三花智控：ZhejiangSanhuaIntelligentControlsCo.,Ltd.2020AnnualReport

Zhejiang Sanhua Intelligent Controls Co. Ltd.2020 Annual Report
March 2021
Section I Important Notes Contents and Definitions
The Board of Directors Board of Supervisors Directors Supervisors and Senior Management
of Zhejiang Sanhua Intelligent Controls Co. Ltd. (hereinafter referred to as the “Company”) hereby
guarantee that the information presented in this report shall be authentic accurate complete and
free from material misstatement whether due to false record misleading statement or significant
omission and they will bear both individual and joint legal liabilities.Zhang Yabo the Company's legal representative Yu Yingkui the person in charge of the
accounting work and Sheng Xiaofeng the person in charge of accounting department (Accounting
Officer) hereby declare and warrant that the financial statements in this report are authentic
accurate and complete.
All directors attended the board meeting to review this report.
The Company describes in detail concerning the possible risks and countermeasures in Section
IX "Outlook for the Future Development of the Company" under Section IV " Management’s
Discussion and Analysis of Operations". Please pay particular attention to relevant contents.
The profit distribution proposal approved by the board of directors is as follows: With
3581818372 as the base number cash dividend of RMB 2.50 (including tax) will be distributed to
all shareholders for every 10 shares. The Company will not distribute bonus shares or convert
capital reserves to share capital.CONTENTS
Section I Important Notes Contents and Definitions ..............................................................................................................................2
Section II Corporate Profile and Key Financial Indicators ......................................................................................................................5
Section III Corporate Business Overview.............................................................................................................................................. 12
Section IV Management’s Discussion and Analysis of Operations..................................................................................................... 16
Section V Significant Events ................................................................................................................................................................. 47
Section VI Changes in Shares and Information about Shareholders ...................................................................................................... 85
Section VII Information of Preferred Shares ....................................................................................................................................... 103
Section VIII Information about Convertible Bonds ............................................................................................................................. 104
Section IX Information about Directors Supervisors Senior Management ........................................................................................ 105
Section X Corporate Governance ........................................................................................................................................................ 119
Section XI Corporate Bonds ................................................................................................................................................................ 128
Section XII Financial Report ............................................................................................................................................................... 129
Section XIII Documents Available for Inspection ............................................................................................................................... 272
Definitions
Items Refers to Definition
The Company Company Refers to Zhejiang Sanhua Intelligent Controls Co. Ltd.The Articles of Associations Refers to Articles of Associations for Zhejiang Sanhua Intelligent Controls Co. Ltd.The CSRC Refers to China Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
Zhejiang Securities Regulatory Bureau
Refers to Zhejiang Securities Regulatory Bureau of China Securities Regulatory
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
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
listed
Shenzhen Stock Exchange
Name of the Company in
Chinese
浙江三花智能控制股份有限公司
Abbr. of the Company name
in Chinese (if any)
三花智控
Name of the Company in
English (if any)
ZHEJIANG SANHUA INTELLIGENT CONTROLS CO. LTD.
Abbr. of the Company name
in English (if any)
SANHUA
Legal representative Zhang Yabo
Registered Address Xialiquan Qixing Street Xinchang Zhejiang
Post Code of Registered
Address
312500
Office Address No. 219 Woxi Avenue Meizhu Xinchang Zhejiang China
Post Code of Office Address 312532
Website http://www.zjshc.com
E-mail shc@zjshc.com
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Hu Kaicheng Wang Yutong
Address
No. 12 St. No. 289 Xiasha Economic
Development Hangzhou Zhejiang China.
No. 219 Woxi Avenue Meizhu Xinchang
County Zhejiang China.
Tel. 0571-28020008 0575-86255360
Fax 0571-28876605 0575-86563888-8288
E-mail shc@zjshc.com shc@zjshc.com
III. Information Disclosure and Place of the Report
1. Company’s contact information
Newspaper designated by the Company for
information disclosure
Securities Times Shanghai Securities News
Website specified by CSRC for release of the Annual
Report
http://www.cninfo.com.cn
Place where the Annual Report is available for
inspection
Office of the Board of Directors of the Company
IV. Company Registration and Alteration
Organization code 913300006096907427
Changes in principle business activities
since the Company was listed (if any)
No change
Changes of controlling shareholders of the
Company (if any)
No change
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Pan-China Certified Public Accountants LLP
Business address of the accounting
firm
Building B China Resources Building 1366 Qianjiang Road Jianggan District Hangzhou
City Zhejiang Province China
Name of accountants for writing
signature
Luo Xunchao Ouyang Xiaoyun
Sponsor institution engaged by the Company to continuously perform its supervisory function during the
Reporting Period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to perform the duties of continuous supervision during the reporting
period
□ Applicable √ Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √No
2020 2019 YoY Change 2018
Operating Revenue (RMB) 12109833368.44 11287489442.23 7.29% 10835990677.51
Net Profit Attributable to
Shareholders of the Listed
1462158821.57 1421204236.13 2.88% 1292349782.17
Company (RMB)
Net Profit Attributable to
Shareholders of the Listed
Company after Deducting
Non-recurring Gains and Losses
(RMB)
1270609746.53 1351335040.19 -5.97% 1294769254.99
Net Cash Flow Generated by
Operational Activities (RMB)
2087343783.11 1900163604.60 9.85% 1287595477.72
Basic Earnings per Share
(RMB/Share)
0.41 0.40 2.50% 0.36
Diluted Earnings per Share
(RMB/Share)
0.41 0.40 2.50% 0.36
Weighted Average ROE 15.04% 16.08% -1.04% 15.65%
At the End of 2020 At the End of 2019 YoY Change At the End of 2018
Total Assets (RMB) 17032530730.18 14790190170.64 15.16% 13932172478.62
Net Assets Attributable to
Shareholders of the Listed
Company (RMB)
10064794519.57 9291632928.45 8.32% 8614844555.48
The Company's net profit before and after deducting non-recurring profit and loss in the last three fiscal years
whichever is lower is negative and the audit report of the last year shows that the Company's ability to continue as a
going concern is uncertain
□ Yes √ No
The lower of the net profit before and after deducting the non-recurring profit and loss is negative
□ Yes √ No
VII. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the financial report of net profits and net assets according to the disclosure of
International Financial Reporting Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets according to the disclosure of
International Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
VIII. Key Quarterly Financial Indicators
Unit: RMB
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating income 2483672660.52 2834505966.25 3275037359.22 3516617382.45
Net profit attributable to
shareholders of the Company
211359665.77 432122051.58 448766825.92 369910278.30
Net profit attributable to
shareholders of the Company
excluding non-recurring gains
and losses
266958886.61 315232275.06 374984962.07 313433622.79
Net cash flows from operating
activities
519305066.00 585346383.42 465557608.32 517134725.37
Whether there is significant difference between the above individual or aggregate financial indicators and that of
what disclosed in the quarterly report half-year report
□ Yes √ No
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2020 2019 2018 Note
Profit or loss from disposal of non-current
assets (including the write-off for the
impairment provision of assets)
-14770607.27 -6087268.05 -3220333.08
The government subsidies included in the
current profits and losses (excluding the
government subsidy closely related to
regular course of business of the Company
and government subsidy based on
standard quota or quantitative continuous
application according to the state
industrial policy.)
134101082.00 86311151.49 43294732.23
Capital occupation fees charged to
non-financial enterprises included in
current profits and losses
61191.86
Profits and losses attributed to change in
fair value for held-for-trading financial
assets derivative financial assets
held-for-trading financial liabilities and
derivative financial liabilities; and
investment income from disposal of
91394679.61 563966.95 -35231187.51
1. The floating
income generated
by futures hedging
business is detailed
in "Notes to income
from changes in fair
held-for-trading financial assets
derivative financial assets
held-for-trading financial liabilities
derivative financial liabilities and other
debt investments excluding the effective
hedging business related to the regular
business operation of the Company.value and
investment income"
of this financial
report. According to
the Operation
Management
Measures of Futures
Hedging Business
the Company will
continue to carry
out the futures
hedging business of
raw materials such
as copper zinc
nickel and other raw
materials in 2020
mainly for customer
price and fixed price
futures hedging
business. As the
number of contracts
locked is consistent
with the customer's
orders and the
contract locked
price is not higher
than the customer's
locked price. The
Company can keep
the stable profit
margin of the above
customer's business
and achieve the
purpose of hedging.The above clients
who carry out
futures hedging
business are
well-known
domestic and
foreign
manufacturers and
have good historical
credit. Since the
implementation of
customer copper
locking mechanism
there has been no
breach of contract.
2. Floating income
of foreign exchange
forward contract is
calculated as
follows: In order to
avoid exchange rate
risk the Company
has signed a
forward foreign
exchange contract
with the bank
which will be
exercised at the
appointed price
when it matures in
the future and the
settlement will be
based on the
difference between
the forward
exchange rate on the
starting date of the
contract and the
spot exchange rate
at the time of
settlement.Reversal of the receivables and contract
assets depreciation reserves for separate
impairment test
81318.50
Other non-operating income and
expenditures except the items mentioned
above
620065.25 5445213.46 -3933272.04
Other gains and losses items that fit the
definition of non-recurring gains and
losses
1246912.65 92329.55
Less: Impact of income tax 19272109.42 13966646.08 2763172.58
Impact of the minority interests (after
tax)
1770947.78 2550743.24 647558.34
Total 191549075.04 69869195.94 -2419472.82 --
The reasons for the non-recurring gains and losses items defined or listed in the Explanatory Announcement No. 1
of Information Disclosure of Listed Companies – Non-recurring Gains and Losses are defined as recurring gains
and losses items
□Applicable √ Not applicable
In the reporting period the Company did not define any non-recurring gains and losses items defined and listed in
the Explanatory Announcement No. 1 of Information Disclosure of Listed Companies – Non-recurring Gains and
Losses as recurring gains and losses items.Section III Corporate Business Overview
I. The Principal Business of the Company during the Reporting Period
1. Main business
The Company adheres to the "Focus on Leading Innovation Transcendence" business path concentrating on the
research and application of heat pump technology and thermal management system products focusing on the
development of environmental thermal management solutions for heat exchange and temperature intelligent
control and is committed to the professional operation in the fields of building HVAC electrical equipment and
automotive thermal management. According to the different stages and characteristics of strategic business and
their development the Company's business is mainly divided into refrigeration and air conditioning electrical
components business and automotive components business.The main products of refrigeration and A/C electrical parts business include Four-way Reversing Valve Electronic
Expansion Valve Solenoid Valve Microchannel Heat Exchanger Omega Pump etc. which are widely used in
A/C refrigerator cold chain logistics dishwasher and other fields; the main products of automotive components
business include Thermal Expansion Valve Receiver Drier Electronic Expansion Valve Thermal Management
Integrated Module for new energy vehicle Electronic Water Pump etc. which are widely used in both traditional
fuel vehicles and new energy vehicle.
During the reporting period the Company's main business and its business model have not changed.
2. Industry development
（1） Refrigeration and air conditioning electrical components industry
China is the largest manufacturing base of A/C and refrigerators in the world and its production and sales volume
ranks first globally. In line with the trend of environmental protection in the world energy-saving inverter and
intelligent technology have become the trend which puts forward a series of new requirements for the market of
control components and also brings new development opportunities. As a leading enterprise in the refrigeration
control components industry the Company will follow the trend firmly seize this opportunity and develop
steadily.
（2） Automotive components industry
The global automobile industry has been developing rapidly which also drives the market demand of automotive
A/C and thermal management products to continue to grow substantially. In recent years the development of new
energy vehicles has become a certain trend which puts forward higher and more updated requirements for A/C
and thermal management products no matter in hybrid pure electric or hydrogen energy vehicles. Focusing on the
in-depth research on A/C and thermal management system of new energy vehicles the Company has gradually
developed from components to module and subsystems and has become the supplier of Valeo Volkswagen
Mercedes Benz BMW Volvo Toyota GM Geely BYD SAIC NIO and other cooperative partners.3. Industry status
The Company is the world's largest manufacturer of refrigeration control components and the world's leading
manufacturer of automotive A/C and thermal management system control components. "Sanhua" refrigeration
intelligent control components have become a world-famous brand and a strategic partner of many automobile
enterprises and air-conditioning refrigeration appliance manufacturers in the world. After more than 30 years of
development the Company has established a leading position in the global market of refrigeration and automotive
thermal management. The market share of the Company's Electronic Expansion Valve Four-way Reversing
Valve Solenoid Valve Microchannel Heat Exchanger Automotive Electronic Expansion Valve Thermal
Management Integrated Module for new energy vehicle Omega Pump ranks first globally. The market share of
the Company's Service Valve Vehicle Thermal Expansion Valve and Receiver Drier is in the leading position in
the world.II. Significant Changes in Main Assets
1. Significant changes in main assets
Major assets Explanation on Major Changes
Fixed Assets
Increased by 459.80 million +13.61% compared with the beginning of the year mainly
due to investment of raised funds and the transformation of automation equipment
Construction in Progress
Increased by 147.77 million +30.72% compared with the beginning of the year mainly
due to investment of raised funds and the transformation of automation equipment
2. Major overseas assets
√Applicable □ Not applicable
Content of
Assets
Formation
Size of
Assets
Location
Operation
Mode
Control
measures
of security
assets
Income
Status
Proportion
of overseas
assets in
net assets
of the
Company
Whether
there is
significant
impairment
risk
Sanhua
Internation
al Limited
(USA)
(merger)
Equity
Investment
1351516
858.23
The United
States
R&D
Manufactur
ing
Marketing
and
Investment
Manageme
nt
Financial
supervision
and
external
audit
45106474
.68
No
Sanhua Equity 2213696 Singapore R&D Financial 44696908 No
Internation
al
Singapore
PTE. Ltd.
(merger)
Investment 335.86 Manufactur
ing
Marketing
and
Investment
Manageme
nt
supervision
and
external
audit
.08
III. Core Competitiveness Analysis
1. Clear strategic layout
The Company adheres to the " Focus on Leading Innovation Transcendence " business path takes the research
and application of heat pump technology and thermal management system products as the core firmly grasps the
development theme of energy conservation environmental protection and intelligent control upgrades from
"mechanical parts development" to "system control technology solution development of electronic control
integration". The Company’s product series are expanded from household A/C and refrigerator components to the
field of commercial A/C and commercial refrigeration and extending to the direction of inverter control
technology and system integration and upgrading. Meanwhile after the injection of automotive business it gives
full play to the synergy effect with the original business continues to deepen the research and development of
automobile A/C and new energy vehicle thermal management system components and actively explores the
deeper application of thermal management components and subsystems in the automotive field so as to provide
global customers with competitive environmental intelligent control solutions.
2. Technology leading customer oriented
As a national high-tech enterprise the Company has always adhered to the technological route of independent
development and innovation. For decades it has focused on the field of intelligent control and vigorously
cultivated core technologies with independent intellectual property rights. It has been granted 2379 patents both
domestic and abroad including 1168 invention patents. All products services and quality of the Company are to
meet the needs of customers as the first priority.
3. Quality assurance scale economy effect
The Company's products cover refrigeration A/C electrical components and automotive components industry. The
market share of the Company's Electronic Expansion Valve Four-way Reversing Valve Solenoid Valve
Microchannel Heat Exchanger Automotive Electronic Expansion Valve Thermal Management Integrated Module
for new energy vehicle Omega Pump ranks first globally. The market share of Service Valve Vehicle Thermal
Expansion Valve and Receiver Drier is in the leading position in the world. The Company has established a
complete and strict quality assurance system achieved ISO9001 IATF16949 QC080000 quality system
certification. The Company won the National Quality Award Zhejiang Quality Award and won the high
comments from JCI Daikin Carrier Gree Midea Haier Toyota Benz Volkswagen Valeo and other well-known
enterprises at home and abroad.
4. Advantages of global marketing network and production base
Since the 1990s the Company has focused on expanding the international market and has established overseas
subsidiaries in Japan South Korea Singapore the United States Mexico Germany and other places to build a
global marketing network. At the same time it has established overseas production bases in the United States
Poland Mexico Vietnam and other places and has preliminary ability to cope with globalization. And in practice
we have trained a number of management talents who can meet the needs of business development in different
countries and regions.Section IV Management’s Discussion and Analysis of Operations
I. Overview
In 2020 China and foreign countries were negatively affected by the COVID-19. Globally the U.S. economy is
cooling Europe's economic recovery is slow while China's epidemic situation is under better control and takes
the lead in economic recovery. However under the challengeable international background of looser monetary
policy of Federal Reserve and rising commodity prices external industry environment of the Company is under
pressure. Specific to the industry in which the Company operates the Company's refrigeration and air
conditioning electrical components business is affected by the epidemic and the overall performance is under
pressure in the short term. However with the inventory clearance of the industry and the release of new energy
efficiency standards for air conditioning the demand has gradually begun to recover even reaching a new high
point. The automotive components business has been greatly affected by the overall decline of the automobile
industry but new energy vehicles develop rapidly.
During the reporting period the operating revenue is RMB 12.11 billion a year-on-year increase of 7.29%; the
operating profit is RMB 1.70 billion a year-on-year increase of 2.27%; the net profit attributable to shareholders
of the listed Company is RMB 1.46 billion a year-on-year increase of 2.88%. The operating revenue of
refrigeration and air conditioning electrical components business is RMB 9.64 billion a year-on-year increase of
0.04%; the operating revenue of automotive components business is RMB 2.47 billion a year-on-year increase of
49.57%.
The main works of the Company in the first half of 2020 are as follows:
1. Focus on operation and deepen industrial layout
(1). Refrigeration and air conditioning electrical components business
The Company's refrigeration and air conditioning electrical components business was negatively affected by
the epidemic. Under the pressure of a sharp decline in the first quarter the Company paid close attention to
the market trend actively adjusted the market strategy further strengthened the strategic relationship with
customers externally seized orders and steadily increased the market share. At the same time with the
release of new energy efficiency standards for air conditioning we will actively seize market opportunities
such as energy efficiency upgrading and refrigerant switching and continue to promote more competitive
products. Due to long term work of integration of Aweco business its revenue has been turned to positive. In
addition the construction of Vietnam's factories has achieved initial results and is able to effectively coping
with the challenge of US tariff increase.
(2). Automotive components business
On the premise of epidemic prevention and control the automotive components business actively built global
marketing network and production capacity layout. Production capacity’s landing and climbing of a variety of
products in Mexico factory has been realized and steady expansion of Shaoxing Binhai factory actively
responded to the delivery of orders from domestic and foreign customers. At the same time Sanhua actively
promoted integrated module projects among existing customers so as to make products more standard
integrated and platform oriented. With heat pump components and key components as the core business the
Company constantly improved the competitiveness of its products and actively developed new customers
under guarantee of existing projects. In 2020 the Company achieved breakthroughs of many new customers
and orders of many new projects and became a tier 1 supplier of the top ten automobile manufacturers in the
world with the continuous rising in total life cycle value.
2. Unite as one and fight against the epidemic together
After the outbreak of the epidemic under guidance of government departments the Company concentrated on the
prevention and control of the epidemic on one hand and the resumption of production on the other hand. In each
subsidiary around the world timely implemented the anti-epidemic material reserve overcame plenty of
difficulties implemented of resumption of work in batches provided timely products and service for customers
and ensured the normal operation and production. Due to timely stable and effective epidemic prevention
measures the Company's annual revenue has achieved positive growth.
3. Strengthen the creation of product strength and improve the patent layout of strategic products
During the reporting period the Company invested 518 million yuan in R & D this continuous R & D investment
is used to build the product strength. And the Company participated in market competition with new products and
new technologies through continuous optimization iteration. In terms of patent layout the main work is to
"eliminate product patent risks and enhance patent rights" to sort out and summarize the patents of key products
so as to achieve resource sharing of each unit. By the end of the report period 2379 patents have been authorized
at home and abroad including 1168 invention patents.
4. Pay attention to the construction of talent team and establish sustained and long-term incentive mechanism
The Company continued to deepen the work of "strengthening the talents streamlining and high efficiency"
promote each business unit to optimize the talent development and elimination mechanism and comprehensively
apply the talent review results. At the same time during the reporting period the Company implemented the
second phase of restricted stock incentive plan for directors senior managers and other core talents and further
established and improved the Company's long-term incentive mechanism.
5. Attach great importance to the maintenance of investor relations strengthen the awareness of service and
return to shareholders
During the reporting period the Company strengthened and improved the construction of internal control system
standardized the operation of the three committees improved the Company's information disclosure investor
relationship management and other aspects. And ensured smooth communication between investors and listed
company through interactive platform investor call answering on-site reception and other means. In 2020 the
Company's market value reached a new record.
II. Main Business Analysis
1. Overview
Please refer to details in “I. Overview” of “Section IV Management’s Discussion and Analysis of Operation”
2. Operating incomes and operating costs
1) Operating income structure
2020 2019
YoY Change
Amount
Proportion to
operating income
Amount
Proportion to
operating income
Total Revenue 12109833368.44 100% 11287489442.23 100% 7.29%
Classified by Industry
General
Equipment
Manufacturing
Industry
12109833368.44 100.00% 11287489442.23 100.00% 7.29%
Classified by Products
Refrigeration A/C
Electrical
Components
9640647193.31 79.61% 9636588706.35 85.37% 0.04%
Automotive
Components
2469186175.13 20.39% 1650900735.88 14.63% 49.57%
Classified by Region
Domestic 5864589812.78 48.43% 5594651760.03 49.57% 4.82%
Overseas 6245243555.66 51.57% 5692837682.20 50.43% 9.70%
2) Industries products or regions accounting for more than 10% of the Company’s operating income or
operating profit
√ Applicable □ Not applicable
Operating
income
Operating cost Gross margin
YoY Change
of operating
income
YoY Change
of operating
cost
YoY Change
of gross margin
Classified by Industry
General
Equipment
Manufacturing
Industry
12109833368
.44
8500391322.
27
29.81% 7.29% 6.97% 0.21%
Classified by Products
Refrigeration
A/C Electrical
Components
9640647193.
31
6764599091.
22
29.83% 0.04% -0.55% 0.41%
Automotive
Components
2469186175.
13
1735792231.
05
29.70% 49.57% 51.58% -0.94%
Classified by Region
Domestic
5864589812.
78
4214522983.
97
28.14% 4.82% 4.80% 0.02%
Overseas
6245243555.
66
4285868338.
30
31.37% 9.70% 9.18% 0.32%
Adjusted statistics of principal business are based on the caliber at the end of the reporting period of last year if
the statistics caliber of principal business has been changed during the reporting period
□ Applicable √ Not applicable
3) If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2020 2019 YoY Change
General
Equipment
Manufacturing
Industry
Sales Yuan 12109833368.44 11287489442.23 7.29%
Production Yuan 12170122424.44 11337224679.64 7.35%
Inventory Yuan 2402338998.74 2273270394.25 5.68%
Explanation on why the related data varied by more than 30% on a YOY basis
□Applicable √Not applicable
4) Fulfillment of signed significant sales contracts by the reporting period
□ Applicable √ Not applicable
5) Operating cost structure
Unit：Yuan
Industry Item
2020 2019
YoY Change
Amount
Proportion to
operating cost
Amount
Proportion to
operating cost
General
Equipment
Manufacturing
Industry
Material
6445946206.
35
75.83%
6022623114.
62
75.79% 7.03%
General
Equipment
Manufacturing
Industry
Labor
1274879076.
04
15.00%
1176641430.
25
14.81% 8.35%
General
Equipment
Manufacturing
Industry
Depreciation 254799059.70 3.00% 224908694.23 2.83% 13.29%
General
Equipment
Manufacturing
Industry
Energy Source 188350845.76 2.22% 194227590.85 2.44% -3.03%
General Other 336416134.42 3.96% 328443615.88 4.13% 2.43%
Equipment
Manufacturing
Industry
Unit：Yuan
Product Item
2020 2019
YoY Change
Amount
Proportion to
operating cost
Amount
Proportion to
operating cost
Refrigeration
A/C Electrical
Components
Material
5186890211.
38
61.02%
5241925556.
58
65.96% -1.05%
Refrigeration
A/C Electrical
Components
Labor
1059871851.
73
12.47%
1045010795.
00
13.15% 1.42%
Refrigeration
A/C Electrical
Components
Depreciation 201479294.12 2.37% 189097669.75 2.38% 6.55%
Refrigeration
A/C Electrical
Components
Energy Source 140848963.04 1.66% 150757539.80 1.90% -6.57%
Refrigeration
A/C Electrical
Components
Other 175508770.95 2.06% 174957696.44 2.20% 0.31%
Automotive
Components
Material
1259055994.
97
14.81% 780697558.04 9.82% 61.27%
Automotive
Components
Labor 215007224.31 2.53% 131630635.25 1.66% 63.34%
Automotive
Components
Depreciation 53319765.58 0.63% 35811024.48 0.45% 48.89%
Automotive
Components
Energy Source 47501882.72 0.56% 43470051.05 0.55% 9.27%
Automotive
Components
Other 160907363.47 1.89% 153485919.44 1.93% 4.84%
6) Any change in consolidation scope during the reporting period
√Yes □ No
1. Disposal of subsidiaries
Lose control due to disposal
Name of subsidiary Equity disposal
price
Equity disposal
ratio
Equity disposal
method
Date of losing control
Qingdao Debaiyi Refrigeration Equipment Co. 6562658.15 70% Transfer to 2020-12-02
Ltd Minority shareholders
(Continued)
Determination fo losing
control
The difference between the
disposal price and
corresponding net asset of
consolidated financial
statements
Proportion of
remaining equity on
the date of loss of
control
Net assets on
disposal date
Net profit from the beginning
of the period to the disposal
date
Complete the registration
procedures for industrial and
commercial changes
-4098327.44 0.00 15229979.42 -1609483.26
2. Changes in the scope of consolidation due to other reasons
1) Increased scope of consolidation
Name Method of
obtaining equity
Date of equity
acquisition
Actual contribution at
the end of the period
Contribution ratio
Zhejiang Xianji Intelligent Technology Co. Ltd New investment 2020-09-10 34.6 million yuan 100%
Sanhua Mexico Investment Co. Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial Refrigeration Co.Ltd
New investment 2020-10-09 68.29 million yuan 100%
Shaoxing Sanhua Automobile Thermal
Management Technology Co. Ltd
New investment 2020-12-03 0.00 100%
2) Decreased scope of consolidation
Name Method of
disposal
Date of disposal Net assets on
disposal date
Net profit from the
beginning of the period to
the date of cancellation
Hangzhou Sanhuajia Electric Heating Management
System Co. Ltd
Liquidation
cancellation
2020-05-18 147448.25 -78092.41
Aweco Electrical Equipment (Shanghai) Co. Ltd Liquidation
cancellation
2020-06-02 6669.73 22351.38
Ma'anshan Sanhua Intelligent Technology Co. Ltd Liquidation
cancellation
2020-08-03 3907472.50 -478491.11
7) Significant change or adjustment of the Company’s business products or services during the reporting
period:
□ Applicable √ Not applicable
8) Major customers and suppliers:
Sales to major customers of the Company
Sales to top five customers (RMB) 4291399554.22
Total sales to top five customers as a percentage of the
total sales for the year (%)
35.43%
Total sales to the related parties in top five customers as
a percentage of the total sales of the year (%)
0.00%
Information on top five customers
No. Name of Customer Sales Amount (RMB) Percentage of total sales for the year
1 First 1157466943.06 9.56%
2 Second 946329101.54 7.81%
3 Third 815461250.85 6.73%
4 Fourth 809814087.88 6.69%
5 Fifth 562328170.89 4.64%
Total -- 4291399554.22 35.43%
Other information of major customers
□Applicable√ Not applicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 946674947.40
Total purchases from top five suppliers as a percentage
of the total purchases for the year
15.37%
Total purchases from the related parties in the top five
suppliers as a percentage of the total purchases for the
year
0.00%
Information on top five suppliers of the Company
No. Name of Supplier Purchase Amount (RMB) Percentage of total purchase for the year
1 First 324721054.98 5.27%
2 Second 273488083.85 4.44%
3 Third 132846224.35 2.16%
4 Fourth 116287076.44 1.89%
5 Fifth 99332507.78 1.61%
Total -- 946674947.40 15.37%
Other information on major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
2020 2019 YoY Change Note of significant change
Sales expenses 602954759.17 588547454.16 2.45%
Administrative
expenses
764084428.88 595781120.22 28.25%
It is mainly due to the increase of
employee compensation and share
based payment in the current period.
Financial expenses 128860093.64 -7772819.07 1757.83%
Mainly due to changes in gains and
losses of exchange rate fluctuations
R&D expenses 518401363.63 532012335.99 -2.56%
4. R&D Investment
√Applicable □Not applicable
2020 2019 YoY Change
Number of R & D personnel 1576 1279 23.22%
Proportion of R & D
personnel
12.06% 12.03% 0.03%
Amount of R&D expenses
(RMB)
518401363.63 532012335.99 -2.56%
R&D investment as a
percentage of operating
income
4.28% 4.71% -0.43%
Capitalized R&D expenses
(RMB)
0.00 0.00 0.00%
Capitalized R&D expenses as
a percentage of R&D
expenses
0.00% 0.00% 0.00%
Reason of significant change of total R&D expenses as a percentage of operating income as compared to last year
□ Applicable √ Not applicable
Reason and explanation of its reasonableness of significant change of the capitalized R&D expenses
□ Applicable √ Not applicable
5. Cash flow
Item 2020 2019 YoY Change
Subtotal of cash inflows from
operating activities
12367638678.57 12520735302.40 -1.22%
Subtotal of cash outflows
from operating activities
10280294895.46 10620571697.80 -3.20%
Net cash flows from
operating activities
2087343783.11 1900163604.60 9.85%
Subtotal of cash inflows from
investing activities
644636918.39 1123706197.07 -42.63%
Subtotal of cash outflows
from investing activities
1439811450.15 900786184.48 59.84%
Net cash flows from
investing activities
-795174531.76 222920012.59 -456.71%
Subtotal of cash inflows from
financing activities
2163516795.02 2283952930.77 -5.27%
Subtotal of cash outflows
from financing activities
2559032808.73 3017767552.58 -15.20%
Net cash flows from
financing activities
-395516013.71 -733814621.81 46.10%
Net increase in cash and
cash equivalents
846361023.53 1389240153.53 -39.08%
Explanation of why the related data varied significantly on a YoY basis
√ Applicable □ Not applicable
1. The net cash flow from investment activities decreased by 456.71% mainly due to the decrease in
redemption of bank financial products.
2. Net cash flow from financing activities increased by 46.10% mainly due to the decrease of cash paid
for debt.
Explanation of reasons leading to the material difference between cash flow from operating activities during the
reporting period and net profit for the year
√Applicable □Not applicable
It is mainly caused by changes in operating receivables and receivables. See the supplementary information of
cash flow statement in the financial report for details.III. Non-Core Business Analysis
√Applicable □Not applicable
Unit: RMB
Amount
Proportion to net
profit
Note of Change Sustainability
Investment
Income
89078877.16 5.26%
Gains and losses of futures
contract settlement foreign
exchange forward contract
settlement bank financial
product etc.No
Gains and Losses
from Change of
Fair Value
31847915.76 1.88%
Floating income of futures
contracts foreign exchange
forward contracts bank
financial products etc.No
Non-operating 5055479.82 0.30% Income from nonpayment No
Revenue compensation and
liquidated damages gains
from retirement of fixed
assets etc.Non-operating
Expenditures
14843633.18 0.88%
Loss on retirement of fixed
assets litigation
compensation loss etc.No
Credit
Impairment Loss
-28677382.30 -1.69% Bad debt loss etc. No
Assets
Impairment Loss
-58672538.84 -3.47%
Loss on impairment of
inventories
No
Gains on
Disposal of
Properties
-486378.33 -0.03%
Gains on disposal of fixed
assets
No
Other Gains 151555896.45 8.96%
Government subsidies
value-added tax rebate for
civil affairs and welfare
enterprises value-added tax
rebate for software
products etc.The government grants of
VAT refund of civil welfare
enterprises and software
product VAT exceeding tax
burden are sustainable
while the rest are not
sustainable
IV. Analysis of Assets and Liabilities
1. Material changes of assets
The Company implemented new income or lease standard and adjusted beginning balance of relevant items of
financial statements for the first time in 2020.
Applicable
Unit: RMB
December 31st 2020
January 1st 2020
YoY
Change
Note of significant change
Amount
Percentage of
total assets
Amount
Percentage of
total assets
Cash and Bank
Balances
3489687568.
14
20.49%
2663719770.
15
18.01% 2.48%
Mainly due to the increase of net cash
flow generated by the Company's
operating activities
Account
Receivable
2355613299.
57
13.83%
1871323522.
82
12.65% 1.18%
Inventories
2307761706.
46
13.55%
2180838596.
07
14.75% -1.20%
Investment
property
10067588.96 0.06% 27025974.05 0.18% -0.12%
Long-term Equity
Investment
15219616.68 0.09% 14522259.80 0.10% -0.01%
Fixed Assets
3839408059.
45
22.54%
3379608199.
26
22.85% -0.31%
Construction in
Progress
628730529.0
7
3.69% 480959262.46 3.25% 0.44%
Short-term
borrowings
383088296.6
0
2.25%
1295610572.
07
8.76% -6.51%
Long-term
borrowings
1707918994.
87
10.03% 392882280.09 2.66% 7.37%
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Items
Opening
balance
Profit and
loss of fair
value change
in the current
period
Cumulative
changes in
fair value
included in
equity
Impairment
accrued in the
current period
Current
purchase
amount
Current sale
amount
Other
changes
Closing
balance
Financial Assets
1.
Held-for-tradi
ng financial
assets
(Excluding
Derivative
Financial
Assets)
993634433.3
1
-241409571.
53
752224861
.78
2.Derivative
Financial
Assets
8314400.73
50016085.8
0
58330486.
53
Subtotal of
financial
assets
1001948834
.04
-191393485.
73
810555348
.31
Total
1001948834
.04
-191393485.
73
810555348
.31
Financial
Liabilities
126364.40 7813593.51
7939957.9
1
Whether there were any material changes on the measurement attributes of major assets of the Company
during the reporting period:
□ Yes √ No
3. Assets right restrictions as of the end of reporting period
Items Closing Book value Reasons for being restricted
Cash and Bank Balances
46093170.51 Deposits
32327359.09 Deposits in futures institutions
11123000.00 Litigation frozen funds
Note Receivable 1608722846.32 Pledge for financing
Total 1698266375.92 -
V. Analysis of Investments
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Period
(RMB)
Investment over the Corresponding Period
of Last Year (RMB)
YoY Change
277394000.00 11038318.85 2413.01%
2. Significant equity investment during the reporting period
□Applicable √Not applicable
3. Significant non-equity investment during the reporting period
□Applicable √ Not applicable
4. Financial asset portfolio
（1）Securities Investments
□ Applicable √ Not applicable
No such case in the reporting period.
（2）Derivatives Investments
□Applicable √Not applicable
5. Usage of raised funds
√Applicable □Not applicable
（1）Overall usage of raised fund
√Applicable □Not applicable
Unit: RMB in 10 thousand
Year Method
Total
amount
of raised
funds
Total
amount
of raised
funds
invested
in the
report
period
Accumu
lated
amount
of raised
funds
invested
Total
amount
of raised
funds
with use
alteratio
n during
the
reportin
g period
Accumu
lated
amount
of raised
funds
with use
alteratio
n
Proporti
on of
accumul
ated
amount
of raised
funds
with use
alteratio
n to the
total
amount
of raised
funds
Total
amount
of
unused
raised
funds
Raised
funds
has not
been
used
Raised
funds
has not
been
used for
two
years
2015
Non-pub
lic
offering
39400 536.6
35105.6
4
11471.7
6
29.12% -
2017
Non-pub
lic
offering
132231
43306.9
9
125424.
14
16631.4
5
Deposite
d in the
special
account
of raised
funds
and used
for
purchasi
ng bank
financial
products
Total -- 171631
43843.5
9
160529.
78
11471.7
6
6.68%
16631.4
5
-- 0
Description of Overall Usage of Raised Funds
The information in the above table includes the raised funds issued by the Company in 2015 and 2017.(1) Year 2015
1. The actual amount of raised fund and date of transfer in
Approved by China Securities Regulatory Commission (CSRC) [2015] No. 1454 the Company non-public offered 46349942
common shares with a total raised fund of RMB 399999999.46. After deducting the issuance expenses of RMB 5999999.47
the net amount of raised funds is RMB 393999999.99. The raised funds were transferred in on December 21st 2015 and it has
been verified by Tianjian accounting firm which has issued the Capital Verification Report (TJY [2015] No. 531).
As the principal body of the project is Hangzhou Sanhua Microchannel Heat Exchanger Co. Ltd. (hereinafter referred to as
Sanhua Microchannel) and its subsidiary Sanhua Mexico Industry s. de.r.l.de C.V. (hereinafter referred to as Mexico
Microchannel) the Company allocated RMB 393999999.99 of raised funds to Sanhua Microchannel in the form of capital
increase on December 29th 2015.
2. Usage and balance of raised funds
The Company has used RMB 345.6904 million of raised funds in previous years. The amount of bank deposit interest and
financial income net of bank charges received in previous years was RMB 12.2878 million. The surplus balance of raised funds
amounted to RMB 26100 all of which has been used to permanently replenish the Company's working capital. From January to
December 2020 the actual use of raised funds is RMB 5.3660 million the amount of bank deposit interest and financial income
after deducting bank charges is RMB 444100. The surplus balance of raised funds amounted to RMB 55.6494 million all of
which has been used to permanently replenish the Company's working capital. The accumulated amount of used raised funds was
RMB 351.0564 million the accumulated amount of bank deposits interest and financial income after deducting bank charges is
RMB 12.7319 million. The accumulated surplus balance of raised funds amounted to RMB 55.6755 million all of which has
been used to permanently replenish the Company's working capital.
After being deliberated and approved by the Company's 2019 shareholders' meeting on May192020 the surplus raised funds will
supplement working capital permanently and all regulatory accounts for storing the raised funds were cancelled. As of December
31 2020 the balance of raised funds is RMB 0.000.
(1) Year 2017
1. The actual amount of raised fund and date of transfer in
With the approval of China Securities Regulatory Commission (CSRC) [2017] No. 1392 the Company non-public issued
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).Since Zhejiang Sanhua Automotive Components Co. Ltd. (hereinafter referred to as Sanhua Automotive) and its subsidiary
Shaoxing Sanhua New Energy Automotive Components Co. Ltd. (hereinafter referred to as Shaoxing Automotive) the Company
has allocated the raised funds of RMB 1301310000.00 to Sanhua Automotive in the form of capital increase. Sanhua
Automotive synchronously allocated the raised fund of RMB 503620000.00 to Shaoxing Automotive in the form of capital
increase.
2. Usage and balance of raised funds
The Company has used RMB 821.1715 million of the raised funds in previous years and the amount of bank deposit interest and
financial income net of bank charges received in previous years was RMB 77.6239 million. In 2020 the actual usage of raised
funds is RMB 433.0699 million and the amount of bank deposit interest and financial income net of bank charges is RMB 20.62
million. The accumulated amount of used raised funds was RMB 1254.2414 million the accumulated amount of bank deposits
interest and financial income after deducting bank charges is RMB 98.2459 million.
As of December 31 2020 the balance of raised funds is RMB 116.3145 million (including the net amount of accumulated bank
deposit interest and financial income deducting bank charges etc.) and the balance of raised funds actually used by the Company
to purchase financial products is RMB 50 million.
（2）Statement of Committed Investment Projects of Raised Funds
√Applicable □Not applicable
Unit: RMB in 10 thousand
Committed
investment projects
and allocation of
over-raised funds
Wheth
er
project
has
been
(or
partiall
y)
altered
Total
commit
ted
invest
ment of
raised
funds
Total
invest
ment
after
alterati
on (a)
Invest
ment in
the
current
year
Accum
ulative
invest
ment at
the end
of the
period
(b)
Invest
ment
progres
s at the
end of
the
period
(%)
(d)=(b)
/(a)
Date of
asset
ready
for
intende
d use
Benefit
s
achieve
d in the
current
year
Whethe
r
expecte
d
benefit
s have
been
achieve
d
Whethe
r
feasibil
ity of
project
has
change
d
signific
antly
Committed investment projects
Construction of
Microchannel Heat
Exchanger
production line in
Mexico
Yes 22755 11760
11739.
6
99.83%
Decem
ber
31st
2017
N/A Yes
Technical
transformation
project of heat
exchanger with an
annual output of
additional 800000
units
No 7996 7996 7996
100.00
%
June
30th
2017
N/A No
Replenish working
capital
No 9249 9249 8649 93.51%
N/A No
Automatic technical
transformation
project of heat
exchanger with an
annual output of
additional 700000
units
No
11471.
76
536.6
6721.0
4
58.59%
Decem
ber
31st
2019
N/A No
New energy auto
parts construction
project with annual
output of 11.5
million sets
No 50362 50362
18903.
69
47464.
86
94.25%
Decem
ber
31st
2021
N/A No
Technical
transformation
project of
Automotive thermal
management system
module with an
annual output of
additional 7.3
million units
No 45495 45495
21922.
48
47150.
26
103.64
%
January
31st
2021
N/A No
Technical
transformation
project of
Automotive A/C
control components
with an annual
output of additional
12.70 million units
No 20874 20874
1204.6
9
19064.
52
91.33%
March
31st
2020
N/A No
Expansion of
product testing room
and auxiliary
production room
project
No 13400 13400
1276.1
3
9686.6
5
72.29%
January
31st
2019
N/A No
Payment of agents’
fees
No 2100 2100
2057.8
5
97.99%
N/A No
Subtotal of
committed
investment projects
--
17223
1
17270
7.76
43843.
59
16052
9.78
-- --
1633.9
3
-- --
Investment of excess proceeds
--
Total --
17223
1
17270
7.76
43843.
59
16052
9.78
-- --
1633.9
3
-- --
The situation and
reasons of not
reaching the planned
schedule or expected
income (by specific
project)
Funds raised in 2015:
After deliberation and approval of the board of directors on August 6th 2016 the date of asset ready for
intended use of " Technical transformation project of heat exchanger with an annual output of additional
800000 units " was extended from June 2016 to June 2017 and other contents of the project remained
unchanged. This project has been completed. The specific reasons for postponement of the construction
progress of the project are as follows: According to the medium and long-term development strategy
combined with the existing product structure the Company adopted the strategy of prudent use and
reasonable investment in the previous fund-raising. The new invested equipment tends to be more
intelligent and systematic and the equipment selection is carried out according to the latest technical
requirements and product models. At the same time due to the change of market demand the production
process needs to be improved which leads to the equipment investment progress later than expected. In
June 2017 the project has been completed.
After deliberation and approval of the board of directors on November 30th 2017 the Company made
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
production line in Mexico" and transferred the remaining raised funds into " Automatic technical
transformation project of heat exchanger with an annual output of additional 700000 units". The new
project plans to use RMB 114.7176 million of raised funds (including RMB 4.7676 million of bank
deposit interest and financing income of raised funds) accounting for 29.12% of the net amount of funds
raised in 2015. Reasons for the change: In order to accelerate the development of Microchannel business
improve the level of technical equipment realize the adjustment and upgrading of product structure and
give full play to the resource advantages of Sanhua Microchannel Hangzhou factory in R&D
technology equipment and improve the utilization efficiency of raised funds. The Company postponed
the investment in the third production line and other related supporting facilities of Mexico project. The
investment of the third production line and other supporting facilities in Mexico project shall be arranged
by the Company with own funding. " Automatic technical transformation project of heat exchanger with
an annual output of additional 700000 units " is implemented by Sanhua Microchannel which is a
technology transformation project with new production capacity and the benefit of this project cannot be
calculated separately.
Funds raised in 2017:
(1) After deliberation and approval by the board of directors of the Company on April 1st 2019 the date
of asset ready for intended use of " Technical transformation project of Automotive thermal management
system module with an annual output of additional 7.3 million units " and " Technical transformation
project of Automotive A/C control components with an annual output of additional 12.70 million units "
was extended from January 2019 to January 2021 the other contents of the project will remain
unchanged. Reasons for the change: Combined with the existing product structure and market trend the
Company adopts the strategy of prudent use and reasonable investment for the raised funds. As the new
equipment tends to be more intelligent and systematic the Company selects the equipment according to
the latest technical requirements and product models so that the investment progress of new equipment
of the project is later than expected. In March 2020 " Technical transformation project of Automotive
A/C control components with an annual output of additional 12.70 million units " has been completed. In
January 2021 the " Technical transformation project of Automotive thermal management system module
with an annual output of additional 7.3 million units " has been completed.
(2) After deliberation and approval by the board of directors on April 27th 2020 the date of asset ready
for intended use of " New energy auto parts construction project with annual output of 11.5 million sets"
was extended from December 2019 to December 2021 and other contents of the project remained
unchanged. Reasons for the change: Combined with the existing product structure and market trend the
Company adopts the strategy of prudent use and reasonable investment for the raised funds. In
combination with customer feedback and production scheduling plan the Company will gradually
release the production capacity according to the actual customer demand. In order to ensure that the
investment progress can meet the actual production demand the Company will adjust the equipment
procurement timing of the raised fund investment project according to the customer's actual
requirements thus extend the investment period of the raised fund investment project.Significant changes
in the feasibility of
projects
Funds raised in 2015:
1. Basic information about the change of projects invested by raising funds
After deliberation and approval of the board of directors on November 30th 2017 the Company made
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
production line in Mexico" and transferred the remaining raised funds into " Automatic technical
transformation project of heat exchanger with an annual output of additional 700000 units". The costs of
this new project is around RMB 114.7176 million of raised funds (including RMB 4.7676 million of
bank deposit interest and financing income of raised funds) accounting for 29.12% of the net amount of
funds raised in 2015.
2. Reasons for the change of the project invested by raising funds
In order to accelerate the development of Microchannel business improve the level of technical
equipment realize the adjustment and upgrading of product structure and give full play to the resource
advantages of Sanhua Microchannel Hangzhou factory in R&D technology equipment and improve the
utilization efficiency of raised funds. The Company postponed the investment in the third production line
and other related supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own funding.
3. Decision making procedures for the change of projects invested by raising funds
The change of raised investment project was approved by the board of directors of the Company on
November 30th 2017.
4. Information disclosure of changes in projects invested by raised funds
On December 2nd 2017 the Company disclosed the Announcement on Changing the Usage of Part
Raised Funds (Announcement No.: 2017-078).
5. " Automatic technical transformation project of heat exchanger with an annual output of additional
700000 units " is implemented by Sanhua Microchannel which is a technology transformation project
with new production capacity and the benefit of this project cannot be calculated separately.
Amount usage and
use progress of
over-raised Funds
Not applicable
Change in
implementation
location of
investment projects
of Raised Funds
Not applicable
Adjustment to
implementation
method of
investment projects
of Raised Funds
Not applicable
Advance investment
and replacement of
projects invested
with raised funds
Applicable
Raised funds in 2015: In 2016 the Company replaced the initial investment amount with raised funds of
RMB 72.6453 million.
Funds raised in 2017: In 2017 the Company replaced the initial investment amount by raised funds of
RMB 140.5585 million.
Temporary
supplement of
working capital with
idle raised funds
Not applicable
The amount and
reasons of the
balance of raised
funds in the project
implementation
Applicable
Funds raised in 2015:
After deliberation and approval of the board of directors on November 30th 2017 the Company made
some changes to the purpose of the raised funds for the " Construction of Microchannel Heat Exchanger
production line in Mexico" and transferred the remaining raised funds into " Automatic technical
transformation project of heat exchanger with an annual output of additional 700000 units". The costs of
this new project are around RMB 114.7176 million of raised funds (including RMB 4.7676 million of
bank deposit interest and financing income of raised funds) accounting for 29.12% of the net amount of
funds raised in 2015.In order to accelerate the development of Microchannel business improve the level of technical
equipment realize the adjustment and upgrading of product structure and give full play to the resource
advantages of Sanhua Microchannel Hangzhou factory in R&D technology equipment and improve the
utilization efficiency of raised funds. The Company postponed the investment in the third production line
and other related supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own funding.Funds raised in 2017:
The project of " Technical transformation project of Automotive thermal management system module
with an annual output of additional 7.3 million units " has been put into operation. The project was
completed and checked before acceptance by the office of general manager on January 31 2021. On
January 31 2021 the final payment of the project is about 52.7745 million yuan which is paid with its
own funds according to the contract and the balance of the project is about 14.1079 million yuan.Use of unused raised
funds
Funds raised in 2017:
It was deposited in the special account of raised funds and used to purchase bank financial products.Problems or other
situations in the use
and disclosure of
raised funds
No
（3）Statement of Altered Investment Projects of Raised Funds
√Applicable □Not applicable
Unit: RMB in 10 thousand
Project
after
alteration
Project
before
alteration
Total
Raised
Funds to
be
invested
to the
project
after
alteration
(a)
Actual
investmen
t in the
current
year
Actual
accumulat
ive
investmen
t (b)
Investme
nt
progress
(%)
(c)=(b)/(a
)
Date of
asset
ready for
intended
use
Benefits
achieved
in the
current
year
Whether
expected
benefits
have been
achieved
Whether
feasibility
of project
has
changed
significan
tly
Automati
c
technical
transform
ation
project of
heat
exchanger
with an
annual
output of
additional
700000
units
Construct
ion of
Microcha
nnel Heat
Exchange
r
productio
n line in
Mexico
11471.76 536.6 6721.04 58.59%
December
31st 2019
Not
applicable
No
Total -- 11471.76 536.6 6721.04 -- -- 0 -- --
Alteration reason decision making
progress and information disclosure
(of a specific project)
1. Basic information about the change of projects invested by raising funds
After deliberation and approval of the board of directors on November 30th 2017 the
Company made some changes to the purpose of the raised funds for the " Construction of
Microchannel Heat Exchanger production line in Mexico" and transferred the remaining
raised funds into " Automatic technical transformation project of heat exchanger with an
annual output of additional 700000 units". The new project plans to use RMB 114.7176
million of raised funds (including RMB 4.7676 million of bank deposit interest and
financing income of raised funds) accounting for 29.12% of the net amount of funds
raised in 2015.
2. Reasons for the change of the project invested by raising funds
In order to accelerate the development of Microchannel business improve the level of
technical equipment realize the adjustment and upgrading of product structure and give
full play to the resource advantages of Sanhua Microchannel Hangzhou factory in R&D
technology equipment and improve the utilization efficiency of raised funds. The
Company postponed the investment in the third production line and other related
supporting facilities of Mexico project. The investment of the third production line and
other supporting facilities in Mexico project shall be arranged by the Company with own
funding.
3. Decision making procedures for the change of projects invested by raising funds
The change of raised investment project was approved by the board of directors of the
Company on November 30th 2017.
4. Information disclosure of changes in projects invested by raised funds
On December 2nd 2017 the Company disclosed the Announcement on Changing the
Usage of Part Raised Funds (Announcement No.: 2017-078).
5. " Automatic technical transformation project of heat exchanger with an annual output
of additional 700000 units " is implemented by Sanhua Microchannel which is a
technology transformation project with new production capacity and the benefit of this
project cannot be calculated separately.The situation and reasons of not
reaching the planned schedule or
expected income (by specific
project)
Not applicable
Description of significant changes in
the feasibility of the changed project
Not applicable
VI. Disposal of Significant Assets and Equity
1. Disposal of significant assets
□ Applicable √ Not applicable
During the reporting period there was no disposal of significant assets
2. Sale of significant equity
□ Applicable √ Not applicable
VII. Analysis of Major Subsidiaries and Investees
√ Applicable □ Not applicable
Information about major subsidiaries and investees that contribute above 10% of the Company’s net Profit
Unit：RMB
Company
name
Company
type
Principal
business
Registered
capital
Total
assets
Net assets
Operating
revenue
Operating
profit
Net profit
Zhejiang
Sanhua
Refrigerati
on Group
Co. Ltd.
Subsidiary
Refrigerati
on and A/C
electrical
component
s
manufactur
ing and
marketing
250
million
3422167
038.05
3182229
394.09
1190814
030.28
22739606
8.39
19804898
0.66
Hangzhou
Sanhua
Microchan
nel Heat
Exchanger
Co. Ltd.
Subsidiary
Refrigerati
on and A/C
electrical
component
s
manufactur
ing and
marketing
360
million
1631228
511.78
1043129
777.10
1277658
814.36
16908216
0.80
14199366
5.67
Zhejiang
Sanhua
Trading
Co. Ltd.
Subsidiary
Refrigerati
on and A/C
electrical
component
s
marketing
50 million
2481484
241.37
12161344
1.43
3758566
203.96
10935839
.37
6595425.
66
Zhejiang
Sanhua
Subsidiary
Automotiv
e
1460 4371825 2961182 2469186 37714340 33177897
Automotiv
e
Componen
ts Co. Ltd
component
s
manufactur
ing and
marketing
million 691.32 045.19 175.13 1.31 6.74
Sanhua
Internation
al Limited
(USA)
(merger)
Subsidiary
Refrigerati
on and A/C
electrical
component
s
manufactur
ing
marketing
and
investment
manageme
nt
37.55
million
USD
1351516
858.23
25530774
8.50
2472709
133.91
61453322
.54
45106474
.68
Sanhua
Internation
al
Singapore
PTE. Ltd.
(merger)
Subsidiary
Refrigerati
on and A/C
electrical
component
s
manufactur
ing
marketing
and
investment
manageme
nt
$105.5798
33 million
2213696
335.86
60483201
0.57
3428049
807.50
60076824
.35
44696908
.08
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Company name
Equity acquisition and disposal method
during the reporting period
Impact on overall production results
Hangzhou
Hangzhou Sanhua Household Thermal
Management System Co. Ltd.Liquidation cancellation No significant impact
AWECO Electric Equipment (Shanghai)
Co. Ltd.
Liquidation cancellation No significant impact
Ma'anshan Sanhua Intelligent
Technology Co. Ltd
Liquidation cancellation No significant impact
Qingdao Debaiyi Refrigeration
Equipment Co. Ltd
Equity transfer No significant impact
Zhejiang Xianji Intelligent Technology
Co. Ltd
New investment
No significant impact
Sanhua Mexico Investment Limited New investment No significant impact
Zhejiang Sanhua Commercial
Refrigeration Co. Ltd
New investment
No significant impact
Shaoxing Sanhua Automobile Thermal
Management Technology Co. Ltd
New investment
No significant impact
VIII. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
IX. Outlook for the Future Development of the Company
1. Development strategy
The Company adheres to the business strategy of "Focusing on leading innovation and transcendence" and firmly
grasps the product development theme of energy conservation environmental protection and intelligent control.With the research and application of heat pump technology and thermal management system products as the core
we continuously deepen and expand the global business layout through continuous innovation of products and
technologies. It transformed from "cost leading" to "technology leading" from "mechanical parts development" to
"electronic control integrated system control technology solution development" in order to provide competitive
environmental intelligent control solutions for global high-quality customers. As a result it becomes a global
leader in the climate intelligent control system industry.
2. Business plan for 2021
(1) Refrigeration air conditioning electrical parts business
The refrigeration and air conditioning electrical parts business will seize the opportunities of energy efficiency
upgrading refrigerant switching multi-line and other related business products continue to expand the customer
base strengthen the acquisition and transformation of business opportunities and improve operation sales. The
Company promotes intelligent manufacturing and lean production increases special procurement management
deeply promotes team building and constantly improves product competitiveness. Continue to integrate and
improve the operation and management of Aweco at home and abroad increase the construction of overseas
factories in Vietnam and Mexico improve the overall operation efficiency of overseas manufacturing and
marketing and create greater benefits. At the same time we will accelerate the planning of new factories in
Daming City and lay a solid foundation in various commercial fields of consumption upgrading and industrial
upgrading of the Chinese market in the future.
(2) Automotive components business
Under the development opportunity of new energy vehicle thermal management industry automotive components
business should strengthen the direction of system integration increase R & D investments and maintain the
leading technology of the industry. At the same time in the process of rapid growth of new energy thermal
management we always pay attention to the changes of market demand and competition pattern constantly
accelerate the construction of informatization and intelligence increase the construction and management of
supply chain pay attention to cost control actively respond to the needs of customers and ensure the product
quality and delivery of projects. In addition in the process of global development we will actively promote the
construction of Mexico and Binhai increase the layout of production capacity and the construction of talent team
so as to grow rapidly in global automotive electrification and intellectualization.
3. Main risks for future development
(1) Risk of price fluctuation of raw materials
The raw materials required by the Company are copper and aluminum which account for a large proportion of the
cost composition of the products. Therefore the fluctuation of the market price of raw materials will bring large cost
pressure to the Company. The Company will reduce the adverse impact of raw material price fluctuations through
the establishment of linkage pricing mechanism hedging operation of commodity futures and timely negotiation
with customers.
(2) The risk of rising labor cost
The labor costs are rising year by year which reduces the profit margin of the Company to a certain extent. In the
future the Company will continue to improve the level of intelligent manufacturing by continuously promoting
lean production process improvement and technical transformation.
(3) Trade and exchange rate risk
The Company's export volume is large involving North America Europe Japan Southeast Asia and other regions.
Due to the changes in regional trade policies the Company's daily operation will be affected. The Company deals
with interregional trade risks through transferring production capacity to foreign countries. In addition the
fluctuation of exchange rate will also have a certain impact on the profit. According to the actual situation the
Company deals with and reduces this risk by means of forward foreign exchange settlement and establishing
overseas production bases in the United States Poland Mexico India and other places.X. Reception of activities including research communication and interviews during the
report period
√ Applicable □ Not applicable
(1) Reception of research activities during the reporting period.
Time of
reception
Location of
reception
Method of
reception
Type of
reception object
Reception object
Main contents of
discussion and
materials
provided
Index of basic situation
of the research
June 2 2020 Hangzhou On-site research Institution
Dongwu
Securities: Chai
Jiahui; Guangfa
Fund: Mo Jiao;
Dacheng Fund:
Cheng Xiang
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
July 1 2020 Hangzhou On-site research Institution
CICC: Liu
Chang; Jingshun
Great Wall: Han
Ting Zhang
Qingze
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
July 8 2020 Hangzhou On-site research Institution
E Fund: Feng
Bo Qi He Cai
Rongcheng Lin
Gaobang Jia
Jian He
Chongkai Li
Zhongyang Hu
Yunfeng Liu
Wu Chen Lixin
Zheng Xi Wei
Yixi Lin Sen
Ge Qiushi
Wuyang
Ouyang Liangqi;
Dongwu
Securities: Feng
Yanzhu Zeng
Duohong Chai
Jiahui
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
August 25 2020 Hangzhou On-site research Institution
Huitianfu Fund:
Yuan Jianjun
Wang Xu Lao
Jienan Hu
Xinwei Zhao
Pengfei Ma
Xiang Yang
Yican Yang Fan
Tan Zhiqiang
Liu Weilin Zhao
Jian Zheng
Huilian Zhang
Peng Weng
Qiang Bian
Zheng Rao
Yunfei;
Zheshang
Securities: Wang
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
Haiyang Zhang
Yuyuan
August 27-28
2020
Hangzhou On-site research Institution
Ping’an Asset
Management:
Xu Zhixiang;
CICC Fund: Qiu
Yanbing;
Dingfeng Asset:
Zhang Qijia;
Anxin
Securities: Li
Yizhen; Baoxin
Asset: Lin
Haifeng;
Everbright Asset
Management:
Ying Chao;
Shenwan
Appliance: Liu
Yizhen Zheng;
Shenwan
Appliance: Shi
Jinxing; GF
Securities: Wang
Chaoning;
Tianchong
Capital: Fu
Jiesong; Jiaoyin
Kanglian: Wang
Yaoyong;
Shanghai Bank
Fund: Wang
Kexin; First
Beijing: Li
Ancheng; Yimu
Assets: Jiang
Yue; Zijin
Insurance: Sang
Yadong; Hua'an
Securities: Ye
Qun; Debang
Fund: Tao Yutao;
Panjing
Investment:
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
Wang Linsen;
GF Securities:
Zhang Xiujun;
Tianchong
Capital: Jiang
Xiaodong;
Hangyin
Financial
Management:
Shen Jiexin
November 9
2020
Hangzhou On-site research Institution
Huatai
Securities: Xing
Chongyang
Wang Tao;
Huishitong
Investment: Bao
Yunan; Chao
Tiancheng: Fang
Sixin; Qianrui
Assets: Wang
Yongqiang;
Zheshang
Securities: Li
Bohua; Pacific
Securities: Fan
Xiapei; Guotai
Yuanxin: Lu
Daming;
Qiantou
Finance: Zhou
Wei Chen Kai;
Shangfeng
Capital: Gu
Jiahao;
Shenghua
Capital: Chai
Shanshan;
Ningju
Investment: Luo
Zhe
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
November 19
2020
Hangzhou On-site research Institution
E-Fund: Zhu
Yan; Ping’an
Asset
Management:
Introduction of
the company's
operation and
reply to
http://irm.cninfo.com.c
n/ssessgs/S002050
Liu Ruiyuan
Ren Zheng Han
Yue Zhang Ze
Cheng
Zhucheng;
Changjiang
Securities: Wu
Bohua
investors'
questions
December 8
2020
Hangzhou On-site research Institution
Caitong
Securities: Gong
Siwen Fu
Zhenghao;
Western Asset
Management:
Shuang Xing Fu
Yunchuan; Yipin
Assets: Zhou
Xin; Oriental
Wealth
Securities: Wang
Ying Yu Na;
Xinda
Securities: Wu
Hao Chen Lei;
Shibei
Investment: Qin
Xuefeng; Yanxin
Assets: Shen
Mengkai Tang
Qingqing
Huang Huaying;
Hongcheng
Investment:
Ding Lijia
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
December
Hangzhou On-site research Institution
CITIC
Securities: Dong
Yudan Li Cong
Li Jingtao Wang
Hao Qian
Xiangjin Li
Hang; Kaiyin
Capital: Shen
Lingna; Yihui
Investment:
Introduction of
the company's
operation and
reply to
investors'
questions
http://irm.cninfo.com.c
n/ssessgs/S002050
45
Wang Zhen;
Kaiji Securities:
Wei Hongda;
Changsheng
Fund: Guo Kun;
Guotou Ruiyin:
Ye Qing;
Zhongtai
Securities: Chen
Chuanhong;
Zheshang Fund:
Chai Ming;
Nord Fund: Luo
Shifeng;
Xinyuan
Investment: Wen
Zuobei;
Guantong
Futures: Zhao
Yan; Yibo
Investment: Lv
Guojin; Qinghe
Capital: Dong
Xinghua and
Xiao Han;
Hongshan
Capital: Song
Yahui;
Tianchong
Capital: Fu
Jiesong;
Dongfang
Financial
Holding: Chen
Xiaohe; Nanhua
Fund: Li
Fangfang; China
Europe Fund:
Shen Shaobo;
Zhongtai
Securities:
Suchen; Huatai
Baoxing: Liu
Tengfei; Nord
Fund: Yan Anqi
Section V Significant Events
I. Profit distribution of ordinary shares and capitalization of capital reserves
Profit distribution policy of ordinary shares in the reporting period especially the formulation implementation
and adjustment of cash dividend policy
√ Applicable □ Not applicable
1.On April 30 2020 The Company's 2019 Annual Profit Distribution Plan was approved in the 2019 Annual
General Meeting of Shareholders. Based on 275583602 existing shares excluding the repurchased shares RMB
1.50 (including tax) was distributed to all shareholders for every 10 shares with a total of RMB 413337540.30.
Meanwhile 3 shares were distributed for every 10 shares with capital reserve with a total of 826675080 shares.
After this the total share increased to 3592041778. The profit distribution plan has been completed on June 2
2020.
2. Based on 3582258682 shares of the Company excluding the repurchased shares RMB 1.00 (including tax)
was distributed to all shareholders for every 10 shares totaling of RMB 358225868.20. The profit distribution
plan has been completed on September 16 2020.The formulation and implementation of the Company's cash dividend policy has been in strict compliance with the
relevant laws and regulations normative documents and the articles of association in line with the provisions of
the articles of association or the requirements of the resolution of the general meeting of shareholders. The
dividend standard and proportion are clear the relevant decision-making procedures and mechanisms are
complete the independent directors perform their duties and play their due role and minor shareholders have fully
expressed their views. The legitimate rights and interests of them have been fully protected.Special Notes on Cash Dividend Policies
Whether they comply with the requirements of the Company's
articles of incorporation or the resolutions of the General
Meeting of Shareholders:
Yes
Whether the dividend standards and proportions are distinct and
clear:
Yes
Whether the relevant decision-making procedures and
mechanisms are complete:
Yes
Whether the independent directors performed their duties and
played their due role:
Yes
Whether the minority shareholders have the opportunity to fully
express their opinions and appeals and whether their legitimate
rights and interests have been fully protected:
Yes
Whether relevant conditions and procedures are compliant and
transparent when the cash dividend policies are being adjusted or
N/A
changed:
Profit distribution policy (proposal) and capitalizing of capital reserves policy (proposal) in last three years
(including the current reporting period)
1. Profit distribution for the year 2018
(1) Profit distribution for the half year 2018：Based on the Company’s total share capital of 2120316835 the
Company distributed cash dividend of RMB 1.00 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 212031683.50.
(2) Profit distribution for the year 2018：Based on the Company’s total share capital of 2116703682 the
Company distributed cash dividend of RMB 2.5 (tax inclusive) and 3 shares dividend per each 10 shares to all
shareholders with a total of RMB 529175920.50 and 635011063 shares. After this the total share capital was
increased to 2765657898.
2. Profit distribution for the year 2019
Profit distribution for the year 2019: Based on the Company’s total share capital of 2755583602 the Company
distributed cash dividend of RMB 1.5 (tax inclusive) and 3 shares dividend per each 10 shares to all shareholders
with a total of RMB 413337540.30 and 826675080 shares. After this the total share capital was increased to
3592041778.
3. Profit distribution proposal for the year 2020：
(1) Profit distribution for the half year 2020：Based on the Company’s total share capital of 3582258682 the
Company distributed cash dividend of RMB 1.00 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 358225868.20.
(2) Profit distribution for the year 2020：Based on the Company’s total share capital of 3581818372 the
Company distributed cash dividend of RMB 2.50 (tax inclusive) per each 10 shares to all shareholders with a total
of RMB 895454593.
Cash dividend of ordinary shares in last 3 years (including the current reporting period)
Unit: Yuan
Year
Cash dividend
amount (tax
included)
Net profit
attributable to
common stock
shareholders of
listed
companies in
the
consolidated
financial
statement of
the year for
dividend
The ratio of
cash dividends
to the net profit
attributable to
ordinary
shareholders of
listed
companies in
the
consolidated
statements
The amount of
cash dividends
in other ways
(such as share
repurchase)
The proportion
of cash
dividends in
other ways to
the net profit
attributable to
ordinary
shareholders of
listed
companies in
the
consolidated
Total amount
of cash
dividends
(including
other ways)
The ratio of
total amount of
cash dividends
(including
other ways) to
the net profit
attributable to
ordinary
shareholders of
listed
companies in
the
distribution statements consolidated
statements
2020
1253680461.
20
1462158821.
57
85.74% 0.00 0.00%
1253680461.
20
85.74%
2019 413337540.30
1421204236.
13
29.08% 274375830.00 19.31% 687713370.30 48.39%
2018 741207604.00
1292349782.
17
57.35% 29995518.45 2.32% 771203122.45 59.67%
During the reporting period the company was profitable and the distributable profits to ordinary shareholders of
the parent company was positive but the Company did not propose a cash dividend distribution plan of ordinary
shares.
□ Applicable √ Not applicable
II. Profit distribution and capitalizing of capital reserves proposal for the current reporting
period
√ Applicable □Not applicable
Bonus share issued per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
inclusive)
2.50
Total capital share basis for the distribution
proposal (share)
3581818372
Total cash dividend (RMB) (tax inclusive) 895454593.00
Cash dividend amount in other ways (such as
share repurchase) (RMB)
0.00
Total cash dividends (including other ways)
(RMB)
895454593.00
Distributable profits (RMB) 1089748875.88
Percentage of cash dividends in the total
distributed profit (%)
100%
Cash dividends
Other
Detailed description of profit distribution or capital reserves conversion plan
With 3581818372 as the base number cash dividend of RMB 2.50 (including tax) will be distributed to all shareholders for every
10 shares. A total of RMB 895454593 will be distributed. There are no bonus shares. The remaining undistributed profits of the
Company shall be carried forward to the next year and there is no conversion of capital reserve to share capital.
III. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller shareholders related
parties acquirers and other related parties for the commitments by the end of the reporting period.
√ Applicable □ Not applicable
Commitments
Giver of
commitments
Nature Details of commitments
Date of
commitments
Term of
commitments
Performance
Commitment
from
reformation of
shareholding
Zhang Yabo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd.Other
commi
tment
When the number of shares sold through listing
and trading in Shenzhen Stock Exchange
reaches 1% of the total number of shares of the
Company it shall make an announcement
within two working days from the date of the
occurrence of the fact.November 21st
2005
Long term
Strict
performance
Zhang Daocai
controlling
shareholder
Sanhua
Holding
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
occupa
tion
Zhang Daocai and Sanhua holding group the
controlling shareholder of the Company
promise that there will not be any competition
with Sanhua intelligent controls in the business
scope being or already carried out in the future.January 5th
2009
Long term
Strict
performance
Zhang Daocai
controlling
shareholder
Sanhua
Holding
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
occupa
Sanhua Holding Group promises: after the
completion of this transaction Sanhua Holding
Group and Sanhua intelligent controls will sign
an agreement according to law perform legal
procedures fulfill the obligation of information
disclosure and handle significant matters for
approval in accordance with relevant laws
regulations articles of association of Sanhua
intelligent controls. In the 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
January 5th
2009
Long term
Strict
performance
tion other shareholders will not be damaged through
related party transactions.Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd. Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
occupa
tion
In order to avoid horizontal competition with
Sanhua intelligent controls Zhang Daocai
Zhang Yabo Zhang Shaobo Sanhua Holding
Group the controlling shareholder of the
Company and Sanhua Lvneng Industry the
trading partner made the following
commitments:
1. I (or the Company) will not directly or
indirectly engage in or participate in the
business that constitutes potential direct or
indirect competition with Sanhua Intelligent
Controls and its subordinate enterprises;
guarantee that legal and effective measures shall
be taken to urge other enterprises controlled by
me (or the Company) not to engage in or
participate in any business competing with
Sanhua Intelligent Controls and its subordinate
enterprises.
2. If Sanhua Intelligent Controls further
expands its business scope I (or the Company)
and other controlled enterprises will not
compete with Sanhua Intelligent Controls'
expanded business; if it is possible to compete
with Sanhua Intelligent Controls' business after
expansion I (or the Company) and other
controlled enterprises will withdraw from
Sanhua Intelligent Controls in the following
ways of competition: A. Stop the businesses that
compete or may compete with Sanhua
Intelligent Controls; B. Inject the competitive
business into Sanhua Intelligent Controls; C.Transfer the competitive business to an
unrelated third party.
3. If I (or the Company) and other enterprises
controlled by me (or the Company) have any
business opportunities to engage in and
participate in any activities that may compete
with Sanhua Intelligent Controls' business
operation they shall immediately inform
Sanhua Intelligent Controls of the above
business opportunities. If Sanhua Intelligent
Controls makes an affirmative reply to take
July 24th 2015 Long term
Strict
performance
advantage of the business opportunity within a
reasonable period specified in the notice it shall
do its best to give the business opportunity to
Sanhua Intelligent Controls.
4. In case of breach of the above commitment I
(or the Company) is willing to bear all
responsibilities arising therefrom and fully
compensate all direct or indirect losses caused
to Sanhua Intelligent Controls.Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd. Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
occupa
tion
In order to standardize the related party
transactions with Sanhua Intelligent Controls
Zhang Daocai Zhang Yabo Zhang Shaobo
Sanhua Holding Group the controlling
shareholder of the Company and Sanhua
Lvneng Industrial the trading partner made the
following commitments:
1. I (or the Company) and the controlled
enterprises will reduce the related party
transactions with Sanhua intelligent controls as
far as possible and will not use their own status
as shareholders of Sanhua intelligent controls to
seek for superior rights in terms of business
cooperation and other aspects compared with
other third parties;
2. I (or the Company) will not take advantage of
the right to enter into a transaction with Sanhua
intellectual controls using the position as a
shareholder.
3. If there are necessary and unavoidable related
party transactions I (or the Company) and the
controlled enterprises will sign agreements with
Sanhua intelligent controls in accordance with
the principles of fairness follow legal
procedures and perform the information
disclosure obligations in accordance with the
requirements of relevant laws regulatory
documents and the articles of association. It
shall also perform relevant internal
decision-making and approval procedures to
ensure that it will not conduct transactions with
Sanhua intelligent controls on terms that are
obviously unfair compared with the market
price and will not use such transactions to
July 24th 2015 Long term
Strict
performance
engage in any behavior that damages the
legitimate rights and interests of Sanhua
intelligent controls and other shareholders.Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd.Other
Comm
itment
Zhang Daocai Zhang Yabo Zhang Shaobo and
Sanhua holding Group the controlling
shareholder of the Company made the
following commitments: after the completion of
the transaction Sanhua intelligent controls will
continue to improve the corporate governance
structure and independent operation of the
Company management system in accordance
with the requirements of relevant laws and
regulations and the articles of Association and
continue to maintain the independence of
Sanhua intelligent controls in business assets
finance institutions personnel etc. to protect
the interests of all shareholders.July 24th 2015 Long term
Strict
performance
Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd.
Comm
itment
of
restrict
ed
shares
The shares acquired in this transaction shall not
be transferred within 36 months from the listing
date of new shares after the completion of the
issuance; within 6 months after the completion
of the transaction if the closing price of the
shares of the listed Company is lower than the
issue price of the shares to purchase assets for
20 consecutive trading days or if the closing
price at the end of 6th month is lower than the
issue price of the shares to purchase assets the
locking period of the shares acquired by the
Company due to this transaction will be
automatically extended for at least 6 months.September
20th 2017
September
19th 2020
Strict
performance
Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd. Zhejiang
Sanhua
Lvneng
Industrial
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
1. I (or the Company) and the controlled
enterprises will reduce the related party
transactions with Sanhua intelligent controls as
far as possible and will not use the position as a
shareholder of Sanhua intellectual controls to
seek the superior rights for business cooperation
with Sanhua intelligent controls compared with
other third parties;
2. I (or the Company) will not 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
September
18th 2017
Long term
Strict
performance
Group Co.Ltd.occupa
tion
party transactions I (or the Company) and the
controlled enterprises will sign agreements with
Sanhua intelligent controls in accordance with
the principles of fairness follow legal
procedures and perform the information
disclosure obligations in accordance with the
requirements of relevant laws regulatory
documents and the articles of association. It
shall also perform relevant internal
decision-making and approval procedures to
ensure that it will not conduct transactions with
Sanhua intelligent controls on terms that are
obviously unfair compared with the market
price and will not use such transactions to
engage in any behavior that damages the
legitimate rights and interests of Sanhua
intelligent controls and other shareholders.Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd. Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
tions
and
capital
occupa
tion
1. I (or the Company) will not directly or
indirectly engage in or participate in any
business that may constitute potential direct or
indirect competition with Sanhua intelligent
controls and its subordinate enterprises;
guaranteed that legal and effective measures
will be taken to urge other enterprises
controlled by me (or the Company) not to
engage in or participate in any business that is
competitive with Sanhua intelligent controls
and its subordinate enterprises Business.
2. If Sanhua intelligent controls further expands
its business scope I (or the Company) and other
enterprises controlled by me (or the Company)
will not compete with Sanhua intelligent
controls' expanded business; if it is possible to
compete with Sanhua intelligent controls'
business after expansion I (or the Company)
and other enterprises controlled by me (or the
Company) will withdraw from Sanhua
intelligent controls in the following ways of
competition: A. stop the businesses that
compete or may compete with Sanhua
intelligent controls; B. inject the competitive
business into Sanhua intelligent controls; C.transfer the competitive business to an unrelated
third party.September
18th 2017
Long term
Strict
performance
3. If I (or the Company) and other enterprises
controlled by me (or the Company) have any
business opportunities to engage in and
participate in any activities that may compete
with Sanhua intelligent controls' business
operation they shall immediately inform
Sanhua intelligent controls of the above
business opportunities. If Sanhua intelligent
controls makes an affirmative reply to take
advantage of the business opportunity within a
reasonable period specified in the notice it shall
do its best to give the business opportunity to
Sanhua intelligent controls.
4. In case of breach of the above commitment I
(or the Company) is willing to bear all
responsibilities arising therefrom and fully
compensate all direct or indirect losses caused
to Sanhua intelligent controls.Zhang Daocai
Zhang Yabo
Zhang
Shaobo
controlling
shareholder
Sanhua
Holding
Group Co.Ltd. Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd.Other
commi
tment
After the completion of the transaction the
listed Company will continue to improve the
corporate governance structure and independent
operation of the Company management system
in accordance with the requirements of relevant
laws and regulations and the articles of
association continue to maintain the
independence of the listed Company in
business assets finance institutions personnel
and other aspects and effectively protect the
interests of all shareholders.September
18th 2017
Long term
Strict
performance
Zhang Daocai
controlling
shareholder
Sanhua
Holding
Group Co.Ltd.
Comm
itment
on
horizo
ntal
compe
tition
related
party
transac
The commitment made at the time of IPO it
shall not engage in the same production
operation or business as the Company in the
future. In order to avoid business competition
with the Company and clarify the
non-competition obligations Sanhua Holding
Group on behalf of itself and its subsidiaries
with more than 50% equity makes a
commitment to Sanhua intelligent controls to
avoid possible horizontal competition.June 7th 2005 Long term
Strict
performance
tions
and
capital
occupa
tion
Are the
commitments
fulfilled on
time
Yes
2. Where any profit forecast was made for any of the Company’s assets or projects and the current
reporting period is still within the forecast period the Company shall explain whether the performance of
the asset or project reaches the profit forecast and why:
□ Applicable √ Not applicable
IV. The Company’s funds used by the controlling shareholder or its related parties for
non-operating purposes.
□ Applicable √ Not applicable
No such case during the reporting period.
V. Explanation Given by the Board of Directors and Supervisory Committee Regarding the
“Non-standard Auditor’s Report” Issued by the CPA Firm for the Reporting Period
□ Applicable √ Not applicable
VI. For changes in accounting policies accounting estimates and accounting methods as
compared to the financial report for the prior year
√ Applicable □Not applicable
The Company implemented the Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter
referred to as the new revenue standards) revised by the Ministry of Finance from January 1 2020. According to
this standard the information of the comparable period will not be adjusted. The cumulative impact of retained
earning and other related items in financial statements due to the implementation of the new standards shall be
retroactively adjusted to January 1 2020.Since January 1 2020 the implementation of the new revenue standards has no impact on the Company's retained
earnings. Other affected items and amounts are shown in the following table:
Item Balance sheet
December 31 2019 Impact of new revenue standard January 1 2020
Advance
payment
23453218.32 -23453218.32
Contract
liabilities
+23453218.32 23453218.32
VII. Explanation for retrospective restatement of major accounting errors during the
reporting period
□ Applicable √ Not applicable
No such case during the reporting period.VIII. Explanation for changes in scope of the consolidated financial statements as compared
to the financial report for the prior year
√ Applicable □ Not applicable
1. Disposal of subsidiaries
Lose control due to disposal
Name of subsidiary Equity disposal
price
Equity disposal
ratio
Equity disposal
method
Date of losing control
Qingdao Debaiyi refrigeration equipment Co.Ltd
6562658.15 70% Transfer to
Minority shareholders
2020-12-02
(Continued)
Determination fo losing
control
The difference between the
disposal price and
corresponding net asset of
consolidated financial
statements
Proportion of
remaining equity on
the date of loss of
control
Net assets on
disposal date
Net profit from the beginning
of the period to the disposal
date
Complete the registration
procedures for industrial and
commercial changes
-4098327.44 0.00 15229979.42 -1609483.26
2. Changes in the scope of consolidation due to other reasons
1) Increased scope of consolidation
Name Method of
obtaining equity
Date of equity
acquisition
Actual contribution at the
end of the period
Contribution ratio
Zhejiang Xianji Intelligent Technology Co. Ltd New investment 2020-09-10 34.6 million yuan 100%
Sanhua Mexico Investment Co. Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial Refrigeration Co.Ltd
New investment 2020-10-09 68.29 million yuan 100%
Shaoxing Sanhua Automobile Thermal
Management Technology Co. Ltd
New investment 2020-12-03 0.00 100%
2) Decreased scope of consolidation
Name Method of
disposal
Date of disposal Net assets on
disposal date
Net profit from the
beginning of the period
to the date of
cancellation
Hangzhou Sanhuajia Electric Heating Management
System Co. Ltd
Liquidation
cancellation
2020-05-18 147448.25 -78092.41
Aweco Electrical Equipment (Shanghai) Co. Ltd Liquidation
cancellation
2020-06-02 6669.73 22351.38
Ma'anshan Sanhua Intelligent Technology Co. Ltd Liquidation
cancellation
2020-08-03 3907472.50 -478491.11
IX. Engagement and disengagement of the CPA firm
CPA firm engaged at present
Name of the domestic CPA firm Pan-China Certified Public Accountants LLP
Remuneration of domestic accounting firms (in 10000 yuan) 245.28
Consecutive years of the audit service provided by the domestic
CPA firm
20
Name of the certified public accountants from the domestic CPA
firm
Luo Xunchao Ouyang Xiaoyun
Consecutive years of the audit service provided by the certified
public accountants from the domestic CPA firm
1
Whether the CPA firm was changed in the current period
□ Yes √ No
Engagement of internal control audit CPA firm financial advisor or sponsor
√Applicable □Not applicable
During the reporting period the Company did not change accounting firm. It continued to engage Tianjian
accounting firm as the internal control audit accounting firm of the Company.X. Listing suspension and termination after disclosure of this annual report
□ Applicable √ Not applicable
XI. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case during the reporting period.XII. Material Litigation and Arbitration
□ Applicable √ Not applicable
No such case during the reporting period.XIII. Punishments and Rectifications
□ Applicable √ Not applicable
No such case during the reporting period.XIV. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. The Implementation of an Equity Incentive Plan Employee Stock Incentive Plan or
Other Incentive Plans
√Applicable □Not applicable
In order to further improve the governance structure of the Company establish and improve the incentive
mechanism attract and retain talents and effectively mobilize core talents the Company launched the second
phase of equity incentive.
1. In 2018 the Company launched the 2018 restricted stock incentive plan and stock appreciation right incentive
plan granting 10.33 million restricted shares to 753 incentive objects and 355000 stock appreciation rights to 22
incentive objects. The grant date of this equity incentive plan is September 18 2018. The grant price of restricted
shares and stock appreciation rights is RMB 8.37 per share and the listing date is November 6 2018.
(1) On October 24 2019 the Company held the 5th interim meeting of the sixth board of directors and the 5th
interim meeting of the sixth board of supervisors respectively in which Resolution on adjusting the
repurchase price and repurchase quantity of restricted stock incentive plan in 2018 Resolution on the
achievement of exercise conditions adjustment of exercise price quantity and cancellation of some stock
appreciation rights in the first exercise period of 2018 stock appreciation rights incentive plan Resolution on
repurchase and cancellation of some restricted stocks Resolution on the achievement of the unlocking
conditions of first restriction period of 2018 restricted stock incentive plan were approved.The unlocking date of the restricted shares is November 6 2019 and the number of incentive objects
qualified for unlocking is 720. A total of 3.9195 million shares have been released accounting for 0.1417% of
the Company's current total share capital. There were 19 incentive objects meeting the conditions for the
exercise of the stock appreciation right and the number of exercisable shares is 95550.
(2) On November 11 2019 the first extraordinary general meeting of shareholders of 2019 was held in which
the Resolution on repurchase and cancellation of some restricted stocks was approved. The Company
repurchased and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2018
restricted stock incentive plan totaling of 0.2912 million shares.
(3) On October 20 2020 the Company held the 13th interim meeting of the sixth board of directors and the 12th
interim meeting of the sixth board of supervisors respectively in which Resolution on adjusting the
repurchase price and repurchase quantity of restricted stock incentive plan in 2018 Resolution on the
achievement of exercise conditions adjustment of exercise price quantity and cancellation of some stock
appreciation rights in the second exercise period of 2018 stock appreciation rights incentive plan Resolution
on repurchase and cancellation of some restricted stocks Resolution on the achievement of the unlocking
conditions of second restriction period of 2018 restricted stock incentive plan were approved.The unlocking date of the restricted shares is November 6 2020 and the number of incentive objects
qualified for unlocking is 702. A total of 4.9889 million shares have been released accounting for 0.1389% of
the Company's current total share capital. There were 18 incentive objects meeting the conditions for the
exercise of the stock appreciation right and the number of exercisable shares is 131820.
(4) On November 5 2020 the fourth extraordinary general meeting of shareholders of 2020 was held in which
Resolution of repurchase and cancellation of some restricted stocks was approved. The Company repurchased
and cancelled all or part of the restricted stocks held by unqualified incentive objects in the 2018 restricted
stock incentive plan totaling of 0.3363 million shares.
2. In 2020 the Company launched the 2020 restricted stock incentive plan granting 12.04 million restricted
shares to 914 incentive objects. The grant date of this equity incentive plan is February 24 2020. The grant price
of restricted shares is RMB 9.85 per share and the listing date is March 20 2020.On November 5 2020 the fourth extraordinary general meeting of shareholders of 2020 was held in which the
Resolution on repurchase and cancellation of some restricted stocks was approved. The Company repurchased
and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2020 restricted stock
incentive plan totaling of 0.1040 million shares.XVI. Significant Related-party Transaction
1. Related-party transactions arising from routine operation
□Applicable √Not applicable
No such case in the reporting period.
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Not applicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Not applicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √Not applicable
No such case in the reporting period.
5. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.XVII. Significant Contracts and Their Execution
1. Matters on trusteeship contracting and leasing
（1）Trusteeship
□ Applicable √ Not applicable
No such case in the reporting period.
（2）Contracting
□ Applicable √ Not applicable
No such case in the reporting period.
（3）Leasing
√Applicable □ Not applicable
Illustration of lease
Aweco Polskas Appliance sp.z.o.o sp.k a wholly-owned subsidiary of the Company acquired 2 buildings through
leasing.Items with profit and loss exceeding 10% of the total profit of the Company in the report period
□ Applicable √ Not applicable
During the reporting period there is no leasing project with profit and loss of more than 10% of the total profit of
the Company during the reporting period.
2. Significant guarantees
√Applicable □ Not applicable
(1) Guarantees
Unit: RMB in 10 thousand
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Guaranteed Party
Announc
ement
Guarante
e
Actual
Occurrence
Actual
Guarantee
Type of
Guarantee
Term of
Guarantee
Due or
Not
Guaran
tee for
Date of
Disclosur
e of the
Guarante
e Amount
Amount Date Amount Related
Parties
or Not
Company's Guarantees to Subsidiaries
Guaranteed Party
Announc
ement
Date of
Disclosur
e of the
Guarante
e Amount
Guarante
e Amount
Actual
Occurrence
Date
Actual
Guarantee
Amount
Type of
Guarantee
Term of
Guarantee
Due or
Not
Guaran
tee for
Related
Parties
or Not
Sanhua AWECO
Appliance Systems
GmbH
April 16
2018
35000
November 5
2018
18457.5
Joint
liability
guarantee
2018.11.05
-2021.11.0
4
Y Y
Sanhua AWECO
Appliance Systems
GmbH
April 3
2019
41000 April 8 2020 12840
Joint
liability
guarantee
2020.04.08
-2021.11.0
4
Y Y
Sanhua AWECO
Appliance Systems
GmbH
April 29
2020
52000 June 5 2020 8827.5
Joint
liability
guarantee
2020.06.05
-2021.11.0
4
Y Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 16
2018
132000
September 17
2018
13241.25
Joint
liability
guarantee
2018.09.17
-2022.09.1
6
Y Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 3
2019
132000 July 29 2019 8482.37
Joint
liability
guarantee
2019.07.29
-2020.01.3
0
Y Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 3
2019
132000
September 23
2019
6524.9
Joint
liability
guarantee
2019.09.23
-2020.09.2
3
Y Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 3
2019
132000 July 5 2019 12037.5
Joint
liability
guarantee
2019.07.05
-2022.06.2
0
N Y
SANHUA
INTERNATIONAL
INC.
April 3
2019
30000
December 9
2019
20227.19
Joint
liability
guarantee
2019.12.09
-2022.12.0
9
N Y
SANHUA
INTERNATIONAL
INC.
April 16
2018
30000
January 18
2019
9787.35
Joint
liability
guarantee
2019.01.18
-2020.01.2
1
Y Y
SANHUA
INTERNATIONAL
INC.
April 3
2019
30000
January 21
2020
9787.35
Joint
liability
guarantee
2020.01.21
-2020.07.0
9
Y Y
SANHUA
INTERNATIONAL
INC.
April 29
2020
50000 June 24 2020 9787.35
Joint
liability
guarantee
2020.06.24
-2021.06.2
3
N Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 29
2020
150000
September 14
2020
8025
Joint
liability
guarantee
2020.09.14
-2021.09.1
3
N Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 29
2020
150000
November 2
2020
8025
Joint
liability
guarantee
2020.11.02
-2021.11.0
1
N Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 29
2020
150000 June 12 2020 7500
Joint
liability
guarantee
2020.06.12
-2022.12.2
5
N Y
SANHUA
INTERNATIONAL
SINGAPORE PTE.
LTD.
April 3
2019
132000
February 10
2020
10432.5
Joint
liability
guarantee
2020.02.10
-2021.02.0
9
N Y
Total Amount of Guarantees to
Subsidiaries Approved during the
Reporting Period (B1)
310000
Total Amount of
Guarantees to
Subsidiaries Actually
Occurred during the
Reporting Period (B2)
75224.7
Total Amount of Guarantees to
Subsidiaries Approved by the
End of the Reporting Period (B3)
352697.19
Total Balance of
Guarantees Actually Paid
to Subsidiaries at the End
of the Reporting Period
(B4)
76034.54
Subsidiaries' Guarantees to Subsidiaries
Guaranteed Party
Announc
ement
Date of
Disclosur
e of the
Guarante
e
Amount
Actual
Occurrence
Date
Actual
Guarantee
Amount
Type of
Guarantee
Term of
Guarantee
Due or
Not
Guaran
tee for
Related
Parties
or Not
Guarante
e
Amount
The total amount of the Company's guarantees (the total of the above three items)
Total Amount of Guarantees
Approved during the Reporting
Period (A1+B1+C1)
310000
Total Amount of
Guarantees Actually
Occurred during the
Reporting Period
(A2+B2+C2)
75224.7
Total Amount of Guarantees
Approved by the End of the
Reporting Period (A3+B3+C3)
352697.19
Total Balance of
Guarantees Actually Paid
at the End of the
Reporting Period
(A4+B4+C4)
76034.54
Total Amount of Actual Guarantees (A4+B4+C4) as a
Percentage of the Company's Net Assets
7.55%
Of which：
Balance of Debt Guarantees Directly or Indirectly Offered to
Guaranteed Objects with Asset-liability Ratio Exceeding 70%
(E)
30014.54
Total Amount of the Above Three Guarantees (D+E+F) 30014.54
(2) Illegal external guarantees
□ Applicable √ Not applicable
No illegal external guarantees during the reporting period.
3. Entrusted wealth management
(1) Entrusted finances
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Specific types Capital source Amount
Balance before
maturity
Overdue uncollected
amount
Bank financial
products
The Company’s owned
funds and raised funds
163871.5 75048.5 0
Total 163871.5 75048.5 0
Specific situation of high-risk entrusted financial management with large single amount or low security poor
liquidity and without guarantee of principal
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Name of
trustee
Type
of
trustee
Product
type
Amoun
t
Capital
source
Start
date
Termina
tion
date
Capital
investm
ent
Determi
nation
of
return
Referen
ce
annualiz
ed rate
of
return
Expecte
d return
(if any)
Actual
profit
and loss
in the
reportin
g period
Actual
recover
y of
profit
and loss
in the
reportin
g period
Amount
of
provisio
n for
impair
ment (if
any)
Throug
h legal
procedu
res or
not
Future
entruste
d
financia
l
manage
ment
plan or
not
Event
overvie
w and
relevant
index
(if any)
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Cash
deposit
(Company
)
19500
Self-fun
ds
Decemb
er 31
2019
January
15
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.24% 25.99 25.99 Yes -
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Cash
deposit
(Company
)
10000
Self-fun
ds
January
15
2020
January
21
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.39% 5.56 5.56 Yes -
Bank of
Hangzhou
Bank
"Tianlibao
"
10000
Self-fun
ds
January
21
April
21
Bank
financia
Floating
income
4.00% 94.08 94.08 Yes -
Xinchang
sub
branch
structured
deposit
products
2020 2020 l
product
s
with
guarant
ee of
principa
l
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Cash
deposit
(Company
)
5000
Self-fun
ds
March
6 2020
March
16
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.09% 5.50 5.50 Yes -
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Structured
deposits
176 days
7000
Self-fun
ds
March
31
2020
Septem
ber 23
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.75% 119.41 119.41 Yes -
Bank of
Hangzhou
Xinchang
sub
branch
Bank
"Tianlibao
"
structured
deposit
products
20000
Self-fun
ds
March
26
2020
May 26
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.80% 119.82 119.82 Yes -
ABC Bank Huilifeng 10000 Self-fun April Decemb Bank Floating 3.70% 239.08 239.08 Yes -
Xinchang
sub
branch
issue
4840 of
2020
customize
d RMB
structured
deposit
products
(250
days)
ds 22
2020
er 28
2020
financia
l
product
s
income
with
guarant
ee of
principa
l
Bank of
China
Xinchang
sub
branch
Bank
Linked
structured
deposits
10000
Self-fun
ds
April
27
2020
May 29
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.60% 29.78 29.78 Yes -
Bank of
China
Xinchang
sub
branch
Bank
Linked
structured
deposits
10000
Self-fun
ds
April
27
2020
May 29
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.60% 29.78 29.78 Yes -
ABC
Xinchang
sub
branch
Bank
Huilifeng
no.4917
customize
d RMB
structured
10000
Self-fun
ds
April
29
2020
Decemb
er 28
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
3.70% 232.39 232.39 Yes -
deposit
products
in 2020
(243
days)
principa
l
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Cash
deposit
(Company
)
6000
Self-fun
ds
May 26
2020
June 15
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.16% 10.37 10.37 Yes
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
97 days of
Bank of
Communi
cations
Yuntong
wealth
fixed term
structured
deposit
10000
Self-fun
ds
June 4
2020
Septem
ber 10
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.27% 81.98 81.98 Yes -
ABC
Xinchang
sub
branch
Bank
Huilifeng
no.5371
customize
d RMB
structured
deposit
products
10000
Self-fun
ds
June 4
2020
Decemb
er 18
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.40% 172.24 172.24 Yes -
in 2020
(196
days)
Shaoxing
Xinchang
sub
branch of
Bank of
Communi
cations
Co. Ltd
Bank
Daily
profit of
long-term
pension
6000
Self-fun
ds
August
27
2020
Septem
ber 15
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
2.75% 8.59 8.59 Yes
Xinchang
sub
branch of
Industrial
and
Commerci
al Bank of
China
Bank
Corporate
"Tianlibao
" net
value
financial
products
20000
Self-fun
ds
Decemb
er 30
2020
January
4 2021
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.28% Yes
Xinchang
sub
branch of
Industrial
and
Commerci
al Bank of
China
Bank
"E-Lingto
ng" net
value
corporate
non fixed
term
RMB
financial
products
5000
Self-fun
ds
Decemb
er 30
2020
January
4 2021
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.03% Yes
Guangfa Bank Xinjiaxin 5500 Raised October January Bank Floating 3.95% 43.24 43.24 Yes -
Bank
Hangzhou
Xiaoshan
sub
branch
No.16
structured
deposit
funds 28
2019
13
2020
financia
l
product
s
income
with
guarant
ee of
principa
l
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
5500
Raised
funds
July 30
2019
July 29
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
4.05% 210.14 210.14 Yes -
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
10000
Raised
funds
April
29
2019
April
27
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
4.10% 385.73 385.73 Yes -
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
(Shaoxing
)
Bank
Xinjiaxin
No.16
structured
deposit
5500
Raised
funds
January
14
2020
July 13
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.95% 101.07 101.07 Yes -
Hangzhou Bank Structural 5000 Raised Septem October Bank Floating 3.05% 15.12 15.12 Yes
Xiaoshan
sub
branch of
Guangfa
bank
deposit of
"Wuhua
Tianbao"
W
customize
d personal
currency
funds ber 4
2020
13
2020
financia
l
product
s
income
with
guarant
ee of
principa
l
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
5000
Raised
funds
July 29
2020
Septem
ber 3
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.25% 14.25 14.25 Yes
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
5500
Self-fun
ds
January
3 2020
April
20
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.90% 59.88 59.88 Yes
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
8000
Raised
funds
July 30
2019
July 29
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
4.05% 305.66 305.66 Yes -
Hangzhou Bank Xinjiaxin 7000 Raised April April Bank Floating 4.10% 270.01 270.01 Yes -
Xiaoshan
sub
branch of
Guangfa
bank
No.16 funds 29
2019
27
2020
financia
l
product
s
income
with
guarant
ee of
principa
l
Heng
Seng
Bank
Hangzhou
Branch
Bank
Hengliyin
g
6000
Self-fun
ds
April 4
2019
January
6 2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
4.10% 176.64 176.64 Yes -
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
structured
deposit
5000
Self-fun
ds
April
30
2019
Februar
y 24
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
4.10% 158.96 158.96 Yes -
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
7500
Self-fun
ds
October
25
2019
October
26
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.95% 281.01 281.01 Yes -
ICBC
economic
Bank Tianlibao 5000
Self-fun
ds
January
3 2020
January
22
Bank
financia
Floating
income
3.30% 6.12 6.12 Yes -
developm
ent sub
branch
2020 l
product
s
with
guarant
ee of
principa
l
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 5000
Self-fun
ds
Februar
y 24
2020
Februar
y 26
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.30% 0.85 0.85 Yes -
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 5000
Self-fun
ds
March
26
2020
March
27
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.10% 0.25 0.25 Yes -
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
5500
Self-fun
ds
April
21
2020
October
21
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.90% 102.01 102.01 Yes -
Hangzhou
Xiaoshan
sub
Bank
Xinjiaxin
No.16
7000
Raised
funds
April
27
2020
June 2
2020
Bank
financia
l
Floating
income
without
3.55% 23.43 23.43 Yes -
branch of
Guangfa
bank
product
s
guarant
ee of
principa
l
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Structural
deposit of
"Wuhua
Tianbao"
W
customize
d personal
currency
5000
Raised
funds
Septem
ber 4
2020
October
13
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.05% 15.12 15.12 Yes
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 6000
Self-fun
ds
June 9
2020
June 10
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.00% 0.39 0.39 Yes -
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 8000
Self-fun
ds
June 10
2020
June 24
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
3.00% 8.42 8.42 Yes -
ICBC
economic
developm
Bank Tianlibao 5000
Self-fun
ds
July 30
2020
August
5 2020
Bank
financia
l
Floating
income
with
2.70% 1.85 1.85 Yes
ent sub
branch
product
s
guarant
ee of
principa
l
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 6000
Self-fun
ds
October
23
2020
Decemb
er 3
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
2.58% 17.39 17.39 Yes
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 6000
Self-fun
ds
October
26
2020
October
29
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
2.59% 1.28 1.28 Yes
Hangzhou
Xiaoshan
sub
branch of
Guangfa
bank
Bank
Xinjiaxin
No.16
9500
Self-fun
ds
October
22
2020
January
22
2021
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.30% Yes
Heng
Seng
Bank
Hangzhou
Bank
Henghuiyi
ng
5000
Self-fun
ds
October
23
2020
January
22
2021
Bank
financia
l
product
Floating
income
with
guarant
3.35% Yes
Branch s ee of
principa
l
ICBC
economic
developm
ent sub
branch
Bank Tianlibao 5000
Self-fun
ds
July 31
2020
August
25
2020
Bank
financia
l
product
s
Floating
income
without
guarant
ee of
principa
l
2.80% 9.58 9.58 Yes
China
CITIC
Bank
Fengqi
sub
branch
Bank
Win win
interest
rate
structure
31784
RMB
structured
deposit
products
5000
Raised
funds
January
15
2020
January
31
2020
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
2.60% 5.38 5.38 Yes -
China
CITIC
Bank
Fengqi
sub
branch
Bank
Structured
deposit
5000
Self-fun
ds
Decemb
er 31
2020
Februar
y 1
2021
Bank
financia
l
product
s
Floating
income
with
guarant
ee of
principa
l
3.55% Yes
Total
34200
0[1]
-- -- -- -- -- -- 0
3413.5
8
-- -- -- --
Note: [1] During the reporting period the accumulated financial management amount of the Company is RMB
6.33 billion and the above information are the details of the Company's single significant financial management
(single amount which is more than RMB 50 million).
Entrusted financial management is expected to be unable to recover the principal or there are other situations that
may lead to impairment
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
No such case in the reporting period.
4. Significant contracts in operation
□ Applicable √ Not applicable
No such case in the reporting period.
5. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.XVIII. Social Responsibility
1. Fulfillment of social responsibilities
During the reporting period the Company actively fulfilled its social responsibilities. The Company takes
"People-oriented Continuous innovation Employee satisfaction Customer satisfaction Supplier satisfaction
Shareholder satisfaction and Social satisfaction" as its core values. While continuously creating value for
shareholders it also actively undertakes the responsibility to employees customers society and other stakeholders.The Company fully respects and protects the legitimate rights and interests of relevant stakeholders adheres to
paying equal attention to economic benefits social benefits and environmental benefits and realizes the
sustainable development of society and the Company.
(1) Maintain the continuous and stable growth of revenue care about the return of shareholders
Since listing the Company has established a corporate governance organization composed of the general meeting
of shareholders the board of directors and the board of supervisors and formed a complete internal control
system in strict accordance with the requirements of the Company Law the Listing Rules of Shenzhen Stock
Exchange and the Articles of Association. During the reporting period the Company continuously improved the
governance structure and internal control system to raise the standard operation level and fully protected the
legitimate rights and interests of all shareholders. The general meeting of shareholders the board of directors and
the board of supervisors exercise their functions and powers within the scope of relevant laws and regulations.The convening proposal notice and resolution procedures of previous meetings are in line with laws and
regulations. There is no case of ultra vires approval or implementation before approval so as to ensure that the
rights of all shareholders are not infringed especially minor shareholders.Information disclosure the Company has been strictly in compliance with the relevant provisions of CSRC and
Shenzhen Stock Exchange and has fulfilled the obligation of truthfulness accuracy timeliness and completeness.The Company has been awarded A for 10 consecutive years which is not common among listed companies. The
Company enhances the interaction with investors by means of investor hotline interactive platform and reception
of investors so that investors can have a more in-depth understanding of the Company's development production
and operation. It promotes the Company to establish a long-term and stable relationship with investors and
safeguard the legitimate rights and interests of minor investors effectively. At the same time the Company pays
special attention to the management of insider information and actively prevents the occurrence of insider trading.
During the reporting period the Company does not have insider trading or damage the interests of shareholders.
The Company attaches great importance to the return to shareholders. According to the relevant provisions of
China Securities Regulatory Commission on cash dividends and sustainable development the Company has
formulated and strictly implemented the continuous dividend return plan for shareholders since listing and
insisted on sharing the Company's operation achievements with shareholders.
(2) Safeguard the legitimate rights and interests of employees and improve their comprehensive ability
The Company always adheres to the people-oriented core values takes improving the working environment of
employees realizing their self-worth improving their quality of life and promoting their career growth which is
also treated as the important part of the Company's development strategy. It regards employees as the Company's
primary resources earnestly protects their rights and interests and strives to realize the common development of
employees and the enterprise so as to enhance the cohesion of the enterprise.
Abiding by the Labor Law Labor Contract Law Law on the Protection of Women's Rights and Interests and other
relevant laws and regulations the Company establishes a series of labor management systems signs labor
contracts with employees according to law pays employees' wages in full timely and pays various social
insurance for employees. The Company has a sound vacation system. Employees not only enjoy national statutory
holidays according to law but also enjoy gifts issued by the Company on various important public festivals such
as Spring Festival Mid-Autumn Festival International Women's Day etc.The Company has established a reasonable human resource management system and a scientific performance
appraisal system. In order to implement the principle of equality between men and women the Company links the
performance appraisal of management cadres at all levels with the Company's business objectives. In order to
motivate the employees stimulate their sense of responsibility and mission managements’ KPI aligned with the
Company’s operation target and related income evaluation system was implemented. In addition the Company
has established a perfect staff training system designed training courses for each employee and encouraged
employees to study in their spare time to improve their own quality and comprehensive ability.
At the same time the Company has always attached importance to and adhered to the construction of enterprise
culture creating a healthy positive and cooperative working atmosphere. The Company actively cares for the life
of employees sends greetings to employees who have encounter sudden disasters. And it establishes the
"Sanhua--One family" fund to help employees in difficulties and increase their sense of belonging to the
enterprise. The Company also carries out sports job skills competitions festival parties and other recreational
activities to show the good spirit of employees and it builds a communication platform for employees which
effectively stimulate the sense of collective honor and team cohesion.
(3) Safeguard the rights and interests of suppliers and treat customers with integrity
In line with the principle of "Communication with integrity and sharing value" the Company pays attention to the
relationship with suppliers and customers constantly strengthens the communication and cooperation with all
parties and earnestly protects their legitimate rights and interests.
For suppliers the Company always adheres to the business values of “Honesty Fairness Mutual Benefit and
Collaborative Development” strictly complies with contracts signed with suppliers establishes and strictly
implements the procurement standards and evaluation system carries out stable and effective management of
procurement so as to effectively protect the legitimate rights and interests of suppliers. The Company continues to
strengthen the internal control and audit supervision of the supply chain resolutely eradicate black box operation
commercial bribery and improper transactions strive to provide a good competitive environment for suppliers
and promote the long-term and stable cooperation between the Company and suppliers.
For customers the Company always maintains the concept of "Customer first grow together with customers"
attaches great importance to customer relationship management takes customers’ satisfaction as the standard to
measure the Company's operation and is committed to providing customers with high-quality products and
services. Over the years the Company has established a good corporate image and gained a good reputation from
all walks of life.
(4) Energy saving innovative production and environmental protection
The Company takes the vision of "Developing energy saving and low-carbon economy creating a quality and
green environment" while pursuing economic benefits. It pays attention to environmental protection and energy
conservation and consumption reduction takes the construction of resource saving and environment-friendly
enterprises as an important part of sustainable development strategy actively promotes the strategic
transformation from "Cost leading" to "Technology leading" and continuously develops independent intellectual
property rights new products and new technologies such as energy saving environmental protection material
saving consumption reduction. At the same time the Company has successfully developed the inverter controller
and other system solutions which will further improve the energy conservation and environmental protection of
air conditioning system.The Company emphasizes safety production and environmental protection and adheres to the principle of
"Prevention first combination of prevention and control". While realizing its own development it actively
shoulders the social responsibility of environmental protection and strives to promote the sustainable
development of society and environment. The Company strictly abides by related national laws and regulations.On the one hand the Company has established strict rules in effectively guiding the safety and environmental
protection of each subsidiary company; on the other hand the Company continuously optimizes the production
process continuously carries out the overhaul and technical transformation of environmental protection facilities
actively deepens the three wastes treatment and clean production level. In addition the Company has prepared an
effective comprehensive emergency plan for environmental risks and various specific emergency. Equipped with a
sound emergency management team and various emergency facilities equipment and materials regular
emergency training and drills are carried out so as to minimize the occurrence of environmental pollution safety
accidents.
(5) Shoulder social responsibility and participate in social charity
The Company takes "Public welfare society building a harmonious society" as an important responsibility. With
its continuous development it has also made positive contributions to the infrastructure construction
environmental protection poverty alleviation and community construction of Shaoxing. During the reporting
period the Company actively undertakes its due responsibilities and obligations and strives to create a good
corporate image.
2. Fulfillment of the social responsibility of targeted poverty alleviation
Not applicable
3. Environmental protection
Whether the Company or the Company’s subsidiaries are critical pollutant enterprises disclosed by National
Environmental Protection Department
Yes
Name of
Company or
subsidiary
Name of
main
pollutants
and
characteristi
c pollutants
Emission
mode
Number of
outlets
Distribution
of emission
outlets
Emission
concentratio
n
Emission
standards
Total
emissions
Approved
total
emission
Over
standard
emission
Zhejiang
Sanhua
Intelligent
Controls
Co. Ltd
COD Nanotube 1 North ≦500mg/L
The
limitation of
COD in
GB8978-19
96
Integrated
Wastewater
Emission
Standard is
500mg / L
32.81 T
61.867 T
/year
Not
exceeding
the standard
Zhejiang
Sanhua
Intelligent
Controls
Co. Ltd
Ammonia
Nitrogen
Nanotube 1 North ≦35mg/L
The
limitation
listed in
DB33/887-2
013 Indirect
Emission
Limits of
Nitrogen
and
Phosphorus
3.281 T
6.186 T
/year
Not
exceeding
the standard
Pollutants
from
Industrial
Wastewater
is 35mg / L
Zhejiang
Sanhua
Intelligent
Controls
Co. Ltd
SO2
Direct
emission
1 North ≦50mg/m3
The
limitation
listed in
GB13271-2
014
Emission
Standard of
Air
Pollutants
for Boilers
is 50mg/m3
0.99 T 2.15 T /year
Not
exceeding
the standard
Zhejiang
Sanhua
Intelligent
Controls
Co. Ltd
Nitrogen
Oxide
Direct
emission
1 North ≦50mg/m3
According
to the low
Nitrogen
emission
requirement
s of local
government
the limit
value of
gas-fired
boiler is
50mg / m3
4.64 T
10.06 T
/year
Not
exceeding
the standard
Zhejiang
Sanhua
Refrigeratio
n Group
Co. Ltd
COD Nanotube 1 South ≦500mg/l
The
limitation
from
GB8979-19
96 is 500mg
/ L
2.864 T
9.205 T
/year
Not
exceeding
the standard
Zhejiang
Sanhua
Refrigeratio
n Group
Co. Ltd
Total
Copper
Nanotube 1 South ≦2.0mg/l
The
limitation
from
GB8979-19
96 is
2.0mg/l
0.047 T /
Not
exceeding
the standard
Construction and operation of pollution control facilities
Adhering to the advanced management concept the Company takes "developing energy-saving and low-carbon
economy creating a green quality environment" as its own responsibility constantly surpasses and becomes an
important creator and contributor of human green quality living environment with limited resources and unlimited
wisdom.
1. In terms of waste water treatment the Company responded to the construction of "five water treatment"
"eliminating inferior V-type water" and "zero direct discharge of sewage" in the whole province. The
Company renovated the rainwater and sewage outlets in the factory area implemented the separation of
rainwater and sewage and installed cut-off valves and video monitoring equipment at the Company's
rainwater discharge outlets and collected and treated the early rainwater. There are two wastewater treatment
stations in the factory. The sewage treatment stations have been equipped with standardized sewage outlets
and set up discharge outlet signs. Online monitoring device solenoid valve flowmeter and card swiping
sewage system are installed at the discharge outlet which has been connected with the environmental
protection department. The monitoring indicators include pH COD total copper total zinc and flow.Wastewater treatment: The Company has entrusted a third-party professional treatment unit for treatment. The
discharge indicators of the Company's internal control wastewater are stricter than the environmental
discharge standard. The final treated wastewater is discharged into the sewage collection pipe network of the
industrial zone and sent to Shengxin sewage treatment plant for retreatment.
2. Waste gas treatment: The Company has acid pickling electroplating waste gas welding dust ultrasonic
cleaning and other waste gas. All kinds of waste gas discharge cylinders are equipped with corresponding
waste gas treatment devices. The acid pickling and electroplating waste gas absorption and treatment tower is
installed with automatic dosing system and the waste gas is discharged to air after treatment. At the same
time in order to win the blue-sky defense activity the Company carried out low Nitrogen emission
transformation of the Company's gas boilers in accordance with the requirements of relevant official
departments in 2019.
3. Solid waste and soil treatment: all kinds of hazardous waste of the Company are entrusted to the third
qualified party for disposal the general solid waste with utilization value is recycled the domestic waste is
cleared and transported by the environmental sanitation station and the construction waste is cleaned and
transported by the construction unit. The Company also tests the soil and groundwater every year and
publishes them on the corresponding website In March 2020 Sanhua Refrigeration Group carried out a
special site investigation on soil and groundwater in Xialiquan plant area and prepared an investigation report.No pollution was found. In July 2020 the Company became one of the first "waste free factories" in Shaoxing
City.
4. Noise control: The Company's existing main noise is workshop production noise air compressor room waste
gas and waste water treatment equipment noise. Equipment layout is reasonable and trees are planted around
the workshop. Noise at factory meets the standard.
5. The "three wastes" pollution control facilities of the Company are in normal and stable operation the
pollutants are discharged based on the standard and there is no environmental pollution event.
Environmental Impact Assessment (EIA) of construction projects and other administrative permits for
environmental protection
1. Since 2010 the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang
County and has obtained 23 EIA replies. All the projects have passed. In August 2020 the Company obtained the
national emission permit.
2. Zhejiang Sanhua Refrigeration Group Co. Ltd. has invested in Xialiquan of Xinchang County since 2013 and
has obtained 6 EIA replies. All the projects have passed.
Emergency Response Plan
1. The Company re-prepared the Emergency Response Plan in November 2017 and filed with Xinchang
Environmental Protection Bureau on January 25 2018 (Record No. 3306242018001).
2. In order to manage environmental emergencies and reduce the environmental hazards caused by sudden
environmental pollution accidents Zhejiang Sanhua Refrigeration Group Co. Ltd. re-compiled Emergency
Response Plan for Environmental Pollution Accidents of Zhejiang Sanhua Refrigeration Group Co. Ltd.(simplified version) in October 2018 which was filed with Xinchang County Environmental Protection Bureau on
October 29 2018 (Record No. 3306242018013).
Environmental self-monitoring program
The Company formulated Self-monitoring Scheme of Zhejiang Sanhua Intelligent Control Co. Ltd. according to
the requirements of the superior environmental protection department combined with the actual production
situation and the actual needs of environmental management of the Company. The sewage station of the Company
is equipped with a laboratory and the detection is conducted by a specially assigned person. On line automatic
monitoring equipment such as pH COD TOC total copper total zinc flow rate etc. are installed at the
Company's total wastewater discharge outlet so as to achieve the combination of automatic monitoring and
manual testing. For the pollution factors such as suspended matters total Phosphorus Ammonia Nitrogen total
Iron and Petroleum the Company entrusts a third-party testing agency to carry out regular monitoring. The
monitoring results are published regularly on the enterprise self-monitoring information disclosure platform of
Zhejiang Province.Zhejiang Sanhua Refrigeration Group Co. Ltd. has good pollutant emission monitoring and management ability
and can timely inform the environmental protection administrative department and the public of the monitoring
information. According to the actual production situation and the actual needs of environmental management the
environmental protection laboratory of wastewater treatment station is set up and the detection is carried out by
specially assigned person daily. On line automatic monitoring equipment such as pH COD TOC total copper and
flow rate are installed at the total wastewater discharge outlet of the Company. The combination of automatic
monitoring and manual testing effectively ensures the timeliness and effectiveness of monitoring. At the same
time a third-party testing Company is entrusted to carry out regular monitoring. The monitoring results are
published regularly on the enterprise self-monitoring information disclosure platform of Zhejiang Province.Other environmental information that should be disclosed
Not applicable
Other environmental information
Not applicable
XIX. Other Significant Events
√ Applicable □ Not applicable
During the 13th meeting of the 6th board of directors and the 4th interim general meeting of shareholders in 2020
the Company approved Proposal on the Plan of Publicly Issuing Convertible Corporate Bonds Proposal on
Feasibility Analysis Report on the Use of Raised Funds of Convertible Corporate Bonds. The total amount of
convertible bonds planned to be issued shall not exceed RMB 3 billion with a term of 6 years which will be used
for the Company's subsequent operation. For more details please refer announcements disclosed on CNINFO
(http://www.cninfo.com.cn) October 21 2020. The Company's application for public issuance of convertible
corporate bonds has been deliberated and approved by China Securities Regulatory Commission. The board of
directors will handle the relevant matters of the public issuance of convertible corporate bonds within the
specified period and fulfill the obligation of information disclosure in a timely manner in accordance with the
requirements of relevant laws and regulations the approval documents of China Securities Regulatory
Commission and the authorization of the general meeting of shareholders of the Company.
XX. Significant Events of the Company’s Subsidiaries
□ Applicable √ Not applicable
Section VI Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
Before the change Changes in the period (+ -) After the change
Shares Ratio
New
Shares
Issued
Bonus
share
Share
transferred
from
capital
reserve
Others Sub-total Shares Ratio
1. Shares subject to
conditional restriction(s)
3469767
85
12.55%
1076191
76
-3832740
79
-2756549
03
7132188
2
1.99%
3) Other domestic shares
3469312
85
12.55%
1075140
26
-3835537
29
-2760397
03
7089158
2
1.98%
Of which: Shares held by
domestic legal person
2998927
03
10.84%
8996781
1
-3898605
14
-2998927
03
0 0.00%
Shares held by domestic
natural person
4699308
2
1.70%
1754621
5
6306785
2385300
0
7089158
2
1.98%
4)Foreign shares 45500 0.00% 105150 279650 384800 430300 0.01%
Shares held by foreign
natural person
45500 0.00% 105150 279650 384800 430300 0.01%
2. Shares without
restriction
2418681
113
87.45%
7190559
04
3825425
69
1101598
473
3520279
586
98.01%
1) RMB ordinary shares
2418681
113
87.45%
7190559
04
3825425
69
1101598
473
3520279
586
98.01%
3. Total
2765657
898
100.00%
8266750
80
-731510
8259435
70
3591601
468
100.00%
Reason for the changes in share capital
√ Applicable □ Not applicable
1. At the beginning of each year the number of locked shares of the executives is re-calculated according to 75% of
the total number of shares held by the executives.
2. The Company repurchased and cancelled 291200 restricted shares held by unqualified incentive objects but not
yet unlocked. After this the total share capital of the Company will be reduced from 2765657898 shares to
2765366698 shares.
3. The Company granted 12.045 million restricted shares to 914 incentive objects under the Company's restricted
stock incentive plan in 2020 and those shares came from the Company's repurchase account.
4. During reporting period the Company implemented the profit distribution plan for the year of 2019: The plan of
converting capital reserve into share capital took 2755583602 shares of capital stock as the base and distributed 3
shares for every 10 shares of all shareholders with a total of 826675080 shares. After the conversion the total
share capital was increased from 2765366698 to 3592041778 shares.
5. On September 21 2020 the Company's non-public offering of shares were unlocked and released 389860514
restricted shares.
6. On November 6 2020 the second phase of the restricted stock incentive plan in 2018 matured and 4.9888
million restricted shares of 702 incentive objects meeting the conditions were released.
7. The total number of restricted shares held by the unqualified incentive objects but not yet unlocked is 440310
shares. After the repurchase and cancellation the total share capital will be reduced from 3592041778 shares to
3591601468 shares.
Approval for changes in share capital
√ Applicable □ Not applicable
1. On November 11th 2019 the first interim general meeting of shareholders was held in which the proposal on
repurchases and cancellation of partial restricted shares was approved. The Company conducted repurchase and
cancellation of 291200 restricted shares held by the incentive objects that are not qualified and not yet unlocked.
2. The incentive plan of restricted stock in 2020 plans to grant 12.045 million restricted shares to 914 incentive
objects with the grant price of 9.85 yuan per share and the grant date is February 24 2020.
(1) On January 21 2020 the 7th interim meeting of the sixth board of directors and the 7th interim meeting of the
sixth board of supervisors of the Company approved the "Resolution on the 2020 restricted stock incentive plan of
Zhejiang Sanhua Intelligent Controls Co. Ltd. (Draft) and its abstract "and the" Resolution on the implementation
assessment management of the 2020 restricted stock incentive plan of Zhejiang Sanhua Intelligent Controls Co. Ltd
"and" Resolution on requesting the general meeting of shareholders to authorize the board of directors to handle
matters related to the 2020 restricted stock incentive plan ". The independent directors expressed clear independent
opinions on the relevant issues of the incentive plan. The board of supervisors checked the list of the incentive
objects of the incentive plan and expressed its opinions.
(2) On February 4th 2020 the Company announced Publicity and verification opinions on the list of incentive
objects granted in the 2020 restricted stock incentive plan of the board of supervisors.
(3) On February 10 2020 the Company held the first extraordinary general meeting of shareholders in 2020
approved the "Resolution on the incentive plan for restricted shares of Zhejiang Sanhua Intelligent Controls Co.Ltd. in 2020 (Draft) and its abstract " " Resolution on implementation of assessment of the 2020 restricted stock
incentive plan of Zhejiang Sanhua Intelligent Controls Co. Ltd " " Resolution on requesting the general meeting
of shareholders to authorize the board of directors to handle matters related to the 2020 restricted stock incentive
plan "
(4) On February 24 2020 the eighth interim meeting of the sixth board of directors and the eighth interim
meeting of the sixth board of supervisors deliberated and passed the "Resolution on adjusting matters related to
the 2020 restricted stock incentive plan" and "Resolution on granting restricted stocks to the incentive objects of
the 2020 restricted stock incentive plan". The independent directors expressed their independent opinions on the
above adjustment and grant items; the board of supervisors checked the relevant adjustment items and the list of
incentive objects granted with restricted shares.
3. The 2019 annual general meeting of shareholders held on May 19 2020 deliberated and approved the
Company's profit distribution plan for 2019. It took 2755583602 shares as the base and distributed 3 shares for
every 10 shares to all shareholders with a total of 826675080 shares. After the conversion the total share capital
was increased from 2765366698 shares to 3592041778 shares.
4. On October 20 2020 the 13th interim meeting of the sixth board of directors and the 12th interim meeting of
the sixth board of supervisors was held to deliberate and pass the Resolution on the achievement of the second
lifting of the restricted stock incentive plan for 2018. There are 702 incentive objects eligible for unlocking this
plan and the number of shares to be released is 4.9888 million shares.
5. On November 5 2020 the fourth extraordinary general meeting of shareholders in 2020 was held to review and
pass the Resolution on repurchase and cancellation of partial restricted shares. The Company repurchased and
cancelled 440310 shares held by the incentive objects that are not qualified and not yet unlocked.Transfer of shares
√ Applicable □ Not applicable
1.The Company repurchased 291200 shares that were not qualified for unlocking. After cancellation its share
capital was reduced from 2765657898 to 2765366698.
2.On February 24 2020 the Company granted 12.045 million restricted shares to 914 incentive objects under the
Company's restricted stock incentive plan in 2020.
3. On June 2 2020 after the implementation of the profit distribution plan in 2019 the Company's share capital
increased from 2765366698 shares to 3592041778 shares.
4. The Company repurchased 440310 shares that were not qualified for unlocking. After cancellation its share
capital was reduced from 3592041778 to3591601468.Information about the implementation of share repurchase
√Applicable □Not applicable
1.On June 16 2020 the Announcement about Halfway Through the Buyback Plan is not yet Implemented was
published in Securities Times Shanghai Securities News and CNINFO (www.cninfo.com.cn).
2.According to the Announcement on expiration of repurchase period and implementation disclosed on December
16 2020 the Company did not repurchase its shares within the validity period of the repurchase plan. The reason
is: Since the disclosure of the Repurchase Report the Company's share price has shown an upward trend. As of
December 15 2020 the trading price lower than 15.95 yuan / share (adjusted for dividend distribution) are limited.
In addition according to Article 17 of the detailed rules for the implementation the Company has fewer trading
days to repurchase shares due to the influence of the window period of seasonal reports and other major events.Therefore the Company failed to carry out share repurchase plan. Please refer CNINFO (www.cninfo.com.cn)
Securities Times Shanghai Securities News for more detail.The progress on reduction of re-purchase shares by means of centralized bidding
□Applicable √Not applicable
Effects of changes in share capital on the basic earnings per share ("EPS") diluted EPS net assets per
share attributable to common shareholders of the Company and other financial indexes over the last year
and last period
√Applicable □Not applicable
Please refer to the financial report for details.Other contents that the Company considers necessary or required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Name of
shareholder
Opening balance
of restricted
shares
Vested in current
period
Unlock shares in
current period
Closing balance
of restricted
shares
Note for
restricted shares
Date of unlocking
Zhejiang Sanhua
Lvneng Industrial
Group Co. Ltd
299892703 89967811 389860514 0
Non public
offering of shares
Due to the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted to
share capital and
89967811 shares
of restricted
shares were
added.September 18
2020
Zhang Yabo 37518000 11255400 48773400
Executive locked
shares
According to the
relevant
Due to the
implementation
of the equity
distribution plan
of2019 on June 2
2020 the capital
reserve was
converted into
share capital and
the number of
restricted shares
was increased by
1125540 shares.
provisions of
executives shares
management
Wang Dayong 97500 159250 50700 256750
(1) 100000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
59250 shares. (3)
Comply with
relevant
provisions of
equity incentive
and executive
shares
management.
According to the
relevant
provisions of
equity incentive
and executives
shares
management
Ni Xiaoming 97500 159250 50700 256750
(1) 100000
restricted shares
were granted in
2020. (2) Due to
the
implementation
According to the
relevant
provisions of
equity incentive
and executives
shares
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
59250 shares. (3)
Unlock share is
50700 on
November 6
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.management
Chen Yuzhong 97500 159250 50700 256750
(1) 100000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
59250 shares. (3)
Unlock share is
50700 on
November 6
2020. (4) Comply
According to the
relevant
provisions of
equity incentive
and executives
shares
management
with relevant
provisions of
equity incentive
and executive
shares
management.Hu Kaicheng 97500 159250 50700 256750
(1) 100000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
59250 shares. (3)
Unlock share is
50700 on
November 6
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.
According to the
relevant
provisions of
equity incentive
and executives
shares
management
Yu Yingkui 121582 166475 50700 288057
(1) 100000
restricted shares
were granted in
2020. (2) Due to
the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
According to the
relevant
provisions of
equity incentive
and executives
shares
management
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
66475 shares. (3)
Unlock share is
50700 on
November 6
2020. (4) Comply
with relevant
provisions of
equity incentive
and executive
shares
management.
Chen Xiaoming 0 8325 8325
According to the
relevant
regulations of
executives shares
management
According to the
relevant
regulations of
executives shares
management
Incentive objects 9054500 17637490 4735380 21225100
(1) 11545000
restricted shares
were granted in
2020 equity
incentive plan; (2)
Due to the
implementation
of the equity
distribution plan
of 2019 on June
2 2020 the
capital reserve
was converted
into share capital
and the number
of restricted
shares was
increased by
6092490; (3)
Comply with
relevant
According to the
relevant
provisions of
equity incentive
management.provisions of
equity incentive
management.Total 346976785 119672501 394849394 71321882 -- --
II. Issuance and Listing of Securities
1. Securities (exclude preferred share) issued during the reporting period
□ Applicable √ Not applicable
2. Explanation on changes in share capital & the structure of shareholders the structure of assets and
liabilities
√Applicable □ Not applicable
1. The first extraordinary general meeting of shareholders in 2019 was held on November 11 2019 and the
Proposal on repurchase and cancellation of some restricted shares was deliberated and passed. The Company
repurchased and cancelled 291200 restricted shares held by unqualified incentive objects but not yet unlocked.
After the repurchase and cancellation the total share capital of the company was reduced from 2765657898
shares to 2765366698 shares
2. During the reporting period the Company has carried out the profit distribution plan for 2019: It took
2755583602 shares as the base distributed 3 shares for every 10 shares to all shareholders and increased by
826675080 shares in total. After the conversion the total share capital was increased from 2765366698 shares
to 3592041778 shares.
3. On November 5 2020 the fourth extraordinary general meeting of shareholders in 2020 was held and the
Resolution on repurchase and cancellation of some restricted stocks was deliberated and passed. The Company
repurchased and cancelled 440310 shares of restricted stocks held by unqualified incentive objects but not yet
unlocked. After this the total share capital of the Company will be reduced from 3592041778 shares to
3591601468 shares.
3. Existent shares held by internal staff of the Company
□ Applicable √ Not applicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: Share
Total
Number of
Common
Shareholder
78206
Total number
of common
shareholders
at the end of
97396
Total
Number of
Preferred
Shareholders
0
Total number
of preferred
shareholders
(if any) (refer
0
s at the End
of the
Reporting
Period
previous
month before
the disclosure
date of the
annual report
(If Any)
(Refer to
Note 8)
Whose
Voting Rights
Have Been
Recovered at
the End of
the Reporting
Period
to Note 8)
with resumed
voting rights
at the end of
previous
month before
the disclosure
date of the
annual report
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
Name of
shareholder
Nature of
shareholder
Share-holdi
ng
percentage
(%)
Total
shares
held at the
end of the
reporting
period
Increase/
decrease
during the
reporting
period
The
number of
common
shares
held with
trading
restriction
s
The number
of shares
held
without
trading
restrictions
Pledged or frozen
Status Amount
Sanhua
Holding
Group Co.Ltd.
Domestic
non-state-owned
corporation
29.78%
10695
37580
1726864
42
1069537
580
Pledged 240420000
Zhejiang
Sanhua
Lvneng
Industrial
Group Co.Ltd
Domestic
non-state-owned
corporation
20.68%
742747
954
1714033
74
7427479
54
Hong Kong
Central
Clearing
Limited
Overseas
corporation
7.94%
285173
115
2735902
0
2851731
15
Zhang Yabo
Domestic
Individual
1.45%
52031
200
2007200
48773
400
3257800
China
Construction
Bank
Corporation -
Bank of
Communicati
ons Schroder
Others 0.89%
31976
323
1764017
7
3197632
3
alpha core
hybrid
securities
investment
fund
Industrial
and
Commercial
Bank of
China
Limited-E
fund
emerging
growth
flexible
allocation
hybrid
securities
investment
fund
Others 0.86%
30736
564
3073656
4
3073656
4
CITIC Bank
Co. Ltd. -
Bank of
Communicati
ons
Schroeder
new vitality
flexible
allocation of
hybrid
securities
investment
funds
Others 0.74%
26604
389
1167495
6
2660438
9
China
Merchants
Bank Co.
Ltd. – E fund
innovative
growth
hybrid
securities
investment
fund
Others 0.71%
25526
687
2552668
7
2552668
7
National
Social
Security
Fund-111
Others 0.66%
23658
180
7593186
2365818
0
Central
Huijin Asset
Management
Co. Ltd
Domestic
state-owned
corporation
0.65%
23183
420
5350020
2318342
0
Information about Strategic
Investors’ or General Legal
Persons’ Becoming Top Ten
Common Shareholders for
Placement of New Shares (If
Any) (Refer to Note 3)
No
Explanation on Associated
Relationship or Concerted
Actions among the
Above-Mentioned Shareholders
Among the above shareholders Sanhua Holding Group Co. Ltd. Zhejiang Sanhua Lvneng
Industrial Group Co. Ltd. and Zhang Yabo are the persons acting in concert. The Company
does not know whether there is any related relationship between other shareholders or
whether they belong to the persons acting in concert stipulated in the Administrative
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
Name of Shareholder
Number of Common Shares Held without
Restrictions at the End of the Reporting Period
Type of shares
Type Amount
Sanhua Holding Group Co. Ltd. 1069537580
RMB common
stock
1069537580
Zhejiang Sanhua Lvneng
Industrial Group Co. Ltd
742747954
RMB common
stock
742747954
Hong Kong Central Clearing
Limited
285173115
RMB common
stock
285173115
China Construction Bank
Corporation - Bank of
Communications Schroder alpha
core hybrid securities investment
fund
31976323
RMB common
stock
31976323
Industrial and Commercial Bank
of China Limited-E fund
emerging growth flexible
allocation hybrid securities
investment fund
30736564
RMB common
stock
30736564
CITIC Bank Co. Ltd. - Bank of
Communications Schroeder new
vitality flexible allocation of
26604389
RMB common
stock
26604389
hybrid securities investment funds
China Merchants Bank Co. Ltd.
– E fund innovative growth
hybrid securities investment fund
25526687
RMB common
stock
25526687
National Social Security
Fund-111
23658180
RMB common
stock
23658180
Central Huijin Asset Management
Co. Ltd
23183420
RMB common
stock
23183420
Industrial and Commercial Bank
of China Limited - Bank of
Communications Schroeder
advantage industry flexible
allocation of hybrid securities
investment fund
22846399
RMB common
stock
22846399
Explanation of Associated
Relationship or Concerted
Actions among Top Ten Common
Shareholders without Trading
Restrictions and among Top Ten
Common Shareholders without
Trading Restrictions and Top Ten
Common Shareholders
Among the above shareholders Sanhua Holding Group Co. Ltd.and Zhejiang Sanhua
Lvneng Industrial Group Co. Ltd. are the persons acting in concert. The Company does not
know whether there is any related relationship between other shareholders or whether they
belong to the persons acting in concert stipulated in the Administrative Measures for the
Acquisition of Listed Companies.
Explanation of Top Ten Common
Shareholders’ Participation in
Securities Margin Trading (If
Any) (Refer to Note 4)
No
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any
agreed buy-back in the reporting period?
□ Applicable √ Not applicable
No such cases during the current reporting period.
2.Particulars about controlling shareholder of the Company
Nature of the controlling shareholder: Domestic non-state-owned corporation
Type of the actual controller: Corporation
Name of controlling
shareholder
Legal Representative
/People in charge
Date of establishment Organization code Business scope
Sanhua Holding Group
Co. Ltd
Zhang Daocai July 11 2000 911330624720002522J
Industrial investment;
Manufacturing and sales:
refrigeration control
components auto parts
electronic products;
sales: metal materials
(excluding precious and
rare metals) chemical
raw materials (except
dangerous chemicals and
precursor chemicals)
gold and silver jewelry
rubber; export of
products and related
technologies produced by
the enterprise and its
member enterprises. It is
engaged in the export
business of raw and
auxiliary materials
machinery and
equipment instruments
and meters spare parts
and related technologies
needed by the enterprise
and its member
enterprises for
production and scientific
research; it is engaged in
the processing of
imported materials and
the business of "three
supplies and one
supplement". Technical
consultation technical
service financial
consultation and
investment consultation.Shares held by the
controlling shareholder in
other listed companies
through controlling or
holding during the
reporting period
N/A
Change of the controlling shareholder during the reporting period
□ Applicable √ Not applicable
The Company's controlling shareholder has not changed during the reporting period.
3.Particulars about the Company’s actual controller & concerted parties
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Name of the actual
controller
Relationship with the actual
controller
Nationality
Whether he/she has obtained
the right of residence in another
country or region
Zhang Daocai Himself China No
Zhang Yabo Himself China No
Zhang Shaobo Himself China No
Main occupation and position
Mr. Zhang Daocai: Chinese nationality born in 1950 senior economist and special supervisor of
MBA graduate student of Zhejiang University. He is honorary chairman of the Company and
chairman of the board of directors of Sanhua Holding Group Co. Ltd. He was elected as the
representative of the 8th 9th 10th 11th and 12th National People's Congress of Zhejiang
Province and vice president of the China Enterprise Federation and the Chinese Entrepreneurs
Association. Vice president of Zhejiang small and medium sized Enterprises Association vice
president of Zhejiang Business Management Research Association and vice president of Asia
Pacific Chinese Leaders Association and won the National Labor Medal of May 1st national
excellent entrepreneur master of Chinese management most creative Chinese business leader in
Asia Pacific Model worker of Zhejiang Province meritorious entrepreneur of implementing the
"eight eight strategy" in Zhejiang Province lifelong leader entrepreneur of Zhejiang Province
leading figures of Zhejiang Manufacturing and other honors.Mr. Zhang Yabo: Chinese nationality CPC member born in February 1974 graduated from
Shanghai Jiaotong University received a master's degree in Business Administration from CEIBS.
At present he is the chairman of the board of the Company Secretary of the Party committee of
Sanhua holding group vice chairman and director of the board of Sanhua Holding Group Co. Ltd.he has successively won Zhejiang outstanding young private entrepreneurs Zhejiang operation
and management masters Shaoxing labor model Shaoxing top ten outstanding young people
Shaoxing mayor award Changjiang River Delta top ten outstanding young businessmen Fengyun
Zhejiang businessmen Zhejiang outstanding entrepreneurs glorious Zhejiang businessman etc.He served as member of the 12th Zhejiang Provincial Committee of the Chinese people's Political
Consultative Conference deputy to the 5th 6th and 7th Shaoxing people's Congress vice
chairman of Zhejiang Youth Federation President of Zhejiang Youth Entrepreneurs Association
vice chairman of Shaoxing Youth Federation President of Shaoxing Youth Entrepreneurs
Association director of China Youth Entrepreneurs Association and director of Zhejiang Youth
Entrepreneurship foundation.
Mr. Zhang Shaobo: Chinese nationality born in 1979 master's degree graduated from CEIBS. He
serves as a director of the Company director of Sanhua Holding Group Co. Ltd. CEO of
Hangzhou Sanhua International Building Co. Ltd. and executive director and CEO of Zhejiang
Sanhua Zhicheng Real Estate Development Co. Ltd.
Domestic and foreign listed
companies controlled in the past
N/A
10 years
Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such change during the reporting period.The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
10.85%
27.27%
20.68%
37.89%
100%
100%
33%
6%
31%
64.07%
11.81%
30%
1.45%
Yabo Zhang
Daocai Zhang
Shaobo Zhang
Sanhua Holding Group Co. Ltd.
12.88%
29.78%
Haoyide International Limited OF Hong Kong
Fuxun Co. Ltd.
Zhejiang Sanhua Lvneng Industry Group Co. Ltd.
62.11%
Zhejiang Sanhua Intelligent Controls Co. Ltd.Xinchang Huaqing Investment Co. Ltd.Xinchang Huaxin Investment Co. Ltd.Qingjuan Yu
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. Particulars about other corporate shareholders with shareholding proportion over 10%
√ Applicable □ Not applicable
Name of corporate shareholder Legal representative
Date of
incorporation
Registered capital Main business
Zhejiang Sanhua Lvneng
Industrial Group Co. Ltd
Zhang Shaobo
September 30
2001
483 million yuan
Manufacturing and sales: air
suspension assembly
general equipment
electromechanical
equipment technology
development technical
service technical
consultation achievement
transfer: electromechanical
technology environmental
protection technology
biotechnology (except for
human stem cells gene
diagnosis and treatment
technology development
and application); electronic
and electrical products
metal materials (excluding
precious metals) chemical
raw materials (except
chemical dangerous goods
and precursor chemicals)
Wholesale retail and import
and export business of gold
and silver jewelry rubber
mineral products machinery
and equipment instruments
and accessories; services:
enterprise management
consulting property
management (operating by
qualification certificate)
self-owned house leasing
industrial investment
management consulting
management (except for
securities and goods
without approval of
financial supervision
departments shall not
engage in deposit financing
guarantee agency for public
financing Financial services
such as customer finance)
power supply development
and construction of
distributed solar energy
projects and contract
energy management.(except for those involving
the implementation of
special management
measures for access
stipulated by the state). (for
projects that need to be
approved according to law
business activities can only
be carried out with the
approval of relevant
departments.)
5. Particulars on shareholding decrease restrictions for the controlling shareholders actual controller
restructurer or other committing parties
□ Applicable √ Not applicable
Section VII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.Section VIII Information about Convertible Bonds
□ Applicable √ Not applicable
No existed Convertible bonds for the Company during the current reporting period.Section IX Information about Directors Supervisors Senior
Management
I. Shareholding changes of directors supervisors senior management
√ Applicable □ Not applicable
Name Title
Tenure
status
Gender Age
Commencement
of term of office
Terminati
on of
term of
office
Shares
held at
the
beginning
of the
Period
(Shares)
Shares
increased
during the
Period
(Shares)
Shares
decreased
during the
Period
(Shares)
Other
changes
(Shares)
Shares
held at
the end of
the Period
(Shares)
Zhang
Yabo
Director
chairman
CEO
Incumb
ent
Male 47
December 13
2012
December
6 2021
5002400
0
1200720
0
1000000
0
5203120
0
Wang
Dayong
Director
President
Incumb
ent
Male 52
December 13
2012
December
6 2021
130000 169000 42250 256750
Yu Shuli Director
Incumb
ent
Male 73 April 28 2006
December
6 2021
Ni
Xiaoming
Director
Incumb
ent
Male 53 May 6 2011
December
6 2021
130000 169000 42250 256750
Chen
Yuzhong
Director
chief
engineer
Incumb
ent
Male 55
November 29
2011
December
6 2021
130000 169000 42250 256750
Zhang
Shaobo
Director
Incumb
ent
Male 42 May 18 2015
December
6 2021
Ji Hua
Independ
ent
director
Incumb
ent
Male 53 May 18 2015
May 17
2021
Shen
Yuping
Independ
ent
director
Resigne
d
Male 64 June 8 2014
June 7
2020
Zhang
Yaping
Independ
ent
director
Resigne
d
Female 64 June 8 2014
June 7
2020
Shi Independ Incumb Male June 8 2020 December
Jianhui ent
director
ent 6 2021
Zhu
Hongjun
Independ
ent
director
Resigne
d
Male June 8 2020
February
25 2021
Pan Yalan
Independ
ent
director
Incumb
ent
Female February 26 2021
December
6 2021
Weng
Weifeng
Convener
of the
board of
superviso
rs
Incumb
ent
Male 55 June 8 2014
December
6 2021
Zhao
Yajun
superviso
r
Incumb
ent
Male 50
November 29
2011
December
6 2021
Chen
Xiaoming
superviso
r
Incumb
ent
Male 52 March 26 2011
December
6 2021
0 11100 11100
Hu
Kaicheng
Vice
president
Secretary
of the
board of
directors
Incumb
ent
Male 46 January 26 2015
December
6 2021
130000 169000 42250 256750
Yu
Yingkui
Vice
president
CFO
Incumb
ent
Male 47
September 30
2011
December
6 2021
162110 178633 52686 288057
Total -- -- -- -- -- --
5070611
0
1287293
3
1022168
6
5335735
7
Note: Mr. Zhu Hongjun the independent director resigned on December 28 2020 and continued to perform the duties as the
independent director and the member of audit committee of the board of directors. On February 26 2021 the general meeting of
shareholders approved the proposal to appoint Ms. pan Yalan as an independent director of the Company.II. Changes of Directors Supervisors and Senior Management
√Applicable □Not applicable
Name Position Type Date Reasons
Shen Yuping
Independent
Director
Leave the
position when
term of office
expires
June 8 2020 Leave the position when six-year term of office expires
Zhang Yaping Independent Leave the June 8 2020 Leave the position when six-year term of office expires
Director position when
term of office
expires
Zhu Hongjun
Independent
Director
Resigned
February 25
2021
Not qualified to be a director
III. Positions and Incumbency
Mr. Zhang Yabo: Born in 1974 master of Business Administration of CEIBS. Graduated from Shanghai Jiao Tong
University in July 1996. From May 2007 to September 2009 he served as the vice president of Sanhua Holding
Group Co. Ltd.; from May 2007 up to present he has been appointed as the director and vice chairman of the board
of directors of Sanhua Holding Group Co. Ltd.; from September 2009 to December 2012 he served as the general
manager of the Company; from October 2009 up to present he has been appointed as the director of the Company;
from December 2012 up to present he has served as the chairman and CEO of the Company.Mr. Wang Dayong: Born in 1969 senior manager master of Business Administration (EMBA) senior economist
and engineer. He served as chief of planning section Secretary of general manager director of manufacturing
department director of refrigeration valve business department assistant to general manager assistant to President
vice president and director of Sanhua Holding Group. He served as a supervisor of the Company from December
2001 to April 2006 a director of the Company from April 2006 to May 2011. He currently serves as a director of
Sanhua Holding Group and a director and President of the Company since December 2012.Mr. Yu Shuli: Born in 1948 graduated from the Department of economics of Shanghai University of Finance and
Economics in 1983. He used to be the chief accountant and factory director of Shanghai Xinxin machinery factory
deputy factory director of Shanghai automobile air conditioner factory director of the first board of directors of
Shanghai Aerospace electromechanical Co. Ltd. general manager of Shanghai Deerfu Automobile Air
Conditioning System Co. Ltd. and factory director of Shanghai automobile air conditioner factory. He has been a
director of the Company since April 2006.Mr. Ni Xiaoming: Born in 1968 master’s degree economist. From November 2005 to July 2009 he served as the
general manager of Sanhua International (USA) Co. Ltd. and the deputy general manager of sales of Zhejiang
Sanhua Refrigeration Group Co. Ltd.; August 2009 he served as the deputy general manager of Sanhua Danfoss
(Hangzhou) Microchannel Heat Exchanger Co. Ltd.; since May 2010 he has served as the general manager of
Hangzhou Sanhua Microchannel Heat Exchanger Co. Ltd. as well as the director of Sanhua Holding Group Co.Ltd.; He has been a director of the Company since May 2011.Mr. Chen Yuzhong: Born in 1966 master’s degree engineer. He was the chief engineer of the Company from
December 2001 to May 2011; he was the deputy general manager of the Company from May 2011 to December
2012; he has been the chief engineer of the Company since December 2012; he has been the general manager of
Zhejiang Sanhua Refrigeration Group Co. Ltd. since August 2015; he is also the director of Sanhua Holding
Group Co. Ltd.; and he has been the director of the Company since November 2011.Mr. Zhang shaobo: Born 1979 master’s degree graduated from the China Europe Institute of Business School.Since November 2012 he has served as general manager of Sanhua Real Estate Group and Zhejiang Sanhua Real
Estate Co. Ltd.; since July 2013 he has served as general manager of Hangzhou Sanhua International Building
Co. Ltd.; since May 2017 he has served as executive director and general manager of Zhejiang Sanhua Zhicheng
Real Estate Development Co. Ltd.; he currently serves as a director of Sanhua Holding Group Co. Ltd.; from
May 2015 up to present he has served as the director of the Company.Mr. Ji Hua: Born in 1968 master’s degree graduated from Peking University majoring in finance. From October
2004 to October 2008 he was the general manager of Guangzhou Jinri Yihua Food and Beverage Co. Ltd.; from
August 2009 to June 2014 he served as the chief researcher and partner of the Research Institute of the board of
directors of Hong Kong; from August 2014 to February 2017 he served as the executive director of Hangzhou
Ron Investment Management Co. Ltd.; from March 2017 up to present he has served as the partner of
Guangzhou Wisteria Stone Business Consulting Co. Ltd. He has been appointed as an independent director of the
Company since May 2015.
