Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Zhejiang Sanhua Intelligent Controls Co., Ltd.
2021 Semi-Annual Report
August 2021
1
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior Management
of Zhejiang Sanhua Intelligent Controls Co., Ltd. (hereinafter referred to as the “Company”) hereby
guarantee that the information presented in this report shall be authentic, accurate, complete and
free from material misstatement whether due to false record, misleading statement or significant
omission, and they will bear both individual and joint legal liabilities.
Zhang Yabo, the Company's legal representative, Yu Yingkui, the person in charge of the
accounting work, and Sheng Xiaofeng, the person in charge of accounting department (Accounting
Officer) hereby declare and warrant that the financial statements in this report are authentic,
accurate and complete.
All directors attended the board meeting to review this report.
The Company describes in detail concerning the possible risks and countermeasures in Section
X " Risks and Countermeasures of the Company" under Section III " Management’s Discussion and
Analysis of Operations". Please pay particular attention to relevant contents.
The Company will not distribute cash dividend, distribute bonus shares, or distribute shares from
capital reserve during the current reporting period.
2
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
CONTENTS
Section I Important Notes, Contents and Definitions...................................................................................................................................... 2
Section II Corporate Profile and Key Financial Indicators............................................................................................................................. 6
Section III Management’s Discussion and Analysis of Operations...........................................................................................................10
Section IV Corporate Governance.................................................................................................................................................................. 26
Section V Environmental and Social Responsibility.....................................................................................................................................29
Section VI Significant Events......................................................................................................................................................................... 34
Section VII Changes in Shares and Information about Shareholders...........................................................................................................52
Section VIII Information of Preferred Shares................................................................................................................................................ 59
Section IX Bonds............................................................................................................................................................................................. 60
Section X Financial Report..............................................................................................................................................................................63
3
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
List of Documents Available for Inspection
1. The 2021 Semi-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. Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
4. Other documents available for inspection
4
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Definitions
Items Refers to Definition
The Company, Company Refers to Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Articles of Associations Refers to Articles of Associations for Zhejiang Sanhua Intelligent Controls Co., Ltd.
The CSRC Refers to China Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
Refers to Zhejiang Securities Regulatory Bureau of China Securities Regulatory
Zhejiang Securities Regulatory Bureau
Commission
General Meeting Refers to General Meeting of Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Board of Directors Refers to The Board of Directors of Zhejiang Sanhua Intelligent Controls Co., Ltd.
The Board of Supervisors Refers to The Board of Supervisors of Zhejiang Sanhua Intelligent Controls Co., Ltd.
Yuan Refers to RMB
5
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section II Corporate Profile and Key Financial Indicators
I. Corporate Information
Stock abbreviation Sanhua Intelligent Controls Stock code 002050
Stock Exchange where the
shares of the Company are Shenzhen Stock Exchange
listed
Name of the Company in
浙江三花智能控制股份有限公司
Chinese
Abbr. of the Company name
三花智控
in Chinese (if any)
Name of the Company in
ZHEJIANG SANHUA INTELLIGENT CONTROLS CO., LTD.
English (if any)
Abbr. of the Company name
SANHUA
in English (if any)
Legal Representative Zhang Yabo
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Hu Kaicheng Wang Yutong
No. 12 St., No. 289 Xiasha Economic No. 219, Woxi Avenue, Meizhu, Xinchang,
Address
Development, Hangzhou, Zhejiang, China. Zhejiang, China.
Tel. 0571-28020008 0575-86255360
Fax 0571-28876605 0575-86563888-8288
E-mail shc@zjshc.com shc@zjshc.com
III. Other Relevant Information
1. Company’s contact information
Whether there is any change in the Company’s registered address, office address, zip code, website or email
address during the reporting period.
□Applicable √Not applicable
There are no changes in the Company’s registered address, office address, zip code, website or Company email
address during the reporting period. Please refer to 2020 Annual Report for details.
6
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
2. Information disclosure and place of the report
Whether there is any change in information disclosure and place of the report during the reporting period.
√Applicable □ Not applicable
Newspaper designated by the Company for
China Securities Journal, Securities Times
information disclosure
Website specified by CSRC for release of the
http://www.cninfo.com.cn
Semi-Annual Report
Place where the Semi-Annual Report is available for
Office of the Board of Directors
inspection
Note: The newspapers designated by the Company were changed from Securities Times and Shanghai Securities News to China
Securities Journal and Securities Times on July 1.
IV. Key Accounting Information and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √ No
Unit: RMB
Corresponding Period of
Current Reporting Period YoY Change (%)
Last Year
Operating Revenue (RMB) 7,674,081,761.69 5,318,178,626.77 44.30%
Net Profit Attributable to Shareholders
823,881,221.70 643,481,717.35 28.03%
of the Listed Company (RMB)
Net Profit Attributable to Shareholders
of the Listed Company after Deducting 719,771,655.78 582,191,161.67 23.63%
Non-recurring Gains and Losses (RMB)
Net Cash Flow Generated from
825,216,623.26 1,104,651,449.42 -25.30%
Operational Activities (RMB)
Basic Earnings per Share (RMB/Share) 0.23 0.18 27.78%
Diluted Earnings per Share (RMB/Share) 0.23 0.18 27.78%
Weighted Average ROE 8.04% 6.74% 1.30%
At the End of the Current
At the End of Last Year YoY Change (%)
Reporting Period
Total Assets (RMB) 21,007,499,311.90 17,032,530,730.18 23.34%
Net Assets Attributable to Shareholders
10,444,077,103.59 10,064,794,519.57 3.77%
of the Listed Company (RMB)
7
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
V. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in net profits and net assets of this financial report between International Financial
Reporting Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in net profits and net assets of this financial report between International Financial
Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in net profits and net assets of this financial report between Overseas Accounting Standards
and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in net profits and net assets of this financial report between Overseas Accounting Standards
and China Accounting Standards in the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Items Amount Note
Gains or Losses from Disposal of Non-current Assets
-1,623,182.25
(Including the Write-off for the Accrued Impairment of Assets)
The Government Subsidies Included in the Current Gains and
Losses (Excluding the Government Subsidies Closely Related
64,034,111.05
to Regular Businesses of the Company and Issued in the Quota
or Quantity Based on the National Standards)
In order to avoid the price risk
of raw materials and prevent
exchange rate risk, the
Company and its subsidiaries
Gains or Losses Attributed to the Changes in Fair Value for have carried out derivatives
Holding Held-for-trading financial assets, Derivative Financial business, including futures
Assets, Trading Financial Liabilities, Derivative Financial contracts and foreign exchange
Liabilities and Investment Income from Disposal of forward contracts. From
60,752,561.20
Held-for-trading financial assets, Derivative Financial Assets, January to June 2021, the
Trading Financial Liabilities, Derivative Financial Liabilities futures income was RMB
and Other Debt Investment, Excluding Hedging Businesses 19.8287 million and the
Related to the Regular Business Operation of the Company forward income was RMB
40.9239 million; from January
to June 2020, the futures
income was RMB 1.0049
million and the forward loss
8
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
was RMB 24.4147 million.
Thus, the amount of
non-recurring profit and loss
items fluctuated greatly in the
first half of the two years.
Meanwhile, the exchange loss
from January to June 2021 was
RMB 51.1292 million, and the
exchange gain from January to
June 2020 was RMB 45.6796
million. According to the
Explanatory Announcement
No. 1 of Information
Disclosure of Listed
Companies – Non-recurring
Gains and Losses, foreign
exchange gains and losses are
recurring gains and losses,
while futures and forward gains
and losses are non-recurring
gains and losses.
Non-operating Income and Expenditures Other Than the Above 891,333.20
Other Gains and Losses Items that Fit in the Definition of
702,064.60
Non-recurring Gains and Losses
Less: Impact of Income Tax 20,201,305.62
Impact of Minority Equity (after tax) 446,016.26
Total 104,109,565.92 --
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.
9
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section III Management’s Discussion and Analysis of Operations
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 cooperative partner of Valeo,
Volkswagen, Mercedes Benz, BMW, Volvo, Toyota, GM, Geely, BYD, SAIC, NIO, etc.
10
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
3. Industry position of the Company
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. 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 synergetic 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 authorized 2,529 patents
both domestic and abroad, including 1,235 invention patents. The first priority of the Company is to meet the
needs of customers with all products, services and quality.
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
11
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
enterprises at home and abroad.
4. Advantages of global marketing network and production base
Since the 1990s, the Company has focused on opening up international market, and established overseas
subsidiaries in Japan, South Korea, Singapore, the United States, Mexico, Germany and other places to build a
global marketing network. At the same time, it established overseas production bases in the United States, Poland,
Mexico, Vietnam and other places, and has preliminary ability to cope with production globalization. And in
practice, we have trained a number of management talents who can meet the requirements of business
development in different countries and regions.
III. Main Business Analysis
Overview
In the first half of 2021, the Company actively responded to the changes and challenges, and the overall operation
of the Company were elevated even under the harsh background of continued impact from overseas epidemic,
sharp rise in international shipping prices and raw material prices, appreciation of RMB exchange rate against US
dollar. Specific to the industry in which the Company operates, the refrigeration and air conditioning electrical
parts business has maintained a growth trend due to the stable recovery of the home appliance industry and the
upgrading of consumption concept. The automotive components business continues to improve due to the
prosperity of the new energy vehicle market, which drives the rapid growth of revenue.
During the reporting period, the operating revenue is RMB 7.674 billion, a year-on-year increase of 44.30%. The
operating profit is RMB 1.008 billion, a year-on-year increase of 36.29%. The net profit attributable to
shareholders of listed company is RMB 824 million, a year-on-year increase of 28.03%. The operating revenue of
refrigeration and air conditioning electrical components business is RMB 5.563 billion, a year-on-year increase of
27.37%. The operating revenue of automotive components business is RMB 2.111 billion, a year-on-year increase
of 122.14%.
(I). Actively improve efficiency, reduce costs and optimize the layout of globalization
1. Refrigeration and air conditioning electrical components business
In terms of the refrigeration and air conditioning electrical components business, the Company improves
efficiency and reduces costs through automation transformation, lean production, staff reduction and efficiency
increase, procurement costs reduction, technology costs reduction and other measures. Although AWECO's
business is affected by the European epidemic, it has realized positive net profit monthly through tapping
potentials of internal management and supply chain transformation. After relocation of the new plant in Vietnam
Sanhua, it has been recognized by major customers in the United States, and costs of some products have been
lower than that in China. In addition, the Company actively expands kitchen appliances and other products, so as
to further broaden the Company's new development fields, continuously improve its sustainable profitability and
market competitiveness.
2. Automotive components business
The automotive components business will continue to support its strategic customers. In order to satisfy the
increasing need of capacity, the Company orderly promotes the production line construction and mass production
12
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
project of the Mexican factory and Shaoxing Binhai factory. On the premise of ensuring the projects of existing
customers, the Company develops competitive products, technologies, and actively obtains new orders. In terms
of internal management, the Company takes first-class enterprises as models, establishes a global quality
management system, so as to improve the quality management of factories at home and abroad. Facing the
challenge of the continuous rise of raw material prices and freight expenses, the Company spares no effort to
promote the costs reduction, efficiency increase, and linkage rise of product prices through active communication
with downstream customers.
(II). Continue to promote investment projects and improve the profitability
The Company's convertible bonds were listed and traded in Shenzhen Stock Exchange on June 30, 2021, raising
RMB 3 billion, which is mainly used in "Construction project of commercial refrigeration and air conditioning
intelligent control components with a capacity of 65 million sets per year" and "Technical transformation project
of high-efficiency and energy-saving control components for refrigeration and air conditioning with a capacity of
50.5 million sets per year”. The implementation of these projects will help promote the development of the
Company's products towards a more efficient and energy-saving direction, further improve the Company's
business scale and competitive advantage, optimize the business structure, improve the Company's sustainable
profitability, and lay a solid foundation for the Company to achieve medium and long-term strategic development
goals.
(III). Enhance product strength and improve patent layout of strategic products
During the reporting period, the Company invested RMB 352 million in R&D, a year-on-year increase of 46.73%.
The Company spares no effort in enhancing its product strengthen through continuous R&D investment. And the
Company participates in market competition with new products and new technologies through continuous
optimization iteration. In terms of patent layout, the Company will continue to implement "High-quality patents
and high-value patents" by promoting the patent layout of key products. By the end of the reporting period, 2,529
patents have been authorized at home and abroad, including 1,235 invention patents.
Changes in key financial data over the corresponding period of last year
Unit: RMB
Corresponding Period of
Current Reporting Period YoY Change (%) Note of Change
Last Year
Operating Revenue 7,674,081,761.69 5,318,178,626.77 44.30%
Operating Cost 5,601,811,479.62 3,839,626,004.70 45.89%
Selling Expenses 321,908,769.46 257,442,500.54 25.04%
Administrative Expenses 374,431,536.21 315,350,745.15 18.73%
Mainly due to the
increase of foreign
Financial Expenses 49,304,431.90 -29,893,397.04 264.93%
exchange loss in the
current period
Mainly due to the
Income Tax Expenses 170,607,121.16 99,017,348.37 72.30%
increase of total profit in
13
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
the current period, and
difference resulted from
adjustment of final
settlement of income tax
Mainly due to the
increase of R&D
R&D Investments 352,175,549.62 240,012,928.38 46.73% personnel salary +
investment in material
and power
Mainly due to increase in
purchasing goods and
receiving labor services,
Net Cash Flows from
825,216,623.26 1,104,651,449.42 -25.30% decrease in net cash
Operating Activities
inflow from sales, and
increase in employee
compensation
Mainly due to the
increase in net
redemption of financial
Net Cash Flows from
-313,010,482.60 -679,392,344.66 53.93% products and the increase
Investment Activities
in the purchase of fixed,
intangible and other
long-term assets
Mainly due to the
Net Cash Flows from issuance of convertible
2,299,821,228.74 310,293,217.58 641.18%
Financing Activities bonds in the current
period
Net Increase in Cash and
2,794,780,733.88 709,896,200.36 293.69%
Cash Equivalents
Whether there is significant change in Company’s profit structure or profit source during the reporting
period
□ Applicable √ Not applicable
There is no such case during the reporting period
Revenue structure
Unit: RMB
Current Reporting Period Corresponding Period of Last Year
Proportion to total Proportion to total YoY Change (%)
Amount Amount
revenue revenue
Total Revenue 7,674,081,761.69 100% 5,318,178,626.77 100% 44.30%
Classified by Industry
General 7,674,081,761.69 100.00% 5,318,178,626.77 100.00% 44.30%
14
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Equipment
Manufacturing
Industry
Classified by Products
Refrigeration A/C
Electrical 5,563,260,796.57 72.49% 4,367,942,431.64 82.13% 27.37%
Components
Automotive
2,110,820,965.12 27.51% 950,236,195.13 17.87% 122.14%
Components
Classified by Region
Domestic 3,703,718,671.83 48.26% 2,479,768,382.72 46.63% 49.36%
Overseas 3,970,363,089.86 51.74% 2,838,410,244.05 53.37% 39.88%
Industries, products or regions accounting for more than 10% of the Company’s operating revenue or
operating profit
√ Applicable □ Not applicable
Unit: RMB
YoY Change (%)
Operating YoY Change (%) YoY Change (%)
Operating cost Gross margin of operating
revenue of operating cost of gross margin
revenue
Classified by industry
General
Equipment
7,674,081,761.69 5,601,811,479.62 27.00% 44.30% 45.89% -0.80%
Manufacturing
Industry
Classified by product
Refrigeration A/C
Electrical 5,563,260,796.57 4,015,609,936.55 27.82% 27.37% 26.91% 0.26%
Components
Automotive
2,110,820,965.12 1,586,201,543.07 24.85% 122.14% 134.80% -4.06%
Components
Classified by region
Domestic 3,703,718,671.83 2,655,946,262.75 28.29% 49.36% 52.18% -1.33%
Overseas 3,970,363,089.86 2,945,865,216.87 25.80% 39.88% 40.66% -0.41%
In the case that the Company's main business data statistics are adjusted during the reporting period, the
Company's main business data of the latest reporting period were adjusted according to the statistics at the
end of the last reporting period
□ Applicable √ Not applicable
Explanations on relevant data changed for more than 30% on a year-over-year base
15
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
√Applicable □Not applicable
The operating revenue of automotive components business is increased by 122.14% over the same period of last
year. It is mainly due to the continuous improvement of new energy vehicle market. Thus, it drives automotive
components business to grow rapidly and operating costs are increased correspondingly.
IV. Non-Main 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
97,400,173.01 9.67% exchange forward contract No
Income
settlement, bank financial
product, etc.
Floating income of futures
Gains and Losses
contracts, foreign exchange
from Change of -32,695,697.38 -3.25% No
forward contracts, bank
Fair Value
financial products, etc.
Income from nonpayment,
compensation and
Non-operating
2,472,160.14 0.25% liquidated damages, gains No
Income
from retirement of fixed
assets, etc.
Loss on retirement of fixed
Non-operating
3,604,181.70 0.36% assets, litigation No
Expenditures
compensation loss, etc.
Credit
-48,442,168.40 -4.81% Bad debt loss, etc. No
Impairment Loss
Assets Loss on impairment of
-18,614,580.55 -1.85% No
Impairment Loss inventories, etc.
Gains on
Gains on disposal of fixed
Disposal of 400,172.51 0.04% No
assets
Properties
The government grants of
VAT refund of civil welfare
enterprises and software
Other Gains 72,081,481.22 7.16% Government subsidies, etc.
product VAT exceeding tax
burden are sustainable,
while the rest are not
16
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
sustainable
V. Analysis of Assets and Liabilities
1. Material changes of assets
Unit: RMB
At the End of Current
At the End of Last Year YoY
Reporting Period
Change Note of significant change
Percentage of Percentage of
Amount Amount (%)
total assets total assets
Cash and Bank 6,301,888,182. 3,489,687,568. Mainly due to the issuance of
30.00% 20.49% 9.51%
Balance 65 14 convertible bonds in the current period
Accounts 3,100,856,902. 2,355,613,299.
14.76% 13.83% 0.93%
Receivable 63 57
2,917,803,847. 2,307,761,706.
Inventories 13.89% 13.55% 0.34%
90 46
Investment
9,398,176.54 0.04% 10,067,588.96 0.06% -0.02%
property
Long-term Equity
17,828,507.38 0.08% 15,219,616.68 0.09% -0.01%
Investment
3,965,615,647. 3,839,408,059.
Fixed Assets 18.88% 22.54% -3.66%
93 45
Construction in 914,010,795.5
4.35% 628,730,529.07 3.69% 0.66%
Progress 9
Short-term 521,381,193.6
2.48% 383,088,296.60 2.25% 0.23%
Borrowings 4
Contractual
44,096,560.86 0.21% 42,581,607.67 0.25% -0.04%
Liabilities
Long-term 1,707,918,994.
17,425,691.86 4.37% 10.03% -5.66%
Borrowings 87
Non-current
1,012,141,338.
liabilities due 4.82% 130,553,923.87 0.77% 4.05%
04
within one year
2,588,449,353. Mainly due to the issuance of
Bonds Payable 12.32% 12.32%
66 convertible bonds in the current period
2. Main overseas assets
√Applicable □ Not applicable
17
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Proportion
Whether
Control of overseas
Assets there is
Content of Operation measures Income assets in
Formation Scale Location significant
Assets Mode to ensure (RMB) net assets
(RMB) impairment
asset safety of the
risk
Company
R&D,
Sanhua Manufactur
Financial
Internation ing,
supervision
al Inc. Equity 1,676,659, The United Marketing 108,267,40
and No
(USA) Investment 000.33 States and 6.20
external
(Consolidat Investment
audit
ed) Manageme
nt
Sanhua Manufactur
Internation ing, Financial
al Marketing supervision
Equity 3,020,615, 48,785,981
Singapore Singapore and and No
Investment 669.89 .05
PTE. Ltd. Investment external
(Consolidat Manageme audit
ed) nt
3. 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 752,224,861.7 562,087,170. 189,524,312
-613,379.14
(Excluding 8 50 .14
Derivative
Financial
Assets)
2.Derivative -31,937,779.9 26,392,706.
58,330,486.53
Financial 1 62
18
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Assets
810,555,348.3 -32,551,159.0 562,087,170. 215,917,018
Subtotal
1 5 50 .76
810,555,348.3 -32,551,159.0 562,087,170. 215,917,018
Total
1 5 50 .76
Financial 7,726,384.6
7,939,957.91 -213,573.29
Liabilities 2
Whether there were any material changes on the measurement attributes of major assets of the Company
during the reporting period:
□ Yes √ No
4. Limitation of asset rights as of the end of reporting period
Items Closing Book value (RMB) Reasons for being restricted
Margin deposits, margin deposits in futures
Cash and Bank Balance 106,963,410.23
institutions, litigation frozen bank deposits
Notes Receivable 1,579,929,231.31 Pledge for financing
Total 1,686,892,641.54 --
VI. Analysis of Investments
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Period Investment over the Corresponding Period
Fluctuation Rate (%)
(RMB) of Last Year (RMB)
1,581,000,000.00 0.00 0.00%
2. Significant equity investment during the reporting period
□Applicable √Not applicable
3. Significant non-equity investment during the reporting period
□Applicable √ Not applicable
4. Financial asset investment
（1）Securities Investments
□ Applicable √ Not applicable
19
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（2）Derivatives Investments
√Applicable □ Not applicable
20
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Unit: RMB in 10 thousand
Proportion
of closing
investment
Actual
amount to
Initial Purchased Sold gain or
Operation Impairmen the
Whether Whether Type of investment Opening amount amount Closing loss
party of Terminatio t Company’
related related derivatives amount of Initial date investment during the during the investment during
derivatives n date provisions s net
party transaction investment derivatives amount reporting reporting amount the
investment (if any) assets at
investment period period reporting
the end of
period
the
reporting
period
Futures
contracts,
Futures foreign
Company, No No exchange
Bank forward
contracts,
etc.
Total -- --
Capital source of derivatives investment Company’s self-fund
Prosecution (if applicable) Not applicable
Announcement date for approvals of derivatives
investment from the board of directors (if any)
Announcement date for approvals of derivatives
investment from the general meeting (if any)
Risk analysis and control measures (including but not In order to avoid the price risk of raw materials and exchange rate risk, the Company and its subsidiaries have carried out derivative
21
Zhejiang Sanhua Intellige
limited to, market risk, liquidity risk, credit risk, business, including futures contracts and foreign exchange forward contracts. The Com
operational risk, legal risk, etc.) of holding relevant provisions listed in the Management Measures for Future Hedging Business an
derivatives during the reporting period Hedging Business.
Change of market price or fair value of invested
derivatives during the reporting period; specific
methods, related assumptions and parameter setting --
of the derivatives’ fair value analysis should be
disclosed
During the current reporting period, whether there
was significant changes of accounting policies and
Not applicable
accounting principles of the Company’s derivatives
comparing to the prior reporting period
Specific opinions on the Company’s derivatives
investments and risk control from independent Not applicable
directors
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
VII. 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
VIII. 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 RMB 250 3,637,761, 3,279,261, 774,323,41 111,526,87 95,553,871
Refrigerati Subsidiary
s million 589.65 854.94 5.75 9.24 .33
on Group
manufactur
Co., Ltd.
ing and
marketing
Refrigerati
Hangzhou on and A/C
Sanhua electrical
Microchan component RMB 360 1,800,554, 1,108,549, 770,019,63 81,182,913 63,929,318
Subsidiary
nel Heat s million 246.62 765.66 9.79 .69 .98
Exchanger manufactur
Co., Ltd. ing and
marketing
Refrigerati
Zhejiang on and A/C
Sanhua electrical RMB 50 2,537,279, 123,385,28 1,945,291, 2,372,959.
Subsidiary 843,027.66
Trading component million 807.18 1.81 190.28 94
Co., Ltd. s
marketing
Zhejiang Subsidiary Automotiv RMB 1.46 5,169,808, 3,247,619, 2,110,820, 308,193,12 258,125,37
23
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Sanhua e billion 588.81 222.58 965.12 6.38 9.09
Automotiv component
e s
Componen manufactur
ts Co., Ltd ing and
marketing
Zhejiang Refrigerati
Sanhua on and A/C
RMB
Commerci electrical 1,707,953, 1,646,698, -2,147,004. -2,147,004.
Subsidiary 1.64929
al component 772.71 303.74 73 73
billion
Refrigerati s
on Co., Ltd marketing
Refrigerati
on and A/C
electrical
Sanhua component
Internation s
al Limited manufactur USD 37.55 1,676,659, 359,644,42 1,648,045, 116,132,36 108,267,40
Subsidiary
(USA) ing million 000.33 5.37 127.66 6.44 6.20
(Consolida marketing
ted) and
investment
manageme
nt
Refrigerati
on and A/C
electrical
Sanhua
component
Internation
s
al USD
manufactur 3,020,615, 627,453,69 2,727,490, 62,021,135 48,785,981
Singapore Subsidiary 105.57983
ing 669.89 3.86 087.22 .54 .05
PTE. Ltd. 3 million
marketing
(Consolida
and
ted)
investment
manageme
nt
Information about obtaining and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
IX. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
24
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
X. Risks and Countermeasures of the Company
(1) Risk of price fluctuation of raw materials
The raw materials needed 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) Exchange rate fluctuation risks
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.
25
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section IV Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings Convened During the
Reporting Period
1. Annual General Meeting convened during the current reporting period
Proportion of
Meeting Nature participating Convened Date Disclosure Date Disclosure Index
investors
The announcement
of the resolution of
the first
extraordinary
First Extraordinary general meeting of
Extraordinary
General Meeting in 69.04% February 25, 2021 February 26, 2021 shareholders in 2021
General Meeting
2021 No. 2021-012 was
published in
Securities Times,
Shanghai Securities
News and CNINFO
The announcement
on the resolution of
the annual general
meeting of
2020 Annual Annual General
shareholders in 2020
General Meeting of Meeting of 69. 77% April 16, 2021 April 17, 2021
(2021-029) was
Shareholders Shareholders
published in
Securities Times,
Shanghai Securities
News and CNINFO.
The announcement
on the resolution of
the second
Second extraordinary
Extraordinary Extraordinary general meeting of
67. 29% June 24, 2021 June 25, 2021
General Meeting in General Meeting shareholders in 2021
2021 (2021-055) was
published in
Securities Times,
Shanghai Securities
26
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
News and CNINFO.
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights
□ Applicable √ Not applicable
II. Changes of directors, supervisors and senior management personnel
√ Applicable □Not applicable
Name Position Type Date Reasons
Mr. Zhu Hongjun, an independent director, resigned
on December 28, 2020 and continued to perform the
duties of independent director and the audit
committee of the board of directors. On February 25,
Independent February 25,
Pan Yalan Appointment 2021, the general meeting of shareholders agreed to
Director 2021
appoint Ms. Pan Yalan as an independent director of
the Company. Ms. Pan Yalan will take the relevant
position of Mr. Zhu Hongjun in the audit committee
of the sixth board of directors of the Company.
III. Profit distribution and conversion of capital reserve to share capital during the reporting
period
□ Applicable √ Not applicable
The Company will not distribute cash dividend, distribute bonus shares, or distribute shares from capital reserve
during the current reporting period.
IV. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or
Other Incentive Plans
√Applicable □Not applicable
On June 8, 2021, The 18th extraordinary meeting of the 6th board of directors and the 16th extraordinary meeting
of the 6th board of supervisors approved The Proposal on Adjusting Repurchase Price of Restricted Stock
Incentive Plan in 2020, The Proposal on Repurchase and Cancellation of Some Restricted Stocks, The Proposal
on the Achievement of Unlocking Conditions of the First Vesting Period for the 2020 Stock Incentive Plan, and
The Proposal on Adjusting the Repurchase Price of the Restricted Stock Incentive Plan in 2018. The specific
contents of the announcements are disclosed as follows:
Important issues Disclosure Date Disclosure Index
Announcement on the Resolution of the 18th
June 9, 2021 http://www.cninfo.com.cn
Interim Meeting of the 6th Board of Directors
27
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Announcement on the Resolution of the 16th
Interim Meeting of the 6th Board of June 9, 2021 http://www.cninfo.com.cn
Supervisors
Announcement on Adjusting the Repurchase
Price of the Restricted Stock Incentive Plan in June 9, 2021 http://www.cninfo.com.cn
2018
Announcement on adjusting the exercise price
of stock appreciation right incentive plan in June 9, 2021 http://www.cninfo.com.cn
2018
Announcement on Adjusting Repurchase Price
June 9, 2021 http://www.cninfo.com.cn
of Restricted Stock Incentive Plan in 2020
Announcement on the Achievement of
Unlocking Conditions of the First Vesting June 9, 2021 http://www.cninfo.com.cn
Period for the 2020 Stock Incentive Plan
Announcement on Cancellation of Stock
June 9, 2021 http://www.cninfo.com.cn
Appreciation Right
Announcement on Repurchase and
June 9, 2021 http://www.cninfo.com.cn
Cancellation of Some Restricted Stocks
28
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section V Environmental and Social Responsibility
I. Significant environmental issues
Whether the Company or any of its subsidiaries should be categorized as a critical pollutant enterprise defined by
National Environmental Protection Department
√ Yes □ No
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 21.53 T exceeding
Integrated /year
Controls the standard
Wastewater
Co., Ltd
Emission
Standard is
500mg / L
The
limitation
listed in
DB33/887-2
013 Indirect
Zhejiang Emission
Sanhua Limits of Not
Ammonia 6.186 T
Intelligent Nanotube 1 North ≦35mg/L Nitrogen 2.153 T exceeding
Nitrogen /year
Controls and the standard
Co., Ltd Phosphorus
Pollutants
from
Industrial
Wastewater
is 35mg / L
Zhejiang The
Direct Not
Sanhua SO2 1 North ≦50mg/m3 limitation 0.402 T 2.15 T /year
emission exceeding
Intelligent listed in
29
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Controls GB13271-2 the standard
Co., Ltd 014
Emission
Standard of
Air
Pollutants
for Boilers
is 50mg/m3
According
to the low
Nitrogen
emission
Zhejiang
requirement
Sanhua Not
Nitrogen Direct s of local 10.06 T
Intelligent 1 North ≦50mg/m3 1.879 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 2.377 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 0.079 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
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
30
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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, total chromium,
total nickel 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. In 2021, the transformation and upgrading of VOCs treatment facilities in industrial
enterprises are being implemented. At the same time, in order to reduce generation of VOCs, aqueous
cleaning is used to replace organic solvent cleaning.
3. Solid waste and soil (groundwater) 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
1. Since 2010, the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang
County, and has obtained 25 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
31
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
has obtained 6 EIA replies. All the projects have passed.
Emergency Response Plan
1. The Company re-write Emergency Response Plan in April 2021, and filed with Xinchang Environmental
Protection Bureau on June 10, 2021 (Record No. 330624-2021-06-M).
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, total chromium, total nickel, 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.
Administrative penalties for environmental problems during the reporting period
Not applicable
Other environmental information that should be disclosed
Not applicable
Other environmental information
Not applicable
32
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
II. Social Responsibility
NO
33
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section VI Significant Events
I. Complete and Incomplete Commitments of the Company and Its Actual Controller,
Shareholders, Related parties, Acquirers, and Other Related Parties by the End of the
Reporting Period
√ Applicable □ Not applicable
Giver of Date of Term of
Commitments Nature Details of commitments Performance
commitments commitments commitments
When the number of shares sold
Zhang Yabo, through listing and trading in
controlling Shenzhen Stock Exchange
Other
Commitments shareholder reaches 1% of the total number
comm November 21, Strict
of share Sanhua of shares of the Company, it Long term
itment 2005 performance
reform Holding shall make an announcement
Group Co., within two working days from
Ltd. the date of the occurrence of the
fact.
The commitment made at the
Comm
time of IPO, it shall not engage
itment
in the same production,
on
operation or business as the
horizo
Company in the future. In order
Zhang Daocai, ntal
to avoid business competition
controlling compe
with the Company and clarify
shareholder tition,
the non-competition Strict
Sanhua related June 7, 2005 Long term
Commitments obligations, Sanhua Holding performance
Holding party
made during Group, on behalf of itself and
Group Co., transa
asset its subsidiaries with more than
Ltd. ctions
restructuring 50% equity, makes a
and
commitment to Sanhua
capital
intelligent controls to avoid
occup
possible horizontal competition.
ation
Zhang Daocai, Comm Zhang Daocai and Sanhua
controlling itment holding group, the controlling January 5, Strict
Long term
shareholder on shareholder of the Company, 2009 performance
Sanhua horizo promise that there will not be
34
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Holding ntal any competition with Sanhua
Group Co., compe intelligent controls in the
Ltd. tition, business scope being or already
related carried out in the future.
party
transa
ctions
and
capital
occup
ation
Sanhua Holding Group
promises: after the completion
of this transaction, Sanhua
Holding Group and Sanhua
intelligent controls will sign an
Comm agreement according to law,
itment perform legal procedures, fulfill
on the obligation of information
horizo disclosure and handle
Zhang Daocai, ntal significant matters for approval
controlling compe in accordance with relevant
shareholder tition, laws, regulations, articles of
January 5, Strict
Sanhua related association of Sanhua Long term
2009 performance
Holding party intelligent controls. In the
Group Co., transa process of implementation of
Ltd. ctions related party transactions, we
and will follow the principle of
capital legality and reasonableness,
occup ensure the fairness of prices and
ation procedures, and make certain
that the legitimate interests of
Sanhua intelligent controls and
other shareholders will not be
damaged through related party
transactions.
Zhang Daocai, Comm In order to avoid horizontal
Zhang Yabo, itment competition with Sanhua
Zhang on intelligent controls, Zhang
Shaobo, horizo Daocai, Zhang Yabo, Zhang Strict
July 24, 2015 Long term
controlling ntal Shaobo, Sanhua Holding Group performance
shareholder compe the controlling shareholder of
Sanhua tition, the Company, and Sanhua
Holding related Lvneng Industry, the trading
35
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Group Co., party partner made the following
Ltd., Zhejiang transa commitments:
Sanhua ctions 1. I (or the Company) will not
Lvneng and directly or indirectly engage in
Industrial capital or participate in the business
Group Co., occup that constitutes potential direct
Ltd. ation 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 me (or the
Company) not to engage in or
participate in any business
competing with Sanhua
Intelligent Controls and its
subordinate enterprises.
2. If Sanhua Intelligent Controls
further expands its business
scope, I (or the Company) and
other controlled enterprises will
not compete with Sanhua
Intelligent Controls' expanded
business; if it is possible to
compete with Sanhua Intelligent
Controls' business after
expansion, I (or the Company)
and other controlled enterprises
will withdraw from Sanhua
Intelligent Controls in the
following ways of competition:
A. Stop the businesses that
compete or may compete with
Sanhua Intelligent Controls; B.
Inject the competitive business
into Sanhua Intelligent
Controls; C. Transfer the
competitive business to an
unrelated third party.
3. If I (or the Company) and
other enterprises controlled by
me (or the Company) have any
business opportunities to
36
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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.
In order to standardize the
related party transactions with
Sanhua Intelligent Controls,
Zhang Daocai, Comm
Zhang Daocai, Zhang Yabo,
Zhang Yabo, itment
Zhang Shaobo, Sanhua Holding
Zhang on
Group the controlling
Shaobo, horizo
shareholder of the Company
controlling ntal
and Sanhua Lvneng Industrial
shareholder compe
the trading partner made the
Sanhua tition,
following commitments: Strict
Holding related July 24, 2015 Long term
1. I (or the Company) and the performance
Group Co., party
controlled enterprises will
Ltd., Zhejiang transa
reduce the related party
Sanhua ctions
transactions with Sanhua
Lvneng and
intelligent controls as far as
Industrial capital
possible, and will not use their
Group Co., occup
own status as shareholders of
Ltd. ation
Sanhua intelligent controls to
seek for superior rights in terms
of business cooperation and
37
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
other aspects compared with
other third parties;
2. I (or the Company) will not
take advantage of the right to
enter into a transaction with
Sanhua intellectual controls
using the position as a
shareholder.
3. If there are necessary and
unavoidable related party
transactions, I (or the Company)
and the 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.
Zhang Daocai, Zhang Daocai, Zhang Yabo,
Zhang Yabo, Zhang Shaobo and Sanhua
Zhang holding Group, the controlling
Other
Shaobo, shareholder of the Company, Strict
Comm July 24, 2015 Long term
controlling made the following performance
itment
shareholder commitments: after the
Sanhua completion of the transaction,
Holding Sanhua intelligent controls will
38
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Group Co., continue to improve the
Ltd. corporate governance structure
and independent operation of
the Company management
system in accordance with the
requirements of relevant laws
and regulations and the articles
of Association, and continue to
maintain the independence of
Sanhua intelligent controls in
business, assets, finance,
institutions, personnel, etc. to
protect the interests of all
shareholders.
1. I (or the Company) and the
controlled enterprises will
reduce the related party
transactions with Sanhua
intelligent controls as far as
possible, and will not use the
position as a shareholder of
Sanhua intellectual controls to
Zhang Daocai, Comm
seek the superior rights for
Zhang Yabo, itment
business cooperation with
Zhang on
Sanhua intelligent controls
Shaobo, horizo
compared with other third
controlling ntal
parties;
shareholder compe
2. I (or the Company) will not
Sanhua tition,
use my position as a September 18, Strict
Holding related Long term
shareholder of Sanhua 2017 performance
Group Co., party
intellectual controls to seek for
Ltd., Zhejiang transa
the priority right to cooperate
Sanhua ctions
with Sanhua intellectual
Lvneng and
controls;
Industrial capital
3. If there are necessary and
Group Co., occup
unavoidable related party
Ltd. ation
transactions, I (or the Company)
and the controlled enterprises
will sign agreements with
Sanhua intelligent controls in
accordance with the principles
of fairness, follow legal
procedures, and perform the
information disclosure
39
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
Zhang Daocai, Comm
and its subordinate enterprises;
Zhang Yabo, itment
guaranteed that legal and
Zhang on
effective measures will be taken
Shaobo, horizo
to urge other enterprises
controlling ntal
controlled by me (or the
shareholder compe
Company) not to engage in or
Sanhua tition,
participate in any business that September 18, Strict
Holding related Long term
is competitive with Sanhua 2017 performance
Group Co., party
intelligent controls and its
Ltd., Zhejiang transa
subordinate enterprises
Sanhua ctions
business.
Lvneng and
2. If Sanhua intelligent controls
Industrial capital
further expands its business
Group Co., occup
scope, I (or the Company) and
Ltd. ation
other enterprises controlled by
me (or the Company) will not
compete with Sanhua intelligent
controls' expanded business; if
it is possible to compete with
Sanhua intelligent controls'
40
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
business after expansion, I (or
the Company) and other
enterprises controlled by me (or
the Company) will withdraw
from Sanhua intelligent controls
in the following ways of
competition: A. stop the
businesses that compete or may
compete with Sanhua intelligent
controls; B. inject the
competitive business into
Sanhua intelligent controls; C.
transfer the competitive
business to an unrelated third
party.
3. If I (or the Company) and
other enterprises controlled by
me (or the Company) have any
business opportunities to
engage in and participate in any
activities that may compete
with Sanhua intelligent controls'
business operation, they shall
immediately inform Sanhua
intelligent controls of the above
business opportunities. If
Sanhua intelligent controls
makes an affirmative reply to
take advantage of the business
opportunity within a reasonable
period specified in the notice, it
shall do its best to give the
business opportunity to Sanhua
intelligent controls.
4. In case of breach of the
above commitment, I (or the
Company) is willing to bear all
responsibilities arising
therefrom and fully compensate
all direct or indirect losses
caused to Sanhua intelligent
controls.
Zhang Daocai, Other After the completion of the September 18, Strict
Long term
Zhang Yabo, comm transaction, the listed Company 2017 performance
41
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Zhang itment will continue to improve the
Shaobo, corporate governance structure
controlling and independent operation of
shareholder the Company management
Sanhua system in accordance with the
Holding requirements of relevant laws
Group Co., and regulations and the articles
Ltd., Zhejiang of association, continue to
Sanhua maintain the independence of
Lvneng the listed Company in business,
Industrial assets, finance, institutions,
Group Co., personnel and other aspects, and
Ltd. effectively protect the interests
of all shareholders.
Are the
commitments
Yes
fulfilled on
time
II. 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.
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such case during the reporting period.
IV. Engagement and disengagement of the CPA firm
Whether this financial report was audited
□Yes √ No
This report was not audited.
V. Explanation Given by the Board of Directors and Supervisory Committee Regarding the
“Non-standard Auditor’s Report” Issued by the CPA Firm for the Reporting Period
□ Applicable √ Not applicable
42
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
VI. Explanation Given by the Board of Directors Regarding the “Non-standard Auditor’s
Report” Issued by the CPA Firm for the Prior Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case during the reporting period.
VIII. Material Litigation and Arbitration
Material Litigation and Arbitration
□ Applicable √ Not applicable
No such case during the reporting period.
Other litigations
□ Applicable √ Not applicable
IX. Punishments and Rectifications
□ Applicable √ Not applicable
No such case during the reporting period.
X. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Significant Related-party Transaction
1. Significant related-party transactions arising from routine operation
□Applicable √Not applicable
No such case in the reporting period.
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Not applicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Not applicable
No such case in the reporting period.
43
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
4. Related credit and debt transactions
□ Applicable √Not applicable
No such case in the reporting period.
5. Transactions with related financial companies and financial companies controlled by the Company
□Applicable √Not applicable
No such case in the reporting period.
6. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.
XII. 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
capital lease.
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.
2. Significant guarantees
√Applicable □ Not applicable
44
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(1) Guarantees
Unit: RMB in 10 thousand
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Disclosure
Guarante
date of Counter
Actual Actual e for
Guaranteed announcem Guarantee Type of Collateral guarant Term of Due or
Occurrence Guarantee Related
Party ent of the Cap Guarantee (if any) ee (if Guarantee Not
Date Amount Parties or
guarantee any)
Not
cap
Company's Guarantees to Subsidiaries
Disclosure
Guarante
date of Counter
Actual Actual e for
Guaranteed announcem Guarantee Type of Collateral guarant Term of Due or
Occurrence Guarantee Related
Party ent of the Cap Guarantee (if any) ee (if Guarantee Not
Date Amount Parties or
guarantee any)
Not
cap
SANHUA
INTERNAT
Joint 2019.07.0
IONAL April 3, July 5,
132,000 11,529.3 liability 5-2022.06 No Yes
SINGAPO 2019 2019
guarantee .20
RE PTE.
LTD.
SANHUA
Joint 2019.12.0
INTERNAT April 3, December
30,000 20,026.31 liability 9-2022.12 No Yes
IONAL, 2019 9, 2019
guarantee .09
INC.
SANHUA
Joint 2020.06.2
INTERNAT April 29, June 24,
50,000 9,690.15 liability 4-2021.06 Yes Yes
IONAL, 2020 2020
guarantee .23
INC.
SANHUA
INTERNAT
Joint 2020.09.1
IONAL April 29, September
150,000 7,686.2 liability 4-2021.09 No Yes
SINGAPO 2020 14, 2020
guarantee .13
RE PTE.
LTD.
SANHUA
Joint 2020.11.0
INTERNAT April 29, November
150,000 7,686.2 liability 2-2021.11 No Yes
IONAL 2020 2, 2020
guarantee .01
SINGAPO
45
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
RE PTE.
LTD.
SANHUA
INTERNAT
Joint 2020.06.1
IONAL April 29, June 12,
150,000 7,500 liability 2-2022.12 No Yes
SINGAPO 2020 2020
guarantee .25
RE PTE.
LTD.
SANHUA
INTERNAT
Joint 2020.02.1
IONAL April 3, February
132,000 9,992.06 liability 0-2021.02 Yes Yes
SINGAPO 2019 10, 2020
guarantee .09
RE PTE.
LTD.
SANHUA
Joint 2021.06.2
INTERNAT March 27, June 23,
50,000 9,690.15 liability 3-2022.06 No Yes
IONAL, 2021 2021
guarantee .16
INC.
SANHUA
INTERNAT
Joint 2021.02.1
IONAL March 27, February
180,000 9,992.06 liability 0-2021.08 No Yes
SINGAPO 2021 10, 2021
guarantee .06
RE PTE.
LTD.
SANHUA
INTERNAT
Joint 2021.06.0
IONAL March 27, June 8,
180,000 1,537.24 liability 8-2021.12 No Yes
SINGAPO 2021 2021
guarantee .08
RE PTE.
LTD.
Total Amount of Total Amount of
Guarantees to Guarantees to
Subsidiaries Approved 280,000 Subsidiaries Actually 21,219.45
during the Reporting Occurred during the
Period (B1) Reporting Period (B2)
Total Amount of Total Balance of
Guarantees to Guarantees Actually
Subsidiaries Approved 334,428.01 Paid to Subsidiaries at 75,647.46
by the End of the the End of the Reporting
Reporting Period (B3) Period (B4)
Subsidiaries' Guarantees to Subsidiaries
Guaranteed Disclosure Guarantee Actual Actual Type of Collateral Counter Term of Due or Guarante
46
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Party date of Cap Occurrence Guarantee Guarantee (if any) guarant Guarantee Not e for
announcem Date Amount ee (if Related
ent of the any) Parties or
guarantee Not
cap
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 280,000 Occurred during the 21,219.45
Period (A1+B1+C1) Reporting Period
(A2+B2+C2)
Total Balance of
Total Amount of Guarantees Guarantees Actually
Approved by the End of the 334,428.01 Paid at the End of the 75,647.46
Reporting Period (A3+B3+C3) Reporting Period
(A4+B4+C4)
Total Amount of Actual Guarantees (A4+B4+C4)
7.24%
as a Percentage of the Company's Net Assets
Of which：
Balance of Debt Guarantees Directly or Indirectly
Offered to Guaranteed Objects with Asset-liability 29,716.46
Ratio Exceeding 70% (E)
Total Amount of the Above Three Guarantees
29,716.46
(D+E+F)
3. Entrusted wealth management
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Accrued impairment
Balance before Overdue amount of overdue
Specific types Capital source Amount
maturity uncollected amount unrecovered
financial product
The Company’s
Bank financial
owned funds, raised 75,048.5 18,839.78
products
funds
Total 75,048.5 18,839.78
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
47
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Unit: RMB in 10 thousand
Future
Actual
Amount entruste
Referen Actual recover Event
of Throug d
Determi ce profit y of overvie
Type Termina Capital Expecte provisio h legal financia
Name of Product Amoun Capital Start nation annualiz and loss profit w and
of tion investm d return n for procedu l
trustee type t source date of ed rate in the and loss relevant
trustee date ent (if any) impair res or manage
return of reportin in the index
ment (if not ment
return g period reportin (if any)
any) plan or
g period
not
Industrial
"Tianlibao Floating
and
" Net Bank income
Commerci
worth Decemb financia without
al Bank of Self-fun January
Bank financial 20,000 er 30, l guarant 2.62% 7.19 7.19 Yes -
China ds 4, 2021
product 2020 product ee of
Xinchang
for s principa
sub
corporate l
branch
"E-Lingto
Industrial
ng" net Floating
and
worth Bank income
Commerci
financial Decemb financia without
al Bank of Self-fun January
Bank products 5,000 er 31, l guarant 3.03% 1.66 1.66 Yes -
China ds 4, 2021
for 2020 product ee of
Xinchang
corporate s principa
sub
without l
branch
fixed term
Bank of Bank Bank of 10,000 Self-fun Februar May 10, Bank Floating 3.50% 80.51 80.51 Yes -
48
Zhejiang Sanhua Intellige
Communi Communi ds y 10, 2021 financia income
cations cations 2021 l with
Co., Ltd. Yuntong product guarant
Shaoxing wealth fix s ee of
Xinchang structured principa
sub deposit l
branch for 89
days
(linked
exchange
rate
bullish)
Structured
deposits Floating
linked Bank income
BNP
with Decemb financia with
Paribas Self-fun June 29,
Bank foreign 10,000 er 13, l guarant 3.80% 0 0
Shanghai ds 2021
exchange 2021 product ee of
Branch
rate of s principa
Euro and l
US dollar
Guangzho
Floating
u
Bank income
Developm Xinjiaxin
October January financia with
ent Bank No.16 Self-fun
Bank 9,500 22, 22, l guarant 3.30% 73.74 73.7
Hangzhou structured ds
2020 2021 product ee of
Xiaoshan deposit
s principa
sub
l
branch
Zhejiang Sanhua Intellige
Floating
Heng Bank income
Seng October January financia with
Hengliyin Self-fun
Bank Bank 5,000 23, 22, l guarant 3.35% 39.94 39.9
g ds
Hangzhou 2020 2021 product ee of
Branch s principa
l
Fix
China Bank income
CITIC Decemb Februar financia with
Structured Self-fun
Bank Bank 5,000 er 31, y 1, l guarant 3.55% 15.14 15.1
deposit ds
Hangzhou 2020 2021 product ee of
Branch s principa
l
64,500
Total 【 1】
-- -- -- -- -- -- 0 218.18 --
Note: [1] The above mentioned are the details of the Company's single significant financial management (single amount is m
Entrusted financial management is expected to be unable to recover the principal or there are other situations that may lead to
□ Applicable √ Not applicable
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
4. Significant contracts for daily 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.
XIII. Other significant events
√Applicable □ Not applicable
The Company completed the issuance and listing of RMB 3 billion convertible bonds. According to China
Securities Regulatory Commission Reply on Approving Public Offering of Convertible Corporate Bonds by
Zhejiang Sanhua Intelligent Controls Co., Ltd (ZJXK [2021] NO. 168), the Company issued 30 million
convertible corporate bonds with a face value of RMB 100 on June 1, 2021. It was listed and traded on Shenzhen
Stock Exchange on June 30, 2021 (the bond is referred to as "Sanhua convertible bond" and the bond code is
"127036"). See Section IX "Bonds" of the 2021 Semi-Annual report for more details.
XIV. Significant events of the Company’s subsidiaries
□ Applicable √ Not applicable
51
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section VII 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 61,268,30 56,841,96
1.71% -4,426,340 -4,426,340 1.58%
conditional restriction(s) 5 5
61,268,30 56,841,96
3) Other domestic shares 1.71% -4,426,340 -4,426,340 1.58%
5 5
Of which: Shares held by
domestic legal person
Shares held by domestic 61,268,30 56,841,96
1.71% -4,426,340 -4,426,340 1.58%
natural person 5 5
2. Shares without 3,530,333, 3,534,759
98.29% 4,426,340 4,426,340 98.42%
restriction 163 ,503
3,530,333, 3,534,759
1) RMB ordinary shares 98.29% 4,426,340 4,426,340 98.42%
163 ,503
3,591,601, 3,591,601
3. Total 100.00% 0 0 100.00%
468 ,468
Reason for the changes in share capital
√ Applicable □ Not applicable
1.At the beginning of each year, the number of locked shares held by senior executives of the Company shall be
recalculated according to 75% of the total shares held by senior executives.
2. On June 18, 2021, the first vesting period of the 2020 restricted stock incentive plan matured, and 4,596,150
restricted shares of 883 incentive objects who meet the unlocking conditions were unlocked. According to the
relevant provisions of shares management for senior executives, 4,426,340 shares were actually unlocked and
listed for circulation.
Approval for changes in share capital
52
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
√ Applicable □ Not applicable
On June 8, 2021, the 18th interim meeting of the sixth board of directors and the 16th interim meeting of the sixth
board of supervisors deliberated and approved The Proposal on the Achievement of Unlocking Conditions of the
First Vesting Period for the 2020 Stock Incentive Plan. There were 883 incentive objects who meet the conditions
for unlocking, and the number of unlocked shares was 4,596,150
Transfer of shares
□Applicable √ Not applicable
Information about the implementation of share repurchase
□Applicable √ Not applicable
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 Increased in Note for
of restricted of restricted Date of unlocking
shareholder period current period restricted shares
shares shares
According to the
relevant
Restricted shares
provisions of
Zhang Yabo 39,023,400 0 0 39,023,400 for senior
shares
executives
management for
senior executives
On June 18, According to the
2021, 39,000 relevant
restricted shares provisions of
Wang Dayong 197,600 39,000 33,962 192,562 were unlocked + shares
restricted shares management for
for senior senior executives
executives + equity incentive
On June 18, According to the
Ni Xiaoming 197,600 39,000 33,962 192,562
2021, 39,000 relevant
53
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
restricted shares provisions of
were unlocked + shares
restricted shares management for
for senior senior executives
executives + equity incentive
On June 18, According to the
2021, 39,000 relevant
restricted shares provisions of
Chen Yuzhong 197,600 39,000 33,962 192,562 were unlocked + shares
restricted shares management for
for senior senior executives
executives + equity incentive
On June 18, According to the
2021, 39,000 relevant
restricted shares provisions of
Hu Kaicheng 197,600 39,000 33,962 192,562 were unlocked + shares
restricted shares management for
for senior senior executives
executives + equity incentive
On June 18, According to the
2021, 39,000 relevant
restricted shares provisions of
Yu Yingkui 221,080 39,000 33,962 216,042 were unlocked + shares
restricted shares management for
for senior senior executives
executives + equity incentive
According to the
relevant
Restricted shares
provisions of
Chen Xiaoming 8,325 0 0 8,325 for senior
shares
executives
management for
senior executives
According to the
On June 18,
relevant
2021, 4,401,150
Other incentive provisions of
21,225,100 4,401,150 16,823,950 restricted shares
objects shares
were unlocked +
management for
equity incentive
equity incentive
Total 61,268,305 4,596,150 169,810 56,841,965 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
54
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
III. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total Number of Preferred
Shareholders (If Any) (Refer
Total Number of Common
to Note 8) Whose Voting
Shareholders at the End of 77,721 0
Rights Have Been Recovered
the Reporting Period
at the End of the Reporting
Period
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
The Pledged or frozen
Total number of The number
Increase/
Share-holdi shares common of shares
decrease
Name of Nature of ng held at the shares held
during the
shareholder shareholder percentage end of the held with without Status Amount
reporting
(%) reporting trading trading
period
period restriction restrictions
s
Sanhua
Domestic
Holding 1,057,2 -12,291,8 1,057,245
non-state-owned 29.44% Pledged 228,128,169
Group Co., 45,749 31 ,749
corporation
Ltd.
Zhejiang
Sanhua
Domestic
Lvneng 742,747 742,747,9
non-state-owned 20.68% 0
Industrial ,954 54
corporation
Group Co.,
Ltd
Hong Kong
Central Overseas 592,539 307,366,2 592,539,3
16.50%
Clearing corporation ,322 07 22
Limited
Domestic 52,031, 39,023, 13,007,80
Zhang Yabo 1.45% 0
Individual 200 400 0
China
Construction
Bank
Corporation - 36,405, 36,405,56 36,405,56
Others 1.01%
Huaxia 561 1 1
energy
innovation
stock
55
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
securities
investment
fund
Bank of
China
Limited - E
fund strategic
emerging 33,182, 33,182,09 33,182,09
Others 0.92%
industry 090 0 0
equity
securities
investment
fund
Abu Dhabi
Overseas 26,879, 26,879,72 26,879,72
Investment 0.75%
corporation 720 0 0
Authority
Agricultural
Bank of
China
Limited –
Guotai
24,221, 24,221,78 24,221,78
intelligent Others 0.67%
783 3 3
automobile
stock
securities
investment
fund
National
Social 23,692, 23,692,94
Others 0.66% 34,765
Security 945 5
Fund-111
China
Merchants
Bank Co.,
Ltd. - E fund
innovative 23,290, -2,235,77 23,290,91
Others 0.65%
growth 913 4 3
hybrid
securities
investment
fund
Information about Strategic No
56
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Investors’ or General Legal
Persons’ Becoming Top Ten
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. 1,057,245,749 1,057,245,749
stock
Zhejiang Sanhua Lvneng RMB common
742,747,954 742,747,954
Industrial Group Co., Ltd stock
Hong Kong Central Clearing RMB common
592,539,322 592,539,322
Limited stock
China Construction Bank
Corporation - Huaxia energy RMB common
36,405,561 36,405,561
innovation stock securities stock
investment fund
Bank of China Limited - E fund
RMB common
strategic emerging industry equity 33,182,090 33,182,090
stock
securities investment fund
RMB common
Abu Dhabi Investment Authority 26,879,720 26,879,720
stock
Agricultural Bank of China
Limited – RMB common
24,221,783 24,221,783
Guotai intelligent automobile stock
stock securities investment fund
National Social Security RMB common
23,692,945 23,692,945
Fund-111 stock
China Merchants Bank Co., Ltd. -
RMB common
E fund innovative growth hybrid 23,290,913 23,290,913
stock
securities investment fund
China Construction Bank
Corporation - BOCOM Schroder RMB common
22,714,690 22,714,690
alpha core hybrid securities stock
investment fund
57
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Explanation of Associated
Relationship or Concerted
Among the above shareholders, Sanhua Holding Group Co., Ltd., Zhejiang Sanhua Lvneng
Actions among Top Ten Common
Industrial Group Co., Ltd. are the persons acting in concert. The Company does not know
Shareholders without Trading
whether there is any related relationship between other shareholders, or whether they belong
Restrictions, and among Top Ten
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.
IV. Shareholding changes of directors, supervisors, senior management personnel
□ Applicable √ Not applicable
V. Changes in Controlling Shareholders or Actual Controllers
Change of the controlling shareholder during the current reporting period
□ Applicable √ Not applicable
No such cases in the reporting period.
Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such cases in the current reporting period.
58
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section VIII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.
59
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section IX Bonds
√ Applicable □ Not applicable
I. Enterprise bond (hereinafter referred to as the bond issued by domestic state-owned
entity)
□ Applicable √ Not applicable
II. Corporate bond
□ Applicable √ Not applicable
III. Debt financing instruments of non-financial enterprises
□ Applicable √ Not applicable
IV. Convertible bond
√ Applicable □ Not applicable
1. Previous Adjustments of Stock Conversion Price
□ Applicable √ Not applicable
2. Share Conversions (Accumulative)
□ Applicable √ Not applicable
3. Top 10 Holders of the Convertible Bond
Unit: share
Number of Amount of Proportion of
Nature of convertible bonds convertible bonds convertible bonds
Name of convertible bond holder convertible bond held at the end of held at the end of held at the end of
holders the reporting the reporting the reporting
period (share) period (yuan) period
Domestic
1 Sanhua Holding Group Co., Ltd. non-state-owned 8,854,432 885,443,200.00 29.51%
corporation
Domestic
Zhejiang Sanhua Lvneng
2 non-state-owned 6,220,514 622,051,400.00 20.74%
Industrial Group Co., Ltd
corporation
Domestic
3 Zhang Yabo 435,760 43,576,000.00 1.45%
Individual
4 Bank of China Limited - E fund Others 263,035 26,303,500.00 0.88%
60
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
strategic emerging industry
equity securities investment fund
China Construction Bank
Corporation - Huaxia energy
5 Others 219,101 21,910,100.00 0.73%
innovation stock securities
investment fund
China Merchants Bank Co., Ltd.
6 - E fund innovative growth Others 213,786 21,378,600.00 0.71%
hybrid securities investment fund
China Construction Bank
Corporation - BOCOM Schroder
7 Others 211,157 21,115,700.00 0.70%
alpha core hybrid securities
investment fund
Agricultural Bank of China
Limited – Guotai intelligent
8 Others 206,817 20,681,700.00 0.69%
automobile stock securities
investment fund
Domestic
9 Bohai Securities Co., Ltd state-owned 200,315 20,031,500.00 0.67%
corporation
Industrial and Commercial Bank
of China Limited - BOCOM
Schroeder's advantageous
10 Others 193,317 19,331,700.00 0.64%
industries flexibly allocate
hybrid securities investment
funds
4. The Profitability, Asset and Credit Status of the Guarantor Have Changed Significantly
□ Applicable √ Not applicable
V. The loss within the scope of consolidated statements in the reporting period exceeded
10% of the net assets at the end of the previous year
□ Applicable √ Not applicable
VI. Main accounting data and financial indicators of the Company in recent two years by the
end of the reporting period
Unit: RMB in 10 thousand
At the end of the reporting
Item At the end of last year YoY Change (%)
period
61
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Current ratio 228.79% 245.04% -16.25%
Asset liability ratio 49.81% 40.39% 9.42%
Quick ratio 183.95% 196.22% -12.27%
Corresponding Period of Last
Current Reporting Period YoY Change (%)
Year
Net profit after deducting
71,977.17 58,219.12 23.63%
non-recurring profit and loss
EBITDA total debt ratio 18.39% 27.11% -8.72%
Time interest earned ratio 26.05 23.72 9.82%
Cash interest guarantee times 33.01 36.41 -9.34%
EBITDA Time interest earned
31.93 29.92 6.72%
ratio
Repayment of debt (%) 100.00% 100.00%
Payment of interest (%) 100.00% 100.00%
62
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Section X Financial Report
I. Auditor Report
Whether audit has been performed on this interim financial report
□ Yes √ No
The Company’s 2021 Half Year Report has not been audited
II. Financial Statements
Units of financial reports in the notes: RMB
1. Consolidated Balance Sheet
Prepared by: Zhejiang Sanhua Intelligent Controls Co., Ltd.
June 30, 2021
Unit: RMB
Items June 30, 2021 December 31, 2020
Current asset：
Cash and Bank Balances 6,301,888,182.65 3,489,687,568.14
Settlement funds
Loans to other banks
Held-for-trading financial assets 189,524,312.14 752,224,861.78
Derivative financial assets 26,392,706.62 58,330,486.53
Notes receivable 2,019,431,592.73 2,323,934,781.53
Accounts receivable 3,100,856,902.63 2,355,613,299.57
Receivable financing
Advances paid 101,251,054.08 69,404,326.45
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 98,155,207.51 76,935,495.05
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 2,917,803,847.90 2,307,761,706.46
63
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Contract assets
Assets held for sales
Non-current assets due within one
year
Other current assets 131,694,347.04 150,460,488.01
Total current assets 14,886,998,153.30 11,584,353,013.52
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 2,295,085.00 2,074,750.00
Long-term equity investments 17,828,507.38 15,219,616.68
Other equity instrument
investments
Other non-current financial assets
Investment property 9,398,176.54 10,067,588.96
Fixed assets 3,965,615,647.93 3,839,408,059.45
Construction in progress 914,010,795.59 628,730,529.07
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 643,300,116.81 507,693,672.93
Development expenditures
Goodwill 31,959,091.60 31,959,091.60
Long-term prepayments 26,140,183.68 23,706,401.61
Deferred tax assets 144,257,327.85 137,808,879.28
Other non-current assets 365,696,226.22 251,509,127.08
Total non-current assets 6,120,501,158.60 5,448,177,716.66
Total assets 21,007,499,311.90 17,032,530,730.18
Current liabilities:
Short-term borrowings 521,381,193.64 383,088,296.60
Central bank loans
Loans from other banks
Held-for-trading financial
liabilities
64
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Derivative financial liabilities 7,726,384.62 7,939,957.91
Notes payable 1,856,484,983.84 1,238,574,463.73
Accounts payable 2,491,675,800.21 2,279,661,755.97
Advances received 10,000,000.00 10,000,000.00
Contract liabilities 44,096,560.86 42,581,607.67
Selling of repurchased financial
assets
Absorbing deposit and interbank
deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 219,968,593.89 289,305,913.99
Taxes and rates payable 113,721,224.46 75,008,142.06
Other payables 229,547,075.23 270,888,400.58
Including: Interest Payable
Dividends Payable 1,200,000.00
Handling fee and commission
payable
Reinsurance accounts payable
Liabilities classified as held for
sale
Non-current liabilities due within
1,012,141,338.04 130,553,923.87
one year
Other current liabilities
Total current liabilities 6,506,743,154.79 4,727,602,462.38
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 917,425,691.86 1,707,918,994.87
Bonds payable 2,588,449,353.66
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 84,940,677.91 90,336,083.27
Long-term employee benefits
65
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
payable
Provisions 2,638,000.00
Deferred income 134,799,813.94 140,105,336.43
Deferred tax liabilities 151,508,468.13 130,778,184.48
Other non-current liabilities 79,000,938.74 80,398,897.72
Total non-current liabilities 3,956,124,944.24 2,152,175,496.77
Total liabilities 10,462,868,099.03 6,879,777,959.15
Equity:
Share capital 3,591,601,468.00 3,591,601,468.00
Other equity instruments 409,766,556.24
Including: Preferred shares
Perpetual bonds
Capital reserve 335,514,496.32 315,417,434.22
Less: Treasury shares 243,244,768.84 281,483,741.34
Other comprehensive income -106,871,598.13 -89,624,962.61
Special reserve
Surplus reserve 637,967,613.47 637,967,613.47
General risk reserve
Undistributed profit 5,819,343,336.53 5,890,916,707.83
Total equity attributable to the parent
10,444,077,103.59 10,064,794,519.57
Company
Non-controlling interest 100,554,109.28 87,958,251.46
Total equity 10,544,631,212.87 10,152,752,771.03
Total liabilities & equity 21,007,499,311.90 17,032,530,730.18
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 June 30, 2021 December 31, 2020
Current assets:
Cash and bank balances 2,959,776,349.70 1,848,930,095.07
Held-for-trading financial assets 100,000,000.00 323,000,000.00
Derivative financial assets 7,353,623.48 8,856,174.56
Notes receivable 888,134,401.64 773,393,944.74
66
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Accounts receivable 510,046,587.17 729,906,676.91
Receivables financing
Advances paid 5,250,160.02 6,803,910.27
Other receivables 396,489,965.06 348,897,078.11
Including: Interest Receivable
Dividends Receivable 1,800,000.00
Inventories 530,323,536.73 553,388,303.73
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 36,417,031.99 46,083,837.26
Total current assets 5,433,791,655.79 4,639,260,020.65
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 6,129,331,347.10 4,528,546,229.37
Other equity instrument investments
Other non-current financial assets
Investment property
Fixed assets 1,548,514,876.61 1,565,826,802.57
Construction in progress 42,341,929.78 71,862,243.72
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 153,679,564.23 156,335,743.52
Development expenditures
Goodwill
Long-term prepayments
Deferred tax assets 7,419,451.65 7,336,345.87
Other non-current assets 49,684,556.63 36,566,524.79
Total non-current assets 7,930,971,726.00 6,366,473,889.84
Total assets 13,364,763,381.79 11,005,733,910.49
Current liabilities:
67
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Short-term borrowings 20,012,527.78
Held-for-trading financial liabilities
Derivative financial liabilities 2,395,550.00
Notes payable 499,079,955.18 381,631,833.96
Accounts payable 1,568,983,343.65 1,566,994,944.07
Advances received
Contract liabilities 261,929.11 1,155,759.09
Employee benefits payable 54,314,740.59 93,150,785.46
Taxes and rates payable 8,234,550.36 10,811,341.50
Other payables 1,173,975,858.95 1,355,955,388.81
Including: interest payable
Dividends Payable
Liabilities classified as held for sale
Non-current liabilities due within one year 770,756,434.72
Other current liabilities
Total current liabilities 4,078,002,362.56 3,429,712,580.67
Non-current liabilities:
Long-term borrowings 660,582,222.22 1,381,428,522.65
Bonds payable 2,588,449,353.66
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions 2,638,000.00
Deferred income 31,801,319.56 35,908,399.54
Deferred tax liabilities 45,003,642.04 48,177,657.42
Other non-current liabilities
Total non-current liabilities 3,325,836,537.48 1,468,152,579.61
Total liabilities 7,403,838,900.04 4,897,865,160.28
Equity:
Share capital 3,591,601,468.00 3,591,601,468.00
Other equity instruments 409,766,556.24
Including: Preferred shares
68
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Perpetual bonds
Capital reserve 1,224,991,751.62 1,198,721,706.52
Less: treasury shares 243,244,768.84 281,483,741.34
Other comprehensive income
Special reserve
Surplus reserve 509,280,441.15 509,280,441.15
Undistributed profit 468,529,033.58 1,089,748,875.88
Total equity 5,960,924,481.75 6,107,868,750.21
Total liabilities & equity 13,364,763,381.79 11,005,733,910.49
3. Consolidated Income statement
Unit: RMB
Items 2021 Interim 2020 Interim
I. Total operating revenue 7,674,081,761.69 5,318,178,626.77
Including: Operating revenue 7,674,081,761.69 5,318,178,626.77
Interest income
Premium earned
Revenue from handling
charges and commission
II. Total operating cost 6,735,994,919.86 4,658,848,422.13
Including: Operating cost 5,601,811,479.62 3,839,626,004.70
Interest expenses
Handling charges and commission
expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy
reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 36,363,153.05 36,309,640.40
Selling expenses 321,908,769.46 257,442,500.54
Administrative expenses 374,431,536.21 315,350,745.15
R&D expenses 352,175,549.62 240,012,928.38
Financial expenses 49,304,431.90 -29,893,397.04
69
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Including: Interest expenses 40,208,255.75 32,558,310.10
Interest income 43,640,017.31 19,167,271.27
Add: Other income 72,081,481.22 101,528,141.23
Investment income (or “-”: losses) 97,400,173.01 -8,109,921.96
Including: Investment income
4,108,890.70 1,826,673.64
from associates and joint ventures
Gains from derecognition of
-3,707,072.41 -114,807.17
financial assets at amortized cost
Gains on foreign exchange (or “-”:
losses)
Gains on net exposure to hedging
risk (or “-”: losses)
Gains on changes in fair value (or
-32,695,697.38 6,520,045.96
“-”: losses)
Credit impairment loss (or “-”:
-48,442,168.40 -12,874,290.80
losses)
Assets impairment loss (or “-”:
-18,614,580.55 -6,302,857.17
losses)
Gains on asset disposal (or “-”:
400,172.51 -319,355.00
losses)
III. Operating profit (or “-”: losses) 1,008,216,222.24 739,771,966.90
Add: Non-operating revenue 2,472,160.14 1,466,984.81
Less: Non-operating expenditures 3,604,181.70 1,354,079.15
IV. Profit before tax (or “-”: losses) 1,007,084,200.68 739,884,872.56
Less: Income tax expense 170,607,121.16 99,017,348.37
V. Net profit (or “-”: losses) 836,477,079.52 640,867,524.19
(I) Categorized by the continuity of
operations
1. Net profit from continuing
836,477,079.52 640,867,524.19
operations (or “-”: losses)
2. Net profit from discontinued
operations (or “-”: losses)
(II) Categorized by the portion of
equity ownership
1. Net profit attributable to owners
823,881,221.70 643,481,717.35
of parent Company
2. Net profit attributable to 12,595,857.82 -2,614,193.16
70
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
non-controlling shareholders
VI. Other comprehensive income after
-17,246,635.52 -26,456,121.98
tax
Items attributable to the owners of the
-17,246,635.52 -26,456,121.98
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
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
-17,246,635.52 -26,456,121.98
to profit or loss
1. Items under equity method that
may be reclassified to profit or loss
2. Changes in fair value of other
debt investments
3. Profit or loss from
reclassification of financial assets into
other comprehensive income
4. Provision for credit impairment
of other debt investments
5.Cash flow hedging reserve
6. Translation reserve -17,246,635.52 -26,456,121.98
7. Others
Items attributable to non-controlling
shareholders
VII. Total comprehensive income 819,230,444.00 614,411,402.21
Items attributable to the owners of
806,634,586.18 617,025,595.37
the parent Company
Items attributable to non-controlling
12,595,857.82 -2,614,193.16
shareholders
VIII. Earnings per share (EPS):
71
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(I) Basic EPS 0.23 0.18
(II) Diluted EPS 0.23 0.18
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 2021 Interim 2020 Interim
I. Operating revenue 2,657,932,583.46 2,117,212,102.62
Less: Operating cost 2,099,047,503.77 1,616,751,481.77
Taxes and surcharges 14,087,430.38 14,883,710.72
Selling expenses 18,489,336.95 15,130,538.49
Administrative expenses 88,329,399.37 72,140,520.61
R&D expenses 130,378,747.72 88,292,793.63
Financial expenses 28,429,967.53 8,904,811.12
Including: Interest expenses 38,011,175.51 34,495,598.61
Interest income 21,728,593.75 10,398,609.20
Add: Other income 26,148,191.57 52,824,654.27
Investment income (or “-”: losses) 32,124,589.36 10,995,316.73
Including: Investment income
3,703,896.30 1,922,776.38
from associates and joint ventures
Gains from derecognition of
financial assets at amortized cost (or
“-”: losses)
Gains on net exposure to hedging
(or “-”: losses)
Gains on changes in fair value (or
-3,898,101.08 12,520,875.00
“-”: losses)
Credit impairment loss (or “-”:
-2,333,077.79 1,810,314.30
losses)
Assets impairment loss (or “-”:
losses)
Gains on asset disposal (or “-”:
31,965.08 60,000.75
losses)
II. Operating profit (or “-”: losses) 331,243,764.88 379,319,407.33
Add: Non-operating revenue 703,532.10 472,666.13
72
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Less: Non-operating expenditures 553,058.35 137,009.04
III. Profit before tax (or “-”: losses) 331,394,238.63 379,655,064.42
Less: Income tax expense 57,159,487.93 42,344,717.35
IV. Net profit (or “-”: losses) 274,234,750.70 337,310,347.07
(I) Net profit from continuing
274,234,750.70 337,310,347.07
operations (or “-”: losses)
(II) Net profit from discontinued
operations (or “-”: losses)
V. Other comprehensive income after
tax
(I) Not to be reclassified
subsequently to profit or loss
1. Changes in remeasurement on
the net defined benefit plan
2. Items under equity method that
will not be reclassified to profit or loss
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of own
credit risk
5. Others
(II) To be reclassified subsequently
to profit or loss
1. Items under equity method that
may be reclassified to profit or loss
2. Changes in fair value of other
debt investments
3. Profit or loss from
reclassification of financial assets into
other comprehensive income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income 274,234,750.70 337,310,347.07
73
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
5. Consolidated Cash Flow Statement
Unit: RMB
Items 2021 Interim 2020 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods or
7,791,922,676.43 5,669,226,956.30
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 292,769,667.23 135,301,637.22
Other cash receipts related to
112,704,898.93 138,981,847.05
operating activities
Subtotal of cash inflows from operating
8,197,397,242.59 5,943,510,440.57
activities
Cash payments for goods purchased
5,594,083,556.18 3,476,000,876.09
and services received
Net increase of loans and advances to
clients
Net increase of central bank deposit
and interbank deposit
Cash payments for insurance
indemnities of original insurance
contracts
Net increase of loans to others
74
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Cash payments for interest, handling
charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of
1,043,695,672.97 783,884,263.51
employees
Cash payments for taxes and rates 212,797,119.37 205,682,821.70
Other cash payments related to
521,604,270.81 373,291,029.85
operating activities
Subtotal of cash outflows from
7,372,180,619.33 4,838,858,991.15
operating activities
Net cash flows from operating activities 825,216,623.26 1,104,651,449.42
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment
5,663,475.29 23,348,369.16
income
Net cash receipts from the disposal of
fixed assets, intangible assets and other 508,246.83 2,066,447.61
long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to
671,922,049.93 277,649,043.00
investing activities
Subtotal of cash inflows from investing
678,093,772.05 303,063,859.77
activities
Cash payments for the acquisition of
fixed assets, intangible assets and other 955,954,243.67 442,252,824.96
long-term assets
Cash payments for investments
Net increase of pledged borrowings
Net cash payments for the acquisition
of subsidiaries & other business units
Other cash payments related to
35,150,010.98 540,203,379.47
investing activities
Subtotal of cash outflows from
991,104,254.65 982,456,204.43
investing activities
Net cash flows from investing activities -313,010,482.60 -679,392,344.66
III. Cash flows from financing
75
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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 283,678,800.00 1,379,378,896.06
Other cash receipts related to
2,987,977,500.00 26,080,652.17
financing activities
Subtotal of cash inflows from financing
3,271,656,300.00 1,524,102,798.23
activities
Cash payments for the repayment of
38,237,578.82 758,969,786.13
borrowings
Cash payments for distribution of
dividends or profits and for interest 924,187,677.93 451,059,488.63
expenses
Including: Cash paid by subsidiaries
to non-controlling shareholders as 2,680,000.00
dividend or profit
Other cash payments related to
9,409,814.51 3,780,305.89
financing activities
Subtotal of cash outflows from
971,835,071.26 1,213,809,580.65
financing activities
Net cash flows from financing activities 2,299,821,228.74 310,293,217.58
IV. Effect of foreign exchange rate
-17,246,635.52 -25,656,121.98
changes on cash & cash equivalents
V. Net increase in cash and cash
2,794,780,733.88 709,896,200.36
equivalents
Add: Opening balance of cash and
3,400,144,038.54 2,553,783,015.01
cash equivalents
VI. Closing balance of cash and cash
6,194,924,772.42 3,263,679,215.37
equivalents
6. Cash Flow Statement of the Parent Company
Unit: RMB
Items 2021 Interim 2020 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods and
2,501,766,645.73 1,582,936,545.48
rendering of services
Receipts of tax refund 69,595,321.15 45,688,483.71
76
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Other cash receipts related to
44,634,342.32 59,466,164.51
operating activities
Subtotal of cash inflows from operating
2,615,996,309.20 1,688,091,193.70
activities
Cash payments for goods purchased
1,584,525,056.92 822,533,884.63
and services received
Cash paid to and on behalf of
259,052,505.85 193,396,299.54
employees
Cash payments for taxes and rates 67,230,440.08 51,272,174.14
Other cash payments related to
99,950,220.20 79,419,321.52
operating activities
Subtotal of cash outflows from
2,010,758,223.05 1,146,621,679.83
operating activities
Net cash flows from operating activities 605,238,086.15 541,469,513.87
II. Cash flows from investing activities:
Cash receipts from withdrawal of
3,000,000.00
investments
Cash receipts from investment
21,811,801.45 6,834,184.92
income
Net cash receipts from the disposal of
fixed assets, intangible assets and other 104,233.67 174,800.00
long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to
229,811,657.82 175,228,503.46
investing activities
Subtotal of cash inflows from investing
251,727,692.94 185,237,488.38
activities
Cash payments for the acquisition of
fixed assets, intangible assets and other 89,501,487.52 102,274,729.91
long-term assets
Cash payments for investments 1,581,000,000.00 140,874,000.00
Net cash payments for the acquisition
of subsidiaries & other business units
Other cash payments related to
88,686,804.01 472,363,792.38
investing activities
Subtotal of cash outflows from
1,759,188,291.53 715,512,522.29
investing activities
77
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Net cash flows from investing activities -1,507,460,598.59 -530,275,033.91
III. Cash flows from financing
activities:
Cash receipts from absorbing
118,643,250.00
investments
Cash receipts from borrowings 50,000,000.00 1,159,811,000.00
Other cash receipts related to
3,139,300,342.01 161,770,652.17
financing activities
Subtotal of cash inflows from financing
3,189,300,342.01 1,440,224,902.17
activities
Cash payments for the repayment of
20,000,000.00 570,000,000.00
borrowings
Cash payments for distribution of
dividends or profits and for interest 919,172,149.40 437,223,073.41
expenses
Other cash payments related to
250,973,534.61 12,254,861.11
financing activities
Subtotal of cash outflows from
1,190,145,684.01 1,019,477,934.52
financing activities
Net cash flows from financing activities 1,999,154,658.00 420,746,967.65
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
1,096,932,145.56 431,941,447.61
equivalents
Add: Opening balance of cash and
1,803,237,880.51 974,923,339.25
cash equivalents
VI. Closing balance of cash and cash
2,900,170,026.07 1,406,864,786.86
equivalents
78
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
2021 Interim
Equity Attributable to parent Company
Other equity instruments Speci Gener
Items Less: Non-controll
Other
Capital al Surplus al risk Undistributed Othe Total equity
Preferr Perpetu ing interest
Share Capital treasury comprehensi Subtotal
ed al Others reserve reser reserve reserv profit rs
shares ve income
shares bonds ve e
I. Balance
at the end 3,591,601,46 315,417,434 281,483,741 -89,624,962. 637,967,613 5,890,916,70 10,064,794,51 87,958,251.4 10,152,752,77
of prior 8.00 .22 .34 61 .47 7.83 9.57 6 1.03
year
Add:
Cumulative
changes of
accounting
policies
Error
correction
of prior
period
Business
combinatio
n under
79
Zhejiang Sanhua Intellige
common
control
Others
II. Balance
at the
3,591,601,46 315,417,434 281,483,741 -89,624,962. 637,967,613 5,890,916,70
beginning
8.00 .22 .34 61 .47 7.83
of current
year
III. Current
period
409,766,556 20,097,062. -38,238,972. -17,246,635. -71,573,371.3
increase (or
.24 10 50 52 0
“-”:
decrease)
(I) Total
-17,246,635. 823,881,221.
comprehens
52 70
ive income
(II) Capital
contributed
409,766,556 20,097,062. -38,238,972.
or
.24 10 50
withdrawn
by owners
1. Ordinary
shares
contributed
by owners
2. Capital 409,766,556
contributed .24
Zhejiang Sanhua Intellige
by holders
of other
equity
instruments
3. Amount
of
share-based 20,097,062. -38,238,972.
payment 10 50
included in
equity
4. Others
(III) Profit -895,454,593.
distribution 00
1.
Appropriati
on of
surplus
reserve
2.
Appropriati
on of
general risk
reserve
3.
Appropriati -895,454,593.
on of profit 00
to owners
4. Others
Zhejiang Sanhua Intellige
(IV)
Internal
carry-over
within
equity
1. Transfer
of capital
reserve to
capital
2. Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover losses
4. Changes
in defined
benefit plan
carried over
to retained
earnings
5. Other
comprehens
ive income
carried over
to retained
earnings
Zhejiang Sanhua Intellige
6. Others
(V) Special
reserve
1.
Appropriati
on of
current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end 3,591,601,46 409,766,556 335,514,496 243,244,768 -106,871,598 637,967,613 5,819,343,33
of current 8.00 .24 .32 .84 .13 .47 6.53
period
Amount of Previous Period
2020 Interim
Equity Attributable to parent Company
Other equity
Items Speci Gener
instruments Less: Other
Capital al Surplus al risk Undistributed Oth
Share Capital Preferr Perpetu treasury comprehensi
Other reserve reserv reserve reserv profit s
ed al shares ve income
s e e
shares bonds
I. Balance at 2,765,657,898. 1,090,800,022. 363,781,151. -39,332,748. 559,896,619. 5,278,392,288.
Zhejiang Sanhua Intellige
the end of 00 06 34 50 39 84
prior year
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Business
combination
under
common
control
Others
II. Balance
at the 2,765,657,898. 1,090,800,022. 363,781,151. -39,332,748. 559,896,619. 5,278,392,288.
beginning of 00 06 34 50 39 84
current year
III. Current
period
826,383,880.0 -847,059,678. -54,328,425. -26,456,121. 230,144,177.0
increase (or
0 04 00 98 5
“-”:
decrease)
(I) Total -26,456,121. 643,481,717.3
Zhejiang Sanhua Intellige
comprehensi 98 5
ve income
(II) Capital
contributed
-20,384,598.0 -54,328,425.
or -291,200.00
4 00
withdrawn
by owners
1. Ordinary
shares -49,264,050.0 -49,264,050.
contributed 0 00
by owners
2. Capital
contributed
by holders
of other
equity
instruments
3. Amount
of
share-based
30,463,131.96
payment
included in
equity
-5,064,375.0
4. Others -291,200.00 -1,583,680.00
0
(III) Profit -413,337,540.
distribution 30
1.
Zhejiang Sanhua Intellige
Appropriatio
n of surplus
reserve
2.
Appropriatio
n of general
risk reserve
3.
Appropriatio -413,337,540.
n of profit to 30
owners
4. Others
(IV) Internal
carry-over 826,675,080.0 -826,675,080.
within 0 00
equity
1. Transfer
of capital 826,675,080.0 -826,675,080.
reserve to 0 00
capital
2. Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover losses
Zhejiang Sanhua Intellige
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
1.
Appropriatio
n of current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end of 3,592,041,778. 243,740,344.0 309,452,726. -65,788,870. 559,896,619. 5,508,536,465.
current 00 2 34 48 39 89
period
Zhejiang Sanhua Intellige
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
2021 Interim
Items Other equity instruments Other
Less: treasury Special
Share Capital Capital reserve comprehensive Surplus res
Preferred Perpetual shares reserve
Others income
shares bonds
I. Balance at the
3,591,601,468.00 1,198,721,706.52 281,483,741.34 509,280,44
end of prior year
Add:
Cumulative
changes of
accounting policies
Error correction of
prior period
Others
II. Balance at the
beginning of 3,591,601,468.00 1,198,721,706.52 281,483,741.34 509,280,44
current year
III. Current period
increase (or less: 409,766,556.24 26,270,045.10 -38,238,972.50
decrease)
(I) Total
comprehensive
income
(II) Capital
contributed or
409,766,556.24 26,270,045.10 -38,238,972.50
withdrawn by
owners
1. Ordinary shares
contributed by
Zhejiang Sanhua Intellige
owners
2. Capital
contributed by
409,766,556.24
holders of other
equity instruments
3. Amount of
share-based
26,270,045.10 -38,238,972.50
payment included
in equity
4. Others
(III) Profit
distribution
1. Appropriation of
surplus reserve
2. Appropriation of
profit to owners
3. Others
(IV) Internal
carry-over within
equity
1.Transfer of
capital reserve to
capital
2.Transfer of
surplus reserve to
capital
3.Surplus reserve
to cover losses
4. Changes in
defined benefit
plan carried over to
retained earnings
5. Other
comprehensive
income carried
over to retained
earnings
Zhejiang Sanhua Intellige
6. Others
(V) Special reserve
1. Appropriation of
current period
2. Application of
current period
(VI) Others
IV. Balance at the
end of current 3,591,601,468.00 409,766,556.24 1,224,991,751.62 243,244,768.84 509,280,44
period
Amount of Previous Period
2020 Interim
Items Other equity instruments Other
Less: treasury Special
Share Capital Capital reserve comprehensive Surplus reserve
Preferred Perpetual shares reserve
Others income
shares bonds
I. Balance at the end
2,765,657,898.00 2,005,303,119.53 363,781,151.34 431,209,447.07
of prior year
Add:
Cumulative changes
of accounting
policies
Error correction of
prior period
Others
II. Balance at the
beginning of current 2,765,657,898.00 2,005,303,119.53 363,781,151.34 431,209,447.07
year
III. Current period 826,383,880.00 -847,059,678.04 -54,328,425.00
increase (or less:
Zhejiang Sanhua Intellige
decrease)
(I) Total
comprehensive
income
(II) Capital
contributed or
-291,200.00 -20,384,598.04 -54,328,425.00
withdrawn by
owners
1. Ordinary shares
contributed by -49,264,050.00 -49,264,050.00
owners
2. Capital
contributed by
holders of other
equity instruments
3. Amount of
share-based
30,463,131.96
payment included in
equity
4. Others -291,200.00 -1,583,680.00 -5,064,375.00
(III) Profit
distribution
1. Appropriation of
surplus reserve
2. Appropriation of
profit to owners
3. Others
(IV) Internal
carry-over within 826,675,080.00 -826,675,080.00
equity
1.Transfer of capital
826,675,080.00 -826,675,080.00
reserve to capital
2.Transfer of
surplus reserve to
capital
3.Surplus reserve to
cover losses
Zhejiang Sanhua Intellige
4. Changes in
defined benefit plan
carried over to
retained earnings
5. Other
comprehensive
income carried over
to retained earnings
6. Others
(V) Special reserve
1. Appropriation of
current period
2. Application of
current period
(VI) Others
IV. Balance at the
end of current 3,592,041,778.00 1,158,243,441.49 309,452,726.34 431,209,447.07
period
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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 RMB 3,591,601,468.00 ， total share of 3,591,601,468 shares (each with par value of RMB 1). 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
August 11th, 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.
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.
93
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
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 acquire 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
94
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
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.
95
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset, it continues recognizing the financial asset.
Where the Company does not transfer or retain substantially all of the risks and rewards related to the
ownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the
Company does not retain its control over the financial asset, it derecognizes the financial asset, and any right or
liability arising from such transfer is recognized independently as an asset or a liability; (2) if the Company retains
its control over the financial asset, according to the extent of its continuing involvement in the transferred
financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset.
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
96
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
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
97
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
Ages
portfolios the comparison table of age and expected credit loss rate
Accounts receivable – comparison table of ages and lifetime expected credit loss rate
Ages Expected credit loss rate
Within 1 year 5%
1-2 years 10%
2-3years 30%
Over 3 years 50%
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.
However, the Company offsets a financial asset and a financial liability and presents the net amount in the balance
sheet when those who meet the corresponding conditions at the same time.
10．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
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
98
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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.
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.
99
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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 structures Straight-line method 20-30 0%, 5% 3.17% - 5%
Machinery and
Straight-line method 5-12 0%, 5% 7.92% - 20%
equipment
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
100
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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 Straight-line method 10
controller of 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
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
1. Employee benefits includes short-term employee benefits, post- employment benefits, termination benefits
and other long-term employee benefits.
2. 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.
101
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(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
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,
102
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
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.
103
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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.
(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
104
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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
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
105
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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. Identification of a lease
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset
for a period of time, the Company assesses whether, throughout the period of use, the customer has both of the
following: (a) the right to obtain substantially all of the economic benefits from use of the identified asset; and (b)
the right to direct the use of the identified asset.
2. Identification of separate leases
For a contract that contains more than one lease component, the Company separates the components and
accounts for each lease component separately. The right to use an underlying asset is a separate lease component
if both: (a) the lessee can benefit from use of the underlying asset either on its own or together with other
resources that are readily available to the lessee; and (b) the underlying asset is neither highly dependent on, nor
highly interrelated with, the other underlying assets in the contract.
3. Accounting treatments for the Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a
short-term lease, which shall not contain a purchase option; the Company recognizes a lease as a lease of a
low-value asset if the underlying asset is of low value when it is new. If the Company subleases an asset, or
expects to sublease an asset, the head lease does not qualify as a lease of a low-value asset.
For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or
loss with straight-line method/unit-of-production method over the lease term. (Reminder: For short-term leases,
choose the accounting policy according to the type of leased asset, and for low-value leases, choose the
accounting policy for each lease. Please modify it according to the actual situation.)
Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach,
the Company recognizes right-of-use assets and lease liabilities at the commencement date.
At the commencement date, the Company measures the lease liability at the present value of the lease
payments that are not paid at that date, discounted using the interest rate implicit in the lease. If that rate cannot be
readily determined, the Company’s incremental borrowing rate shall be used. Unrecognized financing expenses,
calculated at the difference between the lease payment and its present value, are recognized as interest expenses
over the lease term using the discount rate which has been used to determine the present value of lease payment
and included in profit or loss. Variable lease payments not included in the measurement of lease liabilities are
included in profit or loss in the periods in which they are incurred.
After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b)
amounts expected to be payable under residual value guarantees; (c) an index or a rate used to determine lease
payments; (d) assessment result or exercise of purchase option, extension option or termination option, the
Company remeasures the lease liability based on the present value of lease payments after changes.
4. Accounting treatments for lease modifications in which the Company as lessee
106
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(1) A lease modification as a separate lease
The Company accounts for a lease modification as a separate lease if both: (a) the modification increases the
scope of the lease by adding the right to use one or more underlying assets; and (b) the consideration for the lease
increases by an amount commensurate with the stand-alone price for the increase in scope.
(2) A lease modification not as a separate lease
At the effective date of the lease modification, the Company redetermines the lease term of the modified
lease and remeasures the lease liability by discounting the revised lease payment using a revised discount rate.
The revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term;
if the interest rate implicit in the lease cannot be readily determined, the revised discount rate is determined as the
Company’s incremental borrowing rate at the effective date of the modification.
The Company accounts for the remeasurement of the lease liability by:
1) Decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the
lease for lease modifications that decrease the scope of the lease. The Company recognizes in profit or loss any
gain or loss relating to the partial or full termination of the lease.
2) Making a corresponding adjustment to carrying amount of the right-of-use asset for all other lease
modifications.
5. Accounting treatments for the Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all
the risks and rewards incidental to ownership of an underlying asset. Otherwise, it is classified as an operating
lease.
(1) Operating lease
Lease receipts are recognized as lease income with straight-line method over the lease term. Initial direct
costs incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and included
into profit or loss by installments. Variable lease payments related to operating lease which are not included in the
lease payment are charged as profit or loss in the periods in which they are incurred.
(2) Finance lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the net
investment in the lease (sum of the present value of unguaranteed residual value and lease receipts that are not
received at the commencement date, discounted by the interest rate implicit in the lease), and derecognizes assets
held under the finance lease. The Company calculates and recognizes interest income using the interest rate
implicit in the lease over the lease term.
Variable lease payments not included in the measurement of the net investment in the lease are charged as
profit or loss in the periods in which they are incurred.
6. Accounting treatments for lease modifications in which the Company as lessor
(1) Operating lease
The Company accounts for a modification to an operating lease as a new lease from the effective date of the
modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease
payments for the new lease.
(2) Finance lease
1) A lease modification as a separate lease
The Company accounts for a lease modification as a separate lease if both: (a) the modification increases the
scope of the lease by adding the right to use one or more underlying assets; and (b) the consideration for the lease
increases by an amount commensurate with the stand-alone price for the increase in scope.
2) A lease modification not as a separate lease
107
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
If the lease would have been classified as an operating lease had the modification been in effect at the
inception date, the Company accounts for the lease modification as a new lease from the effective date of the
modification, and measures the carrying amount of the underlying asset as the net investment in the lease
immediately before the effective date of the lease modification. Otherwise, the Company applies regulations in the
“CASBE 22 – Financial Instruments: Recognition and Measurement” regarding the modification or renegotiation
of contracts.
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 21- Leases” revised by Ministry of Finance of PRC since January 1,
2021.
（2）Since 2021 , adjustments to the relevant items of financial statements at the beginning of the year at
the first implementation of lease standards.
Applicable
Whether it is necessary to adjust the balance sheet accounts at the beginning of the year
□ Yes √ No
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
VAT rendering of services in accordance with the tax law, net of the input tax 13%
that is allowed to be deducted in the current period
Urban maintenance and construction tax The sum of turnover tax payable and value-added tax exemption 5%, 7%
108
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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%
2. Tax preferential policies
1．Enterprise income tax
Being categorized as high-tech enterprises, the income tax of the Company and several subsidiaries for 2021
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 327,111.73 232,265.51
Cash in bank 6,205,720,660.69 3,411,034,773.03
Other cash and bank balances 95,840,410.23 78,420,529.60
109
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Total 6,301,888,182.65 3,489,687,568.14
Including: Deposited overseas 283,016,150.48 370,754,548.72
The total amount of the cash and bank
balances that are limited by mortgage, 106,963,410.23 89,543,529.60
pledge or freeze
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through profit
189,524,312.14 752,224,861.78
or loss
Including:
Bank financial products 189,524,312.14 752,224,861.78
Including:
Total 189,524,312.14 752,224,861.78
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 20,863,496.96 49,339,961.11
Futures tools 5,529,209.66 8,990,525.42
Total 26,392,706.62 58,330,486.53
4. Notes receivable
（1）Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 1,718,559,685.30 2,190,368,328.70
Trade acceptance 300,871,907.43 133,566,452.83
Total 2,019,431,592.73 2,323,934,781.53
Unit: RMB
110
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Closing balance Opening balance
Provision for bad
Book balance Book balance Provision for bad debt
debt
Categories Carrying Carrying
Provision Amount Proportio Amount Provision
Proportio amount amount
Amount Amount proportio n proportio
n
n n
Including:
Notes receivable with
provision for bad 2,035,26 15,835,3 2,019,431 2,330,964 7,029,813.3 2,323,934
100.00% 0.78% 100.00% 0.30%
debt made on a 6,956.28 63.55 ,592.73 ,594.83 0 ,781.53
collective basis
Including:
1,718,55 1,718,559 2,190,368 2,190,368
Bank acceptance 84.44% 93.97%
9,685.30 ,685.30 ,328.70 ,328.70
316,707, 15,835,3 300,871,9 140,596,2 7,029,813.3 133,566,4
Trade acceptance 15.56% 5.00% 6.03% 5.00%
270.98 63.55 07.43 66.13 0 52.83
2,035,26 15,835,3 2,019,431 2,330,964 7,029,813.3 2,323,934
Total 100.00% 0.78% 100.00% 0.30%
6,956.28 63.55 ,592.73 ,594.83 0 ,781.53
Provision for bad debt made on a collective basis:
Unit: RMB
Items Closing balance
Book balance Provision for bad debt Provision proportion (%)
Bank acceptance portfolio 1,718,559,685.30
Trade acceptance portfolio 316,707,270.98 15,835,363.55 5.00%
Total 2,035,266,956.28 15,835,363.55 --
If the provision for bad debt of notes receivable is in accordance with the general expected credit loss model, please refer to the
disclosure of the bad debt provision for other receivables:
□ Applicable √ Not Applicable
（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of this period
Categories Opening balance Recovered or Closing balance
Accrual Write off Others
reversed
Trade acceptance 7,029,813.30 8,805,550.25 15,835,363.55
Total 7,029,813.30 8,805,550.25 15,835,363.55
111
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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 1,579,929,231.31
Total 1,579,929,231.31
（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 72,862,252.02
Trade acceptance 202,271,622.33 23,201,547.82
Total 275,133,874.35 23,201,547.82
5. 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
Categories Carrying Carrying
Amount Proportio Amount Accrued Amount Proportio Amount Accrued
amount amount
n proportio n proportio
n n
Receivables with
57,335.2 57,335.2
provision made on an 0.00% 100.00% 0.00 57,335.28 0.00% 57,335.28 100.00% 0.00
8 8
individual basis
Including:
Receivables with
3,264,62 163,764, 3,100,856 2,481,072 125,458,7 2,355,613,2
provision made on a 100.00% 5.02% 100.00% 5.06%
1,824.66 922.03 ,902.63 ,027.67 28.10 99.57
collective basis
Including:
3,264,67 163,822, 3,100,856 2,481,129 125,516,0 2,355,613,2
Total 100.00% 5.02% 100.00% 5.06%
9,159.94 257.31 ,902.63 ,362.95 63.38 99.57
Provision made on an individual basis:
112
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Unit: RMB
Closing balance
Debtors
Book balance Provision for bad debts Accrued proportion Reasons
MAHLE BEHR MEXICO S.DE R.L.DE.C.V. 57,335.28 57,335.28 100.00%
Total 57,335.28 57,335.28 -- --
Provision made on a collective basis: aging
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Within 1 year 3,261,150,680.57 163,057,534.04 5.00%
1 to 2 years 2,154,196.08 215,419.61 10.00%
2 to 3 years 832,528.12 249,758.43 30.00%
Over 3 years 484,419.89 242,209.95 50.00%
Total 3,264,621,824.66 163,764,922.03 --
If the provision for bad debt of accounts receivable is in accordance with the general expected credit loss model, please refer to the
disclosure of bad debt provision for other receivables:
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year(including 1 year) 3,261,150,680.57
1 to 2 years 2,154,196.08
2 to 3 years 832,528.12
Over 3 years 541,755.17
Total 3,264,679,159.94
（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Categories Opening balance Recovered or Closing balance
Accrued Write off Others
reversed
Receivables with provision
57,335.28 57,335.28
made on an individual basis
Receivables with provision 125,458,728.10 39,398,806.27 1,092,612.34 163,764,922.03
113
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
made on a collective basis
Total 125,516,063.38 39,398,806.27 1,092,612.34 163,822,257.31
（3）Actual write-off of accounts receivable in current period
Unit: RMB
Items Write-off amount
Small sporadic accounts receivable 1,092,612.34
（4）Top 5 debtors with the largest accounts receivable balances
Unit: RMB
Proportion to the total balance of Provision for bad debt at the end
Debtors Closing balance
accounts receivable of the period
Top 5 debtors with the
1,171,560,371.61 35.89% 58,578,018.58
largest balances
Total 1,171,560,371.61 35.89%
6. Advances paid
（1）Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 97,728,785.42 96.52% 61,348,884.20 88.39%
1 to 2 years 2,502,832.59 2.47% 6,712,609.39 9.67%
2 to 3 years 350,677.15 0.35% 64,117.70 0.09%
Over 3 years 668,758.92 0.66% 1,278,715.16 1.84%
Total 101,251,054.08 -- 69,404,326.45 --
（2）Top 5 debtors with the largest advances paid balances
Closing balance of top 5 debtors totaled RMB 24,289,065.18，accounting for 23.99% of the total closing
balance of advances paid.
114
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 98,155,207.51 76,935,495.05
Total 98,155,207.51 76,935,495.05
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Tax refund receivable 50,947,804.02 36,628,075.87
Guarantee deposits 32,226,145.19 30,801,053.14
Others 17,412,718.56 11,700,014.42
Total 100,586,667.77 79,129,143.43
2）Provision of bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt 12month expected Lifetime expected credit Lifetime expected credit Subtotal
credit losses losses (credit not impaired) losses (credit impaired)
Balance on January 1,
856,410.48 1,337,237.90 2,193,648.38
2021
The balance as of
January 1, 2021 is in the —— —— —— ——
current period
Provision made in the
441,538.92 441,538.92
current period
Provision recovered in
203,727.04 203,727.04
current period
Balance on June 30, 2021 1,297,949.40 1,133,510.86 2,431,460.26
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclose by aging
Unit: RMB
Aging Closing balance
115
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Within 1 year (including 1 year) 1,297,949.40
1 to 2 years 126,719.58
2 to 3 years 278,342.70
Over 3 years 728,448.58
Total 2,431,460.26
3）Details of the top 5 debtors with largest balances
Unit: RMB
Proportion to the Provision for bad
Items Nature of receivables Closing balance Ages total balance of debt at the end of
other receivables the period
Tax refund receivables Tax refund 50,947,804.02 Within 1 year 50.65%
Finance Bureau of Xinchang
Performance bond 6,971,285.00 1 to 4 years 6.93%
County
Shaoxing Binhai New City Performance bond for land
5,410,000.00 3 to 4 years 5.38%
Management Committee and project construction
Xinchang County Land Deposit of construction
3,774,000.00 5 to 8 years 3.75%
Reserve Development Center projects
Wuhu Yijiang District Finance Deposit of construction
3,751,000.00 3 to 4 years 3.73%
Bureau projects
Total -- 70,854,089.02 -- 70.44%
4）Other receivables related to Government grants
Unit: RMB
Estimated receipt time,
Items Government grant Closing balance Ages
amount and basis
Local finance and VAT refund of civil From July to October,
1,735,806.82 Within 1 year
taxation departments welfare enterprises 2021, Tax refund return
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
（1）Categories of inventories
Unit: RMB
Items Closing balance Opening balance
116
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Provision for Provision for
decline in decline in
value of value of
inventories or inventories or
Book balance provision for Carrying amount Book balance Book balance provision for
impairment of impairment of
contract contract
performance performance
costs costs
Raw materials 798,314,357.03 39,409,438.41 758,904,918.62 530,578,235.34 38,591,465.21 491,986,770.13
Work-in-progress 267,306,340.68 955,782.93 266,350,557.75 377,607,984.60 661,948.94 376,946,035.66
Finished goods 1,931,323,857.32 46,652,663.72 1,884,671,193.60 1,488,998,382.81 55,323,878.13 1,433,674,504.68
Others 7,877,177.93 7,877,177.93 5,154,395.99 5,154,395.99
Total 3,004,821,732.96 87,017,885.06 2,917,803,847.90 2,402,338,998.74 94,577,292.28 2,307,761,706.46
（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 Reversal or write Closing balance
Accrued Others Others
off
Raw materials 38,591,465.21 4,457,352.23 3,639,379.03 39,409,438.41
Work-in-progress 661,948.94 293,833.99 955,782.93
Finished goods 55,323,878.13 13,863,394.33 22,534,608.74 46,652,663.72
Total 94,577,292.28 18,614,580.55 26,173,987.77 87,017,885.06
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 67,017,753.97 100,377,659.11
Prepaid Enterprise income tax 63,363,501.00 49,911,203.33
Others 1,313,092.07 171,625.57
Total 131,694,347.04 150,460,488.01
117
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
10. Long-term receivable
（1）Long-term receivable
Unit: RMB
Closing balance Opening balance
Range of
Items Provision for Carrying Provision for Carrying
Book balance Book balance discount rate
bad debt amount bad debt amount
Employee home
2,295,085.00 2,295,085.00 2,074,750.00 2,074,750.00
loan
Total 2,295,085.00 2,295,085.00 2,074,750.00 2,074,750.00 --
Impairment of provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt 12month expected Lifetime expected credit Lifetime expected credit Total
credit losses losses (credit not impaired) losses (credit impaired)
The balance as of
January 1, 2021 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
Closing
Cash
Investme balance
Opening Adjustme dividends Closing
nt income Provision of
balance Investme Investme nt in other Changes or profit balance
Investees recognize for provision
(Carrying nt nt comprehe in other declared Others (Carrying
d under impairme for
amount) increased decreased nsive equity to amount)
equity nt impairme
income distributio
method nt
n
Ⅰ. Joint ventures
Ⅱ.Associates
Guochuan
g Energy
1,525,252 1,540,513
Internet 15,260.42
.76 .18
Innovatio
n Center
118
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(Guangdo
ng) Co.,
Ltd.
Chongqin
g Tainuo
9,396,904 3,344,529 1,500,000 11,241,43
Machiner
.73 .44 .00 4.17
y Co.,
Ltd.
Nanchang
Sanhua
Jinlifeng 1,517,138 1,515,375
-1,763.92
Machiner .95 .03
y Co.,
Ltd.
Ningbo
Jinlifeng
1,062,209 345,870.3 1,408,079
Machiner
.18 6 .54
y Co.,
Ltd.
Qingdao
Sanhua
Jinlifeng
0.00 0.00
Machiner
y Co.,
Ltd.
Zhongsha
n Xuanyi
Pipe 1,718,111 404,994.4 2,123,105
Manufact .06 0 .46
uring Co.,
Ltd.
Xinchang
zhejiang
energy
sanhua
0.00 0.00
comprehe
nsive
energy
co.
15,219,61 4,108,890 1,500,000 17,828,50
Subtotal
6.68 .70 .00 7.38
Total 15,219,61 4,108,890 1,500,000 17,828,50
119
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
6.68 .70 .00 7.38
Other remarks:
Qingdao Sanhua Jinlifeng Machinery Co., Ltd. has been insolvent, the equity investment has been reduced to
zero yuan; As of June 30, 2021, 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
Items Buildings and structures Construction in progress Total
Overseas land ownership
Ⅰ. Original Carrying
amount
1. Opening balance 12,643,427.54 3,539,025.00 16,182,452.54
2. Increase in current
-403,290.39 -149,410.80 -552,701.19
period
(1) Acquisition
(2) Transferred in from
inventory\fixed assets\
construction in progress
(3) Business combination
(4) Converted difference
in Foreign Currency -403,290.39 -149,410.80 -552,701.19
Statements
3. Decrease in current
period
(1) Disposal
(2) Other transfer out
4. Closing balance 12,240,137.15 3,389,614.20 15,629,751.35
Ⅱ. Accumulated
depreciation and
amortization
1. Opening balance 6,114,863.58 6,114,863.58
2. Increase in current
116,711.23 116,711.23
period
120
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(1) Depreciation or
380,365.53 380,365.53
amortization
(2) Converted difference
in Foreign Currency -263,654.30 -263,654.30
Statements
3. Decrease in current
period
(1) Disposal
(2) Other transfer out
4. Closing balance 6,231,574.81 6,231,574.81
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 6,008,562.34 3,389,614.20 9,398,176.54
2. Opening balance 6,528,563.96 3,539,025.00 10,067,588.96
13. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 3,965,615,647.93 3,839,408,059.45
Total 3,965,615,647.93 3,839,408,059.45
（1）Fixed assets
Unit: RMB
121
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Measurement
Buildings and Machinery and Transportation Office and other
Items analysis Total
structures equipment vehicles equipment
equipment
Ⅰ. Original book
value:
1. Opening
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
2. Increase in
-3,329,066.88 331,090,911.94 7,942,035.57 2,097,563.13 6,744,983.38 344,546,427.14
current period
(1) Acquisition 95,281,538.93 8,411,514.29 2,351,291.15 8,262,324.06 114,306,668.43
(2) Transferred in
from construction 5,563,254.51 251,194,456.72 256,757,711.23
in progress
(3) Business
combination
(4) Converted
difference in -8,892,321.39 -15,385,083.71 -469,478.72 -253,728.02 -1,517,340.68 -26,517,952.52
Foreign
3. Decrease in
13,242,839.12 462,910.27 956,717.03 8,098,164.35 22,760,630.77
current period
(1) Disposal or
13,242,839.12 462,910.27 956,717.03 8,098,164.35 22,760,630.77
scrap
4.Closing balance 2,332,421,408.13 3,957,097,979.59 122,930,710.72 41,495,025.10 235,585,806.13 6,689,530,929.67
Ⅱ. Accumulated
depreciation
1. Opening
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
2. Increase in
42,520,529.36 151,621,285.50 5,646,196.60 1,633,711.35 8,077,616.47 209,499,339.28
current period
(1) Accrual 44,929,601.97 159,841,857.17 5,700,348.95 1,753,189.02 9,021,453.76 221,246,450.87
(2) Converted
difference in
-2,409,072.61 -8,220,571.67 -54,152.35 -119,477.67 -943,837.29 -11,747,111.59
Foreign Currency
Statements
3. Decrease in
9,017,193.54 439,764.76 954,046.09 3,510,127.00 13,921,131.39
current period
(1) Disposal or
9,017,193.54 439,764.76 954,046.09 3,510,127.00 13,921,131.39
scrap
122
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
4. Closing
654,301,397.17 1,821,080,603.86 45,305,782.66 31,083,742.57 168,449,424.80 2,720,220,951.06
balance
Ⅲ. Provision for
impairment
1. Opening
3,694,330.68 3,694,330.68
balance
2. Increase in
current period
(1) Accrual
3. Decrease in
current period
(1) Disposal or
scrap
4.Closing balance 3,694,330.68 3,694,330.68
Ⅳ. Carrying
amount
1. Closing
1,678,120,010.96 2,132,323,045.05 77,624,928.06 10,411,282.53 67,136,381.33 3,965,615,647.93
balance
2. Opening
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）Fixed assets with certificate of titles being unsettled
Unit: RMB
Items Carrying amount Reasons for unsettlement
New assets, the certificate of title to be processed
13# factory in Meizhu North district 74,188,222.31
uniformly after the overall completion
Finished goods warehouse in Meizhu New assets, the certificate of title to be processed
20,742,454.16
North district uniformly after the overall completion
New assets, the certificate of title to be processed
14# factory in Meizhu North district 23,819,727.63
uniformly after the overall completion
New assets, the certificate of title to be processed
15# factory in Meizhu North district 58,312,098.92
uniformly after the overall completion
New assets, the certificate of title to be processed
Shaoxing new energy plant (Phase Ⅰ) 146,061,271.52
uniformly after the overall completion
123
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
小计 323,123,774.54
14. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 914,010,795.59 628,730,529.07
Total 914,010,795.59 628,730,529.07
（1）Details of construction in progress
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Book balance Provision for Carrying
Book balance
impairment amount impairment amount
Annual production of 7.3
million sets of new energy
138,826,452.14 138,826,452.14 145,885,533.67 145,885,533.67
vehicle thermal management
system components project
Annual production of 12.7
million sets of automotive air
13,272,734.98 13,272,734.98
conditioning control
components project
Annual production of 11.5
million sets of new energy 78,054,678.49 78,054,678.49 78,290,263.60 78,290,263.60
auto parts project
Annual production of 1.5
million sets of new energy
168,660,657.79 168,660,657.79 88,939,186.18 88,939,186.18
thermal management
components project
Annual production of 1
million sets of new energy
1,038,025.68 1,038,025.68 3,772,038.19 3,772,038.19
vehicle air-conditioning
thermal sensors project
Annual production of 11
million sets of high-efficiency
25,437,837.80 25,437,837.80
heat exchanger components
for new energy vehicles
Annual production of 65
101,456,068.31 101,456,068.31 25,812,948.25 25,812,948.25
million sets of commercial
124
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
refrigeration and air
conditioning intelligent
control components
construction project
Annual output of 50.5 million
sets of high efficiency and
energy saving refrigeration
15,371,049.05 15,371,049.05 11,841,050.00 11,841,050.00
and air conditioning control
components technology
transformation projects
Annual output of 27.5 million
tubing part and 10,000 tons of
38,692,424.61 38,692,424.61 20,961,098.29 20,961,098.29
stainless steel pipe
construction project
Vietnam industrial plant
97,028,569.59 97,028,569.59 80,569,043.24 80,569,043.24
project
Others 236,172,297.15 236,172,297.15 172,659,367.65 172,659,367.65
Total 914,010,795.59 914,010,795.59 628,730,529.07 628,730,529.07
（2）Changes of significant construction in progress in current period
125
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Unit: RMB
Transferred Other Including: Capitalizatio
Accumulated Completio Accumulate
to fixed amounts capitalize n rate for
Opening Increased in Closing investment n d amount of Fund
Items Budget assets in decreased d interest interest in
balance current period balance to budget percentage capitalized source
the current in current in current current
(%) (%) interest
period period period period
Annual production of 7.3
million sets of new energy
468,600,000.0 Raised
vehicle thermal 145,885,533.67 148,210,461.30 155,269,542.83 138,826,452.14 104.28%
0 funds
management system
components project
Annual production of 12.7
million sets of automotive 215,000,000.0 Raised
13,329,200.13 56,465.15 13,272,734.98 91.12%
air conditioning control 0 funds
components project
Annual production of 11.5
528,800,000.0 Raised
million sets of new energy 78,290,263.60 49,586,870.52 49,822,455.63 78,054,678.49 87.00%
0 funds
auto parts project
Annual production of 1.5
million sets of new energy 500,000,000.0
88,939,186.18 102,836,403.92 23,114,932.31 168,660,657.79 38.41% Other
thermal management 0
components project
Annual production of 1
million sets of new energy
44,786,000.00 3,772,038.19 2,734,012.51 1,038,025.68 45.81% Other
vehicle air-conditioning
thermal sensors project
126
Zhejiang Sanhua Intellige
Annual production of 11
million sets of
760,000,000.0
high-efficiency heat 25,437,837.80 25,437,837.80 3.35%
0
exchanger components for
new energy vehicles
Annual production of 65
million sets of commercial
refrigeration and air 1,780,550,000
25,812,948.25 75,643,120.06 101,456,068.31 7.01%
conditioning intelligent .00
control components
construction project
Annual output of 50.5
million sets of high
efficiency and energy
785,570,000.0
saving refrigeration and air 11,841,050.00 20,226,039.05 16,696,040.00 15,371,049.05 4.10%
0
conditioning control
components technology
transformation projects
Annual output of 27.5
million tubing part and
409,420,000.0
10,000 tons of stainless 20,961,098.29 17,731,326.32 38,692,424.61 9.45%
0
steel pipe construction
project
Vietnam industrial plant 180,882,800.0
80,569,043.24 16,459,526.35 97,028,569.59 52.14%
project 0
5,673,608,800
Total 456,071,161.42 469,460,785.45 247,693,448.43 677,838,498.44 -- --
.00
Zhejiang Sanhua Intellige
15. Intangible Assets
（1）Details of intangible assets
Intellectual property right Patent technology
Non-patent Overseas land
Items Land use right Patent right of air conditioner electronic exp
technology ownership
controller controll
Ⅰ. Original book value
1. Opening balance 552,419,787.61 28,945,626.51 42,150,175.56 6
2. Increased in current period 106,915,159.83 35,839,547.38
(1) Acquisition 107,284,800.00 36,642,563.43
(2) Internal research and
development
(3) Business combination
(4 ) Converted difference in
-369,640.17 -803,016.05
Foreign
3. Decreased in current period
(1) Disposal
4. Closing balance 659,334,947.44 64,785,173.89 42,150,175.56 6
Ⅱ. Accumulated amortization
1.Opening balance 99,284,584.15 314,580.96 25,152,312.84 1
2. Increased in current period 6,408,869.88 84,765.91 1,947,508.82
(1) Accrual 6,425,475.49 92,303.33 1,947,508.82
Zhejiang Sanhua Intellige
(2) Converted difference in
-16,605.61 -7,537.42
Foreign
3. Decreased in current period
(1) Disposal
4. Closing balance 105,693,454.03 399,346.87 27,099,821.66 1
Ⅲ. Provision for impairment
1.Opening balance 3,862,456.71
2. Increased in current period -38,358.78
(1) Accrual
(2) Converted difference in
-38,358.78
Foreign
3. Decreased in current period
(1) Disposal
4. Closing balance 3,824,097.93
Ⅳ. Carrying amount
1. Closing balance 553,641,493.41 60,561,729.09 15,050,353.90 5
2. Opening balance 453,135,203.46 24,768,588.84 16,997,862.72 5
At the balance sheet date, intangible assets formed from internal R&D account for 0.00% of total closing balance of intangible assets.
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
16. Goodwill
（1）Original Carrying amount of goodwill
Unit: RMB
Investee or events Increased in current period Decreased in current period
resulting in Opening balance Due to business Closing balance
Disposal
goodwill combination
R-Squared
31,959,091.60 31,959,091.60
Puckett Inc.
Total 31,959,091.60 31,959,091.60
17. Long-term prepayments
Unit: RMB
Increased in current
Items Opening balance Amortization Other decreases Closing balance
period
Plant renovation
23,706,401.61 7,076,194.30 4,642,412.23 26,140,183.68
expenditure
Total 23,706,401.61 7,076,194.30 4,642,412.23 26,140,183.68
18. Deferred tax assets / deferred tax liabilities
（1）Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible temporary Deferred tax Deductible temporary
Deferred tax assets
difference assets difference
Provision for bad debt 115,626,649.82 23,099,167.21 78,915,609.30 15,835,440.18
Provision for inventory write-down 62,933,045.42 10,444,607.18 67,642,565.60 11,282,463.93
Unrealized profit from internal transactions 185,453,037.25 22,200,912.62 180,209,650.54 17,242,885.11
Deductible losses 148,946,529.36 29,996,233.85 153,097,367.85 32,871,988.62
Deferred income: government grants 134,799,813.94 22,257,469.79 140,105,328.43 22,782,106.08
Provision for fixed assets impairments 3,694,330.68 554,149.62 3,694,330.68 554,149.61
Floating loss on derivatives 3,665,344.50 549,801.68 300,000.00 45,360.00
Share-paid remuneration 193,768,250.56 30,827,179.70 209,618,110.53 33,059,655.93
Provisional cost estimate 28,942,635.18 4,327,806.20 27,565,532.12 4,134,829.82
Total 877,829,636.71 144,257,327.85 861,148,495.05 137,808,879.28
130
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（2）Deferred tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Items Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Depreciation and
867,295,201.66 149,245,103.66 770,755,369.92 128,446,514.86
amortization expense
Floating gain on
13,672,819.75 2,261,859.33 13,804,602.36 2,070,690.35
derivatives
Floating gain on financial
10,034.26 1,505.14 1,739,861.78 260,979.27
products
Total 880,978,055.67 151,508,468.13 786,299,834.06 130,778,184.48
（3）Deferred tax assets or liabilities after offset shown on a net offsetting basis
Unit: RMB
Deferred tax assets and liabilities Closing balance of Deferred tax assets and Opening balance of
Items offset amount at the end of the deferred tax assets or liabilities offset amount at deferred tax assets or
balance amount liabilities after offset the beginning of the period liabilities after offset
Deferred tax
144,257,327.85 137,808,879.28
assets
Deferred tax
151,508,468.13 130,778,184.48
liabilities
（4）Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 66,462,431.30 55,823,915.76
Provision for inventory write-down 24,084,839.64 26,934,726.68
Deductible losses of subsidiaries 26,719,611.87 24,790,389.63
Provision for intangible assets impairments 3,824,097.93 3,862,456.71
Floating loss on derivatives 4,061,040.12 7,639,957.91
Share-paid remuneration 12,106,170.57 11,139,485.50
Investment losses recognized by the equity
6,428,507.38 4,319,616.68
method
Total 143,686,698.81 134,510,548.87
131
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-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 2025 445,585.90 445,585.90
Year 2026 2,147,004.73
Year 2028 10,478,078.42 10,478,078.42
Year 2029 7,488,066.67 7,488,066.67
Year 2030 6,146,831.81 6,378,658.64
Year 2031 14,044.34
Total 26,719,611.87 24,790,389.63 --
19. Other non-current assets
Unit: RMB
Closing balance Opening balance
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Advanced payment for
365,696,226.22 365,696,226.22 251,509,127.08 251,509,127.08
assets purchasing
Total 365,696,226.22 365,696,226.22 251,509,127.08 251,509,127.08
20. Short-term borrowings
（1）Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Credit borrowings 20,000,000.00
Overseas loan under domestic guarantee 520,960,900.00 362,698,500.00
Accrued interest 420,293.64 389,796.60
Total 521,381,193.64 383,088,296.60
21. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 3,100,848.00 7,939,957.91
132
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Futures tool 4,625,536.62
Total 7,726,384.62 7,939,957.91
22. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 1,856,484,983.84 1,238,574,463.73
Total 1,856,484,983.84 1,238,574,463.73
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 2,476,690,653.88 2,184,050,911.51
1 to 2 years 7,670,181.61 88,579,882.54
2 to 3 years 2,553,875.30 1,289,268.11
Over 3 years 4,761,089.42 5,741,693.81
Total 2,491,675,800.21 2,279,661,755.97
24. Advances received
（1）Details of advances received
Unit: RMB
Items Closing balance Opening balance
Advance collection of asset package
10,000,000.00 10,000,000.00
disposal funds
Total 10,000,000.00 10,000,000.00
25. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Advance payment for goods 44,096,560.86 42,581,607.67
Total 44,096,560.86 42,581,607.67
133
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
26. Employee benefits payable
（1）Details of employee benefits payable
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Ⅰ. Short-term employee
282,701,491.43 938,462,396.23 1,008,263,483.03 212,900,404.63
benefits
Ⅱ. Post-employment
benefits - defined 2,888,141.35 33,893,467.67 32,910,297.65 3,871,311.37
contribution plan
Ⅲ. Termination benefits 3,716,281.21 519,403.32 3,196,877.89
Total 289,305,913.99 972,355,863.90 1,041,693,184.00 219,968,593.89
（2）Details of Short-term employee benefits
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1. Wage, bonus, allowances and subsidy 264,874,751.98 793,550,205.74 864,919,353.82 193,505,603.90
2. Employee welfare fund 27,709,433.14 27,709,433.14
3. Social insurance premium 10,408,040.81 54,208,888.92 52,896,580.40 11,720,349.33
Including：Occupational injuries
256,781.03 805,218.15 827,973.35 234,025.83
premium
Medicare premium and Maternity
2,405,489.05 18,967,757.73 19,016,455.93 2,356,790.85
premium
Overseas social security contributions 7,745,770.73 34,435,913.04 33,052,151.12 9,129,532.65
4. Housing provident fund 16,029,179.81 16,029,179.81
5. Trade union fund and employee education
1,224,164.06 3,590,876.43 3,554,347.13 1,260,693.36
fund
Dispatching remuneration 3,460,279.64 43,149,696.73 43,154,588.73 3,455,387.64
Cash stock appreciation option 2,734,254.94 224,115.46 2,958,370.40
Total 282,701,491.43 938,462,396.23 1,008,263,483.03 212,900,404.63
134
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（3）Details of defined contribution plan
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1. Basic endowment
2,771,543.35 32,894,443.29 31,945,151.28 3,720,835.36
insurance premium
2. Unemployment
116,598.00 999,024.38 965,146.37 150,476.01
insurance premium
Total 2,888,141.35 33,893,467.67 32,910,297.65 3,871,311.37
27. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
VAT 23,370,647.97 14,647,359.92
Enterprise income tax 66,877,724.47 33,105,141.57
Individual income tax 5,192,919.69 5,797,449.67
Urban maintenance and construction tax 1,894,588.22 2,283,772.47
Education surcharge 978,617.02 1,207,595.10
Local education surcharge 652,424.69 717,275.16
Housing property tax 7,615,056.89 14,503,893.38
Land use tax 6,375,492.82 2,162,780.06
Local foundation for water works 73,179.76 60,119.04
Others 690,572.93 522,755.69
Total 113,721,224.46 75,008,142.06
28. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividend payable 1,200,000.00
Other payables 228,347,075.23 270,888,400.58
Total 229,547,075.23 270,888,400.58
（1）Dividend payable
Unit: RMB
135
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Items Closing balance Opening balance
Dividend of common stock 1,200,000.00
Total 1,200,000.00
（2）Other payables
1）Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 106,824,717.50 145,063,690.00
Freight and miscellaneous charges 69,107,949.99 72,117,058.15
Product warranty fee 3,030,855.08 2,757,036.90
Guarantee deposit 13,589,517.70 6,564,169.23
Rent and property fee 2,044,648.52 7,877,975.71
Compensation for product quality loss 1,303,380.14 3,889,429.08
Collection of talent awards 6,013,705.92 1,320,000.00
Others 26,432,300.38 31,299,041.51
Total 228,347,075.23 270,888,400.58
29. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 770,000,000.00
Overseas loan under domestic guarantee 241,362,511.00 130,498,000.00
Accrued interest 778,827.04 55,923.87
Total 1,012,141,338.04 130,553,923.87
30. Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 660,000,000.00 1,380,000,000.00
Overseas loan under domestic guarantee 256,465,970.00 326,142,884.74
Accrued interest 959,721.86 1,776,110.13
136
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Total 917,425,691.86 1,707,918,994.87
31. Bonds payable
（1）Bonds payable
Unit: RMB
Items Closing balance Opening balance
Convertible bond 2,588,449,353.66
Total 2,588,449,353.66
（2） Changed amount in current period（Excluding preferred shares, perpetual bonds and other financial
instruments classified as financial liabilities）
Unit: RMB
Premium
Accrued Repayme
Issue in or
Nominal Bond Issue Opening interest at nt in Closing
Bonds Issue date current discount
value duration amount balance nominal current balance
period amortizati
value period
on
Sanhua
Jun 1, 3,000,000 2,577,764 500,000.0 10,184,90 2,588,449
convertibl 100.00 6 years
2021 ,000.00 ,452.17 0 1.49 ,353.66
e bond
3,000,000 2,577,764 500,000.0 10,184,90 2,588,449
Total -- -- --
,000.00 ,452.17 0 1.49 ,353.66
（3）Condition for shares converted from convertible bond and the time of conversion
According to ZJXK [2021] No. 168, the company issued RMB 3 billion convertible bonds on June 1, 2021. The Company
issued 30 million convertible corporate bonds with a nominal value of RMB 100.
Condition for shares converted from convertible bond and the time of conversion:
1) Bond duration: The term of convertible bonds is 6 years from the date of issuance, i.e. from June 1, 2021 to May 31, 2027
2) Nominal interest rate: 0.2% in the first year, 0.4% in the second year, 0.6% in the third year, 1.5% in the fourth year, 1.8% in
the fifth year and 2.0% in the sixth year.
3) Initial shares conversion price: the initial conversion price of the convertible bonds is RMB 21.55 per share. During the
duration of the convertible bond, when the closing price of the Company's stock is lower than 85% of the current conversion price for
at least 15 trading days in any 30 consecutive trading days, the board of directors of the Company has the right to propose a
downward amendment for the conversion price and submit it to the general meeting of shareholders of the Company for deliberation
and voting.
4) Term of conversion: the term of the convertible bond starts from the first trading day (December 7, 2021), 6 months after the
end of the issuance on June 7, 2021(T + 4 days), to the maturity date of the convertible bond (May 31, 2027)
137
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
5) Redemption conditions:
a. Redemption at maturity
Within five trading days after the maturity of convertible bond issuance, the Company will redeem the unconverted convertible
bond at a price of 110% of the bond's nominal value (including the last instalment interest)
b. Conditional redemption
During the conversion period, when any of the following situations occurs, the Company reserves the right to decide to redeem
all or part of the convertible bonds that have not been converted at the nominal value of the bonds plus the accrued interest for the
current period.
(1) The closing price of the Company's stock shall not be lower than 130% of the current conversion price for at least 15
trading days in any 30 consecutive trading days.
(2) When the unconverted balance of convertible bond is less than RMB 30 million.
6) Puttable bonds provision
a. Conditional convertible puttable bonds
In the last two interest bearing years of the Conditional Convertible Puttable Bonds (“the Puttable Bonds”), if the company's
stock closing price for any 30 consecutive trading days is lower than 70% of the current conversion price, the Puttable Bonds holders
have the right to resell all or part of the Puttable Bonds to the Company at the nominal value plus the current accrued interest. If the
conversion price has been adjusted within by the above 30 trading days, the trading day before adjustment should be calculated
according to the conversion price and closing price before adjustment, and the trading day after adjustment shall be calculated
according to the conversion price and closing price after adjustment. In case of downward amendment for the conversion price, the
above 30 consecutive trading days should be recalculated from the first trading day after downward amendment for the conversion
price.
Within the last two interest bearing years of the Puttable Bonds, after the conditions for exercise right are met for the first time
each year, the holder of the Puttable Bonds can exercise the puttable right once in accordance with the above agreed conditions. If the
conditions for bondholders to exercise the right to early repayment of the principal are met for the first time and the holder of the
Puttable Bonds fails to notify their intention to exercise it during the repurchase declaration period announced by the company at that
time, the bondholder right to early repayment shall not be exercised in the interest calculation year. Each puttable bond holder can
exercise the puttable right only once in accordance with the above agreed conditions.
b. Additional issuance of puttable bonds
If there is a significant change in the implementation of the company’s investment project with the proceeds raised from the
issuance of Puttable Bonds and the company’s commitment in the prospectus, it will be deemed to be a change in the use of the
proceeds according to the relevant provisions of the China Securities Regulatory Commission or be recognized by the China
Securities Regulatory Commission as if the purpose of the raised funds is changed, the holders of the Puttable Bonds have the option
to exercise the right once to early repayment of principal. Holders of Puttable Bonds have the right to sell all or part of their Puttable
Bonds back to the company at the bond face value plus current accrued interest. In the event that additional issuance of puttable
bonds conditions are met, the existing holder can exercise its right for the bond to be redeemed during the reporting period after the
company's announcement; if the right to redemption is not exercised during the reporting period by the bondholder, the bondholder’s
right shall not be exercised.
32. Long-term payables
Unit: RMB
Items Closing balance Opening balance
138
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Long-term payables 84,940,677.91 90,336,083.27
Total 84,940,677.91 90,336,083.27
（1）Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Payables for financial leasing 84,162,723.15 89,432,221.08
Stock appreciation rights deposit 777,954.76 903,862.19
Payables for financial leasing
Remaining lease term Closing balance Opening balance
Within 1 year 9,196,945.21 6,417,433.10
1 to 2 years 9,840,440.59 10,274,197.36
2 to 3 years 10,019,388.66 10,274,197.36
Over 3 years 62,098,461.15 70,534,422.75
Subtotal 91,155,235.61 97,500,250.57
Less: Unrecognized financing charges 6,992,512.46 8,068,029.49
Subtotal 84,162,723.15 89,432,221.08
33. Accrued Liability
Unit: RMB
Items Closing balance Opening balance Reason
Pending litigation 2,638,000.00
Total 2,638,000.00 --
34. Deferred income
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance Reason
period period
Government grants 140,105,336.43 4,700,000.00 10,005,522.49 134,799,813.94
Total 140,105,336.43 4,700,000.00 10,005,522.49 134,799,813.94 --
139
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Projects related to government grants：
Unit: RMB
Grants included
The amount
into Offsetting cost Related to
Increased in recorded as Closing
Items Opening balance Non-operating and expenses in Other changes assets/related to
current period other income in balance
revenue in current period income
current period
current period
Grant for project of an annual output of 15 million
Related to
commercial refrigeration and air-conditioning 2,449,000.20 1,224,499.98 1,224,500.22
assets
automatic control components
Special fund grant for multistory factory buildings of Related to
4,995,134.10 110,959.98 4,884,174.12
small and medium-sized enterprises assets
Grant for innovation ability construction project of Related to
3,125,000.16 312,499.98 2,812,500.18
National Enterprise Technology Center assets
Grant for technical transformation project of newly Related to
2,274,000.00 379,000.00 1,895,000.00
increased 800000 sets of heat exchanger per year assets
Grant for technical transformation project of new
Related to
annual output of 2 million air conditioning 2,208,000.08 276,000.00 1,932,000.08
assets
components
Grant for the industrialization project of 20 million
Related to
refrigeration and air conditioning automatic control 278,837.70 278,837.70
assets
components
Grant for commercial machine micro-channel heat Related to
1,291,850.00 369,100.00 922,750.00
exchanger technical transformation project assets
Grant for 1 million sets of air-conditioning thermal
Related to
sensor technology transformation of new energy 5,492,100.16 500,000.00 457,674.95 5,534,425.21
assets
vehicle
140
Zhejiang Sanhua Intellige
Grant for an annual output of 2 million sets of
1,779,470.08 257,973.82
high-efficiency energy-saving inverter controllers
Grant for technical transformation project of newly
5,056,860.00 421,405.00
increased 100000 sets of heat exchanger per year
Grant for construction project of public test and
detection service platform for refrigeration 699,999.64 350,000.04
components
Grant for the construction project of automatic control
components for residential air conditioners with an 480,000.00 240,000.00
annual output of 10 million
Grant for pollution source treatment project 1,168,491.67 89,450.00
Grant for construction project of public inspection and
testing service platform for automobile air 256,666.87 192,499.98
conditioning parts
Technical transformation project for the production
line of energy-saving residential air-conditioning
497,115.56 63,461.52
control components with an annual output of 50
million sets
Grant for construction project of 25 million sets of
new energy-saving and environmental protection 340,000.28 67,999.98
variable frequency air conditioning expansion valve
Industrial transfer projects and single equipment
306,364.06 71,196.42
investment grant
Comprehensive investment award for technological
2,985,248.00 178,944.00
transformation of industrial enterprises in Wuhu City
Industrial transformation and upgrading, technological 1,412,834.44 101,212.44
Zhejiang Sanhua Intellige
transformation and industrial investment
Grant for comprehensive technical transformation
project of intelligent manufacturing of refrigeration 5,799,850.00 414,274.98
components
Grant for technical transformation project of 30
million sets of high efficiency energy saving 6,400,000.00 400,000.02
refrigeration and air conditioning control components
Grant for project of an annual output of 11.5 million
17,663,068.27 4,200,000.00 1,488,090.22
new energy automobile parts
Four-way reversing valve optimization project 573,333.44 79,999.98
Policy grant for Wuhu City's strong industrial base
705,000.00 45,000.00
and manufacturing strong province
Grant for technical transformation project of annual
output of 7.3 million new energy vehicle thermal 40,380,000.00
management system components
Annual production of 3 million self-circulating
717,750.00 49,500.00
superconducting plates technology project
Intelligent factory technological transformation
3,624,999.89 250,000.02
project based on The Internet of Things technology
Grant for intelligent manufacturing technical
transformation project of an annual output of 6 million 2,631,220.00 180,000.00
commercial refrigeration components
Comprehensive award and compensation for
investment in technological transformation of 1,942,702.09 137,982.12
industrial enterprises
Grant for technical transformation project of annual 1,115,724.17 56,254.98
Zhejiang Sanhua Intellige
output of 12 million commercial refrigeration
control components
Grant for equipments promoting new type industrial
1,273,707.32 65,888.98
technological transformation
Product technical transformation project of annual
6,025,050.00 334,725.00
output of 700000 large heat exchangers
Grant for technical transformation project of 30
million sets of high efficiency energy saving 12,015,132.50 605,805.00
refrigeration and air conditioning control components
Grant for energy-saving project with an annual output
of 35 million sets of L-type four-way reversing valve 2,140,825.75 455,285.40
for air conditioners
Total 140,105,336.43 4,700,000.00 10,005,522.49
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
35. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction fund 28,782,218.09 28,782,218.09
Long-term employee rights protection
50,218,720.65 51,616,679.63
payment
Total 79,000,938.74 80,398,897.72
Other remarks:
According to local investment promotion policies, the "seven connections and one leveling" project of the construction land of
the Wuhu city is completed by Wuhu high-tech Industrial Development Zone Administration Committee. As the state-owned assets
management unit of Wuhu high-tech Industrial Development Zone, Wuhu Xinma Investment Co., Ltd. and Wuhu High-tech
Construction Development Co., Ltd. entrusted Wuhu Sanhua Auto-control Components Co., Ltd and Wuhu Sanhua Technology Co.,
Ltd. to build the "seven connections and one leveling" project, and allocated RMB 72.03 million as engineering fund. As of June 30,
2021, 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. Hugo Schrott，father of Mr. Harald Schrott who is
the former actual controller of the Germany Aweco residential appliances business. Based on Austrian labor law, one-time welfare
compensation for termination of labor contract and one-time welfare compensation for retirement, disability and death. The amount
of such liabilities is estimated and determined by an independent actuary.
36. Share capital
Unit: RMB
Changed amount of current period（+/-）
Reserve
Opening balance Issue of new Closing balance
Bonus shares transferred to Others Subtotal
shares
shares
Total shares 3,591,601,468.00 3,591,601,468.00
37. Other equity instruments
（1）Changes in preferred shares, perpetual bonds and other financial instruments issued at the end of the
period
Unit: RMB
Financial Opening balance Increased in current period Decreased in current period Opening balance
instruments
Quantity Book value Quantity Book value Quantity Book value Quantity Book value
issued
144
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Convertible 409,766,556. 409,766,556.
bond 24 24
409,766,556. 409,766,556.
Total
24 24
Changes of other equity instruments in the current period, explanation of change reasons, and basis of relevant accounting treatment:
With the approval of [2021] No. 168 document of China Securities Regulatory Commission, the company publicly issued 30
million convertible bonds on June 1, 2021, with a nominal value of RMB100 per share, a total issuance amount of RMB 3 billion and
a term of 6 years. The total amount of funds raised from the issuance of convertible bonds is RMB 3 billion, after deducting the
issuance expenses of RMB 12,468,991.59 (excluding tax), the actual net amount of funds raised is RMB 2,987,531,008.41.
With reference to the credit bond interest rates of similar enterprises with AA + credit rating and similar maturities in the market,
and after deducting the bond issuance expenses, the value of the convertible bond debt instrument is RMB 2,577,764,452.17 and the
value of the equity instrument is RMB 409,766,556.24.
38. Capital reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Capital premium（Share
99,640,721.51 41,153,220.00 140,793,941.51
premium）
Other capital reserve 215,776,712.71 26,270,045.10 47,326,203.00 194,720,554.81
Total 315,417,434.22 67,423,265.10 47,326,203.00 335,514,496.32
Other remarks, including changed amount of the current period and movement reason:
Reasons for changes in the current period：①In current period, the company have unlocked 4,596,150 equity incentive restricted
shares, corresponding to share-based payment remuneration of RMB 41,153,220.00, transfer the same amount from capital reserve to
share premium, and reduce other capital reserves and deferred income tax assets RMB 6,172,983.00；②Other capital reserve
increased RMB 26,270,045.10 due to the confirmation of share-based payment remuneration.
39. Treasury shares
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Restricted shares 145,063,690.00 38,238,972.50 106,824,717.50
Repo shares 136,420,051.34 136,420,051.34
Total 281,483,741.34 38,238,972.50 243,244,768.84
Other remarks, including changed amount of the current period and movement reason:
①In April 2021, the company implemented the 2020 equity distribution with a dividend of RMB 5,553,275.00 for equity
incentive restricted shares，and the treasury shares and repo obligations payable were reduced by the same amount；②In current
period, the company have unlocked 4,596,150 equity incentive restricted shares, the grant price was RMB 9.85 per share，after
ex-rights dividend adjustment, the price approximately equal to RMB 7.1115 per share（(9.85-0.15)/(1+0.3)-0.1-0.25），unlocked
145
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
amount is RMB 32,685,697.50, and the treasury shares and repo obligations payable were reduced by the same amount.
40. Other comprehensive income (OCI)
Unit: RMB
Changed amount of the current period
Less: OCI Less: OCI
Attributabl Attributabl
Current carried carried
e to e to
Opening period forward forward Less: Closing
Items the parent Non-contr
balance cumulativ transferred to transferred income tax balance
Company olling
e before profit or loss to expense
after interest
income tax undistribut
tax after tax
ed profit
Items to be reclassified -89,624,962. -17,246,63 -17,246,63 -106,871
subsequently to profit or loss 61 5.52 5.52 ,598.13
-89,624,962. -17,246,63 -17,246,63 -106,871
Converted difference in Foreign
61 5.52 5.52 ,598.13
-89,624,962. -17,246,63 -17,246,63 -106,871
Total OCI
61 5.52 5.52 ,598.13
41. Surplus reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Statutory surplus reserve 611,472,556.89 611,472,556.89
Discretionary surplus reserve 8,681,137.20 8,681,137.20
Reserve fund 17,813,919.38 17,813,919.38
Total 637,967,613.47 637,967,613.47
42. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance before adjustment at the end of the
5,890,916,707.83 5,278,392,288.84
previous period
Opening balance after adjustment 5,890,916,707.83 5,278,392,288.84
Add: Net profit attributable to shareholders of the 823,881,221.70 643,481,717.35
146
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
parent company for current year
Less: Payable dividends on ordinary shares 895,454,593.00 413,337,540.30
Closing balance of undistributed profit 5,819,343,336.53 5,508,536,465.89
43. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 7,359,458,785.54 5,303,220,897.98 5,154,036,483.16 3,687,894,611.98
Other operations 314,622,976.15 298,590,581.64 164,142,143.61 151,731,392.72
Total 7,674,081,761.69 5,601,811,479.62 5,318,178,626.77 3,839,626,004.70
44. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 10,179,080.41 11,285,362.07
Education surcharge 5,228,681.60 5,862,443.58
Housing property tax 7,902,829.60 7,739,313.64
Land use tax 4,561,087.17 3,936,973.44
Stamp duty 2,905,152.17 1,718,299.51
Local education surcharge 3,485,801.10 3,917,789.39
Local foundation for water works 480,439.56 317,066.13
Others 1,620,081.44 1,532,392.64
Total 36,363,153.05 36,309,640.40
45. Selling expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 107,494,444.60 89,959,268.53
Warehousing, freight and miscellaneous
170,380,255.46 107,209,661.24
charges
147
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Entertainment expense 15,792,822.53 11,184,991.26
Travel expense 6,797,345.19 7,216,150.87
Market maintenance fee 7,048,733.83 21,127,233.51
Advertising expense 1,899,365.32 3,565,221.92
Others 12,495,802.53 17,179,973.21
Total 321,908,769.46 257,442,500.54
46. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 221,584,740.82 180,394,958.75
Share-based payment remuneration 26,494,160.56 31,363,797.18
Office expense 43,677,277.45 37,525,515.30
Entertainment expense 7,220,376.68 4,931,757.55
Depreciation and amortization expense 34,793,775.73 33,079,843.36
Intermediary service fee 15,889,432.17 15,638,721.85
Vehicle expense 5,647,121.79 3,554,310.73
Others 19,124,651.01 8,861,840.43
Total 374,431,536.21 315,350,745.15
47. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 186,897,454.69 133,441,569.36
Material and power expense 110,747,519.73 70,421,777.52
Depreciation and amortization expense 17,325,821.94 16,095,750.47
Mold manufacturing fee 22,006,077.52 9,274,489.97
Travel expense 1,375,884.50 1,444,769.03
Royalties 2,136,353.46 1,278,190.44
Outsourcing R&D expense 150,000.00 734,967.97
Others 11,536,437.78 7,321,413.62
Total 352,175,549.62 240,012,928.38
148
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
48. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 40,208,255.75 32,558,310.10
Interest income -43,640,017.31 -19,167,271.27
Bank financing fee 802,376.05 1,399,332.23
Cash discount -1,978,825.66 -1,126,936.47
Exchange gains or losses 51,129,161.17 -45,679,616.29
Others 2,783,481.90 2,122,784.66
Total 49,304,431.90 -29,893,397.04
49. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government grants 71,379,416.62 100,414,953.91
Including: VAT refund of civil welfare
4,370,400.00 5,134,826.02
enterprises
VAT refund on software
2,974,905.57 1,689,841.68
products in excess of tax burden
Handling fees for withholding individual
702,064.60 1,113,187.32
income tax
Total 72,081,481.22 101,528,141.23
50. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term equity investments under equity
4,108,890.70 1,826,673.64
method
Investment income of bank financing products 4,163,475.28 20,408,132.79
Gains and losses on settlement of futures contracts 31,449,091.11 -17,407,734.45
Gains and losses on settlement of foreign exchange contract 61,385,788.33 -12,822,186.77
Bill discount interest -3,707,072.41 -114,807.17
149
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Total 97,400,173.01 -8,109,921.96
51. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of bank financing products -613,379.14 -300,099.30
Floating income of futures contracts -11,620,437.02 18,412,630.80
Floating income of foreign exchange contract -20,461,881.22 -11,592,485.54
Total -32,695,697.38 6,520,045.96
52. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -48,442,168.40 -12,874,290.80
Total -48,442,168.40 -12,874,290.80
53. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Inventory write-down loss and contract
-18,614,580.55 -6,302,857.17
performance cost impairment loss
Total -18,614,580.55 -6,302,857.17
54. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of fixed assets 400,172.51 -319,355.00
55. Non-operating revenue
Unit: RMB
150
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Exempted payment 1,062,439.33 637,810.13 1,062,439.33
Compensation and penalty
1,182,168.21 471,406.19 1,182,168.21
income
Gains from retirement of fixed
74,165.94 26,006.68 74,165.94
assets
Others 153,386.66 331,761.81 153,386.66
Total 2,472,160.14 1,466,984.81 2,472,160.14
56. Non-operating expenditures
Unit: RMB
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Donation expenditures 160,000.00 52,072.82 160,000.00
Losses on retirement of fixed
2,097,520.70 1,109,947.20 2,097,520.70
assets
Compensation and liquidated
942,720.28 942,720.28
damages expenses
Others 403,940.72 192,059.13 403,940.72
Total 3,604,181.70 1,354,079.15 3,604,181.70
57. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 162,540,094.71 90,079,636.80
Deferred income tax expenses 8,067,026.45 8,937,711.57
Total 170,607,121.16 99,017,348.37
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
151
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Profit before tax 1,007,084,200.68
Income tax expense based on statutory/applicable tax rate 171,418,116.18
Effect of prior income tax reconciliation 9,019,203.13
Effect of deducible temporary differences or deductible losses
416,537.08
not recognized
Adjustment of permanent differences -10,246,735.23
Income tax expenses 170,607,121.16
58. Other comprehensive income
Please refer to the notes of other comprehensive income of balance sheet items for details.
59. Notes to items of the consolidated cash flow statement
（1）Other cash receipts related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Government grants 44,281,463.72 88,442,413.04
Net change in restricted funds 730,130.35
Interest income 43,640,017.31 19,167,271.27
Rental income 4,188,087.32 5,168,725.74
Guarantee deposit, etc. 19,865,200.23 26,203,437.00
Total 112,704,898.93 138,981,847.05
（2）Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 56,390,427.84
Guarantee deposit 939,945.51 901,638.78
Expense payments for the period 520,664,325.30 315,998,963.23
Total 521,604,270.81 373,291,029.85
152
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（3）Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Redemption of bank financing products 579,087,170.50 276,799,043.00
Net change in restricted funds 850,000.00
Income from settlement of foreign
61,385,788.32
exchange instruments
Income of settlement of futures
31,449,091.11
instruments
Total 671,922,049.93 277,649,043.00
（4）Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Payments for purchasing bank financing
17,000,000.00 505,000,000.00
products
Net change in restricted funds 18,150,010.98 8,965,073.04
Loss from settlement of foreign exchange
12,129,251.67
instruments
Loss of settlement of futures instruments 14,109,054.76
Total 35,150,010.98 540,203,379.47
（5）Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 26,080,652.17
Issuance of convertible bond 2,987,977,500.00
Total 2,987,977,500.00 26,080,652.17
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
153
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Repayment of financial lease and interest 6,345,014.96 2,380,973.66
Bank financing fee 802,376.05 1,399,332.23
Repo shares expenses（including restricted
2,262,423.50
shares）
Total 9,409,814.51 3,780,305.89
60. 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 836,477,079.52 640,867,524.19
Add: Provision for assets impairment loss 67,056,748.95 19,177,147.97
Depreciation of fixed assets, oil and gas assets,
221,626,816.40 188,283,241.38
productive biological assets
Depreciation of right of use assets
Amortization of intangible assets 10,184,699.56 9,406,201.41
Amortization of Long-term prepayments 4,642,412.23 4,013,736.74
Loss on disposal of fixed assets, intangible assets and
-400,172.51 319,355.00
other long-term assets (or “-”: gains)
Loss on retirement of fixed assets (or “-”: gains) 2,023,354.76 1,083,940.52
Losses on changes in fair value (or “-”: gains) 32,695,697.38 -6,520,045.96
Financial expenses(or “-”: income) 41,010,631.80 33,957,642.33
Investment loss(or “-”: income) -101,107,245.42 8,109,921.96
Decrease of deferred tax assets(or “-”: increase) -12,621,431.57 4,667,823.78
Increase of deferred tax liabilities (or “-”: decrease) 20,730,283.65 4,269,887.79
Decrease in inventories(or “-”: increase) -629,050,587.52 271,639,352.73
Decrease in operating receivables(or “-”: increase) -522,973,086.43 112,901,508.32
Increase of operating payables (or “-”: decrease) 828,651,377.36 -218,889,585.92
Others 26,270,045.10 31,363,797.18
Net cash flow from operating activities 825,216,623.26 1,104,651,449.42
2. Significant investing and financing activities not related to
-- --
cash receipts and payments:
154
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
The conversion of a debt into capital
Convertible bonds due within one year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents: -- --
Closing balance of cash 6,194,924,772.42 3,263,679,215.37
Less: Opening balance of cash 3,400,144,038.54 2,553,783,015.01
Add：Closing balance of cash equivalents
Less：Opening balance of cash equivalents
Net increase of cash and cash equivalents 2,794,780,733.88 709,896,200.36
（2）Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
I. Cash 6,194,924,772.42 3,400,144,038.54
Including: Cash on hand 327,111.73 232,265.51
Cash in bank that can be readily
6,194,597,660.69 3,399,911,773.03
drawn on demand
II. Cash and cash equivalents at end of year 6,194,924,772.42 3,400,144,038.54
61. Assets with restriction on ownership or use rights
Unit: RMB
Items Carrying amount at the end of the period Cause of restriction
Guarantee deposit, Guarantee deposited
Cash and bank balance 106,963,410.23 in futures institutions, Bank deposits
frozen by litigation
Notes receivable 1,579,929,231.31 Pledge financing
Total 1,686,892,641.54 --
62. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Items Closing balance in foreign Exchange rate RMB equivalent
155
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
currencies
Cash and bank balances -- --
Including: USD
EUR
HKD
Accounts receivable -- --
Including: USD
EUR
HKD
Long-term receivable -- --
Including: USD
EUR
HKD
Monetary fund
Including: USD 46,015,091.67 6.4601 297,262,093.70
EUR 36,202,791.97 7.6862 278,261,899.64
Other currencies 57,851,656.41
Subtotal 633,375,649.75
Derivative financial assets
Including: USD 1,576,886.76 6.4601 10,186,846.16
EUR 600.00 7.6862 4,611.72
Other currencies 749,740.85
Subtotal 10,941,198.73
Accounts receivable
Including: USD 174,645,579.62 6.4601 1,128,227,908.90
EUR 42,997,722.05 7.6862 330,489,091.22
Other currencies 93,305,368.12
Subtotal 1,552,022,368.24
Other receivables
Including: USD 2,688,153.59 6.4601 17,365,741.01
EUR 38,069.02 7.6862 292,606.10
Other currencies 15,943,987.01
156
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Subtotal 33,602,334.12
Short-term borrowings
Including: USD 39,065,059.93 6.4601 252,364,193.64
EUR 35,000,000.00 7.6862 269,017,000.00
Subtotal 521,381,193.64
Derivative financial liabilities
Including: USD 628,634.25 6.4601 4,061,040.12
Subtotal 4,061,040.12
Accounts payable
Including: USD 12,222,531.59 6.4601 78,958,776.32
EUR 10,293,975.90 7.6862 79,121,557.56
Other currencies 33,500,760.60
Subtotal 191,581,094.48
Other payables
Including: USD 955,519.33 6.4601 6,172,750.42
EUR 1,766,403.53 7.6862 13,576,930.81
Other currencies 17,361,384.04
Subtotal 37,111,065.27
Non-current liabilities due within
one year
Including: USD 20,113,466.25 6.4601 129,935,003.32
EUR 14,500,000.00 7.6862 111,449,900.00
Subtotal 241,384,903.32
Long-term borrowings
Including: USD 39,758,435.57 6.4601 256,843,469.64
EUR 7.6862
Subtotal 256,843,469.64
Long-term payables
Including: USD 32,288.00 6.4601 208,583.67
EUR 11,015,552.19 7.6862 84,667,737.24
Other currencies 64,357.00
Subtotal 84,940,677.91
157
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（2）Notes on overseas operating entities, including for the significant overseas operating entities, its main
operating locations, reporting currency and the basis for selection should be disclosed, and the reason for
changes in reporting currency should also be disclosed
√ Applicable □ Not Applicable
The Company has several overseas subsidiaries, locate in the United States, Europe, Japan, Poland, Mexico and other countries,
where US dollars, Japanese yen, Polish zloty, Mexican pesos, etc. are used as the standard reporting currency.
63. Government grants
（1）Refund of government grants
□ Applicable √ Not Applicable
Other remarks：
Government grants
（1）Details
1）Government grants related to assets
For details, please refer to explanation of deferred income in the notes of the consolidated financial statements.
2）Government grants related to income and used to compensate relevant cost, expenses or losses.
Current period Financial Report
Items
cumulative Items
Overseas subsidy of COVID-19 Other income
15,149,189.44
Award of enterprise R&D investment Other income
11,115,100.00
Talent introduction and job stabilization subsidies Other income
6,748,889.22
VAT refund of civil welfare enterprises Other income
4,370,400.00
Subsidy and award of innovative development Other income
4,366,000.00
Enterprise patent subsidy Other income
4,238,800.00
Subsidies and rewards for scientific and technological innovation
Other income
and entrepreneurship 3,900,000.00
Special funds for foreign trade and economic development Other income
3,710,600.00
VAT refund on software products in excess of tax burden Other income
2,974,905.57
Return of employment promotion unemployment insurance Other income
2,042,500.00
Industrial support fund bonus
Other income
1,480,367.00
158
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Others
Other income
1,979,207.50
Subtotal
62,075,958.73
（ 2 ） The amount of government grants included in the profit or loss statement in the current period is RMB
72,081,481.22
Ⅷ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Main operating Place of Business Holding proportion
Subsidy name Acquisition method
place registration nature Direct Indirect
Zhejiang Sanhua Trading Co., Ltd Zhejiang Zhejiang Commerce 100.00% Establishment
Zhejiang Sanhua Climate &
Business combination
Appliance Controls Group Co., Zhejiang Zhejiang Manufacture 74.00% 26.00%
under common control
Ltd
Zhejiang Sanhua Automotive Business combination
Zhejiang Zhejiang Manufacture 100.00%
Components Co., Ltd under common control
Sanhua(hangzhou) Micro Channel Business combination
Zhejiang Zhejiang Manufacture 100.00%
Heat Exchanger Co., Ltd under common control
Zhejiang Sanhua Commercial
Zhejiang Zhejiang Manufacture 100.00% Establishment
Refrigeration Controls Co., Ltd
Sanhua International Singapore Business combination
Singapore Singapore Commerce 100.00%
Pte. Ltd under common control
the United the United Business combination
Sanhua International Inc Commerce 100.00%
States States under common control
Other remarks:
The above subsidiaries are significant subsidiaries of the Company.
Ⅸ. Risks Relating to Financial Instruments
The Company’s operating activities have exposure to various financial risks, 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
159
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
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. During the evaluation, the Company considers that it can obtain reasonable
and supportable information without additional cost or effort, including qualitative and quantitative analysis based
on historical data, external credit risk rating, and forward-looking information. Based on a single financial
instrument or a combination of financial instruments with similar credit risk characteristics, 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.
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, which include: the debtor has significant financial difficulty,
the debtor breached the binding clause of the contract on the debtor, the debtor is likely to go bankrupt or other
financial reorganization, for economic or contractual reasons relating to the debtor’s financial difficulty, the
creditor having granted to the debtor a concession 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. he 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 account receivable.
The Company deposits 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, cash and
bank balances, 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
160
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
amounts to ensure that there is no major risk of bad debts.
The Company conducts transactions with recognized and creditworthy customers, and the credit risk is
centralized and managed on the basis of customers. As of June 30, 2021, the Company has a certain concentration
of credit risk, and 35.89% of accounts receivable was due from the five largest customers of the Company. The
Company held no collateral or other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset on the balance sheet.
(II) Liquidity risk
The Company continues to monitor short-term and long-term funding needs to ensure that sufficient cash
reserves are maintained. At the same time, the Company continuously monitors compliance with the loan
agreement to ensure that the credit line obtained from commercial banks can meet short-term or long-term funding
needs. When necessary, the Company can implement equity financing.
As of June 30, 2021, the undiscounted contractual cash flows of the Company’s financial liabilities listed by
maturity date are shown in the following table (Unit: RMB):
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) 523,812,457.25 523,812,457.25
Notes payable 1,856,484,983.84 1,856,484,983.84
Accounts payable 2,491,675,800.21 2,491,675,800.21
Other payables 228,347,075.23 228,347,075.23
Non-current liabilities due within one
1,034,381,809.45 1,034,381,809.45
year（Include interest）
Long-term borrowings（Include interest） 949,241,904.65 949,241,904.65
Long-term payables（Include interest） 9,196,945.21 19,859,829.25 62,098,461.15 91,155,235.61
Subtotal 6,143,899,071.19 969,101,733.90 62,098,461.15 7,175,099,266.24
(Continued)
Items Opening balance
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
Other payables 270,888,400.58 270,888,400.58
Non-current liabilities due within one 132,518,381.28 132,518,381.28
year（Include interest）
Long-term borrowings（Include interest） 1,781,690,487.83 1,781,690,487.83
Long-term payables（Include interest） 6,417,433.10 20,548,394.72 70,534,422.75 97,500,250.57
Subtotal 4,312,589,459.38 1,802,238,882.55 70,534,422.75 6,185,362,764.68
(III) Market Risk
1. Interest Rate Risk
The Company’s interest risk relates mainly to bank borrowings. The Company’s cash flow interest risks
arise from floating interest of financial liabilities, and fair value interest risks arise from fixed-rate of financial
161
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
liabilities. The Company determines the proportion of fixed-rate financial liabilities and floating interest rate
financial liabilities based on the market environment. As of June 30, 2021, 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. The Company continues to monitor the level of
interest rates.
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; c. Carry out forward
exchange settlement and foreign currency swap business to lock in exchange rates.
As of June 30, 2021, please refer to “monetary items in foreign currencies” of notes to financial statements
for details in foreign currency financial assets and liabilities.
X. Disclosure of Fair Values
1. Fair values of the assets and liabilities measured at fair value at the end of the period
Unit: RMB
Fair value as of the balance sheet date
Items
Level 1 Level 2 Level 3 Total
I. Recurring fair value measurement -- -- -- --
(I) Held-for-trading financial assets 5,529,209.66 110,387,809.10 100,000,000.00 215,917,018.76
Financial assets measured at fair value through
5,529,209.66 110,387,809.10 100,000,000.00 215,917,018.76
profit or loss
(1) Debt instrument investments 89,524,312.14 100,000,000.00 189,524,312.14
(2) Derivative financial assets 5,529,209.66 20,863,496.96 26,392,706.62
Total amount of assets constantly measured at their
5,529,209.66 110,387,809.10 100,000,000.00 215,917,018.76
fair values
(II) Held-for-trading liabilities 4,625,536.62 3,100,848.00 7,726,384.62
Derivative financial liabilities 4,625,536.62 3,100,848.00 7,726,384.62
Total amount of liabilities constantly measured at
4,625,536.62 3,100,848.00 7,726,384.62
their fair values
II. Non-constant measurement at fair values -- -- -- --
162
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
2. Basis for determining the market price of items under first level constantly and non-constantly
measurement at fair value.
The fair value of futures contracts is measured at the exchange's open market quotes.
3. Items under second level constantly and non-constantly 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 constantly and non-constantly 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.
XI. Related party relationships and transactions
1. Parent Company
Place of Holding proportion Voting right proportion
Parent Company Business nature Registered capital
registration over the Company over the Company
Sanhua Holding Group Co.,
Zhejiang Industrial Investment 660 million yuan 50.12% 50.12%
Ltd
Remarks on the parent company:
As of June 30, 2021, 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.
2. Information about the Company's subsidiaries
Please refer to notes of financial statements about interest on other entities.
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
Qingdao Sanhua jinlifeng Machinery Co., Ltd Associates
Zhongshan Xuanyi Pipe Manufacturing Co., Ltd. Associates
163
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Other remarks
Joint ventures or associates Abbreviation of associate
Qingdao Sanhua Jinlifeng Machinery Co., Ltd QSJM
Zhongshan Xuanyi Pipe Manufacturing Co., Ltd. ZXPM
4. Other related parties of the Company
Other related parties Relationships with the Company
Zhejiang Sanhua Lvneng Industry Group Co., Ltd Shareholders and under the same control of the parent Company
Hangzhou Tongchan Machinery Co., Ltd. under the same control of the parent Company
Hangzhou Sanhua Research Institute 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 Fulda Intelligent Technology Co., Ltd under the same control of the parent Company
Wuhu Alda Technology Co., Ltd. Subsidiary of a Company with shares held by the Company
Hangzhou Formost Material Technology Co., Ltd Subsidiary of a Company with shares held by the Company
Other remarks
Joint ventures or associates Abbreviation of associate
Sanhua Holding Group Co., Ltd. SHG
Zhejiang Sanhua Lvneng Industry Group Co., Ltd ZSGE
Hangzhou Tongchan Machinery Co., Ltd. HTM
Hangzhou Sanhua Research Institute Co., Ltd. HSRI
Zhejiang Sanhua Zhicheng Real Estate Development Co., Ltd. ZSZR
Zhejiang Haoyuan Technology Co., Ltd. ZHT
Ningbo Fulda Intelligent Technology Co., Ltd NFIT
Wuhu Alda Technology Co., Ltd. WAT
Hangzhou Formost Material Technology Co., Ltd HFMT
5. Related party transactions
（1）Purchase and sale of goods, rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Content of Current period Approved transaction Whether it exceeds the Preceding period
Related parties
transaction cumulative limit transaction limit comparative
ZXPM Merchandise 12,581,552.34 35,000,000.00 No 5,023,870.90
164
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
WAT Merchandise 55,752.21 3,000,000.00 No 4,743.36
HSRI Merchandise 14,303.48
QSJM Merchandise 1,656,061.81
ZHT Merchandise 1,063,598.21
HTM Merchandise 57,168.14
Sale of goods and rendering of services
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
SHG Merchandise 52,256.96 674,800.00
QSJM Merchandise 203,134.21 79,420.08
HSRI Merchandise 101,089.74 182,978.26
ZSZR Merchandise 9,734.51
WAT Merchandise 1,350.00 7,230.77
（2）Related party guarantees
The Company as a guaranteed party
Unit: RMB
Guarantor Guaranteed amount Commencement date Maturity date Whether the guarantee is mature
SHG 1,430,000,000.00 February 27, 2020 October 25, 2022 No
SHG 44,000,000.00 December 24, 2019 December 23, 2021 No
Remarks of related party guarantees
The information listed in the table does not include the related guarantee within the consolidation scope, nor does it include the
completed related guarantee, in which the second amount is in US dollars.
（3）Key management’s emoluments
Unit: RMB
Items Current period cumulative Preceding period comparative
Key management’s emoluments 6,196,143.93 4,127,788.78
（4）Other related party transactions
Unit: RMB
Current period Preceding period
Related parties Content of transaction
cumulative comparative
ZHT Rental fee, property management 6,034,039.91 628,351.19
165
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
ZSGE fee, water and electricity fee, 2,631,152.03 1,032,369.03
HSRI service fee 397,622.42 226,684.14
HTM Purchase equipment 24,450,210.36 5,112,554.76
SHG 3,848,329.72 4,313,221.66
HSRI 518,602.95 717,369.20
ZSGE Rental income, property 427,216.07 720,433.64
WAT management income, water and 383,092.22 197,707.74
HFMT electricity income, service income 236,607.29 966,272.27
ZHT 62,433.76
HTM 22,852.39
6. Related party transactions
（1）Receivables
Unit: RMB
Closing balance Opening Balance
Items Related parties
Book balance Provision for bad debts Book balance Provision for bad debts
Accounts receivable SHG 68,948.53 3,447.43 180,000.00 9,000.00
Accounts receivable WAT 271,957.50 13,597.88 376,293.54 18,814.68
Accounts receivable HFMT 267,366.23 13,368.31
Accounts receivable HSRI 114,263.13 5,713.16 18,514.60 925.73
Accounts receivable QSJM 79,541.66 3,977.08 26,973.19 1,348.66
Other receivable SHG 20,000.00 1,000.00 20,000.00 1,000.00
Other non-current assets
HTM 4,175,349.24 9,122,291.82
(equipment prepayment)
（2）Payables
Unit: RMB
Items Related parties Closing balance Opening Balance
Accounts payable ZXPM 5,254,603.61 1,072,110.11
Accounts payable HTM 1,297,118.10 3,883,247.79
Accounts payable HSRI 266,150.00 266,150.00
Accounts payable ZHT 256,549.65
Contract liabilities WAT 1,518.94
Advances received NFIT 10,000,000.00 10,000,000.00
166
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Other payables HFMT 100,000.00 100,000.00
XII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Unit: share
Total equity instruments granted in current period
Total equity instruments exercised in current period 4,596,150
Total equity instruments retired in current period 395,070
The adjusted grant price of stock appreciation rights is
The range of exercise price of stock options issued by the company at the
RMB 4.34, which will be unlocked in batches within 12
end of the period and the remaining term of the contract
months after 36 months from the grant date.
2018 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is RMB 4.34, which will be
unlocked in batches within 12 months after 36 months
The range of exercise prices of other equity instruments at the end of the after the grant date.
period and the remaining contractual life 2020 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is RMB 7.11, which will be
unlocked in batches within 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.
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, and it will be unlocked year by year in
batches at a ratio of 30%:30%:40%.
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.
In April, 2021, the Company implemented the 2020 equity distribution. According to the methods stipulated in the "2018
Restricted Stock Incentive Plan" and "2018 Stock Appreciation Rights Incentive Plan", the exercise price of the underlying stocks
involved were adjusted accordingly. After the adjustment, the grant price per share was RMB 4.34.
167
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
(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.
In April 2021, the Company implemented the 2020 equity distribution. According to methods stipulated in the “2020 Restricted
Stock Incentive Plan”, the exercise price of the underlying stocks involved were adjusted accordingly. After the adjustment, the grant
price per share was RMB 7.11.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Calculated based on the closing price of the stock on the
Determination method for grant-date fair value of equity instruments
grant date minus the grant price of the restricted stock.
Determination method for the number of equity instruments expected to
[Note]
vest
Reasons for significant difference between the estimates in current
Not applicable
period and preceding period
Capital reserve accumulated due to equity-settled share-based payment 123,513,933.28
Total expenses arising from equity-settled share-based payment 26,270,045.10
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 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 assumed by the Calculated based on the closing price of the stock on
Company and to be calculated on the basis of shares or other equity the balance sheet date after deduction of the adjusted
instruments stock appreciation right grant price.
Accumulated liabilities arising from cash-settled share-based payment in 6,556,955.90
168
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
liabilities
Total expenses arising from cash-settled share-based payment 224,115.46
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet date
No significant commitments matter needs to be disclosed by the Company
2. Contingencies
（1）If no significant contingent matter to be disclosed by the Company, it should also be noted accordingly
No significant contingent matter needs to be disclosed by the Company.
XIV. Other significant events
1. Segment information
（1）Basis for reportable segments and the accounting policy
Reportable segments are identified 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 segments
Unit: RMB
Refrigeration and
Inter-segment
Items air-conditioning Auto parts business Total
elimination
electrical parts business
Total operating revenue 5,563,260,796.57 2,110,820,965.12 7,674,081,761.69
Total operating cost 4,015,609,936.55 1,586,201,543.07 5,601,811,479.62
Total assets 15,837,690,723.09 5,169,808,588.81 21,007,499,311.90
Total liabilities 8,540,678,732.80 1,922,189,366.23 10,462,868,099.03
169
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
XV. Notes to items of parent company financial statements
1. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debt debt
Category Carrying Carrying
Accrued Accrued
Proportio amount Proportio amount
Amount Amount proportio Amount Amount proportio
n n
n n
Receivables with
306,020, 306,020,2 568,926,1 568,926,10
provision made on an 58.76% 77.05%
208.90 08.90 07.65 7.65
individual basis
Including:
Receivables with
214,764, 10,738,2 204,026,3 169,453,2 8,472,661 160,980,56
provision made on a 41.24% 5.00% 22.95% 5.00%
608.71 30.44 78.27 30.80 .54 9.26
collective basis
Including:
520,784, 10,738,2 510,046,5 738,379,3 8,472,661 729,906,67
Total 100.00% 2.06% 100.00% 1.15%
817.61 30.44 87.17 38.45 .54 6.91
Provision made on an individual basis:
Unit: RMB
Closing balance
Name Book balance Provision for bad Accrued Accrued reason
debt proportion
Sanhua International Singapore Pte. Ltd 115,562,468.94
Sanhua (Vietnam) Company Limited, etc. 68,788,408.36
American Investment Fund I LLC 33,911,688.82
Zhejiang Sanhua Commercial Refrigeration Controls Co.,
28,141,509.72
Ltd
Zhejiang Sanhua Automotive Components Co.,Ltd 15,601,946.79
Other subsidiaries 44,014,186.27
Total 306,020,208.90 -- --
Provision made on a collective basis:
Unit: RMB
170
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Closing balance
Name
Book balance Provision for bad debt Accrued proportion
Within 1 year 214,764,608.71 10,738,230.44 5.00%
Total 214,764,608.71 10,738,230.44 --
If the Provision for bad debt of accounts receivable is accrued in accordance with the general expected credit loss model, please refer
to the disclosure of other receivables to disclose the relevant information about the Provision for bad debt:
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 520,784,817.61
Total 520,784,817.61
（2）Provision for bad debt accrued, recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Category Opening balance Recovered or Closing balance
Accrued Write off Others
reversed
Receivables with provision
8,472,661.54 2,265,568.90 10,738,230.44
made on a collective basis
Total 8,472,661.54 2,265,568.90 10,738,230.44
（3）Top 5 debtors with the largest accounts receivable balances
Unit: RMB
Proportion to the total balance Provision for bad debt at the
Name Closing balance
of accounts receivable end of the period
Sanhua International Singapore Pte. Ltd 115,562,468.94 22.19%
Sanhua (Vietnam) Company Limited, etc. 68,788,408.36 13.21%
The Third 63,886,602.40 12.27% 3,194,330.12
The Forth 58,929,632.21 11.32% 2,946,481.61
American Investment Fund I LLC 33,911,688.82 6.51%
Total 341,078,800.73 65.50%
171
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Dividends receivable 1,800,000.00
Other receivables 394,689,965.06 348,897,078.11
Total 396,489,965.06 348,897,078.11
（1）Dividends receivable
1）Categories of dividends receivable
Unit: RMB
Project (or invested entity) Closing balance Opening balance
Wuhan Sanhua Refrigeration Parts Co., Ltd 1,800,000.00
Total 1,800,000.00
（2）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 379,004,607.58 329,063,840.37
Refund of VAT receivable 1,962,668.32 8,536,537.99
Guarantee deposit 9,827,285.00 10,381,285.00
Others 4,271,529.69 1,224,031.39
Total 395,066,090.59 349,205,694.75
2）Provision for bad debt
Unit: RMB
Phase 1 Phase 2 Phase 3
Provision for bad debt Next 12month Lifetime expected credit Lifetime expected credit Total
expected credit losses losses (credit not impaired) losses (credit impaired)
Balance on January 1, 2021 43,389.30 265,227.34 308,616.64
Balance in current period on
—— —— —— ——
January 1, 2021
Provision made in current 144,570.13 144,570.13
172
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
period
Reversed in current period 77,061.24 77,061.24
Balance on June 30, 2021 187,959.43 188,166.10 376,125.53
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) 187,959.43
1 to 2 years 9,172.30
2 to 3 years 46,972.80
Over 3 years 132,021.00
Total 376,125.53
3）Top 5 debtors with the largest other receivables balances
Unit: RMB
Nature of Proportion to the Provision for bad
Debtors receivables Closing balance Aging total balance of other debt at the end of the
receivables period
Shaoxing Shangyu Sanli Copper Financial aid
55,067,200.00 Within 1 year 13.94%
Industry Co., Ltd
Wuhu Sanhua Auto-control Financial aid
46,231,000.00 Within 1 year 11.70%
Components Co., Ltd
Sanhua (Jiangxi) Self - control Financial aid Within 1 year
45,318,000.00 11.47%
Components Co., Ltd.
Wuhu Sanhua Refrigeration Fittings Financial aid Within 1 year
44,969,167.21 11.38%
Co. Ltd
Zhongshan Sanhua Refrigeration Financial aid Within 1 year
40,033,000.00 10.13%
Components Co., Ltd
Total -- 231,618,367.21 -- 58.62%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Investees Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
173
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Investments in
6,113,625,945.18 6,113,625,945.18 4,515,044,723.75 4,515,044,723.75
subsidiaries
Investments in
associates and joint 15,705,401.92 15,705,401.92 13,501,505.62 13,501,505.62
ventures
Total 6,129,331,347.10 6,129,331,347.10 4,528,546,229.37 4,528,546,229.37
174
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
（1）Investments in subsidiaries
Unit: RMB
Opening Changed amount of the current period Closing balance of
Closing balance
Investees balance(Carrying Investments Investments Provision for provision for
Others (Carrying amount)
amount) increased decreased impairment impairment
Zhejiang Sanhua Automotive Components Co.,Ltd 1,994,138,976.82 5,959,855.74 2,000,098,832.56
Sanhua (Hangzhou) Micro Channel Heat Exchanger Co.,Ltd. 644,441,139.10 3,326,620.50 647,767,759.60
Zhejiang Sanhua Climate & Appliance Controls Group Co., Ltd 320,278,269.01 3,069,749.10 323,348,018.11
Sanhua International Inc. 308,285,328.31 265,399.02 308,550,727.33
Sanhua International Singapore Pte. Ltd 664,644,511.07 1,221,079.62 665,865,590.69
Wuhu Sanhua Auto-control Components Co., Ltd 151,271,932.66 316,125.36 151,588,058.02
Sanhua (Jiangxi) Self - control Components Co., Ltd. 93,367,388.93 186,714.20 93,554,103.13
Xinchang Sitong Electrical and Mechanical Co., Ltd 46,645,756.62 382,252.13 47,028,008.75
Zhejiang Sanhua Commercial Refrigeration Controls Co., Ltd 68,290,894.37 1,581,000,000.00 1,649,290,894.37
Zhejiang Sanhua Trading Co., Ltd 53,745,007.56 928,812.72 54,673,820.28
Changzhou Ranco Reversing Valve Co., Ltd 62,499,656.16 21,183.00 62,520,839.16
Hangzhou Leaderway Electronics Co., Ltd 51,017,554.19 1,109,051.28 52,126,605.47
Shaoxing Shangyu Sanli Copper Industry Co., Ltd 32,527,587.10 212,854.20 32,740,441.30
Zhongshan Sanhua Air conditioning Refrigeration Components Co., Ltd 5,082,444.18 112,028.64 5,194,472.82
Wuhan Sanhua Refrigeration Parts Co., Ltd 4,240,191.30 163,152.06 4,403,343.36
Zhongshan Sanhua Refrigeration Components Co., Ltd 5,899,010.73 207,963.54 6,106,974.27
Suzhou Sanhua Air-Conditioner Parts Co.,Ltd 8,669,075.64 98,380.32 8,767,455.96
Total 4,515,044,723.75 1,598,581,221.43 6,113,625,945.18
175
Zhejiang Sanhua Intellige
（2）Investments in associates and joint ventures
Changed amount of the current period
Opening
Investment Adjustment in Cash
balance Prov
Investees Investments Investments income other Changes in dividend/profit
(Carrying f
increased decreased recognized under comprehensive other equity declared for
amount) impai
equity method income distribution
I. Joint ventures
II. Associates
Guochuang Energy Internet
Innovation Center 1,525,252.76 15,260.42
(Guangdong) Co., Ltd.
Chongqing Tainuo Machinery
9,396,904.73 3,344,529.44 1,500,000.00
Co., Ltd.
Nanchang Sanhua Jinlifeng
1,517,138.95 -1,763.92
Machinery Co., Ltd.
Ningbo Jinlifeng Machinery
1,062,209.18 345,870.36
Co., Ltd
Qingdao Sanhua Jinlifeng
0.00
Machinery Co., Ltd.
Xinchang zhejiang energy
sanhua comprehensive energy 0.00
co. Ltd
Subtotal 13,501,505.62 3,703,896.30 1,500,000.00
Total 13,501,505.62 3,703,896.30 1,500,000.00
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
4. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 2,466,694,440.92 1,937,346,462.24 2,025,861,982.70 1,525,914,788.36
Other operations 191,238,142.54 161,701,041.53 91,350,119.92 90,836,693.41
Total 2,657,932,583.46 2,099,047,503.77 2,117,212,102.62 1,616,751,481.77
5. Investment income
Unit: RMB
Current period Preceding period
Items
cumulative comparative
Investment income from long-term equity investments under equity method 3,703,896.30 1,922,776.38
Investment income from long-term equity investments under cost method 1,800,000.00 16,058,323.76
Gains on disposal of long-term equity investments -13,099,711.84
Investment income of bank financing products 1,260,477.52 3,214,184.92
Gains and losses on settlement of futures contracts 13,415,131.42 -5,205,759.36
Gains and losses on settlement of foreign exchange contract 5,575,206.59 -1,711,629.28
Income of fund using fee 6,369,877.53 9,817,132.15
Total 32,124,589.36 10,995,316.73
XVI. Supplementary information
1. Non-recurring profit or loss in current period
√ Applicable □ Not Applicable
Unit: RMB
Items Amount Remarks
Gains or loss on disposal of non-current assets -1,623,182.25
Government grants included in profit or loss (excluding
those closely related to operating activities of the
Company, satisfying government policies and regulations, 64,034,111.05
and continuously enjoyed with certain quantity/quota
based on certain standards)
Gains on changes in fair value of held-for-trading In order to avoid raw material price risks and exchange
60,752,561.20
financial assets, derivative financial assets, rate risks, the Company and its subsidiaries have
177
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
held-for-trading financial liabilities and derivative carried out derivatives instruments business, including
financial liabilities, and investment income from disposal futures contracts and foreign exchange forward
of held-for-trading financial assets, derivative financial contracts. From January to June 2021, the futures
assets, held-for-trading financial liabilities, derivative contracts income is RMB 19.8287 million, and foreign
financial liabilities and other investment, excluding those exchange forward contracts income is RMB 40.9239
arising from hedging business related to operating million. And from January to June 2020, the futures
activities contracts income is RMB 1.0049 million, and foreign
exchange forward contracts loss is RMB 24.4147
million. Therefore, the amount of non-recurring profit
and loss items produced large fluctuations between the
first half of the two years. Meanwhile, the
exchange loss from January to June 2021 is RMB
51.1292 million, and it is RMB 45.6796 million from
January to June 2020. According to “the No. 1
Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to Public -
Non-recurring Profit or Loss”, exchange gains and
losses are recurring gains and losses, and futures and
forward contracts gains and losses are non-recurring
gains and losses.
Other non-operating revenue or expenditures except the
891,333.20
above items
Other profit or loss satisfying the definition of
702,064.60
non-recurring profit or loss
Less: Enterprise income tax affected 20,201,305.62
Non-controlling interest affected 446,016.26
Total 104,109,565.92 --
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
Weighted EPS (RMB/share)
Profit of the reporting period
average ROE Basic EPS Diluted EPS
Net profit attributable to shareholders of ordinary shares 8.04% 0.23 0.23
Net profit attributable to shareholders of ordinary shares after deducting
7.02% 0.20 0.20
non-recurring profit or loss
178
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
3. Others
1. Calculation process of weighted average ROE
(1) Weighted average net assets
Weighted by Weighted average net
Changed item in net assets Amount
month assets
Net assets attributable to shareholders of ordinary shares at the beginning 10,064,794,519.57 6/6 10,064,794,519.57
of period
Net profit attributable to shareholders of ordinary shares 823,881,221.70 3/6 411,940,610.85
Cash dividend announced in April -895,454,593.00 2/6 -298,484,864.33
Cash dividend announced in April, including the reduction of 5,553,275.00 2/6 1,851,091.67
restricted shares repo obligations
Converted difference in Foreign Currency Statements -17,246,635.52 3/6 -8,623,317.76
Equity-settled share-based payment (phase 1) 2,407,500.54 3/6 1,203,750.27
Equity-settled share-based payment (phase 2) 23,862,544.56 3/6 11,931,272.28
Net ass ets increased from unlocking of restricted stock incentive on June 26,512,714.50 0/6 -
18, 2021
Fair value of convertible bond equity which issued on June 1, 2021 409,766,556.24 1/6 68,294,426.04
Net assets attributable to shareholders of ordinary shares at the end of 10,444,077,103.59 10,252,907,488.59
period
(2) Weighted average ROE
Current period
Items Symbol
cumulative
Net assets attributable to shareholders of ordinary shares of the parent company A
823,881,221.70
Non-recurring profit or loss attributable to shareholders of ordinary shares of the parent
B
company 104,109,565.92
Net profit attributable to shareholders of ordinary shares of the parent company after deducting
C=A-B
non-recurring profit or loss 719,771,655.78
Weighted average net assets D
10,252,907,488.59
Weighted average ROE E=A/D 8.04%
Weighted average ROE after deducting non-recurring profit or loss F=C/D 7.02%
2. Calculation process of Basic EPS and Diluted EPS
(1) Basic EPS
Current period
Items Symbol
cumulative
Net profit attributable to shareholders of ordinary shares of the parent company A 823,881,221.70
Non-recurring profit or loss attributable to shareholders of ordinary shares of the parent company B 104,109,565.92
Net profit attributable to shareholders of ordinary shares of the parent company after deducting
C=A-B 719,771,655.78
non-recurring profit or loss
Total shares at the beginning of period D 3,591,601,468
179
Zhejiang Sanhua Intelligent Controls Co., Ltd. 2021 Semi-Annual Report
Number of restricted stock （After increase by transferring and repo） E
17,616,950
Weighted average number of ordinary shares outstanding (excluding restricted stock) F=D-E 3,573,984,518
Basic EPS G=A/F
0.23
Basic EPS after deducting non-recurring profit or loss H=C/F
0.20
(2) Diluted EPS
Current period
Items Symbol
cumulative
Net profit attributable to shareholders of ordinary shares of the parent company A 823,881,221.70
Effect of convertible bond assumed conversion on net profit B 9,082,166.27
Net profit attributable to shareholders of ordinary shares of the parent company after dilution C=A+B 832,963,387.97
Non-recurring profit or loss attributable to shareholders of ordinary shares of the parent company D 104,109,565.92
Net profit attributable to shareholders of ordinary shares of the parent company after deducting
E=C-D 728,853,822.05
non-recurring profit or loss
Weighted average number of ordinary shares outstanding (excluding restricted stock) F 3,573,984,518
Weighted average number of ordinary shares diluted by equity incentive restricted shares G 10,280,289
Weighted average number of ordinary shares diluted by convertible bonds H 23,201,856
Weighted average number of ordinary shares outstanding after dilution I= F+G+H 3,607,466,663
Diluted EPS J=C/I 0.23
Diluted EPS after deducting non-recurring profit or loss K=E/I 0.20
180
