三花智控:Zhejiang Sanhua Intelligent Controls Co., Ltd.2022 Semi-Annual Report

Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Zhejiang Sanhua Intelligent Controls Co. Ltd.2022 Semi-Annual Report
August 2022
1Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 profit distribution proposal approved by the board of directors is as follows: Based on
provisional 3586507315 shares of capital stock as of August 10 2022 [note] cash dividend of RMB
1.00 (including tax) will be distributed to all shareholders for every 10 shares. The Company will
not distribute bonus shares or convert capital reserves to share capital.Note: As of August 10 2022 the share capital of the Company is 3591121375 shares of which the number of repurchased
shares is 4614060. According to the provisions of the Company Law the shares held by the listed company through the repurchase
account do not enjoy the right to participate in profit distribution or the conversion of capital reserve into share capital.If the total share capital of the Company changes due to the conversion of convertible bonds share repurchase exercise of
equity incentive scheme refinancing and listing of new shares before the implementation of the distribution plan the total
distribution amount shall be adjusted accordingly based on the principle of unchanged distribution proportion.
2Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
CONTENTS
Section I Important Notes Contents and Definitions... 2
Section II Corporate Profile and Key Financial Ind... 6
Section III Management’s Discussion and Analysis o.. 10
Section IV Corporate Governance .................... 31
Section V Environmental and Social Responsibility .. 35
Section VI Significant Events ...................... 40
Section VII Changes in Shares and Information abou.. 60
Section VIII Information of Preferred Shares ....... 69
Section IX Bonds ................................... 70
Section X Financial Report ......................... 73
3Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
List of Documents Available for Inspection
1. The 2022 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. The Company’s articles of association
4. Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period
5. Other documents available for inspection
4Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Definitions
Items Refers to Definition
The Company Company Refers to Zhejiang Sanhua Intelligent Controls Co. Ltd.The Articles of Association Refers to Articles of Association 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
5Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 2021 Annual Report for details.
6Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
Securities Times Shanghai Securities News
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 information disclosure newspapers selected by the Company were changed from China Securities News
and Securities Times to Securities Times and Shanghai Securities News on July 1.
3. Other relevant information
Whether other relevant information has changed during the reporting period
□Applicable √Not applicable
IV. Key Accounting Information and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √ No
Corresponding Period of
Current Reporting Period YoY Change (%)
Last Year
Total Revenue (RMB) 10159952995.52 7674081761.69 32.39%
Net Profit Attributable to Shareholders
1003187335.23823881221.7021.76%
of the Listed Company (RMB)
Net Profit Attributable to Shareholders
of the Listed Company after Deducting 1030047529.50 719771655.78 43.11%
Non-recurring Gains and Losses (RMB)
Net Cash Flow Generated from
761013129.16825216623.26-7.78%
Operational Activities (RMB)
Basic Earnings per Share (RMB/Share) 0.28 0.23 21.74%
Diluted Earnings per Share (RMB/Share) 0.27 0.23 17.39%
Weighted Average ROE 8.74% 8.04% 0.70%
At the End of the Current
At the End of Last Year YoY Change (%)
Reporting Period
Total Assets (RMB) 25411743393.51 23619966759.91 7.59%
Net Assets Attributable to Shareholders
11681018144.0911150308271.434.76%
of the Listed Company (RMB)
7Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
-2160081.08
(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
42675116.00
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
-74467851.85
Held-for-trading financial assets Derivative Financial Assets January to June 2022 the
Trading Financial Liabilities Derivative Financial Liabilities futures loss is 9.5117 million
and Other Debt Investment Excluding Hedging Businesses yuan and the forward loss is
Related to the Regular Business Operation of the Company 64.9561 million yuan. From
January to June 2021 the
futures income is 19.8287
million yuan and the forward
income is 40.9239 million
8Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
yuan. Therefore the amount of
non-recurring profit and loss
items fluctuated greatly in the
first half of the two years.Meanwhile the exchange gain
from January to June 2022 was
100.6505 million yuan and the
exchange loss from January to
June 2021 was 51.1292 million
yuan. 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 Revenue and Expenditures Other Than the
2794581.35
Above
Other Gains and Losses Items that Fit in the Definition of
1442214.20
Non-recurring Gains and Losses
Less: Impact of Income Tax -5646677.91
Impact of Minority Equity (after tax) 2790850.80
Total -26860194.27 --
Details of other gains and losses items that meet the definition of non-recurring gains and losses:
□Applicable √ Not applicable
The Company has no circumstances of other gains and losses items that meet the definition of non-recurring gains
and losses.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.
9Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 new
energy vehicles and traditional fuel vehicles.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.
10Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 Service 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 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 and 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 components
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 3087 patents
both domestic and abroad including 1498 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 Service 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 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
11Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 2022 the Russia Ukraine war broke out the global prices of bulk raw materials and energy
soared and the inflation situation is severe. At the same time the global supply chain has also been greatly
impacted by this war the COVID-19 and other factors which poses a threat to market demand and supply.Specific to the industry in which the Company operates although the Company's refrigeration and air
conditioning electrical parts business was restrained by consumption due to changes in the competition pattern a
large number of orders flowed in and the revenue increased significantly. The automotive components business
was under short-term pressure due to the impact of the COVID-19 but the tide of global new energy vehicles is
irresistible and it has achieved good revenue growth in the first half of 2022.During the reporting period the total revenue is RMB 10.160 billion a year-on-year increase of 32.39%. The
operating profit is RMB 1.238 billion a year-on-year increase of 22.82%. The net profit attributable to
shareholders of listed company is RMB 1.003 billion a year-on-year increase of 21.76%. The revenue of
refrigeration and air conditioning electrical components business is RMB 6.961 billion a year-on-year increase of
25.13%. The revenue of automotive components business is RMB 3.199 billion a year-on-year increase of
51.53%.
(I). Focus on operation and deepen industrial layout
1. Refrigeration and air conditioning electrical components business
In the context of “carbon neutrality and carbon emission peak” in order to improve the sales volume of products
the refrigeration and air conditioning electrical parts business actively seizes the development opportunities of
related businesses such as energy efficiency upgrading refrigerant switching VRF kitchen appliances and energy
storage continues to expand the target customers deepen the building of product strength and enhance the
acquisition and transformation of business opportunities. The Company internally promotes the construction of
digital factories and improves production efficiency through intelligent manufacturing and lean production.Recently the commercial production lines are being moved to the Industrial Park in the city of Daming and the
construction and relocation are carried out as planned. It lays a foundation for improving the Company's business
scale and competitive advantages optimizing the business structure and realizing the medium and long-term
strategic development goals.
2. Automotive components business
12Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Under the development opportunities of the new energy vehicle thermal management industry the automotive
components business adheres to the direction of system integration increase R&D investment and maintain the
leading technical level in the industry development. At the same time in the rapid growth process of the new
energy thermal management track it adheres to targeted strategic customers always pays close attention to
changes in market demand and competition pattern accelerates product iteration ensures product competitiveness
and actively obtains new orders. In addition in the process of globalization development the Company actively
built plants in Mexico and Shaoxing Binhai and launched new plant projects in Poland to increase production
capacity layout and talent team construction.(II). Deepen the building of product strength and improve the core competitiveness of strategic products
During the reporting period the Company invested RMB 479 million in R&D with a year-on-year increase of
35.99%. The continuous investment in R&D is used to build the value of product strength and enhance the
competitiveness. By focusing on the eight main dimensions of "Design Cost Performance Customer Delivery
Carbon Index Innovation Competitiveness Technological Equipment Supply Chain and Quality" the Company
continues to optimize and iterate and participates in market competition with new products and technologies.(III). Pay attention to the construction of talent team and deepen talent incentive
During the reporting period the Company optimized recruitment channels carried out accurate recruitment and
continued to promote training courses on professional knowledge strengthened the identification of talent growth
and implemented the training and reserve of talents. At the same time the Company launched the third phase
equity incentive scheme for the Company's directors senior managers and other core talents and further
established and improved the Company's long-term incentive mechanism.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
Mainly due to the rapid
development of
refrigeration and air
conditioning control
Total Revenue 10159952995.52 7674081761.69 32.39% components and new
energy automobile
industry which promotes
the steady development
of the Company's sales
Mainly due to the cost
Cost of sales 7702347707.94 5741171853.68 34.16% growth driven by the
sales growth
Selling Expenses 219831170.12 182548395.40 20.42%
Administrative Expenses 468457579.13 374431536.21 25.11%
Financial Expenses -85227439.31 49304431.90 -272.86% Mainly due to the
13Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
increase in exchange
gains in the current
period
Mainly due to the growth
Income Tax Expenses 224588797.63 170607121.16 31.64% of total profits in the
current period
Mainly due to the
increase of R&D
R&D Investments 478918631.31 352175549.62 35.99% personnel salary material
power mold investment
etc.Net Cash Flows from
761013129.16825216623.26-7.78%
Operating Activities
Mainly due to the
increase in the purchase
of large certificates of
Net Cash Flows from
-1493780685.20 -313010482.60 -377.23% deposit the purchase and
Investment Activities
construction of fixed
intangible and other
long-term assets
Mainly due to the
Net Cash Flows from issuance of convertible
-123929030.922299821228.74-105.39%
Financing Activities bonds in the same period
last year
Net Increase in Cash and
-769569702.012794780733.88-127.54%
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 10159952995.52 100% 7674081761.69 100% 32.39%
Classified by Industry
General
Equipment
10159952995.52100.00%7674081761.69100.00%32.39%
Manufacturing
Industry
14Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Classified by Products
Refrigeration A/C
Electrical 6961386065.52 68.52% 5563260796.57 72.49% 25.13%
Components
Automotive
3198566930.0031.48%2110820965.1227.51%51.53%
Components
Classified by Region
Domestic Sales 5237886317.54 51.55% 3703718671.83 48.26% 41.42%
Overseas Sales 4922066677.98 48.45% 3970363089.86 51.74% 23.97%
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 (%)
YoY Change (%) YoY Change (%)
Revenue Cost of sales Gross margin of operating
of Cost of sales of gross margin
revenue
Classified by industry
General
Equipment 10159952995.5
7702347707.9424.19%32.39%34.16%-1.00%
Manufacturing 2
Industry
Classified by product
Refrigeration A/C
Electrical 6961386065.52 5314987405.26 23.65% 25.13% 28.48% -1.99%
Components
Automotive
3198566930.002387360302.6825.36%51.53%48.80%1.37%
Components
Classified by region
Domestic Sales 5237886317.54 3984840532.25 23.92% 41.42% 46.84% -2.81%
Overseas Sales 4922066677.98 3717507175.69 24.47% 23.97% 22.79% 0.72%
In the case that the Company's main business data statistics are adjusted during the reporting period the
Company's main business data of the latest reporting period were adjusted according to the statistics at the
end of the last reporting period
□ Applicable √ Not applicable
Explanations on relevant data changed for more than 30% on a year-over-year base
√Applicable □Not applicable
The revenue of automotive components business is increased by 51.53% 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 cost of sales are increased correspondingly.
15Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
IV. Non-Main Business Analysis
√Applicable □Not applicable
Unit: RMB
Proportion to net
Amount Note of Change Sustainability
profit
Gains of futures contract
settlement foreign
Investment
47271481.68 3.81% exchange forward contract No
Income
settlement bank financial
product etc.Floating income of futures
Gains and Losses
contracts foreign exchange
from Change of -114976611.99 -9.28% No
forward contracts bank
Fair Value
financial products etc.Income from nonpayment
Non-operating
4109594.03 0.33% compensation and No
Revenue
liquidated damages etc.Loss on retirement of
Non-operating
2949255.42 0.24% non-current fixed assets No
Expenditures
etc.Credit
-71124663.90 -5.74% Bad debt loss etc. No
Impairment Loss
Assets Loss on impairment of
-11922725.03 -0.96% No
Impairment Loss inventories etc.Gains on
Loss on disposal of fixed
Disposal of -525838.34 -0.04% No
assets
Properties
The government grants of
VAT refund of civil welfare
enterprises and software
Other Gains 57394745.60 4.63% Government subsidies etc. product VAT exceeding tax
burden are sustainable
while the rest are not
sustainable
V. Analysis of Assets and Liabilities
1. Material changes of assets
Unit: RMB
16Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
At the End of Current Reporting
At the End of Last Year
Period YoY Change Note of significant
Percentage of Percentage of (%) change
Amount Amount
total assets total assets
Cash and bank
6178842175.6324.31%6707721861.1328.40%-4.09%
balance
Accounts
4834233841.8019.02%3516292868.3914.89%4.13%
receivable
Inventories 3904043815.42 15.36% 3637853809.47 15.40% -0.04%
Real estate held
7966521.520.03%8531303.620.04%-0.01%
for investment
Long-term equity
28756781.350.11%22680930.510.10%0.01%
investment
Fixed assets 4460422484.12 17.55% 4232706801.07 17.92% -0.37%
Construction in
1894708897.717.46%1343528875.405.69%1.77%
progress
Assets with right
220803340.440.87%215324024.260.91%-0.04%
of use
Short-term
1105569060.984.35%738190910.543.13%1.22%
borrowings
Contractual
93619937.210.37%79816249.220.34%0.03%
liabilities
Long-term
1642149417.786.46%801461958.893.39%3.07%
borrowings
Lease liabilities 146707369.82 0.58% 157981678.16 0.67% -0.09%
Non-current
liabilities due 914868890.32 3.60% 1763342887.58 7.47% -3.87%
within one year
Bonds payable 2710338901.46 10.67% 2652035619.50 11.23% -0.56%
2. Main overseas assets
√Applicable □ Not applicable
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
17Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
R&D
Sanhua Manufactur Financial
Internation ing supervision
al Inc. Equity 2198454 The United Marketing and 56266211
No
(USA) Investment 385.41 States and entrusted .25
(Consolidat Investment external
ed) Manageme audit
nt
Sanhua Manufactur
Financial
Internation ing
supervision
al Marketing
Equity 4215198 and 10020497
Singapore Singapore and No
Investment 450.20 entrusted .89
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 109383374.7 100000000
-1143374.748240000.00
(Excluding 4 .00
Derivative
Financial
Assets)
2.Derivative
-44430544.810209820.Financial 54640365.03
419
Assets
164023739.7-45573919.5110209820
Subtotal 8240000.00
78.19
164023739.7-45573919.5110209820
Total 8240000.00
78.19
Financial 70095922.9 70095922.
0.00
Liabilities 4 94
18Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
21052115.20 Margin deposit
Cash and Bank Balance
92200363.98 Futures contract margin
Notes Receivable 1712625978.86 Pledge for financing
Electronic digital credit certificate that has been
Accounts receivable 167036569.90
endorsed paid or discounted but has not expired
Total 1992915027.94 --
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)
547740000.001581000000.00-65.35%
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
（2）Derivatives Investments
√Applicable □ Not applicable
19Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 Non foreign
Company related No exchange 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00
Bank parties forward
contracts
etc.Total 0.00 -- -- 0.00 0.00 0.00 0.00 0.00 0.00% 0.00
Capital source of derivatives investment Company’s self-owned fund
Prosecution (if applicable) Not applicable
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
limited to market risk liquidity risk credit risk business including futures contracts and foreign exchange forward contracts. The Company and its subsidiaries strictly comply with the
operational risk legal risk etc.) of holding relevant provisions listed in the Management Measures for Future Hedging Business and Management Measures for Foreign Exchange
derivatives during the reporting period Hedging Business.Change of market price or fair value of invested Not applicable
20Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
1. After verification the independent directors made the following independent opinions: The approval process of the Company and its
subsidiaries to carry out futures hedging business with their own funds complies with relevant national laws regulations and the
relevant provisions of the Articles of Association. At the same time the Company has formulated the Management Measures for the
Operation of Futures Hedging Business which can effectively carry out internal control and management and implement risk
prevention and control measures. On the premise of ensuring normal production and operation the Company's hedging business is
conducive to avoiding market risks hedging the impact of raw material prices on the Company's production and operation and realizing
the Company's long-term steady development. Therefore we agree that the Company and its subsidiaries carry out futures hedging
Special opinions of independent directors on business and agree to submit the proposal to the general meeting of shareholders of the Company for deliberation.derivatives investment and risk control of the 2. After verification the independent directors made the following independent opinions: The approval process of the Company and its
Company subsidiaries to carry out foreign exchange hedging business complies with relevant national laws regulations and the relevant
provisions of the Articles of Association. At the same time the Company has formulated the Management System of Foreign Exchange
Hedging Business which can effectively carry out internal control and management and implement risk prevention and control
measures. On the premise of ensuring normal production and operation the Company's foreign exchange hedging business is conducive
to controlling exchange rate risks reducing exchange losses reducing the impact of exchange rate fluctuations on the Company's
normal operations and realizing the long-term steady development of the Company. Therefore we agree that the Company and its
subsidiaries carry out foreign exchange hedging business and agree to submit the proposal to the general meeting of shareholders of the
Company for deliberation.
21Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
5. Use of raised funds
√ Applicable □ Not applicable
（1） Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB in 10 thousand
Proporti
on of
Total accumul
Total amount Accumul ated
Raised
amount Accumul of raised ated amount Total
Raised funds
Total of raised ated funds amount of raised amount
funds has not
amount funds amount with use of raised funds of
Year Method has not been
of raised invested of raised alteratio funds with use unused
been used for
funds in the funds n during with use alteratio raised
used two
report invested the alteratio n to the funds
years
period reporting n total
period amount
of raised
funds
Non-pub
2017 lic 132231 2611.02 132231 0 0 0.00% 0 / 0
offering
Deposite
d in the
special
account
for
raised
Public funds 298753. 36263.1 147862. 150890.
2021 0 0 0.00% and the 0
offering 1 4 53 57
subscript
ion of
large
amount
certificat
es of
deposit.
430984.38874.1280093.150890.
Total -- 0 0 0.00% -- 0
165357
Description of Overall Usage of Raised Funds
(I) Year 2017
1. The actual amount of raised fund and date of transfer in
With the approval of China Securities Regulatory Commission (CSRC) [2017] No. 1392 the Company non-public issued
22Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
88154000 common shares (A shares) with a total raised capital of RMB 1322310000.00. After deducting the issuance
expenses of RMB 13078480.00 the net amount of raised funds is RMB 1309231520.00. The above-mentioned raised funds
were transferred in on September 1st 2017 and it has been verified by Tianjian accounting firm which has issued the Capital
Verification Report (TJY [2017] No. 327).As the implementation subjects are Zhejiang Sanhua Automotive Components Co. Ltd. (hereinafter referred to as Sanhua Auto)
and its subsidiary Shaoxing Sanhua New Energy Automotive Components Co. Ltd. (hereinafter referred to as Shaoxing Auto) the
Company has allocated the raised funds of RMB 1301310000.00 to Sanhua Auto in the form of capital increase. Sanhua Auto
synchronously allocated the raised fund of RMB 503620000.00 to Shaoxing Auto in the form of capital increase.
2. Usage and balance of raised funds
Amount (Unit: RMB in 10
Items Index
thousand)
Net amount of raised funds A 132231.00
Project investment B1 132606.88
Accumulated amount as of the
Net income from raised funds B2 10100.52
beginning of the period
Replenish working capital B3 7113.62
Project investment C1 401.40
Amount incurred in this
Net income from raised funds C2 23.30
reporting period
Replenish working capital C3 2232.92
Project investment D1=B1+C1 133008.28
Accumulated amount by the
Net income from raised funds D2=B2+C2 10123.82
end of the period
Replenish working capital D2=B3+C3 9346.54
Calculated balance of raised funds E 0.00
Actual balance of raised funds F 0.00
Difference G=E-F 0.00
Note: the net income from raised funds refers to the net amount of interest income and wealth management income after deducting
bank handling charges the same below.(II) Year 2021
1. The actual amount of raised fund and date of transfer in
In June 2021 with the approval of China Securities Regulatory Commission (CSRC) [2021] No. 168 the Company publicly
issued 30 million convertible corporate bonds (Sanhua convertible bond) with a par value of RMB 100 issued at face value
raising RMB 3 billion in total. The net amount of raised funds after deducting the issuance expenses of 12468991.59 yuan is
2987531008.41 yuan. The above-mentioned receipt of raised funds has been verified by Tianjian accounting firm who issued
23Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
the Capital Verification Report (TJY [2021] No. 277).Since Zhejiang Sanhua Commercial Refrigeration Co. Ltd. (hereinafter referred to as "Sanhua Commercial") is one of the
implementation subjects the Company has allocated 1487000000.00 yuan of the raised funds to Sanhua Commercial in the form
of capital increase.
2. Usage and balance of raised funds
Amount (Unit: RMB in 10
Items Index
thousand)
Net amount of funds raised in the current period A 298753.10
Accumulated amount as of the Project investment B1 112860.66
beginning of the period Net income from raised funds B2 1261.27
Amount incurred in this Project investment C1 37097.56
reporting period Net income from raised funds C2 834.41
Accumulated amount by the Project investment D1=B1+C1 149958.22
end of the period Net income from raised funds D2=B2+C2 2095.68
Calculated balance of raised funds E 150890.57
Actual balance of raised funds F 150890.57
Difference G=E-F 0.00
（2） Promised fund-raising projects
√ Applicable □ Not applicable
Unit: RMB in 10 thousand
Investme
Total Whether
Whether Accumul nt Whether
committe Total Date of Benefits feasibility
project Investme ative progress expected
Committed investment d investme asset achieved of project
has been nt in the investme at the end benefits
projects and allocation investme nt after ready for in the has
(or current nt at the of the have
of over-raised funds nt of alteration intended current changed
partially) year end of the period been
raised (1) use year significan
altered period (2) (%) achieved
funds tly
(3)=(2)/(1
24Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
)
Committed investment projects
Construction project of
new energy vehicle
Decembe
parts with an annual No 50362 50362 401.4 52726.95 104.70% 7646.83 Yes No
r 31 2021
output of 11.5 million
sets
Technical
transformation project
of thermal management
January
system modules of new No 45495 45495 49343.68 108.46% N/A No
312021
energy vehicles with an
annual output of 7.3
million sets
Technical
transformation project
of automotive air
March
conditioning control No 20874 20874 19193.15 91.95% N/A No
312020
parts with an annual
output of 12.70 million
sets
Expansion of product
testing room and January
No 13400 13400 9686.65 72.29% N/A No
production auxiliary 31 2019
room project
Payment of
No 2100 2100 2057.85 97.99% N/A No
intermediary fees
Construction project of
commercial
refrigeration and air
May 31
conditioning intelligent No 148700 148700 33528.83 59034.72 39.70% N/A No
2025
control components
with an annual output
of 65 million sets
Technical
transformation project
of high-efficiency and
energy-saving August
No 69800 69800 3568.73 9650.57 13.83% N/A No
refrigeration and air 31 2024
conditioning control
components with an
annual output of 50.5
25Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
million sets
Supplementary of
No 81500 81500 81272.93 99.72% N/A No
working capital
Subtotal of committed
--43223143223137498.96282966.5----7646.83----
investment projects
Investment of over raised funds
/
Total -- 432231 432231 37498.96 282966.5 -- -- 7646.83 -- --
Funds raised in 2017:
(1) Upon deliberation and approval by the board of directors on April 1 2019 the date of scheduled
serviceability status of "7.3 million sets of new energy vehicle thermal management system components
project" and "12.7 million sets of vehicle air conditioning control components project" was extended from
January 2019 to January 2021 and other contents of the project remain unchanged. The specific reasons
for the slowdown of the construction progress of the above two projects are as follows:
The Company adopts the strategy of prudent use and reasonable investment of the raised funds in
combination with the existing product structure and market trend. As the new equipment tends to be more
intelligent and systematic the Company has selected the equipment according to the latest technical
requirements and product models so that the investment progress of the new equipment of the project is
later than expected.Circumstances and In March 2020 "12.7 million sets of automotive air conditioning control parts project" was completed and
reasons for not accepted. In January 2021 the "technical transformation project of thermal management system
reaching the planned components for new energy vehicles with an annual output of 7.3 million sets" was completed and
progress or expected accepted.income (by specific
project)
(2) Upon deliberation and approval by the board of directors on April 27 2020 the date of scheduled
serviceability status of "construction project of new energy vehicle parts with an annual output of 11.5
million sets" was extended from December 2019 to December 2021 while other contents of the project
remain unchanged. The specific reasons for the slowdown of the construction progress of the project are as
follows:
The Company adopts the strategy of prudent use and reasonable investment of the raised funds in
combination with the changing situation of the existing market. In combination with customer feedback
and production scheduling plan the Company gradually released the production capacity according to the
actual customer demand. In order to ensure that the investment progress can meet the actual production
progress demand the Company adjusted the equipment procurement time of the raised investment project
and extend the investment period of the raised capital investment project according to the customer's time
node requirements. In December 2021 the "construction project of new energy auto parts with an annual
output of 11.5 million sets" was completed and accepted.Significant changes in N/A
26Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
the feasibility of
projects
Amount usage and use
progress of over-raised N/A
Funds
Change in
implementation
location of investment N/A
projects of Raised
Funds
Adjustment to
implementation
method of investment N/A
projects of Raised
Funds
Applicable
Advance investment
Funds raised in 2017: In 2017 the Company replaced the initial investment of 140.5585 million yuan with
and replacement of
raised funds.projects invested with
Funds raised in 2021: In 2021 the Company replaced the initial investment amount of 179.3857 million
raised funds
yuan with raised funds.Temporary supplement
of working capital with N/A
idle raised funds
The amount and
reasons of the balance
N/A
of raised funds in the
project implementation
Applications of unused Funds raised in 2021: Deposited in the special account for raised funds and the subscription of large
raised funds amount certificates of deposit.Problems or other
situations in the use
N/A
and disclosure of raised
funds
（3） Changes of raised funds
□ Applicable √ Not applicable
There was no change of raised funds in the reporting period.
27Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
Zhejiang
on and A/C
Sanhua
electrical
Climate &
component RMB 250 4372532 3613356 1394315 23652422 20103861
Appliance Subsidiary
s million 843.68 027.15 015.47 6.41 4.14
Controls
manufactur
Group
ing and
Co.Ltd
marketing
Refrigerati
Sanhua
on and A/C
(Hangzhou
electrical
) Micro
component RMB 360 1834923 96583526 95447001 87862038 72309354
Channel Subsidiary
s million 473.94 6.78 0.72 .08 .83
Heat
manufactur
Exchanger
ing and
Co.Ltd.marketing
Refrigerati
Zhejiang on and A/C
Sanhua electrical RMB 50 3454701 15022251 2483175 -8908806. -5979745.Subsidiary
Trading component million 232.60 6.97 425.00 02 23
Co. Ltd. s
marketing
Zhejiang Automotiv
RMB 1.46 6688366 3993827 3198566 47166301 40521833
Sanhua Subsidiary e
billion 843.14 804.79 930.00 6.70 7.57
Automotiv component
28Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
e s
Componen manufactur
ts Co. Ltd ing and
marketing
Zhejiang Refrigerati
Sanhua on and A/C
RMB
Commerci electrical 1745837 1685961 11823730 14590888 12659617
Subsidiary 1.65529
al component 962.02 102.14 9.42 .59 .24
billion
Refrigerati s
on Co. Ltd marketing
Refrigerati
on and A/C
electrical
Sanhua component
Internation s
al Inc. manufactur USD 37.55 2198454 40120068 2102519 74700822 56266211
Subsidiary
(USA) ing million 385.41 8.92 438.00 .00 .25
(Consolida marketing
ted) and
investment
manageme
nt
Refrigerati
on and A/C
electrical
Sanhua
component
Internation
s
al USD
manufactur 4215198 1015433 3394581 15828198 10020497
Singapore Subsidiary 150.57983
ing 450.20 008.70 392.56 .36 .89
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
Methods of acquiring and disposing Impact on overall production operation
Company name
subsidiaries during the reporting period and performance
Sanhua New Energy Thermal
Management Technology (Hangzhou) New investment No significant impact
Co. Ltd
Sanhua Heat Exchanger (Zhengzhou) New investment No significant impact
29Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Co. Ltd
IX. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
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 Vietnam India and other places.
30Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 75.75% January 26 2022 January 27 2022 shareholders in 2022
General Meeting
2022 No. 2022-009 was
published in China
Securities Journal
Securities Times and
CNINFO
The announcement
on the resolution of
the annual general
meeting of
2021 Annual Annual General
shareholders in 2021
General Meeting of Meeting of 78.31% April 15 2022 April 16 2022
(2022-039) was
Shareholders Shareholders
published in China
Securities Journal
Securities Times and
CNINFO
The announcement
on the resolution of
the second
Second extraordinary
Extraordinary Extraordinary general meeting of
77.80% May 25 2022 May 26 2022
General Meeting in General Meeting shareholders in 2022
2022 (2022-059) was
published in China
Securities Journal
Securities Times and
31Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
Yu Shuli Director Resign January 26 2022 Resign upon expiration of term of office
Ren Jintu Director Elected January 26 2022 Elected by the board of directors
III. Profit distribution and conversion of capital reserve to share capital during the reporting
period
√ Applicable □ Not applicable
Bonus share issued per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax inclusive) 1
Total capital share basis for the distribution proposal (share) 3586507315
Total cash dividend (RMB) (tax inclusive) 358650731.50
Cash dividend amount in other ways (such as share repurchase)
74569331.00
(RMB)
Total cash dividends (including other ways) (RMB) 433220062.50
Distributable profits (RMB) 1278977230.25
Percentage of cash dividends in the total distributed profit (%) 100%
Cash dividends
Other
Detailed description of profit distribution or capital reserves conversion plan
Based on provisional 3586507315 shares of capital stock as of August 10 2022 [note] cash dividend of RMB 1.00 (including tax)
will be distributed to all shareholders for every 10 shares. The Company will not distribute bonus shares or convert capital reserves
to share capital. A total of RMB 358650731.50 will be distributed and the Company's remaining undistributed profits are carried
forward to the next year.Note: As of August 10 2022 the share capital of the Company is 3591121375 shares of which the number of repurchased shares
is 4614060. According to the provisions of the Company Law the shares held by the listed company through the repurchase
account do not enjoy the right to participate in profit distribution or the conversion of capital reserve into share capital.If the total share capital of the Company changes due to the conversion of convertible bonds share repurchase exercise of equity
incentive scheme refinancing and listing of new shares before the implementation of the distribution plan the total distribution
amount shall be adjusted accordingly based on the principle of unchanged distribution proportion.
32Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
IV. The Implementation of an Equity Incentive Plan Employee Stock Incentive Plan or
Other Incentive Plans
√Applicable □Not applicable
1. Equity incentive plan
In order to further improve the Company's governance structure promote to establish and improve the incentive
and restraint mechanism attract and retain excellent talents and effectively mobilize the enthusiasm of the core
talents the Company has continuously launched equity incentive schemes.
1. In 2020 the Company launched the 2020 restricted stock incentive plan granting 12.045 million shares of
restricted stock to 914 incentive objects. The granting date of this equity incentive plan is February 24 2020 and
the granting price of restricted stock is 9.85 yuan/share. The listing date of this restricted stock is March 20 2020.
(1) On November 5 2020 the fourth extraordinary general meeting of shareholders of 2020 was held in which
the Resolution on repurchase and cancellation of some restricted stocks was approved. The Company
repurchased and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2020
restricted stock incentive plan totaling of 104000 shares.
(2) On June 8 2021 the Company held the 18th interim meeting of the 6th board of directors and the 16th
interim meeting of the 6th board of supervisors respectively in which Proposal on adjusting the repurchase
price of 2020 restricted stock incentive plan Proposal on repurchase and cancellation of some restricted
stocks and Proposal on the achievement of unlocking conditions of the first vesting period of the restricted
stock incentive plan in 2020 were approved. The listing date of the restricted shares was June 18 2021. The
number of shareholders meeting the unlocking condition was 883. A total of 4.59615 million shares were
released.
(3) On June 24 2021 the second extraordinary general meeting of shareholders in 2021 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 229450 restricted shares held by unqualified incentive objects in the 2020 restricted stock
incentive plan.
(4) On November 16 2021 the fourth extraordinary general meeting of shareholders in 2021 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 113750 restricted shares held by unqualified incentive objects in the 2020 restricted stock
incentive plan.
(5) On May 9 2022 the Company held the 4th interim meeting of the 7th board of directors and the 4th interim
meeting of the 7th board of supervisors respectively in which Proposal on adjusting the repurchase price of
2020 restricted stock incentive plan Proposal on repurchase and cancellation of some restricted stocks and
Proposal on the achievement of unlocking conditions of the second vesting period of the restricted stock
incentive plan in 2020 were approved. The listing date of the restricted shares was May 19 2022. The number
of shareholders meeting the unlocking condition was 844. A total of 4.4343 million shares were released.
(6) On May 25 2022 the second extraordinary general meeting of shareholders in 2022 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 268450 restricted shares held by unqualified incentive objects in the 2020 restricted stock
33Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
incentive plan.
2. In 2022 the Company launched the 2022 restricted stock incentive plan and stock appreciation right incentive
plan granting 17.585 million restricted shares to 1366 incentive objects and 485000 stock appreciation rights to
41 incentive objects. The granting date of this equity incentive plan is May 31 2022. The granting price of
restricted shares and stock appreciation rights is 10 yuan/share. The listing date of the restricted shares is June 30
2022.
2. Employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive schemes
□ Applicable √ Not applicable
34Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
96 61.867 T Not
Intelligent COD Nanotube 1 North ≦500mg/L 22.27 T
Integrated /year exceeded
Controls
Wastewater
Co. Ltd
Emission
Standard is
500mg / L
The
limitation
listed in
DB33/887-2
013 Indirect
Zhejiang Emission
Sanhua Limits of
Ammonia 6.186 T Not
Intelligent Nanotube 1 North ≦35mg/L Nitrogen 2.23 T
Nitrogen /year exceeded
Controls and
Co. Ltd Phosphorus
Pollutants
from
Industrial
Wastewater
is 35mg / L
Zhejiang SO2 Direct 1 North ≦50mg/m3 The 0.42 T 2.15 T /year Not
35Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Sanhua emission limitation exceeded
Intelligent listed in
Controls GB13271-2
Co. Ltd 014
Emission
Standard of
Air
Pollutants
for Boilers
is 50mg/m3
According
to the low
Nitrogen
emission
Zhejiang
requirement
Sanhua
Nitrogen Direct s of local 10.06 T Not
Intelligent 1 North ≦50mg/m3 1.94 T
Oxide emission government /year exceeded
Controls
the limit
Co. Ltd
value of
gas-fired
boiler is
50mg / m3
Zhejiang
The
Sanhua
limitation
Climate &
from 9.205 T Not
Appliance COD Nanotube 1 South ≦500mg/l 4.692 T
GB8979-19 /year exceeded
Controls
96 is 500mg
Group Co./ L
Ltd
Zhejiang
The
Sanhua
limitation
Climate &
Total from Not
Appliance Nanotube 1 South ≦2.0mg/l 0.066 T /
Copper GB8979-19 exceeded
Controls
96 is
Group Co.
2.0mg/l
Ltd
Construction and operation of pollution control facilities
Adhering to the advanced management concept the Company takes "developing energy-saving and low-carbon
economy creating a green quality environment" as its own responsibility constantly surpasses and becomes an
important creator and contributor of human green quality living environment with limited resources and unlimited
wisdom.
36Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
1. In terms of waste water treatment the Company responded to the construction of "five water treatment"
"eliminating inferior V-type water" and "zero direct discharge of sewage" in the whole province. The
Company renovated the rainwater and sewage outlets in the factory area implemented the separation of
rainwater and sewage and installed cut-off valves and video monitoring equipment at the Company's
rainwater discharge outlets and collected and treated the early rainwater. There are two wastewater treatment
stations in the factory. The sewage treatment stations have been equipped with standardized sewage outlets
and set up discharge outlet signs. Online monitoring device solenoid valve flowmeter and card swiping
sewage system are installed at the discharge outlet which has been connected with the environmental
protection department. The monitoring indicators include pH COD total copper total zinc 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 were 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
37Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
County and has obtained 25 EIA permits. All the projects have passed. In August 2020 the Company obtained the
national emission permit.
2. Zhejiang Sanhua Refrigeration Group Co. Ltd. has invested in Xialiquan of Xinchang County since 2013 and
has obtained 6 EIA permits. 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
38Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Not applicable
Measures and effects in reducing carbon emissions during the reporting period
√ Applicable □ Not applicable
1. The Company is committed to developing a series of low-carbon products continuously improving the energy
efficiency level for the thermal management applications in the fields of refrigeration air conditioning appliances
and automobiles reducing energy consumption and contributing to the emission reduction of the industry.
2. The Company continues to promote the application of smart energy IOT platform and effectively controls the
use efficiency of all energy within the scope through real-time display of digital information traceability
technical transformation and energy conservation and consumption reduction analysis.
3. The industrial zone uses distributed photovoltaic to replace the original purchased electricity in a large area to
achieve clean energy and adopts waste heat recovery technology to achieve lower energy consumption and higher
resource utilization efficiency.
4. The Company improves and reduces energy consumption and improves energy efficiency through the
improvement of manufacturing and technological process. Reduce energy consumption and carbon emission by
troubleshooting of air leakage point of compressed air pipeline of equipment upgrading and transformation of air
compressor emission reduction of triple supply and nitrogen recycling.Other environmental information
Not applicable
II. Social Responsibility
No
39Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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.Comm
itment
on
horizo
Zhang Daocai and Sanhua
Zhang Daocai ntal
holding group the controlling
controlling compe
shareholder of the Company
shareholder tition
promise that there will not be January 5 Strict
Sanhua related Long term
any competition with Sanhua 2009 performance
Commitments Holding party
intelligent controls in the
made during Group Co. transa
business scope being or already
asset Ltd. ctions
carried out in the future.restructuring and
capital
occup
ation
Zhang Daocai Comm Sanhua Holding Group
controlling itment promises: after the completion
January 5 Strict
shareholder on of this transaction Sanhua Long term
2009 performance
Sanhua horizo Holding Group and Sanhua
Holding ntal intelligent controls will sign an
40Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Group Co. compe agreement according to law
Ltd. tition perform legal procedures fulfill
related the obligation of information
party disclosure and handle
transa significant matters for approval
ctions in accordance with relevant
and laws regulations articles of
capital association of Sanhua
occup intelligent controls. In the
ation process of implementation of
related party transactions we
will follow the principle of
legality and reasonableness
ensure the fairness of prices and
procedures and make certain
that the legitimate interests of
Sanhua intelligent controls and
other shareholders will not be
damaged through related party
transactions.In order to avoid horizontal
competition with Sanhua
intelligent controls Zhang
Daocai Zhang Yabo Zhang
Shaobo Sanhua Holding Group
Zhang Daocai Comm
the controlling shareholder of
Zhang Yabo itment
the Company and Sanhua
Zhang on
Lvneng Industry the trading
Shaobo horizo
partner made the following
controlling ntal
commitments:
shareholder compe
1. I (or the Company) will not
Sanhua tition
directly or indirectly engage in Strict
Holding related July 24 2015 Long term
or participate in the business performance
Group Co. party
that constitutes potential direct
Ltd. Zhejiang transa
or indirect competition with
Sanhua ctions
Sanhua Intelligent Controls and
Lvneng and
its subordinate enterprises;
Industrial capital
guarantee that legal and
Group Co. occup
effective measures shall be
Ltd. ation
taken to urge other enterprises
controlled by me (or the
Company) not to engage in or
participate in any business
competing with Sanhua
41Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Intelligent Controls and its
subordinate enterprises.
2. If Sanhua Intelligent Controls
further expands its business
scope I (or the Company) and
other controlled enterprises will
not compete with Sanhua
Intelligent Controls' expanded
business; if it is possible to
compete with Sanhua Intelligent
Controls' business after
expansion I (or the Company)
and other controlled enterprises
will withdraw from Sanhua
Intelligent Controls in the
following ways of competition:
A. Stop the businesses that
compete or may compete with
Sanhua Intelligent Controls; B.Inject the competitive business
into Sanhua Intelligent
Controls; C. Transfer the
competitive business to an
unrelated third party.
3. If I (or the Company) and
other enterprises controlled by
me (or the Company) have any
business opportunities to
engage in and participate in any
activities that may compete
with Sanhua Intelligent
Controls' business operation
they shall immediately inform
Sanhua Intelligent Controls of
the above business
opportunities. If Sanhua
Intelligent Controls makes an
affirmative reply to take
advantage of the business
opportunity within a reasonable
period specified in the notice it
shall do its best to give the
business opportunity to Sanhua
Intelligent Controls.
42Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. In case of breach of the
above commitment I (or the
Company) is willing to bear all
responsibilities arising
therefrom and fully compensate
all direct or indirect losses
caused to Sanhua Intelligent
Controls.In order to standardize the
related party transactions with
Sanhua Intelligent Controls
Zhang Daocai Zhang Yabo
Zhang Shaobo Sanhua Holding
Group the controlling
shareholder of the Company
and Sanhua Lvneng Industrial
the trading partner made the
following commitments:
1. I (or the Company) and the
Zhang Daocai Comm
controlled enterprises will
Zhang Yabo itment
reduce the related party
Zhang on
transactions with Sanhua
Shaobo horizo
intelligent controls as far as
controlling ntal
possible and will not use their
shareholder compe
own status as shareholders of
Sanhua tition
Sanhua intelligent controls to Strict
Holding related July 24 2015 Long term
seek for superior rights in terms performance
Group Co. party
of business cooperation and
Ltd. Zhejiang transa
other aspects compared with
Sanhua ctions
other third parties;
Lvneng and
2. I (or the Company) will not
Industrial capital
take advantage of the right to
Group Co. occup
enter into a transaction with
Ltd. ation
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
43Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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 Yabo
Zhang Shaobo and Sanhua
holding Group the controlling
shareholder of the Company
made the following
commitments: after the
Zhang Daocai completion of the transaction
Zhang Yabo Sanhua intelligent controls will
Zhang continue to improve the
Shaobo corporate governance structure
Other
controlling and independent operation of Strict
Comm July 24 2015 Long term
shareholder the Company management performance
itment
Sanhua system in accordance with the
Holding requirements of relevant laws
Group Co. and regulations and the articles
Ltd. 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.Zhang Daocai Comm 1. I (or the Company) and the
September 18 Long term Strict
Zhang Yabo itment controlled enterprises will
44Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Zhang on reduce the related party 2017 performance
Shaobo horizo transactions with Sanhua
controlling ntal intelligent controls as far as
shareholder compe possible and will not use the
Sanhua tition position as a shareholder of
Holding related Sanhua intellectual controls to
Group Co. party seek the superior rights for
Ltd. Zhejiang transa business cooperation with
Sanhua ctions Sanhua intelligent controls
Lvneng and compared with other third
Industrial capital parties;
Group Co. occup 2. I (or the Company) will not
Ltd. ation use my position as a
shareholder of Sanhua
intellectual controls to seek for
the priority right to cooperate
with Sanhua intellectual
controls;
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
45Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Sanhua intelligent controls and
other shareholders.
1. I (or the Company) will not
directly or indirectly engage in
or participate in any business
that may constitute potential
direct or indirect competition
with Sanhua intelligent controls
and its subordinate enterprises;
guaranteed that legal and
effective measures will be taken
to urge other enterprises
controlled by me (or the
Company) not to engage in or
participate in any business that
is competitive with Sanhua
Zhang Daocai Comm
intelligent controls and its
Zhang Yabo itment
subordinate enterprises
Zhang on
business.Shaobo horizo
2. If Sanhua intelligent controls
controlling ntal
further expands its business
shareholder compe
scope I (or the Company) and
Sanhua tition
other enterprises controlled by September 18 Strict
Holding related Long term
me (or the Company) will not 2017 performance
Group Co. party
compete with Sanhua intelligent
Ltd. Zhejiang transa
controls' expanded business; if
Sanhua ctions
it is possible to compete with
Lvneng and
Sanhua intelligent controls'
Industrial capital
business after expansion I (or
Group Co. occup
the Company) and other
Ltd. ation
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
46Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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.After the completion of the
Zhang Daocai
transaction the listed Company
Zhang Yabo
will continue to improve the
Zhang
corporate governance structure
Shaobo
and independent operation of
controlling
the Company management
shareholder
system in accordance with the
Sanhua Other
requirements of relevant laws September 18 Strict
Holding comm Long term
and regulations and the articles 2017 performance
Group Co. itment
of association continue to
Ltd. Zhejiang
maintain the independence of
Sanhua
the listed Company in business
Lvneng
assets finance institutions
Industrial
personnel and other aspects and
Group Co.effectively protect the interests
Ltd.of all shareholders.Commitments Zhang Daocai Comm The commitment made at the June 7 2005 Long term Strict
47Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
made during controlling itment time of IPO it shall not engage performance
initial public shareholder on in the same production
offering or Sanhua horizo operation or business as the
refinancing Holding ntal Company in the future. In order
Group Co. compe to avoid business competition
Ltd. tition with the Company and clarify
related the non-competition
party obligations Sanhua Holding
transa Group on behalf of itself and
ctions its subsidiaries with more than
and 50% equity makes a
capital commitment to Sanhua
occup intelligent controls to avoid
ation possible horizontal competition.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
48Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual ReportVI. Explanation Given by the Board of Directors Regarding the “Non-standard Auditor’sReport” 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.
49Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
□Applicable √Not applicable
No such case in the reporting period.
6. Transactions between financial companies controlled by the Company and related parties
□Applicable √Not applicable
No such case in the reporting period.
7. 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
For details please refer to the description of right of use assets and lease liabilities in the notes to the items of the
consolidated financial statements in section X of the financial report.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
50Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
the Company.
2. Significant guarantees
√Applicable □ Not applicable
Unit: RMB in 10 thousand
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e cap
Company's Guarantees to Subsidiaries
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e cap
SANHU
A
INTER
Joint
NATIO 2019.07.April 3 July 5 liability
NAL 132000 10512.6 05-2022. Yes Yes
2019 2019 guarante
SINGAP 06.20
e
ORE
PTE.LTD.SANHU
A Joint
Decemb 2019.12.INTER April 3 20805.3 liability
30000 er 9 09-2022. No Yes
NATIO 2019 4 guarante
201912.09
NALIN e
C.SANHU
A
INTER Joint
2020.06.
NATIO April 29 June 12 liability
150000 7500 12-2022. No Yes
NAL 2020 2020 guarante
12.25
SINGAP e
ORE
PTE.
51Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
LTD.SANHU
A
INTER
Joint
NATIO 2021.02.April 29 February liability
NAL 150000 9110.92 10-2022. Yes Yes
2020 10 2021 guarante
SINGAP 02.10
e
ORE
PTE.LTD.SANHU
A Joint
2021.06.
INTER March June 24 liability
50000 10067.1 24-2022. Yes Yes
NATIO 27 2021 2021 guarante
06.16
NALIN e
C.SANHU
A
INTER
Joint
NATIO Septemb 2021.09.March liability
NAL 180000 er 14 7008.4 14-2022. No Yes
27 2021 guarante
SINGAP 2021 08.30
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2021.10.March October liability
NAL 180000 6711.4 25-2022. Yes Yes
27 2021 25 2021 guarante
SINGAP 01.25
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO Novemb 2021.11.October liability
NAL 180000 er 2 7008.4 02-2022. Yes Yes
26 2021 guarante
SINGAP 2021 04.22
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO Novemb 2021.11.October liability
NAL 180000 er 23 6711.4 23-2022. Yes Yes
26 2021 guarante
SINGAP 2021 02.22
e
ORE
PTE.LTD.SANHU Novemb Joint 2021.11.October
A 180000 er 24 6711.4 liability 24-2022. Yes Yes
262021
INTER 2021 guarante 02.24
52Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
NATIO e
NAL
SINGAP
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.01.October January liability
NAL 180000 6711.4 26-2022. No Yes
26 2021 26 2022 guarante
SINGAP 11.24
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.02.October February liability
NAL 180000 9110.92 11-2023. No Yes
26 2021 11 2022 guarante
SINGAP 02.10
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.02.October February liability
NAL 180000 6711.4 25-2022. No Yes
26 2021 25 2022 guarante
SINGAP 11.24
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.04.March April 23 liability
NAL 230000 6711.4 23-2022. Yes Yes
25 2022 2022 guarante
SINGAP 05.06
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.04.March April 23 liability
NAL 230000 7008.4 23-2022. Yes Yes
25 2022 2022 guarante
SINGAP 05.06
e
ORE
PTE.LTD.SANHU Joint
2022.05.
A March May 10 liability
230000 7008.4 10-2022. No Yes
INTER 25 2022 2022 guarante
11.10
NATIO e
53Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
NAL
SINGAP
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.05.March May 10 liability
NAL 230000 3504.2 10-2023. No Yes
25 2022 2022 guarante
SINGAP 05.10
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.05.March May 23 liability
NAL 230000 1342.28 23-2023. No Yes
25 2022 2022 guarante
SINGAP 05.23
e
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2022.05.March May 23 liability
NAL 230000 5369.12 23-2023. No Yes
25 2022 2022 guarante
SINGAP 05.23
e
ORE
PTE.LTD.SANHU
A Joint
2022.06.