Mr. Shi Jianhui Born in 1972 he achieved a master's degree in EMBA from Changjiang Business School and
Shanghai Advanced Finance College. He used to be the chairman / CEO of Minshi Group Co. Ltd. and he
currently serves as the CEO of Xiaozhi Investment Management Partnership in Meishan Bonded Port Area
Ningbo Zhejiang Province. He has been appointed as an independent director of the Company since June 2020.Ms. Pan Yalan: Born in 1965 master degree a member of the League of Civil Society. She participated in work in
August 1987. She is professor of Accounting College of Hangzhou University of Electronic Technology tutor of
graduate students and "151" talents in Zhejiang Province in the new century (third level). Currently she is a
member of the CPPCC of Zhejiang Province member of the Zhejiang Provincial Committee of the Democratic
League a member of the Zhejiang Provincial Finance Association a standing director of Zhejiang Provincial
Taxation Society and a special auditor of Zhejiang Audit Department. She has been appointed as an independent
director of the Company since February 2021.Mr. Weng Weifeng: Born in 1966 bachelor degree graduated from Shanghai Jiao Tong University electrical
engineering. From November 2008 to March 2009 he served as deputy director of human resources and director
of industrial operation management department of Sanhua Holding Group Co. Ltd.; from April 2009 to
September 2009 he served as general manager of Shanghai Kangbasaite Technology Development Co. Ltd. and
general manager of Shanghai Clean Automobile Energy System Co. Ltd.; from January 2010 to September 2020
he served as director of human resources of Sanhua Holding Group Co. Ltd. In February 2019 he served as the
director of Sanhua Holding Group Co. Ltd. From December 2019 up to present he has served as chairmen of
Ningbo Fulda Intelligent Technology Co. Ltd. From November 2011 up to present he has been a supervisor of
the Company.Mr. Zhao Yajun: Born in 1971 master’s degree graduated from school of Business Administration of Zhejiang
University with senior accountant title. From 1996 to 2003 he worked in Zhejiang Tianjian accounting firm; from
January 2004 to February 2011 he served as deputy director of Finance Department of Sanhua Holding Group
Co. Ltd.; from February 2011 to February 2014 he served as director of Finance Department of Sanhua Holding
Group Co. Ltd.; from March 2014 up to present he has served as deputy director of finance of Sanhua Holding
Group Co. Ltd. He has been a supervisor of the Company since November 2011.Mr. Chen Xiaoming: From October 2008 to October 2011 he served as director of quality management
department of Zhejiang Sanhua Intelligent Controls Co. Ltd.; in November 2011 he served as management
representative and director of Quality Department of Changzhou Ranco four-way valve Co. Ltd.; in August 2013
he served as director of quality department and vice director of four-way valve business department of Wuhu
Sanhua Automatic Control Components Co. Ltd.; in January 2016 he served as director of Quality Department of
Wuhu Sanhua Automatic Control Components Co. Ltd; in December 2016 he served as director of four-way
valve department and stop valve department of Wuhu Sanhua Automatic Control Components Co. Ltd.; from
August 2017 up to present he has served as Manufacturing Director of Wuhu Sanhua Automatic Control
Components Co. Ltd. since March 2011 he has been appointed as supervisor of the Company.
Mr. Hu Kaicheng: Born in 1975 master's degree bachelor's degree of Tongji University SAIF EMBA of
Shanghai Jiao Tong University. From August 2006 to August 2009 he served as the director of supplier
management procurement director of Zhejiang Sanhua Refrigeration Group Co. Ltd.; from September 2009 to
December 2010 he served in Sanhua Holding Group Co. Ltd.; from January 2011 to October 2014 he served as
the procurement director of the Company; from October 2014 up to present he served as the vice president of the
Company; from January 2015 up to present he served as the Secretary of the board of directors of the Company.
Mr. Yu Yingkui: Born in 1974 bachelor degree accounting major of Shanghai University of Finance and
Economics. From April 2001 to December 2003 he successively served as the chief accountant of the financial
department of Zhejiang Sanhua Holding Group Co. Ltd. and Zhejiang Sanhua Refrigeration Group Co. Ltd.;
from December 2003 to November 2007 he served as the deputy general manager of Shenyang Durui Wheel Hub
Co. Ltd.; from November 2007 up to present he has been the director of the financial department of the
Company; from September 2011 up to present he has been the chief financial officer of the Company; from
January 2016 up to present he has been the vice president of the Company.Position held in shareholders’ entities
√Applicable □ Not applicable
Name Shareholder's entity
Position in
shareholders’
entities
Commencemen
t of the term
Termination of
the term
Compensation and
allowance from the
shareholders' entity
Zhang Yabo Sanhua Holding Group Co. Ltd
Vice
chairman
(director)
February 26
2019
February 25
2022 No
Wang Dayong Sanhua Holding Group Co. Ltd Director
February 26
2019
February 25
2022
No
Ni Xiaoming Sanhua Holding Group Co. Ltd Director
February 26
2019
February 25
2022
No
Zhang Shaobo Sanhua Holding Group Co. Ltd Director
February 26
2019
February 25
2022
Yes
Zhang Shaobo
Zhejiang Sanhua lvneng Industrial Group
Co. Ltd
Director，general
July 1 2019
No
manager
Chen Yuzhong Sanhua Holding Group Co. Ltd Director
February 26
2019
February 25
2022
No
Weng Weifeng Sanhua Holding Group Co. Ltd Director
February 26
2019
February 25
2022
No
Zhao Yajun Sanhua Holding Group Co. Ltd
Deputy chief
financial
officer
March 1 2014 Yes
Zhao Yajun
Zhejiang Sanhua Lvneng Industrial Group
Co. Ltd
Supervisor July 1 2019 No
Description of
the position in
shareholders’
entities
No
Positions held in other entities
√Applicable □ Not applicable
Name Shareholder's entity
Position in
shareholders’
entities
Commencemen
t of the term
Termination of
the term
Compensation
and allowance
from the
shareholders'
entity
Zhang Yabo
Hangzhou Sanhua Research Institute Co.Ltd
Chairman
February 10
2017
No
Zhang Yabo Hangzhou Fumo New Material Technology
Co. Ltd
Director July 1st 2016
No
Zhang Yabo Xinchang Huaxin Investment Co. Ltd Chairman March 16 2016 No
Zhang Yabo
Wuhu Erda Technology Co. Ltd Director
February 3
2016
No
Zhang Yabo
Hangzhou Zhicheng Investment
Management Co. Ltd
Executive
director and
general
manager
July 23 2007
No
Zhang Yabo Hangzhou Zhishen Investment Management
Co. Ltd
Supervisor July 23 2007
No
Zhang Yabo Zhejiang Haoyuan Technology Co. Ltd Director May 4 2018 No
Zhang Yabo
Sanhua trading Singapore Pte Ltd
Director October 13
2017
No
Wang Dayong Zhejiang Huateng Investment Co. Ltd Chairman April 19 2010 No
Wang Dayong Hangzhou Fufan Investment Management
Co. Ltd
Director
April 28 2016
No
Wang Dayong Guochuang energy Internet Innovation
Center (Guangdong) Co. Ltd
Director August 20
2019
No
Yu Shuli Ningbo Huaxiang Electronics Co. Ltd
Convener of
the board of
supervisors
March 5 2020 Yes
Ni Xiaoming Sanhua Houston Technology Center Director August 2 2017 No
Zhang Shaobo Shanghai Sanhua Electric Co. Ltd
Executive
director
April 10 2017
No
Zhang Shaobo Hangzhou zhiwo Investment Management
Co. Ltd
General
manager
June 16 2014
No
Zhang Shaobo
Hangzhou Zhishen Investment Management
Co. Ltd
Executive
director
general
manager
July 23 2007
No
Zhang Shaobo Hangzhou Fuxiang Property Management
Co. Ltd
Chairman
January 3 2016
No
Zhang Shaobo Xinchang Sanhua Property Management
Co. Ltd
Chairman
March 29 2011
No
Zhang Shaobo
Tianjin Minghao Management Consulting
Co. Ltd
Executive
director
general
manager
May 25 2017
No
Zhang Shaobo
Hangzhou Sanhua International Building
Co. Ltd
Executive
director
general
manager
July 31 2013
No
Zhang Shaobo Xinchang Private Financing Service Center
Co. Ltd
Director March 26 2014
No
Zhang Shaobo
Inner Mongolia Xiqi Mining Co. Ltd Supervisor
September 11
2012
No
Zhang Shaobo
Zhejiang Sanhua Zhicheng Real Estate
Development Co. Ltd
Executive
director
general
manager
May 31 2017
No
Zhang Shaobo Hangzhou Fufan Investment Management
Co. Ltd
Chairman July 9 2010
No
Zhang Shaobo Xinchang United Investment Management
Co. Ltd
Director
December 31
2008
No
Zhang Shaobo
Hangzhou Kaisida Technology Co. Ltd
Executive
director
June 15 2020
No
Zhang Shaobo
Tianjin Sanhua Industrial Park Management
Co. Ltd
Executive
director
general
manager
May 9 2019
No
Zhang Shaobo Hangzhou Huaqin Investment Management
Co. Ltd
Supervisor December 25
2006
No
Zhang Shaobo Hangzhou Mifeng Catering Management
Co. Ltd
Supervisor
March 31 2015
No
Zhang Shaobo
Shanghai Tihu catering Co. Ltd
Director September 26
2017
No
Zhang Shaobo Ningbo Fulda Intelligent Technology Co.Ltd
Director December 26
2019
No
Zhang Shaobo
Zhejiang Sanhua Ecological Agriculture
Co. Ltd
Executive
director
general
manager
September 11
2018
No
Zhang Shaobo Hangzhou Zhicheng Investment
Management Co. Ltd
General
manager
November 4
2020
No
Zhang Shaobo
Hangzhou Zhiyong Enterprise Management
Co. Ltd
Executive
director
general
manager
April 27 2018
No
Ji Hua
Guangzhou Wisteria Stone Business
Consulting Co. Ltd
Executive
director
general
manager
March 1 2017
Yes
Shi Jianhui
Zhejiang Ningbo Meishan free trade port
Xiaozhi investment management
partnership
CEO August 1 2017
Yes
Shi Jianhui
Ningbo Jifeng Auto Parts Co. Ltd Adviser
September 1st
2017
Yes
Shi Jianhui Shanghai Nan'en Automobile Technology
Co. Ltd
Adviser November 1
2018
Yes
Shi Jianhui Changzhou New Energy Automobile Co.Ltd
Adviser
July 1 2019
Yes
Pan Yalan Hangzhou University of Electronic Science Teacher August 1 1987 Yes
and Technology
Pan Yalan Lin'an Rural Commercial Bank Co. Ltd
Independent
director
December 1
2019
Yes
Weng Weifeng Shanghai Sanhua Electric Co. Ltd
General
manager
April 12 2011 Yes
Weng Weifeng
Hangzhou Tongchan Machinery Co. Ltd
Chairman、general
manager
March 22 2017
No
Weng Weifeng Shenyang Sanhua Daika wheel Hub Co.Ltd
Director
June 4 2013
No
Weng Weifeng Shenyang Durui Wheel Hub Co. Ltd Director May 10 2013 No
Weng Weifeng Hangzhou Sanhua Research Institute Co.Ltd
General
manager
May 10 2018
No
Weng Weifeng Ningbo Fulda Intelligent Technology Co.Ltd
Chairman December 26
2019
No
Weng Weifeng Shanghai fuyulong Automobile Technology
Co. Ltd
Chairman December 26
2019
No
Weng Weifeng Shanghai futailong Automotive Electronic
Technology Co. Ltd
Chairman
July 15 2020
No
Weng Weifeng Tianjin Sanhua Industrial Park Management
Co. Ltd
Supervisor
October 10
2018
No
Weng Weifeng Tianjin Sanhua Fuda Intelligent Technology
Co. Ltd
Chairman
November 2
2018
No
Weng Weifeng
Xinchang Huaxin Investment Co. Ltd
Director、general
manager
March 21 2017
No
Zhao Yajun Shanghai Sanhua Electric Co. Ltd Supervisor April 12 2011 No
Zhao Yajun Hangzhou Tongchan Machinery Co. Ltd Supervisor May 31 2011 No
Zhao Yajun Xinchang Private Financing Service Center
Co. Ltd
Supervisor
March 26 2014
No
Zhao Yajun Xinchang United Investment Management
Co. Ltd
Supervisor
January 1 2012
No
Zhao Yajun Zhejiang Xiezhong automobile new energy
technology development Co. Ltd
Supervisor May 25 2018
No
Zhao Yajun Wuhu Erda Technology Co. Ltd Supervisor July 31 2018 No
Zhao Yajun Zhejiang Haoyuan Technology Co. Ltd Supervisor May 4 2018 No
Zhao Yajun Xinchang Huaxin Investment Co. Ltd Director March 21 2017 No
Zhao Yajun Shanghai fuyulong Automobile Technology Supervisor December 26 No
Co. Ltd 2019
Zhao Yajun Tianjin Sanhua Fuda Intelligent Technology
Co. Ltd
Supervisor November 2
2018
No
Zhao Yajun Nanjing Xiezhong automobile new energy
technology development Co. Ltd
Supervisor February 28
2019
No
Yu Yingkui Zhejiang Huateng Investment Co. Ltd Director April 19 2010 No
Yu Yingkui
Chongqing Tainuo Machinery Co. Ltd
Director December 8
2016
No
Yu Yingkui Nanchang Sanhua jinlifeng Machinery Co.Ltd
Director
July 12 2017
No
Yu Yingkui Qingdao Sanhua jinlifeng Machinery Co.Ltd
Director
July 25 2017
No
Yu Yingkui Xinchang Private Financing Service Center
Co. Ltd
Director October 23
2015
No
Yu Yingkui Ningbo Jinlifeng Machinery Co. Ltd Director July 2 2020 No
Yu Yingkui
Sanhua Trading Singapore Pte Ltd Director
October 13
2017
No
Description of
the position in
shareholders’
entities
No
Incumbent and resigned directors supervisors and senior management personnel during the reporting period that
have been imposed administrative penalties by the CSRC during the last three years.
□ Applicable √ Not applicable
IV. Remuneration of directors supervisors and senior management personnel
The remuneration of senior managers shall be assessed by the remuneration and assessment committee of the
board of directors according to the job responsibilities and the performance assessment standards and procedures.
After completion of the main business performance indicators the annual remuneration of the senior managers
shall be proposed. The amount of remuneration for this year shall be within the range determined by the board of
directors. The Company shall bear the travel expenses incurred by the independent directors for attending
meetings. The amount of remuneration of directors and supervisors in this year is within the remuneration range
determined by the general meeting of shareholders.Remuneration of directors supervisors and senior management personnel
Name Title Gender Age Tenure status
Total
remuneration
Remuneration
from related
from the
Company
(RMB'0000)
parties (Y/N)
Zhang Yabo
Director
Chairman、CEO
Male 47 Incumbent 172.39 N
Wang Dayong
Director
President
Male
52
Incumbent
71.22
N
Yu Shuli Director Male 73 Incumbent 7.53 N
Ni Xiaoming Director Male 53 Incumbent 95.75 N
Chen Yuzhong
Director、chief
engineer
Male
55
Incumbent
63.13
N
Zhang Shaobo Director Male 42 Incumbent 0 Y
Ji Hua
Independent
director
Male
53
Incumbent
10.97
N
Shen Yuping
Independent
director
Male
64 Resigned 5.78
N
Zhang Yaping
Independent
director
Female 64 Resigned 5.78
N
Shi Jianhui
Independent
director
Male
49
Incumbent
5.2
N
Zhu Hongjun
Independent
director
Male
45
Incumbent
0 N
Weng Weifeng
Convener of the
board of
supervisors
Male
55
Incumbent
0 Y
Zhao Yajun Supervisor Male 50 Incumbent 0 Y
Chen Xiaoming Supervisor Male 52 Incumbent 29.1 N
Hu Kaicheng
Secretary of the
board of
directors vice
president
Male
46
Incumbent
59.74 N
Yu Yingkui CFO VP Male 47 Incumbent 68.47
Total -- -- -- -- 595.06 --
Share incentives for directors supervisors and senior executives in the Reporting Period
√ Applicable □ Not applicable
Name Title Number of Number of Exercise Market
Restricted
Shares
Shares
vested in
Shares
newly
Price for
restricted
Restricted
Shares
exercisable
shares in
the
reporting
period
exercised
shares in
the
reporting
period
price of
exercised
shares
during the
reporting
period
(yuan /
share)
price at the
end of the
report
period
(yuan /
share)
held at the
beginning
of the
period
the current
period
granted in
the current
period
shares
granted
(RMB per
share)
held at
period-end
Wang
Dayong
Chairman 24.65 91000 42250 157300 9.85 197600
Ni
Xiaoming
Director 24.65 91000 42250 157300 9.85 197600
Chen
Yuzhong
Director、chief
engineer
24.65 91000 42250 157300 9.85 197600
Hu
Kaicheng
Vice
president
Secretary
of the
board of
directors
24.65 91000 42250 157300 9.85 197600
Yu
Yingkui
Vice
president
CFO
24.65 91000 52686 157300 9.85 197600
Total -- 0 0 -- -- 455000 221686 786500 -- 988000
Note (if any)
1. At the beginning of each year the number of locked shares of senior executives is recalculated according
to 75% of the total number of shares held by the them and the number of unlocked shares in current period
is 25% of the circulating shares.
2. On November 6 2020 when second phase of the 2018 restricted stock incentive plan matured 50700
restricted shares of each above-mentioned directors and senior managers will be unlocked with a total of
253500 shares. However due to the lock-in restriction of senior executives the shares will be directly
included in the lock-in shares of senior executives.V. Staff in the Company
1. Statistics of employees professional structure of the staff and educational background
Number of incumbent employees in the parent company 4570
Number of incumbent employees in major subsidiaries 8503
Number of incumbent employees 13073
Number of employees receiving salaries in current period 13073
Number of retired employees requiring the parent Company and 0
its subsidiaries to bear costs
Professional structure
Tier Number of employees
Production staff 8848
Sales staff 503
Engineers 1576
Financial staff 233
Administrative Staff 1913
Total 13073
Educational background
Education background Number of employees
Master and/or doctor/or above 546
Bachelor 2317
Junior College (professional training) 2607
Other 7603
Total 13073
2. Staff remuneration policy
According to the business development plan and the incentive needs of human resource the Company has
established a comprehensive compensation system based on post value standard of personnel ability and
evaluation of performance and formed relevant incentive systems such as Performance Management Measures
Management Measures for Evaluation of Professional Talents Management Measures for Compensation and
Assessment of College Students and Incentive Policy for Purchasing Real Estate etc. It balances the contribution
of talents and their return and income forms an effective salary rise mechanism and motivates their enthusiasm
and innovation. Every year the Company carries out the estimation of college students and professional talents
which has played an important role in motivating new college students and employees at all levels. And regular
review market compensation to ensure competitiveness of the Company's overall salary system. In addition in the
professional system the Company will carry out patent award quality award management effectiveness award
lean improvement award and other management evaluation every year which effectively encourage talents’
innovation. In 2018 the Company launched the first equity incentive plan and in 2020 the Company launched
the restricted stock incentive plan which played an incentive and retention role for the Company's key talents and
laid a foundation for sustainable development.
3. Staff training plans
Based on the development plan from 2021 to 2025 the Company implements the talents strategy of “Internaltraining first and external recruitment second” which will be dedicated to the development of staff at all levels.
According to the requirements of competency development we build a learning organization which would
improve personal ability and create greater value through the cultivation of talents and the construction of cadre
echelon. Staff training plans are mainly on the technical system marketing system quality system production
planning system financial system and other backbone departments so as to improve their professional skills and
management level. We will continue to strengthen talent echelons training manager training management
training and new college students training and reserve of talents.The Company continues to carry out the work of "Retain excellent talents" to identify and develop high potential
talents. In order to build an international professional and young backbone team we strengthen the cultivation
and recruitment of international talents pay attention to the cultural publicity of overseas employees enhance the
sense of cultural identity and influence of culture.
4. Labor outsourcing
□ Applicable √ Not applicable
Section X Corporate Governance
I. Basic situation of corporate governance
During the reporting period the Company strictly abided by the Company Law Securities Law Code of
Corporate Governance for Listed Companies in China Stock Listing Rules of the Shenzhen Stock Exchange
Guidelines of the Shenzhen Stock Exchange for the Standard Operation of Listed Companies and other applicable
laws and regulations of China Securities Regulatory Commission and Shenzhen Stock Exchange. We continue to
improve the corporate governance structure establish and improve the internal control system strengthen the
management of information disclosure actively carry out the activities of investor relations standardize the
operation of the Company and improve the level of corporate governance. During the reporting period the
Company revised the Articles of Association and further planned the corporate governance system. As of the end
of the report period the actual situation of corporate governance conforms to the regulatory documents of CSRC
on the governance of listed companies.
1. Shareholders and general meeting of shareholders
The Company convenes the general meeting of shareholders in strict accordance with the requirements of the
Normative Opinions of the General Meeting of Shareholders the Articles of Association and the Rules of
Procedure of the Shareholders' Meeting. When the shareholders' meeting deliberates related matters the related
shareholders shall avoid voting. The related transactions shall be fair and reasonable without any damage to the
interests of shareholders. Treat all shareholders equally ensure that all shareholders especially minor
shareholders have equal status and fully exercise their rights. The shareholders' meetings held during the
reporting period were convened by the board of directors and lawyers were invited to attend the meeting on site.
2. Directors and the board of directors
The Company elect directors in strict accordance with the Articles of Association and Rules of Procedure for the
Board of Directors; the number and composition of the board of directors meet the requirements of laws and
regulations and the Articles of Association. The board of directors convenes meetings in accordance with the
Company Law and the Rules of Procedure of the Board of Directors. All directors exercise their rights diligently
attend the board of directors and shareholders' meeting and actively participate in relevant training.
3. Supervisors and board of supervisors
The board of supervisors elects the supervisors in strict accordance with the Company Law and the Articles of
Association; the composition and number of the board of supervisors meet the requirements of laws and
regulations. The Company's supervisors conscientiously perform their duties in accordance with the Rules of
Procedure of the Board of Supervisors and effectively supervise and express their opinions on the Company's
major issues related party transactions financial situation and the legality and compliance of the Company's
directors and senior managers in performing their duties.
4. Relationship between controlling shareholders and listed companies
The controlling shareholders can strictly regulate their own behaviors. There is no direct or indirect intervention
beyond the provisions of general meeting of shareholders. The Company and its controlling shareholders are
mutually independent of each other in personnel assets finance institutions and business. The board of directors
board of supervisors and internal institutions of the Company operate independently. There is no such situation
that the controlling shareholders occupy the funds of the listed company for non-operating purposes.
5. Information disclosure and investor relationship management
During the reporting period the Company designated Securities times Shanghai Securities News and CNINFO as
the information disclosure media and disclosed information truthfully accurately and timely in strict accordance
with relevant laws and regulations so as to ensure that all shareholders of the Company have fair access to the
relevant information. In addition the Company designated the secretary of the board of directors as the person in
charge of investor relationship management. Daily management of investor relations includes answering investors'
questions through telephone email interactive platform etc. strengthening the communication with investors so
as to fully guarantee the investors' right to know.
6. Performance evaluation and incentive mechanism
The Company has established a comprehensive employee performance evaluation and incentive mechanism. The
appointment of senior managers is open and transparent and conforms to the relevant laws regulations and the
Articles of Association. In the future the Company will explore more forms of incentive methods form a
multi-level incentive mechanism improve the performance evaluation standards better mobilize the work
enthusiasm of management personnel and attract and stabilize excellent management talents and technical and
business backbones.
7. Stakeholders
The Company can fully respect and safeguard the legitimate rights and interests of stakeholders and realize the
coordination and balance of interests of shareholders employees and society. The Company adheres to the
relevant laws and regulations constantly improves the corporate governance system and effectively protects the
interests of investors.
Any significant incompliance for the relevant regulatory documents issued by China Securities Regulatory
Commission in respect of corporate governance:
□ Yes √ No
II. Company’s Independence in Businesses Management Assets Institutions and Finance from
Controlling Shareholders
The Company is separated from the controlling shareholder the actual controller and the controlled enterprises in
business personnel assets institutions and finance and has the ability of independent operation.
1. Business independence
The main business of the Company is outstanding and it has its own corresponding system in production
procurement and sales. It is independent of the controlling shareholder has a complete business structure and
does not rely on the shareholders or any other related parties. The shareholders exercise their right through
participating in the general meeting of shareholders in accordance with the law. There is no such situation that the
shareholders interfere in the operation beyond the provision of general meeting.2. Personnel independence
The directors supervisors and senior management of the Company are elected or appointed in accordance with
the legal election procedure stipulated in the Company Law and the Articles of Association. The Company's
personnel labor and wages are completely independent. The salary payment welfare expenses and other expenses
of the staff are strictly separated from the controlling shareholder.
3. Asset completeness
The Company has tangible assets such as land buildings machinery and equipments vehicles office facilities
test facilities and intangible assets such as trademarks patents. It has an independent procurement and sales
system and an independent and complete asset structure.
4. Institution independence
In accordance with the relevant provisions of the Company Law and the Articles of Association the Company has
established the institutions like general meeting of shareholders the board of directors the board of supervisors
and other authorities and formulated the corresponding rules of procedure. The Company's production and
operation sites are separated from the controlling shareholders and a comprehensive organizational system has
been established. The board of directors the board of supervisors and other internal institutions operate
independently. There is no such situation that the controlling shareholder interferes in the business activities in the
name of the listed company.
5. Finance independence
The Company has an independent financial department equipped with full-time financial personnel established
an independent accounting system and financial management system that can independently make financial
decisions. The Company has separate accounts and pays taxes independently.III. Horizontal competition
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary General Meetings convened during the
Reporting Period
1. Annual General Meeting convened during the reporting period
Meeting Nature
Proportion of
participating
investors
Convened Date Disclosure Date Disclosure Index
The 1st
extraordinary
general meeting of
shareholders in
2020
Interim general
meeting
63.72% February 10 2020 February 11 2020
Announcement of
the 1st
Extraordinary
General Meeting
of Shareholders in
2020 (2020-014)
was published in
the Securities
Times Shanghai
Securities News
and CNINFO.
Annual general
meeting of
shareholders in
2019
Annual General
Meeting
67.08% May 19 2020 May 20 2020
Announcement of
the Annual
General Meeting
of Shareholders in
2019 (2020-044)
was published in
the Securities
Times Shanghai
Securities News
and CNINFO.The 2nd
extraordinary
general meeting of
shareholders in
2020
Interim general
meeting
67.25% June 22 2020 June 23 2020
Announcement of
the 2nd
Extraordinary
General Meeting
of Shareholders in
2020 (2020-055)
was published in
the Securities
Times Shanghai
Securities News
and CNINFO.The 3rd
extraordinary
general meeting of
shareholders in
2020
Interim general
meeting
65.07% August 28 2020 August 29 2020
Announcement of
the 3rd
Extraordinary
General Meeting
of Shareholders in
2020 (2020-066)
was published in
the Securities
Times Shanghai
Securities News
and CNINFO.The 4th
extraordinary
general meeting of
shareholders in
2020
Interim general
meeting
65.72% November 5 2020 November 6 2020
Announcement of
the 4th
Extraordinary
General Meeting
of Shareholders in
2020 (2020-089)
was published in
the Securities
Times Shanghai
Securities News
and CNINFO.
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights:
□ Applicable √ Not applicable
V. Performance of duties by independent directors during the reporting period
1. Attendance of independent directors in board meetings and general meetings
Attendance of independent directors in board meetings and general meetings
Name of
Independent
Director
Board
meeting
presence
required in
the reporting
period
(times)
Board
meeting
presence on
site (times)
Board
meeting
presence by
telecom-
communicati
on (times)
Board
meeting
presence
through a
proxy
(times)
Board
meeting
absence
(times)
Board
meeting not
attend in
person for
two
consecutive
times
Presence of
independent
directors in
general
meetings
(times)
Ji Hua 7 1 6 0 0 No 0
Shen Yuping 4 0 4 0 0 No 0
Zhang Yaping 4 0 4 0 0 No 0
Shi Jianhui 3 1 2 0 0 No 0
Zhu Hongjun 3 1 2 0 0 No 0
2. Objections from independent directors on related issues of the Company
Were there any objections on related issues of the Company from independent directors?
□ Yes √ No
3. Other details about the performance of duties by independent directors
Were there any suggestions from independent directors accepted by the Company?
√ Yes □ No
During the reporting period the independent directors strictly complied with the relevant laws regulations and the
Articles of Association performed their duties conscientiously paid close attention to the Company's operation
regularly reviewed the Company's announcements got access to the information of operation and development
periodically deeply discussed the opportunities and challenges in the operation and development and timely
prompted risks. Independent directors put forward reasonable opinions and suggestions from their professional
perspectives enhanced the rationality of the board of directors’ decision-making and provided independent and
fair opinions on related transactions profit distribution equity incentive and convertible bonds during the
reporting period. In order to improve the supervision mechanism of the Company and safeguard the legal rights of
all shareholders the Company shall adopt the opinions of independent directors.VI. Performance of duties by special committees under the Board during the Reporting Period
The board of directors has five special committees strategic committee audit committee nomination committee
remuneration and assessment committee and executive committee. In 2020 based on the principle of diligence
the committees carried out their work in accordance with the relevant laws and regulations normative documents
and working rules of the special committees. Committees put forward opinions and suggestions and provide
reference for the decision-making of the board of directors.
1. Performance of the Strategic Committee
The strategic committee is mainly responsible for the feasibility study of the Company's long-term development
strategic planning and major strategic investment. During the reporting period the strategy committee mainly
carried out the following work:(1) Put forward reasonable suggestions for various potential risks that may appear
in production and operation such as response to changes in international trade environment response to global
epidemic situation etc. (2) Deeply analyzes the Company's operation status and development prospects discusses
the Company's operation strategy and strategic investment matters and put forward constructive suggestions. It
plays an important role in strengthening the scientific decision-making and improving the efficiency and quality
of decision-making.
2. Performance of Audit Committee
The audit committee is mainly responsible for communication supervision and verification of internal and
external audit of the Company. The audit committee mainly carried out the following work:(1) Guide and
supervise the implementation of internal audit system;(2) Review the internal audit summary and audit work plan
submitted by the audit department;(3) In the process of annual audit work communicate with audit institutions on
annual audit work arrangement and ensure that the audit work is carried out as planned;(4) Objectively evaluates
the audit work of the accounting firm in this year. On the basis of understanding and evaluating the work of the
current accounting firm put forward some suggestions for the Company to continue to engage the accounting firm.It plays the role of audit and supervision.
3. Performance of Nomination Committee
The nomination committee conscientiously performs its duties in accordance with the Detailed Rules for the
Implementation of the Nomination Committee of the Board of Directors. During the reporting period the
nomination committee mainly carried out the following work:(1) Make suggestions on the selection criteria and
procedures of directors and senior managers of the Company;(2) The qualification and ability of relevant directors
and senior managers were examined carefully to further promote the stability of the Company's management
team.
4. Performance of Remuneration and Assessment Committee
The remuneration and assessment committee of the board of directors perform its duties in accordance with the
relevant requirements of the Rules of Procedure of the Remuneration and Assessment Committee of the Board of
Directors. During the reporting period the remuneration committee mainly carried out the following work:(1) Put
forward suggestions on assessment and evaluation standards to promote the standardized operation of the
Company improve the rationality of salary assessment and ensure the performance of the Committee. (2) Review
the performance of employees who were qualified for unlocking in phase II of 2018 equity incentive plan. (3)
Review the draft of restricted stock in 2020 and assessment management measures.
5. Performance of the Executive Committee
The executive committee is a special work organization established by the board of directors which is mainly
responsible for monitoring of the major strategies major investment decisions and major business activities of the
Company. During the reporting period the executive committee mainly carried out the following work:(1)
Discuss and make suggestions on major issues that may affect the future development of the Company. (2)
Effectively monitor the major investments approved by the general meeting of shareholders and the board of
directors.VII. Performance of duties by the Supervisory Committee
Were there any risks to the Company identified by Supervisory Committee when performing its duties during the
Reporting Period?
□ Yes √ No
VIII. Assessment and incentive mechanism for the senior management
In order to make senior managers better perform their duties and clarify their rights and obligations the Company
has established a fairly sophisticated performance evaluation standard and remuneration system in which senior
managers’ performance and annual business indicators are assessed.The senior managers of the Company are responsible to the board of directors and undertake the business
objectives issued by the board. The remuneration and assessment committee of the board formulate the
remuneration plan based on evaluation of senior managers’ work ability performance and completion of business
targets.IX. Evaluation report on internal control
1. Any significant internal control deficiencies during the reporting period
□ Yes √ No
2. Self-evaluation report on internal control
Disclosure date of full text of
self-evaluation report on internal control
March 27 2021
Disclosure index of full text of
self-evaluation report on internal control
Self-evaluation Report on Internal Control of the Company in 2020
http://www.cninfo.com.cn
Proportion of assets evaluated in total
assets
100.00%
Proportion of revenue evaluated in total
revenue per consolidated financial
statement
100.00%
Recognition standard of deficiencies
Nature Financial report level Non-financial report level
Qualitative criteria
Significant deficiency:
1. Fraud of directors supervisors and
senior managers；2. Major misstatement in
the current financial report found by the
CPA but not identified by the internal
control of the Company；3. The Company
has major violations of laws and
regulations in financial accounting asset
management capital operation
Significant deficiency:
The possibility of defects is high
which will significantly reduce the
work efficiency or effect or
significantly increase the uncertainty
of the effect or make it significantly
deviate from the expected goal.Important defects：Defects are more
likely to occur which will seriously
information disclosure product quality
safety production environmental
protection and other aspects causing
major losses and adverse effects to the
Company or subject to major
administrative supervision and
punishment；4. Supervision of the audit
committee and internal control department
is ineffective on the Company's external
financial report and internal control.Significant deficiency:(1). Failure to select
and apply accounting policies in
accordance with GAAP；(2). Failure to
establish anti-fraud procedures and control
measures；(3). It cannot reasonably
guarantee the truthfulness and
completeness of the financial statements
due to one or more defects in control
process；(4). There is no corresponding
control mechanism or no compensatory
control for the accounting treatment of
non-routine or special transactions.General deficiency：General defects other
than the above-mentioned.reduce the work efficiency or effect or
seriously increase the uncertainty of
the effect or make it seriously deviate
from the expected goal. General
defects：The probability of defects is
small which will reduce the efficiency
or effect increase the uncertainty of
the effect or make it deviate from the
expected goal.Quantitative criteria
The quantitative standard is based on the
percentage of potential misstatements of
pre-tax profit. Significant deficiency：This
defect alone or together with other defects
may cause the misstatement of financial
report to exceed 10% of the profit before
tax. Important defects：This defect alone or
together with other defects may cause the
misstatement of financial report to exceed
5% but less than 10% of the profit before
tax. General defects：This defect alone or
together with other defects may cause the
misstatement of financial report less than
5% of the profit before tax.
The quantitative standard is based on
the percentage of potential
misstatements of pre-tax profit.Significant deficiency：This defect
alone or together with other defects
may cause the misstatement of
financial report to exceed 10% of the
profit before tax. Important defects：
This defect alone or together with
other defects may cause the
misstatement of financial report to
exceed 5% but less than 10% of the
profit before tax. General defects：This
defect alone or together with other
defects may cause the misstatement of
financial report less than 5% of the
profit before tax.Number of significant deficiencies in
financial report level
0
Number of significant deficiencies in
non-financial report level
0
Number of important deficiencies in
financial report level
0
Number of important deficiencies in
non-financial report level
0
X. Audit report or assurance report on internal control
Internal Control Audit Report
Comments of Internal Control Audit Report
We believe that as of December 31 2020 Sanhua has maintained effective internal control over financial reporting in all major
matters in accordance with Guidelines for Standardized Operation of Listed Companies of Shenzhen Stock Exchange (revised in
2020) and other relevant regulations.
Disclosure of internal control
audit report
Disclosure
Date of full disclosure of internal
control audit report
March 27 2021
Index of full disclosure of
internal control audit report
Assurance Report on the Company's Internal Control（http://www.cninfo.com.cn）
Types of opinions of internal
control audit report
Standard Unqualified Opinion
Major defects in non-financial
report or not
No
Accounting firm issues internal control audit report with non-standard opinions or not
□ Yes √ No
The internal control audit report of the external accounting firm is in line with the self-assessment report of the
Board of Directors or not
√ Yes □ No
Section XI Corporate Bonds
Whether the Company has publicly issued corporate bonds on Stock Exchange which has not terminated or
terminated but fail to collect the full payment before the annual report authorized disclosure date.□Yes √No
Section XII Financial Report
I. Audit report
Type of audit opinion Standard Unqualified opinion
Date of signing of audit report March 25 2021
Name of audit firm Pan-China Certified Public Accountants LLP
Document number of audit report PCCPAAR [2021] No. 1098
Name of the certified accountants Luo Xunchao 、Ouyang Xiaoyun
Auditor’s Report
To the Shareholders of Zhejiang Sanhua Intelligent Controls Co. Ltd.:
1. Audit Opinion
We have audited the accompanying financial statements of Zhejiang Sanhua Intelligent Controls Co. Ltd.(the “Company”) which comprise the consolidated and parent company balance sheets as at December 31 2020
the consolidated and parent company income statements the consolidated and parent company cash flow
statements and the consolidated and parent company statements of changes in equity for the year then ended as
well as notes to financial statements.In our opinion the attached financial statements present fairly in all material respects the financial position
of the Company as at December 31 2020 and of its financial performance and its cash flows for the year then
ended in accordance with China Accounting Standards for Business Enterprises.
2. Basis for Audit Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those
standards are further described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants and we have fulfilled other ethical responsibilities. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon and we do not express a separate opinion on
these matters.(I) Revenue recognition
1. Matters description
Please refer to section Ⅲ (22) Ⅴ (2) 1and XIV (2) of the notes to the financial statements for details.The majority of the company's revenue comes from controlling components and components for home
appliances and automobiles. In 2020 the amount of operating income items as shown in the financial statements
of the Company is RMB 12.1098334 billion. Income from domestic sales of products shall be confirmed after
delivery inspection and acquisition of receipt vouchers. Export sales revenue is confirmed after export declaration
and bill of lading is obtained. As operating revenue is one of the key performance indicators of the Company
there might be inherent risks that the Company’s management adopts inappropriate revenue recognition to achieve
specific goals or expectations. We have identified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition assessed the design
of these controls determined whether they had been executed and tested the effectiveness of the operation;
(2) We checked sale contracts obtained understandings of main contractual terms or conditions and
assessed whether the revenue recognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin by month product client etc.
so as to identify whether there are significant or abnormal fluctuations and find out the reason of fluctuations; we
performed cut-off tests on the operating revenue recognized around the balance sheet date and assessed whether
the operating revenue was recognized in the appropriate period;
(4) For revenue from domestic sales，we checked supporting documents related to revenue recognition by
sampling method，including sales contracts orders sales invoices delivery lists delivery orders shippingdocuments client acceptance receipts etc.; for revenue from overseas sales we obtained information from
Electron Port and checked it with accounting records and checked supporting documents including sales contracts
bills of clearance waybills sales invoices etc. by sampling method;
(5) We performed confirmation procedures on current sales amount by sampling method in combination
with confirmation procedure of accounts receivable;
(6) We checked whether information related to operating revenue had been presented appropriately in the
financial statements.(II) Impairment of accounts receivable
1. Matters description
Please refer to section Ⅲ (9) and Ⅴ (1) 5 of the notes to the financial statements for details.
As of December 31 2020 the book balance of the Company's accounts receivable amounted to RMB
2.4811294 billion with provision for bad debt was RMB 125.5161 million and the carrying amount amounted to
RMB2.3556133 billion.
The Company measures accounts receivable with expected credit losses primarily on a collective basis.The
Management classifies portfolios on the basis of ages adjusts them based on historical credit risk loss experience
and forward-looking estimations prepares the comparison table of ages and expected credit loss rate of accounts
receivable so as to calculate the provision for bad debts to be accrued.
As the amount of accounts receivable is significant and the impairment involves significant judgment of the
Management we have identified impairment of accounts receivable as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for impairment of accounts receivable are as follows:
(1) We obtained understandings of key internal controls related to impairment of accounts receivable
assessed the design of these controls determined whether they had been executed and tested the effectiveness of
their operation;
(2) We reviewed the accounts receivable with provision for bad debts made in previous periods for their
subsequent write-off or reversal and assessed the accuracy of historical estimations made by the Management;
(3) We reviewed the consideration of the Management on credit risk assessment and objective evidence and
assessed whether the credit risk features of accounts receivable had been appropriately identified by the
Management;
(4) For accounts receivable with expected credit losses measured on a collective basis we assessed the
reasonableness of portfolio classification on the basis of credit risk features; we assessed the reasonableness of the
comparison table of ages and expected credit loss rate of accounts receivable prepared by the Management based
on the historical credit loss experience of portfolios with similar credit risk features and forward-looking
estimations; we tested the accuracy and completeness of data used by the Management (including ages historical
loss rate migration rate etc.) and whether the calculation of provision for bad debts was accurate;
(5) We checked the subsequent collection of accounts receivable and assessed the reasonableness of
provision for bad debts made by the Management;
(6) We checked whether information related to impairment of accounts receivable had been presented
appropriately in the financial statements.
4. Other Information
The Company’s management (the “Management”) is responsible for the other information. The other
information comprises the information included in the Company’s annual report but does not include the financial
statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information
and in doing so consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of the other
information we are required to report that fact. We have nothing to report in this regard.The Management is responsible for other information. Other information includes the information covered
in the A-share annual report but does not include the financial statements and our auditor’s report thereon. We
have obtained the A-share annual report prior to the audit report date.
5. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management is responsible for preparing and presenting fairly the financial statements in accordance
with China Accounting Standards for Business Enterprises as well as designing implementing and maintaining
internal control relevant to the preparation of financial statements that are free from material misstatement
whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing the Company’s ability to
continue as a going concern disclosing as applicable matters related to going concern and using the going
concern basis of accounting unless the Management either intends to liquidate the Company or to cease operations
or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.
6. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement whether due to fraud or error and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will always detect a material misstatement when it exists.Misstatement can arise from fraud or error and are considered material if individually or in the aggregate they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.We exercise professional judgment and maintain professional skepticism throughout the audit performed in
accordance with China Standards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or
error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and
based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists we are required to draw attention in our auditor’s report to the related disclosures in the
financial statement or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However future events or conditions may cause the
Company to cease to continue as a going concern.
(V) Evaluate the overall presentation structure and content of the financial statements and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are responsible for
the direction supervision and performance of the group audit. We remain sole responsibility for our audit opinion.We communicate with those charged with governance regarding the planned audit scope time schedule and
significant audit findings including any deficiencies in internal control of concern that we identify during our
audit.We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when in extremely rare circumstances we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant
(Engagement Partner) Luo Xun chao
Hangzhou · China Chinese Certified Public Accountant
Ouyang Xiaoyun
Date of Report: March 25 2021
II. Financial Statements
Units of financial reports in the notes: RMB
1.Consolidated balance sheet
Prepared by: Zhejiang Sanhua Intelligent Controls Co. Ltd.
December 31 2020
Unit: RMB
Items December 312020 December 312019
Current asset：
Cash and Bank Balances 3489687568.14 2663719770.15
Settlement funds
Loans to other banks
Held-for-trading financial assets 752224861.78 993634433.31
Derivative financial assets 58330486.53 8314400.73
Notes receivable 2323934781.53 2097159908.40
Accounts receivable 2355613299.57 1871323522.82
Receivable financing
Advances paid 69404326.45 62871924.30
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 76935495.05 97394782.97
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 2307761706.46 2180838596.07
Contract assets
Assets held for sales
Non-current assets due within
one year
Other current assets 150460488.01 75933253.28
Total current assets 11584353013.52 10051190592.03
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 2074750.00 2145963.27
Long-term equity investments 15219616.68 14522259.80
Other equity instrument
investments
Other non-current financial
assets
Investment property 10067588.96 27025974.05
Fixed assets 3839408059.45 3379608199.26
Construction in progress 628730529.07 480959262.46
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 507693672.93 525867518.75
Development expenditures
Goodwill 31959091.60 31959091.60
Long-term prepayments 23706401.61 8720120.64
Deferred tax assets 137808879.28 88952931.69
Other non-current assets 251509127.08 179238257.09
Total non-current assets 5448177716.66 4738999578.61
Total assets 17032530730.18 14790190170.64
Current liabilities:
Short-term borrowings 383088296.60 1295610572.07
Central bank loans
Loans from other banks
Held-for-trading financial
liabilities
Derivative financial liabilities 7939957.91 126364.40
Notes payable 1238574463.73 1130668415.32
Accounts payable 2279661755.97 1587763752.62
Advances received 10000000.00 23453218.32
Contract liabilities 42581607.67
Selling of repurchased financial
assets
Absorbing deposit and interbank
deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 289305913.99 228997483.82
Taxes and rates payable 75008142.06 58192607.75
Other payables 270888400.58 161237214.88
Including: Interest Payable
Dividends Payable 1772750.00
Handling fee and commission
payable
Reinsurance accounts payable
Liabilities classified as held for
sale
Non-current liabilities due
within one year
130553923.87 222228097.22
Other current liabilities
Total current liabilities 4727602462.38 4708277726.40
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1707918994.87 392882280.09
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 90336083.27 94235857.77
Long-term employee benefits
payable
Provisions 2638000.00
Deferred income 140105336.43 82537550.43
Deferred tax liabilities 130778184.48 65049361.71
Other non-current liabilities 80398897.72 81788928.52
Total non-current liabilities 2152175496.77 716493978.52
Total liabilities 6879777959.15 5424771704.92
Equity:
Share capital 3591601468.00 2765657898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 315417434.22 1090800022.06
Less: Treasury shares 281483741.34 363781151.34
Other comprehensive income -89624962.61 -39332748.50
Special reserve
Surplus reserve 637967613.47 559896619.39
General risk reserve
Undistributed profit 5890916707.83 5278392288.84
Total equity attributable to the parent
Company
10064794519.57 9291632928.45
Non-controlling interest 87958251.46 73785537.27
Total equity 10152752771.03 9365418465.72
Total liabilities & equity 17032530730.18 14790190170.64
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting department：Sheng Xiaofeng
2. Parent Company Balance Sheet
Unit: RMB
Items December 312020 December 312019
Current assets:
Cash and bank balances 1848930095.07 1039915005.31
Held-for-trading financial assets 323000000.00 195000000.00
Derivative financial assets 8856174.56 2069850.00
Notes receivable 773393944.74 161946880.21
Accounts receivable 729906676.91 1135299895.98
Receivables financing
Advances paid 6803910.27 6076163.25
Other receivables 348897078.11 603257516.95
Including: Interest Receivable
Dividends Receivable
Inventories 553388303.73 519241847.99
Contract assets
Assets classified as held for sale
Non-current assets due within
one year
Other current assets 46083837.26 21333811.35
Total current assets 4639260020.65 3684140971.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4528546229.37 4256633941.06
Other equity instrument
investments
Other non-current financial assets
Investment property
Fixed assets 1565826802.57 1460855506.39
Construction in progress 71862243.72 44135844.65
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 156335743.52 189181593.94
Development expenditures
Goodwill
Long-term prepayments 625318.03
Deferred tax assets 7336345.87 17068063.08
Other non-current assets 36566524.79 109659279.90
Total non-current assets 6366473889.84 6078159547.05
Total assets 11005733910.49 9762300518.09
Current liabilities:
Short-term borrowings 20012527.78 730799542.65
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 381631833.96
Accounts payable 1566994944.07 1431862681.89
Advances received 92676.29
Contract liabilities 1155759.09
Employee benefits payable 93150785.46 65680254.82
Taxes and rates payable 10811341.50 1576623.72
Other payables 1355955388.81 1252808472.44
Including: interest payable
Dividends Payable 1772750.00
Liabilities classified as held for
sale
Non-current liabilities due within
one year
220225194.44
Other current liabilities
Total current liabilities 3429712580.67 3703045446.25
Non-current liabilities:
Long-term borrowings 1381428522.65
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 2638000.00
Deferred income 35908399.54 30895817.00
Deferred tax liabilities 48177657.42 31296603.88
Other non-current liabilities
Total non-current liabilities 1468152579.61 62192420.88
Total liabilities 4897865160.28 3765237867.13
Equity:
Share capital 3591601468.00 2765657898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1198721706.52 2005303119.53
Less: treasury shares 281483741.34 363781151.34
Other comprehensive income
Special reserve
Surplus reserve 509280441.15 431209447.07
Undistributed profit 1089748875.88 1158673337.70
Total equity 6107868750.21 5997062650.96
Total liabilities & equity 11005733910.49 9762300518.09
3. Consolidated Income statement
Unit: RMB
Items Year2020 Year2019
I. Total operating revenue 12109833368.44 11287489442.23
Including: Operating revenue 12109833368.44 11287489442.23
Interest income
Premium earned
Revenue from handling charges and
commission
II. Total operating cost 10592665388.40 9747723876.16
Including: Operating cost 8500391322.27 7946844445.83
Interest expenses
Handling charges and commission
expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy
reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 77973420.81 92311339.03
Selling expenses 602954759.17 588547454.16
Administrative expenses 764084428.88 595781120.22
R&D expenses 518401363.63 532012335.99
Financial expenses 128860093.64 -7772819.07
Including: Interest expenses 64733993.15 54050078.51
Interest income 52233256.57 29496046.87
Add: Other income 151555896.45 101972467.86
Investment income (or less:
losses)
89078877.16 25335547.44
Including: Investment income 2199442.47 1418182.87
from associates and joint ventures
Gains from derecognition of
financial assets at amortized cost
-4369430.89 -2407426.89
Gains on foreign exchange (or
less: losses)
Gains on net exposure to
hedging risk (or less: losses)
Gains on changes in fair value
(or less: losses)
31847915.76 27906347.18
Credit impairment loss (or less:
losses)
-28677382.30 -3374126.64
Assets impairment loss (or less:
losses)
-58672538.84 -27895239.50
Gains on asset disposal (or less:
losses)
-486378.33 278783.69
III. Operating profit (or less: losses) 1701814369.94 1663989346.10
Add: Non-operating revenue 5055479.82 6792283.12
Less: Non-operating expenditures 14843633.18 7713121.40
IV. Profit before tax (or less: total loss) 1692026216.58 1663068507.82
Less: Income tax expense 218702864.60 229253469.06
V. Net profit (or less: net loss) 1473323351.98 1433815038.76
(I) Categorized by the continuity of
operations
1. Net profit from continuing
operations (or less: net loss)
1473323351.98 1433815038.76
2. Net profit from discontinued
operations (or less: net loss)
(II) Categorized by the portion of
equity ownership
1. Net profit attributable to owners
of parent Company (or less: net
loss)
1462158821.57 1421204236.13
2. Net profit attributable to
non-controlling shareholders (or
less: net loss)
11164530.41 12610802.63
VI. Other comprehensive income after
tax
-50292214.11 -28841.85
Items attributable to the owners of
the parent Company
-50292214.11 -28841.85
(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
-50292214.11 -28841.85
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 -50292214.11 -28841.85
7. Others
Items attributable to non-controlling
shareholders
VII. Total comprehensive income 1423031137.87 1433786196.91
Items attributable to the owners of
the parent Company
1411866607.46 1421175394.28
Items attributable to non-controlling
shareholders
11164530.41 12610802.63
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.41 0.40
(II) Diluted EPS (yuan per share) 0.41 0.40
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting department：Sheng Xiaofeng
4. Income statement of the Parent Company
Unit: RMB
Items Year2020 Year2019
I. Operating revenue 4516583047.45 4463396527.84
Less: Operating cost 3383660538.43 3402597635.57
Taxes and surcharges 27452644.93 33339374.49
Selling expenses 51140200.18 56513307.16
Administrative expenses 187763288.96 156768224.49
R&D expenses 188357821.51 209650329.67
Financial expenses 85010110.29 25674611.42
Including: Interest expenses 41141318.78 63621572.43
Interest income 25340320.97 18055499.73
Add: Other income 62733688.49 21417817.55
Investment income (or less:
losses)
189487259.99 584187850.64
Including: Investment income
from associates and joint ventures
2298930.50 2100652.42
Gains from derecognition of
financial assets at amortized cost
Gains on net exposure to hedging
(or less: losses)
Gains on changes in fair value (or
less: losses)
4086324.56 2767102.00
Credit impairment loss (or less:
losses)
-631899.35 -1678820.26
Assets impairment loss (or less:
losses)
-1496468.86 -368640.74
Gains on asset disposal (or less:
losses)
70090.31 387439.68
II. Operating profit (or less: losses) 847447438.29 1185565793.91
Add: Non-operating revenue 1907081.98 1657122.13
Less: Non-operating expenditures 8389545.94 1068851.00
III. Profit before tax (or less: total
loss)
840964974.33 1186154065.04
Less: Income tax expense 60255033.57 76819516.64
IV. Net profit (or less: net loss) 780709940.76 1109334548.40
(I) Net profit from continuing
operations (or less: net loss)
780709940.76 1109334548.40
(II) Net profit from discontinued
operations (or less: net loss)
V. Other comprehensive income after
tax
(I) Not to be reclassified subsequently
to profit or loss
1.Changes in remeasurement on
the net defined benefit plan
2. Items under equity method that
will not be reclassified to profit or
loss
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of own
credit risk
5. Others
(II) To be reclassified subsequently to
profit or loss
1. Items under equity method that
may be reclassified to profit or
loss
2. Changes in fair value of other
debt investments
3. Profit or loss from
reclassification of financial assets
into other comprehensive income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserve
(profit or loss on cash flow
hedging)
6. Translation reserve
7. Others
VI. Total comprehensive income 780709940.76 1109334548.40
5. Consolidated Cash Flow Statement
Unit: RMB
Items Year 2020 Year 2019
I. Cash flows from operating activities:
Cash receipts from sale of goods or
rendering of services
11849284665.68 12114467691.73
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 264818602.07 231573740.65
Other cash receipts related to operating
activities
253535410.82 174693870.02
Subtotal of cash inflows from operating 12367638678.57 12520735302.40
activities
Cash payments for goods purchased and
services received
7545742409.64 8017585235.57
Net increase of loans and advances to
clients
Net increase of central bank deposit and
interbank deposit
Cash payments for insurance indemnities
of original insurance contracts
Net increase of loans to others
Cash payments for interest handling
charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 1677941014.69 1540342983.64
Cash payments for taxes and rates 363999449.11 440322058.66
Other cash payments related to operating
activities
692612022.02 622321419.93
Subtotal of cash outflows from operating
activities
10280294895.46 10620571697.80
Net cash flows from operating activities 2087343783.11 1900163604.60
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment income 49339043.29 57236631.61
Net cash receipts from the disposal of
fixed assets intangible assets and other
long-term assets
18788012.61 10529127.90
Net cash receipts from the disposal of
subsidiaries & other business units
290189.18
Other cash receipts related to investing
activities
576219673.31 1055940437.56
Subtotal of cash inflows from investing
activities
644636918.39 1123706197.07
Cash payments for the acquisition of
fixed assets intangible assets and other
long-term assets
1149361450.15 869135748.97
Cash payments for investments 1250000.00 1800000.00
Net increase of pledged borrowings
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
activities
289200000.00 29850435.51
Subtotal of cash outflows from investing
activities
1439811450.15 900786184.48
Net cash flows from investing activities -795174531.76 222920012.59
III. Cash flows from financing activities:
Cash receipts from absorbing
investments
118643250.00
Including: Cash received by subsidiaries
from non-controlling shareholders as
investments
Cash receipts from borrowings 2020339244.88 2220988305.90
Other cash receipts related to financing
activities
24534300.14 62964624.87
Subtotal of cash inflows from financing
activities
2163516795.02 2283952930.77
Cash payments for the repayment of
borrowings
1705455347.51 2123117631.60
Cash payments for distribution of
dividends or profits and for interest
expenses
842824941.43 595166284.01
Including: Cash paid by subsidiaries to
non-controlling shareholders as dividend or
profit
4007833.39 20917800.72
Other cash payments related to financing
activities
10752519.79 299483636.97
Subtotal of cash outflows from financing
activities
2559032808.73 3017767552.58
Net cash flows from financing activities -395516013.71 -733814621.81
IV. Effect of foreign exchange rate changes
on cash & cash equivalents
-50292214.11 -28841.85
V. Net increase in cash and cash
equivalents
846361023.53 1389240153.53
Add: Opening balance of cash and cash
equivalents
2553783015.01 1164542861.48
VI. Closing balance of cash and cash
equivalents
3400144038.54 2553783015.01
6. Cash Flow Statement of the Parent Company
Unit: RMB
Items Year 2020 Year 2019
I. Cash flows from operating activities:
Cash receipts from sale of goods and
rendering of services
3591777322.35 3268467818.85
Receipts of tax refund 72901445.17 78890701.50
Other cash receipts related to operating
activities
93832945.34 56268951.89
Subtotal of cash inflows from operating
activities
3758511712.86 3403627472.24
Cash payments for goods purchased and
services received
1965431440.25 1962621401.88
Cash paid to and on behalf of employees 391589764.85 319581376.43
Cash payments for taxes and rates 91135303.51 99864714.09
Other cash payments related to operating
activities
153131340.36 117818085.89
Subtotal of cash outflows from operating
activities
2601287848.97 2499885578.29
Net cash flows from operating activities 1157223863.89 903741893.95
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
19217446.05 10109000.00
Cash receipts from investment income 225498714.94 587278422.76
Net cash receipts from the disposal of fixed
assets intangible assets and other long-term
assets
5013171.60 3038824.89
Net cash receipts from the disposal of
subsidiaries & other business units
2119122.19
Other cash receipts related to investing
activities
271933366.03 565660872.93
Subtotal of cash inflows from investing
activities
523781820.81 1166087120.58
Cash payments for the acquisition of fixed
assets intangible assets and other long-term
assets
235141413.93 261503279.24
Cash payments for investments 236348684.83 238971418.85
Net cash payments for the acquisition of
subsidiaries & other business units
Other cash payments related to investing
activities
149070741.05 35371356.82
Subtotal of cash outflows from investing
activities
620560839.81 535846054.91
Net cash flows from investing activities -96779019.00 630241065.67
III. Cash flows from financing activities:
Cash receipts from absorbing investments 118643250.00
Cash receipts from borrowings 1519811000.00 930000000.00
Other cash receipts related to financing
activities
83377450.00 76225498.75
Subtotal of cash inflows from financing
activities
1721831700.00 1006225498.75
Cash payments for the repayment of
borrowings
1069811000.00 780000000.00
Cash payments for distribution of
dividends or profits and for interest expenses
844817849.02 586298249.58
Other cash payments related to financing
activities
39333154.61 458353614.78
Subtotal of cash outflows from financing
activities
1953962003.63 1824651864.36
Net cash flows from financing activities -232130303.63 -818426365.61
IV. Effect of foreign exchange rate changes
on cash and cash equivalents
V. Net increase in cash and cash equivalents 828314541.26 715556594.01
Add: Opening balance of cash and cash
equivalents
974923339.25 259366745.24
VI. Closing balance of cash and cash
equivalents
1803237880.51 974923339.25
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
Items
Year 2020
Equity Attributable to parent Company
Non-contr
olling
interest
Total equity
Share Capital
Other equity instruments
Capital
reserve
Less:
treasury
shares
Other
comprehe
nsive
income
Speci
al
reser
ve
Surplus
reserve
Gene
ral
risk
reser
ve
Undistribut
ed profit
Othe
rs
Subtotal
Prefer
red
shares
Perpet
ual
bonds
Othe
rs
I. Balance
at the end
of prior
year
276565789
8.00
1090800
022.06
3637811
51.34
-393327
48.50
5598966
19.39
5278392
288.84
92916329
28.45
7378553
7.27
9365418465.
