulative
changes of 120,088.18 1,080,793.66 1,200,881.84
accounting policies
Error correction
of prior period
Others
II. Balance at the
beginning of 2,130,646,835.00 2,621,241,593.01 116,457,618.45 320,275,992.23 689,392,130.64 5,645,098,932.43
current year
III. Current period
increase (or less: 635,011,063.00 -625,187,433.40 183,524,664.63 23,830,227.64 -149,870,807.39
decrease)
(I) Total
comprehensive 553,006,114.14 553,006,114.14
income
(II) Capital
contributed or
9,823,629.60 183,524,664.63 -173,701,035.03
withdrawn by
owners
1. Ordinary shares
contributed by
owners
2. Capital
contributed by
holders of other
equity instruments
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
3. Amount of
share-based
9,823,629.60 9,823,629.60
payment included
in equity
4. Others 183,524,664.63 -183,524,664.63
(III) Profit
-529,175,886.50 -529,175,886.50
distribution
1. Appropriation of
surplus reserve
2. Appropriation of
-529,175,886.50 -529,175,886.50
profit to owners
3. Others
(IV) Internal
carry-over within 635,011,063.00 -635,011,063.00
equity
1.Transfer of
capital reserve to 635,011,063.00 -635,011,063.00
capital
2.Transfer of
surplus reserve to
capital
3.Surplus reserve
to cover losses
4. Changes in
defined benefit
plan carried over to
retained earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special reserve
1. Appropriation of
current period
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
2. Application of
current period
(VI) Others
IV. Balance at the
end of current 2,765,657,898.00 1,996,054,159.61 299,982,283.08 320,275,992.23 713,222,358.28 5,495,228,125.04
period
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
III. Basic information of the Company
The Company was established by the original Sanhua Fuji Koki Co., Ltd. The Company currently holds a
business license with a unified social credit code of 913300006096907427 registered and issued by Zhejiang
Administration of Industry and Commerce, with headquarter in Shaoxing City, Zhejiang Province.
The Company operates in the machinery manufacturing industry. Business scope includes production and
marketing of Service Valve, Electronic Expansion valve, Drainage Pump, Solenoid Valve, One-way Valve,
Compressor Parts, Pressure Pipeline Components, Electromechanical Hydraulic Control Pump and other
electromechanical hydraulic control components, undertaking services of inspection, test and analysis of
refrigeration accessories, and engaging in import and export business. Main products include control components
and parts of household appliances and automobile A/C.
The financial statements have been approved by the board of directors of the Company and disclosed on
August 11th, 2020.
Zhejiang Sanhua Climate & Appliance Controls Group Co., Ltd and other subsidiaries are included in the
scope of consolidated financial statements in the current period. For further details, please refer to the change of
consolidation scope in the notes to the financial report and the description of equity in other entities.
IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. Going concern
The Company has the capability to continue as a going concern business for at least 12 months as of the end
of current reporting period, without any significant matter affecting its capability of going concern.
V. Significant Accounting Polices and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
1. Statement of compliance with China Accounting Standards for Business Enterprises
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.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
3. 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.
4. Functional currency
The Company’s functional currency is Renminbi (RMB) Yuan.
5. The accounting treatment of business combinations involving enterprises under common control and
business combinations not involving enterprises 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.
6. 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.
7. 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.
8. Conversion of transactions and financial statements denominated in foreign currencies
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
beginning of the month 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
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
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 approximate exchange rate similar to the
systematically and rationally determined spot exchange rate at the transaction date. The difference arising from
foreign currency translation is included in other comprehensive income.
9、Financial instruments
Financial instruments refer to contracts that form one party’s financial assets into other parties’ financial
liabilities or equity instruments.
1. Classification of financial assets and financial liabilities
According to the business model of financial assets management of the Company and the contractual cash flow
characteristics of financial assets, the financial assets are mainly classified at the initial recognition into: (1)
financial assets at amortized cost; (2) financial assets at fair value through profit or loss. Financial liabilities are
mainly classified into the following four categories when initially recognized: (1) financial liabilities at amortized
cost. (2) financial liabilities at fair value through profit or loss;
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial
liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or
financial liability. The financial assets and financial liabilities initially recognized by the Company are measured
at fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses
thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, the
transaction expenses thereof are included into the initially recognized amount. However, at initial recognition, for
accounts receivable that do not contain a significant financing component or contracts in which the financing
components with associated period less than one year are not considered, the Company measures at their
transaction price.
(2) Subsequent measurement of financial assets
The Company measures its financial assets at the amortized costs using effective interest method. Gains or
losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial assets are derecognized, reclassified, through the amortization
process or in order to recognize impairment gains or losses.
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss, except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or
losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and through the amortization process.
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Financial liabilities designated as at fair value through profit or loss. The Company measures such kind of
liabilities at fair value. Other gains or losses on those financial liabilities shall be included into profit or loss,
except for financial liabilities that are part of hedging relationships.
(4) Derecognition of financial assets and financial liabilities
Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE23 – Transfer of Financial Assets”.
Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset.
Where the Company does not transfer or retain substantially all of the risks and rewards related to the
ownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the
Company does not retain its control over the financial asset, it derecognizes the financial asset, and any right or
liability arising from such transfer is recognized independently as an asset or a liability; (2) if the Company retains
its control over the financial asset, according to the extent of its continuing involvement in the transferred
financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset.
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.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at
amortized cost. The Company considers reasonable and evidence-based information about past events, current
conditions, and forecasts of future economic conditions, and uses the risk of default as the weight to calculate the
difference between the contractual cash flow receivable and the expected cash flow Probability-weighted amount
of the present value to confirm expected credit losses. The Company separately measures the expected credit
losses of financial instruments at different stages on the balance sheet date. The first stage ,if the credit risk of a
financial instrument has not increased significantly since the initial recognition, and the loss provision is measured
according to the expected credit loss in the next 12 months. The second stage, if the credit risk of a financial
instrument has increased significantly since its initial recognition but no credit impairment has occurred, and the
loss provision is measured based on the expected credit loss for the entire duration. The third stage, if a financial
instrument has been credit-impaired since its initial recognition, and the loss provision is measured based on the
expected credit loss for the entire duration.
Considering reasonable and supportable forward-looking information, the Company compares the risk of a
default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
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financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low credit risk on the balance sheet date.
Regarding the accounts receivable (including bills receivable and accounts receivable) stipulated in the
"CASBE14 –Revenue", regardless of whether it contains significant financing components (including financing in
contracts not exceeding one year) Component), the Company measures the loss provision based on the expected
credit loss for the entire duration.
For financial instruments in the first and second stages and with lower credit risk, the interest income is
calculated based on the book balance and the effective interest rate without deducting the provision for
impairment. For financial instruments in the third stage, the interest income is calculated based on the amortized
cost and the actual interest rate after the book balance minus the provision for impairment.
If the "credit risk-related information" of a single instrument has been known or is relatively easily available,
the Company assesses expected credit risk and measures expected credit losses on the basis of a single financial
instrument. Such financial instruments usually include accounts receivable from related parties, deposit deposits
receivable from government units or public utility units, and financial instruments with solid evidence that credit
impairment has occurred.
If sufficient evidence of “credit risk-related information” cannot be obtained at a reasonable cost at the level
of individual instruments, the Company assesses expected credit risk and measures expected credit losses based
on a combination of financial instruments. The Company combines financial instruments based on the same or
similar credit risk characteristics, including but not limited to aging combinations.
If the availability of "credit risk-related information" of a single tool changes from being difficult to obtain to
being available, the Company will change from a combination-based assessment measurement to a single
tool-based assessment measurement.
The Company remeasures expected credit losses on each balance sheet date, and the resulting increase in loss
reserves or the amount of reversal is included in the current profits and losses as impairment losses or gains. For
financial assets measured at amortized cost, the loss allowance shall be deducted from the book value of the
financial assets listed in the balance sheet.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a
collective basis
For other receivables that are difficult to be evaluated and measured by a single tool, the Company mainly
combines aging as a credit risk feature, refers to historical credit loss experience, combines current conditions and
forecasts of future economic conditions, and adopts default risk exposure and The expected credit loss rate in the
next 12 months or the entire duration is used to calculate the expected credit loss.
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
Regarding the accounts receivable specified in the "CASBE14 –Revenue", regardless of whether it contains
significant financing components (including financing components in contracts not exceeding one year), refer to
historical credit loss experience and combine current The situation and the forecast of future economic conditions,
through the default risk exposure and the entire duration of the expected credit loss rate, calculate the expected
credit loss. For accounts receivable that are difficult to be evaluated and measured by a single tool, the Company
divides the accounts receivable into several combinations based on credit risk characteristics, and calculates the
expected credit loss on the basis of the combination. The basis for determining the combination and the specific
accrual method are shown below table:
Portfolio Name Basis for determination of Method for measuring expected credit loss
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portfolio
Notes receivable—Bank Accepted by financial
No provision
acceptance bill institutions
Notes receivable— Commercial Not accepted by financial
5%
acceptance bill institutions
Accounts receivable—Ages receivable with provision made on a collective basis based on the
Ages
portfolios comparison table of age and expected credit loss rate
Accounts receivable – comparison table of ages and lifetime expected credit loss rate
Ages Expected credit loss rate
Within 1 year 5%
1-2 years 10%
2-3years 30%
Over 3 years 50%
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.
However, the Company offsets a financial asset and a financial liability and presents the net amount in the balance
sheet when those who meet the corresponding conditions at the same time.
10. Notes Receivable
Reference 9. Financial instruments.
11. Accounts Receivable
Reference 9. Financial instruments.
12. Other receivables
Recognizing methods and accounting methods of the expected credit loss of other receivables
Reference 9. Financial instruments.
13. Inventories
1. Category of inventory
Inventories include materials, work in process in the process of production and finished goods etc.
2.Determination of cost
If priced at actual cost, the weighted average method is adopted. If priced according to the planned cost, the
cost difference shall be carried forward at the same time at the end of the month.
3. Basis for the determination of net realizable value and provision method for decline in value of inventories
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.
4. Inventory system
The perpetual inventory system is adopted.
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5. Revolving materials are amortized with one-off method.
14. Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it
makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of
combination, it regards the share of the carrying amount of the equity of the combined party included the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the
acquisition-date fair value of considerations paid.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of
a long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid.
3. Subsequent measurement and recognition method of gain or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for
long-term equity investments with joint control or significant influence relationship, it is accounted for with equity
method.
15. Investment property
Investment property measurement model
Measurement by cost method
Depreciation or amortization method
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.
16.Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets
are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to
the Company and the cost of the assets can be measured reliably.
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2. Depreciation method of different categories of fixed assets
Categories Estimated residual value Annual depreciation rate
Depreciation method Useful life (years)
proportion (%) (%)
Buildings and structures Straight-line method 20-30 0%、5%、10% 3%～5%
Machinery and
Straight-line method 5-12 0%、5%、10% 7.50%～20%
equipment
Measurement analysis
Straight-line method 5-10 5% 9.50%～19%
equipment
Vehicle Straight-line method 5-8 0%、5%、10% 11.25%～20%
Office equipment and
Straight-line method 5-8 0%、5%、10% 11.25%～20%
others
17. 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.
18. Borrowing costs
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.
19. Intangible assets
(1). Valuation method, service life, impairment test
Intangible asset includes land use right, patent right and non-patented technology etc. The initial
measurement of intangible asset is based its cost.
For intangible assets with finite useful lives, its amortization amount is amortized within its useful life
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:
Categories Amortization method Amortization period (years)
Land use right Straight-line method Contractual service life
AWECO intellectual property and business resources Straight-line method 4-7
RANCO intellectual property and business resources Straight-line method 5-8
Intellectual Property of Air Conditioning Controller Straight-line method 5-10
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Patented technology of electronic expansion valve controller of Straight-line method 10
Dotech
Software Straight-line method 1-4
Intangible assets with indefinite useful life are not amortized, but their useful life is reviewed annually. The
indefinite land ownership held by overseas subsidiaries abroad is not amortized due to uncertain service life.
(2). Accounting policy for internal R&D expenditure
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
meet the corresponding conditions.
20. Impairment of long-term assets
Long-term assets, such as long-term equity investment, investment properties, fixed assets, construction in
progress, intangible assets that measured at cost are tested for impairment if there is any indication that an asset
may be impaired at the balance sheet date. Impairment test to goodwill and the intangible assets whose using life
is not certain shall be carried out at least at the end of each year. Goodwill shall be tested for impairment in
combination with its related asset group or combination of asset groups.
If the recoverable amount of the aforementioned long-term assets is lower than its book value, the asset
impairment provision shall be recognized according to the difference and included in the current profit and loss.
21. Long-term prepayments
The long-term deferred expenses have been accounted for and the amortization period is more than 1 year
(excluding 1 year). Long-term prepayments 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.
22. Employee benefits
(1). 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.
(2). Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined
benefit plans. 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.
(3). 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
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the payment of termination benefits.
23. Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as
providing guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the
outflow of the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the
present obligations, and its carrying amount is reviewed at the balance sheet date.
24. Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements, modifications and cancellations of share-based payment terms and
conditions
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees, if the equity instruments granted vest
immediately, the fair value of those equity instruments is measured at grant date and recognized as transaction
cost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest
until the counterparty completes a specified period of service, at the balance sheet date within the vesting period,
the fair value of those equity instruments measured at grant date based on the best estimate of the number of
equity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustment
in capital reserve.
For equity-settled share-based payment transaction with parties other than employees, if the fair value of the
goods or services received can be measured reliably, the fair value is measured at the date the Company obtains
the goods or the counterparty renders service; if the fair value of the goods or services received cannot be
measured reliably, the fair value of the equity instruments granted measured at the date the Company obtains the
goods or the counterparty renders service is referred to, and recognized as transaction cost or expense, with a
corresponding increase in equity.
(2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees, if share appreciation rights vest
immediately, the fair value of the liability incurred as the acquisition of goods or services is measured at grant
date and recognized as transaction cost or expense, with a corresponding increase in liabilities; if share
appreciation rights do not vest until the employees have completed a specified period of service, the liability is
measured, at each balance sheet date until settled, at the fair value of the share appreciation rights measured at
grant date based on the best estimate of the number of share appreciation right expected to vest.
(3) Modifications and cancellations of share-based payment terms and conditions
If the modification increases the fair value of the equity instruments granted, measured immediately before
and after the modification, the Company includes the incremental fair value granted in the measurement of the
amount recognized for services received as consideration for the equity instruments granted; similarly, if the
modification increases the number of equity instruments granted, the Company includes the fair value of the
additional equity instruments granted, measured at the date of the modification, in the measurement of the amount
recognized for services received as consideration for the equity instruments granted; if the Company modifies the
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vesting conditions in a manner that is beneficial to the employee, the Company takes the modified vesting
conditions into account.
If the modification reduces the fair value of the equity instruments granted, measured immediately before and
after the modification, the Company does not take into account that decrease in fair value and continue to measure
the amount recognized for services received as consideration for the equity instruments based on the grant date
fair value of the equity instruments granted; if the modification reduces the number of equity instruments granted
to an employee, that reduction is accounted for as a cancellation of that portion of the grant; if the Company
modifies the vesting conditions in a manner that is not beneficial to the employee, the Company does not take the
modified vesting conditions into account.
If the Company cancels or settles a grant of equity instruments during the vesting period (other than a grant
cancelled by forfeiture when the vesting conditions are not satisfied), the Company accounts for the cancellation
or settlement as an acceleration of vesting, and therefore recognizes immediately the amount that otherwise would
have been recognized for services received over the remainder of the vesting period.
25. Revenue
Accounting policies used in revenue recognition and measurement.
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation
in the contracts, and determine whether the performance obligation should be satisfied over time or at a point in
time.
The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise,
the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes
the benefits provided by the Company’s performance as the Company performs; (2) the customer can control
goods or services as they are created by the Company’s performance; (3) the Company’s performance does not
create goods or services with an alternative uses and the Company has an enforceable right to payment for
performance completed to date.
For each performance obligation satisfied over time, the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation are
expected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress. To determine whether the customer has obtained control of goods, the Company
shall consider the following indicators: (1) the Company has a present right to payment for the goods, i.e., the
customer is presently obliged to pay for the goods; (2) the Company has transferred the legal title of the goods to
the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physical possession of
the goods, i.e., the customer has physically possessed the goods; (4) the Company has transferred significant risks
and rewards of ownership of the goods, i.e., the customer has obtained significant risks and rewards of ownership
of the goods; (5) the customer has accepted the goods; (6) other indicators showing the customer has obtained
control over the goods.
2. Measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of
third parties and those expected to be refunded to the customer.
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(2) If the consideration promised in a contract includes a variable amount, the Company shall estimate the
amount of consideration at expected value or the most likely amount. The Company shall include in the
transaction price the amount of variable consideration only to the extent that it is high probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall
determine the transaction price based on the price that a customer would have paid for if the customer had paid
cash for obtaining control over those goods or services. The difference between the transaction price and the
amount of promised consideration is amortized under effective interest method over contractual period. The
effects of a significant financing component shall not be considered if the Company expects, at the contract
inception, that the period between when the customer obtains control over goods or services and when the
customer pays consideration will be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the
stand-alone selling price at contract inception of the distinct good underlying each performance obligation and
allocate the transaction price to each performance obligation on a relative stand-alone selling price basis.
3. Revenue recognition method
(1) The Company mainly sells control components and parts for household appliances and automobile air
conditioners. Due to continuous batch supply, product sales revenue is confirmed after delivery inspection and
receipt of payment receipts. Export sales revenue is recognized after customs declaration and export and obtaining
the bill of lading.
(2) Recognition of income from the sale of scrap metal after weighing and taking delivery and obtaining
receipts。
Differences in revenue recognition accounting policies caused by different business models of similar businesses
26. Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the
Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary
government grants are measured at the amount received or receivable. Non-monetary government grants are
measured at fair value, and can be measured at nominal amount in the circumstance that fair value can’t be
assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company construct or otherwise
acquire long-term assets under requirements of government. In the circumstances that there is no specific
government requirement, the Company shall determine based on the primary condition to acquire the grants and
government grants related to assets are government grants whose primary condition is to construct or otherwise
acquire long-term assets. They offset carrying amount of relevant assets or recognized as deferred income. If
recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of the
relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold,
transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is transferred
into profit or loss of the year in which the disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For
government grants that contain both parts related to assets and parts related to income, in which those two parts
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are blurred and thus collectively classified as government grants related to income. For government grants related
to income used for compensating the related future cost, expenses or losses of the Company are recognized as
deferred income and are included in profit or loss or offset relevant cost during the period in which the relevant
cost, expenses or losses are recognized; for government grants related to income used for compensating the
related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or directly
offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or offset
relevant cost based on business nature, while those not related to the ordinary course of business shall be included
into non-operating revenue or expenditures.
27. 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.
28. Leases
(1). Accounting of operating lease
When the Company is the lessee, during each period of the lease term, the rent is included in the relevant
asset cost or recognized as the current profit and loss according to the straight-line method, and the initial direct
expenses incurred are directly included in the current profit and loss. Contingent rents are included in the current
profits and losses when they actually occur.
When the Company is the lessor, during each period of the lease term, the rent is recognized as the current
profit and loss according to the straight-line method, and the initial direct expenses incurred are directly included
in the current profit and loss except for the larger amount which is capitalized and included in the profit and loss
in installments. Contingent rents are included in the current profits and losses when they actually occur.
(2). Accounting of finance lease
When the Company is the lessee, on the start date of the lease term, the Company uses the lower of the fair
value of the leased asset on the lease start date and the present value of the minimum lease payment as the entry
value of the leased asset, and the minimum lease payment as the long-term payable For the recorded value of the
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loan, the difference is the unrecognized financing cost, and the initial direct cost incurred is included in the value
of the leased asset. In each period of the lease period, the actual interest rate method is used to calculate and
confirm the current financing costs.
When the Company is the lessor, at the beginning of the lease period, the Company uses the sum of the
minimum lease payment on the lease start date and the initial direct cost as the entry value of the financial lease
receivable, and records the unsecured residual value at the same time; collects the minimum lease payment The
difference between the sum of initial direct costs and the sum of unguaranteed residual value and the sum of its
present value is recognized as unrealized financing income. In each period of the lease period, the actual interest
rate method is used to calculate and confirm the current financing income.
29. Other significant accounting policies and estimates
Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization, management requirements and internal reporting system. An operating
segment is a component of the Company that:
1. engages in business activities from which it may earn revenues and incur expenses;
2. whose financial performance are regularly reviewed by Management to make decisions about resource to
be allocated to the segment and assess its performance; and
3. for which financial information regarding financial position, financial performance and cash flows is
available.
30．Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
The Company has adopted “CASBE 14 - Revenue” revised by Ministry of Finance of PRC (the “revised
lease standard”) since January 1, 2020.
(2) Adjustments to the first implementation of the financial statements at the beginning of the year at the
first implementation of new revenue standards.
√ Applicable □ Not applicable
Whether it is necessary to adjust the balance sheet accounts at the beginning of the year
□ Yes √ No
Explain why there is no need to adjust the balance sheet accounts at the beginning of the year
The Company has adopted “CASBE 14 - Revenue” revised by Ministry of Finance of PRC (the “revised lease
standard”) since January 1, 2020.No impact on the data at the beginning of the year.
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
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The taxable revenue from sales of goods or
VAT 13%
rendering of services
The sum of turnover tax payable and VAT
Urban maintenance and construction tax 5%，7%
exemption
Enterprise income tax Taxable income 15%，25%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Zhejiang Sanhua Intelligent Controls Co., Ltd 15%
Zhejiang Sanhua Climate & Appliance Controls group Co., Ltd 15%
Wuhu Sanhua Auto-control Components Co., Ltd 15%
Zhejiang Sanhua Automotive Components Co., Ltd. 15%
Sanhua(hangzhou) Micro Channel Heat Exchanger Co., Ltd 15%
Hangzhou Leaderway Electronics Co. Ltd 15%
Zhuhai Hengtu Electronics Co., Ltd. 15%
Wuhu Sanhua Refrigeration Fittings Co. Ltd 15%
Sanhua (Jiangxi) Self - control Components Co., Ltd. 15%
Wuhan Sanhua Refrigeration Parts Co., Ltd 15%
Sanhua AWECO Appliance Systems (Wuhu) Co., Ltd. 15%
Domestic taxpayers other than the above-mentioned 25%
2. Preferential tax rate
1．Enterprise income tax
Being categorized as high-tech enterprises, the income tax of the Company and several subsidiaries for 2020
are temporarily calculated at a preferential tax rate of 15%, and the final income tax settlement shall prevail.
2．Value-added tax
Several subsidiaries are welfare enterprises and can enjoy the preferential policy of "VAT refund". The
exceeding portion over the 3% VAT payable of the certified software products enjoy the immediate refund policy.
Export goods enjoy the VAT exemption and refund policy.
Ⅶ. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 572,367.71 417,814.58
Cash in bank 3,263,106,847.66 2,553,365,200.43
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Other cash and bank balances 148,361,603.85 109,936,755.14
Total 3,412,040,819.22 2,663,719,770.15
Including: deposit overseas 346,614,002.37 488,694,193.85
The total amount of the cash
and bank balances that are limited by 148,361,603.85 109,936,755.14
mortgage, pledge or freeze
Other remarks:
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through profit
1,221,535,291.01 993,634,433.31
or loss
Including:
Bank financial products 1,221,535,291.01 993,634,433.31
Including:
Total 1,221,535,291.01 993,634,433.31
Other remarks:
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange contract 229,194.90 3,371,510.40
Futures contract 23,478,931.42 4,942,890.33
Total 23,708,126.32 8,314,400.73
Other remarks:
4. Notes receivable
（1）Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance bill 1,551,375,087.54 1,981,778,291.59
Commercial acceptance bill 101,536,262.45 115,381,616.81
Total 1,652,911,349.99 2,097,159,908.40
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Unit: RMB
Closing balance Opening balance
Provision for bad
Book balance Carryin Book balance Provision for bad debt Carryin
Categories debt
g g
Accrued Amount Proportion Amount Accrued
Amount Proportion Amount amount amount
proportion proportion
Including:
Notes receivable with
1,652,9 2,097,1
provision for bad 1,658,25 5,344,0 2,103,232 6,072,716.
100.00% 0.32% 11,349. 100.00% 0.29% 59,908.
debt made on a 5,363.79 13.80 ,625.08 68
99 40
collective basis
Including:
1,551,3 1,981,7
1,551,37 1,981,778
Bank acceptance bill 93.55% 75,087. 94.23% 78,291.
5,087.54 ,291.59
54 59
Commercial 106,880, 5,344,0 101,536 121,454,3 6,072,716. 115,381
6.45% 5.00% 5.77% 5.00%
acceptance bill 276.25 13.80 ,262.45 33.49 68 ,616.81
1,652,9 2,097,1
1,658,25 5,344,0 2,103,232 6,072,716.
Total 100.00% 0.32% 11,349. 100.00% 0.29% 59,908.
5,363.79 13.80 ,625.08 68
99 40
Provision for bad debt made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Bank acceptance bill 1,551,375,087.54
Commercial acceptance bill 106,880,276.25 5,344,013.80 5.00%
Total 1,658,255,363.79 5,344,013.80 --
Remarks on the determination basis of portfolio:
If the provision for bad debt of notes receivable is in accordance with the general expected credit loss model,
please refer to the disclosure of the bad debt provision for other receivables:
□ Applicable √ Not Applicable
（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of this period
Categories Opening balance Closing balance
Accrual Recovered or Write off Others
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reversed
Commercial
6,072,716.68 728,702.88 5,344,013.80
acceptance bill
Total 6,072,716.68 728,702.88 5,344,013.80
Including significant provision for bad debt recovered or reversed amount:
□ Applicable √ Not Applicable
（3）Notes receivable pledged by the Company at the end of the reporting period
Unit: RMB
Items Closing balance of pledged notes
Bank acceptance bill 1,264,550,094.76
Total 1,264,550,094.76
（4）Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance bill 32,009,582.10
Commercial acceptance bill 29,035,960.88 8,977,580.15
Total 61,045,542.98 8,977,580.15
5. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Provision for bad Book balance Provision for bad debt
Book balance Carryin
Categories debt Carrying
g
Amount Proportion Amount Accrued Amount Proportion Amount Accrued amount
amount
proportion proportion
Receivables with
473,410. 473,410 447,139.6 447,139.
provision made on an 0.02% 100.00% 0.02% 100.00% 0.00
84 .84 7 67
individual basis
Including:
Receivables with 2,130,6
2,243,48 112,875 1,970,386 99,063,4 1,871,323
provision made on a 99.98% 5.03% 07,685. 99.98% 5.03%
3,549.68 ,863.78 ,982.39 59.57 ,522.82
collective basis 90
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Including:
2,130,6
2,243,95 113,349 1,970,834 99,510,5 1,871,323
Total 100.00% 5.05% 07,685. 100.00% 5.05%
6,960.52 ,274.62 ,122.06 99.24 ,522.82
90
Provision made on an individual basis:
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion Accrued reason
Guangzhou Taiyi
Automobile Air
473,410.84 473,410.84 100.00%
Conditioning Electronic
Equipment Co., Ltd., etc.
Total 473,410.84 473,410.84 -- --
Provision made on a collective basis: provision made on a collective basis based on the aging of the accounts
receivable
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Within 1 year 2,234,190,927.71 111,709,546.37 5.00%
1 to 2 years 8,639,632.26 863,963.23 10.00%
2 to 3 years 120,703.35 36,211.00 30.00%
Over 3 years 532,286.36 266,143.18 50.00%
Total 2,243,483,549.68 112,875,863.78 --
Remarks on the determination basis of portfolio:
If the provision for bad debt of accounts receivable is in accordance with the general expected credit loss model,
please refer to the disclosure of bad debt provision for other receivables:
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 2,234,190,927.71
1 to 2 years 8,639,632.26
2 to 3 years 120,703.35
Over 3 years 1,005,697.20
Total 2,243,956,960.52
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（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Categories Opening balance Closing balance
Accrued Recovered or reversed Write off Others
Receivables with
provision made
447,139.67 26,271.17 473,410.84
on an individual
basis
Receivables with
provision made
99,063,459.57 13,812,949.09 544.88 112,875,863.78
on a collective
basis
Total 99,510,599.24 13,839,220.26 544.88 113,349,274.62
（3）Actual write-off of accounts receivable in current period
Actual write-off of accounts receivable in current period is RMB 544.88.
（4）Top 5 debtors with the largest accounts receivable balances
Unit: RMB
Proportion to the total balance of Provision for bad debt at the end
Debtors Closing balance
accounts receivable of the period
Top 5 debtors with the
763,257,417.91 34.01% 38,205,528.30
largest balances
Total 763,257,417.91 34.01%
6. Advances paid
（1）Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year (including
87,228,820.00 95.67% 59,688,137.51 94.94%
1 year)
1 to 2 years 1,885,267.20 2.07% 1,274,082.94 2.03%
2 to 3 years 1,083,388.18 1.19% 1,799,865.58 2.86%
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Over 3 years 981,154.95 1.07% 109,838.27 0.17%
Total 91,178,630.33 -- 62,871,924.30 --
Remarks on reasons for unsettled significant advances paid with aging over one year:
（2）Top 5 debtors with the largest advances paid balances
Closing balance of the top 5 debtors totaled RMB 24,167,344.71, accounting for 26.51% of the total closing
balance of the advances paid.
Other remarks:
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 66,256,474.54 97,394,782.97
Total 66,256,474.54 97,394,782.97
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Tax refund receivable 20,548,202.00 46,670,909.67
Guarantee deposits 32,751,602.02 30,166,732.62
Others 15,438,204.76 23,292,984.90
Total 68,738,008.78 100,130,627.19
2）Provision of bad debt
Unit: RMB
Phase 1 Phase 2 Phase 3
Next 12month Lifetime expected credit Lifetime expected credit
Provision for bad debt Total
expected credit losses (credit not losses (credit impaired)
losses impaired)
Balance on January 1,
1,439,293.11 1,296,551.11 2,735,844.22
2020
Balance in current period
—— —— —— ——
on January 1, 2020
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Provision made in
121,411.51 121,411.51
current period
Provision recovered in
375,721.49 375,721.49
current period
Balance on June 30, 2020 1,063,571.62 1,417,962.62 2,481,534.24
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclose by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 1,063,571.62
1 to 2 years 375,109.33
2 to 3 years 238,282.05
Over 3 years 804,571.24
Total 2,481,534.24
3）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Categories Opening balance Recovered or Closing balance
Accrued Write off Others
reversed
Receivables with provision
2,735,844.22 121,411.51 375,721.49 2,481,534.24
made on a collective basis
Total 2,735,844.22 121,411.51 375,721.49 2,481,534.24
4）Details of the top 5 debtors with largest balances
Unit: RMB
Proportion to the Provision for bad
Nature of
Items Closing balance Ages total balance of other debt at the end of the
receivables
receivables period
Tax refund Within 1
Tax refund 20,548,202.00 29.89%
receivables year(including 1 year)
Finance Bureau of
Performance bond 6,971,285.00 1 to 3 years 10.14%
Xinchang County
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Shaoxing Binhai
Performance bond
New City
for land and project 5,410,000.00 1 to 3 years 7.87%
Management
construction
Committee
Xinchang County
Deposit of
Land Reserve 3,774,000.00 Over 3 years 5.49%
construction projects
Development Center
Finance Bureau of
Deposit of
Yijiang District, 3,751,000.00 1 to 7 years 5.46%
construction projects
Wuhu City
Total -- 40,454,487.00 -- 58.85%
5）Other receivables related to Government grants
Unit: RMB
Estimated receipt time,
Items Government grant Closing balance Ages
amount and basis
Local finance and VAT refund of civil From July to October,
2,521,640.84 Within 1 year
taxation departments welfare enterprises 2020, Tax refund return
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
（1）Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for
Provision for
decline in
decline in
value of
value of
inventories or
Items inventories or
Book balance Carrying amount Book balance provision for Carrying amount
provision for
impairment of
impairment of
contract
contract
performance
performance costs
costs
Raw materials 458,105,736.83 34,167,655.65 423,938,081.18 402,017,918.68 29,042,388.91 372,975,529.77
Work-in-progress 225,619,929.38 4,730,403.55 220,889,525.83 312,143,395.71 4,759,164.75 307,384,230.96
Finished goods 1,309,147,400.86 51,969,501.50 1,257,177,899.36 1,558,291,038.03 58,630,244.52 1,499,660,793.51
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Others 890,879.80 890,879.80 818,041.83 818,041.83
Total 1,993,763,946.87 90,867,560.70 1,902,896,386.17 2,273,270,394.25 92,431,798.18 2,180,838,596.07
（ 2） Provision for decline in value of inventories and Provision for impairment of contract performance
costs
Unit: RMB
Increase in current period Decrease in current period
Items Opening balance Closing balance
Accrued Others Reversal or write off Others
Raw materials 29,042,388.91 5,799,127.62 673,860.88 34,167,655.65
Work-in-progress 4,759,164.75 28,761.20 4,730,403.55
Finished goods 58,630,244.52 1,957,614.90 8,618,357.92 51,969,501.50
Others
Total 92,431,798.18 7,756,742.52 9,320,980.00 90,867,560.70
The determination of the net realizable value of the excess & obsolete inventories of metal materials at the
end of the period is the scrap metal recovery price. The determination of the net realizable value of the excess &
obsolete inventories of electronic components is RMB 0.
9. Other current assets
Unit: RMB
Items Closing balance Opening balance
Deductible input tax 25,187,707.43 41,622,415.21
Prepaid Enterprise income tax 52,657,538.58 33,856,030.95
Others 3,575,506.83 454,807.12
Total 81,420,752.84 75,933,253.28
Other remarks:
10. Long-term receivable
（1）Long-term receivable
Unit: RMB
Closing balance Opening balance
Range of
Items Provision for Carrying Provision for Carrying
Book balance Book balance discount rate
bad debt amount bad debt amount
Employee home
2,306,862.76 2,306,862.76 2,145,963.27 2,145,963.27
loan
Total 2,306,862.76 2,306,862.76 2,145,963.27 2,145,963.27 --
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Impairment of provision for bad debt
Unit: RMB
Phase 1 Phase 2 Phase 3
Next 12month Lifetime expected credit Lifetime expected credit
Provision for bad debt Total
expected credit losses (credit not losses (credit impaired)
losses impaired)
Balance in current period
—— —— —— ——
on January 1, 2020
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
11. Long-term equity investments
Unit: RMB
Increase/decrease in current period
Investm Closing
Cash
ent Adjust balance
Opening dividends Provi Closing
Investm Investm income ment in Change of
balance or profit sion balance
Investees ent ent recogni other s in provision
(Carrying declared for Others (Carrying
increas decreas zed compre other for
amount) to impai amount)
ed ed under hensive equity impairme
distributi rment
equity income nt
on
method
Ⅰ. Joint ventures
Ⅱ.Associates
Guochu
ang
Energy
Internet
Innovat
1,493,7 1,493,2
ion -446.80
18.98 72.18
Center
(Guang
dong)
Co.,
Ltd.
Chongq
ing
8,847,7 1,544,8 1,500,000 8,892,5
Tainuo
28.00 30.62 .00 58.62
Machin
ery Co.,
127
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Ltd.
Nancha
ng
Sanhua
Jinlifen 2,335,2 406,36 500,000.0 2,241,6
g 42.16 4.13 0 06.29
Machin
ery Co.,
Ltd.
Zhongs
han
Sanhua
27,971. -27,971
Tainuo 0.00
57 .57
Machin
ery Co.,
Ltd.
Qingda
o
Sanhua
Jinlifen
0.00 0.00
g
Machin
ery Co.,
Ltd.
Zhongs
han
Xuanyi
Pipe 1,817,5 -96,102 1,721,4
Manufa 99.09 .74 96.35
cturing
Co.,
Ltd.
Subtota 14,522, 1,826,6 2,000,000 14,348,
l 259.80 73.64 .00 933.44
14,522, 1,826,6 2,000,000 14,348,
Total
259.80 73.64 .00 933.44
Other remarks
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12. Investment property
（1）Investment property measured by cost method
√ Applicable □ Not Applicable
Unit: RMB
Buildings and Land use right and
Items Construction in progress Total
structures Overseas land ownership
Ⅰ. Original Carrying
amount
1.Opening balance 36,137,499.11 10,455,622.00 46,593,121.11
2.Increase in current period 282,802.21 64,165.50 346,967.71
（1）Acquisition
（2）Transferred in from
inventory\fixed assets\
construction in progress
（3）Business combination
（4）Converted difference in
Foreign Currency 282,802.21 64,165.50 346,967.71
Statements
3.Decrease in current period
（1）Disposal
（2）Other transfer out
4.Closing balance 36,420,301.32 10,519,787.50 46,940,088.82
Ⅱ. Accumulated
depreciation and
amortization
1.Opening balance 17,507,685.84 2,059,461.22 19,567,147.06
2. Increase in current period 1,033,941.04 76,000.46 1,109,941.50
（1）Accrual or
926,917.56 76,000.46 1,002,918.02
amortization
（2）Converted difference in
Foreign Currency 107,023.48 107,023.48
Statements
3.Decrease in current period
（1）Disposal
（2）Other transfer out
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
4.Closing balance 18,541,626.88 2,135,461.68 20,677,088.56
Ⅲ. Provision for
impairment
1.Opening balance
2. Increase in current period
（1）Accrual
3.Decrease in current period
（1）Disposal
（2）Other transfer out
4.Closing balance
Ⅳ. Carrying amount
1.Closing balance 17,878,674.44 8,384,325.82 26,263,000.26
2.Opening balance 18,629,813.27 8,396,160.78 27,025,974.05
13. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 3,625,967,658.09 3,379,608,199.26
Total 3,625,967,658.09 3,379,608,199.26
（1）Fixed assets
Unit: RMB
Measurement
Buildings and Machinery and Transportation Office and other
Items analysis Total
structures equipment vehicles equipment
equipment
Ⅰ. Original book
value:
1.Opening
2,157,358,358.56 3,050,563,131.59 77,768,081.99 40,349,952.76 224,254,779.28 5,550,294,304.18
balance
2. Increase in
111,153,335.56 278,877,291.33 41,353,626.09 1,581,881.78 9,740,831.02 442,706,965.78
current period
（1）Acquisition 124,325,170.02 41,146,993.83 1,489,848.06 8,732,046.43 175,694,058.34
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
（2）Transferred
in from construction 105,968,706.98 148,477,278.54 206,632.26 254,652,617.78
in progress
（3）Business
combination
（4）Converted
difference in
5,184,628.58 6,074,842.77 92,033.72 1,008,784.59 12,360,289.66
Foreign Currency
Statements
3. Decrease in
17,441,634.83 1,347,431.51 2,109,809.33 3,118,668.47 24,017,544.14
current period
（1）Disposal or
17,441,634.83 1,347,431.51 2,109,809.33 3,118,668.47 24,017,544.14
scrap
4.Closing balance 2,268,511,694.12 3,311,998,788.09 117,774,276.57 39,822,025.21 230,876,941.83 5,968,983,725.82
Ⅱ.Accumulated
depreciation
1.Opening
509,863,544.24 1,443,454,422.50 32,773,108.28 30,515,107.61 150,112,811.87 2,166,718,994.50
balance
2. Increase in
45,052,679.92 131,765,110.76 2,746,767.73 2,108,258.55 10,233,255.85 191,906,072.81
current period
（1）Accrual 44,186,222.63 128,551,265.70 2,746,767.73 2,065,618.96 9,806,448.80 187,356,323.82
(2) Converted
difference in
866,457.29 3,213,845.06 42,639.59 426,807.05 4,549,748.99
Foreign Currency
Statements
3. Decrease in
13,440,835.83 1,209,644.23 2,026,811.77 2,898,818.17 19,576,110.00
current period
（1）Disposal or
13,440,835.83 1,209,644.23 2,026,811.77 2,898,818.17 19,576,110.00
scrap
4.Closing balance 554,916,224.16 1,561,778,697.43 34,310,231.78 30,596,554.39 157,447,249.55 2,339,048,957.31
Ⅲ. Provision for
impairment
1.Opening
3,967,110.42 3,967,110.42
balance
2. Increase in
current period
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
（1）Accrual
3. Decrease in
current period
（1）Disposal or
scrap
4.Closing balance 3,967,110.42 3,967,110.42
Ⅳ. Carrying amount
1.Closing balance 1,713,595,469.96 1,746,252,980.24 83,464,044.79 9,225,470.82 73,429,692.28 3,625,967,658.09
2.Opening
1,647,494,814.32 1,603,141,598.67 44,994,973.71 9,834,845.15 74,141,967.41 3,379,608,199.26
balance
（2）Fixed assets leased through financial leasing
Unit: RMB
Original book Accumulated Provision for
Items Carrying amount
value depreciation impairment
Buildings and structures 154,848,669.67 23,947,897.44 130,900,772.23
（3）Fixed assets with certificate of titles being unsettled
Unit: RMB
Items Carrying amount Reasons for unsettlement
New assets, the certificate of title to be processed uniformly
13# factory in Meizhu North district 85,729,372.11
after the overall completion
Finished goods warehouse in Meizhu New assets, the certificate of title to be processed uniformly
23,998,659.71
North district after the overall completion
New assets, the certificate of title to be processed uniformly
14# factory in Meizhu North district 26,710,037.05
after the overall completion
New assets, the certificate of title to be processed uniformly
Staff dormitory in Meizhu (Phase II) 25,416,491.44
after the overall completion
New assets, the certificate of title to be processed uniformly
15# factory in Meizhu North district 53,734,878.02
after the overall completion
New assets, the certificate of title to be processed uniformly
Class A warehouse 1,968,323.02
after the overall completion
New assets, the certificate of title to be processed uniformly
Auxiliary room 1,629,791.85
after the overall completion
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Subtotal 219,187,553.20
Other remarks
14. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 492,864,704.94 480,959,262.46
Total 492,864,704.94 480,959,262.46
（1）Details of construction in progress
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Book balance Provision for Carrying
Book balance
impairment amount impairment amount
Annual production of 7.3
million sets of new energy
121,470,097.80 121,470,097.80 78,050,708.13 78,050,708.13
vehicle thermal management
system components project
Annual production of 12.7
million sets of automotive air
1,251,699.09 1,251,699.09 50,740,941.36 50,740,941.36
conditioning control
components project
Annual production of 11.5
million sets of new energy 126,534,443.53 126,534,443.53 100,809,231.62 100,809,231.62
auto parts project
Construction of a
micro-channel heat exchanger
92,307.69 92,307.69 92,307.69 92,307.69
production line project in
Mexico
Newly added an annual
production of 800,000 heat
1,014,928.03 1,014,928.03 160,228.03 160,228.03
exchanger technology
transformation projects
Infrastructure project of
12,071,299.73 12,071,299.73 5,043,312.03 5,043,312.03
Meizhu North district
Annual production of 65
million sets of commercial 20,370,108.79 20,370,108.79 13,815,107.62 13,815,107.62
refrigeration and air
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
conditioning intelligent
control components
construction project
Annual production of 103
million residential
33,214,448.15 33,214,448.15 19,942,496.28 19,942,496.28
air-conditioning control
components project
Annual production of 1
million sets of new energy
2,957,132.27 2,957,132.27 2,877,561.33 2,877,561.33
vehicle air-conditioning
thermal sensors project
Annual production of 2
million sets of automotive 504,871.82 504,871.82 2,088,782.95 2,088,782.95
air-conditioning parts project
Vietnam industrial plant
51,029,148.57 51,029,148.57 32,155,560.02 32,155,560.02
project
Others 122,354,219.47 122,354,219.47 175,183,025.40 175,183,025.40
Total 492,864,704.94 492,864,704.94 480,959,262.46 480,959,262.46
（2）Changes of significant construction in progress in current period
Unit: RMB
Includin
Transferr Accumul Capitaliz
Other Accumul g:
ed Completi ated ation rate
Increase amounts ated capitaliz
to fixed on amount for
Opening d in decrease Closing investme ed Fund
Items Budget assets in percenta of interest
balance current d in balance nt to interest source
the ge capitaliz in
period current budget in
current (%) ed current
period (%) current
period interest period
period
Annual
producti
on of 7.3
million
sets of
new 468,600, 78,050,7 82,385,1 38,965,7 121,470, Raised
49.03%
energy 000.00 08.13 60.56 70.89 097.80 funds
vehicle
thermal
manage
ment
system
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
compone
nts
project
Annual
producti
on of
12.7
million
sets of
automoti 215,000, 50,740,9 31,270,2 80,759,5 1,251,69 Raised
80.39%
ve air 000.00 41.36 97.35 39.62 9.09 funds
conditio
ning
control
compone
nts
project
Annual
producti
on of
11.5
million
528,800, 100,809, 134,131, 108,406, 126,534, Raised
sets of 64.37%
000.00 231.62 873.58 661.67 443.53 funds
new
energy
auto
parts
project
Construc
tion of a
micro-ch
annel
heat
exchang 96,075,0 92,307.6 92,307.6
94.20% Other
er 00.00 9 9
producti
on line
project
in
Mexico
Newly
73,560,0 160,228. 854,700. 1,014,92
added an 98.10% Other
00.00 03 00 8.03
annual
135
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
producti
on of
800,000
heat
exchang
er
technolo
gy
transfor
mation
projects
Infrastru
cture
project
482,340, 5,043,31 9,118,89 2,090,90 12,071,2
of 57.63% Other
000.00 2.03 5.95 8.25 99.73
Meizhu
North
district
Annual
producti
on of 65
million
sets of
commerc
ial
refrigerat
ion and
air 1,526,30 13,815,1 6,555,00 20,370,1
1.33% Other
conditio 2,000.00 07.62 1.17 08.79
ning
intellige
nt
control
compone
nts
construct
ion
project
Annual
producti
1,104,05 19,942,4 22,702,6 9,430,68 33,214,4
on of 45.72% Other
0,000.00 96.28 38.70 6.83 48.15
103
million
136
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
residenti
al
air-condi
tioning
control
compone
nts
project
Annual
producti
on of 1
million
sets of
new
44,786,0 2,877,56 179,400. 99,829.0 2,957,13
energy 39.21% Other
00.00 1.33 00 6 2.27
vehicle
air-condi
tioning
thermal
sensors
project
Annual
producti
on of 2
million
sets of
42,830,0 2,088,78 1,583,91 504,871.
automoti 119.98% Other
00.00 2.95 1.13 82
ve
air-condi
tioning
parts
project
Vietnam
USD18,6
industria 32,155,5 21,157,8 2,284,21 51,029,1
40,000.0 40.40% Other
l plant 60.02 02.84 4.29 48.57
0
project
305,776, 308,355, 243,621, 370,510,
Total -- -- --
237.06 770.15 521.74 485.47
137
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
15. Intangible Assets
（1）Details of intangible assets
Unit: RMB
Patented
AWECO RANCO technology
Intellectual
intellectual intellectual of
Overseas property
Land use Patent Non-patent property property electronic
Items land right of air Software Total
right right technology and and expansion
ownership conditione
business business valve
r controller
resources resources controller
of Dotech
Ⅰ.
Original
Carrying
amount
553,075,84 29,413,801 103,486,78 1,758,479. 42,150,175 6,634,364. 27,892,661 764,412,12
1.Opening
9.31 .81 9.02 45 .56 80 .59 1.54
balance
2.Increase
1,784,737. 3,876,142. 6,543,897.
d in 376,887.43 475,709.06 30,420.30
64 70 13
current
period
（1）
3,635,042. 3,635,042.
Acquisitio
77 77
n
（2）
Internal
research
and
developme
nt
（3）
Business
combinatio
n
（4）
Converted 1,784,737. 2,908,854.
376,887.43 475,709.06 30,420.30 241,099.93
difference 64 36
in Foreign
138
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Currency
Statements
3.Decrease
d in 341,251.27 341,251.27
current
period
（1）
341,251.27 341,251.27
Disposal
553,452,73 29,889,510 105,271,52 1,788,899. 42,150,175 6,634,364. 31,427,553 770,614,76
4.Closing
6.74 .87 6.66 75 .56 80 .02 7.40
balance
Ⅱ.
Accumulat
ed
amortizati
on
86,030,559 103,485,85 21,257,295 22,519,438 234,414,99
1.Opening 205,745.37 363,239.45 552,863.70
.93 4.20 .24 .24 6.13
balance
2.Increase
5,528,131. 1,785,672. 1,947,508. 1,664,441. 11,336,543
d in 69,310.41 9,760.30 331,718.22
27 46 80 95 .41
current
period
（1） 5,528,131. 1,947,508. 1,456,578. 9,330,200.
66,263.84 331,718.22
Accrual 27 80 82 95
（2)
Converted
difference 1,785,672. 2,006,342.
3,046.57 9,760.30 207,863.13
in Foreign 46 46
Currency
Statements
3.
Decreased
341,251.27 341,251.27
in current
period
（1）
341,251.27 341,251.27
Disposal
139
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
91,558,691 105,271,52 23,204,804 23,842,628 245,410,28
4.Closing 275,055.78 372,999.75 884,581.92
.20 6.66 .04 .92 8.27
balance
Ⅲ.Provisi
on
for
impairmen
t
4,129,606. 4,129,606.
1.Opening
66 66
balance
2.
Increased
61,149.10 61,149.10
in current
period
（1）
Accrual
（2)
Converted
difference
61,149.10 61,149.10
in Foreign
Currency
Statements
3.
Decreased
in current
period
（1）
Disposal
4,190,755. 4,190,755.
4.Closing
76 76
balance
Ⅳ.
Carrying
amount
461,894,04 25,423,699 1,415,900. 18,945,371 5,749,782. 7,584,924. 521,013,72
1.Closing
5.54 .33 00 .52 88 10 3.37
balance
140
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
467,045,28 25,078,449 1,395,240. 20,892,880 6,081,501. 5,373,223. 525,867,51
2.Opening 934.82
9.38 .78 00 .32 10 35 8.75
balance
At the balance sheet date, intangible assets formed from internal R&D account for 0.00% of total closing balance
of intangible assets.
16. Goodwill
（1）Original Carrying amount of goodwill
Unit: RMB
Investee or events Increased in current period Decreased in current period
resulting in Opening balance Due to business Closing balance
Disposal
goodwill combination
R-Squared
31,959,091.60 31,959,091.60
Puckett Inc.
Total 31,959,091.60 31,959,091.60
17. Long-term prepayments
Unit: RMB
Increased in current
Items Opening balance Amortization Other decreases Closing balance
period
Plant renovation
7,223,760.94 111,964.96 3,423,783.44 3,911,942.46
expenditure
Compensated use fee
968,938.03 484,468.98 484,469.05
for emission rights
Tools 527,421.67 105,484.32 421,937.35
Total 8,720,120.64 111,964.96 4,013,736.74 4,818,348.86
Other remarks
18. Deferred tax assets / deferred tax liabilities
（1）Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
difference assets difference assets
Provision for bad debt 69,545,031.10 14,408,313.03 71,519,997.24 14,114,166.19
141
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Provision for inventory
68,581,055.63 11,089,479.84 69,518,382.06 11,230,078.81
write-down
Unrealized profit from
163,448,516.71 18,214,164.00 223,604,977.62 25,040,965.45
internal transactions
Deductible losses 44,805,724.24 9,694,985.94 72,228,904.20 13,514,908.45
Deferred income:
79,093,357.32 12,664,031.04 82,537,550.43 12,800,632.56
government grants
Provision for fixed assets
3,898,415.90 584,762.40 3,898,415.90 584,762.39
impairments
Floating loss on
382,124.00 62,148.60 126,364.40 18,954.66
derivatives
Share-based payment 67,151,015.24 10,432,601.50 47,235,572.03 7,487,443.77
Provisional cost estimate 47,564,143.70 7,134,621.56 27,740,129.55 4,161,019.41
Total 544,469,383.84 84,285,107.91 598,410,293.43 88,952,931.69
（2）Deferred tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Items Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Depreciation and
408,599,505.53 64,804,531.68 396,585,435.74 62,347,023.15
amortization expense
Floating gain on
15,889,565.30 2,383,434.80 2,906,246.02 435,936.90
derivatives
Floating gain on financial
12,226,291.01 2,131,283.02 12,526,390.31 2,266,401.66
products
Total 436,715,361.84 69,319,249.50 412,018,072.07 65,049,361.71
（3）Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 51,629,791.56 36,799,162.90
Provision for inventory write-down 22,286,505.07 22,913,416.12
Deductible losses of subsidiaries 27,578,280.52 97,583,268.62
Provision for fixed assets impairments 68,694.52 68,694.52
Provision for intangible 4,190,755.76 4,129,606.66
142
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
assets impairment
Floating loss on derivatives 8,067,489.09
Share-based payment 1,606,100.11 1,840,976.14
Total 115,427,616.63 163,335,124.96
（4）Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB
Maturity years Closing balance Opening balance Remarks
Year 2020 129,751.40 770,856.07
Year 2021 1,257,463.18 14,131,496.37
Year 2022 23,008,626.48
Year 2023 15,620,641.85 24,053,673.84
Year 2024 9,171,321.25 17,510,655.24
Year 2025 614,389.17
Year 2028 10,478,078.42
Year 2029 7,629,882.20
Year 2030 784,713.67
Total 27,578,280.52 97,583,268.62 --
Other remarks:
19. Other non-current assets
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
154,342,209. 154,342,209. 179,238,257. 179,238,257.
Advanced payment for assets purchasing
19 19 09 09
154,342,209. 154,342,209. 179,238,257. 179,238,257.
Total
19 19 09 09
Other remarks:
20. Short-term borrowings
（1）Categories of short-term borrowings
Unit: RMB
143
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Items Closing balance Opening balance
Secured borrowings 770,795,000.00 730,000,000.00
Overseas loan under domestic guarantee 495,427,500.00 562,083,652.90
Accrued interest 1,155,741.24 3,526,919.17
Total 1,267,378,241.24 1,295,610,572.07
21. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Foreign exchange forward contract 8,401,313.09 126,364.40
Futures contract 48,300.00
Total 8,449,613.09 126,364.40
Other remarks:
22. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 973,763,888.02 1,130,668,415.32
Total 973,763,888.02 1,130,668,415.32
At the balance sheet date, balances due but unpaid totaled RMB 0.
23. Accounts payable
（1）Details of accounts payable
Unit: RMB
Items Closing balance Opening balance
Within 1 year(including 1 year) 1,533,770,039.02 1,538,694,359.81
1 to 2 years 21,896,931.86 36,247,361.15
2 to 3 years 4,847,681.00 7,254,952.39
Over 3 years 4,572,125.54 5,567,079.27
Total 1,565,086,777.42 1,587,763,752.62
144
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
24. Advances received
（1）Details of advances received
Unit: RMB
Items Closing balance Opening balance
Advances received from sales of goods 31,296,264.17 23,453,218.32
Total 31,296,264.17 23,453,218.32
25. Employee benefits payable
（1）Details of employee benefits payable
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Ⅰ.Short-term employee
221,838,334.79 700,236,484.92 763,597,486.94 158,477,332.77
benefits
Ⅱ.Post-employment
benefits - defined 3,701,568.23 14,445,109.26 16,128,693.35 2,017,984.14
contribution plan
Ⅲ.Termination benefits 3,457,580.80 1,592,729.13 1,864,851.67
Total 228,997,483.82 714,681,594.18 781,318,909.42 162,360,168.58
（2）Details of Short-term employee benefits
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1. Wage, bonus, allowances and subsidy 203,198,192.24 585,062,334.41 656,434,798.79 131,825,727.86
2. Employee welfare fund 2,134,102.51 25,652,596.89 27,008,804.02 777,895.38
3. Social insurance premium 11,162,051.71 49,376,025.31 40,948,536.92 19,589,540.10
Including: Medicare premium 2,023,459.75 10,098,636.99 10,751,102.22 1,370,994.52
Occupational injuries
211,099.28 616,425.35 671,139.76 156,384.87
premium
Maternity premium 233,674.66 300,264.44 412,512.75 121,426.35
Overseas social security contributions 8,693,818.02 38,360,698.53 29,113,782.19 17,940,734.36
4. Housing provident fund 265,855.34 11,935,507.71 11,871,329.34 330,033.71
5. Trade union fund and employee 104,574.42 2,327,899.34 2,301,195.18 131,278.58
145
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
education fund
Salaries of subcontractor 3,511,341.29 24,981,456.04 25,032,822.69 3,459,974.64
Share-based payment 1,462,217.28 900,665.22 2,362,882.50
Total 221,838,334.79 700,236,484.92 763,597,486.94 158,477,332.77
（3）Details of defined contribution plan
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1. Basic endowment insurance premium 3,584,148.09 13,982,466.15 15,605,518.18 1,961,096.06
2. Unemployment insurance premium 117,420.14 462,643.11 523,175.17 56,888.08
Total 3,701,568.23 14,445,109.26 16,128,693.35 2,017,984.14
Other remarks:
26. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
Enterprise income tax 22,518,002.09 27,169,457.87
VAT 14,994,809.42 12,303,529.64
Individual income tax 4,004,798.97 6,570,153.06
Urban maintenance and construction tax 2,171,687.86 2,004,384.14
Education surcharge 1,136,266.20 1,098,720.52
Local education surcharge 757,510.79 623,676.41
Housing property tax 6,904,279.76 5,263,984.54
Land use tax 3,319,306.44 2,277,425.60
Local foundation for water works 52,046.35 6,051.60
Others 1,103,077.56 875,224.37
Total 56,961,785.44 58,192,607.75
Other remarks:
27. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividend payable 1,310,000.00 1,772,750.00
146
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Other payables 291,575,146.18 159,464,464.88
Total 292,885,146.18 161,237,214.88
（1）Dividend payable
Unit: RMB
Items Closing balance Opening balance
Dividend of restricted shares 1,772,750.00
Dividend payable attributable to
1,310,000.00
non-controlling interest
Total 1,310,000.00 1,772,750.00
Other remarks, including disclosure of reason for unpaid dividend payable with aging over 1 year
（2）Other payables
1）Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 173,032,675.00 57,578,920.00
Freight and miscellaneous charges 34,794,242.70 39,930,705.16
Product warranty fee 3,023,787.70 3,114,096.06
Guarantee deposit 19,318,281.20 18,044,694.61
Rent and property fee 4,621,092.70 2,609,059.40
Compensation for product quality loss 20,502,176.15 1,125,611.68
Collection and payment for talent incentive 2,000,000.00 1,969,150.29
Others 34,282,890.73 35,092,227.68
Total 291,575,146.18 159,464,464.88
28. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Guaranteed loans 222,000,000.00
Accrued interest 228,097.22
Total 222,228,097.22
Other remarks:
147
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
29. Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Secured borrowings 790,582,938.30
Overseas loan under domestic guarantee 467,285,650.00 392,371,834.47
Accrued interest 1,245,176.84 510,445.62
Total 1,259,113,765.14 392,882,280.09
30. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 92,435,999.26 94,235,857.77
Total 92,435,999.26 94,235,857.77
（1）Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Payables for financial leasing 90,811,210.12 92,607,634.64
Stock appreciation rights deposit 1,624,789.14 1,628,223.13
Other remarks:
Payables for financial leasing
Remaining lease term Amount
Within 1 year(including 1 year) 7,623,284.47
1 to 2 years 7,078,477.83
2 to 3 years 10,192,259.83
Over 3 years 74,697,343.36
Subtotal 99,591,365.49
Less: Unrecognized financing charges 8,780,155.37
Subtotal 90,811,210.12
31. Deferred income
Unit: RMB
148
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Increased in current Decreased in current
Items Opening balance Closing balance Reason
period period
Government grants 82,537,550.43 5,184,500.00 8,628,693.11 79,093,357.32
Total 82,537,550.43 5,184,500.00 8,628,693.11 79,093,357.32 --
Projects related to government grants:
Unit: RMB
The amount
Grants offsetting Related
Openi Increase recorded as
included into cost and to
ng d in other Other Closing
Items Non-operating expenses in assets/rel
balanc current income in changes balance
revenue in current ated to
e period current
current period period income
period
Comprehensive investment award
3,343, 3,164,192. Related
for technological transformation of 178,944.00
136.00 00 to assets
industrial enterprises in Wuhu City
Policy grant for Wuhu City's strong
795,00 750,000.0 Related
industrial base and manufacturing 45,000.00
0.00 0 to assets
strong province
Grant for an annual output of 2
2,295, 2,037,443. Related
million sets of high-efficiency 257,973.82
417.72 90 to assets
energy-saving inverter controllers
Special fund grant for multistory
5,215, 5,104,160. Related
factory buildings of small and 110,959.98
120.26 28 to assets
medium-sized enterprises
Four-way reversing valve 733,33 653,333.4 Related
79,999.98
optimization project 3.40 2 to assets
Technical transformation project for
the production line of energy-saving
624,03 560,577.0 Related
residential air-conditioning control 63,461.52
8.60 8 to assets
components with an annual output
of 50 million sets
Industrial transfer projects and 450,69 450,690.7 Related
single equipment investment grant 0.70 0 to assets
Comprehensive award and
compensation for investment in 2,218, 2,009,487. Related
209,178.54
technological transformation of 666.33 79 to assets
industrial enterprises
Industrial transformation and
1,615, 1,514,046. Related
upgrading, technological 101,212.50
259.34 84 to assets
transformation and industrial
149
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
investment
Grant for research and development
project of ultrasonic argon protected 1,000,00 950,000.0 Related
49,999.98
welding self-fusion connection 0.00 2 to assets
technology for liquid storage tank
Grant for technical transformation
3,032, 2,653,000. Related
project of newly increased 800000 379,000.00
000.00 00 to assets
sets of heat exchanger per year
Technical transformation project of
5,008, 4,650,555. Related
annual output of 100000 large heat 357,735.00
290.00 00 to assets
exchangers
Grant for commercial machine
2,030, 1,660,950. Related
micro-channel heat exchanger 369,100.00
050.00 00 to assets
technical transformation project
Grant for air-conditioning
1,000, 500,000.0 Related
component micro-channel heat 500,000.00
000.00 0 to assets
exchanger project
Grant for project of an annual
output of 15 million commercial 4,898, 1,224,499.9 3,673,500. Related
refrigeration and air-conditioning 000.16 8 18 to assets
automatic control components
Intelligent factory technological
4,124, 3,874,999. Related
transformation project based on The 250,000.02
999.93 91 to assets
Internet of Things technology
Grant for innovation ability
3,750, 3,437,500. Related
construction project of National 312,499.98
000.12 14 to assets
Enterprise Technology Center
Grant for construction project of
public test and detection service 1,399, 1,049,999. Related
350,000.04
platform for refrigeration 999.72 68 to assets
components
Grant for the construction project of
automatic control components for 960,00 720,000.0 Related
240,000.00
residential air conditioners with an 0.00 0 to assets
annual output of 10 million
Grant for construction project of
public inspection and testing service 641,66 449,166.8 Related
192,499.98
platform for automobile air 6.83 5 to assets
conditioning parts
Annual production of 3 million 816,75 767,250.0 Related
49,500.00
self-circulating superconducting 0.00 0 to assets
150
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
plates technology project
Grant for construction project of 25
million sets of new energy-saving
476,00 408,000.2 Related
and environmental protection 67,999.98
0.24 6 to assets
variable frequency air conditioning
expansion valve
Grant for pollution source treatment 1,347, 1,257,941. Related
89,450.00
project 391.67 67 to assets
Grant for the annual production of
5,280, 4,184,50 9,080,275. Related
11.5 million sets of new energy auto 384,224.96
000.00 0.00 04 to assets
parts project
Grant for the technical
transformation project with an 2,760, 2,484,000. Related
276,000.00
annual output of 2 million sets of 000.08 08 to assets
air-conditioning parts
Grant for 1 million sets of
air-conditioning thermal sensor 6,407, 5,949,775. Related
457,674.98
technology transformation of new 450.08 10 to assets
energy vehicle
Grant for the industrialization
project of 20 million refrigeration 1,443, 861,055.2 Related
582,217.50
and air conditioning automatic 272.70 0 to assets
control components
Grant for intelligent manufacturing
technology transformation project 2,991, 2,811,220. Related
180,000.00
of 6 million sets of commercial 220.00 00 to assets
refrigeration components per year
Grant for technical transformation
6,628, 6,214,125. Related
project of intelligent manufacturing 414,274.99
400.00 01 to assets
of refrigeration components
Grant for technical transformation
project of 30 million sets of high
7,200, 6,799,999. Related
efficiency energy saving 400,000.01
000.00 99 to assets
refrigeration and air conditioning
control components
Grant for energy-saving project with
an annual output of 35 million sets 3,051, 2,596,111. Related
455,285.37
of L-type four-way reversing valve 396.55 18 to assets
for air conditioners
82,537 5,184,50 8,628,693.1 79,093,35
Subtotal
,550.4 0.00 1 7.32
151
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
3
Other remarks:
32. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction fund 32,512,629.00 32,512,629.00
Long-term employee rights protection
49,923,317.79 49,276,299.52
payment
Total 82,435,946.79 81,788,928.52
Other remarks:
According to local investment promotion policies, the "seven connections and one leveling" project of the
construction land of the Wuhu city is completed by Wuhu high-tech Industrial Development Zone Administration
Committee. As the state-owned assets management unit of Wuhu high-tech Industrial Development Zone, Wuhu
Xinma Investment Co., Ltd. and Wuhu High-tech Construction Development Co., Ltd. entrusted Wuhu Sanhua
Auto-control Components Co., Ltd and Wuhu Sanhua Technology Co., Ltd. to build the "seven connections and
one leveling" project, and allocated RMB 72.03 million as engineering fund. As of June 30, 2020, the
accumulated amount of hedging and written-off of engineering agent construction fund and project expense was
RMB 39.5174 million, and the amount to be written-off at the end of the period was RMB 32.5126 million.
Long-term employee rights protection payment: retirement pensions of Mr. Harald Schrott who is the former
actual controller of the Germany Aweco residential appliances business, and his father Hugo Schrott. Based on
Austrian labor law, one-time welfare compensation for termination of labor contract and one-time welfare
compensation for retirement, disability and death. The amount of such liabilities is estimated and determined by
an independent actuary.
33. Share capital
Unit: RMB
Changed amount of current period（+/-）
Opening Reserve Closing
Issue of new
balance Bonus shares transferred to Others Subtotal balance
shares
shares
2,765,657,898. 3,592,041,778.
Total shares 826,675,080.00 -291,200.00 826,383,880.00
00 00
Other remarks:
1 Approved by the Company’s shareholders meeting, the Company transferred 826,675,080 shares to all
shareholders (excluding repo shareholders) with capital reserve at the ratio of increasing 3 shares for
every 10 shares.
2 Repo and write-down of 291,200 shares of equity incentive restricted shares that have not met unlock
condition.
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34. Capital reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Capital premium（Share
970,924,083.94 877,522,810.00 93,401,273.94
premium）
Other capital reserve 119,875,938.12 30,463,131.96 150,339,070.08
Total 1,090,800,022.06 30,463,131.96 877,522,810.00 243,740,344.02
Other remarks, including changes in the current period:
①In current period, the Company granted 12.045 million restricted shares to incentive objects with the repo
shares in the previous period, the grant price was RMB 9.85 per share, and a total of RMB 118,643,250.00 was
raised. Treasury shares decreased RMB 167,907,300.00, and share premium decreased RMB 49,264,050.00. The
restricted shares have not met the unlock condition, the Company accounted them as treasury shares, and
recognized related liabilities for repo obligation.
②Repo and cancellation of equity incentive restricted shares that have not met the unlock condition, share capital
decreased RMB 291,200.00, treasury shares decreased RMB 1,874,880.00, Share premium decreased RMB
1,583,680.00.
③Due to transfer capital reserve to share capital, Share premium decreased RMB 826,675,080.00 .
④Other capital reserve increased RMB 30,463,131.96 due to the confirmation of share-based payment
remuneration.
35. Treasury shares
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Restricted shares 59,453,800.00 118,643,250.00 5,064,375.00 173,032,675.00
Repo shares 304,327,351.34 167,907,300.00 136,420,051.34
Total 363,781,151.34 118,643,250.00 172,971,675.00 309,452,726.34
Other remarks, including changed amount of the current period and movement reason:
①In current period, the Company granted 12.045 million restricted shares to incentive objects with the repo
shares in the previous period, the grant price was RMB 9.85 per share, and a total of RMB 118,643,250.00 was
raised. Treasury shares decreased RMB 167,907,300.00, and share premium decreased RMB 49,264,050.00. The
restricted shares have not met the unlock condition, the Company accounted them as treasury shares, and
recognized related liabilities for repo obligation.
②Repo and cancellation of equity incentive restricted shares that have not met the unlock condition, share capital
decreased RMB 291,200.00, treasury shares decreased RMB 1,874,880.00, Share premium decreased RMB
1,583,680.00.
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③In May 2020, the Company implemented the 2019 equity distribution with a dividend of RMB 3,189,495.00 for
equity incentive restricted shares, and the treasury shares and repo obligations payable were reduced by the same
amount.
36. Other comprehensive income (OCI)
Unit: RMB
Changed amount of the current period
Less: OCI Less: OCI
Attributabl Attributabl
Current carried carried
e to e to
Opening period forward forward Less: Closing
Items the parent Non-contr
balance cumulativ transferred to transferred income tax balance
Company olling
e before profit or loss to expense
after interest
income tax undistribut
tax after tax
ed profit
Items to be reclassified -39,332,748. -26,456,12 -26,456,12 -65,788,
subsequently to profit or loss 50 1.98 1.98 870.48
-39,332,748. -26,456,12 -26,456,12 -65,788,
Translation reserves
50 1.98 1.98 870.48
Other comprehensive income in -39,332,748. -26,456,12 -26,456,12 -65,788,
total 50 1.98 1.98 870.48
Other remarks, including the effective part of the cash flow hedge profit and losses converted into the initial
recognized amount adjustment of the hedged item
37. Surplus reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Statutory surplus reserve 533,401,562.81 533,401,562.81
Discretionary surplus
8,681,137.20 8,681,137.20
reserve
Reserve fund 17,813,919.38 17,813,919.38
Total 559,896,619.39 559,896,619.39
Remarks on surplus reserve, including movement in current period and the reason for changes:
38. Undistributed profit
Unit: RMB
Items Current period Previous period
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Balance before adjustment at the end of the
5,278,392,288.84 4,488,881,759.86
previous period
Add: Increase due to adjustment (or less:
8,359,634.19
decrease)
Opening balance after adjustment 5,278,392,288.84 4,497,241,394.05
Add: Net profit attributable to shareholders of the
643,481,717.35 692,968,498.78
parent Company for current year
Payable dividends on ordinary shares 413,337,540.30 529,175,886.50
Closing balance 5,508,536,465.89 4,661,034,006.33
39. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 5,154,036,483.16 3,687,894,611.98 5,657,122,904.62 4,013,821,685.14
Other operations 164,142,143.61 151,731,392.72 173,984,123.46 166,094,028.84
Total 5,318,178,626.77 3,839,626,004.70 5,831,107,028.08 4,179,915,713.98
Other remarks
40. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 11,285,362.07 14,559,842.14
Education surcharge 5,862,443.58 7,549,103.76
Housing property tax 7,739,313.64 8,186,257.92
Land use tax 3,936,973.44 3,028,888.30
Stamp duty 1,718,299.51 1,675,871.24
Local education surcharge 3,917,789.39 5,008,401.78
Local foundation for water works 317,066.13 414,168.96
Others 1,532,392.64 1,436,057.10
Total 36,309,640.40 41,858,591.20
Other remarks:
41. Selling expenses
Unit: RMB
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Items Current period cumulative Preceding period comparative
Labor cost 89,959,268.53 79,600,268.77
Warehousing, freight and miscellaneous
107,209,661.24 107,031,581.41
charges
Entertainment expense 11,184,991.26 16,553,036.80
Travel expense 7,216,150.87 13,477,802.75
Market maintenance fee 21,127,233.51 21,270,851.67
Advertising expense 3,565,221.92 3,956,700.74
Others 17,179,973.21 21,840,634.79
Total 257,442,500.54 263,730,876.93
Other remarks:
42. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 180,394,958.75 174,052,375.18
Share-based payment remuneration 31,363,797.18 9,774,107.10
Office expense 37,525,515.30 33,355,750.99
Entertainment expense 4,931,757.55 6,478,275.37
Depreciation and amortization expense 33,079,843.36 33,472,260.81
Intermediary service fee 15,638,721.85 19,300,454.09
Vehicle expense 3,554,310.73 4,306,818.34
Others 8,861,840.43 23,554,692.08
Total 315,350,745.15 304,294,733.96
Other remarks:
43. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 133,441,569.36 127,060,317.33
Material and power expense 70,421,777.52 85,322,408.05
Depreciation and amortization expense 16,095,750.47 13,213,234.08
Mold manufacturing fee 9,274,489.97 11,183,661.11
Travel expense 1,444,769.03 3,375,949.73
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Royalties 1,278,190.44 1,240,756.22
Outsourcing R&D expense 734,967.97 772,130.15
Others 7,321,413.62 6,337,949.26
Total 240,012,928.38 248,506,405.93
Other remarks:
44. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 32,558,310.10 26,919,773.79
Interest income -19,167,271.27 -11,053,538.87
Bank financing fee 1,399,332.23 1,443,399.75
Cash discount -1,126,936.47 -1,178,667.37
Exchange gains or losses -45,679,616.29 -5,962,024.68
Others 2,122,784.66 2,195,792.27
Total -29,893,397.04 12,364,734.89
Other remarks:
45. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government grants 100,414,953.91 52,433,523.85
Including: VAT refund of civil welfare
5,134,826.02 5,799,299.40
enterprises
VAT refund on software
1,689,841.68 952,293.40
products in excess of tax burden
Other government grants 93,590,286.21 45,681,931.05
Handling fees for withholding individual
1,113,187.32
income tax
Total 101,528,141.23 52,433,523.85
46. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term equity 1,826,673.64 508,944.08
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investments under equity method
Investment income of bank financing products 20,408,132.79 23,795,957.11
Gains and losses on settlement of futures
-17,407,734.45 -1,037,334.40
contracts
Gains and losses on settlement of foreign
-12,822,186.77 7,090,688.55
exchange contract
Bill discount interest -114,807.17
Total -8,109,921.96 30,358,255.34
Other remarks:
47. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of bank financing
-300,099.30
products
Floating income of futures contracts 18,412,630.80 493,499.16
Floating income of foreign exchange
-11,592,485.54 7,942,917.80
contract
Total 6,520,045.96 8,436,416.96
Other remarks:
48. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -12,874,290.80 -19,122,897.76
Total -12,874,290.80 -19,122,897.76
Other remarks:
49. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Ⅱ. Inventory write-down loss and contract
-6,302,857.17 -22,535,866.59
performance cost impairment loss
Total -6,302,857.17 -22,535,866.59
Other remarks:
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50. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of fixed assets -319,355.00 -122,323.66
51. Non-operating revenue
Unit: RMB
Amount recorded into the
Items Current period cumulative Preceding period comparative current non-recurring profit and
loss
Gains from retirement of fixed
26,006.68 6,896.55 26,006.68
assets
Compensation and penalty
471,406.19 2,125,490.08 471,406.19
income
Exempted payment 637,810.13 250,063.97 637,810.13
Others 331,761.81 335,333.34 331,761.81
Total 1,466,984.81 2,717,783.94 1,466,984.81
52. Non-operating expenditures
Unit: RMB
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Donation expenditures 52,072.82 44,582.08 52,072.82
Losses on retirement of fixed
1,109,947.20 1,055,756.60 1,109,947.20
assets
Others 192,059.13 157,478.28 192,059.13
Total 1,354,079.15 1,257,816.96 1,354,079.15
Other remarks:
53. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 90,079,636.80 146,707,979.68
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Deferred income tax expenses 8,937,711.57 -3,826,432.80
Total 99,017,348.37 142,881,546.88
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Profit before tax 739,884,872.56
Income tax expense based on statutory/applicable tax rate 115,033,160.69
Effect of prior income tax reconciliation -7,748,107.85
Effect of deducible temporary differences or deductible losses
571,518.93
not recognized
Adjustment of permanent differences -8,839,223.40
Income tax expenses 99,017,348.37
Other remarks
54. Other comprehensive income
Please refer to the notes of balance sheet items and other comprehensive income for details.
55. Notes to items of the consolidated cash flow statement
Note: Based on the individual financial statements, bank finance products, restricted funds, collections and
payments are all listed in terms of net changes.
（1）Other cash receipts related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Government grants 88,442,413.04 37,681,612.93
Net change in restricted funds 22,717,257.39
Interest income 19,167,271.27 10,600,273.83
Rental income 5,168,725.74 5,610,795.32
Guarantee deposit, etc. 26,203,437.00 44,574,691.16
Total 138,981,847.05 121,184,630.63
The remarks of other cash receipts related to operating activities:
（2）Other cash payments related to operating activities
Unit: RMB
160
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Items Current period cumulative Preceding period comparative
Net change in restricted funds 56,390,427.84 494,179.42
Guarantee deposit 901,638.78 6,110,490.15
Expense payments for the period 315,998,963.23 356,964,742.86
Total 373,291,029.85 363,569,412.43
The remarks of other cash payments related to operating activities:
（3）Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Redemption of bank financing products 276,799,043.00 615,000,000.00
Net change in restricted funds 850,000.00 891,000.00
Deposit of land transfer 5,000,000.00
Call loans interest 23,127.51
Total 277,649,043.00 620,914,127.51
The remarks of other cash receipts related to investing activities:
（4）Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Payments for purchasing bank financing
505,000,000.00 13,000,000.00
products
Net change in restricted funds 8,965,073.04 12,864,757.37
Loss on foreign exchange contract
12,129,251.67
settlement
Loss on futures contract settlement 14,109,054.76
Call loans 2,000,000.00
Total 540,203,379.47 27,864,757.37
The remarks of other cash payments related to investing activities:
（5）Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 26,080,652.17 58,902,676.13
Total 26,080,652.17 58,902,676.13
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The remarks of other cash payments related to investing activities:
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Bank financing fee 1,399,332.23 1,443,399.75
Repayment of finance lease and interest 2,380,973.66 5,346,642.30
Expenses for acquiring non-controlling
9,238,318.85
interest in subsidiaries
Repo shares expenses 186,107,164.63
Total 3,780,305.89 202,135,525.53
The remarks of other cash payments related to financing activities:
56. Supplement information to the cash flow statement
（1）Supplement information to the cash flow statement
Unit: RMB
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flow
-- --
from operating activities:
Net profit 640,867,524.19 688,461,499.43
Add: Provision for assets impairment
19,177,147.97 41,658,764.35
loss
Depreciation of fixed assets, oil
188,283,241.38 159,606,292.28
and gas assets, productive biological assets
Amortization of intangible assets 9,406,201.41 10,687,228.25
Amortization of Long-term
4,013,736.74 4,552,556.67
prepayments
Loss on disposal of fixed assets,
intangible assets and other long-term assets 319,355.00 122,323.66
(Less: gains)
Loss on retirement of fixed assets
1,083,940.52 1,048,860.05
(Less: gains)
Losses on changes in fair value
-6,520,045.96 -8,436,416.96
(Less: gains)
Financial expenses (Less: gains) 33,957,642.33 26,709,252.54
Investment income (Less: gains) 8,109,921.96 -30,358,255.34
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Decrease of deferred tax assets
4,667,823.78 -6,184,126.60
(Less: increase)
Increase of deferred tax liabilities
4,269,887.79 677,648.21
(Less: decrease)
Decrease in inventories (Less:
271,639,352.73 199,333,205.56
increase)
Decrease in operating receivables
112,901,508.32 -272,007,374.07
(Less: increase)
Increase of operating payables
-218,889,585.92 4,859,823.30
(Less: decrease)
Others 31,363,797.18 9,823,629.60
Net cash flow from operating
1,104,651,449.42 830,554,910.93
activities
2. Significant investing and financing
activities not related to cash receipts and -- --
payments:
3. Net changes in cash and cash equivalents: -- --
Closing balance of cash 3,263,679,215.37 1,573,138,270.95
Less: Opening balance of cash 2,553,783,015.01 1,164,542,861.48
Net increase of cash and cash
709,896,200.36 408,595,409.47
equivalents
（2）Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
Ⅰ . Cash 3,263,679,215.37 2,553,783,015.01
Including: Cash on hand 572,367.71 417,814.58
Cash in bank that can be readily
3,263,106,847.66 2,553,365,200.43
drawn on demand
Ⅲ.Cash and cash equivalents at end of year 3,263,679,215.37 2,553,783,015.01
Other remarks:
57. Assets with restriction on ownership or use rights
Unit: RMB
Items Carrying amount at the end of the period Cause of restriction
Cash and Bank Balances 148,361,603.85 Guarantee deposit and deposited
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investment fund
Notes receivable 1,264,550,094.76 Pledge financing
Total 1,412,911,698.61 --
Other remarks:
58. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Exchange rate RMB equivalent
Items
currencies
Cash and bank balances
Including: USD 88,601,273.08 7.0795 627,252,712.77
EUR 12,102,158.73 7.9610 96,345,285.65
Other currencies 143,557,821.59
Subtotal 867,155,820.01
Derivative financial assets
Including: USD 1,096,031.70 7.0795 7,759,356.42
EUR 7,436.83 7.9610 59,204.60
Subtotal 7,818,561.02
Accounts receivable
Including: USD 129,685,575.47 7.0795 918,109,031.54
EUR 25,679,783.62 7.9610 204,436,757.40
Other currencies 84,787,541.78
Subtotal 1,207,333,330.72
Other receivables
Including: USD 947,584.77 7.0795 6,708,426.38
EUR 151,029.24 7.9610 1,202,343.78
Other currencies 13,691,631.92
Subtotal 21,602,402.08
Long-term receivable
Including: EUR 182,999.97 7.9610 1,456,862.76
Subtotal 1,456,862.76
Short-term borrowings
Including: USD 35,000,000.00 7.0795 247,782,500.00
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EUR 45,379,501.79 7.9610 361,266,213.75
Subtotal 609,048,713.75
Derivative financial liabilities
Including: USD 508,835.62 7.0795 3,602,301.77
Other currencies 4,168,901.99
Subtotal 7,771,203.76
Accounts payable
Including: USD 8,261,395.33 7.0795 58,486,548.24
EUR 6,168,103.96 7.9610 49,104,275.63
Other currencies 10,883,916.14
Subtotal 118,474,740.01
Other payables
Including: USD 2,961,019.03 7.0795 20,962,534.22
EUR 1,412,922.11 7.9610 11,248,272.92
Other currencies 9,912,810.69
Subtotal 42,123,617.83
Long-term borrowings
Including: USD 52,607,400.00 7.0795 372,434,088.30
EUR 14,500,000.00 7.9610 115,434,500.00
Subtotal 487,868,588.30
Long-term payables
Including: USD 82,565.00 7.0795 584,518.92
EUR 11,521,992.44 7.9610 91,726,581.81
Other currencies 124,898.53
Subtotal 92,435,999.26
Other remarks:
（2）Notes on overseas operating entities, including for the significant overseas operating entities, its main
operating locations, reporting currency and the basis for selection should be disclosed, and the reason for
changes in reporting currency should also be disclosed.
√ Applicable □ Not Applicable
The Company has several overseas subsidiaries, locate in the United States, Europe, Japan, Poland, Mexico
and other countries, where US dollars, Japanese yen, Polish zloty, Mexican pesos, etc. are used as the standard
reporting currency.
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59. Government grants
（1）Details
1) Government grants related to assets
For details, please refer to explanation of deferred income in the notes of the consolidated financial statements.
2) Government grants related to income and used to compensate relevant cost, expenses or losses.
Items Current period Financial Report
cumulative Items
Award of Meizhu industrial park construction project 41,560,300.00 Other income
Subsidy of COVID-19 10,344,959.70 Other income
Refund of social security expenses 7,403,385.72 Other income
Award of industry support fund 7,104,236.00 Other income
Award of enterprise R&D investment 5,736,773.27 Other income
VAT refund of civil welfare enterprises 5,134,826.02 Other income
Subsidy and award of technological innovation and entrepreneurship 4,115,700.00 Other income
Special funds for foreign trade and economic development 2,381,300.00 Other income
VAT refund on software products in excess of tax burden 1,689,841.68 Other income
Talent introduction and job stabilization subsidies 1,514,013.37 Other income
Award of urban land use tax policy 1,307,700.00 Other income
Enterprise operation development reward 1,090,000.00 Other income
Reward of industrial information development 984,100.00 Other income
Others 1,419,125.04 Other income
Subtotal 91,786,260.80
(2). The amount of government grant included in the profit or loss statement in the current period is RMB
100,414,953.91
Ⅷ. Changes in the consolidation scope
1. Changes in consolidation scope due to other reasons
Changes in consolidation scope due to other reasons and related information (such as newly established subsidiary,
liquidation subsidiary, etc.
Net profit from the
Net assets of the
Entity name Disposal method Deregister date beginning date to
deregister date
deregister date
Hangzhou Sanhua Home Appliance Thermal Liquidation
2020/5/18 147,448.25 -80,047.52
Management System Co., Ltd cancellation
Liquidation
Aweco Appliance (Shanghai) Co., Ltd 2020/6/2 6,669.73 22,351.38
cancellation
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Ⅸ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Main Holding proportion
Place of Acquisition
Subsidy name operating Business nature
registration Direct Indirect method
place
Zhejiang Sanhua Trading Co., Ltd Zhejiang Zhejiang Commerce 100.00% Establishment
Business
Zhejiang Sanhua Climate & Appliance combination
Zhejiang Zhejiang Manufacture 74.00% 26.00%
Controls Group Co., Ltd under common
control
Business
Zhejiang Sanhua Automotive combination
Zhejiang Zhejiang Manufacture 100.00%
Components Co., Ltd. under common
control
Business
Sanhua(hangzhou) Micro Channel Heat combination
Zhejiang Zhejiang Manufacture 100.00%
Exchanger Co., Ltd under common
control
Business
combination
Sanhua International Inc. USA USA Commerce 100.00%
under common
control
Business
combination
Sanhua International Singapore Pte. Ltd Singapore Singapore Commerce 100.00%
under common
control
Other remarks:
The above subsidiaries are significant subsidiaries of the Company.
2. Interest in joint venture arrangement or associates
（1）Aggregated financial information of insignificant joint ventures and associates
Unit: RMB
Closing balance/ Current period Opening balance/ Preceding period
cumulative comparative
Joint ventures: -- --
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Proportionate shares in the following items -- --
Associates: -- --
Total Carrying amount of investment 14,348,933.44 14,522,259.80
Proportionate shares in the following items -- --
--Net profit 1,826,673.64 508,944.08
--Total comprehensive income 1,826,673.64 508,944.08
Other remarks
X. Risks Relating to Financial Instruments
The Company has exposure to the following risks from its use of financial instruments, which mainly include:
credit risk, liquidity risk, and market risk. The Company's overall risk management strategy is aimed at the
unpredictability of the financial market and strives to reduce the potential adverse effects on the Company's
financial performance.
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When assessing whether the credit risk has increased significantly since
initial recognition, the Company takes into account reasonable and supportable information, which is available
without undue cost or effort, including qualitative and quantitative analysis based on historical data, external
credit risk rating, and forward-looking information. The Company determines the changes in default risk of
financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet date
and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or
more of the following qualitative and quantitative standards are met. Quantitative standard mainly relates to the
scenario in which, on the balance sheet date, the probability of default in the remaining lifetime has risen by more
than a certain percentage compared with the initial recognition. Qualitative standard mainly relates to significant
adverse changes in the debtor’s operation or financial position, present or expected changes in technology, market,
economy or legal environment that will have significant adverse impact on the debtor’s repayment ability.
(2) Definition of default and credit-impaired asset
A financial asset is credit-impaired when one or more following events have occurred. The standard is
consistent with the definition of credit impairment. The debtor has significant financial difficulty. The debtor
breached the binding clause of the contract on the debtor. The debtor is likely to go bankrupt or other financial
reorganization. The creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial
difficulty, having granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of
default, and exposure to default risk. The Company develops a model of the probability of default, loss rate of
default, and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating,
guarantee measures and collateral type, payment method, etc.) and forward-looking information.
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3. Please refer to “Notes receivable”, “Accounts receivable”, “Other receivable” for details on the
reconciliation table of opening balance and closing balance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances, bank financial investments
and receivables.
The Company deposits its bank balances and other cash and bank balances in financial institutions with
relatively high credit levels. Some bank acceptance bills held by the Company are accepted and paid by small and
medium financial institutions. In addition, in order to improve the efficiency of capital use, the Company entrusts
idle funds to banks for financial investment.
The management of the Company believes that, based on the current operating status of domestic banks, bank
balances and other cash, notes receivable and bank financial investments are not currently facing serious credit
risks. If there is a serious unfavorable differentiation in the bank's credit system in the future, the Company will
make adjustments in due course.
The Company performs credit assessment on customers who uses credit settlement on a continuous basis.
Based on the customer's financial status, past credit history and other factors, assess the customer's credit rating,
and monitor the balance of accounts receivable to control credit risk exposure. For customers with bad credit
records, the Company will use written reminders, shorten or cancel credit periods, and reduce credit transaction
amounts to ensure that there is no major risk of bad debts.
The Company conducts transactions with recognized and creditworthy customers, and the credit risk is
centralized and managed on the basis of customers. As of June 30,2020, the Company has a certain concentration
of credit risk, and 34.01% of accounts receivable was due from the five largest customers of the Company. The
Company held no collateral or other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset on the balance sheet.
(II) Liquidity risk
The Company continues to monitor short-term and long-term funding needs to ensure that sufficient cash
reserves are maintained. At the same time, the Company continuously monitors compliance with the loan
agreement to ensure that the credit line obtained from commercial banks can meet short-term or long-term funding
needs. When necessary, the Company can implement equity financing.
As of June 30,2020, the undiscounted contractual cash flows of the Company’s financial liabilities listed by
maturity date are shown in the following table.
Financial instruments classified based on remaining time period till maturity
Closing balance
Items
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings（Include interest） 1,275,596,654.06 1,275,596,654.06
Notes payable 973,763,888.02 973,763,888.02
Accounts payable 1,565,086,777.42 1,565,086,777.42
Other payable 291,575,146.18 291,575,146.18
Long-term borrowings（Include interest） 1,324,404,456.90 1,324,404,456.90
Long-term payables（Include interest） 17,738,655.90 74,697,343.36 92,435,999.26
Subtotal 4,106,022,465.68 1,342,143,112.80 74,697,343.36 5,522,862,921.84
(Continued)
Items Opening balance
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Within 1 year 1-3 years Over 3 years Total
Short-term borrowings（Include interest） 1,311,299,960.81 1,311,299,960.81
Notes payable 1,130,668,415.32 1,130,668,415.32
Accounts payable 1,587,763,752.62 1,587,763,752.62
Other payable 159,464,464.88 159,464,464.88
Non-current liabilities due within one year 223,342,263.89 223,342,263.89
（Include interest）
Long-term borrowings（Include interest） 411,319,664.33 411,319,664.33
Long-term payables（Include interest） 194,556.75 15,342,264.21 78,699,036.81 94,235,857.77
Subtotal 4,412,733,414.27 426,661,928.54 78,699,036.81 4,918,094,379.62
(II)Market Risk
1. Interest Rate Risk
The Company’s interest risk relates mainly to bank borrowings. The Company’s fair value interest risks
arise from fixed-rate financial instruments, while the cash flow interest risks arise from floating interest financial
instruments. The Company determines the proportion of fixed-rate financial instruments and floating interest rate
financial instruments based on the market environment. As of June 30, 2020, the Company's interest-bearing debt
accounted for a small proportion, and the interest rate risk it faced was within a controllable range.
The Company continues to monitor the level of interest rates. Rising interest rates will have an adverse
impact on the Company's financial performance, and the management will make necessary response measures in
a timely manner based on the latest market conditions.
2. Foreign currency risk
The Company's production bases and sales markets are distributed in developed and developing countries,
including the United States, the European Union, Japan, India, Mexico, etc. The business volume settled in
Euros and U.S. dollars has a certain proportion, and the exchange rate risk is relatively high. Based on internal
risk control policies, the Company's management has taken several measures to deal with exchange rate risks: a.
pre-judgment based on the trend of exchange rate changes, timely settlement of foreign exchange receipts or
delayed settlement of foreign exchange; b. Carry out overseas financing through domestic guarantees and
overseas loans to hedge foreign currency monetary assets and control net risk exposure; and c. Carry out
forward exchange settlement and foreign currency swap business to lock in exchange rates.
As of June 30, 2020, please refer to “monetary items in foreign currencies” of notes to financial statements
for details in foreign currency financial assets and liabilities.
XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair value as of the balance sheet date
Item Name
Level 1 Level 2 Level 3 Total
I. Recurring fair value
-- -- -- --
measurement
(I) Held-for-trading 23,478,931.42 1,092,455,485.91 129,309,000.00 1,245,243,417.33
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financial assets
1. Financial assets
measured at fair value 23,478,931.42 1,092,455,485.91 129,309,000.00 1,245,243,417.33
through profit or loss
(1) Debt instrument
1,092,226,291.01 129,309,000.00 1,221,535,291.01
investments
(2) Derivative financial
23,478,931.42 229,194.90 23,708,126.32
assets
Total amount of assets
constantly measured at 23,478,931.42 1,092,455,485.91 129,309,000.00 1,245,243,417.33
their fair values
(Ⅵ) Held-for-trading
48,300.00 8,401,313.09 8,449,613.09
liabilities
Derivative financial
48,300.00 8,401,313.09 8,449,613.09
liabilities
Total amount of liabilities
constantly measured at 48,300.00 8,401,313.09 8,449,613.09
their fair values
II. Non-constant
-- -- -- --
measurement at fair values
2. Basis for determining the market price of items under first level constant and non-constant measurement
at fair value.
The fair value of futures contracts is measured at the exchange's open market quotes.
3. Items under second level constant and non-constant measurement at fair value, valuation technique
adopted, and qualitative and quantitative information of important parameters
The fair value of forward foreign exchange contracts and bank financing products is measured based on the
valuation amount of the host bank or the forward foreign exchange rate announced by the Bank of China. Bank
financing products are measured based on the valuation amount of the issuer or manager.
4. Items under third level constant and non-constant measurement at fair value, valuation technique
adopted, and qualitative and quantitative information of important parameters.
If the fair value information is insufficient, the bank financing products are measured at cost on behalf of the
fair value.
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XII. Related party relationships and transactions
1. Parent Company
Voting right
Holding proportion
Parent Company Place of registration Business nature Registered capital proportion over the
over the Company
Company
Sanhua Holding
Zhejiang Province Industrial Investment 660 million yuan 50.46% 50.46%
Group Co., Ltd
Remarks on the parent Company:
As of June 30, 2020, Sanhua Holding Group Co., Ltd. directly holds 29.78% of the Company's shares, and
indirectly holds 20.68% of the shares through its subsidiaries, for a total of 50.46% of the shares.
The final controllers of the Company are Mr Zhang Daocai, Mr Zhang Yabo and Zhang Shaobo.
Other remarks:
2. Information about the Company's subsidiaries
Please refer to section IX of notes to financial statements.
3. Joint ventures and associates of the Company
Please refer to section IX of notes to financial statements for details on the Company’s significant joint ventures
and associates.
Details of other joint ventures or associates carrying out related party transactions with the Company in current
period or in preceding period but with balance in current period are as follows:
Joint ventures or associates Relationships with the Company
Qingdao Sanhua jinlifeng Machinery Co., Ltd Associates
Zhongshan Xuanyi Pipe Manufacturing Co., Ltd. Associates
Chongqing Tainuo Machinery Co., Ltd Associates
Other remarks
Joint ventures or associates Abbreviation of associate
Qingdao Sanhua Jinlifeng Machinery Co., Ltd QSJM
Zhongshan Xuanyi Pipe Manufacturing Co., Ltd. ZXPM
Chongqing Tainuo Machinery Co., Ltd CTMC
4. Other related parties of the Company
Other related parties Other relationships with the Company
Zhejiang Sanhua Lvneng Industry Group Co., Ltd Shareholders and under the same control of the parent Company
Hangzhou Sanhua Research Institute Co., Ltd. under the same control of the parent Company
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Hangzhou Tongchan Machinery Co., Ltd. under the same control of the parent Company
Zhejiang Haoyuan Technology Co., Ltd. under the same control of the parent Company
Hangzhou Sanhua International Building Co., Ltd. under the same control of the parent Company
Zhejiang Sanhua Zhicheng Real Estate Development Co., Ltd. under the same control of the parent Company
Xinchang County Sanhua Property Management Co., Ltd. under the same control of the parent Company
Wuhu Alda Technology Co., Ltd. Subsidiary of a Company with shares held by the Company
Hangzhou Formost Material Technology Co., Ltd Subsidiary of a Company with shares held by the Company
Other remarks
Joint ventures or associates Abbreviation of associate
Sanhua Holding Group Co., Ltd. SHG
Zhejiang Sanhua Lvneng Industry Group Co., Ltd ZSGE
Hangzhou Sanhua Research Institute Co., Ltd. HSRI
Hangzhou Tongchan Machinery Co., Ltd. HTM
Zhejiang Haoyuan Technology Co., Ltd. ZHT
Hangzhou Sanhua International Building Co., Ltd. HSIB
Zhejiang Sanhua Zhicheng Real Estate Development Co., Ltd. ZSZR
Xinchang County Sanhua Property Management Co., Ltd. XCSP
Wuhu Alda Technology Co., Ltd. WAT
Hangzhou Formost Material Technology Co., Ltd HFMT
5. Related party transactions
（1）Purchase and sale of goods, rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Content of Current period Approved Transaction Over the Transaction Preceding period
Related parties
transaction cumulative Limit Limit or No comparative
HSRI Merchandise 14,303.48 1,500,000.00 No
HTM Merchandise 57,168.14 1,500,000.00 No 81,077.58
HTM Services 124,929.81
QSJM Merchandise 1,656,061.81 2,000,000.00 No 349,774.37
WAT Merchandise 4,743.36 50,000.00 No 17,327.58
ZHT Merchandise 1,063,598.21 1,500,000.00 No
ZXPM Merchandise 5,023,870.90 10,000,000.00 No 6,263,590.90
Sale of goods and rendering of services
Unit: RMB
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Related parties Content of transaction Current period cumulative Preceding period comparative
HSRI Merchandise 182,978.26 1,329,760.44
HSRI Services 636,792.45
QSJM Merchandise 79,420.08 4,064.97
SHG Merchandise 674,800.00
WAT Merchandise 7,230.77 218,234.34
CTMC Merchandise 223,199.82
HSIB Merchandise 265,862.07
ZSZR Merchandise 17,388.50
Other remarks:
Due to the large number of related parties involved in related party transactions between the parent Company
Sanhua Holding Group Co., Ltd and its subsidiaries, the Company approved RMB 1.5 million as the overall
purchase quota for purchases from the parent company Sanhua Holding Group Co., Ltd. and its subsidiaries
collectively. The approval bases on the merger of the parent Company and its subsidiaries.
（2）Related party guarantees
The Company as guarantors
Unit: RMB
Guaranteed parties Maturity date Whether the guarantee is
Amount guaranteed Commencement date
mature
The Company as guaranteed parties
Maturity date Whether the guarantee is
Guaranteed parties Amount guaranteed Commencement date
mature
SHG RMB 250,000,000.00 February 27, 2020 February 26, 2022 No
SHG RMB 220,000,000.00 March 26, 2020 March 24, 2022 No
SHG RMB 100,000,000.00 April 23, 2020 April 22, 2022 No
SHG RMB 200,000,000.00 June 17, 2020 June 15, 2022 No
SHG RMB 150,000,000.00 August 28, 2019 August 27, 2020 No
SHG RMB 130,000,000.00 September 30, 2019 September 29, 2020 No
SHG RMB 100,000,000.00 October 24, 2019 October 23, 2020 No
SHG USD 20,000,000.00 December 24, 2019 December 23, 2021 No
SHG EUR 15,000,000.00 July 5, 2019 June 20, 2022 No
Remarks of related party guarantees
（3）Key management’s emoluments
Unit: RMB
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Items Current period cumulative Preceding period comparative
Key management’s emoluments 4,127,788.78 3,920,120.27
（4）Other related party transactions
Unit: RMB
Abbreviation of associate Content of transaction Current period cumulative Preceding period comparative
HSRI Rental fee, property management 226,684.14 270,459.92
ZHT fee, water and electricity fee, 628,351.19
ZSGE service fee 1,032,369.03 1,380,688.85
HTM Purchase equipment 5,112,554.76 7,056,710.66
HFMT 966,272.27 1,908,561.58
HSRI Rental fee, property management 717,369.20 1,595,968.94
SHG fee, water and electricity fee, 4,313,221.66 3,496,679.16
WAT service fee 197,707.74 300,394.03
ZSGE 720,433.64 869,874.64
6.Balance due to or from related parties
（1）Receivables
Unit: RMB
Closing balance Opening Balance
Items Related parties
Book balance Provision for bad debts Book balance Provision for bad debts
Accounts receivable HSRI 434,918.95 21,745.95 358,962.37 17,948.12
Accounts receivable QSJM 93,610.79 4,680.54 9,331.56 466.58
Accounts receivable SHG 2,272,555.94 113,627.80
Accounts receivable WAT 182,166.18 9,108.31 62,502.41 3,125.12
Accounts receivable XCSP 3,372.00 168.60 3,372.00 168.60
Accounts receivable ZSGE 81,403.01 4,070.15
Accounts receivable HFMT 1,044,608.14 52,230.41
Advances paid HTM 6,233,021.74
Advances paid ZXPM 186,974.96
（2）Payables
Unit: RMB
Items Related parties Closing balance Opening Balance
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Accounts payable HSRI 266,150.00 266,150.00
Accounts payable HTM 2,536,979.58 4,002,107.32
Accounts payable QSJM 1,640,137.08 1,177,838.77
Accounts payable ZXPM 3,191,767.02
Advances received WAT 2,101.34 2,101.34
Other payables HFMT 100,000.00 100,000.00
Other payables ZSGE 30,135.60
XIII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Total equity instruments granted in current period 12.04 million shares
Incentive plan for stock appreciation rights in 2018: The
adjusted grant price of stock appreciation rights is 4.69
The range of exercise prices of share options outstanding at the end of the
yuan, which will be unlocked in batches within 12
period and the remaining contractual life
months after 24 months and 36 months from the grant
date.
2018 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is 4.69 yuan, which will be
unlocked in batches within 12 months after 24 months
The range of exercise prices of other equity instruments at the end of the and 36 months after the grant date. 2020 Restricted
period and the remaining contractual life Stock Incentive Plan: The adjusted restricted stock
grant price is RMB 7.46, which will be unlocked in
batches within 12 months after 12 months, 24 months,
and 36 months from the grant date.
Other remarks
In 2018, the Company implemented a restricted stock and stock appreciation right incentive plan for core
employees. Among them, the number of restricted stocks granted was 10.33 million shares, the number of stock
appreciation rights granted was 355,000 shares, and the grant price per share was RMB 8.37. The grant date was
September 18, 2018, at 30%:30%:40%. The proportion is unlocked year by year in batches.
In May 2019 and June 2020, the Company implemented the 2018 and 2019 equity distribution. According to
the methods stipulated in the "2018 Restricted Stock Incentive Plan" and "2018 Stock Appreciation Rights
Incentive Plan", the exercise price and quantity of the underlying stocks involved were adjusted accordingly. After
the adjustment, the number of restricted stocks granted was 11.98 million shares. The number of value-added
rights granted was 325,300 shares, and the grant price per share was RMB 4.69.
In 2020, the Company implemented a restricted stock incentive plan for core employees. The number of
grants was 12.045 million shares, and the grant price per share was RMB 9.85. The grant date was February 24,
2020, and it will be unlocked year by year in batches at a ratio of 30%:30%:40%.
In June 2020, the Company implemented the 2019 equity distribution. According to the method stipulated in
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the "2020 Restricted Stock Incentive Plan", the exercise price and quantity of the underlying stocks involved were
adjusted accordingly. After the adjustment, the number of restricted stocks granted was 15.6585 million shares,
and the grant price per share was RMB 7.46.
2.Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for grant-date fair value of equity Calculated based on the closing price of the stock on the grant
instruments date minus the grant price of the restricted stock.
According to the aforementioned adjusted restricted stock
quantity (base number), it will be unlocked year by year in
batches at a ratio of 30%:30%:40%. The Company estimates
Determination method for the best estimate of the number of equity the number of exercisable equity instruments on the following
instruments expected to vest basis: the Company's operating performance can meet the
target, the future voluntary turnover rate of the incentive
objects is 0%, and the performance appraisal level is above C
(the unlocking coefficient is 1).
Reasons for significant difference between the estimates in current
Not applicable
period and preceding period
Capital reserve accumulated due to equity-settled share-based
54,905,976.80
payment
Total expenses incurred due to equity-settled share-based payment
30,463,131.96
transactions
Other remarks
3.Cash-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
It is calculated based on the closing price of the stock on the
Determination method for the fair value of liability incurred by the
balance sheet date after deduction of the adjusted stock
Company and to be settled in cash or other assets
appreciation right grant price.
Liabilities incurred due to cash-settled share-based payment 3,139,116.00
Total expenses incurred due to cash-settled share-based payment
900,665.22
transactions
Other remarks
4. Modifications and cancellations of share-based payment transactions
According to the resolution of the Company’s second extraordinary general meeting of shareholders in 2020,
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the Company adjusted some performance evaluation indicators for the above incentive plan. The main adjustment
content is the evaluation indicators for 2020 and beyond, adjusted from "weighted average return on net assets not
less than 17%" to "weighted average return on net assets not lower than 17% or not lower than the same industry
benchmarking Company's 80-th percentile weighted average return on net assets for the same period." Refer to the
Company's Corresponding announcements for details.
XIV. Commitments and contingencies
1. Significant commitments
Significant commitments on the balance sheet day
Approved by the China Securities Regulatory Commission in the Securities Regulatory Commission [2017]
No. 1392 document, the Company issued shares in September 2017 to raise a total of 1.3223 million yuan. The
funds raised will be used to invest in the construction of "11.5 million sets of new energy auto parts construction
project", "new energy vehicle thermal management system component technology transformation project with an
annual output of 7.3 million sets", " vehicle air-conditioning control component technology transformation project
with an annual output of 12.7 million sets", "expanding product testing room and production auxiliary room
project" and "paying intermediary fees".
As of June 30, 2020, please refer to the analysis of investment status in the discussion and analysis of the
Company's operation status in the 2020 semi-annual report for details of the expenditure of fundraising projects.
2. Contingencies
（1）If no important contingent matter to be disclosed by the Company, it should also be noted accordingly
No important contingent matter needs to be disclosed by the Company.
XV. Events after the balance sheet date
1. Profit distribution
Unit: RMB
Proposed distribution of profits or dividends 358,225,868.20
Profits or dividends declared to be distributed after deliberation and
358,225,868.20
approval
XVI. Other Significant Events
1. Segment information
（1）Basis for reportable segments and the accounting policy
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization, management requirements and internal reporting system, etc., and
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identified the reportable segments based on products.
（2）Financial information of the reporting subsection
Unit: RMB
Refrigeration and
Inter-segment
Items air-conditioning Auto parts business Total
elimination
electrical parts business
Total Operating revenue 4,367,942,431.64 950,236,195.13 5,318,178,626.77
Total Operating cost 3,164,066,988.85 675,559,015.85 3,839,626,004.70
Total assets 12,018,152,672.59 3,522,572,484.15 15,540,725,156.74
Total liabilities 5,207,994,133.80 732,586,068.35 5,940,580,202.15
2.Other remarks
Please refer to “Fixed assets” of notes to financial statements for details in fixed assets leased in by financing.
Please refer to “Long-term payables” of notes to financial statements for details in unrecognized financing costs
and minimum lease payments to be paid in subsequent years.
XVII. Notes to items of parent Company financial statements
1. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debt debt
Category Carrying Carrying
Accrued Accrued
Proportio amount Proportio amount
Amount Amount proportio Amount Amount proportio
n n
n n
Receivables with
823,985, 823,985,3 986,349,0 986,349,01
provision made on an 87.71% 86.28%
398.50 98.50 14.75 4.75
individual basis
Including:
Receivables with
115,416, 5,770,81 109,645,5 156,790,4 7,839,520 148,950,88
provision made on a 12.29% 5.00% 13.72% 5.00%
370.93 8.55 52.38 01.29 .06 1.23
collective basis
Including:
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
939,401, 5,770,81 933,630,9 1,143,139 7,839,520 1,135,299,8
Total 100.00% 0.61% 100.00% 0.69%
769.43 8.55 50.88 ,416.04 .06 95.98
Provision made on an individual basis:
Unit: RMB
Closing balance
Name Book balance Provision for bad Accrued proportion Accrued reason
debt
Zhejiang Sanhua Trading Co., Ltd 537,087,611.22
Sanhua International Singapore Pte. Ltd 245,518,524.35
Sanhua (Vietnam) Company Limited, etc. 41,379,262.93
Total 823,985,398.50 -- --
Provision made on a collective basis:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debt Accrued proportion
Receivables with provision
115,416,370.93 5,770,818.55 5.00%
made on a collective basis
Total 115,416,370.93 5,770,818.55 --
The statement of determination of a collective basis:
If the Provision for bad debt of accounts receivable is accrued in accordance with the general expected credit loss
model, please refer to the disclosure of other receivables to disclose the relevant information about the Provision
for bad debt:
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 939,401,769.43
Total 939,401,769.43
（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Category Opening balance Closing balance
Accrued Recovered or reversed Write off Others
Receivables with provision
7,839,520.06 2,068,701.51 5,770,818.55
made on a collective basis
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Total 7,839,520.06 2,068,701.51 5,770,818.55
（3）Top 5 debtors with the largest accounts receivable balances
Unit: RMB
Proportion to the total balance Provision for bad debt at the
Name Closing balance
of accounts receivable end of the period
Top 5 debtors with largest
846,553,684.24 90.12% 2,292,600.34
balances
Total 846,553,684.24 90.12%
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Interest receivable 1,789,540.22
Dividends receivable 14,438,323.76
Other receivables 548,566,113.71 603,257,516.95
Total 564,793,977.69 603,257,516.95
（1）Interest receivable
1）Categories of interest receivable
Unit: RMB
Items Closing balance Opening balance
Interest on subsidiaries funds 1,789,540.22
Total 1,789,540.22
2）Provision for bad debt
□ Applicable √ Not Applicable
（2）Dividends receivable
1）Categories of dividends receivable
Unit: RMB
Project (or invested entity) Closing balance Opening balance
Xinchang Sitong Electrical and Mechanical Co., Ltd 12,048,323.76
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Suzhou Sanhua Air-Conditioner Parts Co., Ltd 1,190,000.00
Zhongshan Sanhua Air conditioning Refrigeration Components Co., Ltd 1,200,000.00
Total 14,438,323.76
2）Provision for bad debt
□ Applicable √ Not Applicable
Other remarks:
（3）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Other receivables categorized by nature Closing balance Opening balance
Principal and interest of capital assistance
534,369,210.21 573,806,364.53
to subsidiaries
Refund of VAT receivable 256,448.95 15,017,287.01
Guarantee deposit 10,381,285.00 10,381,285.00
Others 4,214,247.02 4,660,439.18
Total 549,221,191.18 603,865,375.72
2）Provision for bad debt
Unit: RMB
Phase 1 Phase 2 Phase 3
Next 12month Lifetime expected credit Lifetime expected credit
Provision for bad debt Total
expected credit losses (credit not losses (credit impaired)
losses impaired)
Balance on January 1,
607,858.77 607,858.77
2020
Balance in current period
—— —— —— ——
on January 1, 2020
Provision made in
47,218.70 47,218.70
current period
Balance on June 30, 2020 655,077.47 655,077.47
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclosure by aging
182
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 117,125.08
1 to 2 years 113,408.50
2 to 3 years 221,343.39
Over 3 years 203,200.50
Total 655,077.47
3）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Category Opening balance Recovered or Closing balance
Accrued Write off Others
reversed
Receivables with
provision made
607,858.77 47,218.70 655,077.47
on a collective
basis
Total 607,858.77 47,218.70 655,077.47
4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Debtors Nature of Proportion to the Provision for bad
receivables Closing balance Age total balance of other debt at the end of the
receivables period
Sanhua International Singapore Pte.
Financial aid 141,590,000.00 1 to 2 years 25.78% 0.00
Ltd
Sanhua (Jiangxi) Self - control
Financial aid 50,264,000.00 Within 1 year 9.15% 0.00
Components Co., Ltd.
Shaoxing Shangyu Sanli Copper Within 1 year
Financial aid 50,084,000.00 9.12% 0.00
Industry Co., Ltd
Hangzhou Leaderway Electronics Within 1 year
Financial aid 48,000,000.00 8.74% 0.00
Co., Ltd
Wuhu Sanhua Auto-control Within 1 year
Financial aid 46,252,000.00 8.42% 0.00
Components Co., Ltd
Total -- 336,190,000.00 -- 61.21% 0.00
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Investees Book balance Provision for Book balance Provision for
Carrying amount Carrying amount
impairment impairment
Investments in
4,389,484,397.89 4,389,484,397.89 4,297,929,280.35 54,000,000.00 4,243,929,280.35
subsidiaries
Investments in
associates and 12,627,437.09 12,627,437.09 12,704,660.71 12,704,660.71
joint ventures
Total 4,402,111,834.98 4,402,111,834.98 4,310,633,941.06 54,000,000.00 4,256,633,941.06
（1）Investments in subsidiaries
Unit: RMB
Opening Changed amount of the current period
Closing balance Closing balance
balance(Carr Investments Investmen Provision
Investees (Carrying of provision for
ying increased ts for Others
amount) impairment
amount) decreased impairment
Sanhua International Singapore 454,171,908 142,872,270
597,044,178.95
Pte. Ltd .17 .78
Zhejiang Sanhua Self - control 32,000,000.
32,000,000.00
Components Co., Ltd 00
Zhejiang Sanhua Climate &
310,155,131 3,544,630.4
Appliance Controls Group Co., 313,699,761.65
.25 0
Ltd
Xinchang Sitong Electrical and 65,444,051.
303,458.12 65,747,509.27
Mechanical Co., Ltd 15
Wuhu Sanhua Auto-control 150,379,784
381,494.26 150,761,279.15
Components Co., Ltd .89
Shaoxing Shangyu Sanli Copper 31,930,719.
247,690.94 32,178,410.86
Industry Co., Ltd 92
Changzhou Ranco Reversing 35,196,850.
23,719.04 35,220,569.63
Value Co., Ltd 59
Suzhou Sanhua Air-Conditioner 8,395,763.8
112,619.90 8,508,383.76
Parts Co.,Ltd 6
Zhongshan Sanhua Refrigeration 5,163,639.2
254,300.23 5,417,939.52
Components Co., Ltd 9
184
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Zhongshan Sanhua Air
4,885,524.3
conditioning Refrigeration 135,071.10 5,020,595.42
2
Components Co., Ltd
Hangzhou Leaderway Electronics 47,798,913. 1,312,876.1
49,111,789.97
Co., Ltd 83 4
Sanhua (Jiangxi) Self - control 92,824,141.
195,545.52 93,019,687.43
Components Co., Ltd. 91
Wuhan Sanhua Refrigeration 3,734,983.4
186,130.72 3,921,114.18
Parts Co., Ltd 6
Sanhua (Hangzhou) Micro 635,170,819 3,821,105.6
638,991,925.12
Channel Heat Exchanger Co., Ltd .48 4
51,053,113. 1,135,431.8
Zhejiang Sanhua Trading Co., Ltd 52,188,545.74
94 0
Hangzhou Sanhua Home
16,247,160. 16,247,16
Appliance Thermal Management 0.00
09 0.09
System Co., Ltd
Qingdao Debaiyi Refrigeration 14,580,943.
14,580,943.52
Equipment Co., Ltd. 52
Zhejiang Sanhua Automotive 1,977,416,8 6,900,232.0 1,984,317,035.
Components Co., Ltd. 02.97 6 03
307,379,027
Sanhua International Inc. 375,700.98 307,754,728.69
.71
4,243,929,2 161,802,277 16,247,16 4,389,484,397.
Total
80.35 .63 0.09 89
（2）Investments in associates and joint ventures
Unit: RMB
本期增减变动
Closing
Cash
Investme balance
Opening Adjustme dividend/ Closing
nt income Provision of
balance Investme Investme nt in other Changes profit balance
Investees recognize for provision
(Carrying nts nts comprehe in other declared Others (Carrying
d under impairme for
amount) increased decreased nsive equity for amount)
equity nt impairme
income distributio
method nt
n
Ⅰ. Joint ventures
Ⅱ. Associates
Guochuan 1,493,718 1,493,272
-446.80
g Energy .98 .18
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Internet
Innovatio
n Center
(Guangdo
ng) Co.,
Ltd.
Nanchang
Sanhua
Jinlifeng 2,335,242 406,364.1 500,000.0 2,241,606
Machiner .16 3 0 .29
y Co.,
Ltd.
Zhongsha
n Sanhua
Tainuo -27,971.5
27,971.57 0.00
Machiner 7
y Co.,
Ltd.
Chongqin
g Tainuo
8,847,728 1,544,830 1,500,000 8,892,558
Machiner
.00 .62 .00 .62
y Co.,
Ltd.
Qingdao
Sanhua
Jinlifeng
0.00 0.00
Machiner
y Co.,
Ltd.
12,704,66 1,922,776 2,000,000 12,627,43
Subtotal
0.71 .38 .00 7.09
12,704,66 1,922,776 2,000,000 12,627,43
Total
0.71 .38 .00 7.09
（3）Other remarks
4. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Main operations 2,025,861,982.70 1,525,914,788.36 2,383,024,761.99 1,852,588,211.54
Other operations 91,350,119.92 90,836,693.41 112,813,701.85 112,416,460.61
Total 2,117,212,102.62 1,616,751,481.77 2,495,838,463.84 1,965,004,672.15
Other remarks：
5. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term equity investments under cost
16,058,323.76 248,086,031.19
method
Investment income from long-term equity investments under
1,922,776.38 867,006.32
equity method
Gains on disposal of long-term equity investments -13,099,711.84 57,012.43
Gains and losses on settlement of futures contracts -5,205,759.36 485,064.76
Gains and losses on settlement of foreign exchange contract -1,711,629.28 48,634.20
Investment income of bank financing products 3,214,184.92 5,388,024.29
Income of fund using fee 9,817,132.15
Total 10,995,316.73 254,931,773.19
6. Others
XVIII. Supplementary information
1. Non-recurring profit or loss in current period
√ Applicable □ Not Applicable
Unit: RMB
Items Amount Remarks
Gains or loss on disposal of non-current assets -1,403,295.52
Government grant included in current period profit or loss (excluding Government grants closely
related to enterprise business and enjoyed in accordance with the unified national standard quota or 93,590,286.21
ration
Gains on changes in fair value of held-for-trading financial assets, derivative financial assets,
held-for-trading financial liabilities and derivative financial liabilities, and investment income from
disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial -23,409,775.96
liabilities, derivative financial liabilities and other investment, excluding those arising from
hedging business related to operating activities
Other non-operating revenue or expenditures except the above items 1,196,846.18
187
2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Other profit or loss satisfying the definition of non-recurring profit or loss 1,113,187.32
Less: Enterprise income tax affected 9,222,107.32
Non-controlling interest affected 574,585.23
Total 61,290,555.68 --
For items defined as non-recurring profit or loss according to “the No. 1 Explanatory Announcement on
Information Disclosure for Companies Offering Their Securities to Public - Non-recurring Profit or Loss”,
non-recurring profit or loss items listed in the said document defined as project of recurring profit or loss, specify
the reason
□ Applicable √ Not Applicable
2. ROE and EPS
EPS
Weighted
Profit of the reporting period Basic Diluted
average ROE
EPS(RMB/share) EPS(RMB/share)
Net profit attributable to shareholders of ordinary shares 6.74% 0.18 0.18
Net profit attributable to shareholders of ordinary shares
6.10% 0.16 0.16
after deducting non-recurring profit or loss
3. Financial data variance between financial reporting prepared under domestic and international
accounting standards
（1）Differences of net profits and net assets in the financial reports disclosed according to the IFRS and
Chinese Accounting Standards
□ Applicable √ Not Applicable
（ 2 ） Differences of net profits and net assets in the financial reports disclosed according to the overseas
accounting standards and Chinese Accounting Standards
□ Applicable √ Not Applicable
（ 3 ） Reasons for accounting data variance between financial reporting prepared under domestic and
international accounting standards, and for the difference adjustment on the data already audited by an
overseas audit institution, the name of the audit institution should be noted
4. Others
1．Calculation process of weighted average ROE
(1) Weighted average net assets
Weighted by Weighted average net
Changed item in net assets Amount
month assets
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Net assets attributable to shareholders of ordinary shares at the 9,291,632,928.45 6/6 9,291,632,928.45
beginning of period
643,481,717.35 3/6
Net profit attributable to shareholders of ordinary shares
321,740,858.68
Cash dividend announced in May -413,337,540.30 1/6 -68,889,590.05
Cash dividend announced in May, including the reduction of restricted 3,189,495.00 1/6 531,582.50
shares repo obligations
-26,456,121.98 3/6
Converted difference in Foreign Currency Statements
-13,228,060.99
Equity-settled share-based payment (phase 1) 4,728,589.32 3/6 2,364,294.66
Equity-settled share-based payment (phase 2) 25,734,542.64 2/6 8,578,180.88
Net assets attributable to shareholders of ordinary shares at the end of 9,528,973,610.48 9,542,730,194.13
period
(2) Weighted average ROE
Items Symbol Current period cumulative
Net profit attributable to shareholders of ordinary shares A 643,481,717.35
Non-recurring profit or loss B 61,290,555.68
Net profit attributable to shareholders of ordinary shares after deducting C=A-B 582,191,161.67
non-recurring profit or loss
Weighted average net assets D 9,542,730,194.13
Weighted average ROE E=A/D 6.74%
Weighted average ROE after deducting non-recurring profit or loss F=C/D 6.10%
2．Calculation process of Basic EPS and Diluted EPS
(1) Basic EPS
Items Symbol Current period cumulative
Net profit attributable to shareholders of ordinary shares A 643,481,717.35
Non-recurring profit or loss attributable to shareholders of ordinary shares B 61,290,555.68
Net profit attributable to shareholders of ordinary shares after deducting C=A-B 582,191,161.67
non-recurring profit or loss
Total shares at the beginning of period D 2,765,657,898
Capital reserve converted into share capital E 826,675,080
Considering the number of restricted shares after the conversion and lifting F 27,642,290
of the ban
Weighted average number of ordinary shares outstanding (excluding G(noted) 3,564,690,688
restricted shares)
Basic EPS H=A/G 0.18
Basic EPS after deducting non-recurring profit or loss I=C/G 0.16
Remark: G=D+E-F
(2) Diluted EPS
Items Symbol Current period cumulative
Net profit attributable to shareholders of ordinary shares A 643,481,717.35
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Non-recurring profit or loss B 61,290,555.68
Net profit attributable to shareholders of ordinary shares after deducting C=A-B 582,191,161.67
non-recurring profit or loss
Weighted average number of ordinary shares outstanding (excluding D 3,564,690,688
restricted shares)
Weighted average number of ordinary shares increased by equity E 14,003,342
incentive restricted shares
Weighted average number of ordinary shares outstanding after dilution F=D+E 3,578,694,030
Diluted EPS G=A/F 0.18
Diluted EPS after deducting non-recurring profit or loss H=C/F 0.16
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2020 Interim Report of Zhejiang Sanhua Intelligent Control Co., Ltd.
Section XII Documents Available for Inspection
1. The financial report signed by the chairman of the board.
2. The financial report signed and sealed by the Company's legal representative, chief finance officer and
person in charge of accounting department.
3. Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
4. Other documents available for inspection
191