INTER March June 17 liability
50000 10067.1 17-2023. No Yes
NATIO 25 2022 2022 guarante
06.09
NALIN e
C.Sanhua
AWECO
Electrica Joint
2022.04.
l March April 1 liability
5000 3816.17 01-2023. No Yes
Equipme 25 2022 2022 guarante
04.01
nt e
(Wuhu)
Co. Ltd
Total Amount of Total Amount of
Guarantees to Guarantees to
Subsidiaries Subsidiaries Actually
32800067360.79
Approved during the Occurred during the
Reporting Period Reporting Period
(B1) (B2)
Total Amount of 328000 Total Balance of 88954.73
54Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Guarantees to Guarantees Actually
Subsidiaries Paid to Subsidiaries
Approved by the at the End of the
End of the Reporting Reporting Period
Period (B3) (B4)
Subsidiaries' Guarantees to Subsidiaries
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e 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 328000 Occurred during the 67360.79
Reporting Period Reporting Period
(A1+B1+C1) (A2+B2+C2)
Total Amount of Total Balance of
Guarantees Guarantees Actually
Approved by the 328000 Paid at the End of 88954.73
End of the Reporting the Reporting Period
Period (A3+B3+C3) (A4+B4+C4)
Total Amount of Actual Guarantees
(A4+B4+C4) as a Percentage of the 7.62%
Company's Net Assets
Of which：
Balance of Debt Guarantees Directly or
Indirectly Offered to Guaranteed Objects 30872.44
with Asset-liability Ratio Exceeding 70% (E)
Total Amount of the Above Three Guarantees
30872.44
(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
55Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Bank financial The Company’s
1382410000
products self-owned funds
Total 13824 10000
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
56Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
China
Constructi
on Bank
Floating
Zhejiang
China income
Branch
Constructi Self-ow with
customize July 2 June 30
on Bank Bank 10000 ned Other guarant 3.80% 313.7 313.70 Yes Yes
d 2021 2022
Xinchang funds ee of
corporatio
sub branch principa
n
l
structured
deposit
BNP RMB Floating
Paribas structured income
Self-ow
(China) deposits June 16 June 13 with
Bank 5000 ned Other Yes Yes
Co. Ltd. due in 12 2022 2023 guarant
funds
Shanghai months ee of
Branch and linked principa
57Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
to a basket l
of
customize
d indices
JPMorgan
JPMorgan XRP Floating
Chase index income
Bank 100% Self-ow with
June 27 June 27
(China) Bank Principal 5000 ned Other guarant Yes Yes
20222023
Co. Ltd. Guarantee funds ee of
Shanghai d principa
Branch structured l
deposits
2000
Total -- -- -- -- -- -- 0 313.7 -- -- -- --
【1】0
Note: [1] The above mentioned are the details of the Company's single significant financial management (single amount is more than RMB 50 million)
Entrusted financial management is expected to be unable to recover the principal or there are other situations that may lead to impairment
□ Applicable √ Not applicable
58Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.XIII. Other significant events
□ Applicable √ Not applicable
XIV. Significant events of the Company’s subsidiaries
□ Applicable √ Not applicable
59Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 5035016 1318463 1318463 6353479
1.40%1.77%
conditional restriction(s) 1 0 0 1
1) Shares held by the states
2) Shares held by
State-owned corporate
5007261132300813230086330269
3) Other domestic shares 1.39% 1.76%
1001
Of which: Shares held by
domestic legal person
Shares held by domestic 5007261 1323008 1323008 6330269
1.39%1.76%
natural person 1 0 0 1
4) Shares held by overseas
2775500.01%-45450-454502321000.01%
investors
Of which: Shares held by
overseas legal person
Shares held by overseas
2775500.01%-45450-454502321000.01%
natural person
2. Shares without 3540901 -1333218 -1333218 3527568
98.60%98.23%
restriction 127 4 4 943
3540901-1333218-13332183527568
1) RMB common shares 98.60% 98.23%
12744943
2) Domestically listed
foreign shares
3) Foreign shares listed
overseas
4) Others
60Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
35912513591103
3. Total 100.00% -147554 -147554 100.00%
288734
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. The Company repurchased and canceled all or part of the restricted shares held by unqualified incentive objects
totaling 161070 shares. After the repurchase and cancellation the total number of shares of the Company was
reduced from 3591226678 to 3591065608.
3. May 19 2022 the second vesting period of the 2020 restricted stock incentive plan matured and 4.4343 million
restricted shares of 844 incentive objects who meet the unlocking conditions were listed for circulation.
4. The Company's 2022 restricted stock incentive plan granted 17.585 million restricted shares to 1366 incentive
objects. These shares came from the repurchase account of the Company.
5. From January 1 2022 to June 30 2022 the "Sanhua convertible bonds" decreased by RMB 291500 (2915 pieces)
due to share conversion and the number of shares converted was 13516.Approval for changes in share capital
√ Applicable □ Not applicable
1. The fourth extraordinary general meeting of shareholders in 2021 was held on November 16 2021 in which The
Proposal on Repurchase and Cancellation of Some Restricted Shares was deliberated and approved. The Company
repurchased and cancelled a total of 161070 restricted shares held but not yet unlocked by unqualified incentive
objects.
2. May 9 2022 the 4th interim meeting of the seventh board of directors and the 4th interim meeting of the seventh
board of supervisors deliberated and approved The Proposal on the Achievement of Unlocking Conditions of the
Second Vesting Period for the 2020 Stock Incentive Plan. There were 844 incentive objects who meet the conditions
for unlocking and the number of unlocked shares was 4.4343 million shares.
3. According to the 2022 restricted stock incentive plan the Company granted 17.585 million restricted shares to
1366 incentive objects at a price of 10 yuan per share on May 31 2022. The approval process is:
(1) May 9 2022 the 4th interim meeting of the seventh board of directors and the 4th interim meeting of the
seventh board of supervisors of the Company deliberated and approved The Proposal on the 2022 Restricted Stock
Incentive Plan of Zhejiang Sanhua Intelligent Controls Co. Ltd. (Draft) and Its Abstract The Proposal on the
Assessment Management Measures for the 2022 Equity Incentive Plan of Zhejiang Sanhua Intelligent Controls
Co. Ltd. and Proposal on Submitting to the General Meeting of Shareholders to Authorize the Board of Directors
to Handle Matters Related to the 2022 Equity Incentive Plan and other relevant proposals. The independent
directors of the Company expressed clear independent opinions on matters related to this incentive plan. The
board of supervisors examined and verified the list of incentive objects of this incentive plan and issued
verification opinions.
61Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(2) May 20 2022 the Company announced and disclosed The Explanation and verification opinions of the board
of supervisors on the publicity of the list of restricted stock incentive objects in 2022.
(3) May 25 2022 the second extraordinary general meeting of shareholders in 2022 deliberated and approved The
Proposal on the 2022 Restricted Stock Incentive Plan of Zhejiang Sanhua Intelligent Controls Co. Ltd. (Draft)
and Its Abstract The Proposal on the Assessment Management Measures for the 2022 Equity Incentive Plan of
Zhejiang Sanhua Intelligent Controls Co. Ltd. and Proposal on Submitting to the General Meeting of
Shareholders to Authorize the Board of Directors to Handle Matters Related to the 2022 Equity Incentive Plan.
(4) May 31 2022 the 5th interim meeting of the seventh board of directors and the 5th interim meeting of the
seventh board of supervisors of the Company deliberated and approved The Proposal on Adjusting Matters
Related to the 2022 Restricted Stock Incentive Plan and The Proposal on Granting Restricted Shares to the
Incentive Objects of the 2022 Restricted Stock Incentive Plan of the Company. Independent directors have
expressed independent opinions on the above adjustments and award. The board of supervisors examined and
verified the relevant adjustments and the list of incentive objects granted with restricted shares.Transfer of shares
√ Applicable □ Not applicable
1. The Company repurchased and cancelled 161070 restricted shares held but not yet unlocked by unqualified
incentive objects. After the repurchase and cancellation the total share capital of the Company was reduced from
3591226678 shares to 3591065608 shares.
2. June 29 2022 the Company granted 17.585 million restricted shares to 1366 incentive objects and completed
the transfer registration of restricted shares.Information about the implementation of share repurchase
√ Applicable □ Not applicable
As of June 30 2022 the number of shares repurchased by the Company through the special securities account for
share repurchases through centralized bidding transactions is 12415964 shares accounting for about 0.35% of
the Company's current total share capital. The highest repurchase price is 27.31 yuan / share the lowest
repurchase price is 15.98 yuan / share and the total transaction amount is RMB 274580332.49 (excluding
transaction costs).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
62Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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 According to the
relevant relevant
provisions of provisions of
Zhang Yabo 39023400 0 39023400
shares shares
management for management for
senior executives senior executives
According to the According to the
relevant relevant
provisions of provisions of
Wang Dayong 192562 80000 272562 shares shares
management for management for
senior executives senior executives
+ equity incentive + equity incentive
According to the According to the
relevant relevant
provisions of provisions of
Ni Xiaoming 192562 70000 262562 shares shares
management for management for
senior executives senior executives
+ equity incentive + equity incentive
According to the According to the
relevant relevant
provisions of provisions of
Chen Yuzhong 192562 80000 272562 shares shares
management for management for
senior executives senior executives
+ equity incentive + equity incentive
According to the According to the
relevant relevant
provisions of provisions of
Hu Kaicheng 192562 80000 272562
shares shares
management for management for
senior executives senior executives
63Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
+ equity incentive + equity incentive
According to the According to the
relevant relevant
provisions of provisions of
Yu Yingkui 216042 80000 296042 shares shares
management for management for
senior executives senior executives
+ equity incentive + equity incentive
According to the According to the
relevant relevant
provisions of provisions of
Mo Yang 10926 0 10926
shares shares
management for management for
senior executives senior executives
According to the According to the
relevant relevant
provisions of provisions of
Chen Xiaoming 8325 0 8325
shares shares
management for management for
senior executives senior executives
According to the According to the
relevant relevant
Other incentive provisions of provisions of
1032122044003701719500023115850
objects shares shares
management for management for
equity incentive equity incentive
Total 50350161 4400370 17585000 63534791 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total Number of Preferred
Shareholders (If Any) (Refer
Total Number of Common
to Note 8) Whose Voting
Shareholders at the End of 60603 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
64Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
non-state-owned 10524 -479451 105245129.31% 0 Pledged 285913653
Group Co. 51233 6 233
corporation
Ltd.Zhejiang
Sanhua
Domestic
Lvneng 742747 7427479
non-state-owned 20.68% 0 0
Industrial 954 54
corporation
Group Co.Ltd
Hong Kong
Central Overseas 731059 -835375 7310599
20.36%0
Clearing corporation 926 28 26
Limited
Domestic 52031 39023 1300780
Zhang Yabo 1.45% 0
Individual 200 400 0
Abu Dhabi
Overseas 25546 2554654
Investment 0.71% 1382984 0
corporation 544 4
Authority
Industrial and
Commercial
Bank of
China
Limited -
Huitianfu CSI
New Energy 14173 1417345 1417345
Others 0.39% 0
Automobile 455 5 5
Industry
Index
Sponsored
Securities
Investment
Fund (LOF)
1360613606751360675
China Others 0.38% 0
75999
65Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Construction
Bank
Corporation -
Guangfa
Technology
Innovation
Hybrid
Securities
Investment
Fund
Bank of
China
Limited -
Cathay
Pacific
Jiangyuan
Advantage 13180 1318054 1318054
Others 0.37% 0
Selection 547 7 7
Flexible
Allocation
Hybrid
Securities
Investment
Fund
Oriental
Overseas 13096 1309624 1309624
Trading Co. 0.36% 0
corporation 245 5 5
Ltd
Domestic 12900 1290000 1290000
Chen Jun 0.36% 0
Individual 000 0 0
Information about Strategic
Investors’ or General Legal
Persons’ Becoming Top Ten
No
Common Shareholders for
Placement of New Shares (If
Any) (Refer to Note 3)
Among the above shareholders Sanhua Holding Group Co. Ltd. Zhejiang Sanhua Lvneng
Explanation on Associated
Industrial Group Co. Ltd. and Zhang Yabo are the persons acting in concert. The Company
Relationship or Concerted
does not know whether there is any related relationship between other shareholders or
Actions among the
whether they belong to the persons acting in concert stipulated in the Administrative
Above-Mentioned Shareholders
Measures for the Acquisition of Listed Companies.Particulars about Shares Held by Top Ten Common Shareholders Holding Shares That Are Not Subject to Trading Restrictions
Number of Common Shares Held without Type of shares
Name of Shareholder
Restrictions at the End of the Reporting Period Type Amount
66Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
RMB common
Sanhua Holding Group Co. Ltd. 1052451233 1052451233
stock
Zhejiang Sanhua Lvneng RMB common
742747954742747954
Industrial Group Co. Ltd stock
Hong Kong Central Clearing RMB common
731059926731059926
Limited stock
RMB common
Abu Dhabi Investment Authority 25546544 25546544
stock
Industrial and Commercial Bank
of China Limited - Huitianfu CSI
RMB common
New Energy Automobile Industry 14173455 14173455
stock
Index Sponsored Securities
Investment Fund (LOF)
China Construction Bank
Corporation - Guangfa RMB common
1360675913606759
Technology Innovation Hybrid stock
Securities Investment Fund
Bank of China Limited - Cathay
Pacific Jiangyuan Advantage
RMB common
Selection Flexible Allocation 13180547 13180547
stock
Hybrid Securities Investment
Fund
RMB common
Oriental Trading Co. Ltd 13096245 13096245
stock
RMB common
Zhang Yabo 13007800 13007800
stock
RMB common
Chen Jun 12900000 12900000
stock
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. and Zhang Yabo are the persons acting in concert. The Company
Shareholders without Trading
does not know whether there is any related relationship between other shareholders or
Restrictions and among Top Ten
whether they belong to the persons acting in concert stipulated in the Administrative
Common Shareholders without
Measures for the 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?
67Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
□ Applicable √ Not applicable
No such cases during the current reporting period.IV. Shareholding changes of directors supervisors senior management personnel
√ Applicable □ Not applicable
Number
Number
of Number
Shares of
Shares restricted of
held at Shares Shares restricted
held at stocks restricted
the increased decreased stocks
the end of held at stocks
beginning during the during the held at
Tenure the the granted in
Name Title of the current current the end of
status current beginning the
current reporting reporting the
reporting of the current
reporting period period current
period current reporting
period (shares) (shares) reporting
(Shares) reporting period
(shares) period
period (shares)
(shares)
(shares)
Director
Wang Incumben
General 256750 80000 0 336750 91000 80000 132000
Dayong t
Manager
Ni Incumben
Director 256750 70000 0 326750 91000 70000 122000
Xiaoming t
Director
Chen Incumben
Chief 256750 80000 0 336750 91000 80000 132000
Yuzhong t
Engineer
Secretary
Hu of the Incumben
2567508000003367509100080000132000
Kaicheng board of t
directors
Chief
Yu Incumben
Financial 288057 80000 0 368057 91000 80000 132000
Yingkui t
Officer
Total -- -- 1315057 390000 0 1705057 455000 390000 650000
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.
68Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Section VIII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.
69Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
May 11 2022 the Company completed the 2021 annual equity distribution plan. According to the relevant
provisions on the price adjustment of convertible bonds the conversion price of "Sanhua convertible bonds" was
adjusted from 21.55 yuan / share to 21.40 yuan / share. The adjusted conversion price took effect since May 11
2022.
2. Share Conversions (Accumulative)
√ Applicable □ Not applicable
Proportion
of the
number of
Proportion
converted
of the
Cumulative Cumulative shares to Amount of
Convertible Start and amount of
Total Total amount of number of the total shares not
bond end date of non-conver
issuance issuance share shares share yet
abbreviatio share ted shares
(piece) amount conversion transferred capital of converted
n conversion to the total
(yuan) (shares) the (yuan)
amount of
Company
issuance
before the
date of
conversion
December
Sanhua 30000000 29991764
730000000823600.00381260.00%99.97%
Convertible 00.00 00.00
2021-May
70Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Bond 31 2027
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 8854432 885443200.00 29.52%
corporation
Domestic
Zhejiang Sanhua Lvneng
2 non-state-owned 6220514 622051400.00 20.74%
Industrial Group Co. Ltd
corporation
Industrial and Commercial Bank
3 of China Limited - Boshi Credit Others 800055 80005500.00 2.67%
Bond Investment Fund
Shanghai Alluvial Asset
Management Center (limited
partnership) - Alluvial Selects
4 Others 687741 68774100.00 2.29%
China's Advantageous Industry
No. 1 Private Securities
Investment Fund
China Construction Bank
Corporation - Guangfa
5 Others 500429 50042900.00 1.67%
Technology Innovation Hybrid
Securities Investment Fund
Shanghai Alluvial Asset
Management Center (limited
6 partnership) - Alluvial Positive Others 491088 49108800.00 1.64%
Growth No. 1 Private Securities
Investment Fund
Kunlun Health Insurance Co.
7 Ltd. - Traditional Insurance Others 489988 48998800.00 1.63%
Product 1
Fuguo Fuyi Progressive Fixed
Income Pension Product
8 Others 360675 36067500.00 1.20%
Industrial and Commercial Bank
of China Limited
Industrial and Commercial Bank
9 of China Limited - Huitianfu Others 313553 31355300.00 1.05%
Convertible Bond Bond
71Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Securities Investment Fund
Shanghai Alluvial Asset
Management Center (limited
10 partnership) - Alluvial Growth Others 281127 28112700.00 0.94%
Optimization No. 6 Private
Securities Investment Fund
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
Current ratio 2.01 1.98 1.52%
Asset liability ratio 53.58% 52.36% 1.22%
Quick ratio 1.56 1.55 0.65%
Corresponding Period of Last
Current Reporting Period YoY Change (%)
Year
Net profit after deducting
103004.7571977.1743.11%
non-recurring profit and loss
EBITDA total debt ratio 18.69% 18.39% 0.30%
Time interest earned ratio 12.12 26.05 -53.47%
Cash interest guarantee times 19.4 33.01 -41.23%
EBITDA Time interest earned
14.4931.93-54.62%
ratio
Repayment of debt (%) 100.00% 100.00%
Payment of interest (%) 100.00% 100.00%
72Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Section X Financial Report
I. Audit Report
Whether the semi-annual report is audited
□ Yes √ No
The Company’s 2022 Semi-annual Financial 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 2022
Unit: RMB
Items June 30 2022 January 1 2022
Current asset：
Cash and Bank Balances 6178842175.63 6707721861.13
Settlement funds
Loans to other banks
Held-for-trading financial assets 100000000.00 109383374.74
Derivative financial assets 10209820.19 54640365.03
Notes receivable 1978234601.55 2144193032.32
Accounts receivable 4834233841.80 3516292868.39
Receivable financing
Advances paid 126009532.63 93884245.02
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 147817352.70 121135343.85
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 3904043815.42 3637853809.47
73Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Contract assets
Assets held for sales
Non-current assets due within one
year
Other current assets 129255293.17 185985696.06
Total current assets 17408646433.09 16571090596.01
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 3425966.00 3608561.00
Long-term equity investments 28756781.35 22680930.51
Other equity instrument
investments
Other non-current financial assets
Investment property 7966521.52 8531303.62
Fixed assets 4460422484.12 4232706801.07
Construction in progress 1894708897.71 1343528875.40
Productive biological assets
Oil & gas assets
Right-of-use assets 220803340.44 215324024.26
Intangible assets 717365972.36 696390544.36
Development expenditures
Goodwill 7591830.61 7591830.61
Long-term prepayments 40989733.87 36640828.07
Deferred tax assets 165824399.52 153262506.84
Other non-current assets 455241032.92 328609958.16
Total non-current assets 8003096960.42 7048876163.90
Total assets 25411743393.51 23619966759.91
Current liabilities:
Short-term borrowings 1105569060.98 738190910.54
Central bank loans
Loans from other banks
Held-for-trading financial
liabilities
74Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Derivative financial liabilities 70095922.94
Notes payable 2443829960.15 1891526333.48
Accounts payable 3246452742.77 3214698131.59
Advances received
Contract liabilities 93619937.21 79816249.22
Selling of repurchased financial
assets
Absorbing deposit and interbank
deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 279553332.67 371773987.76
Taxes and rates payable 163250633.85 113404466.20
Other payables 320786812.27 172923251.10
Including: Interest Payable
Dividends Payable
Handling fee and commission
payable
Reinsurance accounts payable
Liabilities classified as held for
sale
Non-current liabilities due within 914868890.32 1763342887.58
one year
Other current liabilities 8069213.68 5276677.78
Total current liabilities 8646096506.84 8350952895.25
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1642149417.78 801461958.89
Bonds payable 2710338901.46 2652035619.50
Including: Preferred shares
Perpetual bonds
Lease liabilities 146707369.82 157981678.16
Long-term payables 4799239.86
Long-term employee benefits
75Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
payable
Provisions
Deferred income 184244624.86 156831834.71
Deferred tax liabilities 209741997.43 172910149.31
Other non-current liabilities 72716934.36 75202015.36
Total non-current liabilities 4970698485.57 4016423255.93
Total liabilities 13616794992.41 12367376151.18
Equity:
Share capital 3591103734.00 3591090218.00
Other equity instruments 409644784.03 409684602.93
Including: Preferred shares
Perpetual bonds
Capital reserve 279805819.87 373419775.02
Less: Treasury shares 342578665.17 411949612.90
Other comprehensive income -42283962.44 -129410847.39
Special reserve
Surplus reserve 701784529.70 701784529.70
General risk reserve
Undistributed profit 7083541904.10 6615689606.07
Total equity attributable to the parent 11681018144.09 11150308271.43
Company
Non-controlling interest 113930257.01 102282337.30
Total equity 11794948401.10 11252590608.73
Total liabilities & equity 25411743393.51 23619966759.91
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 2022 January 1 2022
Current assets:
Cash and bank balances 3640547872.62 3392202314.60
Held-for-trading financial assets 100000000.00 101020675.59
Derivative financial assets 326424.94 794800.00
Notes receivable 1149271421.83 1081856992.97
76Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Accounts receivable 941113600.82 575659433.91
Receivables financing
Advances paid 9623222.74 10590428.30
Other receivables 450068047.00 389775386.82
Including: Interest Receivable
Dividends Receivable 19000000.00
Inventories 587749061.53 731722817.30
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets
Total current assets 6878699651.48 6283622849.49
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 6955276814.16 6428786880.28
Other equity instrument investments
Other non-current financial assets
Investment property
Fixed assets 1518758152.24 1526603446.11
Construction in progress 78176377.74 73592261.61
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 150741453.62 153726187.34
Development expenditures
Goodwill
Long-term prepayments 2210872.98 2526712.00
Deferred tax assets 29460569.25 27736717.51
Other non-current assets 39106267.56 42826333.80
Total non-current assets 8773730507.55 8255798538.65
Total assets 15652430159.03 14539421388.14
Current liabilities:
77Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Short-term borrowings 100024833.33
Held-for-trading financial liabilities
Derivative financial liabilities 6508150.00
Notes payable 711439915.76 588779423.55
Accounts payable 1401455896.72 1428940784.60
Advances received
Contract liabilities 288265.96 213590.21
Employee benefits payable 62066744.02 107620422.34
Taxes and rates payable 43119416.78 20645647.29
Other payables 1528465487.21 1215554441.77
Including: interest payable
Dividends Payable
Liabilities classified as held for sale
Non-current liabilities due within one year 660586666.66 1431477411.53
Other current liabilities
Total current liabilities 4513955376.44 4793231721.29
Non-current liabilities:
Long-term borrowings 1641478277.78 800824388.89
Bonds payable 2710338901.46 2652035619.50
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 38728851.23 35807671.23
Deferred tax liabilities 63690409.17 59345035.23
Other non-current liabilities
Total non-current liabilities 4454236439.64 3548012714.85
Total liabilities 8968191816.08 8341244436.14
Equity:
Share capital 3591103734.00 3591090218.00
Other equity instruments 409644784.03 409684602.93
Including: Preferred shares
78Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Perpetual bonds
Capital reserve 1173993902.46 1267607857.61
Less: treasury shares 342578665.17 411949612.90
Other comprehensive income
Special reserve
Surplus reserve 573097357.38 573097357.38
Undistributed profit 1278977230.25 768646528.98
Total equity 6684238342.95 6198176952.00
Total liabilities & equity 15652430159.03 14539421388.14
3. Consolidated Income statement
Unit: RMB
Items 2022 Interim 2021 Interim
I. Total operating revenue 10159952995.52 7674081761.69
Including: Operating revenue 10159952995.52 7674081761.69
Interest income
Premium earned
Revenue from handling
charges and commission
II. Total operating cost 8827805669.58 6735994919.86
Including: Cost of sales 7702347707.94 5741171853.68
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 43478020.39 36363153.05
Selling expenses 219831170.12 182548395.40
Administrative expenses 468457579.13 374431536.21
R&D expenses 478918631.31 352175549.62
Financial expenses -85227439.31 49304431.90
79Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Including: Interest expenses 111508677.30 40208255.75
Interest income 99255925.36 43640017.31
Add: Other income 57394745.60 72081481.22
Investment income (or “-”: losses) 47271481.68 97400173.01
Including: Investment income 6300850.84 4108890.70
from associates and joint ventures
Gains from derecognition of -1716468.88 -3707072.41
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 -114976611.99 -32695697.38
“-”: losses)
Credit impairment loss (or “-”: -71124663.90 -48442168.40
losses)
Assets impairment loss (or “-”: -11922725.03 -18614580.55
losses)
Gains on asset disposal (or “-”: -525838.34 400172.51
losses)
III. Operating profit (or “-”: losses) 1238263713.96 1008216222.24
Add: Non-operating revenue 4109594.03 2472160.14
Less: Non-operating expenditures 2949255.42 3604181.70
IV. Profit before tax (or “-”: losses) 1239424052.57 1007084200.68
Less: Income tax expense 224588797.63 170607121.16
V. Net profit (or “-”: losses) 1014835254.94 836477079.52
(I) Categorized by the continuity of
operations
1. Net profit from continuing 1014835254.94 836477079.52
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 1003187335.23 823881221.70
of parent Company
2. Net profit attributable to 11647919.71 12595857.82
80Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
non-controlling shareholders
VI. Other comprehensive income after 87126884.95 -17246635.52
tax
Items attributable to the owners of the 87126884.95 -17246635.52
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 87126884.95 -17246635.52
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 87126884.95 -17246635.52
7. Others
Items attributable to non-controlling
shareholders
VII. Total comprehensive income 1101962139.89 819230444.00
Items attributable to the owners of 1090314220.18 806634586.18
the parent Company
Items attributable to non-controlling 11647919.71 12595857.82
shareholders
VIII. Earnings per share (EPS):
81Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(I) Basic EPS 0.28 0.23
(II) Diluted EPS 0.27 0.23
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 2022Interim 2021 Interim
I. Operating revenue 3193327856.30 2657932583.46
Less: Cost of sales 2583435014.85 2105732175.57
Taxes and surcharges 11476966.33 14087430.38
Selling expenses 14635706.60 11804665.15
Administrative expenses 95902750.30 88329399.37
R&D expenses 132514241.91 130378747.72
Financial expenses 13812595.95 28429967.53
Including: Interest expenses 102596230.96 38011175.51
Interest income 52980388.10 21728593.75
Add: Other income 9961694.64 26148191.57
Investment income (or “-”: losses) 766572383.64 32124589.36
Including: Investment income 5599588.25 3703896.30
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 -8372200.65 -3898101.08
“-”: losses)
Credit impairment loss (or “-”: -822121.28 -2333077.79
losses)
Assets impairment loss (or “-”:
losses)
Gains on asset disposal (or “-”: 16472.35 31965.08
losses)
II. Operating profit (or “-”: losses) 1108906809.06 331243764.88
Add: Non-operating revenue 798996.34 703532.10
82Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Less: Non-operating expenditures 12253.93 553058.35
III. Profit before tax (or “-”: losses) 1109693551.47 331394238.63
Less: Income tax expense 64027813.00 57159487.93
IV. Net profit (or “-”: losses) 1045665738.47 274234750.70
(I) Net profit from continuing 1045665738.47 274234750.70
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 1045665738.47 274234750.70
83Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
5. Consolidated Cash Flow Statement
Unit: RMB
Items 2022 Interim 2021 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods or 9386162507.29 7791922676.43
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 393707345.33 292769667.23
Other cash receipts related to 153194318.48 112704898.93
operating activities
Subtotal of cash inflows from operating 9933064171.10 8197397242.59
activities
Cash payments for goods purchased 7239805026.09 5594083556.18
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
84Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Cash payments for interest handling
charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of 1250642544.42 1043695672.97
employees
Cash payments for taxes and rates 278913274.35 212797119.37
Other cash payments related to 402690197.08 521604270.81
operating activities
Subtotal of cash outflows from 9172051041.94 7372180619.33
operating activities
Net cash flows from operating activities 761013129.16 825216623.26
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment 43500525.32 5663475.29
income
Net cash receipts from the disposal of 1192948.89 508246.83
fixed assets intangible assets and other
long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to 646640000.00 671922049.93
investing activities
Subtotal of cash inflows from investing 691333474.21 678093772.05
activities
Cash payments for the acquisition of 1373819652.01 955954243.67
fixed assets intangible assets and other
long-term assets
Cash payments for investments
Net increase of pledged borrowings
Net cash payments for the acquisition
of subsidiaries & other business units
Other cash payments related to 811294507.40 35150010.98
investing activities
Subtotal of cash outflows from 2185114159.41 991104254.65
investing activities
Net cash flows from investing activities -1493780685.20 -313010482.60
III. Cash flows from financing
85Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
activities:
Cash receipts from absorbing 175850000.00
investments
Including: Cash received by
subsidiaries from non-controlling
shareholders as investments
Cash receipts from borrowings 1243594000.00 283678800.00
Other cash receipts related to 149041182.61 2987977500.00
financing activities
Subtotal of cash inflows from financing 1568485182.61 3271656300.00
activities
Cash payments for the repayment of 1002826150.00 38237578.82
borrowings
Cash payments for distribution of 583563129.96 924187677.93
dividends or profits and for interest
expenses
Including: Cash paid by subsidiaries
to non-controlling shareholders as
dividend or profit
Other cash payments related to 106024933.57 9409814.51
financing activities
Subtotal of cash outflows from 1692414213.53 971835071.26
financing activities
Net cash flows from financing activities -123929030.92 2299821228.74
IV. Effect of foreign exchange rate 87126884.95 -17246635.52
changes on cash & cash equivalents
V. Net increase in cash and cash -769569702.01 2794780733.88
equivalents
Add: Opening balance of cash and 2690002225.09 3400144038.54
cash equivalents
VI. Closing balance of cash and cash 1920432523.08 6194924772.42
equivalents
6. Cash Flow Statement of the Parent Company
Unit: RMB
Items 2022 Interim 2021 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods and 2899104267.44 2501766645.73
rendering of services
Receipts of tax refund 76326054.50 69595321.15
86Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Other cash receipts related to 32979392.30 44634342.32
operating activities
Subtotal of cash inflows from operating 3008409714.24 2615996309.20
activities
Cash payments for goods purchased 2017479986.14 1584525056.92
and services received
Cash paid to and on behalf of 288368735.03 259052505.85
employees
Cash payments for taxes and rates 49746243.40 67230440.08
Other cash payments related to 60695494.49 99950220.20
operating activities
Subtotal of cash outflows from 2416290459.06 2010758223.05
operating activities
Net cash flows from operating activities 592119255.18 605238086.15
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment 775597711.02 21811801.45
income
Net cash receipts from the disposal of 18700.00 104233.67
fixed assets intangible assets and other
long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to 123910705.51 229811657.82
investing activities
Subtotal of cash inflows from investing 899527116.53 251727692.94
activities
Cash payments for the acquisition of 92038000.65 89501487.52
fixed assets intangible assets and other
long-term assets
Cash payments for investments 11500000.00 1581000000.00
Net cash payments for the acquisition
of subsidiaries & other business units
Other cash payments related to 1272858190.07 88686804.01
investing activities
Subtotal of cash outflows from 1376396190.72 1759188291.53
investing activities
87Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Net cash flows from investing activities -476869074.19 -1507460598.59
III. Cash flows from financing
activities:
Cash receipts from absorbing 175850000.00
investments
Cash receipts from borrowings 1070000000.00 50000000.00
Other cash receipts related to 6000000.00 3139300342.01
financing activities
Subtotal of cash inflows from financing 1251850000.00 3189300342.01
activities
Cash payments for the repayment of 900000000.00 20000000.00
borrowings
Cash payments for distribution of 578648166.97 919172149.40
dividends or profits and for interest
expenses
Other cash payments related to 76447283.64 250973534.61
financing activities
Subtotal of cash outflows from 1555095450.61 1190145684.01
financing activities
Net cash flows from financing activities -303245450.61 1999154658.00
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash -187995269.62 1096932145.56
equivalents
Add: Opening balance of cash and 1379413954.98 1803237880.51
cash equivalents
VI. Closing balance of cash and cash 1191418685.36 2900170026.07
equivalents
88Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
2022 Interim
Equity Attributable to parent Company
Other equity instruments
Items Speci GenerLess: Other Non-controll
Preferr Perpetu Capital al Surplus al risk Undistributed Othe
Total equity
Share Capital treasury comprehensi Subtotal ing interest
ed al Others reserve reser reserve reserv profit rs
shares ve income
shares bonds ve e
I. Balance 359109021 409684602 373419775. 411949612. -129410847 701784529 661568960 1115030827 102282337 1125259060
at the end 8.00 .93 02 90 .39 .70 6.07 1.43 .30 8.73
of prior
year
Add:
Cumulative
changes of
accounting
policies
Error
correction
of prior
period
Business
combinatio
n under
89Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
common
control
Others
II. Balance 359109021 409684602 373419775. 411949612. -129410847 701784529 661568960 1115030827 102282337 1125259060
at the 8.00 .93 02 90 .39 .70 6.07 1.43 .30 8.73
beginning
of current
year
III. Current 13516.00 -39818.90 -93613955. -69370947. 87126884.9 467852298. 530709872.6 11647919.7 542357792.3
period 15 73 5 03 6 1 7
increase (or
“-”:
decrease)
(I) Total 87126884.9 100318733 1090314220. 11647919.7 1101962139.comprehens 5 5.23 18 1 89
ive income
(II) Capital 13516.00 -39818.90 -93613955. -69370947. -24269310.3 -24269310.3
contributed 15 73 2 2
or
withdrawn
by owners
1. Ordinary
shares -287338900 287338900.0 287338900.0
contributed .00 0 0
by owners
2. Capital 13516.00 -39818.90 287694.78 261391.88 261391.88
contributed
90Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
by holders
of other
equity
instruments
3. Amount 17587250.0 143388177. -125800927. -125800927.
of 7 50 43 43
share-based
payment
included in
equity
-11148890074579774.7-186068674.-186068674.
4. Others.0077777
(III) Profit -535335037. -535335037. -535335037.distribution 20 20 20
1.
Appropriati
on of
surplus
reserve
2.
Appropriati
on of
general risk
reserve
3.-535335037.-535335037.-535335037.
Appropriati 20 20 20
on of profit
to owners
91Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Others
(IV)
Internal
carry-over
within
equity
1. Transfer
of capital
reserve to
capital
2. Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover losses
4. Changes
in defined
benefit plan
carried over
to retained
earnings
5. Other
comprehens
ive income
carried over
to retained
92Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
earnings
6. Others
(V) Special
reserve
1.
Appropriati
on of
current
period
2.
Application
of current
period
(VI) Others
IV. Balance 359110373 409644784 279805819. 342578665. -42283962. 701784529 708354190 1168101814 113930257. 1179494840
at the end 4.00 .03 87 17 44 .70 4.10 4.09 01 1.10
of current
period
Amount of Previous Period
Unit: RMB
2021 Interim
Equity Attributable to parent Company
Other equity instruments
Items Speci GenerLess: Other Non-controll
Preferr Perpetu Capital al Surplus al risk Undistributed Othe
Total equity
Share Capital treasury comprehensi Subtotal ing interest
ed al Others reserve reser reserve reserv profit rs
shares ve income
shares bonds ve e
I. Balance 359109021 409684602 373419775. 411949612. -129410847 701784529 661568960 1115030827 102282337 1125259060
93Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
at the end 8.00 .93 02 90 .39 .70 6.07 1.43 .30 8.73
of prior
year
Add:
Cumulative
changes of
accounting
policies
Error
correction
of prior
period
Business
combinatio
n under
common
control
Others
II. Balance 359109021 409684602 373419775. 411949612. -129410847 701784529 661568960 1115030827 102282337 1125259060
at the 8.00 .93 02 90 .39 .70 6.07 1.43 .30 8.73
beginning
of current
year
III. Current 13516.00 -39818.90 -93613955. -69370947. 87126884.9 467852298. 530709872.6 11647919.7 542357792.3
period 15 73 5 03 6 1 7
increase (or
94Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
“-”:
decrease)
(I) Total 87126884.9 100318733 1090314220. 11647919.7 1101962139.comprehens 5 5.23 18 1 89
ive income
(II) Capital 13516.00 -39818.90 -93613955. -69370947. -24269310.3 -24269310.3
contributed 15 73 2 2
or
withdrawn
by owners
1. Ordinary
shares
contributed
by owners
2. Capital 13516.00 -39818.90 287694.78 261391.88 261391.88
contributed
by holders
of other
equity
instruments
3. Amount 17587250.0 -143950722 161537972.5 161537972.5
of 7 .50 7 7
share-based
payment
included in
equity
-11148890074579774.7-186068674.-186068674.
4. Others.0077777
95Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(III) Profit -535335037. -535335037. -535335037.distribution 20 20 20
1.
Appropriati
on of
surplus
reserve
2.
Appropriati
on of
general risk
reserve
3.-535335037.-535335037.-535335037.
Appropriati 20 20 20
on of profit
to owners
4. Others
(IV)
Internal
carry-over
within
equity
1. Transfer
of capital
reserve to
capital
2. Transfer
of surplus
96Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
6. Others
(V) Special
reserve
1.
Appropriati
on of
current
period
2.
Application
of current
97Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
period
(VI) Others
IV. Balance 359110373 409644784 279805819. 342578665. -42283962. 701784529 708354190 1168101814 113930257. 1179494840
at the end 4.00 .03 87 17 44 .70 4.10 4.09 01 1.10
of current
period
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
2022 Interim
Items Other equity instruments Other
Less: treasury Special Undistributed
Share Capital Capital reserve comprehensive Surplus reserve Others Total equity
Preferred Perpetual
Others shares reserve profit income
shares bonds
I. Balance at the 3591090218.00 409684602.93 1267607857.61 411949612.90 573097357.38 768646528.98 6198176952.00
end of prior year
Add:
Cumulative
changes of
accounting
policies
Error correction of
prior period
Others
II. Balance at the 3591090218.00 409684602.93 1267607857.61 411949612.90 573097357.38 768646528.98 6198176952.00
beginning of
current year
98Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
III. Current period 13516.00 -39818.90 -93613955.15 -69370947.73 510330701.27 486061390.95
increase (or less:
decrease)
(I) Total 1045665738.47 1045665738.47
comprehensive
income
(II) Capital 13516.00 -39818.90 -93613955.15 -69370947.73 -24269310.32
contributed or
withdrawn by
owners
1. Ordinary shares 287338900.00
contributed by -287338900.00
owners
2. Capital 13516.00 -39818.90 287694.78 261391.88
contributed by
holders of other
equity instruments
3. Amount of 17587250.07 143388177.50 -125800927.43
share-based
payment included
in equity
4. Others -111488900.00 74579774.77 -186068674.77
(III) Profit -535335037.20 -535335037.20
distribution
1. Appropriation
of surplus reserve
2. Appropriation -535335037.20 -535335037.20
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
99Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
3.Surplus reserve
to cover losses
4. Changes in
defined benefit
plan carried over
to retained
earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special
reserve
1. Appropriation
of current period
2. Application of
current period
(VI) Others
IV. Balance at the 3591103734.00 409644784.03 1173993902.46 342578665.17 573097357.38 1278977230.25 6684238342.95
end of current
period
Amount of Previous Period
Unit: RMB
2021 Interim
Items Other equity instruments Other
Less: treasury Special Undistributed
Share Capital Capital reserve comprehensive Surplus reserve Others Total equity
Preferred Perpetual
Others shares reserve profit income
shares bonds
I. Balance at 3591601468.00 1198721706.52 281483741.34 509280441.15 1089748875.88 6107868750.21
the end of prior
year
Add:
100Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Others
II. Balance at 3591601468.00 1198721706.52 281483741.34 509280441.15 1089748875.88 6107868750.21
the beginning
of current year
III. Current 409766556.24 26270045.10 -38238972.50 -621219842.30 -146944268.46
period increase
(or less:
decrease)
(I) Total 274234750.70 274234750.70
comprehensive
income
(II) Capital 409766556.24 26270045.10 -38238972.50 474275573.84
contributed or
withdrawn by
owners
1. Ordinary
shares
contributed by
owners
2. Capital 409766556.24 409766556.24
contributed by
holders of other
equity
instruments
3. Amount of 26270045.10 -38238972.50 64509017.60
share-based
payment
included in
equity
101Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Others
(III) Profit -895454593.00 -895454593.00
distribution
1.
Appropriation
of surplus
reserve
2.-895454593.00-895454593.00
Appropriation
of profit to
owners
3. Others
(IV) Internal
carry-over
within equity
1.Transfer of
capital reserve
to capital
2.Transfer of
surplus reserve
to capital
3.Surplus
reserve to cover
losses
4. Changes in
defined benefit
plan carried
over to retained
earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special
reserve
102Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
1.
Appropriation
of current
period
2. Application
of current
period
(VI) Others
IV. Balance at 3591601468.00 409766556.24 1224991751.62 243244768.84 509280441.15 468529033.58 5960924481.75
the end of
current period
103Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
III. Company profile
The Company was established by the overall change of the original Sanhua Fuji Koki Co. Ltd.headquartered in Shaoxing City Zhejiang Province. 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. The registered capital of RMB 3591065608.00，total share of 3591103734 shares (each with
par value of RMB 1). The Company’s shares were listed at Shenzhen Stock Exchange.The Company belongs to the machinery manufacturing industry. Business scope: production and sales of
refrigeration equipment automatic control components pressure pipeline components electromechanical
hydraulic control pumps electromechanical hydraulic control components undertake services of inspection test
and analysis of refrigeration accessories and engage in import and export business. Main products include control
components and parts of household appliances and automobiles.The financial statements have been approved by the board of directors of the Company and disclosed on
August 11th 2022.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
Tips on 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 year of the Company runs from January 1 to December 31 under the Gregorian calendar..
104Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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 functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan while the
functional currency of subsidiaries engaged in overseas operations including SANHUA AWECO Appliance
Systems GmbH、Sanhua International Inc etc. is the currency of the primary economic environment in which they
operate.
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 acquiree at the
acquisition date the excess is recognized as goodwill; otherwise the fair value of identifiable assets liabilities and
contingent liabilities and the measurement of the combination cost are reviewed then the difference is recognized
in profit or loss.
6．Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidatedfinancial statements are compiled by the parent company according to “CASBE 33 – Consolidated FinancialStatements” 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 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
105Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
principal and interest of exclusive borrowings eligible for capitalization included in profit or loss; non-cash items
carried at historical costs are translated at the spot exchange rate at the transaction date with its RMB amount
unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the
date when the fair value was determined with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date;
the equity items other than undistributed profit are translated at the spot rate at the transaction date; the revenues
and expenses in the income statement are translated into RMB at the approximate exchange rate similar to the
systematically and rationally determined spot exchange rate at the transaction date. The translation differences of
foreign currency financial statements generated by the above translation are included in other comprehensive
income.
9．Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets
at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair
value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2) and commitments to provide a loan at a below-market
interest rate which do not fall within the above category (1); (4) financial liabilities at amortized cost.
2. Recognition criteria measurement method and derecognition condition of financial assets and financial
liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument it is recognized as a financial asset or financial
liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair value;
for the financial assets and liabilities at fair value through profit or loss the transaction expenses thereof are directly
included in profit or loss; for other categories of financial assets and financial liabilities the transaction expenses
thereof are included into the initially recognized amount. However at initial recognition for accounts receivable
that do not contain a significant financing component or in circumstances where the Company does not consider the
financing components in contracts within one year the Company measures the transaction price in accordance with
“CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized costs
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.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests impairment losses or gains and
gains and losses on foreign exchange that calculated using effective interest method shall be included into profit or
loss while other gains or losses are included into other comprehensive income. Accumulated gains or losses that
106Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
initially recognized as other comprehensive income should be transferred out into profit or loss when the financial
assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as
part of investment cost recovery) shall be included into profit or loss while other gains or losses are included into
other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income
should be transferred out into retained earnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income unless such treatment would create or enlarge accounting mismatches in profit or loss.Other gains or losses on those financial liabilities (including interests changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as
other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies
The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2) and commitments to provide a
loan at a below-market interest rate which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: * the amount of loss allowances in
accordance with impairment requirements of financial instruments; * the amount initially recognized less the
amount of accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or
losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and amortized using effective interest
method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
* the contractual rights to the cash flows from the financial assets expire;
* 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
107Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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 is included in profit or loss: (1) the carrying amount of the transferred financial
asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the financial asset
and the accumulative amount of the changes of the fair value originally included in other comprehensive income
proportionate to the transferred financial asset (financial assets transferred refer to debt instrument investments at
fair value through other comprehensive income). If the transfer of financial asset partially satisfies the conditions to
derecognition the entire carrying amount of the transferred financial asset is between the portion which is
derecognized and the portion which is not apportioned according to their respective relative fair value and the
difference between the amounts of the following two items is included into profit or loss: (1) the carrying amount of
the portion which is derecognized; (2) the sum of consideration of the portion which is derecognized and the
portion of the accumulative amount of the changes in the fair value originally included in other comprehensive
income which is corresponding to the portion which is derecognized (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
and information are available to measure fair value. The inputs to valuation techniques used to measure fair value
are arranged in the following hierarchy and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the
Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset
or liability either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than
quoted prices that are observable for the asset or liability for example interest rates and yield curves observable at
commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is
not observable and cannot be corroborated by observable market data at commonly quoted intervals historical
volatility future cash flows to be paid to fulfill the disposal obligation assumed in business combination financial
forecast developed using the Company’s own data etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company on the basis of expected credit loss recognizes loss allowances of financial assets at amortized
cost debt instrument investments at fair value through other comprehensive income contract assets leases
receivable loan commitments other than financial liabilities at fair value through profit or loss financial guarantee
contracts not belong to financial liabilities at fair value through profit or loss or financial liabilities that arise when a
108Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default
occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the
Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash
shortfalls) discounted at the original effective interest rate. Among which purchased or originated credit-impaired
financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date the Company shall only recognize the cumulative changes in the lifetime expected
credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.For leases receivable and accounts receivable and contract assets resulting from transactions regulated in
“CASBE 14 – Revenues” the Company chooses simplified approach to measure the loss allowance at an amount
equal to lifetime expected credit losses.For financial assets other than the above on each balance sheet date the Company shall assess whether the
credit risk on the financial instrument has increased significantly since initial recognition. The Company shall
measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if
the credit risk on that financial instrument has increased significantly since initial recognition; otherwise the
Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected
credit loss.Considering reasonable and supportable forward-looking information the Company compares the risk of a
default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
financial instrument as at the date of initial recognition so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet
date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a
collective basis. When the Company adopts the collective basis financial instruments are grouped with similar
credit risk features.The Company shall remeasure expected credit loss on each balance sheet date and increased or reversed
amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a
financial asset measured at amortized cost the loss allowance reduces the carrying amount of such financial asset
presented in the balance sheet; for a debt investment measured at fair value through other comprehensive income
the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of
such financial asset.
(2) Financial instruments that evaluate expected credit risk by portfolio and use three-stage model to measure
expected credit loss
Items Basis for determination Method for measuring expected credit
of portfolio loss
Based on historical credit loss
experience the current situation and the
forecast of future economic conditions
Other receivables – Portfolio grouped
Ages the Company calculates expected credit
with ages
loss through exposure at default and
12-month or lifetime expected credit loss
rate.
(3) Receivables with expected credit loss measured by combination using simplified measurement method
1) Specific portfolios and method for measuring expected credit loss
109Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Items Basis for determination Method for measuring expected credit
of portfolio loss
Based on historical credit loss
Notes receivable-Bank acceptance experience the current situation and the
Bank acceptance
receivable forecast of future economic conditions
the Company calculates expected credit
loss through exposure at default and
Notes receivable -Trade acceptance Trade acceptance lifetime expected credit loss rate.receivable
Based on historical credit loss
experience the current situation and the
forecast of future economic conditions
Accounts receivable – Portfolio
Ages the Company prepares the comparison
grouped with ages
table of ages and lifetime expected credit
loss rate of accounts receivable so as to
calculate expected credit loss.
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped
with ages
Ages Expected credit loss rate (%)
Within 1 year (inclusive the same 5%
hereinafter)
1-2 years 10%
2-3 years 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 and only when the Company: (1) currently has a legally enforceable right to set off the recognized
amounts; and (2) intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition the Company does not offset the
transferred asset and the associated liability.
10．Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business work in process
in the process of production materials or supplies etc. to be consumed in the production process or in the
rendering of services.
2. Accounting method for dispatching inventories
Inventories dispatched from storage are accounted for with weighted average method at the end of each
month/specific identification method.
3. Basis for determining net realizable value
At the balance sheet date inventories are measured at the lower of cost or net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value.
110Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Inventory system
The perpetual inventory system is adopted.
5. Amortization method of low-value consumables and packages
Low-value consumables and packages are amortized with one-off method.
11. Contract assets contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required
before the consideration is due) as a receivable and presents a right to consideration in exchange for goods that it
has transferred to a customer (which is conditional on something other than the passage of time) as a contract
asset.The company presents the obligation to transfer goods to customers for the consideration received or
receivable from customers as contract liabilities.
12．Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to
be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization
period of the asset is one year or less.If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories fixed
assets or intangible assets etc. the Company shall recognize the costs to fulfil a contract as an asset if all the
following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract including direct labor direct materials
manufacturing overhead cost (or similar cost) cost that are explicitly chargeable to the customer under the contract
and other costs that are only related to the contract;
2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the
future;
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods
or services with amortization included into profit or loss.The Company shall make provision for impairment and recognize an impairment loss to the extent that the
carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the
Company expects to receive in exchange for the goods or services to which the asset relates less the costs expected
to be incurred. The original provision for asset impairment shall be reversed and included in the current profit and
loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset after the
reversal shall not exceed the amount that would have been determined on the reversal date if no provision for
impairment had been made previously.
111Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
13. 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; that
obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained
through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through
non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship it is accounted for with cost method; for long-term
equity investments of associated enterprises and cooperative enterprises it is accounted for with equity method.
14．Investment property
Investment property measurement model
Measurement by cost method
Depreciation or amortization method
1. Investment property includes land use right of leased-out property and of property held for capital
appreciation and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost and subsequent measurement is made
using the cost model the depreciation or amortization method is the same as that of fixed assets and intangible
assets.
15．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
112Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
the Company and the cost of the assets can be measured reliably.
（2）Depreciation method of different categories of fixed assets
Depreciation Estimated residual Annual depreciation
Categories Useful life (years)
method value proportion (%) rate (%)
Buildings and Straight-line
20-300%-5%3.17%～5.00%
structures method
Machinery and Straight-line
5-120%-5%7.92%～20.00%
equipment method
Measurement Straight-line
5-100%-5%9.50%～19.00%
analysis equipment method
Straight-line
Vehicle 5-8 0%-5% 11.88%～20.00%
method
Office equipment Straight-line
5-80%-5%11.88%～20.00%
and others method
16．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.
17．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.
18．Intangible assets
(1) Valuation method service life impairment test
1.Intangible assets include land use right patent right and non-patented technology etc. The initial
measurement of intangible assets is based on its cost.
2. Amortization method
Amortization
Categories Amortization period (years)
method
Land use rights Straight-line method Contractual service life
Application software Straight-line method 1-4
113Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Intellectual property Straight-line method 5-10
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.
19．Impairment of long-term assets
For long-term assets such as long-term equity investments investment property at cost model fixed assets
construction in progress right-of-use assets intangible assets with finite useful lives etc. if at the balance sheet
date there is indication of impairment the recoverable amount is to be estimated. For goodwill recognized in
business combination and intangible assets with indefinite useful lives no matter whether there is indication of
impairment impairment test is performed annually. Impairment test on goodwill is performed on related asset
group or asset group portfolio.When the recoverable amount of such long-term assets is lower than their carrying amount the difference is
recognized as provision for assets impairment through profit or loss.
20．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.
21．Employee benefits
(1) Short-term employee benefits
The Company recognizes in the accounting period in which an employee provides service short-term
employee benefits actually incurred as liabilities with a corresponding charge to profit or loss or the cost of a
relevant asset.
(2) Post-employment benefits
Post-employment benefit plans are mainly classified as defined contribution plans. During the accounting
period employees provide services according the defined contribution plan the amount payable is recognized as
liabilities and included in the current profits and losses or relevant asset costs.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability with a
corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company cannot unilaterally
withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; (2)
when the Company recognizes cost or expenses related to a restructuring that involves the payment of termination
benefits.
114Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
22．Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements modifications and cancellations of share-based payment terms and
conditions
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees if the equity instruments granted vest
immediately the fair value of those equity instruments is measured at grant date and recognized as transaction cost
or expense with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest until the
counterparty completes a specified period of service at the balance sheet date within the vesting period the fair
value of those equity instruments measured at grant date based on the best estimate of the number of equity
instruments expected to vest is recognized as transaction cost or expense with a corresponding adjustment in capital
reserve.For equity-settled share-based payment transaction with parties other than employees if the fair value of the
goods or services received can be measured reliably the fair value is measured at the date the Company obtains the
goods or the counterparty renders service; if the fair value of the goods or services received cannot be measured
reliably the fair value of the equity instruments granted measured at the date the Company obtains the goods or the
counterparty renders service is referred to and recognized as transaction cost or expense with a corresponding
increase in equity.
(2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees if share appreciation rights vest
immediately the fair value of the liability incurred as the acquisition of goods or services is measured at grant date
and recognized as transaction cost or expense with a corresponding increase in liabilities; if share appreciation
rights do not vest until the employees have completed a specified period of service the liability is measured at each
balance sheet date until settled at the fair value of the share appreciation rights measured at grant date based on the
best estimate of the number of share appreciation right expected to vest.
(3) Modifications and cancellations of share-based payment terms and conditions
If the modification increases the fair value of the equity instruments granted measured immediately before and
after the modification the Company includes the incremental fair value granted in the measurement of the amount
recognized for services received as consideration for the equity instruments granted; similarly if the modification
increases the number of equity instruments granted the Company includes the fair value of the additional equity
instruments granted measured at the date of the modification in the measurement of the amount recognized for
services received as consideration for the equity instruments granted; if the Company modifies the 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
115Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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．Convertible bonds
The Company classifies convertible bonds at initial recognition as a financial asset or liability or equity
instrument based on contract terms and economic essence it reveals instead of its legal form combining with the
definitions of financial asset liability and equity instrument.At the balance sheet date for a financial instrument classified as an equity instrument its interest expenditure
or dividend distribution is treated as profit distribution and share repurchase and cancellation are treated as
changes in equity; for a financial instrument classified as a financial liability its interest expenditure or dividend
distribution is treated as borrowing expense and gain or loss on repurchase or redemption is included in profit or
loss.
24．Revenue
Accounting policies used in revenue recognition and measurement
1. Revenue recognition principles
At contract inception the Company shall assess the contracts and shall identify each performance obligation
in the contracts and determine whether the performance obligation should be satisfied over time or at a point in
time.The Company satisfies a performance obligation over time if one of the following criteria is met otherwise
the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes
the benefits provided by the Company’s performance as the Company performs; (2) the customer can control
goods or services as they are created by the Company’s performance; (3) the Company’s performance does not
create goods or services with an alternative uses and the Company has an enforceable right to payment for
performance completed to date.For each performance obligation satisfied over time the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably but the costs incurred in satisfying the performance obligation are
expected to be recovered the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress. To determine whether the customer has obtained control of goods the Company
shall consider the following indicators: (1) the Company has a present right to payment for the goods i.e. the
customer is presently obliged to pay for the goods; (2) the Company has transferred the legal title of the goods to
the customer i.e. the customer has legal title to the goods; (3) the Company has transferred physical possession of
the goods i.e. the customer has physically possessed the goods; (4) the Company has transferred significant risks
and rewards of ownership of the goods i.e. the customer has obtained significant risks and rewards of ownership
of the goods; (5) the customer has accepted the goods; (6) other indicators showing the customer has obtained
control over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring goods or services to a customer excluding amounts collected on behalf of third parties
116Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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
The company's main business activities are the R&D production and sales of control components and parts
of household appliances and automobiles which belong to the performance obligations at a certain point in time.The income from domestic sales of products shall be recognized after the delivery inspection and the receipt
certificate are obtained and the income from export of products shall be recognized after the export declaration
and the bill of lading are obtained. The sales revenue of metal scrap is recognized after weighing and picking up
the goods and obtaining the receipt certificate.Differences in accounting policies for revenue recognition due to different business models adopted by
similar businesses.
25．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
117Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank who provides loans
for the Company with a policy subsidized interest rate borrowings are carried at the amount received with
relevant borrowings cost computed based on the principal and the policy subsidized interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company the
subsidized interest shall offset relevant borrowing cost.
26．Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference
between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and
tax base of items not recognized as assets and liabilities but with their tax base being able to be determined
according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income which it is most likely
to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date if there
is any exact evidence that it is probable that future taxable income will be available against which deductible
temporary differences can be utilized the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be
available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to
the extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss excluding those arising from the following circumstances: (1) business combination; and (2) the
transactions or items directly recognized in equity.
27. Leases
1. The Company as lessee
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 assets in 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.Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach
118Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
the Company recognizes right-of-use assets and lease liabilities at the commencement date.
(1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial
measurement of the lease liability; 2) any lease payments made at or before the commencement date less any
lease incentives received; 3) any initial direct costs incurred by the lessee; and 4) an estimate of costs to be
incurred by the lessee in dismantling and removing the underlying asset restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be
certain that the ownership of the underlying asset can be acquired by the end of the lease term the Company
depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset.Otherwise the Company depreciates the right-of-use asset from the commencement date to the earlier of the end
of the useful life of the right-of-use asset or the end of the lease term.
(2) Lease liability
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.
2. 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.
28. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization
management requirements and internal reporting system. An operating segment is a component of the Company:
(1) that engages in business activities from which it may earn revenues and incur expenses;
(2) whose financial performance is regularly reviewed by the Management to make decisions about resource
119Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
to be allocated to the segment and to assess its performance; and
(3) for which accounting information regarding financial position financial performance and cash flows is
available through analysis.
29. Share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its
employees. The amount actually paid shall be treated as treasury stock and registered for future reference at the
same time. If the purchased shares are to be retired the difference between the total book value of shares retired
and the cash distributed to existing shareholders for repurchase is to reduce capital reserve or retained earnings
when the capital reserve is not enough to reduce. If the Company repurchases vested equity instruments in
equity-settled share-based payment transactions with employees cost of treasury shares granted to employees and
capital reserve (other capital reserve) accumulated within the vesting period are to be written off on the payment
made to employees with a corresponding adjustment in capital reserve (share premium).
30. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
In November 2021 the accounting department of the Ministry of Finance issued the fifth batch of questions
and answers on the implementation of accounting standards for business enterprises in 2021. According to the
article under normal circumstances the transportation activities before the control of the enterprise's goods or
services is transferred to the customer and in order to perform the customer's contract do not constitute a single
performance obligation and the relevant transportation costs should be regarded as the contract performance costs
amortized on the same basis as the recognition of the revenue of goods or services and included in the current
profit and loss The contract performance cost shall be carried forward and included in the title of "main business
cost" or "other business cost" when recognizing the revenue of goods or services and shall be listed in the item of
" cost of sales " in the income statement.Due to the implementation of the question and answer on the implementation of accounting standards for
business enterprises (the fifth batch) the company retroactively corrected the presentation of sales freight and
miscellaneous expenses from January to June in 2021 and reclassified the item from "sales expenses" to " Cost of
sales ". The adjustment impact of the accounting policy change on the financial statements from January to June
in 2021 is shown in the table below:
Items Income statement in 2021(from January to June)
Amount before adjustment Amounts affected Adjusted amount
Consolidated income statement
Cost of sales 5601811479.62 +139360374.06 5741171853.68
Selling expenses 321908769.46 -139360374.06 182548395.40
Parent Company Income statement
Cost of sales 2099047503.77 +6684671.80 2105732175.57
Selling expenses 18489336.95 -6684671.80 11804665.15
120Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
（2）Changes in significant accounting estimates
□ Applicable √ Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
The output tax calculated based on the revenue from sales of goods or rendering of
VAT services in accordance with the tax law net of the input tax that is allowed to be deducted 13%9%6%
in the current period
Urban maintenance and
The sum of turnover tax payable and value-added tax exemption 5%7%
construction tax
Enterprise income tax Taxable income 15%25%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Zhejiang Sanhua Intelligent Controls Co. Ltd 15%
Zhejiang Sanhua Climate and Appliance Controls Group Co. Ltd 15%
Sanhua (hangzhou) Micro Channel Heat Exchanger Co. Ltd 15%
Zhejiang Sanhua Automotive Components Co. Ltd. 15%
Shaoxing Sanhua New Energy Automotive Components Co. Ltd- 15%
Wuhu Sanhua Auto-control Components Co. Ltd and other subsidiaries 15%
Domestic taxpayers other than the above-mentioned 25%
2. Tax preferential policies
Being categorized as high-tech enterprises the income tax of the Company and several subsidiaries for 2022
are temporarily calculated at a preferential tax rate of 15% and the final income tax settlement shall prevail.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.
121Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Ⅶ. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 197565.09 214611.31
Cash in bank 6065392131.36 6602049617.99
Other cash and bank balances 113252479.18 105457631.83
Total 6178842175.63 6707721861.13
Including: Deposited overseas 252118223.52 294941970.98
The total amount of the cash and
bank balances that are limited by mortgage 113252479.18 81437216.06
pledge or freeze
Other remarks:
As of June 30 2022 bank deposits containing principal and interest of large deposit certificates amounted to 4135.6962 million
yuan.
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through
100000000.00109383374.74
profit or loss
Including:
Including:
Bank financial products 100000000.00 109383374.74
Total 100000000.00 109383374.74
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 10179360.19 50103815.20
Futures tools 30460.00 4536549.83
Total 10209820.19 54640365.03
122Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Notes receivable
(1) Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 1969119125.52 2131097187.89
Trade acceptance 9115476.03 13095844.43
Total 1978234601.55 2144193032.32
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debt debt
Categories Carryin
Provis Carrying Provis g
Propor ion amount ion
Amount Amount Amount Proportion Amount amount
tion propor propor
tion tion
Including
:
Notes
receivable
with
provision 1978714 100.0 479761. 1978234 214488 689254. 214419
0.02%100.00%0.03%
for bad debt 363.45 0% 90 601.55 2287.29 97 3032.32
made on a
collective
basis
Including
:
Bank 1969119 99.52 1969119 213109 213109
99.36%
acceptance 125.52 % 125.52 7187.89 7187.89
Trade 9595237. 479761. 9115476. 137850 689254. 130958
0.48%5.00%0.64%5.00%
acceptance 93 90 03 99.40 97 44.43
1978714100.0479761.1978234214488689254.214419
Total 0.02% 100.00% 0.03%
363.450%90601.552287.29973032.32
Provision for bad debt made on a collective basis
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Provision proportion
Bank acceptance portfolio 1969119125.52
Trade acceptance portfolio 9595237.93 479761.90 5.00%
Total 1978714363.45 479761.90
Description of the basis for determining the combination:
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
123Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(2) Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of this period
Opening
Categories Recovered or Closing balance balance Accrual Write off Others
reversed
Provision for
bad debt made
689254.97-209493.07479761.90
on a collective
basis
Total 689254.97 -209493.07 479761.90
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 1712625978.86
Total 1712625978.86
(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 55531191.78
Total 55531191.78
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
Categori debt debt
es Carrying Carrying
Accrued amount Accrued Proporti Proporti amount
Amount Amount proporti Amount Amount proporti
on on
on on
Receiva
bles with
provisio
106605106605106605106605
n made 0.02% 100.00% 0.03% 100.00% 0.00
9.269.269.269.26
on an
individu
al basis
124Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Includ
ing:
Receiva
bles with
provisio
509146257234483423370262186328351629
n made 99.98% 5.05% 99.97% 5.03%
8614.50772.703841.800878.17009.782868.39
on a
collectiv
e basis
Includ
ing:
509253258300483423370368187394351629
Total 100.00% 5.07% 100.00% 5.06%
4673.76831.963841.806937.43069.042868.39
Provision made on an individual basis:
Unit: RMB
Closing balance
Debtors Provision for Accrued
Book balance Reasons
bad debts proportion
The credit status of the customer unit is
Beijing Baowo Automobile
560808.07 560808.07 100.00% abnormal and it is expected that it is
Co. Ltd
difficult to recover the payment due
The credit status of the customer unit is
Brilliance Automobile Group
488550.18 488550.18 100.00% abnormal and it is expected that it is
Holding Co. Ltd
difficult to recover the payment due
The credit status of the customer unit is
Brilliance Renault Jinbei
16701.01 16701.01 100.00% abnormal and it is expected that it is
Automobile Co. Ltd
difficult to recover the payment due
Total 1066059.26 1066059.26
Provision for bad debt accrued made on account receivable portfolio: Provision for account receivable bad debt adopting aging
portfolio
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Within 1 year 5057737377.99 252886868.98 5.00%
1 to 2 year 30686432.08 3068643.21 10.00%
2 to 3 year 1215708.56 364712.57 30.00%
Over 3 year 1829095.87 914547.94 50.00%
Total 5091468614.50 257234772.70
Description of the basis for determining the combination:
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
125Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Unit: RMB
Aging Closing balance
Within 1 year(inclusive) 5057737377.99
1 to 2 year 31191683.27
2 to 3 year 1776516.63
Over 3 year 1829095.87
Total 5092534673.76
(2) Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening
Categories Closing balance
balance Recovered Accrued Write off Others
or reversed
Receivables with provision
1066059.261066059.26
made on an individual basis
Receivables with provision
186328009.7871130383.31223620.39257234772.70
made on a collective basis
Total 187394069.04 71130383.31 223620.39 258300831.96
(3) Details about accounts receivable actually written off in the current period
Unit: RMB
Items Write-off amount
Small sporadic accounts receivable 223620.39
(4) Top 5 debtors with the largest accounts receivable balances
Unit: RMB
Proportion to the total balance Provision for bad debt at the
Debtors Closing balance
of accounts receivable end of the period
Top 5 debtors with the largest
2095532596.5341.15%104828021.72
balances
Total 2095532596.53 41.15%
(5) Other remarks
Some of the company's accounts receivable are collected by electronic and digital credit credentials such as "Meiyi order of
Midea Group" "Gree financial order of Gree Electric Appliance" and "TCL gold order". The company has not terminated the
recognition of accounts receivable before the actual arrival of funds. At the same time the company endorsed and paid part of the
126Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
electronic and digital credit credentials to the upstream suppliers. Before the expiration of the electronic and digital credit credentials
the company did not terminate the recognition of accounts payable.As of June 30 2022 the company had 788.6378 million yuan of electronic and digital credit credentials in hand 35.8404
million yuan of electronic and digital credit credentials that had been endorsed and paid but not expired and 131.1962 million yuan
of electronic and digital credit credentials that had been used for factoring financing but not expired.
6.Advances paid
(1) Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 118682754.02 94.19% 90174287.14 96.05%
1 to 2 year 4612526.25 3.66% 2441003.70 2.60%
2 to 3 year 1559067.22 1.24% 649786.02 0.69%
Over 3 year 1155185.14 0.92% 619168.16 0.66%
Total 126009532.63 93884245.02
Explanation of the reasons why the advances paid with an aging of more than 1 year and significant amount are not settled in time:
(2) Top 5 debtors with the largest advances paid balances
Closing balance of top 5 debtors totaled 15018615.77 yuan accounting for 11.92% of the total closing balance of advances
paid.
7.Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 147817352.70 121135343.85
Total 147817352.70 121135343.85
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Tax refund receivable 86625378.32 61621187.53
Guarantee deposits 37162127.32 38950699.99
127Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Others 27542591.27 23872426.88
Total 151330096.91 124444314.40
2) Provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt 12-month expected Lifetime expected credit Lifetime expected credit Total
credit losses losses (credit not impaired) losses (credit impaired)
Balance on January 1 2022 1461164.06 1847806.49 3308970.55
The balance as of January 1
2022 is in the current period
Provision made in the current
694599.64694599.64
period
Provision recovered in current
490825.98490825.98
period
Balance on June 30 2022 2155763.70 1356980.51 3512744.21
Loss provisions for significant changes in book balances in current period
□ Applicable □ Not Applicable
Disclose by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 129384888.55
1 to 2 year 3206997.22
2 to 3 year 601685.44
Over 3 year 14623781.49
Total 147817352.70
3) Details of the top 5 debtors with largest balances
Unit: RMB
Proportion Provision
to the total for bad
Items Nature of receivables Closing balance Ages balance of debt at the
other end of the
receivables period
Tax refund receivables Tax refund 86625378.32 Within 1 year 57.24%
Performance bond for
Shaoxing Binhai New City
land and project 5410000.00 3 to 5 year 3.57%
Management Committee
construction
Xinchang County Land Reserve Deposit of construction
3774000.00 6 to 10 year 2.49%
Development Center projects
Wuhu Yijiang District Finance Deposit of construction
3751000.00 5 to 8year 2.48%
Bureau project
Customs Customs deposit 1800000.00 Within 1 year 1.19%
Total 101360378.32 66.98%
128Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4) Other receivables related to Government grants
Unit: RMB
Estimated receipt time
Items Government grant Closing balance Ages
amount and basis
Expected to be fully
received from July to
Local finance and VAT refund of civil
3113280.00 Within 1 year October 2022 based on
taxation departments welfare enterprises
the tax refund
application form.
8.Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
decline in decline in
value of value of
Items inventories or inventories or Carrying Carrying
Book balance provision for Book balance provision for
amount amount
impairment of impairment of
contract contract
performance performance
costs costs
1084949769.33443282.851051506486.988227079.3333309247.33954917832.00
Raw materials
8297
Work-in-progre 478269873.83 1451381.52 476818492.31 475907400.34 1451381.52 474456018.82
ss
2410883711.36725332.172374158379.2231635847.45599140.842186036707.
Finished goods
42259208
Others 1560456.89 0.00 1560456.89 22443251.57 22443251.57
3975663811.71619996.543904043815.3718213579.80359769.693637853809.
Total
96421647
(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
Opening
Items Reversal or Closing balance balance Accrued Others Others
write off
Raw materials 33309247.33 1005871.00 871835.48 33443282.85
Work-in-progre 1451381.52 1451381.52
ss
129Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Finished goods 45599140.84 3970094.57 12843903.24 36725332.17
Total 80359769.69 4975965.57 13715738.72 71619996.54
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 128342658.70 154807049.35
Prepaid Enterprise income tax 295765.59 30197003.59
Others 616868.88 981643.12
Total 129255293.17 185985696.06
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 3608561.
3425966.003425966.003608561.00
home loan 00
3608561.
Total 3425966.00 3425966.00 3608561.00
00
Impairment of provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt Lifetime expected Lifetime expected 12?month expected Total
credit losses (credit not credit losses (credit
credit losses
impaired) impaired)
The balance as of
January 1 2022 is in
the current period
Loss provisions for significant changes in book balances in current period
□ Applicable □ Not Applicable
130Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
11. Long-term equity investments
Unit: RMB
Increase/decrease in current period
Closing
Investme Closing Opening Adjustm Cash balance balance
balance nt ChanInvestm Investm ent in dividends Provis of Invest income ges in (Carryi(Carryin
ees ent ent other or profit ion for
provisi
g recogniz other Other
ng
increas decreas compreh declared to impair on for
ed under equit amountamount)) ed ed ensive distributio ment impair
equity y )
income n ment
method
Ⅰ.Joint ventures
Ⅱ.Associates
Chong
qing
Tainu
o 136591 320728 2000000. 14866
Machi 35.38 8.16 00 423.54
nery
Co.Ltd.Nanch
ang
Sanhu
a
Jinlife 151398 -34463. 12545
225000.00
ng 8.70 17 25.53
Machi
nery
Co.Ltd.Qingd
ao
Sanhu
a
Jinlife 439804. 20000 272515 51649
ng 26 00.00 6.96 61.22
Machi
nery
Co.Ltd.Guoch
uang
Energ
y
Intern
et
15403327138.515674
Innov
9.99278.51
ation
Center
(Guan
gdong
) Co.Ltd.
131Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Ningb
o
Jinlife
ng 151215 379901. 18920
Machi 1.41 80 53.21
nery
Co.Ltd.Xinch
ang
zhejia
ng
energy
sanhu 183436 -24144. 18102
a 5.07 77 20.30
compr
ehensi
ve
energy
co.Zhong
shan
Xuany
i Pipe
21811419973.322011
Manuf
5.70419.04
acturi
ng
Co.Ltd.Subtot 226809 20000 630085 2225000. 28756
0.000.000.000.000.00
al 30.51 00.00 0.84 00 781.35
226809200006300852225000.28756
Total 0.00 0.00 0.00 0.00 0.00
30.5100.000.8400781.35
12.Investment property
(1) Investment property measured by cost method
□Applicable □Not applicable
Unit: RMB
Buildings and Land use right and Construction
Items Total
structures Overseas land ownership in progress
Ⅰ. Original Carrying amount
1.Opening balance 11514530.95 3183887.70 14698418.65
2.Increase in current period -300434.61 -93183.30 -393617.91
(1) Acquisition
(2) Transferred in from inventory\fixed
assets\construction in progress
(3) Business combination
132Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(4) Converted difference in Foreign
-300434.61-93183.30-393617.91
Currency Statements
3.Decrease in current period
(1) Disposal
(2) Other transfer out
4.Closing balance 11214096.34 3090704.40 14304800.74
Ⅱ. Accumulated depreciation and
amortization
1.Opening balance 6167115.03 6167115.03
2.Increase in current period 171164.19 171164.19
(1) Depreciation or amortization 355230.61 355230.61
(2) Converted difference in Foreign
-184066.42-184066.42
Currency Statements
3.Decrease in current period
(1) Disposal
(2) Other transfer out
4.Closing balance 6338279.22 6338279.22
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 4875817.12 3090704.40 7966521.52
2.Opening balance 5347415.92 3183887.70 8531303.62
13.Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 4460422484.12 4232706801.07
Total 4460422484.12 4232706801.07
(1) Fixed assets
Unit: RMB
Measurem
Machinery Office and
Buildings and ent Transportati
Items and other Total
structures analysis on vehicles
equipment equipment
equipment
Ⅰ. Original book value:
1.Opening balance 2260940388 4383699834 1140880 36024771. 2531360 70478891
133Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report.77.9779.020991.1865.03
10605969.82455044936.39642223.8511738.41103953494844403
2.Increase in current period
81576.12.94
5478500.290.007148871.8483802.28072732.29183906.
(1) Acquisition
6638199
(2) Transferred in from 2098178.89 449172079.9 451270258
construction in progress 3 .83
(3) Business combination
(4) Converted difference in 3029290.63 5872856.45 2493351. 27936.25 2966803. 14390238.
Foreign 49 31 13
27794246.332234259.1747978.3214615853238066.
3.Decrease in current period
4512.5665
27794246.332234259.1747978.3214615853238066.
(1) Disposal or scrap
4512.5665
22715463584810950525121496042788531.242714074894955
4.Closing balance.59.0242.722544.7502.32
Ⅱ. Accumulated depreciation
660956999.81917864567461448228168250.149922328030569
1.Opening balance
3.587.705233.2278.85
41268539.71192117254.15758224.1978581.31134974252472346
2.Increase in current period
10267.03.24
41219931.36189507864.85641774.1974946.31125774249602262
(1) Accrual
36225.25.37
(2) Converted difference in 48608.35 2609389.28 116449.4 3635.05 92001.79 2870083.8
Foreign Currency Statements 0 6
22376020.101707612.1352259.6131457938581691.
3.Decrease in current period
5059.7499
22376020.101707612.1352259.6131457938581691.
(1) Disposal or scrap
5059.7499
702225539.52087605801501954328794572.148126230169476
4.Closing balance
4.599.222380.5233.09
Ⅲ. Provision for impairment
426713.612125385.
1.Opening balance 11698671.50
111
2.Increase in current period
(1) Accrual
3.Decrease in current period
(1) Disposal or scrap
426713.612125385.
4.Closing balance 11698671.50
111
Ⅳ. Carrying amount
15693208192711646051713006013993959.941610544604224
1.Closing balance.05.933.50020.6284.12
1599983388245413659567943257856520.5102787042327068
2.Opening balance.94.891.32744.3501.07
134Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(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
13# factory in Meizhu North district 71446977.11 processed uniformly after the overall
completion.New assets the certificate of title to be
Finished goods warehouse in Meizhu
19976080.76 processed uniformly after the overall
North district
completion.New assets the certificate of title to be
14# factory in Meizhu North district 22971266.31 processed uniformly after the overall
completion.New assets the certificate of title to be
Meizhu North District class A warehouse 1771170.00 processed uniformly after the overall
completion.New assets the certificate of title to be
15# factory in Meizhu North district 56391108.43 processed uniformly after the overall
completion.New assets the certificate of title to be
Shaoxing new energy plant (phase I and
227325453.07 processed uniformly after the overall
phase II)
completion.
14.Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 1894708897.71 1343528875.40
Total 1894708897.71 1343528875.40
(1) Details of construction in progress
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Annual 458763631.61 458763631.61 284815371.33 284815371.33
production of
65 million sets
of commercial
refrigeration
and air
conditioning
intelligent
control
components
construction
project
Annual 13494196.25 13494196.25 1406087.14 1406087.14
135Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
production of
7.3 million sets
of new energy
vehicle thermal
management
system
components
project
Annual
production of
1.5 million sets
of new energy
177054309.99177054309.99181228255.83181228255.83
thermal
management
components
project
Annual
production of 4
million sets of
new energy
vehicles
29741032.7429741032.7434615615.9634615615.96
technical
transformation
project of heat
pump
components
Annual
production of 3
million sets of
plate heat
exchanger
technical
transformation
project and 2
7569035.777569035.777569035.777569035.77
million sets of
EXV electronic
expansion
valve
components
technical
transformation
project
Annual output
of 3 million
sets thermal
management
parts of new 135033424.69 135033424.69 118637568.31 118637568.31
energy vehicles
technical
transformation
project
Annual output
of 11 million
sets of new 138403552.13 138403552.13 93731401.89 93731401.89
energy vehicles
high efficiency
136Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
heat exchanger
assembly
project
Annual output
of 50.5 million
sets of high
efficiency and
energy saving
refrigeration 20156886.89 20156886.89 6939814.05 6939814.05
and air
conditioning
control
components
project
Vietnam
industrial plant 153930746.52 153930746.52 92246267.70 92246267.70
project
Mexico
industrial plant 167669713.74 167669713.74 53528222.79 53528222.79
project
Annual output
of 14 million
sets cooling
parts of new
32988320.0732988320.07
energy vehicles
technical
transformation
project
Others 559904047.31 559904047.31 468811234.63 468811234.63
1894708897.1894708897.1343528875.1343528875.
Total
71714040
(2) Changes of significant construction in progress in current period
Unit: RMB
Transf Accum Includi
Other Accum Capital
erred ulated ng:
amoun ulated Compl ization
Openi Increas to Closin amoun capital
ts invest etion rate for
ng e in fixed g t of ized Fund
Items Budget decrea ment percen interes
balanc current assets balanc capital interes source
sed in to tage t in
e period in the e ized t in
current budget (%) current
current interes current
period (%) period
period t period
Annua
l
produc
tion of
65178028481199352540245876
30.83 Raised
million 55000 5371. 0464. 204.5 3631.% funds
sets of 0.00 33 85 7 61
comm
ercial
refrige
ration
137Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
and air
conditi
oning
intellig
ent
control
compo
nents
constr
uction
project
Annua
l
produc
tion of
7.3
million
sets of
new
468601398813494
energy 1406 1900 90.65 Raised
0000.374.2196.2
vehicle 087.14 265.14 % funds
0055
therma
l
manag
ement
system
compo
nents
project
Annua
l
produc
tion of
1.5
million
sets of
50000 18122 20036 20453 17705 Self-ra
new 117.43
0000. 8255. 5085. 9031. 4309. ised
energy %
00 83 43 27 99 funds
therma
l
manag
ement
compo
nents
project
Annua
l
produc
tion of
4
16125 34615 37504 42379 29741 Self-ra
million 96.49
4500. 615.9 600.1 183.3 032.7 ised
sets of %
00 6 1 3 4 funds
new
energy
vehicle
s
technic
138Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
al
transfo
rmatio
n
project
of heat
pump
compo
nents
Annua
l
produc
tion of
3
million
sets of
plate
heat
exchan
ger
technic
al
transfo
rmatio
n
19550 Self-ra
project 7569 7569 13.54
0000. ised
and 2 035.77 035.77 %
00 funds
million
sets of
EXV
electro
nic
expans
ion
valve
compo
nents
technic
al
transfo
rmatio
n
project
Annua
l
output
of 3
million
sets
20629 11863 88977 72581 13503 Self-ra
therma 110.53
0400. 7568. 219.4 363.0 3424. ised
l %
00 31 0 2 69 funds
manag
ement
parts
of new
energy
vehicle
139Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
s
technic
al
transfo
rmatio
n
project
Annua
l
output
of 11
million
sets of
new
energy
76000 93731 46695 13840 Self-ra
vehicle 2023 24.55
0000. 401.8 565.0 3552. ised
s high 414.76 %
00 9 0 13 funds
efficie
ncy
heat
exchan
ger
assem
bly
project
Annua
l
output
of 50.5
million
sets of
high
efficie
ncy
and 78557 35687 22470 20156
6939 14.17 Raised
energy 0000. 250.0 177.1 886.8
814.05 % funds
saving 00 0 6 9
refrige
ration
and air
conditi
oning
control
compo
nents
project
Vietna
m
28 92246 61684 15393 Self-ra
industr 84.80
million 267.7 478.8 0746. ised
ial %
USD 0 2 52 funds
plant
project
Mexic 39.745
53528 11414 16766 Self-ra
o 6 66.16
222.7 1490. 9713. ised
industr million %
9 95 74 funds
ial USD
140Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
plant
project
Annua
l
output
of 14
million
sets
coolin
g parts
20000 41678 32988 Self-ra
of new 8689 20.84
0000. 291.6 320.0 ised
energy 971.56 %
00 3 7 funds
vehicle
s
technic
al
transfo
rmatio
n
project
8747184007379981334
Total 7640. 2820. 5610. 80485
7744810.40
15.Right of use assets
Unit: RMB
Items Houses and buildings Vehicle Total
Ⅰ. Original Carrying amount
1.Opening balance 282929660.31 2858999.54 285788659.85
2.Increase in current period 32305356.78 244916.64 32550273.42
(1) Rent 33552797.37 324949.39 33877746.76
(2) Effect of Foreign Currency Translation -1247440.59 -80032.76 -1327473.34
3.Decrease in current period 687082.47 687082.47
1) Disposal 687082.47 687082.47
4.Closing balance 315235017.09 2416833.70 317651850.80
Ⅱ. Accumulated amortization
1.Opening balance 68642542.87 1822092.72 70464635.59
2.Increase in current period 26634898.91 111320.05 26746218.96
(1) Accrual 27297319.04 162639.08 27459958.12
(2) Converted difference in Foreign Currency
-662420.13-51319.03-713739.16
Statements
3.Decrease in current period 362344.19 362344.19
(1) Disposal 362344.19 362344.19
4.Closing balance 95277441.78 1571068.58 96848510.35
Ⅲ. Provision for impairment
1.Opening balance
2.Increase in current period
141Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(1) Accrual
3.Decrease in current period
(1) Disposal
4.Closing balance
Ⅳ. Carrying amount
1.Closing balance 219957575.32 845765.13 220803340.44
2.Opening balance 214287117.44 1036906.82 215324024.26
16.Intangible Assets
(1) Details of intangible assets
Unit: RMB
Patent
AWECO Intellectual technolog
Overseas Intellectual property y of
Items Land use right land property and right of air Dotech Software Total
ownership commercial conditioner electronic
resource controller expansion
controller
Ⅰ.Original
Carrying amount
1.Opening 62267484. 12917600. 42150175. 6634364. 38713375. 872672748
709989748.52
balance 11 00 56 80 01 .00
2.Increase in 2655662.5 1421008.6 34216849.
30140178.12
current period 4 1 27
2162761.330734961.
(1) Acquisition 28572200.00
737
(2) Internal
research and
development
(3) Business
combination
(4) Transferred in
2655662.53481887.9
from investment 1567978.12 -741752.76
40
property
3.Decreased
in current period
(1) Disposal
64923146.12917600.42150175.6634364.40134383.906889597
4.Closing balance 740129926.64
6500568062.27
Ⅱ. Accumulated
amortization
1.Opening 29047330. 1879736. 28026223. 172508066
113128036.40426740.20
balance 34 58 32 .84
2.Increased in 2152933.3 1627509.1 331718.2 1598875.6 13042701.
7246377.6885287.47
current period 3 4 2 4 48
142Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
2152933.31627509.1331718.22319446.713614220.
(1) Accrual 7119794.43 62818.30
342113
(2) Converted
difference in
126583.2522469.17-720571.07-571518.65
Foreign Currency
Statements
3.Decreased in
current period
(1) Disposal
2152933.330674839.2211454.29625098.185550768
4.Closing balance 120374414.08 512027.67
3488096.32
Ⅲ. Provision
for impairment
1.Opening 3774136.8 3774136.8
balance 0 0
2.Increased in
198719.79198719.79
current period
(1) Accrual
(2) Converted
difference in
198719.79198719.79
Foreign Currency
Statements
3.Decreased in
current period
(1) Disposal
3972856.53972856.5
4.Closing balance
99
Ⅳ. Carrying
amount
60438262.10764666.11475336.4422910.10509284.717365972
1.Closing balance 619755512.56
3967080066.36
2.Opening 58066607. 12917600. 13102845. 4754628. 10687151. 696390544
596861712.12
balance 11 00 22 22 69 .36
17.Goodwill
(1) Original Carrying amount of goodwill
Unit: RMB
Investee or Increased in current period Decreased in current period
Opening
events resulting Due to business Closing balance balance
in goodwill Disposal combination
R-Squared
31959091.6031959091.60
Puckett Inc.Zhejiang
Sanhua plate
Exchange 7591830.61 7591830.61
Technology
Co. Ltd
143Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Total 39550922.21 39550922.21
(2) Provision for goodwill impairment
Unit: RMB
Investee or Increased in current period Decreased in current period
Opening
events resulting Closing balance
balance
in goodwill Accrual Disposal
R-Squared
31959091.6031959091.60
Puckett Inc.Total 31959091.60 31959091.60
18.Long-term prepayments
Unit: RMB
Increased in
Items Opening balance Amortization Other decreases Closing balance
current period
Rental housing
construction and
27502950.135639175.82315288.7132826837.24
transformation
expenditure
Compensated use
fee for emission 2526712.00 315839.02 2210872.98
rights
Others 6611165.94 659142.29 5952023.65
Total 36640828.07 5639175.82 1290270.02 40989733.87
19.Deferred tax assets / deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for bad debt 169631383.27 34009094.72 122506455.16 23438581.33
Provision for inventory
43726732.637739041.8246952738.868222942.54
write-down
Unrealized profit from
245931654.1624968718.51258273537.2732617712.51
internal transactions
Deductible losses 166957563.43 27467574.71 173493878.13 26364728.72
Deferred income:
183239076.2429803361.15155568312.2725652746.86
government grants
Provision for fixed
12125385.111818807.7812125385.111818807.78
assets impairments
144Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Floating loss of
13378050.002025097.50
derivative instruments
Share-paid expenses 176151753.74 27111233.13 158564503.67 24461933.94
Difference between
accounting cost and tax
72543134.6710881470.2071233687.7410685053.16
cost of convertible
corporate bonds
Total 1083684733.25 165824399.52 998718498.21 153262506.84
(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
Appreciation of assets
appraisal of the
business combinations 14017789.27 2102668.41 16689933.82 2503490.07
not under common
control
Depreciation and
1287282536.92193312040.531076829976.01161524496.34
amortization expense
Floating gain on
6387569.70958135.4514280622.902142093.44
derivatives
Accrued interest of
87355455.7113369153.0443518763.176586968.05
certificate of deposit
Floating gain on
1020675.59153101.41
financial products
Total 1395043351.60 209741997.43 1152339971.49 172910149.31
(3) Deferred tax assets or liabilities after offset shown on a net offsetting basis
Unit: RMB
Deferred tax assets and Deferred tax assets and
Closing balance of Opening balance of
liabilities offset amount liabilities offset amount
Items deferred tax assets or deferred tax assets or
at the end of the at the beginning of the
liabilities after offset liabilities after offset
balance amount balance amount
Deferred tax assets 1083684733.25 165824399.52 998718498.21 153262506.84
Deferred tax liabilities 1395043351.60 209741997.43 1152339971.49 172910149.31
(4) Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 92661954.80 68885839.40
Provision for inventory write-down 27893263.91 33407030.83
Deductible losses of subsidiaries 118353039.07 119908522.27
Investment losses recognized by the 9330930.51
145Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
equity method
Provision for intangible assets
3972856.59
impairment
Floating loss on derivatives 56717872.94
Deferred income-government grants 1005548.62
Total 300604535.93 231532323.01
(5) Deductible losses of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance Remarks
Year 2025 1176424.56 1176424.56
Year 2026 521923.98 676929.68
Year 2027 215668.29
Year 2028 10478078.42 10478078.42
Year 2039 7488066.67 7488066.67
Year 2030 31592983.55 31604893.55
Year 2031 66879893.60 68484129.39
Total 118353039.07 119908522.27
20.Other non-current assets
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Advanced
payment for
non-current 455241032.92 455241032.92 328609958.16 328609958.16
assets
purchasing
Total 455241032.92 455241032.92 328609958.16 328609958.16
21.Short-term borrowings
(1) Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Credit borrowings 237198000.00
Overseas loan under domestic guarantee 635446200.00 588918308.44
Bill discount financing 98796666.66 98796666.66
Factoring financing of account 131196202.21 49685762.67
146Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
receivable
Guaranteed loan 460000.00
Accrued interest 2471992.11 790172.77
Total 1105569060.98 738190910.54
22.Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Futures tool 14412786.81
Foreign exchange tool 55683136.13
Total 70095922.94
23. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 2443829960.15 1891526333.48
Total 2443829960.15 1891526333.48
24.Accounts payable
(1) Details of accounts payable
Unit: RMB
Items Closing balance Opening balance
Within 1 year (including 1 year) 3218249733.24 3165267168.95
1 to 2 years 18410362.38 40604444.51
2 to 3 years 3747934.34 4647692.76
Over 3 years 6044712.81 4178825.37
Total 3246452742.77 3214698131.59
25. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Advance collection of asset package
93619937.2179816249.22
disposal funds
Total 93619937.21 79816249.22
147Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 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
363181196.471165364955.621256148769.94272397382.15
benefits
Ⅱ.Post-employment
benefits - defined 5755023.95 44195213.85 44274785.71 5675452.09
contribution plan
Ⅲ.Termination benefits 2837767.34 0.00 1357268.91 1480498.43
Total 371773987.76 1209560169.47 1301780824.56 279553332.67
(2) Details of Short-term employee benefits
Unit: RMB
Increased in current Decreased in
Items Opening balance Closing balance
period current period
1.Wage bonus allowances and subsidy 331565586.62 870969567.09 954348575.90 248186577.81
2.Employee welfare fund 68350.93 36691797.76 36760148.69
3.Social insurance premium 11627329.24 59854483.56 58093366.36 13388446.44
Occupational injuries premium 153771.13 1582568.83 1605005.03 131334.93
Medicare premium and Maternity
3245973.1424933161.1324768775.073410359.20
premium
Overseas social security contributions 8227584.97 33338753.60 31719586.26 9846752.31
4.Housing provident fund 6578.00 22219723.21 22226301.21
5.Trade union fund and employee
1273619.014813824.855793591.37293852.49
education fund
6.Dispatching remuneration 18639732.67 170815559.15 178926786.41 10528505.41
Total 363181196.47 1165364955.62 1256148769.94 272397382.15
(3) Details of defined contribution plan
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1.Basic endowment
5560767.5742896980.8942981301.285476447.18
insurance premium
2.Unemployment
194256.381298232.961293484.43199004.91
insurance premium
Total 5755023.95 44195213.85 44274785.71 5675452.09
148Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
27.Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
Enterprise income tax 113769658.21 64102462.85
VAT 20088013.55 9508902.15
Individual income tax 5187630.10 7076026.18
Urban maintenance and construction tax 2206509.60 1552749.69
Education surcharge 1221551.86 918423.85
Local education surcharge 814367.95 545284.63
Housing property tax 10241123.38 18040043.30
Land use tax 6143122.07 10576760.58
Others 3578657.13 1083812.97
Total 163250633.85 113404466.20
28.Other payables
Unit: RMB
Items Closing balance Opening balance
Other payables 320786812.27 172923251.10
Total 320786812.27 172923251.10
(1) Other payables
1) Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 217009400.00 75490047.50
Product warranty fee 2848063.52 5480670.32
Guarantee deposit 11871805.34 10645357.68
Rent and property fee 4290976.65 5524510.45
Compensation for product quality loss 9070602.08 13500685.28
Collection of talent awards 6094315.18 2355610.90
Others 69601649.50 59926368.97
Total 320786812.27 172923251.10
29.Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 660000000.00 1430000000.00
Overseas loan under domestic guarantee 199328580.00 294046008.86
149Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Accrued interest 657975.30 1723095.18
Lease liabilities 54882335.02 37573783.54
Total 914868890.32 1763342887.58
30.Other current liabilities
Unit: RMB
Items Closing balance Opening balance
Output tax to be written off 8069213.68 5276677.78
Total 8069213.68 5276677.78
31.Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 1640000000.00 800000000.00
Overseas loan under domestic guarantee 671140.00 637570.00
Accrued interest 1478277.78 824388.89
Total 1642149417.78 801461958.89
32. Bonds payable
（1）Bonds payable
Unit: RMB
Items Closing balance Opening balance
Sanhua Convertible bonds 2710338901.46 2652035619.50
Total 2710338901.46 2652035619.50(2) Changes of bonds payable（does not include preferred shares perpetual bonds and other financial instruments classifiedas financial liabilities）
Unit: RMB
Amorti Conver
Accrue
zation sion
Issuanc Openin Current d Current
Bond Par Release Bond in from Ending
e g issuanc interest repaym
name value date term discoun shares balance
amount balance e at par ent
t or to
value
premiu equity
150Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
m instrum
ents
Sanhua
300002652027103
Convert June 35000 61063 59985 -26139
100.00 6 year 00000. 35619. 38901.
ible 2021 00.00 205.84 32.00 1.88
005046
bonds
300002652027103
350006106359985-26139
Total —— 00000. 35619. 38901.
00.00205.8432.001.88
005046
(3) Explanation of conditions and time of share conversion for convertible bonds
With the approval of China Securities Regulatory Commission in document zjxk [2021] No. 168 the company publicly issued 30
million convertible corporate bonds (hereinafter referred to as Sanhua convertible bonds) in June 2021 with a face value of 100 yuan
each and a total issuance amount of 3 billion yuan.The start and end date of Sanhua convertible bonds is from December 7 2021 to May 31 2027 and the initial conversion price is
21.55 yuan / share. As of June 30 2022 8236 Sanhua convertible bonds have been converted into 38126 ordinary shares.
33.Leased liabilities
Unit: RMB
Items Closing balance Opening balance
Leased liabilities 201589704.84 195555461.70
Less：Leased liabilities due within 1 year -54882335.02 -37573783.54
Total 146707369.82 157981678.16
34. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 4799239.86
Total 4799239.86
(1) Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Stock appreciation rights deposit 4799239.86
151Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
35.Deferred income
Unit: RMB
Increased in Decreased in Reasons for
Items Opening balance Closing balance
current period current period balance
Government grants 156831834.71 37738540.00 10325749.85 184244624.86
Total 156831834.71 37738540.00 10325749.85 184244624.86
Projects related to government grants：
Unit: RMB
Grants The
included amount Offsetting
Related to
Increased into recorded as cost and
Opening Other Closing assets/relat
Items in current Non-operat other expenses in
balance changes balance ed to
period ing revenue income in current
income
in current current period
period period
Grant for
2014
national
industrial
2500000.2 2187500.2 Related to
technology 312499.98
0 2 assets
research
and
developme
nt
Grant for
constructio
n project of
25 million
sets of new
energy-savi
ng and
environme
Related to
ntal 204000.32 67999.98 136000.34
assets
protection
variable
frequency
air
conditionin
g
expansion
valve
152Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Intelligent
factory
technologic
al
transformat
3125000.0 2874999.8 Related to
ion project 250000.14
0 6 assets
based on
The
Internet of
Things
technology
Annual
production
of 3 million
self-circula
Related to
ting 618750.00 49500.00 569250.00
assets
supercondu
cting plates
technology
project
Comprehen
sive
technical
transformat
ion project
of
4971300.0 4557025.0 Related to
intelligent 414274.98
0 2 assets
manufactur
ing of
refrigeratio
n
component
s
Technical
transformat
ion project
of 30
million sets 5600000.0 5199999.9 Related to
400000.02
of high 0 8 assets
efficiency
energy
saving
refrigeratio
153Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
n and air
conditionin
g control
component
s
Technical
transformat
ion project
of 30
million sets
of high
efficiency
10803522. 10197717. Related to
energy 605805.00
50 50 assets
saving
refrigeratio
n and air
conditionin
g control
component
s
Annual
output of
50.5
million sets
of high
efficiency
and energy
saving
7985098.3 7582488.3 Related to
refrigeratio 402610.02
3 1 assets
n and air
conditionin
g control
component
s
technology
transformat
ion projects
Special
fund grant
for Related to
989591.6789450.00900141.67
prevention assets
and control
of heavy
154Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
metals
pollution
Intelligent
manufactur
ing
technical
transformat
ion project
of an
2271220.0 2091220.0 Related to
annual 180000.00
0 0 assets
output of 6
million
commercial
refrigeratio
n
component
s
Technical
transformat
ion project
of annual
output of
4281862.5 4060297.5 Related to
12 million 221565.00
4 4 assets
commercial
refrigeratio
n control
component
s
Grant for
technical
transformat
ion project
of newly 1516000.0 1137000.0 Related to
379000.00
increased 0 0 assets
800000 sets
of heat
exchanger
per year
Grant for
technical
4214050.0 3792645.0 Related to
transformat 421405.00
0 0 assets
ion project
of newly
155Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
increased
100000 sets
of heat
exchanger
per year
Grant for
commercial
machine
micro-chan
Related to
nel heat 553650.00 369100.00 184550.00
assets
exchanger
technical
transformat
ion project
Product
technical
transformat
ion project
5355600.0 5020875.0 Related to
of annual 334725.00
0 0 assets
output of
700000
large heat
exchangers
Grant for
annual
production
of 2 million
sets of 1656000.0 1380000.0 Related to
276000.00
automobile 8 8 assets
air
conditionin
g parts
project
Grant for
annual
production
of 1 million
sets of new 4576750.2 4119075.2 Related to
457674.97
energy 4 7 assets
vehicle
air-conditio
ning
thermal
156Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
sensors
project
Product
technical
transformat
ion project
of annual
production
of 7.3
million sets 36342000. 2019000.0 34323000. Related to
of new 00 0 00 assets
energy
vehicle
thermal
manageme
nt system
component
s
Grant for
project of
an annual
output of
19663661. 32222740. 1740543.5 50145858. Related to
11.5
78 00 4 24 assets
million
new energy
automobile
parts
Annual
production
of 11
million sets
of
high-efficie 23175000. 23175000. Related to
ncy heat 00 00 assets
exchanger
component
s for new
energy
vehicles
Grant for
an annual 1263522.4 1005548.6 Related to
257973.82
output of 2 4 2 assets
million sets
157Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
of
high-efficie
ncy
energy-savi
ng inverter
controllers
Industrial
transformat
ion and
upgrading
technologic Related to
316049.5629562.45286487.11
al assets
transformat
ion and
industrial
investment
Comprehen
sive
investment
award for
technologic
al
transformat Related to
603120.0043080.00560040.00
ion of assets
industrial
enterprises
in Yijiang
DistrictFin
ance
Bureau
Comprehen
sive
investment
award for
technologic
al
Related to
transformat 251106.67 19970.00 231136.67
assets
ion of
industrial
enterprises
in Yijiang
District
Economic
158Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
and
Informatio
n
Committee
Grant from
Yijiang D
Related to
istrict Fina 40133.33 8600.00 31533.33
assets
nce Burea
u
Special
fund grant
for
multistory
factory
4773214.1 4660320.3 Related to
buildings 112893.78
4 6 assets
of small
and
medium-siz
ed
enterprises
Grant for
technical
transformat
ion project
for the
production
line of
energy-savi
ng
Related to
residential 370192.52 63461.52 306731.00
assets
air-conditio
ning
control
component
s with an
annual
output of
50 million
sets
Industrial
transfer Related to
162037.4266715.0895322.34
projects assets
and single
159Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
equipment
investment
grant
Grant for
four-way
reversing Related to
413333.4879999.98333333.50
valve assets
optimizatio
n project
Comprehen
sive award
and
compensati
on for
investment
1569905.4 1442812.5 Related to
in 127092.92
4 2 assets
technologic
al
transformat
ion of
industrial
enterprises
Grant for
research a
Related to
nd develop 99014.26 10457.53 88556.73
assets
ment equip
ment
Fund subsi
dies for ne 1774085.6 1661661.4 Related to
112424.22
w industria 3 1 assets
lization
Comprehen
sive award
and
compensati
on for
investment 2627360.0 2448416.0 Related to
178944.00
in 0 0 assets
technologic
al
transformat
ion of
industrial
160Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
enterprises
Policy
grant for
strong
industrial Related to
615000.0045000.00570000.00
base and assets
manufactur
ing strong
province
Grant for
equipments
promoting
new type
1141945.3 1076056.2 Related to
industrial 65889.06
0 4 assets
technologic
al
transformat
ion
Grant for
promoting
new
industrializ
ation and
Related to
support 408756.86 20601.86 388155.00
assets
technologic
al
transformat
ion of
enterprises
Annual
output of
50.5
million sets
of high
efficiency
and energy 5515800.0 5423870.0 Related to
91930.00
saving 0 0 assets
refrigeratio
n and air
conditionin
g control
component
s
161Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
technology
transformat
ion projects
1568318337738540.10325749.18424462
Total
4.7100854.86
36.Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction fund 28782218.09 28782218.09
Long-term employee rights protection
43934716.2746419797.27
payment
Total 72716934.36 75202015.36
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
2022 the accumulated amount of hedging and written-off of engineering agent construction fund and project expense was RMB
43.2478 million and the amount to be written-off at the end of the period was RMB 28.7822 million.
Long-term employee rights protection payment: retirement pensions of Mr. Harald Schrott who is the former actual controller of
the Germany Aweco residential appliances business. Based on Austrian labor law one-time welfare compensation for termination of
labor contract and one-time welfare compensation for retirement disability and death.
37.Share capital
Unit: RMB
Changed amount of current period（+/-）
Opening Reserve Closing
balance Issue of new Bonus shares transferred to Others Subtotal balance
shares
shares
359109021359110373
Total shares 13516.00 13516.00
8.004.00
Other remarks:
In the current period 13516 shares were increased due to the conversion of "Sanhua convertible bonds".
38.Other equity instruments
(1) Basic information of preferred shares perpetual bonds and other financial instruments issued at the end of the period
With the approval of [2021] No. 168 document of China Securities Regulatory Commission the company publicly issued 30
million convertible bonds on June 2021 with a nominal value of RMB100 per share a total issuance amount of RMB 3 billion.
162Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
The term of Sanhua convertible bonds is 6 years the interest is paid once a year and the principal and interest of the last year
are returned when due. The coupon rate is 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. The start and end date of Sanhua convertible bonds is from December 7 2021
to May 31 2027 and the initial conversion price is 21.55 yuan / share. Within five trading days after the maturity of Sanhua
convertible bonds the company will redeem the convertible bonds that have not been converted into shares at the price of 110% of
the face value of the bonds (including the last interest).
(2) Statement of changes in preferred shares perpetual bonds and other financial instruments issued at the end of the period
Unit: RMB
Financial Increased in current Decreased in current Opening balance Closing balance
instruments period period
issued Qty Book value Qty Book value Qty Book value Qty Book value
Convertible 40968460 29991764. 40964478
299946792915.0039818.90
bonds 2.93 00 4.03
4096846029991764.40964478
Total 29994679 2915.00 39818.90
2.93004.03
The increase and decrease of other equity instruments in the current period the reasons for the change and the basis of relevant
accounting treatment:
With the approval of the CSRC in document zjxk [2021] No. 168 the company publicly issued 30 million convertible corporate
bonds in June 2021 with a face value of 100 yuan each and a total issuance amount of 3 billion yuan. The amount of these
convertible corporate bonds initially classified as equity instruments is 409766556.24 yuan. Opening Carrying amount is
409684602.93 and due to the conversion of debt to equity 39818.90 yuan of equity instruments was decreased in the current
period.
39.Capital reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Capital premium
191059600.24287694.78111488900.0079858395.02（Share premium）
Other capital reserve 182360174.78 17587250.07 199947424.85
Total 373419775.02 17874944.85 111488900.00 279805819.87
Other remarks including changes and reasons in the current period:
Reasons for the change of increase or decrease in current period:* The capital premium decreased RMB 111488900 yuan due to
restricted stock granted to employees from Treasury stock repurchased by the company on the secondary market;* The capital stock
premium increased by 287694.78 Yuan due to the debt to equity swap of "Sanhua convertible bonds";* Other capital reserve
increased RMB 17587250.07 due to the confirmation of share-based payment remuneration.
163Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
40. Treasury shares
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Restricted shares 75490047.50 175850000.00 32461822.50 218878225.00
Repo shares 336459565.40 74579774.77 287338900.00 123700440.17
Total 411949612.90 250429774.77 319800722.50 342578665.17
Other remarks including changed amount of the current period and movement reason:
Reasons for changes in the current period; * The company paid RMB 74579774.77 for repurchasing tradable shares through
collective bidding; * The company repurchased treasury shares from the secondary market and granted employees restricted stocks
deducting treasury shares of RMB 287338900.00; * The company grants restricted stocks to incentive objects with treasury shares
and reduces treasury stocks by RMB 175850000.00; * The company have unlocked 4434300 equity incentive restricted shares
granted in 2020 the grant price was RMB 6.9615 per share，after ex-rights and ex-dividends unlocked amount is RMB
30869550.00 and the treasury shares and repo obligations payable were reduced by the same amount; * In May 2022 the
company implemented the 2021 equity distribution and the dividend of RMB 1592272.5 for the unlocked part of the restricted
shares of equity incentives will be temporarily withheld by the company. At the same time the treasury shares and repo obligations
payable were reduced by the same amount.
41. Other comprehensive income
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
Ⅱ.Items to be reclassified -12941084 8712688 8712688 -422839
subsequently to profit or loss 7.39 4.95 4.95 62.44
-1294108487126888712688-422839
Converted difference in Foreign
7.394.954.9562.44
-1294108487126888712688-422839
Total OCI
7.394.954.9562.44
Other remarks including the adjustment of the effective portion of the cash flow hedging gain or loss to the initially recognized
amount of the hedged item:
The converted difference in foreign are attributed to the parent company and not affected by corporate income tax.
164Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
42. Surplus reserve
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
Statutory surplus reserve 675289473.12 675289473.12
Discretionary surplus reserve 8681137.20 8681137.20
Reserve fund 17813919.38 17813919.38
Total 701784529.70 701784529.70
43. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance before adjustment at the end of the
6615689606.075890916707.83
previous period
Opening balance after adjustment 6615689606.07 5890916707.83
Add: Net profit attributable to shareholders of the
1003187335.23823881221.70
parent company for current year
Less: Payable dividends on ordinary shares 535335037.20 895454593.00
Closing balance of undistributed profit 7083541904.10 5819343336.53
44. Operating revenue and Cost of sales
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 9759983794.33 7315858292.73 7359458785.54 5442581272.04
Other operations 399969201.19 386489415.21 314622976.15 298590581.64
Total 10159952995.52 7702347707.94 7674081761.69 5741171853.68
45. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 14118529.65 10179080.41
Education surcharge 7275685.11 5228681.60
165Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Housing property tax 10682933.54 7902829.60
Land use tax 1342126.29 4561087.17
Stamp duty 3437021.16 2905152.17
Local education surcharge 4850456.76 3485801.10
Local foundation for water works 507592.79 480439.56
Others 1263675.09 1620081.44
Total 43478020.39 36363153.05
46. Selling expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost (including share-based payment) 131724833.74 107494444.60
Warehousing and handling charges 32810085.05 31019881.40
Entertainment expense 15770497.66 15792822.53
Travel expense 8570995.46 6797345.19
Market maintenance fee 4799215.10 7048733.83
Intermediary service fee 11067900.52 7284083.16
Others 15087642.59 7111084.69
Total 219831170.12 182548395.40
47. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost (including share-based payment) 313527075.86 248078901.38
Office expense 57469324.78 43677277.45
Entertainment expense 7065836.80 7220376.68
Depreciation and amortization expense 43663581.82 34793775.73
Intermediary service fee 24628138.08 15889432.17
Vehicle expense 4892943.15 5647121.79
Others 17210678.64 19124651.01
Total 468457579.13 374431536.21
166Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
48. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost (including share-based payment) 240163086.77 186897454.69
Material and power expense 167084372.30 110747519.73
Depreciation and amortization expense 19284261.30 17325821.94
Mold manufacturing fee 29526485.35 22006077.52
Travel expense 1253983.51 1375884.50
Royalties 3108071.99 2136353.46
Outsourcing R&D expense 2289971.70 150000.00
Others 16208398.39 11536437.78
Total 478918631.31 352175549.62
49. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 111508677.30 40208255.75
Interest income (fill in negative numbers) -99255925.36 -43640017.31
Bank financing fee 167621.82 802376.05
Exchange gains or losses -100650468.17 51129161.17
Others 3002655.10 804656.24
Total -85227439.31 49304431.90
50. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government grants 55952531.40 71379416.62
Including: VAT refund of civil welfare
6110640.004370400.00
enterprises
VAT refund on software products in excess
7166775.402974905.57
of tax burden
167Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Handling fees for withholding individual
1442214.20702064.60
income tax
Total 57394745.60 72081481.22
51. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term equity investments under equity
6300850.844108890.70
method
Investment income of bank financing products 3321714.32 4163475.29
Gains and losses on settlement of futures contracts 9372489.05 31449091.11
Gains and losses on settlement of foreign exchange contract 29992896.35 61385788.32
Bill discount interest -1716468.88 -3707072.41
Total 47271481.68 97400173.01
52. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of futures contracts -18884225.18 -11620437.02
Floating income of foreign exchange contract -94949012.07 -20461881.22
Floating income of bank financing products -1143374.74 -613379.14
Total -114976611.99 -32695697.38
53. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -71124663.90 -48442168.40
Total -71124663.90 -48442168.40
54. Assets impairment loss
Unit: RMB
168Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Items Current period cumulative Preceding period comparative
Inventory write-down loss and contract
-11922725.03-18614580.55
performance cost impairment loss
Total -11922725.03 -18614580.55
55. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of fixed assets -525838.34 400172.51
56. Non-operating revenue
Unit: RMB
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Gains on retirement of
983385.0874165.94983385.08
non-current assets
Gains on compensation and
1620977.491182168.211620977.49
penalty
Exempted payment 1104324.28 1062439.33 1104324.28
Others 400907.18 153386.66 400907.18
Total 4109594.03 2472160.14 4109594.03
57. Non-operating expenditures
Unit: RMB
Amount included in
Items Current period cumulative Preceding period comparative
non-recurring profit or loss
Losses on retirement of
2617627.822097520.702617627.82
non-current assets
Donation expenditures 128378.69 160000.00 128378.69
Compensation and liquidated
942720.28
damages expenses
Others 203248.91 403940.72 203248.91
Total 2949255.42 3604181.70 2949255.42
169Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
58. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 200318842.19 162540094.71
Deferred income tax expenses 24269955.44 8067026.45
Total 224588797.63 170607121.16
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Profit before tax 1239424052.57
Income tax expense based on statutory/applicable tax rate 234386844.71
Effect of prior income tax reconciliation 4997496.73
Effect of deducible temporary differences or deductible losses
578260.11
not recognized
Adjustment of permanent differences -15373803.92
Income tax expenses 224588797.63
59. Other comprehensive income
Please refer to the notes of balance sheet items and other comprehensive income for details.
60. 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 71493052.09 44281463.72
Net change in restricted funds 730130.35
Interest income 46515534.24 43640017.31
Rental income 5622360.24 4188087.32
Guarantee deposit etc. 29563371.91 19865200.23
Total 153194318.48 112704898.93
170Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
（2）Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 5315140.43
Guarantee deposit 939945.51
Expense payments for the period 397375056.65 520664325.30
Total 402690197.08 521604270.81
（3）Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Redemption of certificates of deposit and
646640000.00579087170.50
bank financing products
Income from settlement of foreign
61385788.32
exchange instruments
Income of settlement of futures
31449091.11
instruments
Total 646640000.00 671922049.93
（4）Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Payments for purchasing certificates of
784775000.0017000000.00
deposit and bank financing products
Net change in restricted funds 26519507.40 18150010.98
Total 811294507.40 35150010.98
（5）Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
171Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Accounts receivable factoring financing 149041182.61
Issuance of convertible bond 2987977500.00
Total 149041182.61 2987977500.00
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Bank financing fee 167621.82 802376.05
Repayment of financial lease and interest 29410028.11 6345014.96Repo shares expenses（including restricted
76447283.642262423.50shares）
Total 106024933.57 9409814.51
61. 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 1014835254.94 836477079.52
Add: Provision for assets impairment loss 83047388.93 67056748.95
Depreciation of fixed assets oil and gas assets
283016679.51221626816.40
productive biological assets
Depreciation of right of use assets 27459958.12
Amortization of intangible assets 13614220.13 10184699.56
Amortization of Long-term prepayments 1290270.02 4642412.23
Loss on disposal of fixed assets intangible assets and
525838.34-400172.51
other long-term assets (or “-”: gains)
Loss on retirement of fixed assets (or “-”: gains) 1634242.74 2023354.76
Losses on changes in fair value (or “-”: gains) 114976611.99 32695697.38
Financial expenses (or “-”: income) 58906550.50 41010631.80
Investment loss (or “-”: income) -48987950.56 -101107245.42
172Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Decrease of deferred tax assets (or “-”: increase) -12561892.68 -12621431.57
Increase of deferred tax liabilities (or “-”: decrease) 36831848.12 20730283.65
Decrease in inventories (or “-”: increase) -271165971.52 -629050587.52
Decrease in operating receivables (or “-”: increase) -1280367182.45 -522973086.43
Increase of operating payables (or “-”: decrease) 720370012.96 828651377.36
Others 17587250.07 26270045.10
Net cash flow from operating activities 761013129.16 825216623.26
2. Significant investing and financing activities not related to
----
cash receipts and payments:
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 1920432523.08 6194924772.42
Less: Opening balance of cash 2690002225.09 3400144038.54
Add：Closing balance of cash equivalents
Less：Opening balance of cash equivalents
Net increase of cash and cash equivalents -769569702.01 2794780733.88
（2）Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
I. Cash 1920432523.08 2690002225.09
Including: Cash on hand 197565.08 214611.31
Cash in bank that can be readily
1918234957.992689767198.01
drawn on demand
Funds in other currencies that can
20415.77
be readily drawn on demand
II. Cash and cash equivalents at end of year 1920432523.08 2690002225.09
62. Assets with restriction on ownership or use rights
Unit: RMB
Items Carrying amount at the end of the period Cause of restriction
173Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Guarantee deposit and Guarantee deposit in
Cash and bank balance 113252479.18
futures contracts
Notes receivable 1712625978.86 Pledge financing
Electronic digital credit certificate that has
Accounts receivable 167036569.90 been endorsed paid or discounted but has
not expired
Total 1992915027.94 --
63. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Exchange rate RMB equivalent
Items
currencies
Including: USD 39394752.16 6.7114 264393939.65
EUR 14443868.42 7.0084 101228407.43
Other currencies 79725712.30
Subtotal 445348059.38
Derivative financial assets
Including: USD 0.00 6.7114 0.00
EUR 0.00 7.0084 0.00
Other currencies 3822250.49
Subtotal 3822250.49
Accounts receivable
Including: USD 242640824.00 6.7114 1628459626.19
EUR 68668311.96 7.0084 481254997.54
Other currencies 85783000.05
Subtotal 2195497623.78
Other receivables
Including: USD 4846474.53 6.7114 32526629.16
EUR 122819.91 7.0084 860771.06
Other currencies 4024564.84
Subtotal 37411965.06
Long-term receivables
Including: USD 0.00 6.7114 0.00
174Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
EUR 115000.00 7.0084 805966.00
Other currencies 0.00
Subtotal 805966.00
Short-term borrowings
Including: USD 65000000.00 6.7114 436241000.00
EUR 48000000.00 7.0084 336403200.00
Subtotal 772644200.00
Derivative financial liabilities
Including: USD 8450974.90 6.7114 56717872.94
Subtotal 56717872.94
Accounts payable
Including: USD 20152835.37 6.7114 135253739.30
EUR 7582182.28 7.0084 53138966.29
Other currencies 72636247.39
Subtotal 261028952.98
Other payables
Including: USD 3808592.18 6.7114 25560985.56
EUR 1967843.27 7.0084 13791432.77
Other currencies 2191275.20
Subtotal 41543693.53
Non-current liabilities due within
one year
Including: USD 33168841.60 6.7114 222609363.51
EUR 1111431.18 7.0084 7789354.28
Other currencies 284181.23
Subtotal 230682899.02
Long-term borrowings
Including: USD 100000.00 6.7114 671140.00
EUR 7.0084
Subtotal 671140.00
Long-term payables
Including: USD 309267.99 6.7114 2075621.19
EUR 340046.29 7.0084 2383180.42
Other currencies 340438.25
175Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Subtotal 4799239.86
lease liability
Including: USD 5565499.28 6.7114 37352291.87
EUR 9613982.39 7.0084 67378634.18
Other currencies 188583.97
Subtotal 104919510.02
（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 Vietnam and other
countries where US dollars euro Japanese yen Polish zloty Mexican pesos Vietnamese dong etc. are used as the standard
reporting currency.
64. Government grants
（1）Refund of government grants. Unit: RMB
Items Amount Financial Report Items
Industrial support fund bonus 13185885.00 Other income
Special funds for foreign trade and economic development 7181384.00 Other income
VAT refund on software products in excess of tax burden 7166775.40 Other income
VAT refund of civil welfare enterprises 6110640.00 Other income
Talent introduction and job stabilization subsidies 3302810.53 Other income
Award of enterprise R&D investment 3163000.00 Other income
Subsidies and rewards for scientific and technological innovation and
2433000.00 Other income
entrepreneurship
Subsidy and award of innovative development 1590000.00 Other income
Handling fee for withholding and paying personal income tax 1442214.20 Other income
Enterprise patent subsidy 1198290.00 Other income
Others 294996.62 Other income
Amount of deferred income transferred to other income in the
10325749.85 Other income
current period
Subtotal 57394745.60
176Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
（2）Other remarks
Please refer to the description of deferred income in the Notes to the Consolidated Financial Statements in Section X
Financial Report for details of government grants related to assets
Ⅷ. Changes in the consolidation scope
1. Changes in the consolidation scope due to other reasons
Explain the changes in the scope of consolidation caused by other reasons (e.g. new subsidiaries liquidation
subsidiaries etc.) and their related situations:
Unit: RMB
Equity acquisition Capital contribution
Entities Equity acquisition method Capital contribution
date proportion (%)
Sanhua New Energy Thermal
Management Technology (Hangzhou) New subsidiaries March 30 2022 10000000.00 100%
Co. Ltd.Sanhua plate Exchange Technology
New subsidiaries April 12 2022 7000000.00 100%
(Zhengzhou) Co. Ltd
Ⅸ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Main operating Place of Holding proportion Acquisition
Subsidy name Business nature
place registration Direct Indirect method
Zhejiang
Business
Sanhua Climate Air
combination
and Appliance Zhejiang Zhejiang conditioning 74.00% 26.00%
under common
Controls Group parts
control
Co. Ltd.Zhejiang
Business
Sanhua
Automobile combination
Automotive Zhejiang Zhejiang 100.00%
Parts under common
Components
control
Co. Ltd.Sanhua Zhejiang Zhejiang Air 100.00% Business
177Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(hangzhou) conditioning combination
Micro Channel parts under common
Heat Exchanger control
Co. Ltd
Zhejiang Air
Sanhua Trading Zhejiang Zhejiang conditioning 100.00% Establishment
Co. Ltd parts
SANHUA Business
AWECO Home combination not
Germany Germany 100.00%
Appliance appliance parts under common
Systems GmbH control
Other remarks:
The above companies are important subsidiaries of the Company.
2. Interest in joint venture or associates
（1）Aggregated financial information of insignificant joint ventures and associates
Unit: RMB
Items Closing balance/Current period December 31 2021/Preceding period
cumulative comparative
Joint ventures -- --
Total of the following items calculated by
----
shareholding ratio
Associates -- --
Total book value of investment 28756781.35 22680930.51
Total of the following items calculated by -- --
shareholding ratio
Net profit 6300850.84 4108890.70
X. Risks Related to Financial Instruments
In risk management the Company aims to seek the appropriate balance between the risks and benefits from
its use of financial instruments and to mitigate the adverse effects that the risks of financial instruments have on
the Company’s financial performance so as to maximize the profits of shareholders and other equity investors.Based on such risk management objectives the Company’s risk management policies are established to identify
and analyze the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and
adherence to limits on a timely and reliable basis.The Company has exposure to the following risks from its use of financial instruments which mainly include:
credit risk liquidity risk and market risk. The Management has deliberated and approved policies concerning
such risks and details are:
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
1. Credit risk management practice
178Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
(1) Evaluation method of credit risk
At each balance sheet date the Company assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When assessing whether the credit risk has increased significantly
since initial recognition the Company takes into account reasonable and supportable information which is
available without undue cost or effort including qualitative and quantitative analysis based on historical data
external credit risk rating and forward-looking information. The Company determines the changes in default risk
of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet
date and the initial recognition date on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when one or
more of the following qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which at the balance sheet date the probability of
default in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial
position present or expected changes in technology market economy or legal environment that will have
significant adverse impact on the debtor’s repayment ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred of which
the standard is consistent with that for credit-impairment:
1) Significant financial difficulty of the debtor;
2) A breach of binding clause of contract;
3) It is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) The creditor of the debtor for economic or contractual reasons relating to the debtor’s financial difficulty
having granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default loss rate of
default and exposure to default risk. The Company develops a model of the probability of default loss rate of
default and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating
guarantee measures and collateral type payment method etc.) and forward-looking information.
3. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to
control such risks the Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with
relatively high credit levels hence its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The
Company selects credible and well-reputed customers based on credit assessment result and conducts ongoing
monitoring on balance of receivables to avoid significant risks in bad debts.The company's accounts receivable risk points are distributed among multiple partners and multiple
customers. As of June 30 2022 the Company has no significant central credit risk and the proportion of accounts
receivable from the top five customers in book balance is at a reasonable and moderate level.The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset at the balance sheet.(II) Liquidity risk
179Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
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 2022 the undiscounted contractual cash flows of the Company’s financial liabilities listed by
maturity date are shown in the following table:
Unit: RMB
Closing balance
Items
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings 1116409516.35 1116409516.35
Derivative financial liabilities 70095922.94 70095922.94
Notes payable 2443829960.15 2443829960.15
Accounts payable 3246452742.77 3246452742.77
Other payable 320786812.27 320786812.27
Non-current liabilities due within one year 920586993.47 920586993.47
Long-term borrowings 1729398417.77 1729398417.77
Bonds payable 11996705.60 62982704.40 3353079215.20 3428058625.20
Lease liabilities 79460668.10 67246701.72 146707369.82
Long-term payables 4799239.86 4799239.86
Subtotal 8130158653.55 1876641030.13 3420325916.92 13427125600.60
(Continued)
Opening balance
Items
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings 741497623.23 741497623.23
Notes payable 1891526333.48 1891526333.48
Accounts payable 3214698131.59 3214698131.59
Other payable 172923251.10 172923251.10
Non-current liabilities due within one year 1788496608.56 1788496608.56
Long-term borrowings 852116486.66 852116486.66
Bonds payable 5998935.80 128977119.70 3299414690.00 3434390745.50
Lease liabilities 86244850.09 71736828.07 157981678.16
Subtotal 7815140883.76 1067338456.45 3371151518.07 12253630858.28
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of
financial instruments due to changes in market price. Market risk mainly includes interest risk and foreign
currency risk.
1. Interest Rate Risk
Interest rate risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of
financial instruments due to changes in market interest. The Company’s fair value interest risks arise from
fixed-rate financial instruments while the cash flow interest risks arise from floating-rate financial instruments.
180Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
The Company determines the proportion of fixed-rate financial instruments and floating-rate financial
instruments based on the market environment and maintain a proper financial instruments portfolio through
regular review and monitoring.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial
instrument resulted from changes in exchange rate. The Company’s foreign currency risk relates mainly to foreign
currency monetary assets and liabilities. When short-term imbalance occurred to foreign currency assets and
liabilities the Company may trade foreign currency at market exchange rate when necessary in order to maintain
the net risk exposure within an acceptable level. The Company is mainly operated in mainland China whose main
activities are denominated in RMB; hence the Company bears insignificant market risk arising from foreign
exchange changes.For details of the company's foreign currency monetary assets and liabilities at the end of the period please
refer to the notes to the financial report "Notes to Consolidated Financial Statements Items - Foreign Currency
Monetary Items".XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair value as of the balance sheet date
Item Name
Level 1 Level 2 Level 3 Total
Constant measurement at fair value -- -- -- --
1.Held-for-trading financial assets 10179360.19 100030460.00 110209820.19
Financial assets measured at fair value through profit or loss 10179360.19 100030460.00 110209820.19
Debt instrument investments 100000000.00 100000000.00
Derivative financial assets 10179360.19 30460.00 10209820.19
Total amount of assets constantly measured at their fair values 10179360.19 100030460.00 110209820.19
Including: Trading bonds issued 55683136.13 14412786.81 70095922.94
Derivative financial liabilities 55683136.13 14412786.81 70095922.94
Total amount of liabilities constantly measured at their fair
55683136.1314412786.8170095922.94
values
Non-constant measurement at fair value -- -- -- --
2. Basis for determining the market price of items under first level constant and non-constant measurement
at fair value.The fair value of futures contracts is measured at the exchange's open market quotes.
181Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
3. Items under second level constant and non-constant measurement at fair value valuation technique
adopted and qualitative and quantitative information of important parameters
The fair value of forward foreign exchange contracts 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.XII. Related party relationships and transactions
1. Parent Company
Holding Voting right
Place of
Parent Company Business nature Registered capital proportion over proportion over
registration
the Company the Company
Sanhua Holding Industrial
Zhejiang Province 730 million yuan 49.99% 49.99%
Group Co. Ltd Investment
Remarks on the parent Company:
As of June 30 2022 Sanhua Holding Group Co. Ltd. (Hereinafter referred to as SHG) directly holds
29.31% of the Company's shares and indirectly holds 20.68% of the shares through its subsidiaries for a total of
49.99% 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 subsidiariesFor the details of the subsidiaries of the company please refer to the description of the note “equity in otherentities”.
3. Joint ventures and associates of the Company
For the important joint ventures or associates of the company please refer to the description of the note "equity in
other entities".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 Relationship with the Company
Chongqing Tainuo Machinery Co. Ltd (Hereinafter referred to as Associates
CTMC)
Qingdao Sanhua Jinlifeng Machinery Co. Ltd (Hereinafter referred to Associates
as QSJM)
Zhongshan Xuanyi Pipe Making Co. Ltd (Hereinafter referred to as Associates
ZXPM)
182Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4. Other related parties of the Company
Joint ventures or associates Relationship with the Company
Zhejiang Sanhua Green Energy Industrial Group Co. Ltd. Shareholders controlled by the parent company
(Hereinafter referred to as ZSGE)
Hangzhou Tongchan Machinery Co. Ltd. (Hereinafter Controlled by the parent company
referred to as HTM)
Hangzhou Sanhua Research Institute Co. Ltd. (Hereinafter Controlled by the parent company
referred to as HSRI)
Hangzhou Green Energy New Energy Automotive Controlled by the parent company
Components Co. Ltd. (Hereinafter referred to as HGE)
Shanghai Sanhua Electric Co. Ltd(Hereinafter referred to Controlled by the parent company
as SSE)
Zhejiang Sanhua Zhicheng Real Estate Development Co. Ltd. Controlled by the parent company
(Hereinafter referred to as ZSZR)
Zhejiang Haoyuan Technology Co. Ltd. (Hereinafter Controlled by the parent company
referred to as ZHT)
Ningbo Fuerda Smartech Co. Ltd. (Hereinafter referred to Controlled by the parent company
as NFS)
Wuhu Alda Technology Co. Ltd. (Hereinafter referred to Shareholding company of the parent company
as WAT)
Hangzhou Formost Material Technology Co. Shareholding company of the parent company
Ltd(Hereinafter referred to as HFMT)
5. Related party transactions
（1）Purchase and sale of goods rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Related Content of Current period Approved Over the Transaction Preceding period
parties transaction cumulative Transaction Limit Limit or No comparative
NFS Commodities 27620720.03 50400000.00 No
ZXPM Commodities 9758753.69 30000000.00 No 12581552.34
WAT Commodities 55752.21
Remarks: Due to the large number of related parties involved in related party transactions between the parent
Company Sanhua Holding Group Co. Ltd and its subsidiaries the transaction quota with Sanhua Holding Group
Co. Ltd. and its subordinate subsidiaries is consolidated and reviewed for approval of which the amount of
purchased goods is 50.4 million yuan.
183Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
HSRI Commodities 5928205.09 101089.74
SHG Commodities 10213.26 52256.96
ZSZR Commodities 7893.80 9734.51
QSJM Commodities 1234589.15 203134.21
CTMC Commodities 298843.05
WAT Commodities 1350.00
（2）Related party guarantees
The Company as guaranteed parties
Unit: RMB
Guaranteed parties Amount guaranteed Commencement date Maturity date Whether the guarantee is mature
SHG 2300000000.00 August 12 2020 June 13 2024 No
Remarks of related party guarantees
The information in the table does not include related guarantees within the scope of consolidation nor related
guarantees that have been performed.
（3）Assets transfer and debt restructuring of the related parties
Unit: RMB
Related parties Content of related party transactions Current period cumulative Preceding period comparative
HTM Equipment 517522.13 24450210.36
HSRI Equipment 14207.44
（4）Key management’s emoluments
Unit: RMB
Items Current period cumulative Preceding period comparative
Key management’s emoluments 9109655.39 6196143.93
（5）Other related party transactions
Unit: RMB
Abbreviation of
Content of transaction Current period cumulative Preceding period comparative
associate
ZSGE 5972345.17 2631152.03
Housing land equipment and other rental
ZHT 7238336.48 6034039.91
184Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
HSRI expenses property management water 463773.63 397622.42
HGE electricity and service expenses 272851.46
HSRI 761519.04 518602.95
ZHT 86797.76 62433.76
SHG Housing land equipment and other rental 3895706.95 3848329.72
ZSGE income property management water 308105.81 427216.07
WAT electricity and service income 152049.88 383092.22
HFMT 671533.40 236607.29
HTM 22852.39
In addition，it is affected by the inconsistency between the registered permanent residence of a fewemployees and the place of work，there are transactions between related parties that pay employee socialinsurance premium and housing accumulation fund on behalf of them. In current period，the company pays for therelated party RMB 26493.60.
6. Balance due to or from related parties
（1）Receivables
Unit: RMB
Closing balance Opening Balance
Related
Items
parties Book balance Provision for bad Book balance Provision for bad
debts debts
Accounts receivable QSJM 354663.47 17733.17 68818.81 3440.94
Accounts receivable HSRI 3155046.18 157752.31 4254623.49 212731.17
Accounts receivable CTMC 254123.89 12706.19 84352.01 4217.60
Accounts receivable WAT 19729.80 986.49
Accounts receivable HFMT 741612.65 37080.63
Accounts receivable ZSGE 44396.80 2219.84
Other receivables ZHT 670000.00 33500.00 670000.00 33500.00
（2）Payables
Unit: RMB
Items Related parties Closing balance Opening Balance
Accounts payable NFS 18311372.02
Accounts payable ZXPM 7527391.67 5977186.49
Accounts payable HSRI 377150.00 261150.00
Accounts payable ZSGE 140397.60
Accounts payable HTM 6737074.50
185Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Accounts payable ZHT 316422.06
Other payables HFMT 100000.00 100000.00
XIII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Unit: Shares
Total equity instruments granted in current period 17585000.00
Total equity instruments exercised in current period 4434300.00
Total equity instruments retired in current period 268450.00
The grant price of the stock appreciation rights is RMB
The range of exercise prices of share options outstanding at the end of the 10 which will be unlocked in batches within 12 months
period and the remaining contractual life after 12 months 24 months and 36 months from the
grant date.
2020 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is RMB 6.9615 which will
be unlocked in batches within 12 months after 12
The range of exercise prices of other equity instruments at the end of the months 24 months and 36 months from the grant date.period and the remaining contractual life 2022 Restricted Stock Incentive Plan: The restricted
stock grant price is RMB 10 which will be unlocked in
batches within 12 months after 12 months 24 months
and 36 months from the grant date.Other remarks
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. In May 2021 the company implemented the 2020 equity
distribution. In May 2022 the company implemented the 2021 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 6.9615.In May 2022，the Company implemented a restricted stock incentive plan for core employees. Among them
the number of restricted stocks granted was 17.585 million shares and the grant price per share was RMB 10. The
grant date was May 31 2022 and it will be unlocked year by year in batches at a ratio of 30%:30%:40%.
186Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for grant-date fair value of equity Calculated based on the closing price of the stock on the grant date
instruments minus the grant price of the restricted stock.Determination method for the number of equity instruments
[Note]
expected to vest
Reasons for significant difference between the estimates in
Not applicable
current period and preceding period
Capital reserve accumulated due to equity-settled
166528360.85
share-based payment
Total expenses incurred due to equity-settled share-based
17587250.07
payment
Other remarks
Note： 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 willbe 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 futurevoluntary turnover rate of the incentive objects is 0%，and the performance appraisal level is above C (the unlockingcoefficient is 1).In 2022 the company initially granted 17.585 million restricted stocks to incentive object. 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 ofexercisable 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 (theunlocking 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
8477800.00
liabilities
Total expenses arising from cash-settled share-based payment 8477800.00
187Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
XIV. Events after the balance sheet date
1. Profit distribution
For details please refer to "Detailed Description of Profit Distribution or Capital Reserve Conversion Plan" in
"Profit Distribution and Capital Reserve Conversion to Share Capital" in Section IV "Corporate Governance" of the
Company's 2022 Semi-Annual Report.XV. Other Significant Events
1. Segment information
（1）Basis for reportable segments and the accounting policy
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization management requirements and internal reporting system etc. and
identified the reportable segments based on products.
（2）Financial information of the reporting subsection
Unit: RMB
Refrigeration and
air-conditioning Auto parts Inter-segment
Items Total
electrical parts business elimination
business
Operating revenue 6961386065.52 3198566930.00 10159952995.52
Cost of sales 5314987405.26 2387360302.68 7702347707.94
Total assets 18723376550.37 6688366843.14 25411743393.51
Total liabilities 10922255954.06 2694539038.35 13616794992.41
XVI. Notes to items of parent Company financial statements
1. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Categor
Provision for bad Carrying Provision for bad Carrying
y Book balance Book balance
debt amount debt amount
188Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Accrue Accrue
Proport d Proport d
Amount Amount Amount Amount
ion proport ion proport
ion ion
Receiva
bles
with
provisio 7302154 76.69 7302154 3790791 64.69 3790791
n made 79.37 % 79.37 12.37 % 12.37
on an
individu
al basis
Includin
g:
Receiva
bles
with
provisio 2219980 23.31 1109990 2108981 2069266 35.31 1034633 1965803
5.00%5.00%
n made 22.58 % 1.13 21.45 54.25 % 2.71 21.54
on a
collectiv
e basis
Includin
g:
9522135100.00110999094111365860057100.0010346335756594
Total 1.17% 1.77%
01.95%1.1300.8266.62%2.7133.91
Provision made on an individual basis: Accounts receivable from subsidiaries of the Company
Unit: RMB
Closing balance
Name Book balance Provision for bad Accrued Accrued
debt proportion reason
SANHUA INTERNATIONAL SINGAPORE
353242833.130.00%
PTE.LTD.Zhejiang Sanhua Trading Co. Ltd 192543978.77 0.00%
SANHUA (VIETNAM) COMPANY LIMITED 128503973.32 0.00%
Zhejiang Sanhua Automotive Components Co. Ltd 13394090.70 0.00%
Xinchang Sitong Electrical and Mechanical Co. Ltd 8717771.94 0.00%
SHAOXING SANHUA NEW ENERGY
8488229.140.00%
AUTOMOTIVE COMPONENTS CO.LTD
Other subsidiaries 25324602.37 0.00%
189Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Total 730215479.37
Provision made on a collective basis: Aging portfolio
Unit: RMB
Closing balance
Items
Book balance Book balance Book balance
Within 1 year 221998022.58 11099901.13 5.00%
Total 221998022.58 11099901.13
The remarks of determination of a collective basis:
If the provision for bad debt of accounts receivable is accrued in accordance with the general expected credit loss
model please refer to the disclosure of other receivables to disclose the relevant information about the provision
for bad debt:
□Applicable √Not applicable
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 952213501.95
Total 952213501.95
Disclosure by aging
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Closing
Category Recovered or Write
balance Accrued Others balance
reversed off
Receivables with provision made on a
10346332.71753568.430.0111099901.13
collective basis
Total 10346332.71 753568.43 0.01 11099901.13
（3）Accounts receivable written off in the current period
Unit: RMB
item Amount
Account receivables 0.01
190Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
（4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Proportion to the total ending Closing balance of bad debt
Debtors Closing balance
balance of accounts receivable provision
Top 5 751038543.06 78.87% 3837387.89
Total 751038543.06 78.87% --
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Dividend receivable 19000000.00
Other receivables 450068047.00 370775386.82
Total 450068047.00 389775386.82
（1）Dividend receivable
1) Classification of dividends receivable
Unit: RMB
Items Closing balance Opening balance
Wuhu Sanhua Automatic Control Components Co. Ltd 12000000.00
Zhongshan Sanhua Refrigeration Components Co. Ltd 7000000.00
Total 19000000.00
（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 431411000.00 341107339.69
Tax refund receivable 10313414.25 15563784.83
Guarantee deposit 4122175.52 9827285.00
Others 4664997.36 4651964.58
Total 450511587.13 371150374.10
191Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
2）Provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Next 12?month Lifetime expected credit Lifetime expected credit
Provision for bad debt Total
expected credit losses (credit not losses (credit impaired)
losses impaired)
Balance on January 1
207341.18167646.10374987.28
2022
Balance in current period
on January 1 2022
Provision made in
3556.7764996.0868552.85
current period
Balance on June 30
210897.95232642.18443540.13
2022
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) 445942373.33
1 to 2 years 483762.80
2 to 3 years 91523.00
Over 3 years 3993928.00
3 to 4 years 313618.00
Over 5 years 3680310.00
Total 450511587.13
3）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Closing
Category Recovered or Write
balance Accrued Others balance
reversed off
Provision for bad debts based on aging
374987.2868552.85443540.13
portfolio
Total 374987.28 68552.85 443540.13
192Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Proportion to the Provision for bad
Nature of
Debtors Closing balance Age total balance of debt at the end of
receivables
other receivables the period
Wuhu Sanhua Auto-control
Financial aid 73222000.00 Within 1 year 16.25%
Components Co. Ltd
Shaoxing Shangyu Sanli Copper
Financial aid 70064200.00 Within 1 year 15.55%
Industry Co. Ltd
Hangzhou Leaderway Electronics
Financial aid 59530000.00 Within 1 year 13.21%
Co. Ltd
Sanhua (Jiangxi) Self - control Within 1 year
Financial aid 50270000.00 11.16%
Components Co. Ltd
Wuhan Sanhua Refrigeration
Financial aid 42074400.00 Within 1 year 9.34%
Accessories Co. Ltd
Total -- 295160600.00 -- 65.51%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Book balance Provision Book balance Provision for
Investees
for Carrying amount impairment Carrying amount
impairment
Investments in
6930012392.166930012392.166408397046.536408397046.53
subsidiaries
Investments in
associates and 25264422.00 25264422.00 20389833.75 20389833.75
joint ventures
Total 6955276814.16 6955276814.16 6428786880.28 6428786880.28
（1）Investments in subsidiaries
Unit: RMB
Changed amount of the current period Closing
Opening Investments Investment Provision Closing balance balance of
Investees balance(Carryin increased s decreased for (Carrying provision
Others
g amount) impairmen amount) for
t impairmen
193Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
t
Zhejiang
Sanhua
2005901956.0500000000.02510139764.1
Automotive 4237808.08
503
Components
Co. Ltd.Sanhua
(Hangzhou)
Micro Channel
650983520.910.001847655.70652831176.61
Heat
Exchanger Co.Ltd
Zhejiang
Sanhua
Climate &
324897848.050.001900096.77326797944.82
Appliance
Controls
Group Co. Ltd
Sanhua
International 307031006.84 0.00 162160.23 307193167.07
Inc.Sanhua
International
947959917.230.00953665.43948913582.66
Singapore Pte.Ltd
Wuhu Sanhua
Automatic
Control 151881654.05 0.00 224248.90 152105902.95
Components
Co. Ltd
Sanhua
(Jiangxi) Self -
control 93770008.81 0.00 70128.18 93840136.99
Components
Co. Ltd
Xinchang
Sitong
Electrical and 47453367.13 0.00 292367.98 47745735.11
Mechanical
Co. Ltd
Zhejiang 1649290894.3 1649454856.0
0.00163961.63
Sanhua 7 0
194Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Commercial
Refrigeration
Co. Ltd
Zhejiang
Sanhua
55572473.000.00614876.8256187349.82
Trading Co.Ltd
Changzhou
Lanke
62541614.6062541614.60
four-way valve
co. LTD
Hangzhou
Leaderway
53215278.510.00680585.5753895864.08
Electronics
Co. Ltd
Shaoxing
Shangyu Sanli
Copper 32945551.72 0.00 125990.36 33071542.08
Industry Co.Ltd
Zhongshan
Sanhua Air
conditioning
5295293.380.0071735.775367029.15
Refrigeration
Components
Co. Ltd
Wuhan Sanhua
Refrigeration
4562011.920.00108507.794670519.71
Components
Co. Ltd
Zhongshan
Sanhua
Refrigeration 6231666.65 0.00 103082.80 6334749.45
Components
Co. Ltd
Suzhou Sanhua
Air-Conditione 8862983.31 0.00 58473.62 8921456.93
r Parts Co.Ltd
Sanhua New
Energy
10000000.0010000000.00
Thermal
Management
195Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Technology
(Hangzhou)
Co. Ltd.
6408397046.5510000000.011615345.66930012392.1
Total
3036
（2）Investments in associates and joint ventures
Unit: RMB
Changed amount of the current period Closin
Investm Cash g
Opening Adjustme Chan Closing
ent dividend/ balance
balance Investm Investm nt in ges Provisi balance
income profit of
Investees (Carryin ents ents other in on for Oth (Carryin
recogniz declared provisi
g increase decreas comprehe other impair ers g
ed under for on for
amount) d ed nsive equit ment amount)
equity distributi impair
income y
method on ment
Ⅰ. Joint ventures
Ⅱ. Associates
Guochua
ng
Energy
Internet
15403327138.5156747
Innovatio
9.9928.51
n Center
(Guangdo
ng) Co.Ltd.Chongqin
g Tainuo
1365913207282000000148664
Machiner
35.388.16.0023.54
y Co.Ltd.Nanchan
g Sanhua
Jinlifeng 151398 -34463. 225000.0 125452
Machiner 8.70 17 0 5.53
y Co.Ltd.Ningbo
151215379901.189205
Jinlifeng
1.41803.21
Machiner
196Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
y Co.Ltd
Qingdao
Sanhua
Jinlifeng 329853. 150000 204386 387372
Machiner 20 0.00 7.71 0.91
y Co.Ltd.Xinchang
zhejiang
energy
sanhua 183436 -24144. 181022
comprehe 5.07 77 0.30
nsive
energy
co. LTD
2038981500005599582225000252644
Subtotal
33.750.008.25.0022.00
2038981500005599582225000252644
Total
33.750.008.25.0022.00
4. Operating revenue and Cost of sales
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 2989734423.46 2394290430.11 2466694440.92 1944031134.04
Other operations 203593432.84 189144584.74 191238142.54 161701041.53
Total 3193327856.30 2583435014.85 2657932583.46 2105732175.57
5. Investment income
Unit: RMB
Items Current period Preceding period
cumulative comparative
Investment income from long-term equity investments under cost
750000000.001800000.00
method
Investment income from long-term equity investments under equity 5599588.25 3703896.30
197Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
method
Investment income of bank financing products 3136982.23 1260477.52
Gains and losses on settlement of futures contracts 2520275.99 13415131.42
Gains and losses on settlement of foreign exchange contract -1483174.62 5575206.59
Income of fund using fee 6798711.79 6369877.53
Total 766572383.64 32124589.36
XVII. 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 -2160081.08
Government grants included in profit or loss
(excluding those closely related to operating activities
of the Company satisfying government policies and 42675116.00
regulations and continuously enjoyed with certain
quantity/quota based on certain standards)
In order to avoid the price risk of raw materials and
prevent exchange rate risk the company and its
subsidiaries have carried out derivatives business
including futures contracts and foreign exchange forward
contracts. And from January to June 2022 the futures
loss was 9.5117 million yuan and the foreign exchange
Gains or losses on changes in fair value of loss was 64.9561 million yuan; from January to June
held-for-trading financial assets held-for-trading 2021 the futures income was 19.8287 million yuan and
financial liabilities and investment income from the foreign exchange income was 40.9239 million yuan.disposal of held-for-trading financial assets -74467851.85 Therefore the amount of non-recurring profit and loss
held-for-trading financial liabilities and other debt items in the first half of the two years fluctuated greatly.investments excluding those arising from hedging Meanwhile the exchange loss was 100.6505 million
business related to operating activities yuan from January to June 2022 and 51.1292 millionyuan from January to June 2021. According to “the No. 1Explanatory 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
gains and losses are non-recurring gains and losses.Other non-operating revenue or expenditures except
2794581.35
the above items
198Zhejiang Sanhua Intelligent Controls Co. Ltd. 2022 Semi-Annual Report
Other profit or loss satisfying the definition of
1442214.20
non-recurring profit or loss
Less: Enterprise income tax affected -5646677.91
Non-controlling interest affected 2790850.80
Total -26860194.27 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not Applicable
The company has no specific circumstances of other profit and loss items that meet the definition of
non-recurring profit and loss.For items defined as non-recurring profit or loss according to “the No. 1 Explanatory Announcement onInformation Disclosure for Companies Offering Their Securities to Public - Non-recurring Profit or Loss”
non-recurring profit or loss items listed in the said document defined as project of recurring profit or loss
specify the reason
□ Applicable √ Not Applicable
2. ROE and EPS
EPS (yuan/share)
Weighted average
Profit of the reporting period Basic Diluted
ROE
EPS EPS
Net profit attributable to shareholders of ordinary shares 8.74% 0.28 0.27
Net profit attributable to shareholders of ordinary shares after deducting
8.97%0.290.28
non-recurring profit or loss
3. Financial data variance between financial reporting prepared under domestic and abroad accounting
standards
（1）Differences of net profits and net assets in the financial reports disclosed according to the IFRS and
Chinese Accounting Standards
□ Applicable √ Not Applicable
（2）Differences of net profits and net assets in the financial reports disclosed according to the overseas
accounting standards and Chinese Accounting Standards
□ Applicable √ Not Applicable
199