72
Add:
Cumulativ
e changes
of
accounting
policies
Error
correction
of prior
period
Business
combinati
on under
common
control
Others
II. Balance
at the
beginning
of current
year
276565789
8.00
1090800
022.06
3637811
51.34
-393327
48.50
5598966
19.39
5278392
288.84
92916329
28.45
7378553
7.27
9365418465.
72
III.
Current
period
increase
(or less:
decrease)
825943570.
00
-7753825
87.84
-8229741
0.00
-502922
14.11
7807099
4.08
61252441
8.99
77316159
1.12
1417271
4.19
787334305.31
(I) Total
comprehen
sive
income
-502922
14.11
1462158
821.57
14118666
07.46
1116453
0.41
1423031137.
87
(II) Capital
contribute
d or
withdrawn
by owners
-731510.00
54313350
.39
-8229741
0.00
13587925
0.39
135879250.39
1.
Ordinary
shares
contribute
d by
owners
-4926405
0.00
-1679073
00.00
118643250
.00
118643250.00
2. Capital
contribute
d by
holders of
other
equity
instrument
s
3. Amount
of
share-base
d payment
included in
equity
10702981
4.39
8979381
4.00
17236000.
39
17236000.39
4. Others -731510.00
-3452414.
00
-4183924
.00
(III) Profit
distributio
n
7807099
4.08
-8496344
02.58
-77156340
8.50
-4007833
.39
-775571241.8
9
1.
Appropriat
ion of
surplus
reserve
7807099
4.08
-7807099
4.08
2.
Appropriat
ion of
general
risk
reserve
3.
Appropriat
ion of
profit to
owners
-7715634
08.50
-77156340
8.50
-4007833
.39
-775571241.8
9
4. Others
(IV)
Internal
carry-over
within
equity
826675080.
00
-8266750
80.00
1. Transfer
of capital
reserve to
capital
826675080.
00
-8266750
80.00
2. Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover
losses
4. Changes
in defined
benefit
plan
carried
over to
retained
earnings
5. Other
comprehen
sive
income
carried
over to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropriat
ion of
current
period
2.
Applicatio
n of
current
period
(VI)
Others
-3020858.
23
-3020858.
23
7016017.
17
3995158.94
IV.
Balance at
the end of
current
period
359160146
8.00
31541743
4.22
2814837
41.34
-896249
62.61
6379676
13.47
5890916
707.83
10064794
519.57
8795825
1.46
10152752771
.03
Amount of Previous Period
Unit: RMB
Items
Year 2019
Equity Attributable to parent Company Non-controll Total equity
Share
Capital
Other equity
instruments Capital
reserve
Less:
treasury
shares
Other
comprehe
nsive
income
Spec
ial
reser
ve
Surplus
reserve
Gene
ral
risk
reser
ve
Undistributed
profit
Oth
ers
Subtotal
ing interest
Prefer
red
shares
Perpet
ual
bonds
Oth
ers
I. Balance
at the end
of prior
year
21306468
35.00
17022344
09.35
1164576
18.45
-393039
06.65
4488430
76.37
44888817
59.86
86148445
55.48
8523211
6.46
87000766
71.94
Add:
Cumulativ
e changes
of
accountin
g policies
120088.1
8
8359634.1
9
8479722.3
7
8479722.3
7
Error
correction
of prior
period
Business
combinati
on under
common
control
Others
II.
Balance at
the
beginning
21306468
35.00
17022344
09.35
1164576
18.45
-393039
06.65
4489631
64.55
44972413
94.05
86233242
77.85
8523211
6.46
87085563
94.31
of current
year
III.
Current
period
increase
(or less:
decrease)
63501106
3.00
-61143438
7.29
2473235
32.89
-28841.8
5
1109334
54.84
78115089
4.79
66830865
0.60
-1144657
9.19
65686207
1.41
(I) Total
comprehe
nsive
income
-28841.8
5
14212042
36.13
14211753
94.28
1261080
2.63
14337861
96.91
(II)
Capital
contribute
d or
withdrawn
by owners
24566413.
46
2473235
32.89
-22275711
9.43
-22275711
9.43
1.
Ordinary
shares
contribute
d by
owners
-2700830
0.00
27008300.
00
27008300.
00
2. Capital
contribute
d by
holders of
other
equity
instrument
s
3. Amount
of
share-base
d payment
included
in equity
24566413.
46
24566413.
46
24566413.
46
4. Others
2743318
32.89
-27433183
2.89
-27433183
2.89
(III) Profit
distributio
n
1109334
54.84
-64005334
1.34
-52911988
6.50
-209178
00.72
-55003768
7.22
1.
Appropria
tion of
surplus
reserve
1109334
54.84
-11093345
4.84
2.
Appropria
tion of
general
risk
reserve
3.
Appropria
tion of
profit to
owners
-52911988
6.50
-52911988
6.50
-209178
00.72
-55003768
7.22
4. Others
(IV)
Internal
carry-over
63501106
3.00
-63501106
3.00
within
equity
1.
Transfer
of capital
reserve to
capital
63501106
3.00
-63501106
3.00
2.
Transfer
of surplus
reserve to
capital
3. Surplus
reserve to
cover
losses
4.
Changes
in defined
benefit
plan
carried
over to
retained
earnings
5. Other
comprehe
nsive
income
carried
over to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropria
tion of
current
period
2.
Applicatio
n of
current
period
(VI)
Others
-989737.75 -989737.75
-313958
1.10
-4129318.
85
IV.
Balance at
the end of
current
period
27656578
98.00
10908000
22.06
3637811
51.34
-393327
48.50
5598966
19.39
52783922
88.84
92916329
28.45
7378553
7.27
93654184
65.72
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
Items
Year 2020
Share Capital
Other equity instruments
Capital reserve
Less: treasury
shares
Other
comprehensi
ve income
Specia
l
reserv
e
Surplus
reserve
Undistributed
profit
Other
s
Total equity
Preferre
d shares
Perpetu
al bonds
Other
s
I. Balance at
the end of
prior year
2765657898.
00
2005303119.
53
363781151.3
4
431209447.
07
1158673337.
70
5997062650.
96
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Others
II. Balance at
the beginning
of current
year
2765657898.
00
2005303119.
53
363781151.3
4
431209447.
07
1158673337.
70
5997062650.
96
III. Current
period
increase (or
less:
decrease)
825943570.00
-806581413.0
1
-82297410.0
0
78070994.0
8
-68924461.82 110806099.25
(I) Total
comprehensi
ve income
780709940.76 780709940.76
(II) Capital
contributed
or withdrawn
by owners
-731510.00 20093666.99
-82297410.0
0
101659566.99
1. Ordinary
shares
contributed
by owners
-49264050.00
-167907300.
00
118643250.00
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based
payment
72810130.99 89793814.00 -16983683.01
included in
equity
4. Others -731510.00 -3452414.00 -4183924.00
(III) Profit
distribution
78070994.0
8
-849634402.5
8
-771563408.5
0
1.
Appropriatio
n of surplus
reserve
78070994.0
8
-78070994.08
2.
Appropriatio
n of profit to
owners
-771563408.5
0
-771563408.5
0
3. Others
(IV) Internal
carry-over
within equity
826675080.00
-826675080.0
0
1.Transfer of
capital
reserve to
capital
826675080.00
-826675080.0
0
2.Transfer of
surplus
reserve to
capital
3.Surplus
reserve to
cover losses
4. Changes in
defined
benefit plan
carried over
to retained
earnings
5. Other
comprehensi
ve income
carried over
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriatio
n of current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end of
current
period
3591601468.
00
1198721706.
52
281483741.3
4
509280441.
15
1089748875.
88
6107868750.
21
Amount of Previous Period
Unit: RMB
Items
Year 2019
Share Capital
Other equity instruments
Capital reserve
Less: treasury
shares
Other
comprehensi
ve income
Specia
l
reserv
e
Surplus
reserve
Undistributed
profit
Other
s
Total equity Preferre
d shares
Perpetu
al bonds
Other
s
I. Balance at
the end of
prior year
2130646835.
00
2621241593.
01
116457618.4
5
320155904.0
5
688311336.98
5643898050.
59
Add:
Cumulative
changes of
accounting
policies
120088.18 1080793.66 1200881.84
Error
correction of
prior period
Others
II. Balance at
the beginning
of current
year
2130646835.
00
2621241593.
01
116457618.4
5
320275992.2
3
689392130.64
5645098932.
43
III. Current
period
increase (or
less:
decrease)
635011063.00
-615938473.4
8
247323532.8
9
110933454.8
4
469281207.06 351963718.53
(I) Total
comprehensi
ve income
1109334548.
40
1109334548.
40
(II) Capital
contributed
or withdrawn
by owners
19072589.52
247323532.8
9
-228250943.3
7
1. Ordinary
shares
contributed
by owners
-27008300.0
0
27008300.00
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based
payment
included in
equity
19072589.52 19072589.52
4. Others
274331832.8
9
-274331832.8
9
(III) Profit 110933454.8 -640053341.3 -529119886.5
distribution 4 4 0
1.
Appropriatio
n of surplus
reserve
110933454.8
4
-110933454.8
4
2.
Appropriatio
n of profit to
owners
-529119886.5
0
-529119886.5
0
3. Others
(IV) Internal
carry-over
within equity
635011063.00
-635011063.0
0
1.Transfer of
capital
reserve to
capital
635011063.00
-635011063.0
0
2.Transfer of
surplus
reserve to
capital
3.Surplus
reserve to
cover losses
4. Changes in
defined
benefit plan
carried over
to retained
earnings
5. Other
comprehensi
ve income
carried over
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriatio
n of current
period
2.
Application
of current
period
(VI) Others
IV. Balance
at the end of
current
period
2765657898.
00
2005303119.
53
363781151.3
4
431209447.0
7
1158673337.
70
5997062650.
96
III. Company profile
The Company was established by the original Sanhua Fuji Koki Co. Ltd. The Company currently holds a business license with a unified social credit code of
913300006096907427 registered and issued by Zhejiang Administration of Industry and Commerce with headquarter in Shaoxing City Zhejiang Province. The
registered capital of 3591601468.00 yuan total share of 3591601468 shares (each with par value of one yuan). The Company’s shares were listed at Shenzhen
Stock Exchange.The Company operates in the machinery manufacturing industry. Business scope includes production and marketing of Service Valve Electronic Expansion
valve Drainage Pump Solenoid Valve One-way Valve Compressor Parts Pressure Pipeline Components Electromechanical Hydraulic Control Pump and other
electromechanical hydraulic control components undertaking services of inspection test and analysis of refrigeration accessories and engaging in import and export
business. Main products include control components and parts of household appliances and automobile A/C.The financial statements have been approved by the board of directors of the Company and disclosed on March 25 2021.Zhejiang Sanhua Climate and Appliance Controls Group Co. Ltd. and other subsidiaries are included in the scope of consolidated financial statements in the
current period. For further details please refer to the change of consolidation scope in the notes to the financial report and the description of equity in other entities.IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. Going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to
continue as a going concern within the 12 months after the balance sheet date.V. Significant accounting policies and estimates
Notes to specific accounting policies and accounting estimates:
1．Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements have been prepared in accordance with the requirements of China Accounting
Standards for Business Enterprises (CASBEs) and present truly and completely the financial position results of
operations and cash flows of the Company.
2．Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3．Operating cycle
The Company has a relatively short operating cycle for its business an asset or a liability is classified as
current if it is expected to be realized or due within 12 months.
4．Functional currency
The Company’s functional currency is Renminbi (RMB) Yuan.
5．Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined
party included in the consolidated financial statements of the ultimate controlling party at the combination date.
Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
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/ the
beginning of the month exchange rate at the transaction date at initial recognition. At the balance sheet date
monetary items denominated in foreign currency are translated at the spot exchange rate at the balance sheet date
with difference except for those arising from the principal and interest of exclusive borrowings eligible for
capitalization included in profit or loss; non-cash items carried at historical costs are translated at the spot
exchange rate at the transaction date with its RMB amount unchanged; non-cash items carried at fair value in
foreign currency are translated at the spot exchange rate at the date when the fair value was determined with
difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date;
the equity items other than undistributed profit are translated at the spot rate at the transaction date; the revenues
and expenses in the income statement are translated into RMB at the approximate exchange rate similar to the
systematically and rationally determined spot exchange rate at the transaction date. The difference arising from
foreign currency translation is included in other comprehensive income.
9．Financial instruments
Financial instruments refer to contracts that form one party’s financial assets into other parties’ financial
liabilities or equity instruments.
1. Classification of financial assets and financial liabilities
The Company's financial assets fall into two main categories: (1) financial assets at amortized cost; (2)
financial assets at fair value through profit or loss. Financial liabilities are classified into the following two
categories: (1) financial liabilities at amortized cost; (2) financial liabilities at fair value through profit or loss.
2. Recognition criteria measurement method and derecognition condition of financial assets and financial
liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument it is recognized as a financial asset or
financial liability. The financial assets and financial liabilities initially recognized by the Company are measured
at fair value; for the financial assets and liabilities at fair value through profit or loss the transaction expenses
thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities the
transaction expenses thereof are included into the initially recognized amount. However at initial recognition for
accounts receivable that do not contain a significant financing component or contracts in which the financing
components with associated period less than one year are not considered the Company measures at their
transaction price.
(2) Subsequent measurement of financial assets
The Company measures its financial assets at the amortized costs using effective interest method. Gains or
losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial assets are derecognized reclassified through the amortization
process or in order to recognize impairment gains or losses.The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or
losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and through the amortization process.
Financial liabilities designated as at fair value through profit or loss. The Company measures such kind of
liabilities at fair value. Other gains or losses on those financial liabilities shall be included into profit or loss
except for financial liabilities that are part of hedging relationships.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; or
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset it derecognizes the financial asset and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset it continues recognizing the financial asset.Where the Company does not transfer or retain substantially all of the risks and rewards related to the
ownership of a financial asset it is dealt with according to the circumstances as follows respectively: (1) if the
Company does not retain its control over the financial asset it derecognizes the financial asset and any right or
liability arising from such transfer is recognized independently as an asset or a liability; (2) if the Company retains
its control over the financial asset according to the extent of its continuing involvement in the transferred
financial asset it recognizes the related financial asset and recognizes the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition the difference between the
amounts of the following two items are included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset.
4. Fair value determination method of financial assets and liabilities
The Company use valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company on the basis of expected credit loss recognizes loss allowances of financial assets at
amortized cost. The Company considers reasonable and evidence-based information about past events current
conditions and forecasts of future economic conditions and uses the risk of default as the weight to calculate the
difference between the contractual cash flow receivable and the expected cash flow Probability-weighted amount
of the present value to confirm expected credit losses. The Company separately measures the expected credit
losses of financial instruments at different stages on the balance sheet date. The first stage if the credit risk of a
financial instrument has not increased significantly since the initial recognition and the loss provision is measured
according to the expected credit loss in the next 12 months. The second stage if the credit risk of a financial
instrument has increased significantly since its initial recognition but no credit impairment has occurred and the
loss provision is measured based on the expected credit loss for the entire duration. The third stage if a financial
instrument has been credit-impaired since its initial recognition and the loss provision is measured based on the
expected credit loss for the entire duration.
Considering reasonable and supportable forward-looking information the Company compares the risk of a
default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
financial instrument as at the date of initial recognition so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low credit risk on the balance sheet date. The
Company measures the loss provision according to the expected credit loss in the next 12 months
Regarding the accounts receivable (including bills receivable and accounts receivable) stipulated in the
"CASBE14 –Revenue" regardless of whether it contains significant financing components (including financing in
contracts not exceeding one year) Component) the Company measures the loss provision based on the expected
credit loss for the entire duration.
For financial instruments in the first and second stages and with lower credit risk the interest income is
calculated based on the book balance and the effective interest rate without deducting the provision for
impairment. For financial instruments in the third stage the interest income is calculated based on the amortized
cost and the actual interest rate after the book balance minus the provision for impairment.If the "credit risk-related information" of a single instrument has been known or is relatively easily available
the Company assesses expected credit risk and measures expected credit losses on the basis of a single financial
instrument. Such financial instruments usually include accounts receivable from related parties deposit deposits
receivable from government units or public utility units and financial instruments with solid evidence that credit
impairment has occurred.If sufficient evidence of “credit risk-related information” cannot be obtained at a reasonable cost at the level
of individual instruments the Company assesses expected credit risk and measures expected credit losses based
on a combination of financial instruments. The Company combines financial instruments based on the same or
similar credit risk characteristics including but not limited to aging combinations.If the availability of "credit risk-related information" of a single tool changes from being difficult to obtain to
being available the Company will change from a combination-based assessment measurement to a single
tool-based assessment measurement.The Company remeasures expected credit losses on each balance sheet date and the resulting increase in loss
reserves or the amount of reversal is included in the current profits and losses as impairment losses or gains. For
financial assets measured at amortized cost the loss allowance shall be deducted from the book value of the
financial assets listed in the balance sheet.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a
collective basis
For other receivables that are difficult to be evaluated and measured by a single tool the Company mainly
combines aging as a credit risk feature refers to historical credit loss experience combines current conditions and
forecasts of future economic conditions and adopts default risk exposure and The expected credit loss rate in the
next 12 months or the entire duration is used to calculate the expected credit loss.
(3) Accounts receivable with expected credit losses measured on a collective basis
Regarding the accounts receivable specified in the "CASBE14 –Revenue" regardless of whether it contains
significant financing components (including financing components in contracts not exceeding one year) refer to
historical credit loss experience and combine current The situation and the forecast of future economic conditions
through the default risk exposure and the entire duration of the expected credit loss rate calculate the expected
credit loss. For accounts receivable that are difficult to be evaluated and measured by a single tool the Company
divides the accounts receivable into several combinations based on credit risk characteristics and calculates the
expected credit loss on the basis of the combination. The basis for determining the combination and the specific
accrual method are shown below table:
Portfolio Name
Basis for determination of
portfolio
Method for measuring expected credit loss
Notes receivable—Bank
acceptance bill
Accepted by financial
institutions
No provision
Notes receivable— Commercial
acceptance bill
Not accepted by financial
institutions
5%
Accounts receivable—Ages
portfolios
Ages
receivable with provision made on a collective basis based on the
comparison table of age and expected credit loss rate
Accounts receivable – comparison table of ages and lifetime expected credit loss rate
Ages Expected credit loss rate
Within 1 year 5%
1-2 years 10%
2-3years 30%
Over 3 years 50%
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.
However the Company offsets a financial asset and a financial liability and presents the net amount in the balance
sheet when those who meet the corresponding conditions at the same time.
10．Inventories
1. Classification of inventories
Inventories include material work in process in the process of production and finished goods etc.
2. Accounting method for dispatching inventories
Inventories dispatched from storage at actual cost are accounted with weighted average method at the end of
each month; Inventories dispatched from storage according to the plan the cost difference will be carried forward
at the same time at the end of the month.
3. Basis for determining net realizable value
At the balance sheet date inventories are measured at the lower of cost or net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value. Inventory used directly for
sale in the course of normal production and operation the net realizable value of the inventory shall be
determined by the estimated selling price minus the estimated selling expenses and related taxes; Inventories that
require processing in the course of normal production and operation the net realizable value of the finished
product shall be determined by the estimated selling price of the finished product minus the estimated cost to be
incurred at the time of completion the estimated selling expenses and the relevant taxes and fees. On the balance
sheet date where a part of the same inventory has a contract price and other parts do not have a contract price the
net realizable value thereof shall be determined separately and compare with the corresponding cost to determine
the amount of the provision for inventory depreciation or the amount of the reversal.
4. Inventory system
The perpetual inventory system is adopted.
5. Revolving materials are amortized with one-off method.
11. Contract assets contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required
before the consideration is due) as a receivable and presents a right to consideration in exchange for goods that it
has transferred to a customer (which is conditional on something other than the passage of time) as a contract
asset.
12．Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or joint control
of these policies.2. Determination of investment cost
(1) For business combination under common control if the consideration of the combining party is that it
makes payment in cash transfers non-cash assets assumes its liabilities or issues equity securities on the date of
combination it regards the share of the carrying amount of the equity of the combined party included the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset any excess is adjusted to retained earnings.
(2) For business combination not under common control investment cost is initially recognized at the
acquisition-date fair value of considerations paid.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a
long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship it is accounted for with cost method; for long-term
equity investments with joint control or significant influence relationship it is accounted for with equity method.
13. Investment property
Investment property measurement model
Measurement by cost method
Depreciation or amortization method
1. Investment property includes land use right of rent-out property and of property held for capital appreciation
and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost and subsequent measurement is made
using the cost model the depreciation or amortization method is the same as that of fixed assets and intangible
assets.
14. Fixed assets
（1）Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services for rental to
others or for administrative purposes and expected to be used during more than one accounting year. Fixed assets
are recognized if and only if it is probable that future economic benefits associated with the assets will flow to
the Company and the cost of the assets can be measured reliably.
（2）Depreciation method of different categories of fixed assets
Categories Depreciation method Useful life (years)
Estimated residual value
proportion (%)
Annual depreciation rate
(%)
Buildings and
structures
Straight-line method 20-30 0%、5% 3.17%～5%Machinery and
equipment
Straight-line method 5-12 0%、5% 7.92%～20%Measurement analysis
equipment
Straight-line method 5-10 5% 9.50%～19%
Vehicle Straight-line method 5-8 0%、5% 11.88%～20%Office equipment and
others
Straight-line method 5-8 0%、5% 11.88%～20%
15．Construction in progress
1. Construction in progress is recognized if and only if it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably.
Construction in progress is measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed
usable conditions. When the auditing of the construction in progress was not finished while reaching the designed
usable conditions it is transferred to fixed assets using estimated value first and then adjusted accordingly when
the actual cost is settled but the accumulated depreciation is not to be adjusted retrospectively.
16．Borrowing costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization it is capitalized and included in the costs of relevant
assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred and are
included in profit or loss.
17．Intangible assets
(1) Valuation method service life impairment test
Intangible assets include land use right land ownership application software patent right and non-patented
technology etc. The initial measurement of intangible assets is based on its cost.Intangible assets are amortized by the straight-line method with details as follows:
Categories Amortization method Amortization period (years)
Land use rights Straight-line method Contractual service life
Intellectual Property of Air Conditioning Controller Straight-line method 5-10
Patented technology of electronic expansion valve controller of
Dotech
Straight-line method 10
Application software Straight-line method 1-4
Intangible assets with indefinite useful life are not amortized but their useful life is reviewed annually. The
indefinite land ownership held by overseas subsidiaries abroad is not amortized due to uncertain service life.
（2）Accounting policy for internal R&D expenditure
Expenditures on the research phase of an internal project are recognized as profit or loss when it is incurred.
An intangible asset arising from the development phase of an internal project is recognized if the Company can
meet the corresponding conditions.
18．Impairment of part of long-term assets
Long-term assets such as long-term equity investment investment properties fixed assets construction in
progress intangible assets that measured at cost are tested for impairment if there is any indication that an asset
may be impaired at the balance sheet date. Impairment test to goodwill and the intangible assets whose using life
is not certain shall be carried out at least at the end of each year. Goodwill shall be tested for impairment in
combination with its related asset group or combination of asset groups.If the recoverable amount of the aforementioned long-term assets is lower than its book value the asset
impairment provision shall be recognized according to the difference and included in the current profit and loss.
19．Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost and evenly amortized within the beneficiary period or
stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods
residual values of such items are included in profit or loss.
20．Employee benefits
(1) Short-term employee benefits
The Company recognizes in the accounting period in which an employee provides service short-term
employee benefits actually incurred as liabilities with a corresponding charge to profit or loss or the cost of a
relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined
benefit plans. The Company recognizes in the accounting period in which an employee provides service the
contribution payable to a defined contribution plan as a liability with a corresponding charge to profit or loss or
the cost of a relevant asset.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination
benefits with a corresponding charge to profit or loss at the earlier of the following dates: a. when the Company
cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a
curtailment proposal; or b. when the Company recognizes cost or expenses related to a restructuring that involves
the payment of termination benefits.
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as
a defined contribution plan those benefits are accounted for in accordance with the requirements relating to
defined contribution plan while other benefits are accounted for in accordance with the requirements relating to
defined benefit plan. To simplify the relevant accounting treatment the Company recognizes the cost of employee
benefits arising from other long-term employee benefits as service cost. Net interest on the net liability or net
assets of other long-term employee benefits and changes as a result of remeasurement of the net liability or net
assets of other long-term employee benefits .The net total of the aforesaid amounts is recognized in profit or loss
or included in the cost of a relevant asset.
21．Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as
providing guarantee for other parties litigation products quality guarantee onerous contract etc. may cause the
outflow of the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling
the present obligations and its carrying amount is reviewed at the balance sheet date.
22．Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements modifications and cancellations of share-based payment terms and
conditions
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees if the equity instruments granted vest
immediately the fair value of those equity instruments is measured at grant date and recognized as transaction
cost or expense with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest
until the counterparty completes a specified period of service at the balance sheet date within the vesting period
the fair value of those equity instruments measured at grant date based on the best estimate of the number of
equity instruments expected to vest is recognized as transaction cost or expense with a corresponding adjustment
in capital reserve.
For equity-settled share-based payment transaction with parties other than employees if the fair value of the
goods or services received can be measured reliably the fair value is measured at the date the Company obtains
the goods or the counterparty renders service; if the fair value of the goods or services received cannot be
measured reliably the fair value of the equity instruments granted measured at the date the Company obtains the
goods or the counterparty renders service is referred to and recognized as transaction cost or expense with a
corresponding increase in equity.
(2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees if share appreciation rights vest
immediately the fair value of the liability incurred as the acquisition of goods or services is measured at grant
date and recognized as transaction cost or expense with a corresponding increase in liabilities; if share
appreciation rights do not vest until the employees have completed a specified period of service the liability is
measured at each balance sheet date until settled at the fair value of the share appreciation rights measured at
grant date based on the best estimate of the number of share appreciation right expected to vest.
(3) Modifications and cancellations of share-based payment terms and conditions
If the modification increases the fair value of the equity instruments granted measured immediately before
and after the modification the Company includes the incremental fair value granted in the measurement of the
amount recognized for services received as consideration for the equity instruments granted; similarly if the
modification increases the number of equity instruments granted the Company includes the fair value of the
additional equity instruments granted measured at the date of the modification in the measurement of the amount
recognized for services received as consideration for the equity instruments granted; if the Company modifies the
vesting conditions in a manner that is beneficial to the employee the Company takes the modified vesting
conditions into account.If the modification reduces the fair value of the equity instruments granted measured immediately before and
after the modification the Company does not take into account that decrease in fair value and continue to measure
the amount recognized for services received as consideration for the equity instruments based on the grant date
fair value of the equity instruments granted; if the modification reduces the number of equity instruments granted
to an employee that reduction is accounted for as a cancellation of that portion of the grant; if the Company
modifies the vesting conditions in a manner that is not beneficial to the employee the Company does not take the
modified vesting conditions into account.If the Company cancels or settles a grant of equity instruments during the vesting period (other than a grant
cancelled by forfeiture when the vesting conditions are not satisfied) the Company accounts for the cancellation
or settlement as an acceleration of vesting and therefore recognizes immediately the amount that otherwise would
have been recognized for services received over the remainder of the vesting period.
23．Revenue
Accounting policies used in revenue recognition and measurement
1. Revenue recognition principles
At contract inception the Company shall assess the contracts and shall identify each performance obligation
in the contracts and determine whether the performance obligation should be satisfied over time or at a point in
time.The Company satisfies a performance obligation over time if one of the following criteria is met otherwise
the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes
the benefits provided by the Company’s performance as the Company performs; (2) the customer can control
goods or services as they are created by the Company’s performance; (3) the Company’s performance does not
create goods or services with an alternative uses and the Company has an enforceable right to payment for
performance completed to date.
For each performance obligation satisfied over time the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably but the costs incurred in satisfying the performance obligation are
expected to be recovered the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress. To determine whether the customer has obtained control of goods the Company
shall consider the following indicators: (1) the Company has a present right to payment for the goods i.e. the
customer is presently obliged to pay for the goods; (2) the Company has transferred the legal title of the goods to
the customer i.e. the customer has legal title to the goods; (3) the Company has transferred physical possession of
the goods i.e. the customer has physically possessed the goods; (4) the Company has transferred significant risks
and rewards of ownership of the goods i.e. the customer has obtained significant risks and rewards of ownership
of the goods; (5) the customer has accepted the goods; (6) other indicators showing the customer has obtained
control over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring goods or services to a customer excluding amounts collected on behalf of third parties
and those expected to be refunded to the customer.(2) If the consideration promised in a contract includes a variable amount the Company shall confirm the
best estimate of variable consideration at expected value or the most likely amount. However the transaction price
that includes the amount of variable consideration only to the extent that it is high probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component the Company shall
determine the transaction price based on the price that a customer would have paid for if the customer had paid
cash for obtaining control over those goods or services. The difference between the transaction price and the
amount of promised consideration is amortized under effective interest method over contractual period.
(4) For contracts containing two or more performance obligations the Company shall determine the
stand-alone selling price at contract inception of the distinct good underlying each performance obligation and
allocate the transaction price to each performance obligation on a relative stand-alone selling price basis.
3. Revenue recognition method
(1) The Company mainly sells control components and parts for household appliances and automobile air
conditioners. