Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Zhejiang Sanhua Intelligent Controls Co., Ltd.
2020 Annual Report
March 2021
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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
IX "Outlook for the Future Development of the Company" 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
3,581,818,372 as the base number, cash dividend of RMB 2.50 (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 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..............................................................................................................................................12
Section IV Management’s Discussion and Analysis of Operations.....................................................................................................16
Section V Significant Events .................................................................................................................................................................47
Section VI Changes in Shares and Information about Shareholders ......................................................................................................85
Section VII Information of Preferred Shares .......................................................................................................................................103
Section VIII Information about Convertible Bonds .............................................................................................................................104
Section IX Information about Directors, Supervisors, Senior Management ........................................................................................105
Section X Corporate Governance ........................................................................................................................................................ 119
Section XI Corporate Bonds ................................................................................................................................................................128
Section XII Financial Report ...............................................................................................................................................................129
Section XIII Documents Available for Inspection ...............................................................................................................................272
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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 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
Registered Address Xialiquan, Qixing Street, Xinchang, Zhejiang
Post Code of Registered
312500
Address
Office Address No. 219, Woxi Avenue, Meizhu, Xinchang, Zhejiang, China
Post Code of Office Address 312532
Website http://www.zjshc.com
E-mail shc@zjshc.com
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, Xinchang
Address
Development, Hangzhou, Zhejiang, China. County, Zhejiang, China.
Tel. 0571-28020008 0575-86255360
Fax 0571-28876605 0575-86563888-8288
E-mail shc@zjshc.com shc@zjshc.com
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
III. Information Disclosure and Place of the Report
1. Company’s contact information
Newspaper designated by the Company for
Securities Times, Shanghai Securities News
information disclosure
Website specified by CSRC for release of the Annual
http://www.cninfo.com.cn
Report
Place where the Annual Report is available for
Office of the Board of Directors of the Company
inspection
IV. Company Registration and Alteration
Organization code 913300006096907427
Changes in principle business activities
No change
since the Company was listed (if any)
Changes of controlling shareholders of the
No change
Company (if any)
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Pan-China Certified Public Accountants LLP
Business address of the accounting Building B, China Resources Building, 1366 Qianjiang Road, Jianggan District, Hangzhou
firm City, Zhejiang Province, China
Name of accountants for writing
Luo Xunchao, Ouyang Xiaoyun
signature
Sponsor institution engaged by the Company to continuously perform its supervisory function during the
Reporting Period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to perform the duties of continuous supervision during the reporting
period
□ Applicable √ Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √No
2020 2019 YoY Change 2018
Operating Revenue (RMB) 12,109,833,368.44 11,287,489,442.23 7.29% 10,835,990,677.51
Net Profit Attributable to
1,462,158,821.57 1,421,204,236.13 2.88% 1,292,349,782.17
Shareholders of the Listed
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Company (RMB)
Net Profit Attributable to
Shareholders of the Listed
Company after Deducting 1,270,609,746.53 1,351,335,040.19 -5.97% 1,294,769,254.99
Non-recurring Gains and Losses
(RMB)
Net Cash Flow Generated by
2,087,343,783.11 1,900,163,604.60 9.85% 1,287,595,477.72
Operational Activities (RMB)
Basic Earnings per Share
0.41 0.40 2.50% 0.36
(RMB/Share)
Diluted Earnings per Share
0.41 0.40 2.50% 0.36
(RMB/Share)
Weighted Average ROE 15.04% 16.08% -1.04% 15.65%
At the End of 2020 At the End of 2019 YoY Change At the End of 2018
Total Assets (RMB) 17,032,530,730.18 14,790,190,170.64 15.16% 13,932,172,478.62
Net Assets Attributable to
Shareholders of the Listed 10,064,794,519.57 9,291,632,928.45 8.32% 8,614,844,555.48
Company (RMB)
The Company's net profit before and after deducting non-recurring profit and loss in the last three fiscal years,
whichever is lower, is negative and the audit report of the last year shows that the Company's ability to continue as a
going concern is uncertain
□ Yes √ No
The lower of the net profit before and after deducting the non-recurring profit and loss is negative
□ Yes √ No
VII. 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.
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.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
VIII. Key Quarterly Financial Indicators
Unit: RMB
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating income 2,483,672,660.52 2,834,505,966.25 3,275,037,359.22 3,516,617,382.45
Net profit attributable to
211,359,665.77 432,122,051.58 448,766,825.92 369,910,278.30
shareholders of the Company
Net profit attributable to
shareholders of the Company
266,958,886.61 315,232,275.06 374,984,962.07 313,433,622.79
excluding non-recurring gains
and losses
Net cash flows from operating
519,305,066.00 585,346,383.42 465,557,608.32 517,134,725.37
activities
Whether there is significant difference between the above individual or aggregate financial indicators and that of
what disclosed in the quarterly report, half-year report
□ Yes √ No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2020 2019 2018 Note
Profit or loss from disposal of non-current
assets (including the write-off for the -14,770,607.27 -6,087,268.05 -3,220,333.08
impairment provision of assets)
The government subsidies included in the
current profits and losses (excluding the
government subsidy closely related to
regular course of business of the Company
134,101,082.00 86,311,151.49 43,294,732.23
and government subsidy based on
standard quota or quantitative continuous
application according to the state
industrial policy.)
Capital occupation fees charged to
non-financial enterprises included in 61,191.86
current profits and losses
Profits and losses attributed to change in 1. The floating
fair value for held-for-trading financial income generated
assets, derivative financial assets, by futures hedging
91,394,679.61 563,966.95 -35,231,187.51
held-for-trading financial liabilities, and business is detailed
derivative financial liabilities; and in "Notes to income
investment income from disposal of from changes in fair
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
held-for-trading financial assets, value and
derivative financial assets, investment income"
held-for-trading financial liabilities, of this financial
derivative financial liabilities and other report. According to
debt investments, excluding the effective the Operation
hedging business related to the regular Management
business operation of the Company. Measures of Futures
Hedging Business,
the Company will
continue to carry
out the futures
hedging business of
raw materials such
as copper, zinc,
nickel and other raw
materials in 2020,
mainly for customer
price and fixed price
futures hedging
business. As the
number of contracts
locked is consistent
with the customer's
orders, and the
contract locked
price is not higher
than the customer's
locked price. The
Company can keep
the stable profit
margin of the above
customer's business
and achieve the
purpose of hedging.
The above clients
who carry out
futures hedging
business are
well-known
domestic and
foreign
manufacturers, and
have good historical
credit. Since the
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
implementation of
customer copper
locking mechanism,
there has been no
breach of contract.
2. Floating income
of foreign exchange
forward contract is
calculated as
follows: In order to
avoid exchange rate
risk, the Company
has signed a
forward foreign
exchange contract
with the bank,
which will be
exercised at the
appointed price
when it matures in
the future, and the
settlement will be
based on the
difference between
the forward
exchange rate on the
starting date of the
contract and the
spot exchange rate
at the time of
settlement.
Reversal of the receivables and contract
assets depreciation reserves for separate 81,318.50
impairment test
Other non-operating income and
expenditures except the items mentioned 620,065.25 5,445,213.46 -3,933,272.04
above
Other gains and losses items that fit the
definition of non-recurring gains and 1,246,912.65 92,329.55
losses
Less: Impact of income tax 19,272,109.42 13,966,646.08 2,763,172.58
Impact of the minority interests (after
1,770,947.78 2,550,743.24 647,558.34
tax)
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Total 191,549,075.04 69,869,195.94 -2,419,472.82 --
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 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, Innovation, Transcendence" business path, concentrating on the
research and application of heat pump technology and thermal management system products, focusing on the
development of environmental thermal management solutions for heat exchange and temperature intelligent
control, and is committed to the professional operation in the fields of building HVAC, electrical equipment and
automotive thermal management. According to the different stages 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.
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, Thermal Management
Integrated Module for new energy vehicle, Electronic Water Pump, etc., which are widely used in both traditional
fuel vehicles and new energy vehicle.
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 certain trend, which puts forward higher and more updated requirements for A/C
and thermal management products no matter in hybrid, pure electric or hydrogen energy vehicles. 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, Volkswagen,
Mercedes Benz, BMW, Volvo, Toyota, GM, Geely, BYD, SAIC, NIO and other cooperative partners.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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" 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 automotive
thermal management. The market share of the Company's Electronic Expansion Valve, Four-way Reversing
Valve, Solenoid Valve, Microchannel Heat Exchanger, Automotive Electronic Expansion Valve, Thermal
Management Integrated Module for new energy vehicle, 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.
II. Significant Changes in Main Assets
1. Significant changes in main assets
Major assets Explanation on Major Changes
Increased by 459.80 million, +13.61%, compared with the beginning of the year, mainly
Fixed Assets
due to investment of raised funds and the transformation of automation equipment
Increased by 147.77 million, +30.72%, compared with the beginning of the year, mainly
Construction in Progress
due to investment of raised funds and the transformation of automation equipment
2. Major overseas assets
√Applicable □ Not applicable
Proportion
Whether
Control of overseas
there is
Content of Size of Operation measures Income assets in
Formation Location significant
Assets Assets Mode of security Status net assets
impairment
assets of the
risk
Company
R&D,
Manufactur
Sanhua Financial
ing,
Internation supervision
Equity 1,351,516, The United Marketing 45,106,474
al Limited and No
Investment 858.23 States and .68
(USA) external
Investment
(merger) audit
Manageme
nt
Sanhua Equity 2,213,696, Singapore R&D, Financial 44,696,908 No
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Internation Investment 335.86 Manufactur supervision .08
al ing, and
Singapore Marketing external
PTE. Ltd. and audit
(merger) Investment
Manageme
nt
III. Core Competitiveness Analysis
1. Clear strategic layout
The Company adheres to the " Focus on Leading, Innovation, Transcendence " business path, takes the research
and application of heat pump 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 gives
full play to the synergy effect with the original business, continues to deepen the research and development of
automobile A/C and new energy vehicle thermal management system components, and actively explores 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 2379 patents both
domestic and abroad, including 1168 invention patents. All products, services and quality of the Company are to
meet the needs of customers as the first priority.
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, Thermal Management Integrated Module
for new energy vehicle, 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, achieved 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 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
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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 Annual Report
Section IV Management’s Discussion and Analysis of Operations
I. Overview
In 2020, China and foreign countries were negatively affected by the COVID-19. Globally, the U.S. economy is
cooling, Europe's economic recovery is slow, while China's epidemic situation is under better control and takes
the lead in economic recovery. However, under the challengeable international background of looser monetary
policy of Federal Reserve and rising commodity prices, external industry environment of the Company is under
pressure. 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 new energy vehicles develop rapidly.
During the reporting period, the operating revenue is RMB 12.11 billion, a year-on-year increase of 7.29%; the
operating profit is RMB 1.70 billion, a year-on-year increase of 2.27%; the net profit attributable to shareholders
of the listed Company is RMB 1.46 billion, a year-on-year increase of 2.88%. The operating revenue of
refrigeration and air conditioning electrical components business is RMB 9.64 billion, a year-on-year increase of
0.04%; the operating revenue of automotive components business is RMB 2.47 billion, a year-on-year increase of
49.57%.
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. 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. Due to long term work of integration of Aweco business, its revenue has been turned to positive. In
addition, the construction of Vietnam's factories has achieved initial results, and is able to effectively coping
with the challenge of US tariff increase.
(2). Automotive components business
On the premise of epidemic prevention and control, the automotive components business actively built global
marketing network and production capacity layout. Production capacity’s landing and climbing of a variety of
products in Mexico factory has been realized, and steady expansion of Shaoxing Binhai factory actively
responded to the delivery of orders from domestic and foreign customers. At the same time, Sanhua actively
promoted integrated module projects among existing customers, so as to make products more standard,
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
integrated and platform oriented. With heat pump components and key components as the core business, the
Company constantly improved the competitiveness of its products and actively developed new customers
under guarantee of existing projects. In 2020, the Company achieved breakthroughs of many new customers
and orders of many new projects, and became a tier 1 supplier of the top ten automobile manufacturers in the
world, with the continuous rising in total life cycle value.
2. Unite as one and fight against the epidemic together
After the outbreak of the epidemic, under guidance of government departments, the Company concentrated on the
prevention and control of the epidemic on one hand and the resumption of production on the other hand. In each
subsidiary around the world, timely implemented the anti-epidemic material reserve, overcame plenty of
difficulties, implemented of resumption of work in batches, provided timely products and service for customers,
and ensured the normal operation and production. Due to timely, stable and effective epidemic prevention
measures, the Company's annual revenue has achieved positive growth.
3. Strengthen the creation of product strength and improve the patent layout of strategic products
During the reporting period, the Company invested 518 million yuan in R & D, this continuous R & D investment
is used to build the product strength. And the Company participated in market competition with new products and
new technologies through continuous optimization iteration. In terms of patent layout, the main work is to
"eliminate product patent risks and enhance patent rights" to sort out and summarize the patents of key products,
so as to achieve resource sharing of each unit. By the end of the report period, 2379 patents have been authorized
at home and abroad, including 1168 invention patents.
4. Pay attention to the construction of talent team and establish sustained and long-term incentive mechanism
The Company continued to deepen the work of "strengthening the talents, streamlining and high efficiency",
promote 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 phase of restricted stock incentive plan for directors, senior managers and other core talents, and further
established and improved the Company's long-term incentive mechanism.
5. Attach great importance to the maintenance of investor relations, strengthen the awareness of service and
return to shareholders
During the reporting period, the Company strengthened and improved the construction of internal control system,
standardized the operation of the three committees, improved the Company's information disclosure, investor
relationship management and other aspects. And ensured smooth communication between investors and listed
company through interactive platform, investor call answering, on-site reception and other means. In 2020, the
Company's market value reached a new record.
II. Main Business Analysis
1. Overview
Please refer to details in “I. Overview” of “Section IV Management’s Discussion and Analysis of Operation”
2. Operating incomes and operating costs
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
1) Operating income structure
2020 2019
Proportion to Proportion to YoY Change
Amount Amount
operating income operating income
Total Revenue 12,109,833,368.44 100% 11,287,489,442.23 100% 7.29%
Classified by Industry
General
Equipment
12,109,833,368.44 100.00% 11,287,489,442.23 100.00% 7.29%
Manufacturing
Industry
Classified by Products
Refrigeration A/C
Electrical 9,640,647,193.31 79.61% 9,636,588,706.35 85.37% 0.04%
Components
Automotive
2,469,186,175.13 20.39% 1,650,900,735.88 14.63% 49.57%
Components
Classified by Region
Domestic 5,864,589,812.78 48.43% 5,594,651,760.03 49.57% 4.82%
Overseas 6,245,243,555.66 51.57% 5,692,837,682.20 50.43% 9.70%
2) Industries, products or regions accounting for more than 10% of the Company’s operating income or
operating profit
√ Applicable □ Not applicable
YoY Change YoY Change
Operating YoY Change
Operating cost Gross margin of operating of operating
income of gross margin
income cost
Classified by Industry
General
Equipment 12,109,833,368 8,500,391,322.
29.81% 7.29% 6.97% 0.21%
Manufacturing .44 27
Industry
Classified by Products
Refrigeration
9,640,647,193. 6,764,599,091.
A/C Electrical 29.83% 0.04% -0.55% 0.41%
31 22
Components
Automotive 2,469,186,175. 1,735,792,231.
29.70% 49.57% 51.58% -0.94%
Components 13 05
Classified by Region
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
5,864,589,812. 4,214,522,983.
Domestic 28.14% 4.82% 4.80% 0.02%
78 97
6,245,243,555. 4,285,868,338.
Overseas 31.37% 9.70% 9.18% 0.32%
66 30
Adjusted statistics of principal business are based on the caliber at the end of the reporting period of last year, if
the statistics caliber of principal business has been changed during the reporting period
□ Applicable √ Not applicable
3) If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2020 2019 YoY Change
General Sales Yuan 12,109,833,368.44 11,287,489,442.23 7.29%
Equipment
Production Yuan 12,170,122,424.44 11,337,224,679.64 7.35%
Manufacturing
Industry Inventory Yuan 2,402,338,998.74 2,273,270,394.25 5.68%
Explanation on why the related data varied by more than 30% on a YOY basis
□Applicable √Not applicable
4) Fulfillment of signed significant sales contracts by the reporting period
□ Applicable √ Not applicable
5) Operating cost structure
Unit：Yuan
2020 2019
Industry Item Proportion to Proportion to YoY Change
Amount Amount
operating cost operating cost
General
Equipment 6,445,946,206. 6,022,623,114.
Material 75.83% 75.79% 7.03%
Manufacturing 35 62
Industry
General
Equipment 1,274,879,076. 1,176,641,430.
Labor 15.00% 14.81% 8.35%
Manufacturing 04 25
Industry
General
Equipment
Depreciation 254,799,059.70 3.00% 224,908,694.23 2.83% 13.29%
Manufacturing
Industry
General
Equipment
Energy Source 188,350,845.76 2.22% 194,227,590.85 2.44% -3.03%
Manufacturing
Industry
General Other 336,416,134.42 3.96% 328,443,615.88 4.13% 2.43%
19
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Equipment
Manufacturing
Industry
Unit：Yuan
2020 2019
Product Item Proportion to Proportion to YoY Change
Amount Amount
operating cost operating cost
Refrigeration
5,186,890,211. 5,241,925,556.
A/C Electrical Material 61.02% 65.96% -1.05%
38 58
Components
Refrigeration
1,059,871,851. 1,045,010,795.
A/C Electrical Labor 12.47% 13.15% 1.42%
73 00
Components
Refrigeration
A/C Electrical Depreciation 201,479,294.12 2.37% 189,097,669.75 2.38% 6.55%
Components
Refrigeration
A/C Electrical Energy Source 140,848,963.04 1.66% 150,757,539.80 1.90% -6.57%
Components
Refrigeration
A/C Electrical Other 175,508,770.95 2.06% 174,957,696.44 2.20% 0.31%
Components
Automotive 1,259,055,994.
Material 14.81% 780,697,558.04 9.82% 61.27%
Components 97
Automotive
Labor 215,007,224.31 2.53% 131,630,635.25 1.66% 63.34%
Components
Automotive
Depreciation 53,319,765.58 0.63% 35,811,024.48 0.45% 48.89%
Components
Automotive
Energy Source 47,501,882.72 0.56% 43,470,051.05 0.55% 9.27%
Components
Automotive
Other 160,907,363.47 1.89% 153,485,919.44 1.93% 4.84%
Components
6) Any change in consolidation scope during the reporting period
√Yes □ No
1. Disposal of subsidiaries
Lose control due to disposal
Name of subsidiary Equity disposal Equity disposal Equity disposal Date of losing control
price ratio method
Qingdao Debaiyi Refrigeration Equipment Co., 6,562,658.15 70% Transfer to 2020-12-02
20
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Ltd Minority shareholders
(Continued)
Determination fo losing The difference between the Proportion of Net assets on Net profit from the beginning
control disposal price and remaining equity on disposal date of the period to the disposal
corresponding net asset of the date of loss of date
consolidated financial control
statements
Complete the registration -4,098,327.44 0.00 15,229,979.42 -1,609,483.26
procedures for industrial and
commercial changes
2. Changes in the scope of consolidation due to other reasons
1) Increased scope of consolidation
Name Method of Date of equity Actual contribution at Contribution ratio
obtaining equity acquisition the end of the period
Zhejiang Xianji Intelligent Technology Co., Ltd New investment 2020-09-10 34.6 million yuan 100%
Sanhua Mexico Investment Co., Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial Refrigeration Co., New investment 2020-10-09 68.29 million yuan 100%
Ltd
Shaoxing Sanhua Automobile Thermal New investment 2020-12-03 0.00 100%
Management Technology Co., Ltd
2) Decreased scope of consolidation
Name Method of Date of disposal Net assets on Net profit from the
disposal disposal date beginning of the period to
the date of cancellation
Hangzhou Sanhuajia Electric Heating Management Liquidation 2020-05-18 147,448.25 -78,092.41
System Co., Ltd cancellation
Aweco Electrical Equipment (Shanghai) Co., Ltd Liquidation 2020-06-02 6,669.73 22,351.38
cancellation
Ma'anshan Sanhua Intelligent Technology Co., Ltd Liquidation 2020-08-03 3,907,472.50 -478,491.11
cancellation
7) Significant change or adjustment of the Company’s business, products or services during the reporting
period:
□ Applicable √ Not applicable
8) Major customers and suppliers:
Sales to major customers of the Company
Sales to top five customers (RMB) 4,291,399,554.22
Total sales to top five customers as a percentage of the
35.43%
total sales for the year (%)
21
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Total sales to the related parties in top five customers as
0.00%
a percentage of the total sales of the year (%)
Information on top five customers
No. Name of Customer Sales Amount (RMB) Percentage of total sales for the year
1 First 1,157,466,943.06 9.56%
2 Second 946,329,101.54 7.81%
3 Third 815,461,250.85 6.73%
4 Fourth 809,814,087.88 6.69%
5 Fifth 562,328,170.89 4.64%
Total -- 4,291,399,554.22 35.43%
Other information of major customers
□Applicable√ Not applicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 946,674,947.40
Total purchases from top five suppliers as a percentage
15.37%
of the total purchases for the year
Total purchases from the related parties in the top five
suppliers as a percentage of the total purchases for the 0.00%
year
Information on top five suppliers of the Company
No. Name of Supplier Purchase Amount (RMB) Percentage of total purchase for the year
1 First 324,721,054.98 5.27%
2 Second 273,488,083.85 4.44%
3 Third 132,846,224.35 2.16%
4 Fourth 116,287,076.44 1.89%
5 Fifth 99,332,507.78 1.61%
Total -- 946,674,947.40 15.37%
Other information on major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
2020 2019 YoY Change Note of significant change
Sales expenses 602,954,759.17 588,547,454.16 2.45%
22
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
It is mainly due to the increase of
Administrative
764,084,428.88 595,781,120.22 28.25% employee compensation and share
expenses
based payment in the current period.
Mainly due to changes in gains and
Financial expenses 128,860,093.64 -7,772,819.07 1,757.83%
losses of exchange rate fluctuations
R&D expenses 518,401,363.63 532,012,335.99 -2.56%
4. R&D Investment
√Applicable □Not applicable
2020 2019 YoY Change
Number of R & D personnel 1,576 1,279 23.22%
Proportion of R & D
12.06% 12.03% 0.03%
personnel
Amount of R&D expenses
518,401,363.63 532,012,335.99 -2.56%
(RMB)
R&D investment as a
percentage of operating 4.28% 4.71% -0.43%
income
Capitalized R&D expenses
0.00 0.00 0.00%
(RMB)
Capitalized R&D expenses as
a percentage of R&D 0.00% 0.00% 0.00%
expenses
Reason of significant change of total R&D expenses as a percentage of operating income as compared to last year
□ Applicable √ Not applicable
Reason and explanation of its reasonableness of significant change of the capitalized R&D expenses
□ Applicable √ Not applicable
5. Cash flow
Item 2020 2019 YoY Change
Subtotal of cash inflows from
12,367,638,678.57 12,520,735,302.40 -1.22%
operating activities
Subtotal of cash outflows
10,280,294,895.46 10,620,571,697.80 -3.20%
from operating activities
Net cash flows from
2,087,343,783.11 1,900,163,604.60 9.85%
operating activities
Subtotal of cash inflows from
644,636,918.39 1,123,706,197.07 -42.63%
investing activities
23
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Subtotal of cash outflows
1,439,811,450.15 900,786,184.48 59.84%
from investing activities
Net cash flows from
-795,174,531.76 222,920,012.59 -456.71%
investing activities
Subtotal of cash inflows from
2,163,516,795.02 2,283,952,930.77 -5.27%
financing activities
Subtotal of cash outflows
2,559,032,808.73 3,017,767,552.58 -15.20%
from financing activities
Net cash flows from
-395,516,013.71 -733,814,621.81 46.10%
financing activities
Net increase in cash and
846,361,023.53 1,389,240,153.53 -39.08%
cash equivalents
Explanation of why the related data varied significantly on a YoY basis
√ Applicable □ Not applicable
1. The net cash flow from investment activities decreased by 456.71%, mainly due to the decrease in
redemption of bank financial products.
2. Net cash flow from financing activities increased by 46.10%, mainly due to the decrease of cash paid
for debt.
Explanation of reasons leading to the material difference between cash flow from operating activities during the
reporting period and net profit for the year
√Applicable □Not applicable
It is mainly caused by changes in operating receivables and receivables. See the supplementary information of
cash flow statement in the financial report for details.
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
89,078,877.16 5.26% exchange forward contract No
Income
settlement, bank financial
product, etc.
Floating income of futures
Gains and Losses
contracts, foreign exchange
from Change of 31,847,915.76 1.88% No
forward contracts, bank
Fair Value
financial products, etc.
Non-operating 5,055,479.82 0.30% Income from nonpayment, No
24
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Revenue compensation and
liquidated damages, gains
from retirement of fixed
assets, etc.
Loss on retirement of fixed
Non-operating
14,843,633.18 0.88% assets, litigation No
Expenditures
compensation loss, etc.
Credit
-28,677,382.30 -1.69% Bad debt loss, etc. No
Impairment Loss
Assets Loss on impairment of
-58,672,538.84 -3.47% No
Impairment Loss inventories
Gains on
Gains on disposal of fixed
Disposal of -486,378.33 -0.03% No
assets
Properties
The government grants of
Government subsidies,
VAT refund of civil welfare
value-added tax rebate for
enterprises and software
civil affairs and welfare
Other Gains 151,555,896.45 8.96% product VAT exceeding tax
enterprises, value-added tax
burden are sustainable,
rebate for software
while the rest are not
products, etc.
sustainable
IV. Analysis of Assets and Liabilities
1. Material changes of assets
The Company implemented new income or lease standard and adjusted beginning balance of relevant items of
financial statements for the first time in 2020.
Applicable
Unit: RMB
December 31st 2020 January 1st 2020
YoY
Note of significant change
Percentage of Percentage of Change
Amount Amount
total assets total assets
Mainly due to the increase of net cash
Cash and Bank 3,489,687,568. 2,663,719,770.
20.49% 18.01% 2.48% flow generated by the Company's
Balances 14 15
operating activities
Account 2,355,613,299. 1,871,323,522.
13.83% 12.65% 1.18%
Receivable 57 82
2,307,761,706. 2,180,838,596.
Inventories 13.55% 14.75% -1.20%
46 07
25
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Investment
10,067,588.96 0.06% 27,025,974.05 0.18% -0.12%
property
Long-term Equity
15,219,616.68 0.09% 14,522,259.80 0.10% -0.01%
Investment
3,839,408,059. 3,379,608,199.
Fixed Assets 22.54% 22.85% -0.31%
45 26
Construction in 628,730,529.0
3.69% 480,959,262.46 3.25% 0.44%
Progress 7
Short-term 383,088,296.6 1,295,610,572.
2.25% 8.76% -6.51%
borrowings 0 07
Long-term 1,707,918,994.
10.03% 392,882,280.09 2.66% 7.37%
borrowings 87
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 -241,409,571. 752,224,861
(Excluding 1 53 .78
Derivative
Financial
Assets)
2.Derivative
50,016,085.8 58,330,486.
Financial 8,314,400.73
0 53
Assets
Subtotal of
1,001,948,834 -191,393,485. 810,555,348
financial
.04 73 .31
assets
1,001,948,834 -191,393,485. 810,555,348
Total
.04 73 .31
26
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Financial 7,939,957.9
126,364.40 7,813,593.51
Liabilities 1
Whether there were any material changes on the measurement attributes of major assets of the Company
during the reporting period:
□ Yes √ No
3. Assets right restrictions as of the end of reporting period
Items Closing Book value Reasons for being restricted
46,093,170.51 Deposits
Cash and Bank Balances 32,327,359.09 Deposits in futures institutions
11,123,000.00 Litigation frozen funds
Note Receivable 1,608,722,846.32 Pledge for financing
Total 1,698,266,375.92 -
V. Analysis of Investments
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Period Investment over the Corresponding Period
YoY Change
(RMB) of Last Year (RMB)
277,394,000.00 11,038,318.85 2,413.01%
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
27
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
5. Usage of raised funds
√Applicable □Not applicable
（1）Overall usage of raised fund
√Applicable □Not applicable
Unit: RMB in 10 thousand
Proporti
on of
Total accumul
Total amount Accumu ated
Raised
amount Accumu of raised lated amount Total
Raised funds
Total of raised lated funds amount of raised amount
funds has not
amount funds amount with use of raised funds of
Year Method has not been
of raised invested of raised alteratio funds with use unused
been used for
funds in the funds n during with use alteratio raised
used two
report invested the alteratio n to the funds
years
period reportin n total
g period amount
of raised
funds
Non-pub
35,105.6 11,471.7
2015 lic 39,400 536.6 29.12% -
4 6
offering
Deposite
d in the
special
account
of raised
Non-pub
43,306.9 125,424. 16,631.4 funds
2017 lic 132,231
9 14 5 and used
offering
for
purchasi
ng bank
financial
products
43,843.5 160,529. 11,471.7 16,631.4
Total -- 171,631 6.68% -- 0
9 78 6 5
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.
28
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
(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 21 st, 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
December 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 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.
After being deliberated and approved by the Company's 2019 shareholders' meeting on May19,2020, the surplus raised funds will
supplement working capital permanently, and all regulatory accounts for storing the raised funds were cancelled. As of December
31, 2020, the balance of raised funds is RMB 0.000.
(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
29
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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. In 2020, the actual usage of raised
funds is RMB 433.0699 million, and the amount of bank deposit interest and financial income net of bank charges is RMB 20.62
million. The accumulated amount of used raised funds was RMB 1,254.2414 million, the accumulated amount of bank deposits
interest and financial income after deducting bank charges is RMB 98.2459 million.
As of December 31, 2020, the balance of raised funds is RMB 116.3145 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 50 million.
（2）Statement of Committed Investment Projects of Raised Funds
√Applicable □Not applicable
Unit: RMB in 10 thousand
Invest Whethe
Wheth Whethe
Accum ment r
er Total r
Total ulative progres Date of Benefit feasibil
project commit Invest expecte
Committed invest invest s at the asset s ity of
has ted ment in d
investment projects ment ment at end of ready achieve project
been invest the benefit
and allocation of after the end the for d in the has
(or ment of current s have
over-raised funds alterati of the period intende current change
partiall raised year been
on (a) period (%) d use year d
y) funds achieve
(b) (d)=(b) signific
altered d
/(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
30
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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
18,903. 47,464. ber
project with annual No 50,362 50,362 94.25%
69 86 31st,
output of 11.5
2021
million sets
Technical N/A No
transformation
project of
Automotive thermal January
21,922. 47,150. 103.64
management system No 45,495 45,495 31st,
48 26 %
module with an 2021
annual output of
additional 7.3
million units
Technical N/A No
transformation
project of
March
Automotive A/C 1,204.6 19,064.
No 20,874 20,874 91.33% 31st,
control components 9 52
2020
with an annual
output of additional
12.70 million units
Expansion of N/A No
product testing room January
1,276.1 9,686.6
and auxiliary No 13,400 13,400 72.29% 31st,
3 5
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 43,843. 160,52 1,633.9
committed -- -- -- -- --
1 7.76 59 9.78 3
investment projects
Investment of excess proceeds
--
31
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
172,23 172,70 43,843. 160,52 1,633.9
Total -- -- -- -- --
1 7.76 59 9.78 3
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. The specific reasons for postponement of the construction
progress of the project are as follows: According to the medium and long-term development strategy,
combined with the existing product structure, the Company adopted the strategy of prudent use and
reasonable investment in the previous fund-raising. The new invested equipment tends to be more
intelligent and systematic, and the equipment selection is carried out according to the latest technical
requirements and product models. At the same time, due to the change of market demand, the production
process needs to be improved, which leads to the equipment investment progress later than expected. In
June 2017, the project has been completed.
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
The situation and
deposit interest and financing income of raised funds), accounting for 29.12% of the net amount of funds
reasons of not
raised in 2015. Reasons for the change: In order to accelerate the development of Microchannel business,
reaching the planned
improve the level of technical equipment, realize the adjustment and upgrading of product structure, and
schedule or expected
give full play to the resource advantages of Sanhua Microchannel Hangzhou factory in R&D,
income (by specific
technology, equipment, and improve the utilization efficiency of raised funds. The Company postponed
project)
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. " Automatic technical transformation project of heat exchanger with
an annual output of additional 700,000 units " is implemented by Sanhua Microchannel, which is a
technology transformation project with new production capacity, and the benefit of this project cannot be
calculated separately.
Funds raised in 2017:
(1) After deliberation and approval by the board of directors of the Company on April 1 st, 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. In March, 2020, " Technical transformation project of Automotive
32
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
A/C control components with an annual output of additional 12.70 million units " has been completed. In
January 2021, the " Technical transformation project of Automotive thermal management system module
with an annual output of additional 7.3 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 costs of
this new project is around 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 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
Significant changes
advantages of Sanhua Microchannel Hangzhou factory in R&D, technology, equipment, and improve the
in the feasibility of
utilization efficiency of raised funds. The Company postponed the investment in the third production line
projects
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).
5. " Automatic technical transformation project of heat exchanger with an annual output of additional
700,000 units " is implemented by Sanhua Microchannel, which is a technology transformation project
33
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
with new production capacity, and the benefit of this project cannot be calculated separately.
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
Funds raised in 2015:
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 costs of
The amount and this new project are around RMB 114.7176 million of raised funds (including RMB 4.7676 million of
reasons of the bank deposit interest and financing income of raised funds), accounting for 29.12% of the net amount of
balance of raised funds raised in 2015.
funds in the project
implementation 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.
34
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Funds raised in 2017:
The project of " Technical transformation project of Automotive thermal management system module
with an annual output of additional 7.3 million units " has been put into operation. The project was
completed and checked before acceptance by the office of general manager on January 31, 2021. On
January 31, 2021, the final payment of the project is about 52.7745 million yuan, which is paid with its
own funds according to the contract, and the balance of the project is about 14.1079 million yuan.
Use of unused raised Funds raised in 2017:
funds It was deposited in the special account of raised funds and used to purchase bank financial products.
Problems or other
situations in the use
No
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% st
No
exchanger 31 , 2019 applicable
r
with an
productio
annual
n line in
output of
Mexico
additional
700,000
units
35
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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
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 deposit interest and
financing income of raised funds), accounting for 29.12% of the net amount of funds
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
Alteration reason, decision making Company postponed the investment in the third production line and other related
progress and information disclosure supporting facilities of Mexico project. The investment of the third production line and
(of a specific project) 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).
5. " Automatic technical transformation project of heat exchanger with an annual output
of additional 700,000 units " is implemented by Sanhua Microchannel, which is a
technology transformation project with new production capacity, and the benefit of this
project cannot be calculated separately.
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
36
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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
Unit：RMB
Company Company Principal Registered Total Operating Operating
Net assets Net profit
name type business capital assets revenue profit
Refrigerati
on and A/C
Zhejiang
electrical
Sanhua
component 250 3,422,167, 3,182,229, 1,190,814, 227,396,06 198,048,98
Refrigerati Subsidiary
s million 038.05 394.09 030.28 8.39 0.66
on Group
manufactur
Co., Ltd.
ing and
marketing
Refrigerati
Hangzhou on and A/C
Sanhua electrical
Microchan component 360 1,631,228, 1,043,129, 1,277,658, 169,082,16 141,993,66
Subsidiary
nel Heat s million 511.78 777.10 814.36 0.80 5.67
Exchanger manufactur
Co., Ltd. ing and
marketing
Refrigerati
Zhejiang on and A/C
Sanhua electrical 2,481,484, 121,613,44 3,758,566, 10,935,839 6,595,425.
Subsidiary 50 million
Trading component 241.37 1.43 203.96 .37 66
Co., Ltd. s
marketing
Zhejiang Automotiv
Subsidiary 1,460 4,371,825, 2,961,182, 2,469,186, 377,143,40 331,778,97
Sanhua e
37
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Automotiv component million 691.32 045.19 175.13 1.31 6.74
e s
Componen manufactur
ts Co., Ltd ing and
marketing
Refrigerati
on and A/C
electrical
component
Sanhua
s
Internation 37.55
manufactur 1,351,516, 255,307,74 2,472,709, 61,453,322 45,106,474
al Limited Subsidiary million
ing 858.23 8.50 133.91 .54 .68
(USA) USD
marketing
(merger)
and
investment
manageme
nt
Refrigerati
on and A/C
electrical
Sanhua component
Internation s
al manufactur $105.5798 2,213,696, 604,832,01 3,428,049, 60,076,824 44,696,908
Subsidiary
Singapore ing 33 million 335.86 0.57 807.50 .35 .08
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
Hangzhou Sanhua Household Thermal
Liquidation cancellation No significant impact
Management System Co., Ltd.
AWECO Electric Equipment (Shanghai)
Liquidation cancellation No significant impact
Co., Ltd.
Ma'anshan Sanhua Intelligent
Liquidation cancellation No significant impact
Technology Co., Ltd
Qingdao Debaiyi Refrigeration
Equity transfer No significant impact
Equipment Co., Ltd
38
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Zhejiang Xianji Intelligent Technology New investment
No significant impact
Co., Ltd
Sanhua Mexico Investment Limited New investment No significant impact
Zhejiang Sanhua Commercial New investment
No significant impact
Refrigeration Co., Ltd
Shaoxing Sanhua Automobile Thermal New investment
No significant impact
Management Technology Co., Ltd
VIII. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
IX. Outlook for the Future Development of the Company
1. Development strategy
The Company adheres to the business strategy of "Focusing on leading, innovation and transcendence" and firmly
grasps the product development theme of energy conservation, environmental protection and intelligent control.
With the research and application of heat pump technology and thermal management system products as the core,
we continuously deepen and expand the global business layout through continuous innovation of products and
technologies. It transformed from "cost leading" to "technology leading", from "mechanical parts development" to
"electronic control integrated system control technology solution development" in order to provide competitive
environmental intelligent control solutions for global high-quality customers. As a result, it becomes a global
leader in the climate intelligent control system industry.
2. Business plan for 2021
(1) Refrigeration air conditioning electrical parts business
The refrigeration and air conditioning electrical parts business will seize the opportunities of energy efficiency
upgrading, refrigerant switching, multi-line and other related business products, continue to expand the customer
base, strengthen the acquisition and transformation of business opportunities, and improve operation sales. The
Company promotes intelligent manufacturing and lean production, increases special procurement management,
deeply promotes team building, and constantly improves product competitiveness. Continue to integrate and
improve the operation and management of Aweco at home and abroad, increase the construction of overseas
factories in Vietnam and Mexico, improve the overall operation efficiency of overseas manufacturing and
marketing, and create greater benefits. At the same time, we will accelerate the planning of new factories in
Daming City, and lay a solid foundation in various commercial fields of consumption upgrading and industrial
upgrading of the Chinese market in the future.
(2) Automotive components business
Under the development opportunity of new energy vehicle thermal management industry, automotive components
business should strengthen the direction of system integration, increase R & D investments, and maintain the
leading technology of the industry. At the same time, in the process of rapid growth of new energy thermal
management, we always pay attention to the changes of market demand and competition pattern, constantly
39
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
accelerate the construction of informatization and intelligence, increase the construction and management of
supply chain, pay attention to cost control, actively respond to the needs of customers, and ensure the product
quality and delivery of projects. In addition, in the process of global development, we will actively promote the
construction of Mexico and Binhai, increase the layout of production capacity and the construction of talent team,
so as to grow rapidly in global automotive electrification and intellectualization.
3. Main risks for future development
(1) Risk of price fluctuation of raw materials
The raw materials required by the Company are copper and aluminum, which account for a large proportion of the
cost composition of the products. Therefore, the fluctuation of the market price of raw materials will bring large cost
pressure to the Company. The Company will reduce the adverse impact of raw material price fluctuations through
the establishment of linkage pricing mechanism, hedging operation of commodity futures, and timely negotiation
with customers.
(2) The risk of rising labor cost
The labor costs are rising year by year, which reduces the profit margin of the Company to a certain extent. In the
future, the Company will continue to improve the level of intelligent manufacturing by continuously promoting
lean production, process improvement and technical transformation.
(3) Trade and exchange rate risk
The Company's export volume is large, involving North America, Europe, Japan, Southeast Asia and other regions.
Due to the changes in regional trade policies, the Company's daily operation will be affected. The Company deals
with interregional trade risks through transferring production capacity to foreign countries. In addition, the
fluctuation of exchange rate will also have a certain impact on the profit. According to the actual situation, the
Company deals with and reduces this risk by means of forward foreign exchange settlement and establishing
overseas production bases in the United States, Poland, Mexico, India and other places.
X. Reception of activities including research, communication and interviews during the
report period
√ Applicable □ Not applicable
(1) Reception of research activities during the reporting period.
Main contents of
Time of Location of Method of Type of discussion and Index of basic situation
Reception object
reception reception reception reception object materials of the research
provided
Dongwu Introduction of
Securities: Chai the company's
Jiahui; Guangfa operation and http://irm.cninfo.com.c
June 2, 2020 Hangzhou On-site research Institution
Fund: Mo Jiao; reply to n/ssessgs/S002050
Dacheng Fund: investors'
Cheng Xiang questions
40
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Introduction of
CICC: Liu
the company's
Chang; Jingshun
operation and http://irm.cninfo.com.c
July 1, 2020 Hangzhou On-site research Institution Great Wall: Han
reply to n/ssessgs/S002050
Ting, Zhang
investors'
Qingze
questions
E Fund: Feng
Bo, Qi He, Cai
Rongcheng, Lin
Gaobang, Jia
Jian, He
Chongkai, Li
Zhongyang, Hu
Introduction of
Yunfeng, Liu
the company's
Wu, Chen Lixin,
operation and http://irm.cninfo.com.c
July 8, 2020 Hangzhou On-site research Institution Zheng Xi, Wei
reply to n/ssessgs/S002050
Yixi, Lin Sen,
investors'
Ge Qiushi,
questions
Wuyang,
Ouyang Liangqi;
Dongwu
Securities: Feng
Yanzhu, Zeng
Duohong, Chai
Jiahui
Huitianfu Fund:
Yuan Jianjun,
Wang Xu, Lao
Jienan, Hu
Xinwei, Zhao
Pengfei, Ma
Xiang, Yang Introduction of
Yican, Yang Fan, the company's
Tan Zhiqiang, operation and http://irm.cninfo.com.c
August 25, 2020 Hangzhou On-site research Institution
Liu Weilin, Zhao reply to n/ssessgs/S002050
Jian, Zheng investors'
Huilian, Zhang questions
Peng, Weng
Qiang, Bian
Zheng, Rao
Yunfei;
Zheshang
Securities: Wang
41
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Haiyang, Zhang
Yuyuan
Ping’an Asset
Management:
Xu Zhixiang;
CICC Fund: Qiu
Yanbing;
Dingfeng Asset:
Zhang Qijia;
Anxin
Securities: Li
Yizhen; Baoxin
Asset: Lin
Haifeng;
Everbright Asset
Management:
Ying Chao;
Shenwan
Appliance: Liu
Yizhen Zheng;
Shenwan Introduction of
Appliance: Shi the company's
August 27-28, Jinxing; GF operation and http://irm.cninfo.com.c
Hangzhou On-site research Institution
2020 Securities: Wang reply to n/ssessgs/S002050
Chaoning; investors'
Tianchong questions
Capital: Fu
Jiesong; Jiaoyin
Kanglian: Wang
Yaoyong;
Shanghai Bank
Fund: Wang
Kexin; First
Beijing: Li
Ancheng; Yimu
Assets: Jiang
Yue; Zijin
Insurance: Sang
Yadong; Hua'an
Securities: Ye
Qun; Debang
Fund: Tao Yutao;
Panjing
Investment:
42
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Wang Linsen;
GF Securities:
Zhang Xiujun;
Tianchong
Capital: Jiang
Xiaodong;
Hangyin
Financial
Management:
Shen Jiexin
Huatai
Securities: Xing
Chongyang,
Wang Tao;
Huishitong
Investment: Bao
Yunan; Chao
Tiancheng: Fang
Sixin; Qianrui
Assets: Wang
Yongqiang;
Zheshang
Securities: Li Introduction of
Bohua; Pacific the company's
November 9, Securities: Fan operation and http://irm.cninfo.com.c
Hangzhou On-site research Institution
2020 Xiapei; Guotai reply to n/ssessgs/S002050
Yuanxin: Lu investors'
Daming; questions
Qiantou
Finance: Zhou
Wei, Chen Kai;
Shangfeng
Capital: Gu
Jiahao;
Shenghua
Capital: Chai
Shanshan;
Ningju
Investment: Luo
Zhe
E-Fund: Zhu Introduction of
November 19, Yan; Ping’an the company's http://irm.cninfo.com.c
Hangzhou On-site research Institution
2020 Asset operation and n/ssessgs/S002050
Management: reply to
43
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Liu Ruiyuan, investors'
Ren Zheng, Han questions
Yue, Zhang Ze,
Cheng
Zhucheng;
Changjiang
Securities: Wu
Bohua
Caitong
Securities: Gong
Siwen, Fu
Zhenghao;
Western Asset
Management:
Shuang Xing, Fu
Yunchuan; Yipin
Assets: Zhou
Xin; Oriental
Wealth Introduction of
Securities: Wang the company's
December 8, Ying, Yu Na; operation and http://irm.cninfo.com.c
Hangzhou On-site research Institution
2020 Xinda reply to n/ssessgs/S002050
Securities: Wu investors'
Hao, Chen Lei; questions
Shibei
Investment: Qin
Xuefeng; Yanxin
Assets: Shen
Mengkai, Tang
Qingqing,
Huang Huaying;
Hongcheng
Investment:
Ding Lijia
CITIC
Securities: Dong
Yudan, Li Cong, Introduction of
Li Jingtao, Wang the company's
December Hao, Qian operation and http://irm.cninfo.com.c
Hangzhou On-site research Institution
16-17, 2020 Xiangjin, Li reply to n/ssessgs/S002050
Hang; Kaiyin investors'
Capital: Shen questions
Lingna; Yihui
Investment:
44
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Wang Zhen;
Kaiji Securities:
Wei Hongda;
Changsheng
Fund: Guo Kun;
Guotou Ruiyin:
Ye Qing;
Zhongtai
Securities: Chen
Chuanhong;
Zheshang Fund:
Chai Ming;
Nord Fund: Luo
Shifeng;
Xinyuan
Investment: Wen
Zuobei;
Guantong
Futures: Zhao
Yan; Yibo
Investment: Lv
Guojin; Qinghe
Capital: Dong
Xinghua and
Xiao Han;
Hongshan
Capital: Song
Yahui;
Tianchong
Capital: Fu
Jiesong;
Dongfang
Financial
Holding: Chen
Xiaohe; Nanhua
Fund: Li
Fangfang; China
Europe Fund:
Shen Shaobo;
Zhongtai
Securities:
Suchen; Huatai
Baoxing: Liu
Tengfei; Nord
45
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Fund: Yan Anqi
46
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section V Significant Events
I. Profit distribution of ordinary shares and capitalization of capital reserves
Profit distribution policy of ordinary shares in the reporting period, especially the formulation, implementation
and adjustment of cash dividend policy
√ Applicable □ Not applicable
1.On April 30, 2020, The Company's 2019 Annual Profit Distribution Plan was approved in the 2019 Annual
General Meeting of Shareholders. Based on 275,583,602 existing shares, excluding the repurchased shares, RMB
1.50 (including tax) was distributed to all shareholders for every 10 shares, with a total of RMB 413,337,540.30.
Meanwhile, 3 shares were distributed for every 10 shares with capital reserve, with a total of 826,675,080 shares.
After this, the total share increased to 3,592,041,778. The profit distribution plan has been completed on June 2,
2020.
2. Based on 3,582,258,682 shares of the Company, excluding the repurchased shares, RMB 1.00 (including tax)
was distributed to all shareholders for every 10 shares, totaling of RMB 358,225,868.20. The profit distribution
plan has been completed on September 16, 2020.
The formulation and implementation of the Company's cash dividend policy has been in strict compliance with the
relevant laws and regulations, normative documents and the articles of association, in line with the provisions of
the articles of association or the requirements of the resolution of the general meeting of shareholders. The
dividend standard and proportion are clear, the relevant decision-making procedures and mechanisms are
complete, the independent directors perform their duties and play their due role, and minor shareholders have fully
expressed their views. The legitimate rights and interests of them have been fully protected.
Special Notes on Cash Dividend Policies
Whether they comply with the requirements of the Company's
articles of incorporation or the resolutions of the General Yes
Meeting of Shareholders:
Whether the dividend standards and proportions are distinct and
Yes
clear:
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether the independent directors performed their duties and
Yes
played their due role:
Whether the minority shareholders have the opportunity to fully
express their opinions and appeals, and whether their legitimate Yes
rights and interests have been fully protected:
Whether relevant conditions and procedures are compliant and
N/A
transparent when the cash dividend policies are being adjusted or
47
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
changed:
Profit distribution policy (proposal) and capitalizing of capital reserves policy (proposal) in last three years
(including the current reporting period)
1. Profit distribution for the year 2018
(1) Profit distribution for the half year 2018：Based on the Company’s total share capital of 2,120,316,835, the
Company distributed cash dividend of RMB 1.00 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 212,031,683.50.
(2) Profit distribution for the year 2018：Based on the Company’s total share capital of 2,116,703,682, the
Company distributed cash dividend of RMB 2.5 (tax inclusive) and 3 shares dividend per each 10 shares to all
shareholders with a total of RMB 529,175,920.50 and 635,011,063 shares. After this, the total share capital was
increased to 2,765,657,898.
2. Profit distribution for the year 2019
Profit distribution for the year 2019: Based on the Company’s total share capital of 2,755,583,602, the Company
distributed cash dividend of RMB 1.5 (tax inclusive) and 3 shares dividend per each 10 shares to all shareholders
with a total of RMB 413,337,540.30 and 826,675,080 shares. After this, the total share capital was increased to
3,592,041,778.
3. Profit distribution proposal for the year 2020：
(1) Profit distribution for the half year 2020：Based on the Company’s total share capital of 3,582,258,682, the
Company distributed cash dividend of RMB 1.00 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 358,225,868.20.
(2) Profit distribution for the year 2020：Based on the Company’s total share capital of 3,581,818,372, the
Company distributed cash dividend of RMB 2.50 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 895,454,593.
Cash dividend of ordinary shares in last 3 years (including the current reporting period)
Unit: Yuan
Net profit The proportion The ratio of
The ratio of
attributable to of cash total amount of
cash dividends
common stock dividends in cash dividends
to the net profit
shareholders of other ways to (including
attributable to The amount of Total amount
listed the net profit other ways) to
Cash dividend ordinary cash dividends of cash
companies in attributable to the net profit
Year amount (tax shareholders of in other ways dividends
the ordinary attributable to
included) listed (such as share (including
consolidated shareholders of ordinary
companies in repurchase) other ways)
financial listed shareholders of
the
statement of companies in listed
consolidated
the year for the companies in
statements
dividend consolidated the
48
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
distribution statements consolidated
statements
1,253,680,461. 1,462,158,821. 1,253,680,461.
2020 85.74% 0.00 0.00% 85.74%
20 57 20
1,421,204,236.
2019 413,337,540.30 29.08% 274,375,830.00 19.31% 687,713,370.30 48.39%
13
1,292,349,782.
2018 741,207,604.00 57.35% 29,995,518.45 2.32% 771,203,122.45 59.67%
17
During the reporting period, the company was profitable and the distributable profits to ordinary shareholders of
the parent company was positive, but the Company did not propose a cash dividend distribution plan of ordinary
shares.
□ Applicable √ Not applicable
II. Profit distribution and capitalizing of capital reserves proposal for the current reporting
period
√ Applicable □Not applicable
Bonus share issued per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
2.50
inclusive)
Total capital share basis for the distribution
3,581,818,372
proposal (share)
Total cash dividend (RMB) (tax inclusive) 895,454,593.00
Cash dividend amount in other ways (such as
0.00
share repurchase) (RMB)
Total cash dividends (including other ways)
895,454,593.00
(RMB)
Distributable profits (RMB) 1,089,748,875.88
Percentage of cash dividends in the total
100%
distributed profit (%)
Cash dividends
Other
Detailed description of profit distribution or capital reserves conversion plan
With 3,581,818,372 as the base number, cash dividend of RMB 2.50 (including tax) will be distributed to all shareholders for every
10 shares. A total of RMB 895,454,593 will be distributed. There are no bonus shares. The remaining undistributed profits of the
Company shall be carried forward to the next year, and there is no conversion of capital reserve to share capital.
49
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
III. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related
parties, acquirers, and other related parties for the commitments 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
Zhang Yabo,
When the number of shares sold through listing
controlling
Other and trading in Shenzhen Stock Exchange
shareholder
commi reaches 1% of the total number of shares of the November 21st Strict
Sanhua Long term
tment Company, it shall make an announcement 2005 performance
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
Commitment Group Co., transac scope being or already carried out in the future.
from Ltd. tions
reformation of and
shareholding capital
occupa
tion
Comm Sanhua Holding Group promises: after the
itment completion of this transaction, Sanhua Holding
on Group and Sanhua intelligent controls will sign
horizo an agreement according to law, perform legal
Zhang Daocai,
ntal procedures, fulfill the obligation of information
controlling
compe disclosure and handle significant matters for
shareholder th
tition, approval in accordance with relevant laws, January 5 , Strict
Sanhua Long term
related regulations, articles of association of Sanhua 2009 performance
Holding
party intelligent controls. In the process of
Group Co.,
transac implementation of related party transactions, we
Ltd.
tions will follow the principle of legality and
and reasonableness, ensure the fairness of prices and
capital procedures, and make certain that the legitimate
occupa interests of Sanhua intelligent controls and
50
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
tion other shareholders will not be damaged through
related party transactions.
In order to avoid horizontal competition with
Sanhua intelligent controls, Zhang Daocai,
Zhang Yabo, Zhang Shaobo, Sanhua Holding
Group the controlling shareholder of the
Company, and Sanhua Lvneng Industry, the
trading partner made the following
commitments:
1. I (or the Company) will not directly or
indirectly engage in or participate in the
business that constitutes potential direct or
indirect competition with Sanhua Intelligent
Controls and its subordinate enterprises;
guarantee that legal and effective measures shall
be taken to urge other enterprises controlled by
Zhang Daocai, Comm
me (or the Company) not to engage in or
Zhang Yabo, itment
participate in any business competing with
Zhang on
Sanhua Intelligent Controls and its subordinate
Shaobo, horizo
enterprises.
controlling ntal
2. If Sanhua Intelligent Controls further
shareholder compe
expands its business scope, I (or the Company)
Sanhua tition,
and other controlled enterprises will not Strict
Holding related July 24th, 2015 Long term
compete with Sanhua Intelligent Controls' performance
Group Co., party
expanded business; if it is possible to compete
Ltd., Zhejiang transac
with Sanhua Intelligent Controls' business after
Sanhua tions
expansion, I (or the Company) and other
Lvneng and
controlled enterprises will withdraw from
Industrial capital
Sanhua Intelligent Controls in the following
Group Co., occupa
ways of competition: A. Stop the businesses that
Ltd. tion
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
51
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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.
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
Zhang Daocai, Comm
far as possible, and will not use their own status
Zhang Yabo, itment
as shareholders of Sanhua intelligent controls to
Zhang on
seek for superior rights in terms of business
Shaobo, horizo
cooperation and other aspects compared with
controlling ntal
other third parties;
shareholder compe
2. I (or the Company) will not take advantage of
Sanhua tition,
the right to enter into a transaction with Sanhua Strict
Holding related July 24th, 2015 Long term
intellectual controls using the position as a performance
Group Co., party
shareholder.
Ltd., Zhejiang transac
Sanhua tions 3. If there are necessary and unavoidable related
Lvneng and party transactions, I (or the Company) and the
Industrial capital controlled enterprises will sign agreements with
Group Co., occupa Sanhua intelligent controls in accordance with
Ltd. tion the principles of fairness, follow legal
procedures, and perform the information
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
52
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
engage in any behavior that damages the
legitimate rights and interests of Sanhua
intelligent controls and other shareholders.
Zhang Daocai, Zhang Yabo, Zhang Shaobo and
Sanhua holding Group, the controlling
Zhang Daocai, shareholder of the Company, made the
Zhang Yabo, following commitments: after the completion of
Zhang the transaction, Sanhua intelligent controls will
Shaobo, continue to improve the corporate governance
Other
controlling structure and independent operation of the Strict
Comm July 24th, 2015 Long term
shareholder Company management system in accordance performance
itment
Sanhua with the requirements of relevant laws and
Holding regulations and the articles of Association, and
Group Co., continue to maintain the independence of
Ltd. 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 th th
Industrial restrict 20 , 2017 19 , 2020 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.
Zhang Daocai, Comm 1. I (or the Company) and the controlled
Zhang Yabo, itment enterprises will reduce the related party
Zhang on transactions with Sanhua intelligent controls as
Shaobo, horizo far as possible, and will not use the position as a
controlling ntal shareholder of Sanhua intellectual controls to
shareholder compe seek the superior rights for business cooperation
September Strict
Sanhua tition, with Sanhua intelligent controls compared with th
Long term
18 , 2017 performance
Holding related other third parties;
Group Co., party 2. I (or the Company) will not use my position
Ltd., Zhejiang transac as a shareholder of Sanhua intellectual controls
Sanhua tions to seek for the priority right to cooperate with
Lvneng and Sanhua intellectual controls;
Industrial capital 3. If there are necessary and unavoidable related
53
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Group Co., occupa party transactions, I (or the Company) and the
Ltd. tion controlled enterprises will sign agreements with
Sanhua intelligent controls in accordance with
the principles of fairness, follow legal
procedures, and perform the information
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.
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
Zhang Daocai, Comm will be taken to urge other enterprises
Zhang Yabo, itment controlled by me (or the Company) not to
Zhang on engage in or participate in any business that is
Shaobo, horizo competitive with Sanhua intelligent controls
controlling ntal and its subordinate enterprises Business.
shareholder compe 2. If Sanhua intelligent controls further expands
Sanhua tition, its business scope, I (or the Company) and other
September Strict
Holding related enterprises controlled by me (or the Company) th
Long term
18 , 2017 performance
Group Co., party will not compete with Sanhua intelligent
Ltd., Zhejiang transac controls' expanded business; if it is possible to
Sanhua tions compete with Sanhua intelligent controls'
Lvneng and business after expansion, I (or the Company)
Industrial capital and other enterprises controlled by me (or the
Group Co., occupa Company) will withdraw from Sanhua
Ltd. tion 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.
54
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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
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 The commitment made at the time of IPO, it
itment shall not engage in the same production,
Zhang Daocai,
on operation or business as the Company in the
controlling
horizo future. In order to avoid business competition
shareholder
ntal with the Company and clarify the Strict
Sanhua June 7th 2005 Long term
compe non-competition obligations, Sanhua Holding performance
Holding
tition, Group, on behalf of itself and its subsidiaries
Group Co.,
related with more than 50% equity, makes a
Ltd.
party commitment to Sanhua intelligent controls to
transac avoid possible horizontal competition.
55
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
tions
and
capital
occupa
tion
Are the
commitments
Yes
fulfilled on
time
2. Where any profit forecast was made for any of the Company’s assets or projects and the current
reporting period is still within the forecast period, the Company shall explain whether the performance of
the asset or project reaches the profit forecast and why:
□ Applicable √ Not applicable
IV. The Company’s funds used by the controlling shareholder or its related parties for
non-operating purposes.
□ Applicable √ Not applicable
No such case during the reporting period.
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. For changes in accounting policies, accounting estimates and accounting methods as
compared to the financial report for the prior year
√ Applicable □Not applicable
The Company implemented the Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter
referred to as the new revenue standards) revised by the Ministry of Finance from January 1, 2020. According to
this standard, the information of the comparable period will not be adjusted. The cumulative impact of retained
earning and other related items in financial statements, due to the implementation of the new standards, shall be
retroactively adjusted to January 1, 2020.
Since January 1, 2020, the implementation of the new revenue standards has no impact on the Company's retained
earnings. Other affected items and amounts are shown in the following table:
Item Balance sheet
December 31, 2019 Impact of new revenue standard January 1, 2020
Advance 23,453,218.32 -23,453,218.32
payment
Contract +23,453,218.32 23,453,218.32
liabilities
56
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
VII. Explanation for retrospective restatement of major accounting errors during the
reporting period
□ Applicable √ Not applicable
No such case during the reporting period.
VIII. Explanation for changes in scope of the consolidated financial statements as compared
to the financial report for the prior year
√ Applicable □ Not applicable
1. Disposal of subsidiaries
Lose control due to disposal
Name of subsidiary Equity disposal Equity disposal Equity disposal Date of losing control
price ratio method
Qingdao Debaiyi refrigeration equipment Co., 6,562,658.15 70% Transfer to 2020-12-02
Ltd Minority shareholders
(Continued)
Determination fo losing The difference between the Proportion of Net assets on Net profit from the beginning
control disposal price and remaining equity on disposal date of the period to the disposal
corresponding net asset of the date of loss of date
consolidated financial control
statements
Complete the registration -4,098,327.44 0.00 15,229,979.42 -1,609,483.26
procedures for industrial and
commercial changes
2. Changes in the scope of consolidation due to other reasons
1) Increased scope of consolidation
Name Method of Date of equity Actual contribution at the Contribution ratio
obtaining equity acquisition end of the period
Zhejiang Xianji Intelligent Technology Co., Ltd New investment 2020-09-10 34.6 million yuan 100%
Sanhua Mexico Investment Co., Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial Refrigeration Co., New investment 2020-10-09 68.29 million yuan 100%
Ltd
Shaoxing Sanhua Automobile Thermal New investment 2020-12-03 0.00 100%
Management Technology Co., Ltd
2) Decreased scope of consolidation
Name Method of Date of disposal Net assets on Net profit from the
disposal disposal date beginning of the period
57
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
to the date of
cancellation
Hangzhou Sanhuajia Electric Heating Management Liquidation 2020-05-18 147,448.25 -78,092.41
System Co., Ltd cancellation
Aweco Electrical Equipment (Shanghai) Co., Ltd Liquidation 2020-06-02 6,669.73 22,351.38
cancellation
Ma'anshan Sanhua Intelligent Technology Co., Ltd Liquidation 2020-08-03 3,907,472.50 -478,491.11
cancellation
IX. Engagement and disengagement of the CPA firm
CPA firm engaged at present
Name of the domestic CPA firm Pan-China Certified Public Accountants LLP
Remuneration of domestic accounting firms (in 10,000 yuan) 245.28
Consecutive years of the audit service provided by the domestic
20
CPA firm
Name of the certified public accountants from the domestic CPA
Luo Xunchao, Ouyang Xiaoyun
firm
Consecutive years of the audit service provided by the certified
1
public accountants from the domestic CPA firm
Whether the CPA firm was changed in the current period
□ Yes √ No
Engagement of internal control audit CPA firm, financial advisor or sponsor
√Applicable □Not applicable
During the reporting period, the Company did not change accounting firm. It continued to engage Tianjian
accounting firm as the internal control audit accounting firm of the Company.
X. Listing suspension and termination after disclosure of this annual report
□ Applicable √ Not applicable
XI. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case during the reporting period.
XII. Material Litigation and Arbitration
□ Applicable √ Not applicable
No such case during the reporting period.
58
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
XIII. Punishments and Rectifications
□ Applicable √ Not applicable
No such case during the reporting period.
XIV. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or
Other Incentive Plans
√Applicable □Not applicable
In order to further improve the governance structure of the Company, establish and improve the incentive
mechanism, attract and retain talents, and effectively mobilize core talents, the Company launched the second
phase of equity incentive.
1. In 2018, the Company launched the 2018 restricted stock incentive plan and stock appreciation right incentive
plan, granting 10.33 million restricted shares to 753 incentive objects and 355,000 stock appreciation rights to 22
incentive objects. The grant date of this equity incentive plan is September 18, 2018. The grant price of restricted
shares and stock appreciation rights is RMB 8.37 per share, and the listing date is November 6, 2018.
(1) On October 24, 2019, the Company held the 5th interim meeting of the sixth board of directors and the 5th
interim meeting of the sixth board of supervisors respectively in which Resolution on adjusting the
repurchase price and repurchase quantity of restricted stock incentive plan in 2018, Resolution on the
achievement of exercise conditions, adjustment of exercise price, quantity and cancellation of some stock
appreciation rights in the first exercise period of 2018 stock appreciation rights incentive plan, Resolution on
repurchase and cancellation of some restricted stocks, Resolution on the achievement of the unlocking
conditions of first restriction period of 2018 restricted stock incentive plan were approved.
The unlocking date of the restricted shares is November 6, 2019, and the number of incentive objects
qualified for unlocking is 720. A total of 3.9195 million shares have been released, accounting for 0.1417% of
the Company's current total share capital. There were 19 incentive objects meeting the conditions for the
exercise of the stock appreciation right, and the number of exercisable shares is 95,550.
(2) On November 11, 2019, the first extraordinary general meeting of shareholders of 2019 was held, in which
the Resolution on repurchase and cancellation of some restricted stocks was approved. The Company
repurchased and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2018
restricted stock incentive plan, totaling of 0.2912 million shares.
(3) On October 20, 2020, the Company held the 13th interim meeting of the sixth board of directors and the 12th
interim meeting of the sixth board of supervisors respectively in which Resolution on adjusting the
repurchase price and repurchase quantity of restricted stock incentive plan in 2018, Resolution on the
59
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
achievement of exercise conditions, adjustment of exercise price, quantity and cancellation of some stock
appreciation rights in the second exercise period of 2018 stock appreciation rights incentive plan, Resolution
on repurchase and cancellation of some restricted stocks, Resolution on the achievement of the unlocking
conditions of second restriction period of 2018 restricted stock incentive plan were approved.
The unlocking date of the restricted shares is November 6, 2020, and the number of incentive objects
qualified for unlocking is 702. A total of 4.9889 million shares have been released, accounting for 0.1389% of
the Company's current total share capital. There were 18 incentive objects meeting the conditions for the
exercise of the stock appreciation right, and the number of exercisable shares is 131,820.
(4) On November 5, 2020, the fourth extraordinary general meeting of shareholders of 2020 was held, in which
Resolution of repurchase and cancellation of some restricted stocks was approved. The Company repurchased
and cancelled all or part of the restricted stocks held by unqualified incentive objects in the 2018 restricted
stock incentive plan, totaling of 0.3363 million shares.
2. In 2020, the Company launched the 2020 restricted stock incentive plan, granting 12.04 million restricted
shares to 914 incentive objects. The grant date of this equity incentive plan is February 24, 2020. The grant price
of restricted shares is RMB 9.85 per share, and the listing date is March 20, 2020.
On November 5, 2020, the fourth extraordinary general meeting of shareholders of 2020 was held, in which the
Resolution on repurchase and cancellation of some restricted stocks was approved. The Company repurchased
and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2020 restricted stock
incentive plan, totaling of 0.1040 million shares.
XVI. Significant Related-party Transaction
1. 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
60
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
No such case in the reporting period.
5. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.
XVII. 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)
Announc Guarante Actual Actual Type of Term of Due or Guaran
Guaranteed Party
ement e Occurrence Guarantee Guarantee Guarantee Not tee for
61
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Date of Amount Date Amount Related
Disclosur Parties
e of the or Not
Guarante
e Amount
Company's Guarantees to Subsidiaries
Announc
ement Guaran
Date of Actual Actual tee 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
Sanhua AWECO Joint 2018.11.05
April 16, November 5,
Appliance Systems 35,000 18,457.5 liability -2021.11.0 Y Y
2018 2018
GmbH guarantee 4
Sanhua AWECO Joint 2020.04.08
April 3,
Appliance Systems 41,000 April 8, 2020 12,840 liability -2021.11.0 Y Y
2019
GmbH guarantee 4
Sanhua AWECO Joint 2020.06.05
April 29,
Appliance Systems 52,000 June 5, 2020 8,827.5 liability -2021.11.0 Y Y
2020
GmbH guarantee 4
SANHUA Joint
2018.09.17
INTERNATIONAL April 16, September 17, liability
132,000 13,241.25 -2022.09.1 Y Y
SINGAPORE PTE. 2018 2018 guarantee
6
LTD.
SANHUA Joint
2019.07.29
INTERNATIONAL April 3, liability
132,000 July 29, 2019 8,482.37 -2020.01.3 Y Y
SINGAPORE PTE. 2019 guarantee
0
LTD.
SANHUA Joint
2019.09.23
INTERNATIONAL April 3, September 23, liability
132,000 6,524.9 -2020.09.2 Y Y
SINGAPORE PTE. 2019 2019 guarantee
3
LTD.
SANHUA Joint
2019.07.05
INTERNATIONAL April 3, liability
132,000 July 5, 2019 12,037.5 -2022.06.2 N Y
SINGAPORE PTE. 2019 guarantee
0
LTD.
SANHUA Joint 2019.12.09
April 3, December 9,
INTERNATIONAL, 30,000 20,227.19 liability -2022.12.0 N Y
2019 2019
INC. guarantee 9
62
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
SANHUA Joint 2019.01.18
April 16, January 18,
INTERNATIONAL, 30,000 9,787.35 liability -2020.01.2 Y Y
2018 2019
INC. guarantee 1
SANHUA Joint 2020.01.21
April 3, January 21,
INTERNATIONAL, 30,000 9,787.35 liability -2020.07.0 Y Y
2019 2020
INC. guarantee 9
SANHUA Joint 2020.06.24
April 29,
INTERNATIONAL, 50,000 June 24, 2020 9,787.35 liability -2021.06.2 N Y
2020
INC. guarantee 3
SANHUA Joint
2020.09.14
INTERNATIONAL April 29, September 14, liability
150,000 8,025 -2021.09.1 N Y
SINGAPORE PTE. 2020 2020 guarantee
3
LTD.
SANHUA Joint
2020.11.02
INTERNATIONAL April 29, November 2, liability
150,000 8,025 -2021.11.0 N Y
SINGAPORE PTE. 2020 2020 guarantee
1
LTD.
SANHUA Joint
2020.06.12
INTERNATIONAL April 29, liability
150,000 June 12, 2020 7,500 -2022.12.2 N Y
SINGAPORE PTE. 2020 guarantee
5
LTD.
SANHUA Joint
2020.02.10
INTERNATIONAL April 3, February 10, liability
132,000 10,432.5 -2021.02.0 N Y
SINGAPORE PTE. 2019 2020 guarantee
9
LTD.
Total Amount of
Total Amount of Guarantees to Guarantees to
Subsidiaries Approved during the 310,000 Subsidiaries Actually 75,224.7
Reporting Period (B1) Occurred during the
Reporting Period (B2)
Total Balance of
Total Amount of Guarantees to Guarantees Actually Paid
Subsidiaries Approved by the 352,697.19 to Subsidiaries at the End 76,034.54
End of the Reporting Period (B3) of the Reporting Period
(B4)
Subsidiaries' Guarantees to Subsidiaries
Announc Guaran
ement Guarante Actual Actual tee for
Type of Term of Due or
Guaranteed Party Date of e Occurrence Guarantee Related
Guarantee Guarantee Not
Disclosur Amount Date Amount Parties
e of the or Not
63
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Guarante
e
Amount
The total amount of the Company's guarantees (the total of the above three items)
Total Amount of
Total Amount of Guarantees Guarantees Actually
Approved during the Reporting 310,000 Occurred during the 75,224.7
Period (A1+B1+C1) Reporting Period
(A2+B2+C2)
Total Balance of
Total Amount of Guarantees Guarantees Actually Paid
Approved by the End of the 352,697.19 at the End of the 76,034.54
Reporting Period (A3+B3+C3) Reporting Period
(A4+B4+C4)
Total Amount of Actual Guarantees (A4+B4+C4) as a
7.55%
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 70% 30,014.54
(E)
Total Amount of the Above Three Guarantees (D+E+F) 30,014.54
(2) Illegal external guarantees
□ Applicable √ Not applicable
No illegal external guarantees during the reporting period.
3. Entrusted wealth management
(1) Entrusted finances
√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
163,871.5 75,048.5 0
products funds and raised funds
Total 163,871.5 75,048.5 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
64
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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% 94.08 94.08 Yes -
Hangzhou " ds 21, 21, financia income
65
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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% 119.41 119.41 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% 119.82 119.82 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% 239.08 239.08 Yes -
66
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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% 29.78 29.78 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% 29.78 29.78 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% 232.39 232.39 Yes -
sub ds
d RMB 2020 2020 product guarant
branch
structured s ee of
67
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
deposit principa
products l
in 2020
(243
days)
Shaoxing
Floating
Xinchang
Bank income
sub Cash
financia without
branch of deposit Self-fun May 26, June 15,
Bank 6,000 l guarant 3.16% 10.37 10.37 Yes
Bank of (Company ds 2020 2020
product ee of
Communi )
s principa
cations
l
Co., Ltd
97 days of
Shaoxing
Bank of Floating
Xinchang
Communi Bank income
sub
cations Septem financia with
branch of Self-fun June 4,
Bank Yuntong 10,000 ber 10, l guarant 3.27% 81.98 81.98 Yes -
Bank of ds 2020
wealth 2020 product ee of
Communi
fixed term s principa
cations
structured l
Co., Ltd
deposit
Huilifeng Floating
no.5371 Bank income
ABC
customize Decemb financia with
Xinchang Self-fun June 4,
Bank d RMB 10,000 er 18, l guarant 3.40% 172.24 172.24 Yes -
sub ds 2020
structured 2020 product ee of
branch
deposit s principa
products l
68
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
in 2020
(196
days)
Shaoxing
Floating
Xinchang
Bank income
sub Daily
August Septem financia without
branch of profit of Self-fun
Bank 6,000 27, ber 15, l guarant 2.75% 8.59 8.59 Yes
Bank of long-term ds
2020 2020 product ee of
Communi pension
s principa
cations
l
Co., Ltd
Xinchang
Floating
sub Corporate
Bank income
branch of "Tianlibao
Decemb financia without
Industrial " net Self-fun January
Bank 20,000 er 30, l guarant 3.28% Yes
and value ds 4, 2021
2020 product ee of
Commerci financial
s principa
al Bank of products
l
China
"E-Lingto
Xinchang
ng" net Floating
sub
value Bank income
branch of
corporate Decemb financia without
Industrial Self-fun January
Bank non fixed 5,000 er 30, l guarant 3.03% Yes
and ds 4, 2021
term 2020 product ee of
Commerci
RMB s principa
al Bank of
financial l
China
products
Guangfa Bank Xinjiaxin 5,500 Raised October January Bank Floating 3.95% 43.24 43.24 Yes -
69
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Bank No.16 funds 28, 13, financia income
Hangzhou structured 2019 2020 l with
Xiaoshan deposit product guarant
sub s ee of
branch principa
l
Floating
Hangzhou
Bank income
Xiaoshan
financia with
sub Xinjiaxin Raised July 30, July 29,
Bank 5,500 l guarant 4.05% 210.14 210.14 Yes -
branch of No.16 funds 2019 2020
product ee of
Guangfa
s principa
bank
l
Floating
Hangzhou
Bank income
Xiaoshan
April April financia with
sub Xinjiaxin Raised
Bank 10,000 29, 27, l guarant 4.10% 385.73 385.73 Yes -
branch of No.16 funds
2019 2020 product ee of
Guangfa
s principa
bank
l
Hangzhou
Floating
Xiaoshan
Bank income
sub Xinjiaxin
January financia with
branch of No.16 Raised July 13,
Bank 5,500 14, l guarant 3.95% 101.07 101.07 Yes -
Guangfa structured funds 2020
2020 product ee of
bank deposit
s principa
(Shaoxing
l
)
Hangzhou Bank Structural 5,000 Raised Septem October Bank Floating 3.05% 15.12 15.12 Yes
70
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Xiaoshan deposit of funds ber 4, 13, financia income
sub "Wuhua 2020 2020 l with
branch of Tianbao" product guarant
Guangfa W s ee of
bank customize principa
d personal l
currency
Floating
Hangzhou
Bank income
Xiaoshan
Septem financia with
sub Xinjiaxin Raised July 29,
Bank 5,000 ber 3, l guarant 3.25% 14.25 14.25 Yes
branch of No.16 funds 2020
2020 product ee of
Guangfa
s principa
bank
l
Floating
Hangzhou
Bank income
Xiaoshan
April financia with
sub Xinjiaxin Self-fun January
Bank 5,500 20, l guarant 3.90% 59.88 59.88 Yes
branch of No.16 ds 3, 2020
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% 305.66 305.66 Yes -
branch of No.16 funds 2019 2020
product ee of
Guangfa
s principa
bank
l
Hangzhou Bank Xinjiaxin 7,000 Raised April April Bank Floating 4.10% 270.01 270.01 Yes -
71
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Xiaoshan No.16 funds 29, 27, financia income
sub 2019 2020 l with
branch of product guarant
Guangfa s ee of
bank principa
l
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 6, 2020
Hangzhou product ee of
Branch s 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
Hangzhou
Bank income
Xiaoshan
October October financia with
sub Xinjiaxin Self-fun
Bank 7,500 25, 26, l guarant 3.95% 281.01 281.01 Yes -
branch of No.16 ds
2019 2020 product ee of
Guangfa
s principa
bank
l
ICBC Self-fun January January Bank Floating
Bank Tianlibao 5,000 3.30% 6.12 6.12 Yes -
economic ds 3, 2020 22, financia income
72
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
developm 2020 l with
ent sub product guarant
branch s ee of
principa
l
Floating
ICBC Bank income
economic Februar Februar financia with
Self-fun
developm Bank Tianlibao 5,000 y 24, y 26, l guarant 3.30% 0.85 0.85 Yes -
ds
ent sub 2020 2020 product ee of
branch s principa
l
Floating
ICBC Bank income
economic March March financia without
Self-fun
developm Bank Tianlibao 5,000 26, 27, l guarant 3.10% 0.25 0.25 Yes -
ds
ent sub 2020 2020 product ee of
branch s principa
l
Floating
Hangzhou
Bank income
Xiaoshan
April October financia without
sub Xinjiaxin Self-fun
Bank 5,500 21, 21, l guarant 3.90% 102.01 102.01 Yes -
branch of No.16 ds
2020 2020 product ee of
Guangfa
s principa
bank
l
Hangzhou April Bank Floating
Xinjiaxin Raised June 2,
Xiaoshan Bank 7,000 27, financia income 3.55% 23.43 23.43 Yes -
No.16 funds 2020
sub 2020 l without
73
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
branch of product guarant
Guangfa s ee of
bank principa
l
Structural
Floating
Hangzhou deposit of
Bank income
Xiaoshan "Wuhua
Septem October financia with
sub Tianbao" Raised
Bank 5,000 ber 4, 13, l guarant 3.05% 15.12 15.12 Yes
branch of W funds
2020 2020 product ee of
Guangfa customize
s principa
bank d personal
l
currency
Floating
ICBC Bank income
economic financia without
Self-fun June 9, June 10,
developm Bank Tianlibao 6,000 l guarant 3.00% 0.39 0.39 Yes -
ds 2020 2020
ent sub product ee of
branch s principa
l
Floating
ICBC Bank income
economic financia without
Self-fun June 10, June 24,
developm Bank Tianlibao 8,000 l guarant 3.00% 8.42 8.42 Yes -
ds 2020 2020
ent sub product ee of
branch s principa
l
ICBC Bank Floating
Self-fun July 30, August
economic Bank Tianlibao 5,000 financia income 2.70% 1.85 1.85 Yes
ds 2020 5, 2020
developm l with
74
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
ent sub product guarant
branch s ee of
principa
l
Floating
ICBC Bank income
economic October Decemb financia without
Self-fun
developm Bank Tianlibao 6,000 23, er 3, l guarant 2.58% 17.39 17.39 Yes
ds
ent sub 2020 2020 product ee of
branch s principa
l
Floating
ICBC Bank income
economic October October financia without
Self-fun
developm Bank Tianlibao 6,000 26, 29, l guarant 2.59% 1.28 1.28 Yes
ds
ent sub 2020 2020 product ee of
branch s principa
l
Floating
Hangzhou
Bank income
Xiaoshan
October January financia with
sub Xinjiaxin Self-fun
Bank 9,500 22, 22, l guarant 3.30% Yes
branch of No.16 ds
2020 2021 product ee of
Guangfa
s principa
bank
l
Heng Bank Floating
October January
Seng Henghuiyi Self-fun financia income
Bank 5,000 23, 22, 3.35% Yes
Bank ng ds l with
2020 2021
Hangzhou product guarant
75
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Branch s ee of
principa
l
Floating
ICBC Bank income
economic August financia without
Self-fun July 31,
developm Bank Tianlibao 5,000 25, l guarant 2.80% 9.58 9.58 Yes
ds 2020
ent sub 2020 product ee of
branch 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
Floating
China
Bank income
CITIC
Decemb Februar financia with
Bank Structured Self-fun
Bank 5,000 er 31, y 1, l guarant 3.55% Yes
Fengqi deposit ds
2020 2021 product ee of
sub
s principa
branch
l
342,00 3,413.5
Total [1]
-- -- -- -- -- -- 0 -- -- -- --
0 8
76
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Note: [1] During the reporting period, the accumulated financial management amount of the Company is RMB
6.33 billion, and the above information are the details of the Company's single significant financial management
(single amount which is 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
(2) Entrusted loans
□ Applicable √ Not applicable
No such case in the reporting period.
4. Significant contracts in operation
□ Applicable √ Not applicable
No such case in the reporting period.
5. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.
XVIII. Social Responsibility
1. Fulfillment of social responsibilities
During the reporting period, the Company actively fulfilled its social responsibilities. The Company takes
"People-oriented, Continuous innovation, Employee satisfaction, Customer satisfaction, Supplier satisfaction,
Shareholder satisfaction and Social satisfaction" as its core values. While continuously creating value for
shareholders, it also actively undertakes the responsibility to employees, customers, society and other stakeholders.
The Company fully respects and protects the legitimate rights and interests of relevant stakeholders, adheres to
paying equal attention to economic benefits, social benefits and environmental benefits, and realizes the
sustainable development of society and the Company.
(1) Maintain the continuous and stable growth of revenue, care about the return of shareholders
Since listing, the Company has established a corporate governance organization composed of the general meeting
of shareholders, the board of directors and the board of supervisors, and formed a complete internal control
system in strict accordance with the requirements of the Company Law, the Listing Rules of Shenzhen Stock
Exchange and the Articles of Association. During the reporting period, the Company continuously improved the
governance structure and internal control system to raise the standard operation level, and fully protected the
legitimate rights and interests of all shareholders. The general meeting of shareholders, the board of directors and
the board of supervisors exercise their functions and powers within the scope of relevant laws and regulations.
The convening, proposal, notice and resolution procedures of previous meetings are in line with laws and
regulations. There is no case of ultra vires approval or implementation before approval, so as to ensure that the
rights of all shareholders are not infringed, especially minor shareholders.
77
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Information disclosure, the Company has been strictly in compliance with the relevant provisions of CSRC and
Shenzhen Stock Exchange, and has fulfilled the obligation of truthfulness, accuracy, timeliness and completeness.
The Company has been awarded A for 10 consecutive years which is not common among listed companies. The
Company enhances the interaction with investors by means of investor hotline, interactive platform and reception
of investors, so that investors can have a more in-depth understanding of the Company's development, production
and operation. It promotes the Company to establish a long-term and stable relationship with investors, and
safeguard the legitimate rights and interests of minor investors effectively. At the same time, the Company pays
special attention to the management of insider information, and actively prevents the occurrence of insider trading.
During the reporting period, the Company does not have insider trading or damage the interests of shareholders.
The Company attaches great importance to the return to shareholders. According to the relevant provisions of
China Securities Regulatory Commission on cash dividends and sustainable development, the Company has
formulated and strictly implemented the continuous dividend return plan for shareholders since listing, and
insisted on sharing the Company's operation achievements with shareholders.
(2) Safeguard the legitimate rights and interests of employees and improve their comprehensive ability
The Company always adheres to the people-oriented core values, takes improving the working environment of
employees, realizing their self-worth, improving their quality of life and promoting their career growth which is
also treated as the important part of the Company's development strategy. It regards employees as the Company's
primary resources, earnestly protects their rights and interests, and strives to realize the common development of
employees and the enterprise, so as to enhance the cohesion of the enterprise.
Abiding by the Labor Law, Labor Contract Law, Law on the Protection of Women's Rights and Interests and other
relevant laws and regulations, the Company establishes a series of labor management systems, signs labor
contracts with employees according to law, pays employees' wages in full timely, and pays various social
insurance for employees. The Company has a sound vacation system. Employees not only enjoy national statutory
holidays according to law, but also enjoy gifts issued by the Company on various important public festivals such
as Spring Festival, Mid-Autumn Festival, International Women's Day, etc.
The Company has established a reasonable human resource management system and a scientific performance
appraisal system. In order to implement the principle of equality between men and women, the Company links the
performance appraisal of management cadres at all levels with the Company's business objectives. In order to
motivate the employees, stimulate their sense of responsibility and mission, managements’ KPI aligned with the
Company’s operation target and related income evaluation system was implemented. In addition, the Company
has established a perfect staff training system, designed training courses for each employee, and encouraged
employees to study in their spare time to improve their own quality and comprehensive ability.
At the same time, the Company has always attached importance to and adhered to the construction of enterprise
culture, creating a healthy, positive and cooperative working atmosphere. The Company actively cares for the life
of employees, sends greetings to employees who have encounter sudden disasters. And it establishes the
"Sanhua--One family" fund to help employees in difficulties and increase their sense of belonging to the
enterprise. The Company also carries out sports, job skills competitions, festival parties and other recreational
78
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
activities to show the good spirit of employees, and it builds a communication platform for employees, which
effectively stimulate the sense of collective honor and team cohesion.
(3) Safeguard the rights and interests of suppliers and treat customers with integrity
In line with the principle of "Communication with integrity and sharing value", the Company pays attention to the
relationship with suppliers and customers, constantly strengthens the communication and cooperation with all
parties, and earnestly protects their legitimate rights and interests.
For suppliers, the Company always adheres to the business values of “Honesty, Fairness, Mutual Benefit, and
Collaborative Development”, strictly complies with contracts signed with suppliers, establishes and strictly
implements the procurement standards and evaluation system, carries out stable and effective management of
procurement, so as to effectively protect the legitimate rights and interests of suppliers. The Company continues to
strengthen the internal control and audit supervision of the supply chain, resolutely eradicate black box operation,
commercial bribery and improper transactions, strive to provide a good competitive environment for suppliers,
and promote the long-term and stable cooperation between the Company and suppliers.
For customers, the Company always maintains the concept of "Customer first, grow together with customers",
attaches great importance to customer relationship management, takes customers’ satisfaction as the standard to
measure the Company's operation, and is committed to providing customers with high-quality products and
services. Over the years, the Company has established a good corporate image and gained a good reputation from
all walks of life.
(4) Energy saving, innovative production and environmental protection
The Company takes the vision of "Developing energy saving and low-carbon economy, creating a quality and
green environment", while pursuing economic benefits. It pays attention to environmental protection and energy
conservation and consumption reduction, takes the construction of resource saving and environment-friendly
enterprises as an important part of sustainable development strategy, actively promotes the strategic
transformation from "Cost leading" to "Technology leading", and continuously develops independent intellectual
property rights, new products and new technologies, such as energy saving, environmental protection, material
saving, consumption reduction. At the same time, the Company has successfully developed the inverter controller
and other system solutions, which will further improve the energy conservation and environmental protection of
air conditioning system.
The Company emphasizes safety production and environmental protection, and adheres to the principle of
"Prevention first, combination of prevention and control". While realizing its own development, it actively
shoulders the social responsibility of environmental protection, and strives to promote the sustainable
development of society and environment. The Company strictly abides by related national laws and regulations.
On the one hand, the Company has established strict rules in effectively guiding the safety and environmental
protection of each subsidiary company; on the other hand, the Company continuously optimizes the production
process, continuously carries out the overhaul and technical transformation of environmental protection facilities,
actively deepens the three wastes treatment and clean production level. In addition, the Company has prepared an
effective comprehensive emergency plan for environmental risks and various specific emergency. Equipped with a
sound emergency management team and various emergency facilities, equipment and materials, regular
emergency training and drills are carried out, so as to minimize the occurrence of environmental pollution safety
79
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
accidents.
(5) Shoulder social responsibility and participate in social charity
The Company takes "Public welfare society, building a harmonious society" as an important responsibility. With
its continuous development, it has also made positive contributions to the infrastructure construction,
environmental protection, poverty alleviation and community construction of Shaoxing. During the reporting
period, the Company actively undertakes its due responsibilities and obligations, and strives to create a good
corporate image.
2. Fulfillment of the social responsibility of targeted poverty alleviation
Not applicable
3. Environmental protection
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 32.81 T exceeding
Integrated /year
Controls the standard
Wastewater
Co., Ltd
Emission
Standard is
500mg / L
The
limitation
listed in
Zhejiang
DB33/887-2
Sanhua Not
Ammonia 013 Indirect 6.186 T
Intelligent Nanotube 1 North ≦35mg/L 3.281 T exceeding
Nitrogen Emission /year
Controls the standard
Limits of
Co., Ltd
Nitrogen
and
Phosphorus
80
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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 0.99 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 4.64 T exceeding
Oxide emission government /year
Controls the standard
, the limit
Co., Ltd
value of
gas-fired
boiler is
50mg / m3
The
Zhejiang
limitation
Sanhua Not
from 9.205 T
Refrigeratio COD Nanotube 1 South ≦500mg/l 2.864 T exceeding
GB8979-19 /year
n Group the standard
96 is 500mg
Co., Ltd
/L
The
Zhejiang
limitation
Sanhua Not
Total from
Refrigeratio Nanotube 1 South ≦2.0mg/l 0.047 T / exceeding
Copper GB8979-19
n Group the standard
96 is
Co., Ltd
2.0mg/l
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
81
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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. The Company also tests the soil and groundwater every year and
publishes them 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. In July 2020, the Company became one of the first "waste free factories" in Shaoxing
City.
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.
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
82
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
1. Since 2010, the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang
County, and has obtained 23 EIA replies. All the projects have passed. In August 2020, the Company obtained the
national emission permit.
2. Zhejiang Sanhua Refrigeration 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 Refrigeration Group Co., Ltd. re-compiled Emergency
Response Plan for Environmental Pollution Accidents of Zhejiang Sanhua Refrigeration 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 Refrigeration 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.
Other environmental information that should be disclosed
Not applicable
83
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Other environmental information
Not applicable
XIX. Other Significant Events
√ Applicable □ Not applicable
During the 13th meeting of the 6th board of directors and the 4th interim general meeting of shareholders in 2020,
the Company approved Proposal on the Plan of Publicly Issuing Convertible Corporate Bonds, Proposal on
Feasibility Analysis Report on the Use of Raised Funds of Convertible Corporate Bonds. The total amount of
convertible bonds planned to be issued shall not exceed RMB 3 billion, with a term of 6 years, which will be used
for the Company's subsequent operation. For more details, please refer announcements disclosed on CNINFO
(http://www.cninfo.com.cn), October 21, 2020. The Company's application for public issuance of convertible
corporate bonds has been deliberated and approved by China Securities Regulatory Commission. The board of
directors will handle the relevant matters of the public issuance of convertible corporate bonds within the
specified period, and fulfill the obligation of information disclosure in a timely manner, in accordance with the
requirements of relevant laws and regulations, the approval documents of China Securities Regulatory
Commission and the authorization of the general meeting of shareholders of the Company.
XX. Significant Events of the Company’s Subsidiaries
□ Applicable √ Not applicable
84
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 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 -383,274,0 -275,654,9 71,321,88
12.55% 1.99%
conditional restriction(s) 85 76 79 03 2
346,931,2 107,514,0 -383,553,7 -276,039,7 70,891,58
3) Other domestic shares 12.55% 1.98%
85 26 29 03 2
Of which: Shares held by 299,892,7 89,967,81 -389,860,5 -299,892,7
10.84% 0 0.00%
domestic legal person 03 1 14 03
Shares held by domestic 46,993,08 17,546,21 23,853,00 70,891,58
1.70% 6,306,785 1.98%
natural person 2 5 0 2
4)Foreign shares 45,500 0.00% 105,150 279,650 384,800 430,300 0.01%
Shares held by foreign
45,500 0.00% 105,150 279,650 384,800 430,300 0.01%
natural person
2. Shares without 2,418,681, 719,055,9 382,542,5 1,101,598, 3,520,279
87.45% 98.01%
restriction 113 04 69 473 ,586
2,418,681, 719,055,9 382,542,5 1,101,598, 3,520,279
1) RMB ordinary shares 87.45% 98.01%
113 04 69 473 ,586
2,765,657, 826,675,0 825,943,5 3,591,601
3. Total 100.00% -731,510 100.00%
898 80 70 ,468
Reason for the changes in share capital
√ Applicable □ Not applicable
1. At the beginning of each year, the number of locked shares of the executives is re-calculated according to 75% of
the total number of shares held by the executives.
2. The Company repurchased and cancelled 291,200 restricted shares held by unqualified incentive objects but not
yet unlocked. After this, the total share capital of the Company will be reduced from 2,765,657,898 shares to
2,765,366,698 shares.
85
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
3. The Company granted 12.045 million restricted shares to 914 incentive objects under the Company's restricted
stock incentive plan in 2020, and those shares came from the Company's repurchase account.
4. During reporting period, the Company implemented the profit distribution plan for the year of 2019: The plan of
converting capital reserve into share capital took 2,755,583,602 shares of capital stock as the base, and distributed 3
shares for every 10 shares of all shareholders, with a total of 826,675,080 shares. After the conversion, the total
share capital was increased from 2,765,366,698 to 3,592,041,778 shares.
5. On September 21, 2020, the Company's non-public offering of shares were unlocked, and released 389,860,514
restricted shares.
6. On November 6, 2020, the second phase of the restricted stock incentive plan in 2018 matured, and 4.9888
million restricted shares of 702 incentive objects meeting the conditions were released.
7. The total number of restricted shares held by the unqualified incentive objects but not yet unlocked is 440,310
shares. After the repurchase and cancellation, the total share capital will be reduced from 3,592,041,778 shares to
3,591,601,468 shares.
Approval for changes in share capital
√ Applicable □ Not applicable
1. On November 11th, 2019, the first interim general meeting of shareholders was held, in which the proposal on
repurchases and cancellation of partial restricted shares was approved. The Company conducted repurchase and
cancellation of 291,200 restricted shares held by the incentive objects that are not qualified and not yet unlocked.
2. The incentive plan of restricted stock in 2020 plans to grant 12.045 million restricted shares to 914 incentive
objects, with the grant price of 9.85 yuan per share, and the grant date is February 24, 2020.
(1) On January 21, 2020, the 7th interim meeting of the sixth board of directors and the 7th interim meeting of the
sixth board of supervisors of the Company approved the "Resolution on the 2020 restricted stock incentive plan of
Zhejiang Sanhua Intelligent Controls Co., Ltd. (Draft) and its abstract "and the" Resolution on the implementation
assessment management of the 2020 restricted stock incentive plan of Zhejiang Sanhua Intelligent Controls Co., Ltd
"and" Resolution on requesting the general meeting of shareholders to authorize the board of directors to handle
matters related to the 2020 restricted stock incentive plan ". The independent directors expressed clear independent
opinions on the relevant issues of the incentive plan. The board of supervisors checked the list of the incentive
objects of the incentive plan and expressed its opinions.
(2) On February 4th, 2020, the Company announced Publicity and verification opinions on the list of incentive
objects granted in the 2020 restricted stock incentive plan of the board of supervisors.
(3) On February 10, 2020, the Company held the first extraordinary general meeting of shareholders in 2020,
approved the "Resolution on the incentive plan for restricted shares of Zhejiang Sanhua Intelligent Controls Co.,
Ltd. in 2020 (Draft) and its abstract ", " Resolution on implementation of assessment of the 2020 restricted stock
incentive plan of Zhejiang Sanhua Intelligent Controls Co., Ltd ", " Resolution on requesting the general meeting
of shareholders to authorize the board of directors to handle matters related to the 2020 restricted stock incentive
plan "
(4) On February 24, 2020, the eighth interim meeting of the sixth board of directors and the eighth interim
meeting of the sixth board of supervisors deliberated and passed the "Resolution on adjusting matters related to
86
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
the 2020 restricted stock incentive plan" and "Resolution on granting restricted stocks to the incentive objects of
the 2020 restricted stock incentive plan". The independent directors expressed their independent opinions on the
above adjustment and grant items; the board of supervisors checked the relevant adjustment items and the list of
incentive objects granted with restricted shares.
3. The 2019 annual general meeting of shareholders held on May 19, 2020, deliberated and approved the
Company's profit distribution plan for 2019. It took 2,755,583,602 shares as the base, and distributed 3 shares for
every 10 shares to all shareholders, with a total of 826,675,080 shares. After the conversion, the total share capital
was increased from 2,765,366,698 shares to 3,592,041,778 shares.
4. On October 20, 2020, the 13th interim meeting of the sixth board of directors and the 12th interim meeting of
the sixth board of supervisors was held to deliberate and pass the Resolution on the achievement of the second
lifting of the restricted stock incentive plan for 2018. There are 702 incentive objects eligible for unlocking this
plan, and the number of shares to be released is 4.9888 million shares.
5. On November 5, 2020, the fourth extraordinary general meeting of shareholders in 2020 was held to review and
pass the Resolution on repurchase and cancellation of partial restricted shares. The Company repurchased and
cancelled 440,310 shares held by the incentive objects that are not qualified and not yet unlocked.
Transfer of shares
√ Applicable □ Not applicable
1.The Company repurchased 291,200 shares that were not qualified for unlocking. After cancellation, its share
capital was reduced from 2,765,657,898 to 2,765,366,698.
2.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.
3. On June 2, 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.
4. The Company repurchased 440,310 shares that were not qualified for unlocking. After cancellation, its share
capital was reduced from 3,592,041,778 to3,591,601,468.
Information about the implementation of share repurchase
√Applicable □Not applicable
1.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).
2.According to the Announcement on expiration of repurchase period and implementation disclosed on December
16, 2020, the Company did not repurchase its shares within the validity period of the repurchase plan. The reason
is: Since the disclosure of the Repurchase Report, the Company's share price has shown an upward trend. As of
December 15, 2020, the trading price lower than 15.95 yuan / share (adjusted for dividend distribution) are limited.
87
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
In addition, according to Article 17 of the detailed rules for the implementation, the Company has fewer trading
days to repurchase shares due to the influence of the window period of seasonal reports and other major events.
Therefore, the Company failed to carry out share repurchase plan. Please refer CNINFO (www.cninfo.com.cn),
Securities Times, Shanghai Securities News for more detail.
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
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 Unlock shares 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 of 2019 on June
September 18
Lvneng Industrial 299,892,703 89,967,811 389,860,514 0 2, 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 According to the
Zhang Yabo 37,518,000 11,255,400 48,773,400
shares relevant
88
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Due to the provisions of
implementation executives shares
of the equity management
distribution plan
of2019 on June 2,
2020, the capital
reserve was
converted into
share capital, and
the number of
restricted shares
was increased by
1,125,540 shares.
(1) 100,000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
According to the
2, 2020, the
relevant
capital reserve
provisions of
was converted
equity incentive
Wang Dayong 97,500 159,250 50,700 256,750 into share capital,
and executives
and the number
shares
of restricted
management
shares was
increased by
59,250 shares. (3)
Comply with
relevant
provisions of
equity incentive
and executive
shares
management.
(1) 100,000 According to the
restricted shares relevant
were granted in provisions of
Ni Xiaoming 97,500 159,250 50,700 256,750
2020. (2) Due to equity incentive
the and executives
implementation shares
89
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
of the equity management
distribution plan
of 2019 on June
2, 2020, the
capital reserve
was converted
into share capital,
and the number
of restricted
shares was
increased by
59,250 shares. (3)
Unlock share is
50,700 on
November 6,
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.
(1) 100,000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan According to the
of 2019 on June relevant
2, 2020, the provisions of
capital reserve equity incentive
Chen Yuzhong 97,500 159,250 50,700 256,750
was converted and executives
into share capital, shares
and the number management
of restricted
shares was
increased by
59,250 shares. (3)
Unlock share is
50,700 on
November 6,
2020. (4) Comply
90
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
with relevant
provisions of
equity incentive
and executive
shares
management.
(1) 100,000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
2, 2020, the
capital reserve According to the
was converted relevant
into share capital, provisions of
and the number equity incentive
Hu Kaicheng 97,500 159,250 50,700 256,750
of restricted and executives
shares was shares
increased by management
59,250 shares. (3)
Unlock share is
50,700 on
November 6,
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.
(1) 100,000
restricted shares According to the
were granted in relevant
2020. (2) Due to provisions of
the equity incentive
Yu Yingkui 121,582 166,475 50,700 288,057
implementation and executives
of the equity shares
distribution plan management
of 2019 on June
2, 2020, the
91
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
capital reserve
was converted
into share capital,
and the number
of restricted
shares was
increased by
66,475 shares. (3)
Unlock share is
50,700 on
November 6,
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.
According to the According to the
relevant relevant
Chen Xiaoming 0 8,325 8,325 regulations of regulations of
executives shares executives shares
management management
(1) 11,545,000
restricted shares
were granted in
2020 equity
incentive plan; (2)
Due to the
implementation
of the equity
distribution plan According to the
of 2019 on June relevant
Incentive objects 9,054,500 17,637,490 4,735,380 21,225,100 2, 2020, the provisions of
capital reserve equity incentive
was converted management.
into share capital,
and the number
of restricted
shares was
increased by
6,092,490; (3)
Comply with
relevant
92
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
provisions of
equity incentive
management.
Total 346,976,785 119,672,501 394,849,394 71,321,882 -- --
II. Issuance and Listing of Securities
1. Securities (exclude preferred share) issued during the reporting period
□ Applicable √ Not applicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and
liabilities
√Applicable □ Not applicable
1. The first extraordinary general meeting of shareholders in 2019 was held on November 11, 2019, and the
Proposal on repurchase and cancellation of some restricted shares was deliberated and passed. The Company
repurchased and cancelled 291200 restricted shares held by unqualified incentive objects but not yet unlocked.
After the repurchase and cancellation, the total share capital of the company was reduced from 2,765,657,898
shares to 2,765,366,698 shares
2. During the reporting period, the Company has carried out the profit distribution plan for 2019: It took
2,755,583,602 shares as the base, distributed 3 shares for every 10 shares to all shareholders, and increased by
826,675,080 shares in total. After the conversion, the total share capital was increased from 2,765,366,698 shares
to 3,592,041,778 shares.
3. On November 5, 2020, the fourth extraordinary general meeting of shareholders in 2020 was held, and the
Resolution on repurchase and cancellation of some restricted stocks was deliberated and passed. The Company
repurchased and cancelled 440,310 shares of restricted stocks held by unqualified incentive objects but not yet
unlocked. After this, the total share capital of the Company will be reduced from 3,592,041,778 shares to
3,591,601,468 shares.
3. Existent shares held by internal staff of the Company
□ Applicable √ Not applicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: Share
Total Total number Total Total number
Number of of common Number of of preferred
78,206 97,396 0 0
Common shareholders Preferred shareholders
Shareholder at the end of Shareholders (if any) (refer
93
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
s at the End previous (If Any) to Note 8)
of the month before (Refer to with resumed
Reporting the disclosure Note 8) voting rights
Period date of the Whose at the end of
annual report Voting Rights previous
Have Been month before
Recovered at the disclosure
the End of date of the
the Reporting annual report
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
Sanhua
Domestic
Holding 1,069,5 172,686,4 1,069,537
non-state-owned 29.78% Pledged 240,420,000
Group Co., 37,580 42 ,580
corporation
Ltd.
Zhejiang
Sanhua
Domestic
Lvneng 742,747 171,403,3 742,747,9
non-state-owned 20.68%
Industrial ,954 74 54
corporation
Group Co.,
Ltd
Hong Kong
Central Overseas 285,173 27,359,02 285,173,1
7.94%
Clearing corporation ,115 0 15
Limited
Domestic 52,031, 48,773,
Zhang Yabo 1.45% 2,007,200 3,257,800
Individual 200 400
China
Construction
Bank
31,976, 17,640,17 31,976,32
Corporation - Others 0.89%
323 7 3
Bank of
Communicati
ons Schroder
94
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
alpha core
hybrid
securities
investment
fund
Industrial
and
Commercial
Bank of
China
Limited-E
fund
30,736, 30,736,56 30,736,56
emerging Others 0.86%
564 4 4
growth
flexible
allocation
hybrid
securities
investment
fund
CITIC Bank
Co., Ltd. -
Bank of
Communicati
ons
Schroeder
26,604, 11,674,95 26,604,38
new vitality Others 0.74%
389 6 9
flexible
allocation of
hybrid
securities
investment
funds
China
Merchants
Bank Co.,
Ltd. – E fund
innovative 25,526, 25,526,68 25,526,68
Others 0.71%
growth 687 7 7
hybrid
securities
investment
fund
95
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
National
Social 23,658, 23,658,18
Others 0.66% 7,593,186
Security 180 0
Fund-111
Central
Domestic
Huijin Asset 23,183, 23,183,42
state-owned 0.65% 5,350,020
Management 420 0
corporation
Co., Ltd
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.
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
742,747,954 742,747,954
Industrial Group Co., Ltd stock
Hong Kong Central Clearing RMB common
285,173,115 285,173,115
Limited stock
China Construction Bank
Corporation - Bank of
RMB common
Communications Schroder alpha 31,976,323 31,976,323
stock
core hybrid securities investment
fund
Industrial and Commercial Bank
of China Limited-E fund
RMB common
emerging growth flexible 30,736,564 30,736,564
stock
allocation hybrid securities
investment fund
CITIC Bank Co., Ltd. - Bank of
RMB common
Communications Schroeder new 26,604,389 26,604,389
stock
vitality flexible allocation of
96
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
hybrid securities investment funds
China Merchants Bank Co., Ltd.
RMB common
– E fund innovative growth 25,526,687 25,526,687
stock
hybrid securities investment fund
National Social Security RMB common
23,658,180 23,658,180
Fund-111 stock
Central Huijin Asset Management RMB common
23,183,420 23,183,420
Co., Ltd stock
Industrial and Commercial Bank
of China Limited - Bank of
Communications Schroeder RMB common
22,846,399 22,846,399
advantage industry flexible stock
allocation of hybrid 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
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.
2.Particulars about controlling shareholder of the Company
Nature of the controlling shareholder: Domestic non-state-owned corporation
Type of the actual controller: Corporation
Name of controlling Legal Representative
Date of establishment Organization code Business scope
shareholder /People in charge
Industrial investment;
Manufacturing and sales:
refrigeration control
Sanhua Holding Group
Zhang Daocai July 11, 2000 911330624720002522J components, auto parts,
Co., Ltd
electronic products;
sales: metal materials
(excluding precious and
97
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
rare metals), chemical
raw materials (except
dangerous chemicals and
precursor chemicals),
gold and silver jewelry,
rubber; export of
products and related
technologies produced by
the enterprise and its
member enterprises. It is
engaged in the export
business of raw and
auxiliary materials,
machinery and
equipment, instruments
and meters, spare parts
and related technologies
needed by the enterprise
and its member
enterprises for
production and scientific
research; it is engaged in
the processing of
imported materials and
the business of "three
supplies and one
supplement". Technical
consultation, technical
service, financial
consultation and
investment consultation.
Shares held by the
controlling shareholder in
other listed companies
N/A
through controlling or
holding during the
reporting period
Change of the controlling shareholder during the reporting period
□ Applicable √ Not applicable
The Company's controlling shareholder has not changed during the reporting period.
3.Particulars about the Company’s actual controller & concerted parties
Nature of the actual controller: Domestic natural person
98
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Type of the actual controller: Natural person
Whether he/she has obtained
Name of the actual Relationship with the actual
Nationality the right of residence in another
controller controller
country or region
Zhang Daocai Himself China No
Zhang Yabo Himself China No
Zhang Shaobo Himself China No
Mr. Zhang Daocai: Chinese nationality, born in 1950, senior economist, and special supervisor of
MBA graduate student of Zhejiang University. He is honorary chairman of the Company and
chairman of the board of directors of Sanhua Holding Group Co., Ltd. He was elected as the
representative of the 8th, 9th, 10th, 11th and 12th National People's Congress of Zhejiang
Province and vice president of the China Enterprise Federation and the Chinese Entrepreneurs
Association. Vice president of Zhejiang small and medium sized Enterprises Association, vice
president of Zhejiang Business Management Research Association and vice president of Asia
Pacific Chinese Leaders Association, and won the National Labor Medal of May 1st, national
excellent entrepreneur, master of Chinese management, most creative Chinese business leader in
Asia Pacific, Model worker of Zhejiang Province, meritorious entrepreneur of implementing the
"eight eight strategy" in Zhejiang Province, lifelong leader entrepreneur of Zhejiang Province,
leading figures of Zhejiang Manufacturing and other honors.
Mr. Zhang Yabo: Chinese nationality, CPC member, born in February 1974, graduated from
Shanghai Jiaotong University, received a master's degree in Business Administration from CEIBS.
At present, he is the chairman of the board of the Company, Secretary of the Party committee of
Main occupation and position Sanhua holding group, vice chairman and director of the board of Sanhua Holding Group Co., Ltd.
he has successively won Zhejiang outstanding young private entrepreneurs, Zhejiang operation
and management masters, Shaoxing labor model, Shaoxing top ten outstanding young people,
Shaoxing mayor award, Changjiang River Delta top ten outstanding young businessmen, Fengyun
Zhejiang businessmen, Zhejiang outstanding entrepreneurs, glorious Zhejiang businessman, etc.
He served as member of the 12th Zhejiang Provincial Committee of the Chinese people's Political
Consultative Conference, deputy to the 5th, 6th and 7th Shaoxing people's Congress, vice
chairman of Zhejiang Youth Federation, President of Zhejiang Youth Entrepreneurs Association,
vice chairman of Shaoxing Youth Federation, President of Shaoxing Youth Entrepreneurs
Association, director of China Youth Entrepreneurs Association, and director of Zhejiang Youth
Entrepreneurship foundation.
Mr. Zhang Shaobo: Chinese nationality, born in 1979, master's degree, graduated from CEIBS. He
serves as a director of the Company, director of Sanhua Holding Group Co., Ltd., CEO of
Hangzhou Sanhua International Building Co., Ltd., and executive director and CEO of Zhejiang
Sanhua Zhicheng Real Estate Development Co., Ltd.
Domestic and foreign listed
N/A
companies controlled in the past
99
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
10 years
Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
33% Daocai Zhang Qingjuan Yu 31%
Yabo Zhang 6% Shaobo Zhang
30%
64.07% Xinchang Huaqing Investment Co., Ltd.
Xinchang Huaxin Investment Co., Ltd. 10.85%
27.27%
11.81%
12.88%
Sanhua Holding Group Co., Ltd.
100%
1.45%
Haoyide International Limited OF Hong Kong
100% 62.11%
Fuxun Co., Ltd.
37.89%
29.78%
Zhejiang Sanhua Lvneng Industry Group Co., Ltd.
20.68%
Zhejiang Sanhua Intelligent Controls Co., Ltd.
100
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. Particulars about other corporate shareholders with shareholding proportion over 10%
√ Applicable □ Not applicable
Date of
Name of corporate shareholder Legal representative Registered capital Main business
incorporation
Manufacturing and sales: air
suspension assembly,
general equipment,
electromechanical
equipment, technology
development, technical
service, technical
consultation, achievement
transfer: electromechanical
technology, environmental
protection technology,
biotechnology (except for
human stem cells, gene
diagnosis and treatment
technology development
and application); electronic
and electrical products,
metal materials (excluding
Zhejiang Sanhua Lvneng September 30,
Zhang Shaobo 483 million yuan precious metals), chemical
Industrial Group Co., Ltd 2001
raw materials (except
chemical dangerous goods
and precursor chemicals)
Wholesale, retail and import
and export business of gold
and silver jewelry, rubber,
mineral products, machinery
and equipment, instruments
and accessories; services:
enterprise management
consulting, property
management (operating by
qualification certificate),
self-owned house leasing,
industrial investment
management, consulting
management (except for
securities and goods,
101
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
without approval of
financial supervision
departments, shall not
engage in deposit, financing
guarantee, agency for public
financing Financial services
such as customer finance),
power supply, development
and construction of
distributed solar energy
projects, and contract
energy management.
(except for those involving
the implementation of
special management
measures for access
stipulated by the state). (for
projects that need to be
approved according to law,
business activities can only
be carried out with the
approval of relevant
departments.)
5. Particulars on shareholding decrease restrictions for the controlling shareholders, actual controller,
restructurer or other committing parties
□ Applicable √ Not applicable
102
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section VII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.
103
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section VIII Information about Convertible Bonds
□ Applicable √ Not applicable
No existed Convertible bonds for the Company during the current reporting period.
104
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section IX Information about Directors, Supervisors, Senior
Management
I. Shareholding changes of directors, supervisors, senior management
√ Applicable □ Not applicable
Shares
held at Shares Shares Shares
Terminati
the increased decreased Other held at
Tenure Commencement on of
Name Title Gender Age beginning during the during the changes the end of
status of term of office term of
of the Period Period (Shares) the Period
office
Period (Shares) (Shares) (Shares)
(Shares)
Director,
Zhang Incumb December 13, December 50,024,00 12,007,20 10,000,00 52,031,20
chairman, Male 47
Yabo ent 2012 6, 2021 0 0 0 0
CEO
Wang Director, Incumb December 13, December
Male 52 130,000 169,000 42,250 256,750
Dayong President ent 2012 6, 2021
Incumb December
Yu Shuli Director Male 73 April 28, 2006
ent 6, 2021
Ni Incumb December
Director Male 53 May 6, 2011 130,000 169,000 42,250 256,750
Xiaoming ent 6, 2021
Director,
Chen Incumb November 29, December
chief Male 55 130,000 169,000 42,250 256,750
Yuzhong ent 2011 6, 2021
engineer
Zhang Incumb December
Director Male 42 May 18, 2015
Shaobo ent 6, 2021
Independ
Incumb May 17,
Ji Hua ent Male 53 May 18, 2015
ent 2021
director
Independ
Shen Resigne June 7,
ent Male 64 June 8, 2014
Yuping d 2020
director
Independ
Zhang Resigne June 7,
ent Female 64 June 8, 2014
Yaping d 2020
director
Shi Independ Incumb Male June 8, 2020 December
105
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Jianhui ent ent 6, 2021
director
Independ
Zhu Resigne February
ent Male June 8, 2020
Hongjun d 25, 2021
director
Independ
Incumb December
Pan Yalan ent Female February 26, 2021
ent 6, 2021
director
Convener
of the
Weng Incumb December
board of Male 55 June 8, 2014
Weifeng ent 6, 2021
superviso
rs
Zhao superviso Incumb November 29, December
Male 50
Yajun r ent 2011 6, 2021
Chen superviso Incumb December
Male 52 March 26, 2011 0 11,100 11,100
Xiaoming r ent 6, 2021
Vice
president,
Hu Secretary Incumb December
Male 46 January 26, 2015 130,000 169,000 42,250 256,750
Kaicheng of the ent 6, 2021
board of
directors
Vice
Yu Incumb September 30, December
president, Male 47 162,110 178,633 52,686 288,057
Yingkui ent 2011 6, 2021
CFO
50,706,11 12,872,93 10,221,68 53,357,35
Total -- -- -- -- -- --
0 3 6 7
Note: Mr. Zhu Hongjun, the independent director, resigned on December 28, 2020 and continued to perform the duties as the
independent director and the member of audit committee of the board of directors. On February 26, 2021, the general meeting of
shareholders approved the proposal to appoint Ms. pan Yalan as an independent director of the Company.
II. Changes of Directors, Supervisors and Senior Management
√Applicable □Not applicable
Name Position Type Date Reasons
Leave the
Independent position when
Shen Yuping June 8, 2020 Leave the position when six-year term of office expires
Director term of office
expires
Zhang Yaping Independent Leave the June 8, 2020 Leave the position when six-year term of office expires
106
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Director position when
term of office
expires
Independent February 25,
Zhu Hongjun Resigned Not qualified to be a director
Director 2021
III. Positions and Incumbency
Mr. Zhang Yabo: Born in 1974, master of Business Administration of CEIBS. Graduated from Shanghai Jiao Tong
University in July, 1996. From May 2007 to September 2009, he served as the vice president of Sanhua Holding
Group Co., Ltd.; from May 2007 up to present, he has been appointed as the director and vice chairman of the board
of directors of Sanhua Holding Group Co., Ltd.; from September 2009 to December 2012, he served as the general
manager of the Company; from October 2009 up to present, he has been appointed as the director of the Company;
from December 2012 up to present, he has served as the chairman and CEO of the Company.
Mr. Wang Dayong: Born in 1969, senior manager, master of Business Administration (EMBA), senior economist
and engineer. He served as chief of planning section, Secretary of general manager, director of manufacturing
department, director of refrigeration valve business department, assistant to general manager, assistant to President,
vice president and director of Sanhua Holding Group. He served as a supervisor of the Company from December
2001 to April 2006, a director of the Company from April 2006 to May 2011. He currently serves as a director of
Sanhua Holding Group, and a director and President of the Company since December 2012.
Mr. Yu Shuli: Born in 1948, graduated from the Department of economics of Shanghai University of Finance and
Economics in 1983. He used to be the chief accountant and factory director of Shanghai Xinxin machinery factory,
deputy factory director of Shanghai automobile air conditioner factory, director of the first board of directors of
Shanghai Aerospace electromechanical Co., Ltd., general manager of Shanghai Deerfu Automobile Air
Conditioning System Co., Ltd., and factory director of Shanghai automobile air conditioner factory. He has been a
director of the Company since April 2006.
Mr. Ni Xiaoming: Born in 1968, master’s degree, economist. From November 2005 to July 2009, he served as the
general manager of Sanhua International (USA) Co., Ltd. and the deputy general manager of sales of Zhejiang
Sanhua Refrigeration Group Co., Ltd.; August 2009, he served as the deputy general manager of Sanhua Danfoss
(Hangzhou) Microchannel Heat Exchanger Co., Ltd.; since May 2010, he has served as the general manager of
Hangzhou Sanhua Microchannel Heat Exchanger Co., Ltd., as well as the director of Sanhua Holding Group Co.,
Ltd.; He has been a director of the Company since May, 2011.
Mr. Chen Yuzhong: Born in 1966, master’s degree, engineer. He was the chief engineer of the Company from
December 2001 to May 2011; he was the deputy general manager of the Company from May 2011 to December
2012; he has been the chief engineer of the Company since December 2012; he has been the general manager of
Zhejiang Sanhua Refrigeration Group Co., Ltd. since August 2015; he is also the director of Sanhua Holding
Group Co., Ltd.; and he has been the director of the Company since November 2011.
Mr. Zhang shaobo: Born 1979, master’s degree, graduated from the China Europe Institute of Business School.
107
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Since November 2012, he has served as general manager of Sanhua Real Estate Group and Zhejiang Sanhua Real
Estate Co., Ltd.; since July 2013, he has served as general manager of Hangzhou Sanhua International Building
Co., Ltd.; since May 2017, he has served as executive director and general manager of Zhejiang Sanhua Zhicheng
Real Estate Development Co., Ltd.; he currently serves as a director of Sanhua Holding Group Co., Ltd.; from
May 2015 up to present, he has served as the director of the Company.
Mr. Ji Hua: Born in 1968, master’s degree, graduated from Peking University, majoring in finance. From October
2004 to October 2008, he was the general manager of Guangzhou Jinri Yihua Food and Beverage Co., Ltd.; from
August 2009 to June 2014, he served as the chief researcher and partner of the Research Institute of the board of
directors of Hong Kong; from August 2014 to February 2017, he served as the executive director of Hangzhou
Ron Investment Management Co., Ltd.; from March 2017 up to present, he has served as the partner of
Guangzhou Wisteria Stone Business Consulting Co., Ltd. He has been appointed as an independent director of the
Company since May 2015.
Mr. Shi Jianhui, Born in 1972, he achieved a master's degree in EMBA from Changjiang Business School and
Shanghai Advanced Finance College. He used to be the chairman / CEO of Minshi Group Co., Ltd. and he
currently serves as the CEO of Xiaozhi Investment Management Partnership in Meishan Bonded Port Area,
Ningbo, Zhejiang Province. He has been appointed as an independent director of the Company since June 2020.
Ms. Pan Yalan: Born in 1965, master degree, a member of the League of Civil Society. She participated in work in
August 1987. She is professor of Accounting College of Hangzhou University of Electronic Technology, tutor of
graduate students, and "151" talents in Zhejiang Province in the new century (third level). Currently she is a
member of the CPPCC of Zhejiang Province, member of the Zhejiang Provincial Committee of the Democratic
League, a member of the Zhejiang Provincial Finance Association, a standing director of Zhejiang Provincial
Taxation Society and a special auditor of Zhejiang Audit Department. She has been appointed as an independent
director of the Company since February 2021.
Mr. Weng Weifeng: Born in 1966, bachelor degree, graduated from Shanghai Jiao Tong University, electrical
engineering. From November 2008 to March 2009, he served as deputy director of human resources and director
of industrial operation management department of Sanhua Holding Group Co., Ltd.; from April 2009 to
September 2009, he served as general manager of Shanghai Kangbasaite Technology Development Co., Ltd. and
general manager of Shanghai Clean Automobile Energy System Co., Ltd.; from January 2010 to September 2020,
he served as director of human resources of Sanhua Holding Group Co., Ltd. In February 2019, he served as the
director of Sanhua Holding Group Co., Ltd. From December 2019 up to present, he has served as chairmen of
Ningbo Fulda Intelligent Technology Co., Ltd. From November 2011 up to present, he has been a supervisor of
the Company.
Mr. Zhao Yajun: Born in 1971, master’s degree, graduated from school of Business Administration of Zhejiang
University, with senior accountant title. From 1996 to 2003, he worked in Zhejiang Tianjian accounting firm; from
January 2004 to February 2011, he served as deputy director of Finance Department of Sanhua Holding Group
Co., Ltd.; from February 2011 to February 2014, he served as director of Finance Department of Sanhua Holding
Group Co., Ltd.; from March 2014 up to present, he has served as deputy director of finance of Sanhua Holding
Group Co., Ltd. He has been a supervisor of the Company since November 2011.
108
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Mr. Chen Xiaoming: From October 2008 to October 2011, he served as director of quality management
department of Zhejiang Sanhua Intelligent Controls Co., Ltd.; in November 2011, he served as management
representative and director of Quality Department of Changzhou Ranco four-way valve Co., Ltd.; in August 2013,
he served as director of quality department and vice director of four-way valve business department of Wuhu
Sanhua Automatic Control Components Co., Ltd.; in January 2016, he served as director of Quality Department of
Wuhu Sanhua Automatic Control Components Co., Ltd; in December 2016, he served as director of four-way
valve department and stop valve department of Wuhu Sanhua Automatic Control Components Co., Ltd.; from
August 2017 up to present, he has served as Manufacturing Director of Wuhu Sanhua Automatic Control
Components Co., Ltd., since March 2011, he has been appointed as supervisor of the Company.
Mr. Hu Kaicheng: Born in 1975, master's degree, bachelor's degree of Tongji University, SAIF EMBA of
Shanghai Jiao Tong University. From August 2006 to August 2009, he served as the director of supplier
management, procurement director of Zhejiang Sanhua Refrigeration Group Co., Ltd.; from September 2009 to
December 2010, he served in Sanhua Holding Group Co., Ltd.; from January 2011 to October 2014, he served as
the procurement director of the Company; from October 2014 up to present, he served as the vice president of the
Company; from January 2015 up to present, he served as the Secretary of the board of directors of the Company.
Mr. Yu Yingkui: Born in 1974, bachelor degree, accounting major of Shanghai University of Finance and
Economics. From April 2001 to December 2003, he successively served as the chief accountant of the financial
department of Zhejiang Sanhua Holding Group Co., Ltd. and Zhejiang Sanhua Refrigeration Group Co., Ltd.;
from December 2003 to November 2007, he served as the deputy general manager of Shenyang Durui Wheel Hub
Co., Ltd.; from November 2007 up to present, he has been the director of the financial department of the
Company; from September 2011 up to present, he has been the chief financial officer of the Company; from
January 2016 up to present, he has been the vice president of the Company.
Position held in shareholders’ entities
√Applicable □ Not applicable
Position in Compensation and
Commencemen Termination of
Name Shareholder's entity shareholders’ allowance from the
t of the term the term
entities shareholders' entity
Vice February 26, February 25,
Zhang Yabo Sanhua Holding Group Co., Ltd chairman 2019 2022 No
(director)
February 26, February 25, No
Wang Dayong Sanhua Holding Group Co., Ltd Director
2019 2022
February 26, February 25, No
Ni Xiaoming Sanhua Holding Group Co., Ltd Director
2019 2022
February 26, February 25,
Zhang Shaobo Sanhua Holding Group Co., Ltd Director Yes
2019 2022
Zhejiang Sanhua lvneng Industrial Group Director， July 1, 2019 No
Zhang Shaobo
Co., Ltd general
109
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
manager
February 26, February 25, No
Chen Yuzhong Sanhua Holding Group Co., Ltd Director
2019 2022
February 26, February 25, No
Weng Weifeng Sanhua Holding Group Co., Ltd Director
2019 2022
Deputy chief
Zhao Yajun Sanhua Holding Group Co., Ltd financial March 1, 2014 Yes
officer
Zhejiang Sanhua Lvneng Industrial Group
Zhao Yajun Supervisor July 1, 2019 No
Co., Ltd
Description of
the position in
No
shareholders’
entities
Positions held in other entities
√Applicable □ Not applicable
Compensation
Position in and allowance
Commencemen Termination of
Name Shareholder's entity shareholders’ from the
t of the term the term
entities shareholders'
entity
Hangzhou Sanhua Research Institute Co., February 10,
Zhang Yabo Chairman No
Ltd 2017
Zhang Yabo Hangzhou Fumo New Material Technology No
Director July 1st, 2016
Co., Ltd
Zhang Yabo Xinchang Huaxin Investment Co., Ltd Chairman March 16, 2016 No
Zhang Yabo February 3, No
Wuhu Erda Technology Co., Ltd Director
2016
Zhang Yabo Executive No
Hangzhou Zhicheng Investment director and
July 23, 2007
Management Co., Ltd general
manager
Zhang Yabo Hangzhou Zhishen Investment Management No
Supervisor July 23, 2007
Co., Ltd
Zhang Yabo Zhejiang Haoyuan Technology Co., Ltd Director May 4, 2018 No
Zhang Yabo Director October 13, No
Sanhua trading Singapore Pte Ltd
2017
110
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Wang Dayong Zhejiang Huateng Investment Co., Ltd Chairman April 19, 2010 No
Wang Dayong Hangzhou Fufan Investment Management Director No
April 28, 2016
Co., Ltd
Wang Dayong Guochuang energy Internet Innovation Director August 20, No
Center (Guangdong) Co., Ltd 2019
Convener of
Yu Shuli Ningbo Huaxiang Electronics Co., Ltd the board of March 5, 2020 Yes
supervisors
Ni Xiaoming Sanhua Houston Technology Center Director August 2, 2017 No
Executive No
Zhang Shaobo Shanghai Sanhua Electric Co., Ltd April 10, 2017
director
Zhang Shaobo Hangzhou zhiwo Investment Management General No
June 16, 2014
Co., Ltd manager
Zhang Shaobo Executive No
Hangzhou Zhishen Investment Management director,
July 23, 2007
Co., Ltd general
manager
Zhang Shaobo Hangzhou Fuxiang Property Management Chairman No
January 3, 2016
Co., Ltd
Zhang Shaobo Xinchang Sanhua Property Management Chairman No
March 29, 2011
Co., Ltd
Zhang Shaobo Executive No
Tianjin Minghao Management Consulting director,
May 25, 2017
Co., Ltd general
manager
Zhang Shaobo Executive No
Hangzhou Sanhua International Building director,
July 31, 2013
Co., Ltd general
manager
Zhang Shaobo Xinchang Private Financing Service Center No
Director March 26, 2014
Co., Ltd
Zhang Shaobo September 11, No
Inner Mongolia Xiqi Mining Co., Ltd Supervisor
2012
Zhang Shaobo Executive No
Zhejiang Sanhua Zhicheng Real Estate director,
May 31, 2017
Development Co., Ltd general
manager
Zhang Shaobo Hangzhou Fufan Investment Management No
Chairman July 9, 2010
Co., Ltd
111
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Zhang Shaobo Xinchang United Investment Management December 31, No
Director
Co., Ltd 2008
Zhang Shaobo Executive No
Hangzhou Kaisida Technology Co., Ltd June 15, 2020
director
Zhang Shaobo Executive No
Tianjin Sanhua Industrial Park Management director,
May 9, 2019
Co., Ltd general
manager
Zhang Shaobo Hangzhou Huaqin Investment Management Supervisor December 25, No
Co., Ltd 2006
Zhang Shaobo Hangzhou Mifeng Catering Management Supervisor No
March 31, 2015
Co., Ltd
Zhang Shaobo Director September 26, No
Shanghai Tihu catering Co., Ltd
2017
Zhang Shaobo Ningbo Fulda Intelligent Technology Co., Director December 26, No
Ltd 2019
Zhang Shaobo Executive No
Zhejiang Sanhua Ecological Agriculture director, September 11,
Co., Ltd general 2018
manager
Zhang Shaobo Hangzhou Zhicheng Investment General November 4, No
Management Co., Ltd manager 2020
Zhang Shaobo Executive No
Hangzhou Zhiyong Enterprise Management director,
April 27, 2018
Co., Ltd general
manager
Executive Yes
Guangzhou Wisteria Stone Business director,
Ji Hua March 1, 2017
Consulting Co., Ltd general
manager
Zhejiang Ningbo Meishan free trade port Yes
Shi Jianhui Xiaozhi investment management CEO August 1, 2017
partnership
Shi Jianhui September 1st, Yes
Ningbo Jifeng Auto Parts Co., Ltd Adviser
2017
Shi Jianhui Shanghai Nan'en Automobile Technology Adviser November 1, Yes
Co., Ltd 2018
Shi Jianhui Changzhou New Energy Automobile Co., Adviser Yes
July 1, 2019
Ltd
Pan Yalan Hangzhou University of Electronic Science Teacher August 1, 1987 Yes
112
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
and Technology
Independent December 1, Yes
Pan Yalan Lin'an Rural Commercial Bank Co., Ltd
director 2019
General
Weng Weifeng Shanghai Sanhua Electric Co., Ltd April 12, 2011 Yes
manager
Weng Weifeng Chairman、 No
Hangzhou Tongchan Machinery Co., Ltd general March 22, 2017
manager
Weng Weifeng Shenyang Sanhua Daika wheel Hub Co., Director No
June 4, 2013
Ltd
Weng Weifeng Shenyang Durui Wheel Hub Co., Ltd Director May 10, 2013 No
Weng Weifeng Hangzhou Sanhua Research Institute Co., General No
May 10, 2018
Ltd manager
Weng Weifeng Ningbo Fulda Intelligent Technology Co., Chairman December 26, No
Ltd 2019
Weng Weifeng Shanghai fuyulong Automobile Technology Chairman December 26, No
Co., Ltd 2019
Weng Weifeng Shanghai futailong Automotive Electronic Chairman No
July 15, 2020
Technology Co., Ltd
Weng Weifeng Tianjin Sanhua Industrial Park Management October 10, No
Supervisor
Co., Ltd 2018
Weng Weifeng Tianjin Sanhua Fuda Intelligent Technology November 2, No
Chairman
Co., Ltd 2018
Weng Weifeng Director、 No
Xinchang Huaxin Investment Co., Ltd general March 21, 2017
manager
Zhao Yajun Shanghai Sanhua Electric Co., Ltd Supervisor April 12, 2011 No
Zhao Yajun Hangzhou Tongchan Machinery Co., Ltd Supervisor May 31, 2011 No
Zhao Yajun Xinchang Private Financing Service Center Supervisor No
March 26, 2014
Co., Ltd
Zhao Yajun Xinchang United Investment Management Supervisor No
January 1, 2012
Co., Ltd
Zhao Yajun Zhejiang Xiezhong automobile new energy No
Supervisor May 25, 2018
technology development Co., Ltd
Zhao Yajun Wuhu Erda Technology Co., Ltd Supervisor July 31, 2018 No
Zhao Yajun Zhejiang Haoyuan Technology Co., Ltd Supervisor May 4, 2018 No
Zhao Yajun Xinchang Huaxin Investment Co., Ltd Director March 21, 2017 No
Zhao Yajun Shanghai fuyulong Automobile Technology Supervisor December 26, No
113
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Co., Ltd 2019
Zhao Yajun Tianjin Sanhua Fuda Intelligent Technology Supervisor November 2, No
Co., Ltd 2018
Zhao Yajun Nanjing Xiezhong automobile new energy Supervisor February 28, No
technology development Co., Ltd 2019
Yu Yingkui Zhejiang Huateng Investment Co., Ltd Director April 19, 2010 No
Yu Yingkui Director December 8, No
Chongqing Tainuo Machinery Co., Ltd
2016
Yu Yingkui Nanchang Sanhua jinlifeng Machinery Co., Director No
July 12, 2017
Ltd
Yu Yingkui Qingdao Sanhua jinlifeng Machinery Co., Director No
July 25, 2017
Ltd
Yu Yingkui Xinchang Private Financing Service Center Director October 23, No
Co., Ltd 2015
Yu Yingkui Ningbo Jinlifeng Machinery Co., Ltd Director July 2, 2020 No
Yu Yingkui October 13, No
Sanhua Trading Singapore Pte Ltd Director
2017
Description of
the position in
No
shareholders’
entities
Incumbent and resigned directors, supervisors and senior management personnel during the reporting period that
have been imposed administrative penalties by the CSRC during the last three years.
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior management personnel
The remuneration of senior managers shall be assessed by the remuneration and assessment committee of the
board of directors according to the job responsibilities and the performance assessment standards and procedures.
After completion of the main business performance indicators, the annual remuneration of the senior managers
shall be proposed. The amount of remuneration for this year shall be within the range determined by the board of
directors. The Company shall bear the travel expenses incurred by the independent directors for attending
meetings. The amount of remuneration of directors and supervisors in this year is within the remuneration range
determined by the general meeting of shareholders.
Remuneration of directors, supervisors and senior management personnel
Total Remuneration
Name Title Gender Age Tenure status
remuneration from related
114
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
from the parties (Y/N)
Company
(RMB'0,000)
Director,
Zhang Yabo Male 47 Incumbent 172.39 N
Chairman、CEO
Director, Male Incumbent N
Wang Dayong 52 71.22
President
Yu Shuli Director Male 73 Incumbent 7.53 N
Ni Xiaoming Director Male 53 Incumbent 95.75 N
Director、chief Male Incumbent N
Chen Yuzhong 55 63.13
engineer
Zhang Shaobo Director Male 42 Incumbent 0Y
Independent Male Incumbent N
Ji Hua 53 10.97
director
Independent Male N
Shen Yuping 64 Resigned 5.78
director
Independent N
Zhang Yaping Female 64 Resigned 5.78
director
Independent Male Incumbent N
Shi Jianhui 49 5.2
director
Independent Male Incumbent
Zhu Hongjun 45 0N
director
Convener of the Male Incumbent
Weng Weifeng board of 55 0Y
supervisors
Zhao Yajun Supervisor Male 50 Incumbent 0Y
Chen Xiaoming Supervisor Male 52 Incumbent 29.1 N
Secretary of the Male Incumbent
board of
Hu Kaicheng 46 59.74 N
directors, vice
president
Yu Yingkui CFO, VP Male 47 Incumbent 68.47
Total -- -- -- -- 595.06 --
Share incentives for directors, supervisors and senior executives in the Reporting Period
√ Applicable □ Not applicable
Restricted Shares Shares Price for Restricted
Name Title Number of Number of Exercise Market
Shares vested in newly restricted Shares
115
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
exercisable exercised price of price at the held at the the current granted in shares held at
shares in shares in exercised end of the beginning period the current granted period-end
the the shares report of the period (RMB per
reporting reporting during the period period share)
period period reporting (yuan /
period share)
(yuan /
share)
Wang
Chairman 24.65 91,000 42,250 157,300 9.85 197,600
Dayong
Ni
Director 24.65 91,000 42,250 157,300 9.85 197,600
Xiaoming
Director、
Chen
chief 24.65 91,000 42,250 157,300 9.85 197,600
Yuzhong
engineer
Vice
president,
Hu Secretary
24.65 91,000 42,250 157,300 9.85 197,600
Kaicheng of the
board of
directors
Vice
Yu
president, 24.65 91,000 52,686 157,300 9.85 197,600
Yingkui
CFO
Total -- 0 0 -- -- 455,000 221,686 786,500 -- 988,000
1. At the beginning of each year, the number of locked shares of senior executives is recalculated according
to 75% of the total number of shares held by the them, and the number of unlocked shares in current period
is 25% of the circulating shares.
Note (if any) 2. On November 6, 2020, when second phase of the 2018 restricted stock incentive plan matured, 50,700
restricted shares of each above-mentioned directors and senior managers will be unlocked, with a total of
253,500 shares. However, due to the lock-in restriction of senior executives, the shares will be directly
included in the lock-in shares of senior executives.
V. Staff in the Company
1. Statistics of employees, professional structure of the staff, and educational background
Number of incumbent employees in the parent company 4,570
Number of incumbent employees in major subsidiaries 8,503
Number of incumbent employees 13,073
Number of employees receiving salaries in current period 13,073
Number of retired employees requiring the parent Company and 0
116
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
its subsidiaries to bear costs
Professional structure
Tier Number of employees
Production staff 8,848
Sales staff 503
Engineers 1,576
Financial staff 233
Administrative Staff 1,913
Total 13,073
Educational background
Education background Number of employees
Master and/or doctor/or above 546
Bachelor 2,317
Junior College (professional training) 2,607
Other 7,603
Total 13,073
2. Staff remuneration policy
According to the business development plan and the incentive needs of human resource, the Company has
established a comprehensive compensation system based on post value, standard of personnel ability and
evaluation of performance, and formed relevant incentive systems, such as Performance Management Measures,
Management Measures for Evaluation of Professional Talents, Management Measures for Compensation and
Assessment of College Students and Incentive Policy for Purchasing Real Estate, etc. It balances the contribution
of talents and their return and income, forms an effective salary rise mechanism, and motivates their enthusiasm
and innovation. Every year, the Company carries out the estimation of college students and professional talents,
which has played an important role in motivating new college students and employees at all levels. And regular
review market compensation to ensure competitiveness of the Company's overall salary system. In addition, in the
professional system, the Company will carry out patent award, quality award, management effectiveness award,
lean improvement award and other management evaluation every year, which effectively encourage talents’
innovation. In 2018, the Company launched the first equity incentive plan, and in 2020, the Company launched
the restricted stock incentive plan, which played an incentive and retention role for the Company's key talents and
laid a foundation for sustainable development.
3. Staff training plans
Based on the development plan from 2021 to 2025, the Company implements the talents strategy of “Internal
training first and external recruitment second”, which will be dedicated to the development of staff at all levels.
According to the requirements of competency development, we build a learning organization, which would
improve personal ability and create greater value, through the cultivation of talents and the construction of cadre
echelon. Staff training plans are mainly on the technical system, marketing system, quality system, production
planning system, financial system and other backbone departments so as to improve their professional skills and
117
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
management level. We will continue to strengthen talent echelons training, manager training, management
training, and new college students training, and reserve of talents.
The Company continues to carry out the work of "Retain excellent talents" to identify and develop high potential
talents. In order to build an international, professional and young backbone team, we strengthen the cultivation
and recruitment of international talents, pay attention to the cultural publicity of overseas employees, enhance the
sense of cultural identity and influence of culture.
4. Labor outsourcing
□ Applicable √ Not applicable
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Section X Corporate Governance
I. Basic situation of corporate governance
During the reporting period, the Company strictly abided by the Company Law, Securities Law, Code of
Corporate Governance for Listed Companies in China, Stock Listing Rules of the Shenzhen Stock Exchange,
Guidelines of the Shenzhen Stock Exchange for the Standard Operation of Listed Companies and other applicable
laws and regulations of China Securities Regulatory Commission and Shenzhen Stock Exchange. We continue to
improve the corporate governance structure, establish and improve the internal control system, strengthen the
management of information disclosure, actively carry out the activities of investor relations, standardize the
operation of the Company, and improve the level of corporate governance. During the reporting period, the
Company revised the Articles of Association and further planned the corporate governance system. As of the end
of the report period, the actual situation of corporate governance conforms to the regulatory documents of CSRC
on the governance of listed companies.
1. Shareholders and general meeting of shareholders
The Company convenes the general meeting of shareholders in strict accordance with the requirements of the
Normative Opinions of the General Meeting of Shareholders, the Articles of Association and the Rules of
Procedure of the Shareholders' Meeting. When the shareholders' meeting deliberates related matters, the related
shareholders shall avoid voting. The related transactions shall be fair and reasonable without any damage to the
interests of shareholders. Treat all shareholders equally, ensure that all shareholders, especially minor
shareholders, have equal status and fully exercise their rights. The shareholders' meetings held during the
reporting period were convened by the board of directors and lawyers were invited to attend the meeting on site.
2. Directors and the board of directors
The Company elect directors in strict accordance with the Articles of Association and Rules of Procedure for the
Board of Directors; the number and composition of the board of directors meet the requirements of laws and
regulations and the Articles of Association. The board of directors convenes meetings in accordance with the
Company Law and the Rules of Procedure of the Board of Directors. All directors exercise their rights diligently,
attend the board of directors and shareholders' meeting and actively participate in relevant training.
3. Supervisors and board of supervisors
The board of supervisors elects the supervisors in strict accordance with the Company Law and the Articles of
Association; the composition and number of the board of supervisors meet the requirements of laws and
regulations. The Company's supervisors conscientiously perform their duties in accordance with the Rules of
Procedure of the Board of Supervisors, and effectively supervise and express their opinions on the Company's
major issues, related party transactions, financial situation, and the legality and compliance of the Company's
directors and senior managers in performing their duties.
4. Relationship between controlling shareholders and listed companies
The controlling shareholders can strictly regulate their own behaviors. There is no direct or indirect intervention
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beyond the provisions of general meeting of shareholders. The Company and its controlling shareholders are
mutually independent of each other in personnel, assets, finance, institutions and business. The board of directors,
board of supervisors and internal institutions of the Company operate independently. There is no such situation
that the controlling shareholders occupy the funds of the listed company for non-operating purposes.
5. Information disclosure and investor relationship management
During the reporting period, the Company designated Securities times, Shanghai Securities News and CNINFO as
the information disclosure media, and disclosed information truthfully, accurately and timely in strict accordance
with relevant laws and regulations, so as to ensure that all shareholders of the Company have fair access to the
relevant information. In addition, the Company designated the secretary of the board of directors as the person in
charge of investor relationship management. Daily management of investor relations includes answering investors'
questions through telephone, email, interactive platform etc., strengthening the communication with investors so
as to fully guarantee the investors' right to know.
6. Performance evaluation and incentive mechanism
The Company has established a comprehensive employee performance evaluation and incentive mechanism. The
appointment of senior managers is open and transparent, and conforms to the relevant laws, regulations and the
Articles of Association. In the future, the Company will explore more forms of incentive methods, form a
multi-level incentive mechanism, improve the performance evaluation standards, better mobilize the work
enthusiasm of management personnel, and attract and stabilize excellent management talents and technical and
business backbones.
7. Stakeholders
The Company can fully respect and safeguard the legitimate rights and interests of stakeholders, and realize the
coordination and balance of interests of shareholders, employees and society. The Company adheres to the
relevant laws and regulations, constantly improves the corporate governance system, and effectively protects the
interests of investors.
Any significant incompliance for the relevant regulatory documents issued by China Securities Regulatory
Commission in respect of corporate governance:
□ Yes √ No
II. Company’s Independence in Businesses, Management, Assets, Institutions and Finance from
Controlling Shareholders
The Company is separated from the controlling shareholder, the actual controller and the controlled enterprises in
business, personnel, assets, institutions and finance, and has the ability of independent operation.
1. Business independence
The main business of the Company is outstanding, and it has its own corresponding system in production,
procurement and sales. It is independent of the controlling shareholder, has a complete business structure, and
does not rely on the shareholders or any other related parties. The shareholders exercise their right through
participating in the general meeting of shareholders in accordance with the law. There is no such situation that the
shareholders interfere in the operation beyond the provision of general meeting.
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2. Personnel independence
The directors, supervisors and senior management of the Company are elected or appointed in accordance with
the legal election procedure stipulated in the Company Law and the Articles of Association. The Company's
personnel, labor and wages are completely independent. The salary payment, welfare expenses and other expenses
of the staff are strictly separated from the controlling shareholder.
3. Asset completeness
The Company has tangible assets, such as land, buildings, machinery and equipments, vehicles, office facilities,
test facilities and intangible assets, such as trademarks, patents. It has an independent procurement and sales
system and an independent and complete asset structure.
4. Institution independence
In accordance with the relevant provisions of the Company Law and the Articles of Association, the Company has
established the institutions like general meeting of shareholders, the board of directors, the board of supervisors
and other authorities, and formulated the corresponding rules of procedure. The Company's production and
operation sites are separated from the controlling shareholders, and a comprehensive organizational system has
been established. The board of directors, the board of supervisors and other internal institutions operate
independently. There is no such situation that the controlling shareholder interferes in the business activities in the
name of the listed company.
5. Finance independence
The Company has an independent financial department, equipped with full-time financial personnel, established
an independent accounting system and financial management system that can independently make financial
decisions. The Company has separate accounts and pays taxes independently.
III. Horizontal competition
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary General Meetings convened during the
Reporting Period
1. Annual General Meeting convened during the reporting period
Proportion of
Meeting Nature participating Convened Date Disclosure Date Disclosure Index
investors
Announcement of
the 1st
The 1st Extraordinary
extraordinary General Meeting
Interim general
general meeting of 63.72% February 10, 2020 February 11, 2020 of Shareholders in
meeting
shareholders in 2020 (2020-014)
2020 was published in
the Securities
Times, Shanghai
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Securities News
and CNINFO.
Announcement of
the Annual
General Meeting
Annual general of Shareholders in
meeting of Annual General 2019 (2020-044)
67.08% May 19, 2020 May 20, 2020
shareholders in Meeting was published in
2019 the Securities
Times, Shanghai
Securities News
and CNINFO.
Announcement of
the 2nd
Extraordinary
The 2nd General Meeting
extraordinary of Shareholders in
Interim general
general meeting of 67.25% June 22, 2020 June 23, 2020 2020 (2020-055)
meeting
shareholders in was published in
2020 the Securities
Times, Shanghai
Securities News
and CNINFO.
Announcement of
the 3rd
Extraordinary
The 3rd General Meeting
extraordinary of Shareholders in
Interim general
general meeting of 65.07% August 28, 2020 August 29, 2020 2020 (2020-066)
meeting
shareholders in was published in
2020 the Securities
Times, Shanghai
Securities News
and CNINFO.
Announcement of
the 4th
The 4th Extraordinary
extraordinary General Meeting
Interim general
general meeting of 65.72% November 5, 2020 November 6, 2020 of Shareholders in
meeting
shareholders in 2020 (2020-089)
2020 was published in
the Securities
Times, Shanghai
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Securities News
and CNINFO.
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights:
□ Applicable √ Not applicable
V. Performance of duties by independent directors during the reporting period
1. Attendance of independent directors in board meetings and general meetings
Attendance of independent directors in board meetings and general meetings
Board Board
Board Board Presence of
meeting meeting not
Board meeting meeting Board independent
Name of presence attend in
meeting presence by presence meeting directors in
Independent required in person for
presence on telecom- through a absence general
Director the reporting two
site (times) communicati proxy (times) meetings
period consecutive
on (times) (times) (times)
(times) times
Ji Hua 7 1 6 0 0 No 0
Shen Yuping 4 0 4 0 0 No 0
Zhang Yaping 4 0 4 0 0 No 0
Shi Jianhui 3 1 2 0 0 No 0
Zhu Hongjun 3 1 2 0 0 No 0
2. Objections from independent directors on related issues of the Company
Were there any objections on related issues of the Company from independent directors?
□ Yes √ No
3. Other details about the performance of duties by independent directors
Were there any suggestions from independent directors accepted by the Company?
√ Yes □ No
During the reporting period, the independent directors strictly complied with the relevant laws, regulations and the
Articles of Association, performed their duties conscientiously, paid close attention to the Company's operation,
regularly reviewed the Company's announcements, got access to the information of operation and development
periodically, deeply discussed the opportunities and challenges in the operation and development, and timely
prompted risks. Independent directors put forward reasonable opinions and suggestions from their professional
perspectives, enhanced the rationality of the board of directors’ decision-making, and provided independent and
fair opinions on related transactions, profit distribution, equity incentive and convertible bonds during the
reporting period. In order to improve the supervision mechanism of the Company and safeguard the legal rights of
all shareholders, the Company shall adopt the opinions of independent directors.
VI. Performance of duties by special committees under the Board during the Reporting Period
The board of directors has five special committees, strategic committee, audit committee, nomination committee,
remuneration and assessment committee and executive committee. In 2020, based on the principle of diligence,
the committees carried out their work in accordance with the relevant laws and regulations, normative documents
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and working rules of the special committees. Committees put forward opinions and suggestions, and provide
reference for the decision-making of the board of directors.
1. Performance of the Strategic Committee
The strategic committee is mainly responsible for the feasibility study of the Company's long-term development
strategic planning and major strategic investment. During the reporting period, the strategy committee mainly
carried out the following work:(1) Put forward reasonable suggestions for various potential risks that may appear
in production and operation, such as response to changes in international trade environment, response to global
epidemic situation, etc. (2) Deeply analyzes the Company's operation status and development prospects, discusses
the Company's operation strategy and strategic investment matters, and put forward constructive suggestions. It
plays an important role in strengthening the scientific decision-making and improving the efficiency and quality
of decision-making.
2. Performance of Audit Committee
The audit committee is mainly responsible for communication, supervision and verification of internal and
external audit of the Company. The audit committee mainly carried out the following work:(1) Guide and
supervise the implementation of internal audit system;(2) Review the internal audit summary and audit work plan
submitted by the audit department;(3) In the process of annual audit work, communicate with audit institutions on
annual audit work arrangement and ensure that the audit work is carried out as planned;(4) Objectively evaluates
the audit work of the accounting firm in this year. On the basis of understanding and evaluating the work of the
current accounting firm, put forward some suggestions for the Company to continue to engage the accounting firm.
It plays the role of audit and supervision.
3. Performance of Nomination Committee
The nomination committee conscientiously performs its duties in accordance with the Detailed Rules for the
Implementation of the Nomination Committee of the Board of Directors. During the reporting period, the
nomination committee mainly carried out the following work:(1) Make suggestions on the selection criteria and
procedures of directors and senior managers of the Company;(2) The qualification and ability of relevant directors
and senior managers were examined carefully to further promote the stability of the Company's management
team.
4. Performance of Remuneration and Assessment Committee
The remuneration and assessment committee of the board of directors perform its duties in accordance with the
relevant requirements of the Rules of Procedure of the Remuneration and Assessment Committee of the Board of
Directors. During the reporting period, the remuneration committee mainly carried out the following work:(1) Put
forward suggestions on assessment and evaluation standards to promote the standardized operation of the
Company, improve the rationality of salary assessment and ensure the performance of the Committee. (2) Review
the performance of employees who were qualified for unlocking in phase II of 2018 equity incentive plan. (3)
Review the draft of restricted stock in 2020 and assessment management measures.
5. Performance of the Executive Committee
The executive committee is a special work organization established by the board of directors, which is mainly
responsible for monitoring of the major strategies, major investment decisions and major business activities of the
Company. During the reporting period, the executive committee mainly carried out the following work:(1)
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Discuss and make suggestions on major issues that may affect the future development of the Company. (2)
Effectively monitor the major investments approved by the general meeting of shareholders and the board of
directors.
VII. Performance of duties by the Supervisory Committee
Were there any risks to the Company identified by Supervisory Committee when performing its duties during the
Reporting Period?
□ Yes √ No
VIII. Assessment and incentive mechanism for the senior management
In order to make senior managers better perform their duties and clarify their rights and obligations, the Company
has established a fairly sophisticated performance evaluation standard and remuneration system, in which senior
managers’ performance and annual business indicators are assessed.
The senior managers of the Company are responsible to the board of directors and undertake the business
objectives issued by the board. The remuneration and assessment committee of the board formulate the
remuneration plan based on evaluation of senior managers’ work ability, performance and completion of business
targets.
IX. Evaluation report on internal control
1. Any significant internal control deficiencies during the reporting period
□ Yes √ No
2. Self-evaluation report on internal control
Disclosure date of full text of
March 27, 2021
self-evaluation report on internal control
Disclosure index of full text of Self-evaluation Report on Internal Control of the Company in 2020
self-evaluation report on internal control http://www.cninfo.com.cn
Proportion of assets evaluated in total
100.00%
assets
Proportion of revenue evaluated in total
revenue per consolidated financial 100.00%
statement
Recognition standard of deficiencies
Nature Financial report level Non-financial report level
Significant deficiency: Significant deficiency:
1. Fraud of directors, supervisors and The possibility of defects is high,
senior managers；2. Major misstatement in which will significantly reduce the
the current financial report found by the work efficiency or effect, or
Qualitative criteria CPA but not identified by the internal significantly increase the uncertainty
control of the Company；3. The Company of the effect, or make it significantly
has major violations of laws and deviate from the expected goal.
regulations in financial accounting, asset Important defects：Defects are more
management, capital operation, likely to occur, which will seriously
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
information disclosure, product quality, reduce the work efficiency or effect, or
safety production, environmental seriously increase the uncertainty of
protection and other aspects, causing the effect, or make it seriously deviate
major losses and adverse effects to the from the expected goal. General
Company, or subject to major defects：The probability of defects is
administrative supervision and small, which will reduce the efficiency
punishment；4. Supervision of the audit or effect, increase the uncertainty of
committee and internal control department the effect, or make it deviate from the
is ineffective on the Company's external expected goal.
financial report and internal control.
Significant deficiency:(1). Failure to select
and apply accounting policies in
accordance with GAAP；(2). Failure to
establish anti-fraud procedures and control
measures；(3). It cannot reasonably
guarantee the truthfulness and
completeness of the financial statements
due to one or more defects in control
process；(4). There is no corresponding
control mechanism or no compensatory
control for the accounting treatment of
non-routine or special transactions.
General deficiency：General defects other
than the above-mentioned.
The quantitative standard is based on
the percentage of potential
The quantitative standard is based on the
misstatements of pre-tax profit.
percentage of potential misstatements of
Significant deficiency：This defect
pre-tax profit. Significant deficiency：This
alone or together with other defects
defect alone or together with other defects
may cause the misstatement of
may cause the misstatement of financial
financial report to exceed 10% of the
report to exceed 10% of the profit before
profit before tax. Important defects：
tax. Important defects：This defect alone or
Quantitative criteria This defect alone or together with
together with other defects may cause the
other defects may cause the
misstatement of financial report to exceed
misstatement of financial report to
5% but less than 10% of the profit before
exceed 5% but less than 10% of the
tax. General defects：This defect alone or
profit before tax. General defects：This
together with other defects may cause the
defect alone or together with other
misstatement of financial report less than
defects may cause the misstatement of
5% of the profit before tax.
financial report less than 5% of the
profit before tax.
Number of significant deficiencies in
0
financial report level
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Number of significant deficiencies in
0
non-financial report level
Number of important deficiencies in
0
financial report level
Number of important deficiencies in
0
non-financial report level
X. Audit report or assurance report on internal control
Internal Control Audit Report
Comments of Internal Control Audit Report
We believe that, as of December 31, 2020, Sanhua has maintained effective internal control over financial reporting in all major
matters in accordance with Guidelines for Standardized Operation of Listed Companies of Shenzhen Stock Exchange (revised in
2020) and other relevant regulations.
Disclosure of internal control
Disclosure
audit report
Date of full disclosure of internal
March 27, 2021
control audit report
Index of full disclosure of
Assurance Report on the Company's Internal Control（http://www.cninfo.com.cn）
internal control audit report
Types of opinions of internal
Standard Unqualified Opinion
control audit report
Major defects in non-financial
No
report or not
Accounting firm issues internal control audit report with non-standard opinions or not
□ Yes √ No
The internal control audit report of the external accounting firm is in line with the self-assessment report of the
Board of Directors or not
√ Yes □ No
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section XI 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 annual report authorized disclosure date.
□Yes √No
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Section XII Financial Report
I. Audit report
Type of audit opinion Standard Unqualified opinion
Date of signing of audit report March 25, 2021
Name of audit firm Pan-China Certified Public Accountants LLP
Document number of audit report PCCPAAR [2021] No. 1098
Name of the certified accountants Luo Xunchao 、Ouyang Xiaoyun
Auditor’s Report
To the Shareholders of Zhejiang Sanhua Intelligent Controls Co., Ltd.:
1. Audit Opinion
We have audited the accompanying financial statements of Zhejiang Sanhua Intelligent Controls Co., Ltd.
(the “Company”), which comprise the consolidated and parent company balance sheets as at December 31, 2020,
the consolidated and parent company income statements, the consolidated and parent company cash flow
statements, and the consolidated and parent company statements of changes in equity for the year then ended, as
well as notes to financial statements.
In our opinion, the attached financial statements present fairly, in all material respects, the financial position
of the Company as at December 31, 2020, and of its financial performance and its cash flows for the year then
ended in accordance with China Accounting Standards for Business Enterprises.
2. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those
standards are further described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants, and we have fulfilled other ethical responsibilities. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not express a separate opinion on
these matters.
(I) Revenue recognition
1. Matters description
Please refer to section Ⅲ (22), Ⅴ (2) 1and XIV (2) of the notes to the financial statements for details.
The majority of the company's revenue comes from controlling components and components for home
appliances and automobiles. In 2020, the amount of operating income items as shown in the financial statements
of the Company is RMB 12.1098334 billion. Income from domestic sales of products shall be confirmed after
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
delivery inspection and acquisition of receipt vouchers. Export sales revenue is confirmed after export declaration
and bill of lading is obtained. As operating revenue is one of the key performance indicators of the Company,
there might be inherent risks that the Company’s management adopts inappropriate revenue recognition to achieve
specific goals or expectations. We have identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition, assessed the design
of these controls, determined whether they had been executed, and tested the effectiveness of the operation;
(2) We checked sale contracts, obtained understandings of main contractual terms or conditions, and
assessed whether the revenue recognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, etc.,
so as to identify whether there are significant or abnormal fluctuations and find out the reason of fluctuations; we
performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether
the operating revenue was recognized in the appropriate period;
(4) For revenue from domestic sales，we checked supporting documents related to revenue recognition by
sampling method，including sales contracts, orders, sales invoices, delivery lists, delivery orders, shipping
documents, client acceptance receipts, etc.; for revenue from overseas sales, we obtained information from
Electron Port and checked it with accounting records, and checked supporting documents including sales contracts,
bills of clearance, waybills, sales invoices, etc. by sampling method;
(5) We performed confirmation procedures on current sales amount by sampling method in combination
with confirmation procedure of accounts receivable;
(6) We checked whether information related to operating revenue had been presented appropriately in the
financial statements.
(II) Impairment of accounts receivable
1. Matters description
Please refer to section Ⅲ (9) and Ⅴ (1) 5 of the notes to the financial statements for details.
As of December 31, 2020, the book balance of the Company's accounts receivable amounted to RMB
2.4811294 billion, with provision for bad debt was RMB 125.5161 million, and the carrying amount amounted to
RMB2.3556133 billion.
The Company measures accounts receivable with expected credit losses primarily on a collective basis.The
Management classifies portfolios on the basis of ages, adjusts them based on historical credit risk loss experience
and forward-looking estimations, prepares the comparison table of ages and expected credit loss rate of accounts
receivable, so as to calculate the provision for bad debts to be accrued.
As the amount of accounts receivable is significant and the impairment involves significant judgment of the
Management, we have identified impairment of accounts receivable as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of accounts receivable are as follows:
(1) We obtained understandings of key internal controls related to impairment of accounts receivable,
assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of
their operation;
(2) We reviewed the accounts receivable with provision for bad debts made in previous periods for their
subsequent write-off or reversal, and assessed the accuracy of historical estimations made by the Management;
(3) We reviewed the consideration of the Management on credit risk assessment and objective evidence, and
assessed whether the credit risk features of accounts receivable had been appropriately identified by the
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Management;
(4) For accounts receivable with expected credit losses measured on a collective basis, we assessed the
reasonableness of portfolio classification on the basis of credit risk features; we assessed the reasonableness of the
comparison table of ages and expected credit loss rate of accounts receivable prepared by the Management based
on the historical credit loss experience of portfolios with similar credit risk features and forward-looking
estimations; we tested the accuracy and completeness of data used by the Management (including ages, historical
loss rate, migration rate, etc.) and whether the calculation of provision for bad debts was accurate;
(5) We checked the subsequent collection of accounts receivable and assessed the reasonableness of
provision for bad debts made by the Management;
(6) We checked whether information related to impairment of accounts receivable had been presented
appropriately in the financial statements.
4. Other Information
The Company’s management (the “Management”) is responsible for the other information. The other
information comprises the information included in the Company’s annual report, but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
The Management is responsible for other information. Other information includes the information covered
in the A-share annual report, but does not include the financial statements and our auditor’s report thereon. We
have obtained the A-share annual report prior to the audit report date.
5. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance
with China Accounting Standards for Business Enterprises, as well as designing, implementing and maintaining
internal control relevant to the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Management either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
6. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will always detect a material misstatement when it exists.
Misstatement can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
We exercise professional judgment and maintain professional skepticism throughout the audit performed in
accordance with China Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain sole responsibility for our audit opinion.
We communicate with those charged with governance regarding the planned audit scope, time schedule and
significant audit findings, including any deficiencies in internal control of concern that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant
(Engagement Partner) Luo Xun chao
Hangzhou China Chinese Certified Public Accountant
Ouyang Xiaoyun
Date of Report: March 25, 2021
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
II. Financial Statements
Units of financial reports in the notes: RMB
1.Consolidated balance sheet
Prepared by: Zhejiang Sanhua Intelligent Controls Co., Ltd.
December 31, 2020
Unit: RMB
Items December 31,2020 December 31,2019
Current asset：
Cash and Bank Balances 3,489,687,568.14 2,663,719,770.15
Settlement funds
Loans to other banks
Held-for-trading financial assets 752,224,861.78 993,634,433.31
Derivative financial assets 58,330,486.53 8,314,400.73
Notes receivable 2,323,934,781.53 2,097,159,908.40
Accounts receivable 2,355,613,299.57 1,871,323,522.82
Receivable financing
Advances paid 69,404,326.45 62,871,924.30
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 76,935,495.05 97,394,782.97
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 2,307,761,706.46 2,180,838,596.07
Contract assets
Assets held for sales
Non-current assets due within
one year
Other current assets 150,460,488.01 75,933,253.28
Total current assets 11,584,353,013.52 10,051,190,592.03
Non-current assets:
Loans and advances paid
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Debt investments
Other debt investments
Long-term receivable 2,074,750.00 2,145,963.27
Long-term equity investments 15,219,616.68 14,522,259.80
Other equity instrument
investments
Other non-current financial
assets
Investment property 10,067,588.96 27,025,974.05
Fixed assets 3,839,408,059.45 3,379,608,199.26
Construction in progress 628,730,529.07 480,959,262.46
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 507,693,672.93 525,867,518.75
Development expenditures
Goodwill 31,959,091.60 31,959,091.60
Long-term prepayments 23,706,401.61 8,720,120.64
Deferred tax assets 137,808,879.28 88,952,931.69
Other non-current assets 251,509,127.08 179,238,257.09
Total non-current assets 5,448,177,716.66 4,738,999,578.61
Total assets 17,032,530,730.18 14,790,190,170.64
Current liabilities:
Short-term borrowings 383,088,296.60 1,295,610,572.07
Central bank loans
Loans from other banks
Held-for-trading financial
liabilities
Derivative financial liabilities 7,939,957.91 126,364.40
Notes payable 1,238,574,463.73 1,130,668,415.32
Accounts payable 2,279,661,755.97 1,587,763,752.62
Advances received 10,000,000.00 23,453,218.32
Contract liabilities 42,581,607.67
Selling of repurchased financial
assets
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Absorbing deposit and interbank
deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 289,305,913.99 228,997,483.82
Taxes and rates payable 75,008,142.06 58,192,607.75
Other payables 270,888,400.58 161,237,214.88
Including: Interest Payable
Dividends Payable 1,772,750.00
Handling fee and commission
payable
Reinsurance accounts payable
Liabilities classified as held for
sale
Non-current liabilities due
130,553,923.87 222,228,097.22
within one year
Other current liabilities
Total current liabilities 4,727,602,462.38 4,708,277,726.40
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1,707,918,994.87 392,882,280.09
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 90,336,083.27 94,235,857.77
Long-term employee benefits
payable
Provisions 2,638,000.00
Deferred income 140,105,336.43 82,537,550.43
Deferred tax liabilities 130,778,184.48 65,049,361.71
Other non-current liabilities 80,398,897.72 81,788,928.52
Total non-current liabilities 2,152,175,496.77 716,493,978.52
Total liabilities 6,879,777,959.15 5,424,771,704.92
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Equity:
Share capital 3,591,601,468.00 2,765,657,898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 315,417,434.22 1,090,800,022.06
Less: Treasury shares 281,483,741.34 363,781,151.34
Other comprehensive income -89,624,962.61 -39,332,748.50
Special reserve
Surplus reserve 637,967,613.47 559,896,619.39
General risk reserve
Undistributed profit 5,890,916,707.83 5,278,392,288.84
Total equity attributable to the parent
10,064,794,519.57 9,291,632,928.45
Company
Non-controlling interest 87,958,251.46 73,785,537.27
Total equity 10,152,752,771.03 9,365,418,465.72
Total liabilities & equity 17,032,530,730.18 14,790,190,170.64
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting department：Sheng Xiaofeng
2. Parent Company Balance Sheet
Unit: RMB
Items December 31,2020 December 31,2019
Current assets:
Cash and bank balances 1,848,930,095.07 1,039,915,005.31
Held-for-trading financial assets 323,000,000.00 195,000,000.00
Derivative financial assets 8,856,174.56 2,069,850.00
Notes receivable 773,393,944.74 161,946,880.21
Accounts receivable 729,906,676.91 1,135,299,895.98
Receivables financing
Advances paid 6,803,910.27 6,076,163.25
Other receivables 348,897,078.11 603,257,516.95
Including: Interest Receivable
Dividends Receivable
Inventories 553,388,303.73 519,241,847.99
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Contract assets
Assets classified as held for sale
Non-current assets due within
one year
Other current assets 46,083,837.26 21,333,811.35
Total current assets 4,639,260,020.65 3,684,140,971.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4,528,546,229.37 4,256,633,941.06
Other equity instrument
investments
Other non-current financial assets
Investment property
Fixed assets 1,565,826,802.57 1,460,855,506.39
Construction in progress 71,862,243.72 44,135,844.65
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 156,335,743.52 189,181,593.94
Development expenditures
Goodwill
Long-term prepayments 625,318.03
Deferred tax assets 7,336,345.87 17,068,063.08
Other non-current assets 36,566,524.79 109,659,279.90
Total non-current assets 6,366,473,889.84 6,078,159,547.05
Total assets 11,005,733,910.49 9,762,300,518.09
Current liabilities:
Short-term borrowings 20,012,527.78 730,799,542.65
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 381,631,833.96
Accounts payable 1,566,994,944.07 1,431,862,681.89
Advances received 92,676.29
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Contract liabilities 1,155,759.09
Employee benefits payable 93,150,785.46 65,680,254.82
Taxes and rates payable 10,811,341.50 1,576,623.72
Other payables 1,355,955,388.81 1,252,808,472.44
Including: interest payable
Dividends Payable 1,772,750.00
Liabilities classified as held for
sale
Non-current liabilities due within
220,225,194.44
one year
Other current liabilities
Total current liabilities 3,429,712,580.67 3,703,045,446.25
Non-current liabilities:
Long-term borrowings 1,381,428,522.65
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 2,638,000.00
Deferred income 35,908,399.54 30,895,817.00
Deferred tax liabilities 48,177,657.42 31,296,603.88
Other non-current liabilities
Total non-current liabilities 1,468,152,579.61 62,192,420.88
Total liabilities 4,897,865,160.28 3,765,237,867.13
Equity:
Share capital 3,591,601,468.00 2,765,657,898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,198,721,706.52 2,005,303,119.53
Less: treasury shares 281,483,741.34 363,781,151.34
Other comprehensive income
Special reserve
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Surplus reserve 509,280,441.15 431,209,447.07
Undistributed profit 1,089,748,875.88 1,158,673,337.70
Total equity 6,107,868,750.21 5,997,062,650.96
Total liabilities & equity 11,005,733,910.49 9,762,300,518.09
3. Consolidated Income statement
Unit: RMB
Items Year2020 Year2019
I. Total operating revenue 12,109,833,368.44 11,287,489,442.23
Including: Operating revenue 12,109,833,368.44 11,287,489,442.23
Interest income
Premium earned
Revenue from handling charges and
commission
II. Total operating cost 10,592,665,388.40 9,747,723,876.16
Including: Operating cost 8,500,391,322.27 7,946,844,445.83
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 77,973,420.81 92,311,339.03
Selling expenses 602,954,759.17 588,547,454.16
Administrative expenses 764,084,428.88 595,781,120.22
R&D expenses 518,401,363.63 532,012,335.99
Financial expenses 128,860,093.64 -7,772,819.07
Including: Interest expenses 64,733,993.15 54,050,078.51
Interest income 52,233,256.57 29,496,046.87
Add: Other income 151,555,896.45 101,972,467.86
Investment income (or less:
89,078,877.16 25,335,547.44
losses)
Including: Investment income 2,199,442.47 1,418,182.87
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from associates and joint ventures
Gains from derecognition of
-4,369,430.89 -2,407,426.89
financial assets at amortized cost
Gains on foreign exchange (or
less: losses)
Gains on net exposure to
hedging risk (or less: losses)
Gains on changes in fair value
31,847,915.76 27,906,347.18
(or less: losses)
Credit impairment loss (or less:
-28,677,382.30 -3,374,126.64
losses)
Assets impairment loss (or less:
-58,672,538.84 -27,895,239.50
losses)
Gains on asset disposal (or less:
-486,378.33 278,783.69
losses)
III. Operating profit (or less: losses) 1,701,814,369.94 1,663,989,346.10
Add: Non-operating revenue 5,055,479.82 6,792,283.12
Less: Non-operating expenditures 14,843,633.18 7,713,121.40
IV. Profit before tax (or less: total loss) 1,692,026,216.58 1,663,068,507.82
Less: Income tax expense 218,702,864.60 229,253,469.06
V. Net profit (or less: net loss) 1,473,323,351.98 1,433,815,038.76
(I) Categorized by the continuity of
operations
1. Net profit from continuing
1,473,323,351.98 1,433,815,038.76
operations (or less: 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 Company (or less: net 1,462,158,821.57 1,421,204,236.13
loss)
2. Net profit attributable to
non-controlling shareholders (or 11,164,530.41 12,610,802.63
less: net loss)
VI. Other comprehensive income after
-50,292,214.11 -28,841.85
tax
Items attributable to the owners of
-50,292,214.11 -28,841.85
the parent 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
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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
-50,292,214.11 -28,841.85
profit or loss
1. Items under equity method that
may be reclassified to profit or loss
2. Changes in fair value of other
debt investments
3. Profit or loss from
reclassification of financial assets
into other comprehensive income
4. Provision for credit impairment
of other debt investments
5.Cash flow hedging reserve
6. Translation reserve -50,292,214.11 -28,841.85
7. Others
Items attributable to non-controlling
shareholders
VII. Total comprehensive income 1,423,031,137.87 1,433,786,196.91
Items attributable to the owners of
1,411,866,607.46 1,421,175,394.28
the parent Company
Items attributable to non-controlling
11,164,530.41 12,610,802.63
shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.41 0.40
(II) Diluted EPS (yuan per share) 0.41 0.40
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting department：Sheng Xiaofeng
4. Income statement of the Parent Company
Unit: RMB
Items Year2020 Year2019
I. Operating revenue 4,516,583,047.45 4,463,396,527.84
Less: Operating cost 3,383,660,538.43 3,402,597,635.57
Taxes and surcharges 27,452,644.93 33,339,374.49
Selling expenses 51,140,200.18 56,513,307.16
Administrative expenses 187,763,288.96 156,768,224.49
R&D expenses 188,357,821.51 209,650,329.67
Financial expenses 85,010,110.29 25,674,611.42
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Including: Interest expenses 41,141,318.78 63,621,572.43
Interest income 25,340,320.97 18,055,499.73
Add: Other income 62,733,688.49 21,417,817.55
Investment income (or less:
189,487,259.99 584,187,850.64
losses)
Including: Investment income
2,298,930.50 2,100,652.42
from 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
4,086,324.56 2,767,102.00
less: losses)
Credit impairment loss (or less:
-631,899.35 -1,678,820.26
losses)
Assets impairment loss (or less:
-1,496,468.86 -368,640.74
losses)
Gains on asset disposal (or less:
70,090.31 387,439.68
losses)
II. Operating profit (or less: losses) 847,447,438.29 1,185,565,793.91
Add: Non-operating revenue 1,907,081.98 1,657,122.13
Less: Non-operating expenditures 8,389,545.94 1,068,851.00
III. Profit before tax (or less: total
840,964,974.33 1,186,154,065.04
loss)
Less: Income tax expense 60,255,033.57 76,819,516.64
IV. Net profit (or less: net loss) 780,709,940.76 1,109,334,548.40
(I) Net profit from continuing
780,709,940.76 1,109,334,548.40
operations (or less: net 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
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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 780,709,940.76 1,109,334,548.40
5. Consolidated Cash Flow Statement
Unit: RMB
Items Year 2020 Year 2019
I. Cash flows from operating activities:
Cash receipts from sale of goods or
11,849,284,665.68 12,114,467,691.73
rendering of services
Net increase of client deposit and
interbank deposit
Net increase of central bank loans
Net increase of loans from other financial
institutions
Cash receipts from original insurance
contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and
investment
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 264,818,602.07 231,573,740.65
Other cash receipts related to operating
253,535,410.82 174,693,870.02
activities
Subtotal of cash inflows from operating 12,367,638,678.57 12,520,735,302.40
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activities
Cash payments for goods purchased and
7,545,742,409.64 8,017,585,235.57
services received
Net increase of loans and advances to
clients
Net increase of central bank deposit and
interbank deposit
Cash payments for insurance indemnities
of original insurance contracts
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 1,677,941,014.69 1,540,342,983.64
Cash payments for taxes and rates 363,999,449.11 440,322,058.66
Other cash payments related to operating
692,612,022.02 622,321,419.93
activities
Subtotal of cash outflows from operating
10,280,294,895.46 10,620,571,697.80
activities
Net cash flows from operating activities 2,087,343,783.11 1,900,163,604.60
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment income 49,339,043.29 57,236,631.61
Net cash receipts from the disposal of
fixed assets, intangible assets and other 18,788,012.61 10,529,127.90
long-term assets
Net cash receipts from the disposal of
290,189.18
subsidiaries & other business units
Other cash receipts related to investing
576,219,673.31 1,055,940,437.56
activities
Subtotal of cash inflows from investing
644,636,918.39 1,123,706,197.07
activities
Cash payments for the acquisition of
fixed assets, intangible assets and other 1,149,361,450.15 869,135,748.97
long-term assets
Cash payments for investments 1,250,000.00 1,800,000.00
Net increase of pledged borrowings
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Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
289,200,000.00 29,850,435.51
activities
Subtotal of cash outflows from investing
1,439,811,450.15 900,786,184.48
activities
Net cash flows from investing activities -795,174,531.76 222,920,012.59
III. Cash flows from financing activities:
Cash receipts from absorbing
118,643,250.00
investments
Including: Cash received by subsidiaries
from non-controlling shareholders as
investments
Cash receipts from borrowings 2,020,339,244.88 2,220,988,305.90
Other cash receipts related to financing
24,534,300.14 62,964,624.87
activities
Subtotal of cash inflows from financing
2,163,516,795.02 2,283,952,930.77
activities
Cash payments for the repayment of
1,705,455,347.51 2,123,117,631.60
borrowings
Cash payments for distribution of
dividends or profits and for interest 842,824,941.43 595,166,284.01
expenses
Including: Cash paid by subsidiaries to
non-controlling shareholders as dividend or 4,007,833.39 20,917,800.72
profit
Other cash payments related to financing
10,752,519.79 299,483,636.97
activities
Subtotal of cash outflows from financing
2,559,032,808.73 3,017,767,552.58
activities
Net cash flows from financing activities -395,516,013.71 -733,814,621.81
IV. Effect of foreign exchange rate changes
-50,292,214.11 -28,841.85
on cash & cash equivalents
V. Net increase in cash and cash
846,361,023.53 1,389,240,153.53
equivalents
Add: Opening balance of cash and cash
2,553,783,015.01 1,164,542,861.48
equivalents
VI. Closing balance of cash and cash
3,400,144,038.54 2,553,783,015.01
equivalents
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6. Cash Flow Statement of the Parent Company
Unit: RMB
Items Year 2020 Year 2019
I. Cash flows from operating activities:
Cash receipts from sale of goods and
3,591,777,322.35 3,268,467,818.85
rendering of services
Receipts of tax refund 72,901,445.17 78,890,701.50
Other cash receipts related to operating
93,832,945.34 56,268,951.89
activities
Subtotal of cash inflows from operating
3,758,511,712.86 3,403,627,472.24
activities
Cash payments for goods purchased and
1,965,431,440.25 1,962,621,401.88
services received
Cash paid to and on behalf of employees 391,589,764.85 319,581,376.43
Cash payments for taxes and rates 91,135,303.51 99,864,714.09
Other cash payments related to operating
153,131,340.36 117,818,085.89
activities
Subtotal of cash outflows from operating
2,601,287,848.97 2,499,885,578.29
activities
Net cash flows from operating activities 1,157,223,863.89 903,741,893.95
II. Cash flows from investing activities:
Cash receipts from withdrawal of
19,217,446.05 10,109,000.00
investments
Cash receipts from investment income 225,498,714.94 587,278,422.76
Net cash receipts from the disposal of fixed
assets, intangible assets and other long-term 5,013,171.60 3,038,824.89
assets
Net cash receipts from the disposal of
2,119,122.19
subsidiaries & other business units
Other cash receipts related to investing
271,933,366.03 565,660,872.93
activities
Subtotal of cash inflows from investing
523,781,820.81 1,166,087,120.58
activities
Cash payments for the acquisition of fixed
assets, intangible assets and other long-term 235,141,413.93 261,503,279.24
assets
Cash payments for investments 236,348,684.83 238,971,418.85
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Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
149,070,741.05 35,371,356.82
activities
Subtotal of cash outflows from investing
620,560,839.81 535,846,054.91
activities
Net cash flows from investing activities -96,779,019.00 630,241,065.67
III. Cash flows from financing activities:
Cash receipts from absorbing investments 118,643,250.00
Cash receipts from borrowings 1,519,811,000.00 930,000,000.00
Other cash receipts related to financing
83,377,450.00 76,225,498.75
activities
Subtotal of cash inflows from financing
1,721,831,700.00 1,006,225,498.75
activities
Cash payments for the repayment of
1,069,811,000.00 780,000,000.00
borrowings
Cash payments for distribution of
844,817,849.02 586,298,249.58
dividends or profits and for interest expenses
Other cash payments related to financing
39,333,154.61 458,353,614.78
activities
Subtotal of cash outflows from financing
1,953,962,003.63 1,824,651,864.36
activities
Net cash flows from financing activities -232,130,303.63 -818,426,365.61
IV. Effect of foreign exchange rate changes
on cash and cash equivalents
V. Net increase in cash and cash equivalents 828,314,541.26 715,556,594.01
Add: Opening balance of cash and cash
974,923,339.25 259,366,745.24
equivalents
VI. Closing balance of cash and cash
1,803,237,880.51 974,923,339.25
equivalents
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Unit: RMB
Year 2020
Equity Attributable to parent Company
Other equity instruments Gene
Other Speci Non-contr
Items Less: ral
Capital comprehe al Surplus Undistribut Othe olling Total equity
Prefer Subtotal
Share Capital Perpet Othe treasury risk
reserve nsive reser ed profit rs interest
red ual reserve
rs shares reser
bonds income ve
shares
ve
I. Balance
at the end 2,765,657,89 1,090,800, 363,781,1 -39,332,7 559,896,6 5,278,392, 9,291,632,9 73,785,53 9,365,418,465.
of prior 8.00 022.06 51.34 48.50 19.39 288.84 28.45 7.27 72
year
Add:
Cumulativ
e changes
of
accounting
policies
Error
correction
of prior
period
Business
combinati
on under
common
control
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Others
II. Balance
at the
2,765,657,89 1,090,800, 363,781,1 -39,332,7 559,896,6 5,278,392, 9,291,632,9 73,785,53 9,365,418,465.
beginning
8.00 022.06 51.34 48.50 19.39 288.84 28.45 7.27 72
of current
year
III.
Current
period 825,943,570. -775,382,5 -82,297,41 -50,292,2 78,070,99 612,524,41 773,161,59 14,172,71
787,334,305.31
increase 00 87.84 0.00 14.11 4.08 8.99 1.12 4.19
(or less:
decrease)
(I) Total
comprehen -50,292,2 1,462,158, 1,411,866,6 11,164,53 1,423,031,137.
sive 14.11 821.57 07.46 0.41 87
income
(II) Capital
contribute
54,313,350 -82,297,41 135,879,25
d or -731,510.00 135,879,250.39
.39 0.00 0.39
withdrawn
by owners
1.
Ordinary
shares -49,264,05 -167,907,3 118,643,250
118,643,250.00
contribute 0.00 00.00 .00
d by
owners
2. Capital
149
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
contribute
d by
holders of
other
equity
instrument
s
3. Amount
of
share-base 107,029,81 89,793,81 17,236,000.
17,236,000.39
d payment 4.39 4.00 39
included in
equity
-3,452,414. -4,183,924
4. Others -731,510.00
00 .00
(III) Profit
78,070,99 -849,634,4 -771,563,40 -4,007,833 -775,571,241.8
distributio
4.08 02.58 8.50 .39 9
n
1.
Appropriat
78,070,99 -78,070,99
ion of
4.08 4.08
surplus
reserve
2.
Appropriat
ion of
general
risk
150
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
reserve
3.
Appropriat
-771,563,4 -771,563,40 -4,007,833 -775,571,241.8
ion of
08.50 8.50 .39 9
profit to
owners
4. Others
(IV)
Internal
826,675,080. -826,675,0
carry-over
00 80.00
within
equity
1. Transfer
of capital 826,675,080. -826,675,0
reserve to 00 80.00
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
151
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
5. Other
comprehen
sive
income
carried
over to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropriat
ion of
current
period
2.
Applicatio
n of
current
period
(VI) -3,020,858. -3,020,858. 7,016,017.
3,995,158.94
Others 23 23 17
IV.
Balance at 10,064,794,
3,591,601,46 315,417,43 281,483,7 -89,624,9 637,967,6 5,890,916, 87,958,25 10,152,752,771
the end of 519.57
8.00 4.22 41.34 62.61 13.47 707.83 1.46 .03
current
period
Amount of Previous Period
Unit: RMB
Year 2019
Items
Equity Attributable to parent Company Non-controll Total equity
152
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
ing interest
Other equity Other Spec
Less: Gene
Share instruments Capital comprehe ial Surplus ral
Undistributed Oth
treasury risk
profit Subtotal
Capital Prefer Perpet reserve nsive reser reser ers
Oth reserve
red ual shares ve
ers income ve
shares bonds
I. Balance
at the end 2,130,646,8 1,702,234,4 116,457,6 -39,303,9 448,843,0 4,488,881,7 8,614,844,5 85,232,11 8,700,076,6
of prior 35.00 09.35 18.45 06.65 76.37 59.86 55.48 6.46 71.94
year
Add:
Cumulativ
e changes 120,088.1 8,359,634.1 8,479,722.3 8,479,722.3
of 8 9 7 7
accountin
g policies
Error
correction
of prior
period
Business
combinati
on under
common
control
Others
II.
Balance at 2,130,646,8 1,702,234,4 116,457,6 -39,303,9 448,963,1 4,497,241,3 8,623,324,2 85,232,11 8,708,556,3
the 35.00 09.35 18.45 06.65 64.55 94.05 77.85 6.46 94.31
beginning
153
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
of current
year
III.
Current
period 635,011,06 -611,434,38 247,323,5 -28,841.8 110,933,4 781,150,89 668,308,65 -11,446,57 656,862,07
increase 3.00 7.29 32.89 5 54.84 4.79 0.60 9.19 1.41
(or less:
decrease)
(I) Total
comprehe -28,841.8 1,421,204,2 1,421,175,3 12,610,80 1,433,786,1
nsive 5 36.13 94.28 2.63 96.91
income
(II)
Capital
contribute 24,566,413. 247,323,5 -222,757,11 -222,757,11
d or 46 32.89 9.43 9.43
withdrawn
by owners
1.
Ordinary
shares -27,008,30 27,008,300. 27,008,300.
contribute 0.00 00 00
d by
owners
2. Capital
contribute
d by
holders of
other
equity
instrument
s
154
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
3. Amount
of
share-base 24,566,413. 24,566,413. 24,566,413.
d payment 46 46 46
included
in equity
274,331,8 -274,331,83 -274,331,83
4. Others
32.89 2.89 2.89
(III) Profit
110,933,4 -640,053,34 -529,119,88 -20,917,8 -550,037,68
distributio
54.84 1.34 6.50 00.72 7.22
n
1.
Appropria
110,933,4 -110,933,45
tion of
54.84 4.84
surplus
reserve
2.
Appropria
tion of
general
risk
reserve
3.
Appropria -529,119,88 -529,119,88 -20,917,8 -550,037,68
tion of
profit to 6.50 6.50 00.72 7.22
owners
4. Others
(IV)
635,011,06 -635,011,06
Internal
3.00 3.00
carry-over
155
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
within
equity
1.
Transfer 635,011,06 -635,011,06
of capital
reserve to 3.00 3.00
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
comprehe
nsive
income
carried
over to
retained
earnings
6. Others
(V)
Special
reserve
1.
156
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Appropria
tion of
current
period
2.
Applicatio
n of
current
period
(VI) -3,139,58 -4,129,318.
-989,737.75 -989,737.75
Others 1.10 85
IV.
Balance at
2,765,657,8 1,090,800,0 363,781,1 -39,332,7 559,896,6 5,278,392,2 9,291,632,9 73,785,53 9,365,418,4
the end of
98.00 22.06 51.34 48.50 19.39 88.84 28.45 7.27 65.72
current
period
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
Year 2020
Other equity instruments Specia
Items Other Other
Less: treasury l Surplus Undistributed
Share Capital Other Capital reserve comprehensi Total equity
Preferre Perpetu shares reserv reserve profit s
s ve income
d shares al bonds e
I. Balance at
2,765,657,898. 2,005,303,119. 363,781,151.3 431,209,447. 1,158,673,337. 5,997,062,650.
the end of
00 53 4 07 70 96
prior year
157
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Others
II. Balance at
the beginning 2,765,657,898. 2,005,303,119. 363,781,151.3 431,209,447. 1,158,673,337. 5,997,062,650.
of current 00 53 4 07 70 96
year
III. Current
period -806,581,413.0 -82,297,410.0 78,070,994.0
increase (or 825,943,570.00 -68,924,461.82 110,806,099.25
less: 1 0 8
decrease)
(I) Total
comprehensi 780,709,940.76 780,709,940.76
ve income
(II) Capital
contributed -82,297,410.0
-731,510.00 20,093,666.99 101,659,566.99
or withdrawn 0
by owners
1. Ordinary
shares -167,907,300.
-49,264,050.00 118,643,250.00
contributed 00
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based 72,810,130.99 89,793,814.00 -16,983,683.01
payment
158
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
included in
equity
4. Others -731,510.00 -3,452,414.00 -4,183,924.00
(III) Profit 78,070,994.0 -849,634,402.5 -771,563,408.5
distribution 8 8 0
1.
Appropriatio 78,070,994.0
-78,070,994.08
n of surplus 8
reserve
2.
Appropriatio -771,563,408.5 -771,563,408.5
n of profit to 0 0
owners
3. Others
(IV) Internal -826,675,080.0
carry-over 826,675,080.00
within equity 0
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
comprehensi
ve income
carried over
159
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriatio
n of current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end of 3,591,601,468. 1,198,721,706. 281,483,741.3 509,280,441. 1,089,748,875. 6,107,868,750.
current 00 52 4 15 88 21
period
Amount of Previous Period
Unit: RMB
Year 2019
Other equity instruments Specia
Items Other Other
Less: treasury l Surplus Undistributed
Share Capital Preferre Perpetu Other Capital reserve comprehensi Total equity
shares reserv reserve profit s
ve income
d shares al bonds s e
I. Balance at
2,130,646,835. 2,621,241,593. 116,457,618.4 320,155,904.0 5,643,898,050.
the end of 688,311,336.98
00 01 5 5 59
prior year
Add:
Cumulative
changes of 120,088.18 1,080,793.66 1,200,881.84
accounting
policies
160
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Error
correction of
prior period
Others
II. Balance at
the beginning 2,130,646,835. 2,621,241,593. 116,457,618.4 320,275,992.2 5,645,098,932.
689,392,130.64
of current 00 01 5 3 43
year
III. Current
period -615,938,473.4 247,323,532.8 110,933,454.8
increase (or 635,011,063.00 469,281,207.06 351,963,718.53
less: 8 9 4
decrease)
(I) Total 1,109,334,548. 1,109,334,548.
comprehensi
ve income 40 40
(II) Capital
contributed 247,323,532.8 -228,250,943.3
19,072,589.52
or withdrawn 9 7
by owners
1. Ordinary
shares -27,008,300.0
27,008,300.00
contributed 0
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based
payment 19,072,589.52 19,072,589.52
included in
equity
274,331,832.8 -274,331,832.8
4. Others
9 9
(III) Profit 110,933,454.8 -640,053,341.3 -529,119,886.5
161
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
distribution 4 4 0
1.
Appropriatio 110,933,454.8 -110,933,454.8
n of surplus 4 4
reserve
2.
Appropriatio -529,119,886.5 -529,119,886.5
n of profit to 0 0
owners
3. Others
(IV) Internal -635,011,063.0
carry-over 635,011,063.00
within equity 0
1.Transfer of
capital -635,011,063.0
635,011,063.00
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
comprehensi
ve income
carried over
to retained
earnings
6. Others
(V) Special
reserve
162
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
1.
Appropriatio
n of current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end of 2,765,657,898. 2,005,303,119. 363,781,151.3 431,209,447.0 1,158,673,337. 5,997,062,650.
current 00 53 4 7 70 96
period
III. Company profile
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
registered capital of 3,591,601,468.00 yuan, total share of 3,591,601,468 shares (each with par value of one yuan). The Company’s shares were listed at Shenzhen
Stock Exchange.
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 March 25, 2021.
Zhejiang Sanhua Climate and 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.
163
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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 no events or conditions that may cast significant doubts upon the Company’s ability to
continue as a going concern within the 12 months after the balance sheet date.
V. Significant accounting policies and 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.
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．Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined
party included in the consolidated financial statements of the ultimate controlling party at the combination date.
Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
164
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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 the consolidation scope. The consolidated
financial statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial
Statements”, based on relevant information and the financial statements of the parent company and its
subsidiaries.
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．Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate/ 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
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
165
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
The Company's financial assets fall into two main categories: (1) financial assets at amortized cost; (2)
financial assets at fair value through profit or loss. Financial liabilities are classified into the following two
categories: (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.
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
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset.
Where the Company does not transfer or retain substantially all of the risks and rewards related to the
166
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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
financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.
The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low credit risk on the balance sheet date. The
Company measures the loss provision according to the expected credit loss in the next 12 months
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
167
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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 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:
Basis for determination of
Portfolio Name Method for measuring expected credit loss
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%
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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．Inventories
1. Classification of inventories
Inventories include material, work in process in the process of production and finished goods etc.
2. Accounting method for dispatching inventories
Inventories dispatched from storage at actual cost are accounted with weighted average method at the end of
each month; Inventories dispatched from storage according to the plan, the cost difference will be carried forward
at the same time at the end of the month.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost or net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value. Inventory used directly for
sale, in the course of normal production and operation, the net realizable value of the inventory shall be
determined by the estimated selling price minus the estimated selling expenses and related taxes; Inventories that
require processing, in the course of normal production and operation, the net realizable value of the finished
product shall be determined by the estimated selling price of the finished product minus the estimated cost to be
incurred at the time of completion, the estimated selling expenses and the relevant taxes and fees. On the balance
sheet date, where a part of the same inventory has a contract price and other parts do not have a contract price, the
net realizable value thereof shall be determined separately, and compare with the corresponding cost to determine
the amount of the provision for inventory depreciation or the amount of the reversal.
4. Inventory system
The perpetual inventory system is adopted.
5. Revolving materials are amortized with one-off method.
11. Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.
The Company presents an unconditional right to consideration (i.e., only the passage of time is required
before the consideration is due) as a receivable, and presents a right to consideration in exchange for goods that it
has transferred to a customer (which is conditional on something other than the passage of time) as a contract
asset.
12．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.
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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 profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term
equity investments with joint control or significant influence relationship, it is accounted for with equity method.
13. 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.
14. Fixed assets
（1）Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to
others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets
are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to
the Company and the cost of the assets can be measured reliably.
（2）Depreciation method of different categories of fixed assets
Categories Estimated residual value Annual depreciation rate
Depreciation method Useful life (years)
proportion (%) (%)
Buildings and
Straight-line method 20-30 0%、5% 3.17%～5%
structures
Machinery and
Straight-line method 5-12 0%、5% 7.92%～20%
equipment
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Measurement analysis
Straight-line method 5-10 5% 9.50%～19%
equipment
Vehicle Straight-line method 5-8 0%、5% 11.88%～20%
Office equipment and
Straight-line method 5-8 0%、5% 11.88%～20%
others
15．Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits
associated with the item will flow to the Company, and the cost of the item can be measured reliably.
Construction in progress is measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed
usable conditions. When the auditing of the construction in progress was not finished while reaching the designed
usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when
the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively.
16．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.
17．Intangible assets
(1) Valuation method, service life, impairment test
Intangible assets include land use right, land ownership, application software, patent right and non-patented
technology etc. The initial measurement of intangible assets is based on its cost.
Intangible assets are amortized by the straight-line method with details as follows:
Categories Amortization method Amortization period (years)
Land use rights Straight-line method Contractual service life
Intellectual Property of Air Conditioning Controller Straight-line method 5-10
Patented technology of electronic expansion valve controller of Straight-line method 10
Dotech
Application 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
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meet the corresponding conditions.
18．Impairment of part 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.
19．Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost, and evenly amortized within the beneficiary period or
stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods,
residual values of such items are included in profit or loss.
20．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
the payment of termination benefits.
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as
a defined contribution plan, those benefits are accounted for in accordance with the requirements relating to
defined contribution plan, while other benefits are accounted for in accordance with the requirements relating to
defined benefit plan. To simplify the relevant accounting treatment, the Company recognizes the cost of employee
benefits arising from other long-term employee benefits as service cost. Net interest on the net liability or net
assets of other long-term employee benefits and changes as a result of remeasurement of the net liability or net
assets of other long-term employee benefits .The net total of the aforesaid amounts is recognized in profit or loss
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or included in the cost of a relevant asset.
21．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.
22．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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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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.
23．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. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties
and those expected to be refunded to the customer.
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(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the
best estimate of variable consideration at expected value or the most likely amount. However, the transaction price
that includes the amount of variable consideration only to the extent that it is high probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall
determine the transaction price based on the price that a customer would have paid for if the customer had paid
cash for obtaining control over those goods or services. The difference between the transaction price and the
amount of promised consideration is amortized under effective interest method over contractual period.
(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
24．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
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
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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.
25．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 income will be available against which deductible temporary
differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available
to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that
it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss, excluding those arising from the following circumstances: (a) business combination; and (b) the transactions
or items directly recognized in equity.
26．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
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
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
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.
27．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.
28. 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 (hereinafter
referred to as the “New Revenue Standards”) since January 1, 2020. According to the convergence of the old and
new standards, the information of the comparable period will not be adjusted. The cumulative impact of the
implementation of the new standards on the first implementation date will be retroactively adjusted to the retained
earnings and other relevant items in the financial statements as at January 1, 2020.
On January 1, 2020, the new revenue standards have no adjustment impact on the company's retained earnings,
other affected financial statement items and amounts are shown below table:
Balance sheet
Items adjustment impact of new revenue
December 31, 2019 January 1, 2020
standards
Advance receipts 23,453,218.32 -23,453,218.32
contract liabilities +23,453,218.32 23,453,218.32
（2）Changes in significant accounting estimates
□ Applicable √ Not applicable
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
（3）Since 2020 , Adjustments to the relevant items of financial statements at the beginning of the year at
the first implementation of new revenue and lease standards .
Applicable
Whether it is necessary to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Items December 31, 2019 January 1, 2020 Amount adjusted
Current asset：
Cash and Bank Balances 2,663,719,770.15 2,663,719,770.15
Settlement funds
Loans to other banks
Held-for-trading financial assets 993,634,433.31 993,634,433.31
Derivative financial assets 8,314,400.73 8,314,400.73
Notes receivable 2,097,159,908.40 2,097,159,908.40
Accounts receivable 1,871,323,522.82 1,871,323,522.82
Receivable financing
Advances paid 62,871,924.30 62,871,924.30
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 97,394,782.97 97,394,782.97
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 2,180,838,596.07 2,180,838,596.07
Contract assets
Assets held for sales
Non-current assets due within one year
Other current assets 75,933,253.28 75,933,253.28
Total current assets 10,051,190,592.03 10,051,190,592.03
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Long-term receivable 2,145,963.27 2,145,963.27
Long-term equity investments 14,522,259.80 14,522,259.80
Other equity instrument investments
Other non-current financial assets
Investment property 27,025,974.05 27,025,974.05
Fixed assets 3,379,608,199.26 3,379,608,199.26
Construction in progress 480,959,262.46 480,959,262.46
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 525,867,518.75 525,867,518.75
Development expenditures
Goodwill 31,959,091.60 31,959,091.60
Long-term prepayments 8,720,120.64 8,720,120.64
Deferred tax assets 88,952,931.69 88,952,931.69
Other non-current assets 179,238,257.09 179,238,257.09
Total non-current assets 4,738,999,578.61 4,738,999,578.61
Total assets 14,790,190,170.64 14,790,190,170.64
Current liabilities:
Short-term borrowings 1,295,610,572.07 1,295,610,572.07
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities 126,364.40 126,364.40
Notes payable 1,130,668,415.32 1,130,668,415.32
Accounts payable 1,587,763,752.62 1,587,763,752.62
Advances received 23,453,218.32 -23,453,218.32
Contract liabilities 23,453,218.32 23,453,218.32
Selling of repurchased financial assets
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 228,997,483.82 228,997,483.82
Taxes and rates payable 58,192,607.75 58,192,607.75
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Other payables 161,237,214.88 161,237,214.88
Including: Interest Payable
Dividends Payable 1,772,750.00 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 222,228,097.22 222,228,097.22
Other current liabilities
Total current liabilities 4,708,277,726.40 4,708,277,726.40
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 392,882,280.09 392,882,280.09
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 94,235,857.77 94,235,857.77
Long-term employee benefits payable
Provisions
Deferred income 82,537,550.43 82,537,550.43
Deferred tax liabilities 65,049,361.71 65,049,361.71
Other non-current liabilities 81,788,928.52 81,788,928.52
Total non-current liabilities 716,493,978.52 716,493,978.52
Total liabilities 5,424,771,704.92 5,424,771,704.92
Equity:
Share capital 2,765,657,898.00 2,765,657,898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,090,800,022.06 1,090,800,022.06
Less: Treasury shares 363,781,151.34 363,781,151.34
Other comprehensive income -39,332,748.50 -39,332,748.50
Special reserve
Surplus reserve 559,896,619.39 559,896,619.39
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
General risk reserve
Undistributed profit 5,278,392,288.84 5,278,392,288.84
Total equity attributable to the parent Company 9,291,632,928.45 9,291,632,928.45
Non-controlling interest 73,785,537.27 73,785,537.27
Total equity 9,365,418,465.72 9,365,418,465.72
Total liabilities & equity 14,790,190,170.64 14,790,190,170.64
Adjustment statement
On January 1, 2020, the new revenue standards have no adjustment impact on the company's retained earnings,
other affected financial statement items and amounts are shown below table:
Balance sheet
Items adjustment impact of new revenue
December 31, 2019 January 1, 2020
standards
Advance receipts 23,453,218.32 -23,453,218.32
contract liabilities +23,453,218.32 23,453,218.32
Balance Sheet of the Parent Company
Unit: RMB
Items December 31, 2019 January 1, 2020 Amount adjusted
Current assets:
Cash and bank balances 1,039,915,005.31 1,039,915,005.31
Held-for-trading financial assets 195,000,000.00 195,000,000.00
Derivative financial assets 2,069,850.00 2,069,850.00
Notes receivable 161,946,880.21 161,946,880.21
Accounts receivable 1,135,299,895.98 1,135,299,895.98
Receivables financing
Advances paid 6,076,163.25 6,076,163.25
Other receivables 603,257,516.95 603,257,516.95
Including: Interest Receivable
Dividends Receivable
Inventories 519,241,847.99 519,241,847.99
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 21,333,811.35 21,333,811.35
Total current assets 3,684,140,971.04 3,684,140,971.04
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4,256,633,941.06 4,256,633,941.06
Other equity instrument investments
Other non-current financial assets
Investment property
Fixed assets 1,460,855,506.39 1,460,855,506.39
Construction in progress 44,135,844.65 44,135,844.65
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 189,181,593.94 189,181,593.94
Development expenditures
Goodwill
Long-term prepayments 625,318.03 625,318.03
Deferred tax assets 17,068,063.08 17,068,063.08
Other non-current assets 109,659,279.90 109,659,279.90
Total non-current assets 6,078,159,547.05 6,078,159,547.05
Total assets 9,762,300,518.09 9,762,300,518.09
Current liabilities:
Short-term borrowings 730,799,542.65 730,799,542.65
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1,431,862,681.89 1,431,862,681.89
Advances received 92,676.29 -92,676.29
Contract liabilities 92,676.29 92,676.29
Employee benefits payable 65,680,254.82 65,680,254.82
Taxes and rates payable 1,576,623.72 1,576,623.72
Other payables 1,252,808,472.44 1,252,808,472.44
Including: interest payable
Dividends Payable 1,772,750.00 1,772,750.00
182
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Liabilities classified as held for sale
Non-current liabilities due within one year 220,225,194.44 220,225,194.44
Other current liabilities
Total current liabilities 3,703,045,446.25 3,703,045,446.25
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 30,895,817.00 30,895,817.00
Deferred tax liabilities 31,296,603.88 31,296,603.88
Other non-current liabilities
Total non-current liabilities 62,192,420.88 62,192,420.88
Total liabilities 3,765,237,867.13 3,765,237,867.13
Equity:
Share capital 2,765,657,898.00 2,765,657,898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,005,303,119.53 2,005,303,119.53
Less: treasury shares 363,781,151.34 363,781,151.34
Other comprehensive income
Special reserve
Surplus reserve 431,209,447.07 431,209,447.07
Undistributed profit 1,158,673,337.70 1,158,673,337.70
Total equity 5,997,062,650.96 5,997,062,650.96
Total liabilities & equity 9,762,300,518.09 9,762,300,518.09
Adjustment statement
On January 1, 2020, the new revenue standards have no adjustment impact on the company's retained earnings,
Other affected financial statement items and amounts are shown below table:
Items Balance sheet
183
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
December 31, 2019 adjustment impact of new revenue standards January 1, 2020
Advance receipts 92,676.29 -92,676.29
contract liabilities +92,676.29 92,676.29
（4）Since 2020 , the statements of first implementation of new revenue and lease standards to trace and
adjust previous comparative data.
□ Applicable √ Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
The output tax calculated based on the revenue from sales of goods or rendering of
VAT services in accordance with the tax law, net of the input tax that is allowed to be deducted 13%
in the current period
Urban maintenance and
The sum of turnover tax payable and value-added tax exemption 5%，7%
construction tax
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 and 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%
184
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
2. Tax preferential policies
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.
3. Others
The overseas subsidiary shall be subject to the tax regulations of its host country.
Ⅶ. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 232,265.51 417,814.58
Cash in bank 3,411,034,773.03 2,553,365,200.43
Other cash and bank balances 78,420,529.60 109,936,755.14
Total 3,489,687,568.14 2,663,719,770.15
Including: Deposited overseas 370,754,548.72 488,694,193.85
The total amount of the cash and
bank balances that are limited by 89,543,529.60 109,936,755.14
mortgage, pledge or freeze
Other remarks:
As of December 31, 2020, bank deposits containing large deposit certificates with fixed interest rates
amounted to 1,629 million yuan.
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through
752,224,861.78 993,634,433.31
profit or loss
Including:
Bank financial products 752,224,861.78 993,634,433.31
185
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Including:
Total 752,224,861.78 993,634,433.31
Other remarks:
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 49,339,961.11 3,371,510.40
Futures tools 8,990,525.42 4,942,890.33
Total 58,330,486.53 8,314,400.73
Other remarks:
4. Notes receivable
（1）Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 2,190,368,328.70 1,981,778,291.59
Trade acceptance 133,566,452.83 115,381,616.81
Total 2,323,934,781.53 2,097,159,908.40
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debt debt
Categories Provisi Carrying Amount Propor Amount Provisi Carrying
Propor on amount tion on amount
Amount Amount
tion propor propor
tion tion
Including:
Notes
receivable
with
2,330,9
provision 100.00 7,029,81 2,323,934,7 2,103,232,6 100.00 6,072,71 2,097,159,9
64,594. 0.30% 0.29%
for bad debt % 3.30 81.53 25.08 % 6.68 08.40
83
made on a
collective
basis
186
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Including:
2,190,3
Bank 93.97 2,190,368,3 1,981,778,2 94.23 1,981,778,2
68,328.
acceptance % 28.70 91.59 % 91.59
70
Trade 140,596 7,029,81 133,566,45 121,454,33 6,072,71 115,381,61
6.03% 5.00% 5.77% 5.00%
acceptance ,266.13 3.30 2.83 3.49 6.68 6.81
2,330,9
100.00 7,029,81 2,323,934,7 2,103,232,6 100.00 6,072,71 2,097,159,9
Total 64,594. 0.30% 0.29%
% 3.30 81.53 25.08 % 6.68 08.40
83
Provision for bad debt made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Provision proportion (%)
Bank acceptance portfolio 2,190,368,328.70
Trade acceptance portfolio 140,596,266.13 7,029,813.30 5.00%
Total 2,330,964,594.83 7,029,813.30 --
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
Provision for bad debt Phase I Phase II Phase III Subtotal
12 month expected credit Lifetime expected credit losses Lifetime expected credit losses (credit
losses (credit not impaired) impaired)
Balance on January 1,
6,072,716.68 6,072,716.68
2020
The balance as of —— —— —— ——
January 1, 2020 is in
the current period
--Transferred to phase
II
--Transferred to phase
III
--Reversed to phase II
--Reversed to phase I
Provision made in the
957,096.62 957,096.62
current period
Provision recovered in
current period
187
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Provision reversed in
current period
Provision written off
in current period
Other changes
Balance on December 7,029,813.30 7,029,813.30
31, 2020
（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
Opening Closing
Categories Recovered or
balance Accrual Write off Others balance
reversed
Trade acceptance 6,072,716.68 957,096.62 7,029,813.30
Total 6,072,716.68 957,096.62 7,029,813.30
Including significant provision for bad debt recovered or reversed amount:
□ Applicable √ Not Applicable
（3）Pledged notes at the balance sheet date
Unit: RMB
Items Closing balance of pledged notes
Bank acceptance 1,608,722,846.32
Total 1,608,722,846.32
（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 36,221,098.39
Trade acceptance 101,893,140.59 17,493,416.00
Total 138,114,238.98 17,493,416.00
5. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
188
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debt debt
Categor
Amount Propor Amount Accru Carrying Amount Propor Amount Accru Carrying
ies
tion ed amount tion ed amount
propor propor
tion tion
Receiva
bles
with
provisi
on 100.00 447,139. 100.00
57,335.28 0.00% 57,335.28 0.00 447,139.67 0.02% 0.00
made % 67 %
on an
individ
ual
basis
Includi
ng:
Receiva
bles
with
provisi
2,481,072, 100.00 125,458,7 2,355,613, 1,970,386, 99.98 99,063,4 1,871,323,
on 5.06% 5.03%
027.67 % 28.10 299.57 982.39 % 59.57 522.82
made
on a
collecti
ve basis
Includi
ng:
2,481,129, 100.00 125,516,0 2,355,613, 1,970,834, 100.00 99,510,5 1,871,323,
Total 5.06% 5.05%
362.95 % 63.38 299.57 122.06 % 99.24 522.82
Provision made on an individual basis:
Unit: RMB
Closing balance
Debtors
Book balance Provision for bad debts Accrued proportion Reasons
MAHLE BEHR
MEXICO S. DE R.L. 57,335.28 57,335.28 100.00%
DE .C.V.
Total 57,335.28 57,335.28 -- --
189
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Provision made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Within 1 year 2,460,804,171.04 123,040,285.50 5.00%
1 to 2 years 18,791,491.28 1,879,149.13 10.00%
2 to 3 years 994,446.02 298,333.81 30.00%
Over 3 years 481,919.33 240,959.66 50.00%
Total 2,481,072,027.67 125,458,728.10 --
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
Provision for bad debt Phase I Phase II Phase III Subtotal
12 month expected Lifetime expected credit losses Lifetime expected credit losses (credit
credit losses (credit not impaired) impaired)
Balance on January 1, 2020 99,063,459.57 447,139.67 99,510,599.24
The balance as of January 1, 2020 —— —— —— ——
is in the current period
--Transferred to phase II
--Transferred to phase III
--Reversed to phase II
--Reversed to phase I
Provision made in the current 27,590,321.86 27,590,321.86
period
Provision recovered in current 3,965.64 3,965.64
period
Provision reversed in current period 1,195,053.33 385,838.75 1,580,892.08
Provision written off in current
period
Other changes
Balance on December 31, 2020 125,458,728.10 57,335.28 125,516,063.38
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year 2,460,804,171.04
1 to 2 years 18,791,491.28
2 to 3 years 994,446.02
190
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Over 3 years 539,254.61
Total 2,481,129,362.95
（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
Opening Closing
Categories Recovered or
balance Accrued Write off Others balance
reversed
Receivables with provision
447,139.67 3,965.64 385,838.75 57,335.28
made on an individual basis
Receivables with provision
99,063,459.57 27,590,321.86 1,195,053.33 125,458,728.10
made on a collective basis
Total 99,510,599.24 27,590,321.86 3,965.64 1,580,892.08 125,516,063.38
（3）Details of the top 5 debtors with largest balances
Closing balance of top 5 debtors totaled 932,049,433.02 yuan(Customer controlled by the same actual
controller shall be combined to calculate accounts receivable), accounting for 37.57% of the total closing balance
of accounts receivable, and provision for bad debts made thereon totaled 46,602,471.64 yuan.
Other remarks:
In current period, the Company write-off a total of small sporadic accounts 1,580,892.08 yuan.
6. Advances paid
（1）Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year (including 1 year) 61,348,884.20 88.39% 59,688,137.51 94.94%
1 to 2 years 6,712,609.39 9.67% 1,274,082.94 2.03%
2 to 3 years 64,117.70 0.09% 1,799,865.58 2.86%
Over 3 years 1,278,715.16 1.84% 109,838.27 0.17%
Total 69,404,326.45 -- 62,871,924.30 --
Remarks on reasons for unsettled significant advances paid with aging over one year:
191
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
（2）Top 5 debtors with the largest advances paid balances
Closing balance of top 5 debtors totaled 17,243,886.66 yuan, accounting for 24.85% of the total closing
balance of advances paid.
Other remarks:
614,646.44 yuan of Advances paid written off in current period.
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 76,935,495.05 97,394,782.97
Total 76,935,495.05 97,394,782.97
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Tax refund receivable 36,628,075.87 46,670,909.67
Guarantee deposits 30,801,053.14 30,166,732.62
Others 11,700,014.42 23,292,984.90
Total 79,129,143.43 100,130,627.19
2）Provision of bad debt
Unit: RMB
Phase I Phase II Phase III
12 month
Provision for bad debt Lifetime expected credit Lifetime expected credit Subtotal
expected credit
losses (credit not impaired) losses (credit impaired)
losses
Balance on January 1,
1,439,293.10 1,296,551.12 2,735,844.22
2020
The balance as of
January 1, 2020 is in —— —— —— ——
the current period
Provision made in the
40,686.78 40,686.78
current period
Provision recovered in
582,882.62 582,882.62
current period
192
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Balance on December
856,410.48 1,337,237.90 2,193,648.38
31, 2020
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) 856,410.48
1 to 2 years 257,412.63
2 to 3 years 458,330.02
Over 3 years 621,495.25
Total 2,193,648.38
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
Opening Closing
Categories Recovered or Write
balance Accrued Others balance
reversed off
Receivables with provision made on a
2,735,844.22 40,686.78 582,882.62 2,193,648.38
collective basis
Total 2,735,844.22 40,686.78 582,882.62 2,193,648.38
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 debt at the end of
receivables
other receivables the period
Tax refund
Tax refund 36,628,075.87 1 to 2 years 46.29%
receivables
Finance Bureau of
Performance bond 6,971,285.00 1 to 3 years 8.81%
Xinchang County
Shaoxing Binhai Performance bond
New City for land and
5,410,000.00 2 to 4 years 6.84%
Management project
Committee construction
Xinchang County Deposit of 3,774,000.00 4 to 8 years 4.77%
193
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Land Reserve construction
Development projects
Center
Wuhu Yijiang Deposit of
District Finance construction 3,751,000.00 2 to 4 years 4.74%
Bureau projects
Total -- 56,534,360.87 -- 71.45%
5）Other receivables related to Government grants
Unit: RMB
Estimated receipt time,
Items Government grant Closing balance Ages
amount and basis
From January to April,
Local finance and VAT refund of civil Within 1
1,929,944.96 2021, Tax refund
taxation departments welfare enterprises year(including 1 year)
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 inventories or
Items
Book balance provision for Carrying amount Book balance provision for Carrying amount
impairment of impairment of
contract contract
performance performance
costs costs
Raw materials 530,578,235.34 38,591,465.21 491,986,770.13 402,017,918.68 29,042,388.91 372,975,529.77
Work-in-progress 377,607,984.60 661,948.94 376,946,035.66 312,143,395.71 4,759,164.75 307,384,230.96
Finished goods 1,488,998,382.81 55,323,878.13 1,433,674,504.68 1,558,291,038.03 58,630,244.52 1,499,660,793.51
Others 5,154,395.99 5,154,395.99 818,041.83 818,041.83
Total 2,402,338,998.74 94,577,292.28 2,307,761,706.46 2,273,270,394.25 92,431,798.18 2,180,838,596.07
194
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
（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 18,516,287.33 381,887.15 9,349,098.18 38,591,465.21
Work-in-progress 4,759,164.75 425,935.69 31,395.32 4,554,546.82 661,948.94
Finished goods 58,630,244.52 39,730,315.82 33,833.49 43,070,515.70 55,323,878.13
Others 92,431,798.18 58,672,538.84 447,115.96 56,974,160.70 94,577,292.28
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 100,377,659.11 41,622,415.21
Prepaid Enterprise income tax 49,911,203.33 33,856,030.95
Others 171,625.57 454,807.12
Total 150,460,488.01 75,933,253.28
Other remarks:
10. Long-term receivable
（1）Long-term receivable
Unit: RMB
Closing balance Opening balance
Range of
Items Book Provision for Carrying Book Provision for Carrying
discount rate
balance bad debt amount balance bad debt amount
Employee home
2,074,750.00 2,074,750.00 2,145,963.27 2,145,963.27
loan
Total 2,074,750.00 2,074,750.00 2,145,963.27 2,145,963.27 --
Impairment of provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt Lifetime expected credit Total
12 month Lifetime expected credit
losses (credit not impaired)
195
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
expected credit losses (credit impaired)
losses
The balance as of
January 1, 2020 is in —— —— —— ——
the current period
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
Openin Investm Cash Closing
Closing
g ent Adjust dividen balance
balance
balance Investm Investm income ment in Change ds or Provisi of
Investe (Carryi
(Carryi ent ent recogni other s in profit on for provisi
es Others ng
ng increas decreas zed compre other declare impair on for
amount
amount ed ed under hensive equity d to ment impair
)
) equity income distribu ment
method tion
Ⅰ. Joint ventures
Ⅱ.Associates
Guochu
ang
Energy
Internet
Innovat
1,493,7 31,533. 1,525,2
ion
18.98 78 52.76
Center
(Guang
dong)
Co.,
Ltd.
Chongq
ing
Tainuo 8,847,7 2,049,1 1,500,0 9,396,9
Machin 28.00 76.73 00.00 04.73
ery Co.,
Ltd.
Nancha
2,335,2 431,89 1,250,0 1,517,1
ng
42.16 6.79 00.00 38.95
Sanhua
196
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Jinlifen
g
Machin
ery Co.,
Ltd.
Zhongs
han
Sanhua
27,971. -27,971
Tainuo
57 .57
Machin
ery Co.,
Ltd.
Ningbo
Jinlifen
g 1,250,0 -187,79 1,062,2
Machin 00.00 0.82 09.18
ery Co.,
Ltd.
Qingda
o
Sanhua
Jinlifen
0.00 0.00
g
Machin
ery Co.,
Ltd.
Zhongs
han
Xuanyi
Pipe 1,817,5 -99,488 1,718,1
Manufa 99.09 .03 11.06
cturing
Co.,
Ltd.
Xincha
ng
zhejian
g
energy 0.00
sanhua
compre
hensive
energy
197
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
co.
LTD
Subtota 14,522, 1,250,0 2,197,3 2,750,0 15,219,
l 259.80 00.00 56.88 00.00 616.68
14,522, 1,250,0 2,197,3 2,750,0 15,219,
Total
259.80 00.00 56.88 00.00 616.68
Other remarks:
Zhongshan Sanhua Tainuo Machinery Co., Ltd. has been liquidated and cancelled in May 2020; Qingdao
Sanhua Jinlifeng Machinery Co., Ltd. has been insolvent, the equity investment has been reduced to zero yuan; As
of December 31, 2020, the Company has not paid capital contribution to Xinchang zhejiang energy sanhua
comprehensive energy co. LTD.
12. Investment property
（1）Investment property measured by cost method
√ Applicable □ Not Applicable
Unit: RMB
Land use right and
Buildings and Construction in
Items Overseas land Total
structures progress
ownership
Ⅰ. Original Carrying
amount
1.Opening balance 36,137,499.11 10,455,622.00 46,593,121.11
2.Increase in current
496,203.06 92,389.50 588,592.56
period
（1）Acquisition
（2）Transferred in
from inventory\fixed
assets\ construction in
progress
（3）Acquisition
（4）Converted
difference in Foreign 496,203.06 92,389.50 588,592.56
Currency Statements
3.Decrease in current
23,990,274.63 7,008,986.50 30,999,261.13
period
（1）Disposal
（2）Other transfer out 23,990,274.63 7,008,986.50 30,999,261.13
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
4.Closing balance 12,643,427.54 3,539,025.00 16,182,452.54
Ⅱ. Accumulated
depreciation and
amortization
1.Opening balance 17,507,685.84 2,059,461.22 19,567,147.06
2. Increase in current
2,022,581.60 152,000.96 2,174,582.56
period
（1）Accrual or
1,868,715.21 152,000.96 2,020,716.17
amortization
（2）Converted
difference in Foreign 153,866.39 153,866.39
Currency Statements
3.Decrease in current
13,415,403.86 2,211,462.18 15,626,866.04
period
（1）Disposal
（2）Other transfer out 13,415,403.86 2,211,462.18 15,626,866.04
4.Closing balance 6,114,863.58 0.00 6,114,863.58
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 6,528,563.96 3,539,025.00 10,067,588.96
2.Opening balance 18,629,813.27 8,396,160.78 27,025,974.05
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Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
（2）Investment property measured by fair value measurement model
□Applicable √ Not Applicable
13. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 3,839,408,059.45 3,379,608,199.26
Total 3,839,408,059.45 3,379,608,199.26
（1）Fixed assets
Unit: RMB
Measurement Office and
Buildings and Machinery and Transportation
Items analysis other 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
179,894,850.42 630,215,430.99 45,114,238.58 4,138,500.40 23,166,682.85 882,529,703.24
current period
（1）
288,029,626.86 47,886,534.10 3,941,780.75 24,414,404.42 364,272,346.13
Acquisition
（2）
Transferred in
from 156,700,627.31 355,635,406.70 512,336,034.01
construction in
progress
（3）Business
combination
（4）
Transferred in
from 23,990,274.63 23,990,274.63
investment
property
（5）Converted
difference in -796,051.52 -13,449,602.57 -2,772,295.52 196,719.65 -1,247,721.57 -18,068,951.53
Foreign
200
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Currency
Statements
3. Decrease
in current 1,502,733.97 41,528,655.81 7,430,735.15 4,134,274.16 10,482,475.03 65,078,874.12
period
（1）Disposal
1,502,733.97 41,528,655.81 7,430,735.15 4,134,274.16 10,482,475.03 65,078,874.12
or scrap
4.Closing
2,335,750,475.01 3,639,249,906.77 115,451,585.42 40,354,179.00 236,938,987.10 6,367,745,133.30
balance
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
101,917,323.57 268,939,442.23 10,667,330.59 3,737,219.17 20,793,012.83 406,054,328.39
current period
（1）Accrual 88,427,646.32 273,088,826.33 10,986,039.75 3,683,051.46 20,383,788.57 396,569,352.43
(2)Transferred
in from
13,415,403.86 13,415,403.86
investment
property
(3) Converted
difference in
Foreign 74,273.39 -4,149,384.10 -318,709.16 54,167.71 409,224.26 -3,930,427.90
Currency
Statements
3. Decrease
in current 33,917,352.83 3,341,088.05 3,848,249.47 7,023,889.37 48,130,579.72
period
（1）Disposal
33,917,352.83 3,341,088.05 3,848,249.47 7,023,889.37 48,130,579.72
or scrap
4.Closing
611,780,867.81 1,678,476,511.90 40,099,350.82 30,404,077.31 163,881,935.33 2,524,642,743.17
balance
Ⅲ. Provision
for
impairment
1.Opening 3,967,110.42 3,967,110.42
201
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
balance
2. Increase in
current period
（1）Accrual
3. Decrease
in current 272,779.74 272,779.74
period
（1）Disposal
272,779.74 272,779.74
or scrap
4.Closing
3,694,330.68 3,694,330.68
balance
Ⅳ. Carrying
amount
1.Closing
1,723,969,607.20 1,957,079,064.19 75,352,234.60 9,950,101.69 73,057,051.77 3,839,408,059.45
balance
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 Provision for
Items Accumulated depreciation Carrying amount
value impairment
Buildings and structures 146,648,653.71 27,861,243.95 118,787,409.76
（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
Finished goods warehouse in Meizhu
21,125,640.86 processed uniformly after the overall
North district
completion
New assets, the certificate of title to be
13# factory in Meizhu North district 75,558,844.91 processed uniformly after the overall
completion
New assets, the certificate of title to be
Staff dormitory in Meizhu (Phase II) 22,741,997.90
processed uniformly after the overall
202
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
completion
New assets, the certificate of title to be
14# factory in Meizhu North district 24,243,958.39 processed uniformly after the overall
completion
New assets, the certificate of title to be
15# factory in Meizhu North district 59,110,510.38 processed uniformly after the overall
completion
New assets, the certificate of title to be
Shaoxing new energy plant (PhaseⅠ) 156,481,398.95 processed uniformly after the overall
completion
Subtotal 359,262,351.39
Other remarks
14. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 628,730,529.07 480,959,262.46
Total 628,730,529.07 480,959,262.46
（1）Details of construction in progress
Unit: RMB
Closing balance Opening balance
Provision Book balance Provision Carrying
Items Carrying
Book balance for for amount
amount
impairment impairment
Annual production of 7.3
million sets of new energy
145,885,533.67 145,885,533.67 78,050,708.13 78,050,708.13
vehicle thermal management
system components project
Annual production of 12.7
million sets of automotive air
50,740,941.36 50,740,941.36
conditioning control
components project
Annual production of 11.5
million sets of new energy 78,290,263.60 78,290,263.60 100,809,231.62 100,809,231.62
auto parts project
Annual production of 65
25,812,948.25 25,812,948.25 13,815,107.62 13,815,107.62
million sets of commercial
203
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
refrigeration and air
conditioning intelligent
control components
construction project
Annual production of 1.5
million sets of new energy
88,939,186.18 88,939,186.18
thermal management
components project
Annual production of 1
million sets of new energy
3,772,038.19 3,772,038.19 2,877,561.33 2,877,561.33
vehicle air-conditioning
thermal sensors project
Annual output of 50.5 million
sets of high efficiency and
energy saving refrigeration
11,841,050.00 11,841,050.00
and air conditioning control
components technology
transformation projects
Vietnam industrial plant
80,569,043.24 80,569,043.24 32,155,560.02 32,155,560.02
project
Others 193,620,465.94 193,620,465.94 202,510,152.38 202,510,152.38
Total 628,730,529.07 628,730,529.07 480,959,262.46 480,959,262.46
（2）Changes of significant construction in progress in current period
204
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Unit: RMB
Other Including
Transferred Accumulat Completio Accumulat Capitalizati
amounts :
Increased in to fixed ed n ed amount on rate for Fund
Opening decrease Closing capitalize
Items Budget current assets in investment percentag of interest in sourc
balance d in balance d interest
period the current to budget e capitalized current e
current in current
period (%) (%) interest period
period period
Annual
production of
7.3 million
sets of new
energy Raise
78,050,708.1 193,044,503. 125,209,677. 145,885,533.
vehicle 468,600,000.00 72.65% d
3 01 47 67
thermal funds
management
system
components
project
Annual
production of
12.7 million
sets of
Raise
automotive 50,740,941.3 40,996,513.0 91,737,454.3
215,000,000.00 84.92% d
air 6 0 6
funds
conditioning
control
components
project
205
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
Annual
production of
Raise
11.5 million 100,809,231. 204,228,155. 226,747,123. 78,290,263.6
528,800,000.00 77.62% d
sets of new 62 29 31 0
funds
energy auto
parts project
Annual
production of
65 million
sets of
commercial
refrigeration
1,780,550,000. 13,815,107.6 35,354,907.1 23,357,066.4 25,812,948.2
and air 2.76% Other
00 2 2 9 5
conditioning
intelligent
control
components
construction
project
Annual
production of
1.5 million
sets of new
89,223,942.5 88,939,186.1
energy 500,000,000.00 284,756.33 17.84% Other
1 8
thermal
management
components
project
Annual 44,786,000.00 2,877,561.33 3,134,251.83 2,239,774.97 3,772,038.19 45.81% Other
206
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report
production of
1 million sets
of new energy
vehicle
air-conditioni
ng thermal
sensors
project
Annual output
of 50.5
million sets of
high
efficiency and
energy saving
refrigeration 11,984,150.0 11,841,050.0
785,570,000.00 143,100.00 1.53% Other
and air 0 0
conditioning
control
components
technology
transformatio
n projects
Vietnam
28 million 32,155,560.0 50,790,156.7 80,569,043.2
industrial 2,376,673.48 43.04% Other
dollars 2 0 4
plant project
278,449,110. 628,756,579. 472,095,626. 435,110,063.
Total -- -- --
08 46 41 13
207
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
15. Intangible Assets
（1）Details of intangible assets
Unit: RMB
Patent
RANCO Intellectu technolo
AWECO intellect al gy of
Pate Non-pa Overseas intellectua ual property Dotech
Land use nt tent land l property property right of electroni
Items Software Total
right righ technol ownershi and and air c
t ogy p business business condition expansio
resources resource er n
s controller controlle
r
Ⅰ.
Original
Carrying
amount
1.Openin 553,075,8 29,413,80 103,486,7 1,758,47 42,150,17 6,634,36 27,892,66 764,412,1
g 49.31 1.81 89.02 9.45 5.56 4.80 1.59 21.54
balance
2.Increas
3,549,435. -468,175. 5,340,843 8,422,104.
ed in
90 30 .60 20
current
period
（1） 5,092,556 5,092,556.
Acquisiti .73 73
on
（2）
Internal
research
and
develop
ment
（3）
208
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Business
combinat
ion
（4）
Transferr
ed in
7,008,986. 7,008,986.
from
50 50
investme
nt
property
（5）
Effect of
Foreign -3,459,550 -468,175. 248,286.8 -3,679,439
Currency .60 30 7 .03
Translati
on
3.Decrea
4,205,497. 103,486,7 1,758,47 109,450,7
sed in
60 89.02 9.45 66.07
current
period
4,205,497. 103,486,7 1,758,47 109,450,7
（1）
60 89.02 9.45 66.07
Disposal
4.Closin 552,419,7 28,945,62 42,150,17 6,634,36 33,233,50 663,383,4
g 87.61 6.51 5.56 4.80 5.19 59.67
balance
Ⅱ.
Accumul
ated
amortiza
tion
1.Openin 86,030,55 205,745.3 103,485,8 363,239. 21,257,29 552,863. 22,519,43 234,414,9
g 9.93 7 54.20 45 5.24 70 8.24 96.13
balance
13,422,24 108,835.5 1,395,24 3,895,017 663,436. 3,340,113 22,825,82
2.Increas 934.82
4.12 9 0.00 .60 44 .70 2.27
ed in
209
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
current
period
11,210,78 129,122.4 1,395,24 3,895,017 663,436. 3,111,730 20,406,26
（1） 934.82
1.94 5 0.00 .60 44 .16 3.41
Accrual
（2）
Transferr
ed in
2,211,462. 2,211,462.
from
18 18
investme
nt
property
（3）
Converte
d
differenc
-20,286.8 228,383.5 208,096.6
e in
6 4 8
Foreign
Currency
Statemen
ts
3.
Decrease
168,219.9 103,486,7 1,758,47 105,413,4
d in
0 89.02 9.45 88.37
current
period
168,219.9 103,486,7 1,758,47 105,413,4
（1）
0 89.02 9.45 88.37
Disposal
4.Closin 99,284,58 314,580.9 25,152,31 1,216,30 25,859,55 151,827,3
g 4.15 6 2.84 0.14 1.94 30.03
balance
Ⅲ.
Provisio
n
for
impairm
ent
4,129,606 4,129,606.
210
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
1.Openin .66 66
g
balance
2.
Increase
-267,149. -267,149.9
d in
95 5
current
period
（1）
Accrual
（2)
Converte
d
differenc
-267,149. -267,149.9
e in
95 5
Foreign
Currency
Statemen
ts
3.
Decrease
d in
current
period
（1）
Disposal
4.Closin 3,862,456 3,862,456.
g .71 71
balance
Ⅳ.
Carrying
amount
1.Closin 453,135,2 24,768,58 16,997,86 5,418,06 7,373,953 507,693,6
g 03.46 8.84 2.72 4.66 .25 72.93
balance
467,045,2 25,078,44 934.82 1,395,24 20,892,88 6,081,50 5,373,223 525,867,5
211
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
2.Openin 89.38 9.78 0.00 0.32 1.10 .35 18.75
g
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
Decreased in current
Increased in current period
Investee or events resulting in Opening period Closing
goodwill balance Due to business balance
Disposal
combination
R-Squared Puckett Inc. 31,959,091.60 31,959,091.60
Total 31,959,091.60 31,959,091.60
（2）Provision for goodwill impairment
Unit: RMB
Investee or Increased in current period Decreased in current period
Opening Closing
events resulting
balance Provision made … Disposal … balance
in goodwill
Total
Related information of asset group or asset group portfolios which include goodwill
Impairment test process, the key parameters(Such as expected future cash flow when the present value of the
forecast period growth rate, stable period growth rate, profit margin, discount rate, forecast period) , and conclusion
of goodwill impairment loss:
Based on December 31, 2020, the Company performed an impairment test on the value of the microchannel
asset group portfolio. The recoverable amount of the asset group portfolio is estimated by the income method.
Pre-tax free cash flow for the next five years is based on projections，It's been stable over the years，the pre-tax
discount rate is determined to be13.80%. After testing, the recoverable amount of the microchannel asset group
portfolio is greater than the carrying amount，the management of the company believes that there is no sign of
impairment of goodwill and there is no need to make provision for impairment losses.
Impact of goodwill impairment tests
Other remarks
17. Long-term prepayments
Unit: RMB
212
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Increased in
Items Opening balance Amortization Other decreases Closing balance
current period
Plant renovation
7,223,760.94 20,684,610.31 4,201,969.64 23,706,401.61
expenditure
Compensated use
fee for emission 968,938.03 968,938.03
rights
Tools 527,421.67 527,421.67
Total 8,720,120.64 20,684,610.31 5,698,329.34 23,706,401.61
Other remarks
18. Deferred tax assets / deferred tax liabilities
（1）Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible Deferred tax Deductible Deferred tax
temporary difference assets temporary difference assets
Unrealized profit from internal transactions 180,209,650.54 17,242,885.11 223,604,977.62 25,040,965.45
Deductible losses 153,097,367.85 32,871,988.62 72,228,904.20 13,514,908.45
Provision for bad debt 78,915,609.30 15,835,440.18 71,519,997.24 14,114,166.19
Provision for inventory write-down 67,642,565.60 11,282,463.93 69,518,382.06 11,230,078.81
Deferred income: government grants 140,105,328.43 22,782,106.08 82,537,550.43 12,800,632.56
Provision for fixed assets impairments 3,694,330.68 554,149.61 3,898,415.90 584,762.39
Floating loss on derivatives 300,000.00 45,360.00 126,364.40 18,954.66
The share-paid remuneration without pre-tax
deduction calculated according to the 70,222,810.23 11,050,883.17 12,577,025.65 1,993,619.83
accounting standard
The expected additional deductible share-based
remuneration in the future period calculated 139,395,300.30 22,008,772.76 34,658,546.38 5,493,823.94
according to the tax standard
Provisional cost estimate 27,565,532.12 4,134,829.82 27,740,129.55 4,161,019.41
Total 861,148,495.05 137,808,879.28 598,410,293.43 88,952,931.69
（2）Deferred tax liabilities before offset
Unit: RMB
213
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Closing balance Opening balance
Items Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Depreciation and
770,755,369.92 128,446,514.86 396,585,435.74 62,347,023.15
amortization expense
Floating gain on
13,804,602.36 2,070,690.35 2,906,246.02 435,936.90
derivatives
Floating gain on
1,739,861.78 260,979.27 12,526,390.31 2,266,401.66
financial products
Total 786,299,834.06 130,778,184.48 412,018,072.07 65,049,361.71
（3）Deferred tax assets or liabilities after offset shown on a net offsetting basis
Unit: RMB
Deferred tax assets and
Deferred tax assets and
Closing balance of liabilities offset Opening balance of
liabilities offset
Items deferred tax assets or amount at the deferred tax assets or
amount at the end of
liabilities after offset beginning of the liabilities after offset
the balance amount
balance amount
Deferred tax assets 137,808,879.28 88,952,931.69
Deferred tax liabilities 130,778,184.48 65,049,361.71
（4）Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 55,823,915.76 36,799,162.90
Provision for inventory write-down 26,934,726.68 22,913,416.12
Deductible losses of subsidiaries 24,790,389.63 97,583,268.62
Provision for fixed assets impairments 68,694.52
Provision for intangible assets impairments 3,862,456.71 4,129,606.66
Floating loss on derivatives 7,639,957.91
The share-paid remuneration without pre-tax deduction calculated
11,139,485.50 1,840,976.14
according to the accounting standard
Investment losses recognized by the equity method 4,319,616.68 3,322,259.80
Total 134,510,548.87 166,657,384.76
214
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
（5）Deductible losses of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Maturity years Closing balance Opening balance Remarks
Year 2020 770,856.07
Year 2021 14,131,496.37
Year 2022 23,008,626.48
Year 2023 24,053,673.84
Year 2024 17,510,655.24
Year 2025 445,585.90
Year 2028 10,478,078.42 10,478,078.42
Year 2029 7,488,066.67 7,629,882.20
Year 2030 6,378,658.64
Total 24,790,389.63 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
Advanced payment
for assets 251,509,127.08 251,509,127.08 179,238,257.09 179,238,257.09
purchasing
Total 251,509,127.08 251,509,127.08 179,238,257.09 179,238,257.09
Other remarks:
20. Short-term borrowings
（1）Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 730,000,000.00
Credit borrowings 20,000,000.00
Overseas loan under domestic guarantee 362,698,500.00 562,083,652.90
Accrued interest 389,796.60 3,526,919.17
215
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Total 383,088,296.60 1,295,610,572.07
Remarks on categories of short-term borrowings:
21. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 7,939,957.91 126,364.40
Total 7,939,957.91 126,364.40
Other remarks:
22. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 1,238,574,463.73 1,130,668,415.32
Total 1,238,574,463.73 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) 2,184,050,911.51 1,538,694,359.81
1 to 2 years 88,579,882.54 36,247,361.15
2 to 3 years 1,289,268.11 7,254,952.39
Over 3 years 5,741,693.81 5,567,079.27
Total 2,279,661,755.97 1,587,763,752.62
24. Advances received
（1）Details of advances received
Unit: RMB
Items Closing balance Opening balance
Advance collection of asset package
10,000,000.00
disposal funds
216
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Total 10,000,000.00
25. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Advance payment for goods 42,581,607.67 23,453,218.32
Total 42,581,607.67 23,453,218.32
Reasons for significant changes in the carrying amount of contract liabilities during the reporting period
26. Employee benefits payable
（1）Details of employee benefits payable
Unit: RMB
Opening Increased in current Decreased in current
Items Closing balance
balance period period
Ⅰ. Short-term employee benefits 221,838,334.79 1,697,764,479.73 1,636,901,323.09 282,701,491.43
Ⅱ. Post-employment benefits - defined
3,701,568.23 36,896,982.26 37,710,409.14 2,888,141.35
contribution plan
Ⅲ. Termination benefits 3,457,580.80 2,815,279.48 2,556,579.07 3,716,281.21
Total 228,997,483.82 1,737,476,741.47 1,677,168,311.30 289,305,913.99
（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 203,198,192.24 1,383,935,013.63 1,322,258,453.89 264,874,751.98
subsidy
2. Employee welfare
2,134,102.51 75,651,111.90 77,785,214.41
fund
3. Social insurance
11,162,051.71 96,951,334.31 97,705,345.21 10,408,040.81
premium
Including:
2,023,459.75 27,798,779.14 27,533,189.44 2,289,049.45
Medicare premium
211,099.29 1,552,995.84 1,507,314.10 256,781.03
Occupational injuries
217
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
premium
233,674.66 585,303.76 702,538.82 116,439.60
Maternity premium
Overseas social
8,693,818.01 67,014,255.57 67,962,302.85 7,745,770.73
security contributions
4. Housing provident
265,855.34 28,489,899.73 28,755,755.07
fund
5. Trade union fund
and employee 104,574.42 18,344,132.93 17,224,543.29 1,224,164.06
education fund
8、Dispatching
3,511,341.29 90,298,597.57 90,349,659.22 3,460,279.64
remuneration
9、Cash stock
1,462,217.28 4,094,389.66 2,822,352.00 2,734,254.94
appreciation option
Total 221,838,334.79 1,697,764,479.73 1,636,901,323.09 282,701,491.43
（3）Details of defined contribution plan
Unit: RMB
Opening Increased in current Decreased in current Closing
Items
balance period period balance
1. Basic endowment insurance
3,584,148.09 35,696,556.05 36,509,160.79 2,771,543.35
premium
2. Unemployment insurance
117,420.14 1,200,426.21 1,201,248.35 116,598.00
premium
Total 3,701,568.23 36,896,982.26 37,710,409.14 2,888,141.35
Other remarks:
27. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
VAT 14,647,359.92 12,303,529.64
Enterprise income tax 33,105,141.57 27,169,457.87
Individual income tax 5,797,449.67 6,570,153.06
Urban maintenance and construction tax 2,283,772.47 2,004,384.14
Education surcharge 1,207,595.10 1,098,720.52
Local education surcharge 717,275.16 623,676.41
218
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Housing property tax 14,503,893.38 5,263,984.54
Land use tax 2,162,780.06 2,277,425.60
Local foundation for water works 60,119.04 6,051.60
Others 522,755.69 875,224.37
Total 75,008,142.06 58,192,607.75
Other remarks:
28. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividend payable 1,772,750.00
Other payables 270,888,400.58 159,464,464.88
Total 270,888,400.58 161,237,214.88
（1）Dividend payable
Unit: RMB
Items Closing balance Opening balance
Dividend of restricted shares 1,772,750.00
Total 1,772,750.00
Other remarks, include significant dividend payable with age over one year，should disclose the reasons for the
non-payment
（2）Other payables
1）Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 145,063,690.00 57,578,920.00
Freight and miscellaneous charges 72,117,058.15 39,930,705.16
Product warranty fee 2,757,036.90 3,114,096.06
Guarantee deposit 6,564,169.23 18,044,694.61
Rent and property fee 7,877,975.71 2,609,059.40
Compensation for product quality loss 3,889,429.08 1,125,611.68
Collection of talent awards 1,320,000.00 1,969,150.29
Others 31,299,041.51 35,092,227.68
219
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Total 270,888,400.58 159,464,464.88
Other remarks
Refer to the "Inventory Shares" in the notes to this financial report for the repurchase obligations of restricted
shares.
29. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Overseas loan under domestic guarantee 130,498,000.00
Guaranteed borrowings 222,000,000.00
Accrued interest 55,923.87 228,097.22
Total 130,553,923.87 222,228,097.22
Other remarks:
30. Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 1,380,000,000.00
Overseas loan under domestic guarantee 326,142,884.74 392,371,834.47
Accrued interest 1,776,110.13 510,445.62
Total 1,707,918,994.87 392,882,280.09
Remarks on categories of long-term borrowings:
Other remarks, including interest rate ranges
31. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 90,336,083.27 94,235,857.77
Total 90,336,083.27 94,235,857.77
（1）Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
220
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Payables for financial leasing 89,432,221.08 92,607,634.64
Stock appreciation rights deposit 903,862.19 1,628,223.13
Other remarks:
Payables for financial leasing
Remaining lease term Current period cumulative Preceding period comparative
Within 1 year(including 1 year) 6,417,433.10 9,515,311.20
1 to 2 years 10,274,197.36 3,752,011.15
2 to 3 years 10,274,197.36 10,005,979.99
Over 3 years 70,534,422.75 78,699,036.81
Subtotal 97,500,250.57 101,972,339.15
Less: Unrecognized financing charges 8,068,029.49 9,364,704.51
Subtotal 89,432,221.08 92,607,634.64
32. Provisions
Unit: RMB
Items Closing balance Opening balance Reasons for balance
Pending lawsuit 2,638,000.00
Total 2,638,000.00 --
Other remarks，Including the relevant significant assumptions and estimates of the significant provisions:
33. Deferred income
Unit: RMB
Opening Increased in current Decreased in current Reasons for
Items Closing balance
balance period period balance
Government grants 82,537,550.43 76,420,792.64 18,853,006.64 140,105,336.43
Total 82,537,550.43 76,420,792.64 18,853,006.64 140,105,336.43 --
Other remarks:
34. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction fund 28,782,218.09 32,512,629.00
Long-term employee rights protection
51,616,679.63 49,276,299.52
payment
Total 80,398,897.72 81,788,928.52
Other remarks:
221
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
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 December 31,2020, the
accumulated amount of hedging and written-off of engineering agent construction fund and project expense was
RMB 43.2478 million，and the amount to be written-off at the end of the period was RMB 28.7822 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; one-time welfare
compensation for retirement, disability and death. The amount of such liabilities is estimated and determined by
an independent actuary.
35. Share capital
Unit: RMB
Changed amount of current period（+/-）
Opening balance Issue of Bonus Reserve transferred Closing balance
Others Subtotal
new shares shares to shares
Total
2,765,657,898.00 826,675,080.00 -731,510.00 825,943,570.00 3,591,601,468.00
shares
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 Approved by the Company’s shareholders meeting, repo and write-down of 731,510 shares of equity
incentive restricted shares that have not met unlock condition.
36. Capital reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Capital premium
970,924,083.94 11,129,040.00 882,412,402.43 99,640,721.51
（Share premium）
Other capital reserve 119,875,938.12 107,029,814.59 11,129,040.00 215,776,712.71
Total 1,090,800,022.06 118,158,854.59 893,541,442.43 315,417,434.22
Other remarks, including changes and reasons in the current period:
Reasons for the change of increase or decrease in current period:① Due to transfer capital reserve to share
capital，share premium decreased RMB 826,675,080.00；②The company grants restricted stock to employees in
the form of inventory stock repurchased from the secondary market ， share premium decreased RMB
222
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
49,264,050.00；③ Equity Incentive Restricted Shares unlock 4,988,880 shares this period，the corresponding
accumulative compensation paid by shares is RMB 11,129,040.00，a premium on the share capital transferred in
such amount from other capital reserves；④ Repo and cancellation of equity incentive restricted shares that have
not met the unlock condition，share premium decreased RMB 3,452,414.20；⑤ Other capital reserve increased
RMB 72,810,130.99 due to the confirmation of share-based payment remuneration.；⑥The available income tax
benefit, due to the expected tax cost of equity incentive restricted shares that are no unlockable exceeds
accounting cost, the closing balance was RMB 34,219,683.60 higher than the opening balance, other capital
reserve and deferred tax assets increased such amount；⑦Due to transaction for equity，share premium decreased
RMB 3,020,858.23, refer to the notes to the financial report.
37. 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 33,033,360.00 145,063,690.00
Repo shares 304,327,351.34 167,907,300.00 136,420,051.34
Total 363,781,151.34 118,643,250.00 200,940,660.00 281,483,741.34
Other remarks, including changed amount of the current period and movement reason:
(1) Restricted shares
①In current period，the Company granted 12.045 million restricted shares to incentive objects with the repo
shares from the secondary market, 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.
②Equity incentive restricted shares 2,952,000 shares this period，the grant price was RMB 8.37 per share，the
unlocked amount is RMB 24,708,240.00. Treasury shares and related liabilities for repo obligation decreased such
amount.
③June 2020 and September 2020，The company implemented the 2019 annual equity distribution and the 2020
semi-annual equity distribution，the dividend of the not unlocked portion of the equity incentive restricted shares
is RMB 4,141,196.00，suspended by the company. At the same time，treasury shares and related liabilities for repo
obligation decreased such amount.
④Repo and cancellation of equity incentive restricted shares that have not met the unlock condition，treasury
shares decreased RMB4,183,924.00.
(2) Repo shares
In current period, the Company granted 12,045,000 shares of restricted stock to incentive recipients based on
inventory stock. Repo shares decreased RMB 167,907,300.00.
38. Other comprehensive income (OCI)
Unit: RMB
Items Opening Changed amount of the current period Closing
223
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
balance Less: balance
Less: OCI
OCI Attributable Attributable
Current carried Less:
carried to to
period forward incom
forward the parent Non-controlli
cumulative transferred e tax
transferre Company ng
before to expens
d to after interest
income tax undistribut e
profit or tax after tax
ed profit
loss
Items to be
reclassified
-39,332,748. -50,292,214. -50,292,214. -89,624,962.
subsequently
50 11 11 61
to profit or
loss
-39,332,748. -50,292,214. -50,292,214. -89,624,962.
Translation
50 11 11 61
reserves
Other
comprehensi -39,332,748. -50,292,214. -50,292,214. -89,624,962.
ve income in 50 11 11 61
total
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:
39. Surplus reserve
Unit: RMB
Items Opening balance Increased in current period Decreased in current period Closing balance
Statutory surplus reserve 533,401,562.81 78,070,994.08 611,472,556.89
Discretionary surplus reserve 8,681,137.20 8,681,137.20
Reserve fund 17,813,919.38 17,813,919.38
Total 559,896,619.39 78,070,994.08 637,967,613.47
Remarks on surplus reserve, including movement in current period and the reason for changes:
This period increased by RMB 78,070,994.08，According to the parent company's current net profit 10% of
the statutory surplus reserve.
40. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance before adjustment at the end of the previous period 5,278,392,288.84 4,488,881,759.86
224
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Add: Increase due to adjustment (or less: decrease) 8,359,634.19
Opening balance after adjustment 5,278,392,288.84 4,497,241,394.05
Add: Net profit attributable to shareholders of the parent Company for current year 1,462,158,821.57 1,421,204,236.13
Less: Appropriation of statutory surplus reserve 78,070,994.08 110,933,454.84
Payable dividends on ordinary shares 771,563,408.50 529,119,886.50
Closing balance 5,890,916,707.83 5,278,392,288.84
41. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 11,665,371,918.47 8,081,530,851.82 10,876,865,236.86 7,570,528,297.31
Other operations 444,461,449.97 418,860,470.45 410,624,205.37 376,316,148.52
Total 12,109,833,368.44 8,500,391,322.27 11,287,489,442.23 7,946,844,445.83
After deducting non-recurring profit or loss by audit, whether the net profit is negative or not
□ Applicable √ Not Applicable
Other remarks
42. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 26,020,701.95 26,638,165.64
Education surcharge 13,060,313.39 13,886,087.61
Housing property tax 19,644,211.36 21,934,182.81
Land use tax 3,415,856.97 9,007,858.24
Stamp duty 2,650,817.59 3,334,108.73
Local education surcharge 8,919,791.12 9,220,983.88
Local foundation for water works 596,652.81 642,593.41
Others 3,665,075.62 7,647,358.71
Total 77,973,420.81 92,311,339.03
Other remarks
43. Selling expenses
Unit: RMB
225
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Items Current period cumulative Preceding period comparative
Labor cost 185,383,982.72 187,342,391.33
Warehousing, freight and miscellaneous
298,383,939.51 240,711,888.21
charges
Entertainment expense 38,123,695.62 40,239,474.17
Travel expense 16,841,187.92 43,210,204.21
Market maintenance fee 41,332,674.93 40,227,423.35
Advertising expense 12,803,945.68 13,634,700.98
Others 10,085,332.79 23,181,371.91
Total 602,954,759.17 588,547,454.16
Other remarks:
44. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 400,277,866.64 325,762,128.67
Share-based payment remuneration 72,810,130.99 19,072,589.52
Depreciation and amortization expense 96,201,760.17 84,611,377.76
Office expense 94,094,129.08 87,201,138.67
Intermediary organ expense 48,741,873.10 39,435,559.80
Entertainment expense 14,907,529.66 15,337,269.91
Vehicle expense 10,658,851.78 8,374,929.19
Sporadic renovation expense in the park 17,734,954.44 5,850,964.35
Security fund for the disabled 2,441,941.61
Others 6,215,391.41 10,135,162.35
Total 764,084,428.88 595,781,120.22
Other remarks:
45. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 291,552,480.55 268,606,916.42
Material and power expense 136,062,761.46 169,349,876.66
Depreciation and amortization expense 31,108,149.42 27,393,695.99
226
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Mold manufacturing expense 30,480,247.99 23,688,085.36
Travel expense 3,051,460.51 7,661,182.16
Royalties 4,865,282.70 3,458,424.26
Outsourcing R&D expense 841,185.47 3,958,534.23
Others 20,439,795.53 27,895,620.91
Total 518,401,363.63 532,012,335.99
Other remarks:
46. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 64,733,993.15 54,050,078.51
Interest income -52,233,256.57 -29,496,046.87
Bank financing fee 1,950,351.25 2,102,904.85
Cash discount -2,528,801.21 -3,143,982.74
Exchange gains or losses 112,675,905.53 -35,510,776.78
Others 4,261,901.49 4,225,003.96
Total 128,860,093.64 -7,772,819.07
Other remarks:
47. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government grants 150,308,983.80 101,880,138.31
Including: VAT refund of civil welfare
10,848,552.90 11,634,556.01
enterprises
VAT refund on software
5,359,348.90 3,934,430.81
products in excess of tax burden
Handling fees for withholding individual
1,246,912.65 92,329.55
income tax
Total 151,555,896.45 101,972,467.86
48. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
227
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Investment income from long-term equity
2,199,442.47 1,418,182.87
investments under equity method
disposal of long-term equity investments -4,100,413.03
Investment income of bank financing
46,589,043.29 41,123,586.63
products
Gains and losses on settlement of foreign
19,642,289.10 837,129.75
exchange contract
Gains and losses on settlement of futures
29,117,946.22 -15,653,119.67
contracts
Bill discount interest -4,369,430.89 -2,407,426.89
Other 17,194.75
Total 89,078,877.16 25,335,547.44
Other remarks:
49. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of bank financing
-10,786,528.53 12,526,390.31
products
Floating income of futures contracts 7,260,487.69 8,677,764.72
Floating income of foreign exchange
35,373,956.60 6,702,192.15
contract
Total 31,847,915.76 27,906,347.18
Other remarks:
50. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -28,677,382.30 -3,374,126.64
Total -28,677,382.30 -3,374,126.64
Other remarks:
51. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
228
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Ⅱ. Inventory write-down loss and
contract performance cost impairment -58,672,538.84 -27,895,239.50
loss
Total -58,672,538.84 -27,895,239.50
Other remarks:
52. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of fixed assets -486,378.33 278,783.69
53. Non-operating revenue
Unit: RMB
Current period Preceding period Amount recorded into the current
Items
cumulative comparative non-recurring profit and loss
Exempted payment 3,090,050.86 5,479,565.67 3,090,050.86
Compensation and penalty
1,056,661.41 905,086.14 1,056,661.41
income
Gains from retirement of
84,161.06 43,110.17 84,161.06
fixed assets
Others 824,606.49 364,521.14 824,606.49
Total 5,055,479.82 6,792,283.12 5,055,479.82
Other remarks:
54. Non-operating expenditures
Unit: RMB
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Losses on retirement of fixed
10,492,379.67 6,409,161.91 10,492,379.67
assets
Litigation for damages 2,638,000.00 2,638,000.00
Donation expenditures 51,555.76 75,428.60 51,555.76
Others 1,661,697.75 1,228,530.89 1,661,697.75
Total 14,843,633.18 7,713,121.40 14,843,633.18
Other remarks:
229
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
55. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 185,380,549.14 208,303,742.83
Deferred income tax expenses 33,322,315.46 20,949,726.23
Total 218,702,864.60 229,253,469.06
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Profit before tax 1,692,026,216.58
Income tax expense based on statutory/applicable tax rate 281,618,425.53
Effect of utilization of deductible losses not previously
-46,359.55
recognized as deferred tax assets
Effect of deducible temporary differences or deductible losses
7,966,260.28
not recognized
Effect of prior income tax reconciliation -4,799,245.99
Tax impact of research and development expenses plus
-50,508,344.90
deduction
Impact of restricted stock unlocked tax deduction -14,466,289.89
Adjustment of permanent differences -1,569,237.24
write-off of deferred tax assets previously recognized in
507,656.36
current period
Income tax expenses 218,702,864.60
Other remarks:
56. Other comprehensive income
Please refer to the notes of balance sheet items and other comprehensive income for details.
57. Notes to items of the consolidated cash flow statement
（1）Other cash receipts related to operating activities
Unit: RMB
230
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Items Current period cumulative Preceding period comparative
Government grants 189,256,546.89 96,292,082.24
Net change in restricted funds 22,294,525.74
Interest income 52,233,256.57 29,496,046.87
Rental income 10,255,696.35 10,583,717.33
Guarantee deposit 1,056,661.41 3,820,200.00
Other 733,249.60 12,207,297.84
Total 253,535,410.82 174,693,870.02
The remarks of other cash receipts related to operating activities:
（2）Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 11,123,000.00 5,176,329.03
Guarantee deposit 12,114,845.90 9,307,226.86
Expense payments for the period 669,374,176.12 607,837,864.04
Total 692,612,022.02 622,321,419.93
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 520,254,995.00 1,045,500,000.00
Net change in restricted funds 7,204,442.99 3,384,912.56
Profit on Foreign exchange contract settlement 19,642,289.10
Profit on Futures contract settlement 29,117,946.22
Deposit of land transfer 5,055,525.00
Withdraw call loans 2,000,000.00
Total 576,219,673.31 1,055,940,437.56
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
231
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Payments for purchasing bank financing
289,200,000.00 4,608,043.00
products
Net change in restricted funds 3,929,071.15
Loss on foreign exchange contract
18,623,937.92
settlement
Loss on futures contract settlement 689,383.44
Call loans 2,000,000.00
Total 289,200,000.00 29,850,435.51
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
Disposal of part of the subsidiary's
222,517.59 5,109,000.00
equity
Net change in restricted funds 24,311,782.55 57,855,624.87
Total 24,534,300.14 62,964,624.87
The remarks of other cash payments related to financing activities:
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Repo shares expenses 2,309,044.00 276,250,709.93
Repayment of finance lease 4,472,088.58 9,049,906.21
Bank financing charges 1,950,351.25 2,102,904.85
Finance lease interest expenses 1,296,675.02 1,403,481.08
Expenses for acquiring non-controlling
9,238,318.85
interest in subsidiaries
Payment of stock appreciation right
724,360.94 1,438,316.05
deposit
Total 10,752,519.79 299,483,636.97
The remarks of other cash payments related to financing activities:
232
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
58. 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 1,473,323,351.98 1,433,815,038.76
Add: Provision for assets impairment
87,349,921.14 31,269,366.14
loss
Depreciation of fixed assets, oil
398,438,067.60 342,878,543.15
and gas assets, productive biological assets
Amortization of right-of-use assets
Amortization of intangible assets 20,558,264.41 21,512,188.24
Amortization of Long-term prepayments 5,698,329.34 7,179,778.92
Loss on disposal of fixed
assets, intangible assets and other 486,378.33 -278,783.69
long-term assets (Less: gains)
Loss on retirement of fixed
10,408,218.61 6,366,051.74
assets (Less: gains)
Losses on changes in fair value
-31,847,915.76 -27,906,347.18
(Less: gains)
Financial expenses (Less: gains) 85,662,587.59 56,152,983.36
Investment losses (Less: gains) -93,448,308.05 -25,335,547.44
Decrease of deferred tax assets
-14,636,264.19 -16,761,875.13
(Less: increase)
Increase of deferred tax liabilities
65,728,822.77 32,217,777.42
(Less: decrease)
Decrease of inventories (Less:
-188,213,271.68 -181,755,639.30
increase)
Decrease of operating receivables
-817,805,253.81 82,864,778.13
(Less: increase)
Increase of operating payables
1,012,830,723.84 113,378,878.02
(Less: decrease)
Others 72,810,130.99 24,566,413.46
Net cash flows from operating activities 2,087,343,783.11 1,900,163,604.60
2. Significant investing and financing -- --
233
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
activities not related to cash receipts and
payments:
Conversion of debt into capital
Convertible bonds due within one
year
Fixed assets leased in under finance
leases
3. Net changes in cash and cash
-- --
equivalents:
Cash at the end of the period 3,400,144,038.54 2,553,783,015.01
Less: Cash at the beginning of the
2,553,783,015.01 1,164,542,861.48
period
Add: Cash equivalents at the end of
the period
Less: Cash equivalents at the
beginning of the period
Net increase of cash and cash
846,361,023.53 1,389,240,153.53
equivalents
（2）Net cash receipts from disposal of subsidiaries in current period
Unit: RMB
金额
Cash and cash equivalents received in current period for
6,562,658.15
subsidiary disposal in current period
Including: --
Qingdao Debaiyi Refrigeration Equipment Co. Ltd. 6,562,658.15
Less: Cash and cash equivalents held by subsidiaries on which the
6,272,468.97
Company lost control
Including: --
Qingdao Debaiyi Refrigeration Equipment Co. Ltd. 6,272,468.97
Including: --
Net cash receipts from disposal of subsidiaries in current period 290,189.18
Other remarks:
（3）Composition of cash and cash equivalents
Unit: RMB
234
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Items Closing balance Opening balance
Ⅰ . Cash 3,400,144,038.54 2,553,783,015.01
Including: Cash on hand 232,265.51 417,814.58
Cash in bank that can be
3,399,911,773.03 2,553,365,200.43
readily drawn on demand
Ⅲ. Cash and cash equivalents at end of
3,400,144,038.54 2,553,783,015.01
year
Other remarks:
On December 31, 2020，restricted use of cash and bank balances includes margin deposits 46,093,170.51
yuan 、 Litigation freeze deposit 11,123,000.00yuan and Deposit in securities and futures institutions
32,327,359.09yuan，totals 89,543,529.60 yuan. Such cash and bank balances are not readily available for payment
and do not belong to cash and cash equivalents.
（4）Amount of endorsed acceptance not involving cash receipts and payments
Items Current period cumulative
Amount of endorsed acceptance 112,518,677.57
Including: Payment for operating activities 109,630,824.74
Payment for investment activities 2,887,852.83
59. Assets with restriction on ownership or use rights
Unit: RMB
Carrying amount at the end of the
Items Cause of restriction
period
Guarantee deposit 、Margin deposit with
Cash and Bank Balances 89,543,529.60 a futures institution and litigation freeze
deposit
Notes receivable 1,608,722,846.32 Pledge financing
Total 1,698,266,375.92 --
Other remarks:
Items Carrying amount at the end of the period Cause of restriction
Cash and Bank Balances 46,093,170.51 Guarantee deposit
32,327,359.09 Margin deposit with a futures institution
11,123,000.00 litigation freeze deposit
Subtotal 89,543,529.60
235
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
60. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Closing balance in Exchange rate RMB equivalent
Items
foreign currencies
Cash and Bank Balances -- --
Including: USD 111,089,210.06 6.5249 724,845,986.72
EUR 43,167,466.15 8.0250 346,418,915.85
Other currencies 59,010,905.15
Subtotal 1,130,275,807.72
Accounts receivable -- --
Including: USD 154,439,692.02 6.5249 1,007,703,546.46
EUR 34,569,590.53 8.0250 277,420,964.00
Other currencies 74,178,308.22
Subtotal 1,359,302,818.68
Long-term borrowings -- --
Including: USD 32,166,620.38 6.5249 209,883,981.32
EUR 14,530,450.00 8.0250 116,606,861.25
Subtotal 326,490,842.57
Held-for-trading financial assets
Including: USD 6,396,683.63 6.5249 41,737,721.02
Subtotal 41,737,721.02
Notes receivable
Including: JPY 203,642,687.00 0.0632 12,877,548.96
Subtotal 12,877,548.96
Other receivables
Including: USD 686,535.44 6.5249 4,479,575.09
EUR 150,354.70 8.0250 1,206,596.47
Mexican peso 33,932,763.37 0.3280 11,130,591.11
Other currencies 2,237,538.98
Subtotal 19,054,301.65
Long-term receivable
Including: EUR 190,000.00 8.0250 1,524,750.00
236
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Subtotal 1,524,750.00
Short-term borrowings
Including: USD 15,000,000.00 6.5249 97,873,500.00
EUR 33,047,116.66 8.0250 265,203,111.20
Subtotal 363,076,611.20
Derivative financial liabilities
Including: USD 1,170,892.72 6.5249 7,639,957.91
Subtotal 7,639,957.91
Accounts payable
Including: USD 11,575,948.70 6.5249 75,531,907.67
EUR 13,420,576.38 8.0250 107,700,125.45
Other currencies 18,382,422.89
Subtotal 201,614,456.01
Other payables
Including: USD 2,771,121.00 6.5249 18,081,287.41
EUR 1,606,544.91 8.0250 12,892,522.90
Other currencies 9,528,416.32
Subtotal 40,502,226.63
Non-current liabilities due within
one year
Including: USD 20,008,570.84 6.5249 130,553,923.87
Subtotal 130,553,923.87
Long-term payables
Including: USD 47,180.00 6.5249 307,844.78
EUR 11,209,906.00 8.0250 89,959,495.65
Other currencies 68,742.84
Subtotal 90,336,083.27
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, Euro, Japanese yen, Polish zloty, Mexican pesos, etc. are used as the
standard reporting currency.
237
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
61. Government grants
（1）Details
1) Government grants related to assets
Unit: RMB
Items Opening Increased in The amount recorded Closing balance Related to
balance current period as other income in assets/related
current period to
income
Grant for project of an annual output of 4,898,000.16 2,448,999.96 2,449,000.20 Related
15 million commercial refrigeration and to assets
air-conditioning automatic control
components
Special fund grant for multistory factory 5,215,120.26 219,986.16 4,995,134.10 Related
buildings of small and medium-sized to assets
enterprises
Grant for innovation ability construction 3,750,000.12 624,999.96 3,125,000.16 Related
project of National Enterprise Technology to assets
Center
Grant for energy-saving project with an 3,051,396.55 910,570.80 2,140,825.75 Related to
annual output of 35 million sets of L-type assets
four-way reversing valve for air
conditioners
Grant for technical transformation project 3,032,000.00 758,000.00 2,274,000.00 Related to
of newly increased 800000 sets of heat assets
exchanger per year
Grant for the technical transformation 2,760,000.08 552,000.00 2,208,000.08 Related to
project with an annual output of 2 million assets
sets of air-conditioning parts
Grant for the industrialization project of 1,443,272.70 1,164,435.00 278,837.70 Related to
20 million refrigeration and air assets
conditioning automatic control
components
Grant for commercial machine 2,030,050.00 738,200.00 1,291,850.00 Related to
micro-channel heat exchanger technical assets
transformation project
Grant for 1 million sets of 6,407,450.08 915,349.92 5,492,100.16 Related to
air-conditioning thermal sensor assets
technology transformation of new energy
vehicle
Grant for an annual output of 2 million 2,295,417.72 515,947.64 1,779,470.08 Related to
sets of high-efficiency energy-saving
238
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
inverter controllers assets
Technical transformation project of 5,008,290.00 1,273,400.00 1,224,830.00 5,056,860.00 Related to
annual output of 100000 large heat assets
exchangers
Grant for air-conditioning component 1,000,000.00 1,000,000.00 Related to
micro-channel heat exchanger project assets
Grant for construction project of public 1,399,999.72 700,000.08 699,999.64 Related to
test and detection service platform for assets
refrigeration components
Grant for the construction project of 960,000.00 480,000.00 480,000.00 Related to
automatic control components for assets
residential air conditioners with an annual
output of 10 million
Grant for pollution source treatment 1,347,391.67 178,900.00 1,168,491.67 Related to
project assets
Grant for construction project of public 641,666.83 384,999.96 256,666.87 Related to
inspection and testing service platform for assets
automobile air conditioning parts
Technical transformation project for the 624,038.60 126,923.04 497,115.56 Related to
production line of energy-saving assets
residential air-conditioning control
components with an annual output of 50
million sets
Grant for construction project of 25 476,000.24 135,999.96 340,000.28 Related to
million sets of new energy-saving and assets
environmental protection variable
frequency air conditioning expansion
valve
Industrial transfer projects and single 450,690.70 144,326.64 306,364.06 Related to
equipment investment grant assets
Comprehensive investment award for 3,343,136.00 357,888.00 2,985,248.00 Related to
technological transformation of industrial assets
enterprises in Wuhu City
Industrial transformation and upgrading, 1,615,259.34 202,424.90 1,412,834.44 Related to
technological transformation and assets
industrial investment
Intelligent factory technological 4,124,999.93 500,000.04 3,624,999.89 Related to
transformation project based on The assets
Internet of Things technology
Grant for the annual production of 11.5 4,200,000.00 14,594,072.64 1,131,004.37 17,663,068.27 Related to
million sets of new energy auto parts assets
project
239
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Four-way reversing valve optimization 733,333.40 159,999.96 573,333.44 Related to
project assets
Policy grant for Wuhu City's strong 795,000.00 90,000.00 705,000.00 Related to
industrial base and manufacturing strong assets
province
Annual production of 3 million 816,750.00 99,000.00 717,750.00 Related to
self-circulating superconducting plates assets
technology project
Comprehensive award and compensation 2,218,666.33 275,964.24 1,942,702.09 Related to
for investment in technological assets
transformation of industrial enterprises
Grant for intelligent manufacturing 2,991,220.00 360,000.00 2,631,220.00 Related to
technology transformation project of 6 assets
million sets of commercial refrigeration
components per year
Grant for technical transformation project 6,628,400.00 828,550.00 5,799,850.00 Related to
of intelligent manufacturing of assets
refrigeration components
Grant for technical transformation project 7,200,000.00 800,000.00 6,400,000.00 Related to
of 30 million sets of high efficiency assets
energy saving refrigeration and air
conditioning control components
Grant for an annual output of 7.3 million 1,080,000.00 39,300,000.00 40,380,000.00 Related to
sets of new energy vehicle thermal assets
management system components
technical transformation
Grant for technical transformation project 12,116,100.00 100,967.50 12,015,132.50 Related to
for the high efficiency and energy saving assets
refrigeration and air conditioning control
components with an annual output of 30
million sets
Grant for technical transformation project 1,125,100.00 9,375.83 1,115,724.17 Related to
for the commercial refrigeration control assets
components with an annual output of 12
million sets
Grant for equipment of New 1,317,620.00 43,912.68 1,273,707.32 Related to
technological transformation for assets
industrialization
Technical transformation project of large 6,694,500.00 669,450.00 6,025,050.00 Related to
heat exchanger with annual output of assets
700,000 sets
Subtotal 82,537,550.43 76,420,792.64 18,853,006.64 140,105,336.43
240
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
2) Government grants related to income and used to compensate relevant cost, expenses or losses
Unit: RMB
Items Current period cumulative Financial Report
Items
Awards for major industrial investment projects 41,560,300.00 Other income
Subsidy of overseas COVID-19 13,558,741.13 Other income
Refund of unemployment insurance expenses 10,341,885.75 Other income
VAT refund of civil welfare enterprises 10,848,552.90 Other income
VAT refund on software products in excess of tax burden 5,359,348.90 Other income
Award of enterprise R&D investment 6,713,693.72 Other income
Award of industry support fund 5,840,830.00 Other income
Enterprise operation development reward 4,050,000.00 Other income
Energy saving and consumption reduction and environmental protection 4,601,440.00 Other income
subsidies
Talent introduction and job stabilization subsidies 3,381,598.79 Other income
Subsidy and award of technological innovation and entrepreneurship 6,708,500.00 Other income
Reward for the development of industrial informatization 3,411,500.00 Other income
Special funds for foreign trade and economic development 2,078,801.00 Other income
Award of urban land use tax policy 1,659,233.76 Other income
Patent subsidy for enterprises 1,154,880.00 Other income
Innovation and Development Award 200,000.00 Other income
Award of logistics Development Support 314,100.00 Other income
Other 9,672,571.21 Other income
Subtotal 131,455,977.16
(2)The amount of government grant included in the profit or loss statement in the current period is RMB
150,308,983.80.
62. Others
Ⅷ. Changes in the consolidation scope
1. Disposal of subsidiaries
Whether there is one-time disposal involving loss of control over a subsidiary
√Applicable □ Not Applicable
Unit: RMB
Subsid Equity Equity Equity Loss Deter Differe Propor Carryi Fair Gains/ Deter Chang
241
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
iaries dispos dispos dispos of minati nce tion of ng value Losses minati es in
al al al control on betwee remain amoun of on fair on other
consid propor metho date basis n ing t of remain value metho compr
eration tion d for dispos equity remain ing remeas d and ehensi
(%) loss of al at the ing equity ureme major ve
control consid loss of equity at the nt of assum incom
date eration control at the loss of remain ption e/equit
and date loss of control ing on fair y
net control date equity value related
assets date of to
attribu remain former
table ing subsidi
to the equity ary’s
Comp at the equity
any at loss of invest
the control ment
consol date transfe
idated rred to
financi invest
al ment
statem incom
ents e
level
Compl
ete the
Qingd
registr
ao
ation
Debaiy 4/5000
proced
i Agree
Decem ures
Refrig 6,562, 70.00 ment -4,098,
ber 2, for 0.00%
eration 658.15 % to 327.44
2020 industr
Equip dispos
ial and
ment al
comm
Co.
ercial
Ltd.
change
s
Other remarks:
Whether there is disposal of subsidiaries in stages involving loss of control in current period
□Applicable√ Not Applicable
2. 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.
242
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
1．Entities brought into the consolidation scope
Entity name Equity acquisition Equity Actual capital contribution at Capital contribution
method acquisition date the end of the period proportion (%)
Zhejiang Xianji Intelligent Technology
New investment 2020-09-10 34.6 million yuan 100%
Co., Ltd
Sanhua Mexico Investment Co., Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial
New investment 2020-10-09 68.29 million yuan 100%
Refrigeration Co. Ltd
Shaoxing Sanhua Automobile Thermal
New investment 2020-12-03 0.00yuan 100%
Management Technology Co. Ltd
2．Entities excluded from the consolidation scope
Unit: RMB
Equity disposal Equity disposal Disposal-date net Net profit from the period
Entities
method date assets beginning to the disposal date
Hangzhou Sanhua Home Appliance Liquidation
2020-05-18 147,448.25 -78,092.41
Thermal Management System Co., Ltd cancellation
Liquidation
Aweco Appliance (Shanghai) Co., Ltd 2020-06-02 6,669.73 22,351.38
cancellation
Ma 'anshan Sanhua Intelligent Technology Liquidation
2020-08-03 3,907,472.50 -478,491.11
Co., Ltd cancellation
3. Others
Ⅸ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Main operating Place of Holding proportion Acquisition
Subsidy name Business nature
place registration Direct Indirect method
Zhejiang
Sanhua Trading Zhejiang Zhejiang Commerce 100.00% Establishment
Co., Ltd
Zhejiang
Business
Sanhua Climate
combination
and Appliance Zhejiang Zhejiang Manufacture 74.00% 26.00%
under common
Controls Group
control
Co., Ltd.
Zhejiang Zhejiang Zhejiang Manufacture 100.00% Business
243
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Sanhua combination
Automotive under common
Components control
Co., Ltd.
Sanhua
Business
(hangzhou)
combination
Micro Channel Zhejiang Zhejiang Manufacture 100.00%
under common
Heat Exchanger
control
Co., Ltd
Sanhua Business
International combination
Singapore Singapore Commerce 100.00%
Singapore Pte. under common
Ltd control
Remarks on inconsistency between holding proportion and voting rights proportion in subsidiaries:
Basis for the control of an investee while holding its half or less than half voting rights, and the non-control
of an investee while holding its more than half voting rights
Basis for control of significant structured entities brought into the consolidation scope
Basis for determining an entity being acting as an agent or a principal
Other remarks:
The above subsidiaries are significant subsidiaries of the Company.
（2）Significant not wholly-owned subsidiaries
Remarks on inconsistency between holding proportion and voting rights proportion of non-controlling
shareholders in subsidiaries:
Other remarks:
On December 31, 2020，The Company has no Significant not wholly-owned subsidiaries.
2. Transactions resulting in changes in subsidiaries’ equity but without losing control
（1）Changes in subsidiaries’ equity
Date of Holding proportion before Holding proportion after
Subsidiaries
change change change
Xinchang county sitong mechanical and electrical co.
2020-07-31 100% 70%
LTD
As a result of the Company's transfer to minority shareholders of the 30% equity held in Xinchang County
Sitong Electromechanical Co., Ltd. (Hereinafter referred to as Sitong electromechanical), the company's interest
was reduced from 100% to 70%.
244
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
（2）Effect of transactions on non-controlling interest and equity attributable to parent company
Unit: RMB
Items Sitong electromechanical（100% to 70%）
Acquisition costs/Disposal considerations 8,563,752.16
-- Cash 8,563,752.16
Total acquisition costs/disposal considerations 8,563,752.16
Less: Share in subsidiaries’ net assets based on acquired/disposed net assets proportion 11,584,610.39
Balance -3,020,858.23
Including: Capital reserve adjusted -3,020,858.23
Other remarks:
3. Others
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
245
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
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.
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,
notes receivable and accounts receivable.
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 December 31, 2020, the Company has a certain
concentration of credit risk, and 37.57% 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 December 31, 2020, the undiscounted contractual cash flows of the Company’s financial liabilities
listed by maturity date are shown in the following table:
Financial liabilities 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） 384,529,024.72 384,529,024.72
Notes payable 1,238,574,463.73 1,238,574,463.73
Accounts payable 2,279,661,755.97 2,279,661,755.97
246
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Other payable 270,888,400.58 270,888,400.58
Non-current liabilities due within one year（Include interest） 132,518,381.28 132,518,381.28
Long-term borrowings（Include interest） 1,781,690,487.83 1,781,690,487.83
Long-term payables（Include interest） 6,417,433.10 20,548,394.68 70,534,422.75 97,500,250.53
Subtotal 4,312,589,459.38 1,802,238,882.51 70,534,422.75 6,185,362,764.64
(Continued)
Opening balance
Items
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（Include interest） 223,342,263.89 223,342,263.89
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
(III) 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 December 31, 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 December 31, 2020, please refer to “monetary items in foreign currencies” of notes to financial
statements for details in foreign currency financial assets and liabilities.
247
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
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
Recurring fair value measurement -- -- -- --
1.Held-for-trading financial assets 8,990,525.42 408,564,822.89 393,000,000.00 810,555,348.31
Financial assets measured at fair value through profit or loss 8,990,525.42 408,564,822.89 393,000,000.00 810,555,348.31
Debt instrument investments 359,224,861.78 393,000,000.00 752,224,861.78
Derivative financial assets 8,990,525.42 49,339,961.11 58,330,486.53
Total amount of assets constantly measured at their fair
8,990,525.42 408,564,822.89 393,000,000.00 810,555,348.31
values
2. Held-for-trading liabilities 7,939,957.91 7,939,957.91
Derivative financial liabilities 7,939,957.91 7,939,957.91
Total amount of liabilities constantly measured at their fair
7,939,957.91 7,939,957.91
values
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.
248
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
XII. Related party relationships and transactions
1. Parent Company
Holding Voting right
Place of
Parent Company Business nature Registered capital proportion over proportion over
registration
the Company the Company
Sanhua Holding Industrial
Zhejiang Province 660 million yuan 50.46% 50.46%
Group Co., Ltd Investment
Remarks on the parent Company:
As of December 31, 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 interest in other entities of notes to financial statements.
3. Joint ventures and associates of the Company
Please refer to 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
Chongqing Tainuo Machinery Co., Ltd Associates
Qingdao Sanhua jinlifeng Machinery Co., Ltd Associates
Zhongshan Xuanyi Pipe Making Co., Ltd Associates
Other remarks
Joint ventures or associates Abbreviation of associate
Qingdao Sanhua Jinlifeng Machinery Co., Ltd QSJM
Zhongshan Xuanyi Pipe Making Co., Ltd ZXPM
Chongqing Tainuo Machinery Co., Ltd CTMC
4. Other related parties of the Company
Other related parties Other relationships with the Company
Shareholders and under the same control of the parent
Zhejiang Sanhua Green Energy Industrial Group Co., Ltd.
Company
Hangzhou Tongchan Machinery Co., Ltd. under the same control of the parent Company
249
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Hangzhou Sanhua Research Institute Co., Ltd. under the same control of the parent Company
Hangzhou Sanhua International Building 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
Shanghai Sanhua Electric 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
Zhejiang Haoyuan Technology Co., Ltd. under the same control of the parent Company
Ningbo Fuerda Smartech 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 Green Energy Industrial 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
Shanghai Sanhua Electric Co., Ltd SSE
Xinchang County Sanhua Property Management Co., Ltd. XCSP
Ningbo Fuerda Smartech Co., Ltd. NFS
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
Related Content of Current period Approved Over the Transaction Preceding period
parties transaction cumulative Transaction Limit Limit or No comparative
Materials and
HTM 519,318.58 1,500,000.00 81,077.58
mechanical parts
HTM Services 50,000.00 NO 130,682.02
HSRI Water and electricity 115,165.09 30,500,000.00 NO 1,144,787.13
HSRI Materials 14,303.48 1,500,000.00
250
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
ZSGE Utility 2,151,282.58 30,500,000.00 NO 2,333,110.78
ZXPM Materials 9,947,414.32 10,000,000.00 NO 11,884,054.12
QSJM Merchandise 1,702,420.54 2,000,000.00 NO 1,702,846.12
WAT Merchandise 16,601.77 50,000.00 NO 17,327.58
ZHT Merchandise 1,063,598.21 1,500,000.00
ZHT Utility 7,308,466.90 30,500,000.00 NO
Sale of goods and rendering of services
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
SHG Merchandise and Materials 1,080,229.07
SHG Water and electricity 1,871,967.25
CTMC Merchandise 233,517.60
QSJM Materials 291,399.64 12,322.99
HFMT Water and electricity 890,529.83 2,354,827.67
HSRI Water and electricity 919,853.20 3,010,720.73
HSRI Merchandise and Materials 305,509.41 1,805,362.91
HSRI Services 636,792.45
WAT Utility 212,462.82 320,544.07
WAT Merchandise and Materials 1,449.92 228,021.51
WAT Services 59,840.90
ZSGE Water and electricity 1,357,863.17 1,520,785.51
HSIB Merchandise 290,149.69
ZSZR Merchandise 29,990.27 17,388.50
ZHT Water and electricity 95,522.69
ZHT Merchandise 159.29
HTM Water and electricity 42,297.07
Remarks of related transactions related to the purchase and sale of goods and the provision and acceptance of
services
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 and purchase rent, equipment rental, property management, water, electricity
and power, service fee amount of 30.5 million yuan 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 leases
The Company as the lessor：
251
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Unit: RMB
Lessees Types of asset leased Lease income for current period Lease income for the preceding period
SHG Office building 5,309,339.44 5,309,339.44
HFMT Plant 1,022,346.21 849,851.40
WAT Plant 345,223.41 312,302.76
The Company as the lessee：
Unit: RMB
Lessors Types of asset leased Lease expenses for current period Lease expenses for the preceding period
HSRI Office building 1,134,833.52 921,788.57
ZSGE dormitory 80,800.00 80,800.00
ZSGE Plant 405,234.27 17,828.56
Remarks of related party leases
（3）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
Guaranteed parties Amount guaranteed Commencement date Maturity date Whether the guarantee is mature
SHG RMB 1,380,000,000.00 February 7, 2020 October 25, 2022 No
SHG EUR14,500,000.00 July 05, 2019 June 20, 2022 No
SHG USD20,000,000.00 December 24, 2019 December 23, 2021 No
Remarks of related party guarantees
The information in the table does not include related guarantees within the scope of consolidation, nor related
guarantees that have been performed.
（4）Assets transfer and debt restructuring of the related parties
Unit: RMB
Related parties Content of related party transactions Current period cumulative Preceding period comparative
HTM Equipment 21,622,706.86 19,421,679.72
HSRI Equipment 17,393,367.30
（5）Key management’s emoluments
Unit: RMB
252
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Items Current period cumulative Preceding period comparative
Key management’s emoluments 5,950,600.00 5,664,500.00
（6）Other related party transactions
Unit: RMB
Abbreviation of associate Content of transaction Current period cumulative Preceding period comparative
SHG Property income 1,684,018.88 1,684,018.88
Property expenses 847,318.27 254,553.09
ZSGE
Service income 3,849.06 6,943.40
HFMT Property income 461,320.79 379,584.92
HSRI Property expenses 44,752.78 30,483.19
HTM Service income 6,867.92 13,207.55
XCSP Property expenses 2,984.07
In addition，it is affected by the inconsistency between the registered permanent residence of a few
employees and the place of work，there are transactions between related parties that pay employee social
insurance premium and housing accumulation fund on behalf of them. In current period，related parties pay for the
company RMB2,828,941.97，the company pays for the related party RMB3,786.42.
6. Balance due to or from related parties
（1）Receivables
Unit: RMB
Closing balance Opening Balance
Related
Items
parties Book balance Provision for bad Book balance Provision for bad
debts debts
Accounts receivable WAT 376,293.54 18,814.68 62,502.41 3,125.12
Accounts receivable SHG 180,000.00 9,000.00
Accounts receivable QSJM 26,973.19 1,348.66 9,331.56 466.58
Accounts receivable HSRI 18,514.60 925.73 358,962.37 17,948.12
Accounts receivable XCSP 3,372.00 168.60
Advances paid ZXPM 186,974.96
Other receivables SHG 20,000.00 1,000.00
Other non-current assets
HTM 9,122,291.82
（Equipment payment in advance）
（2）Payables
Unit: RMB
253
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Items Related parties Closing balance Opening Balance
Accounts payable HTM 3,883,247.79 4,002,107.32
Accounts payable ZXPM 1,072,110.11
Accounts payable HSRI 266,150.00 266,150.00
Accounts payable QSJM 1,177,838.77
Contract liabilities WAT 1,518.94 2,101.34
Advances received NFS 10,000,000.00
Other payables HFMT 100,000.00 100,000.00
7. Related party commitments
8. Others
XIII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Unit: RMB
Total equity instruments granted in current period 12,045,000.00
Total equity instruments exercised in current period 5,120,700.00
Total equity instruments retired in current period 458,055.00
The adjusted grant price of stock appreciation rights
The range of exercise prices of share options outstanding at the end of is 4.59 yuan, which will be unlocked in batches
the period and the remaining contractual life within 12 months after 36 months from the grant
date.
2018 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is 4.59 yuan, which will
be unlocked in batches within 12 months after 36
The range of exercise prices of other equity instruments at the end of the months after the grant date. 2020 Restricted Stock
period and the remaining contractual life Incentive Plan: The adjusted restricted stock grant
price is RMB 7.36, which will be unlocked in batches
within 12 months after 12 months, 24 months, and 36
months from the grant date.
Other remarks
(1) Restricted stock and stock appreciation right incentive plan implemented in 2018
In September 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.
254
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
In May 2019, the Company implemented the 2018 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 13.429 million shares. The number of stock appreciation rights granted was 461,500
shares, and the grant price per share was RMB 6.25.
In June 2020, the Company implemented the 2019 equity distribution. In September 2020, the company
implemented the 2020 semi-annual 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 17.4577 million shares. The number of stock appreciation rights granted was 599,950 shares, and the grant price
per share was RMB 4.59.
(2) Restricted stock incentive plan implemented in 2020
In February 2020，the Company implemented a restricted stock incentive plan for core employees. Among
them，the number of restricted stocks granted 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. In September 2020, the company
implemented the 2020 semi-annual equity distribution. According to the method stipulated in 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 7.36.
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 date
instruments minus the grant price of the restricted stock.
Determination method for the number of equity instruments
[Note]
expected to vest
Reasons for significant difference between the estimates in
Not applicable
current period and preceding period
Capital reserve accumulated due to equity-settled
97,243,888.18
share-based payment
Total expenses incurred due to equity-settled share-based
72,810,130.99
payment
Other remarks
Note：In 2018, the company initially granted 10.33 million restricted stocks to incentive object. Later, it was
adjusted to 17.4577 million shares due to the annual distribution of equity in 2018 and the annual distribution of
equity in 2019. In 2020, the company initially granted 12.045 million restricted stocks to incentive object. Later, it
was adjusted to 17.4577 million shares due to the annual distribution of equity in 2019. The number is the base，it
will be unlocked year by year in batches at a ratio of 30%:30%:40%. The Company estimates the number of
255
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
exercisable equity instruments on the following 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).
3. Cash-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for the fair value of liability It is calculated based on the closing price of the stock on the balance
incurred by the Company and to be settled in cash or other sheet date after deduction of the adjusted stock appreciation right grant
assets price.
Liabilities incurred due to cash-settled share-based
6,332,840.44
payment
Total expenses incurred due to cash-settled share-based
4,094,389.66
payment
Other remarks
4. Others
XIV. Commitments and contingencies
1. Contingencies
（1）Significant contingencies existing on the balance sheet date
On December 31, 2020，no significant contingent matter needs to be disclosed by the Company.
（2）If no significant 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.
2. Others
XV. Events after the balance sheet date
1. Profit distribution
Unit: RMB
Proposed profits or dividends 895,454,593.00
Profits or dividends declared to be paid after approval 895,454,593.00
256
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
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
identified the reportable segments based on products.
（2）Financial information of the reporting subsection
Unit: RMB
Refrigeration and air-conditioning Auto parts Inter-segment
Items Total
electrical parts business business elimination
Total Operating revenue 964,064.72 246,918.62 1,210,983.34
Total Operating cost 676,459.91 173,579.22 850,039.13
Total assets 1,266,070.50 437,182.57 1,703,253.07
Total liabilities 546,913.43 141,064.36 687,977.79
2. Other remarks
(1) Convertible corporate bonds
In January 2021, The Company has received the "Retification on Approval of Zhejiang Sanhua Intelligent
Controls Co., Ltd.'s Public Issuance of Convertible Corporate Bonds" (CSRC License [2021] No. 168) issued by
China Securities Regulatory Commission. Within 12 months as of the date of approval, the Company may issue
convertible corporate bonds with a total face value of 3 billion yuan to the public.
(2)Financing lease
Please refer to “Fixed assets” of notes to financial statements for details in fixed assets leased in by financing.
The unrecognized financing costs are 8,068,029.49yuan at the end of period and minimum lease payments to be
paid in subsequent years are as follows:
Remaining lease term Amount
Within 1 year(including 1 year) 6,417,433.10
1 to 2 years 10,274,197.36
2 to 3 years 10,274,197.36
Over 3 years 70,534,422.75
Subtotal 97,500,250.57
257
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
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
Categor
Accrue Carrying Accrue Carrying
y
Proport d amount Proport d amount
Amount Amount Amount Amount
ion proport ion proport
ion ion
Receiva
bles
with
provisio 568,926,1 77.05 568,926,1 986,349,01 86.28 986,349,01
n made 07.65 % 07.65 4.75 % 4.75
on an
individu
al basis
Includin
g:
Receiva
bles
with
provisio 169,453,2 22.95 8,472,66 160,980,5 156,790,40 13.72 7,839,52 148,950,88
5.00% 5.00%
n made 30.80 % 1.54 69.26 1.29 % 0.06 1.23
on a
collecti
ve basis
Includin
g:
738,379,3 100.00 8,472,66 729,906,6 1,143,139,4 100.00 7,839,52 1,135,299,8
Total 1.15% 0.69%
38.45 % 1.54 76.91 16.04 % 0.06 95.98
Provision made on an individual basis:
Unit: RMB
Closing balance
Name Book balance Provision for bad Accrued Accrued
debt proportion reason
258
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Zhejiang Sanhua Trading Co., Ltd 391,515,686.85
SANHUA INTERNATIONAL SINGAPORE
91,681,883.29
PTE.LTD.
SANHUA (VIETNAM) COMPANY LIMITED 57,017,505.61
Zhejiang Sanhua Automotive Components Co., Ltd. 13,985,140.95
Other subsidiaries 14,725,890.95
Total 568,926,107.65 -- --
Provision made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Book balance Book balance
Within 1 year 169,453,230.80 8,472,661.54 5.00%
Total 169,453,230.80 8,472,661.54 --
The remarks 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
Phase I Phase II Phase III Subtotal
Provision for bad debt 12 month expected Lifetime expected credit losses Lifetime expected credit losses
credit losses (credit not impaired) (credit impaired)
Balance on January 1, 2020 7,839,520.06 7,839,520.06
The balance as of January 1, 2020 is
—— —— —— ——
in the current period
--Transferred to phase II
--Transferred to phase III
--Reversed to phase II
--Reversed to phase I
Provision made in the current period 633,141.48 633,141.48
Provision recovered in current period
Provision reversed in current period
Provision written off in current
period
Other changes
Balance on December 31, 2020 8,472,661.54 8,472,661.54
Disclosure by aging
Unit: RMB
Aging Closing balance
259
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Within 1 year (including 1 year) 738,379,338.45
Total 738,379,338.45
（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
Opening Closing
Category Recovered or Write
balance Accrued Others balance
reversed off
Receivables with provision made on a
7,839,520.06 633,141.48 8,472,661.54
collective basis
Total 7,839,520.06 633,141.48 8,472,661.54
Including significant provision for bad debt recovered or reversed amount:
（3）Assets and liabilities arising from transferred but still involved accounts receivable
Other remarks:
Closing balance of top 5 debtors totaled 629,113,983.75yuan, accounting for 85.20% of the total closing
balance of accounts receivable, and provision for bad debts made thereon totaled 4,444,945.40 yuan.
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 348,897,078.11 603,257,516.95
Total 348,897,078.11 603,257,516.95
（1）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 to subsidiaries 329,063,840.37 573,806,364.53
Tax refund receivable 8,536,537.99 15,017,287.01
Guarantee deposit 10,381,285.00 10,381,285.00
Others 1,224,031.39 4,660,439.18
Total 349,205,694.75 603,865,375.72
260
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
2）Provision for bad debt
Unit: RMB
Phase I Phase II Phase III
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,
152,826.34 455,032.43 607,858.77
2020
Balance in current
period on January 1, —— —— —— ——
2020
Provision recovered in
109,437.04 189,805.09 299,242.13
current period
Balance on December
43,389.30 265,227.34 308,616.64
31, 2020
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 43,389.30
1 to 2 years 8,689.84
2 to 3 years 232,704.00
Over 3 years 23,833.50
Total 308,616.64
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
Opening Closing
Category Recovered or Write
balance Accrued Others balance
reversed off
Receivables with provision made on a
607,858.77 299,242.13 308,616.64
collective basis
Total 607,858.77 299,242.13 308,616.64
Including significant provision for bad debt recovered or reversed amount:
Unit: RMB
261
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Debtors Recovered or reversed Way of collection
4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Proportion to the total
Nature of Closing Provision for bad debt
Debtors Age balance of other
receivables balance at the end of the period
receivables
Sanhua (Jiangxi) Self -
Within
control Components Co., Financial aid 50,000,000.00 14.32%
1 year
Ltd.
Wuhu Sanhua Auto-control Within
Financial aid 46,000,000.00 13.17%
Components Co., Ltd 1 year
Shaoxing Shangyu Sanli Within
Financial aid 40,000,000.00 11.45%
Copper Industry Co., Ltd 1 year
Zhongshan Sanhua
Within
Refrigeration Accessories Financial aid 40,000,000.00 11.45%
1 year
Co., Ltd
Wuhu Sanhua Refrigeration Within
Financial aid 40,000,000.00 11.45%
Accessories Co., Ltd 1 year
Total -- 216,000,000.00 -- 61.85%
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
4,515,044,723.75 4,515,044,723.75 4,297,929,280.35 54,000,000.00 4,243,929,280.35
subsidiaries
Investments in
associates and 13,501,505.62 13,501,505.62 12,704,660.71 12,704,660.71
joint ventures
Total 4,528,546,229.37 4,528,546,229.37 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
Investees
balance(Carrying Investments Investments Provision Others (Carrying balance of
262
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
amount) increased decreased for amount) provision
impairment for
impairment
Zhejiang
Sanhua
Automotive 1,977,416,802.97 16,722,173.85 1,994,138,976.82
Components
Co., Ltd.
Sanhua
(Hangzhou)
Micro Channel 635,170,819.48 9,270,319.62 644,441,139.10
Heat Exchanger
Co., Ltd
Zhejiang
Sanhua Climate
& Appliance 310,155,131.25 10,123,137.76 320,278,269.01
Controls Group
Co., Ltd
Sanhua
International 307,379,027.71 906,300.60 308,285,328.31
Inc.
Sanhua
International
454,171,908.17 210,472,602.90 664,644,511.07
Singapore Pte.
Ltd
Wuhu Sanhua
Automatic
Control 150,379,784.89 892,147.77 151,271,932.66
Components
Co., Ltd
Sanhua
(Jiangxi) Self -
control 92,824,141.91 543,247.02 93,367,388.93
Components
Co., Ltd
Xinchang
Sitong
Electrical and 65,444,051.15 759,611.86 19,557,906.39 46,645,756.62
Mechanical
Co., Ltd
Zhejiang
68,290,894.37 68,290,894.37
Sanhua
263
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Commercial
Refrigeration
Co. Ltd
Zhejiang
Sanhua Trading 51,053,113.94 2,691,893.62 53,745,007.56
Co. Ltd
Changzhou
Lanke four-way 35,196,850.59 27,302,805.57 62,499,656.16
valve co., LTD
Hangzhou
Leaderway
47,798,913.83 3,218,640.36 51,017,554.19
Electronics Co.,
Ltd
Shaoxing
Shangyu Sanli
31,930,719.92 596,867.18 32,527,587.10
Copper Industry
Co., Ltd
Zhongshan
Sanhua Air
conditioning
4,885,524.32 196,919.86 5,082,444.18
Refrigeration
Components
Co., Ltd
Wuhan Sanhua
Refrigeration
3,734,983.46 505,207.84 4,240,191.30
Components
Co., Ltd
Zhongshan
Sanhua
Refrigeration 5,163,639.29 735,371.44 5,899,010.73
Components
Co., Ltd
Suzhou Sanhua
Air-Conditioner 8,395,763.86 273,311.78 8,669,075.64
Parts Co.,Ltd
Hangzhou
Sanhua Home
Appliance
16,247,160.09 16,247,160.09
Thermal
Management
System Co., Ltd
264
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Zhejiang
Sanhua Self -
control 32,000,000.00 32,000,000.00
Components
Co., Ltd
Qingdao
Debaiyi
Refrigeration 14,580,943.52 14,580,943.52
Equipment Co.,
Ltd
Total 4,243,929,280.35 353,501,453.40 82,386,010.00 4,515,044,723.75
（2）Investments in associates and joint ventures
Unit: RMB
Changed amount of the current period Closin
Investm Cash g
Opening Adjustme Chan Closing
ent dividend/ balance
balance Investm Investm nt in ges Provisi balance
income profit of
Investees (Carryin ents ents other in on for Oth (Carryin
recogniz declared provisi
g increase decreas comprehe other impair ers g
ed under for on for
amount) d ed nsive equit ment amount)
equity distributi impair
income y
method on ment
Ⅰ. Joint ventures
Ⅱ. Associates
Guochua
ng
Energy
Internet
1,493,71 31,533.7 1,525,25
Innovatio
8.98 8 2.76
n Center
(Guangdo
ng) Co.,
Ltd.
Chongqin
g Tainuo
8,847,72 2,049,17 1,500,000 9,396,90
Machiner
8.00 6.73 .00 4.73
y Co.,
Ltd.
Nanchan 2,335,24 431,896. 1,250,000 1,517,13
g Sanhua 2.16 79 .00 8.95
265
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Jinlifeng
Machiner
y Co.,
Ltd.
Ningbo
Jinlifeng
1,250,00 -187,79 1,062,20
Machiner
0.00 0.82 9.18
y Co.,
Ltd
Qingdao
Sanhua
Jinlifeng
0.00 0.00
Machiner
y Co.,
Ltd.
Zhongsha
n Sanhua
Tainuo 27,971.5 -27,971.
0.00
Machiner 7 57
y Co.,
Ltd.
Xinchang
zhejiang
energy
sanhua
comprehe
nsive
energy
co. LTD
12,704,6 1,250,00 2,296,84 2,750,000 13,501,5
Subtotal
60.71 0.00 4.91 .00 05.62
12,704,6 1,250,00 2,296,84 2,750,000 13,501,5
Total
60.71 0.00 4.91 .00 05.62
（3）Other remarks
Due to the implementation of the enterprise group share payment transactions, the company as a settlement
enterprise，according to the fair value of the granted entity instrument. Confirm equity investments in subsidiaries
(service receivers). At the same time, increase capital reserves 50,111,874.20yuan.
266
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
4. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 4,261,339,025.61 3,143,704,934.36 4,241,261,150.67 3,184,390,923.55
Other operations 255,244,021.84 239,955,604.07 222,135,377.17 218,206,712.02
Total 4,516,583,047.45 3,383,660,538.43 4,463,396,527.84 3,402,597,635.57
Other remarks：
5. Investment income
Unit: RMB
Items Current period Preceding period
cumulative comparative
Investment income from long-term equity investments under cost
174,095,823.76 549,123,531.19
method
Investment income from long-term equity investments under equity
2,298,930.50 2,100,652.42
method
Gains on disposal of long-term equity investments -27,199,644.40 956,707.24
Investment income of bank financing products 13,307,539.55 4,103,178.32
Gains and losses on settlement of futures contracts 17,957,388.89 165,534.20
Gains and losses on settlement of foreign exchange contract -8,360,741.05 163,949.06
Income of fund using fee 17,387,962.74 27,618,295.32
other -43,997.11
Total 189,487,259.99 584,187,850.64
6. R&D expenses
Unit: RMB
Items 2020 2019
Labor cost 101,435,220.21 80,284,612.99
Material and power expense 72,943,704.17 107,351,260.95
Depreciation and amortization expense 7,931,315.36 9,801,734.85
Mold manufacturing expense 2,063,576.52 1,192,844.56
Travel expense 833,067.62 1,863,554.26
Royalties 825,497.30 642,382.70
267
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Outsourcing R&D expense 443,167.38 1,351,326.21
Others 1,882,272.95 7,162,613.15
Total 188,357,821.51 209,650,329.67
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 -14,770,607.27
Government grants included in profit or loss
(excluding those closely related to operating activities
of the Company, satisfying government policies and 134,101,082.00
regulations, and continuously enjoyed with certain
quantity/quota based on certain standards)
Mainly for 1.floating profit from futures hedging
operations, refer to "Notes on Changes in Fair Value and
Investment Income" in this financial report for details.
According to the Measures for the Operation and
Management of Futures Hedge Business，the company
will continue to carry out futures hedging business of
copper, zinc, nickel and other raw materials in 2020，
mainly for customers point price and fixed price futures
Gains on changes in fair value of held-for-trading hedging business. Due to the contract lock quantity is
financial assets, derivative financial assets, consistent with the customer order，and the contract lock
held-for-trading financial liabilities and derivative up price is not higher than the customer lock up price.
financial liabilities, and investment income from Therefore, the future period is now after the merger
disposal of held-for-trading financial assets, 91,394,679.61 (referring to the customer's actual implementation)，the
derivative financial assets, held-for-trading financial company can keep the above customer business profit
liabilities, derivative financial liabilities and other rate stable, to achieve the purpose of hedging. The above
investment, excluding those arising from hedging mentioned clients who carry out futures hedging business
business related to operating activities are all well-known manufacturers at home and abroad
and have good historical credit, the company have not
defaulted since the company implemented the copper
lock mechanism.
2. Based on the internal risk control policy, the
management of the Company has taken several measures
to deal with the exchange rate risk, such as to carry out
forward settlement of foreign exchange and foreign
currency swap business, lock the exchange rate.
268
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Other non-operating revenue or expenditures except
620,065.25
the above items
Other profit or loss satisfying the definition of
1,246,912.65
non-recurring profit or loss
Less: Enterprise income tax affected 19,272,109.42
Non-controlling interest affected 1,770,947.78
Total 191,549,075.04 --
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 (yuan/share)
Weighted average
Profit of the reporting period Basic Diluted
ROE
EPS EPS
Net profit attributable to shareholders of ordinary shares 15.04% 0.41 0.41
Net profit attributable to shareholders of ordinary shares after deducting
13.07% 0.36 0.36
non-recurring profit or loss
3. Financial data variance between financial reporting prepared under domestic and abroad 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
269
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
(1) Weighted average net assets
Weighted by Weighted average net
Changed item in net assets Amount
month assets
Net assets attributable to shareholders of ordinary shares at the beginning of 9,291,632,928.45 12/12 9,291,632,928.45
period
Net profit attributable to shareholders of ordinary shares 1,462,158,821.57 6/12 731,079,410.79
2019 cash dividend -410,148,045.30 7/12 -239,253,026.43
Semi-annual cash dividend in 2020 -355,461,639.20 3/12 -88,865,409.80
Stock incentive restricted shares unlock increased net assets 22,895,712.00 2/12 3,815,952.00
Compensation is paid in equity-settled shares 72,810,130.99 6/12 36,405,065.50
The accounting cost and tax cost of share-based compensation have different 34,219,683.40 6/12 17,109,841.70
calculation caliber, which has an impact on current income tax benefits
Effect of Foreign Currency Translation -50,292,214.11 6/12 -25,146,107.06
Adjustment of capital reserves for equity transactions -3,020,858.23 7/12 -1,762,167.30
Net assets attributable to shareholders of ordinary shares at the end of period 10,064,794,519.57 9,725,016,487.85
(2) Weighted average ROE
Items Symbol Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 1,462,158,821.57
Non-recurring profit or loss attributable to shareholders of ordinary shares B 191,549,075.04
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or C=A-B 1,270,609,746.53
loss
Weighted average net assets D 9,725,016,487.85
Weighted average ROE E=A/D 15.04%
Weighted average ROE after deducting non-recurring profit or loss F=C/D 13.07%
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 1,462,158,821.57
Equity incentive dividend on restricted stock B 4,141,196.00
Net profit attributable to shareholders of ordinary shares after deducting the equity incentive C=A-B 1,458,017,625.57
dividend on restricted stock
Non-recurring profit or loss attributable to shareholders of ordinary shares D 191,549,075.04
Net profit attributable to shareholders of ordinary shares after deducting dividends on restricted E=C-D 1,266,468,550.53
stock and non-recurring profit or loss
270
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Total shares at the beginning of period（Do not consider the unvested repurchase inventory shares） F 2,743,829,802
Capital reserve converted into share capital G 826,675,080
The number of equity incentive restricted stock unreleased in 2018（After transition increase） H 6,658,600
Number of restricted stock write off（After transition increase） I 627,510
Weighted average number of ordinary shares outstanding J[noted] 3,563,218,772
Basic EPS K=C/J 0.41
Basic EPS after deducting non-recurring profit or loss L=E/J 0.36
Remark: J=F+G-H-I
(2) Diluted EPS
Items Symbol Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 1,462,158,821.57
Non-recurring profit or loss attributable to shareholders of ordinary shares B 191,549,075.04
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss C=A-B 1,270,609,746.53
Weighted average number of ordinary shares outstanding D 3,563,218,772
The weighted average number of shareholders of ordinary shares increased by equity incentive E 9,840,255
restricted shares
Weighted average number of ordinary shares outstanding after dilution F=D+E 3,573,059,027
Diluted EPS G=A/F 0.41
Diluted EPS after deducting non-recurring profit or loss H=C/F 0.36
271
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2020 Annual Report.
Section XIII Documents Available for Inspection
1. The 2020 annual 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. Articles of Association.
4. Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
5. Other documents available for inspection.
Note: The Company shall disclose the catalogue of documents available for inspection, including:
(1) The financial report signed and sealed by the Company's legal representative, chief finance officer and
person in charge of accounting department.
(2) The original audit report with the seal of the accounting firm and the signature and seal of the certified
public accountant.
(3) Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
(4) Annual reports published in other securities markets.
272
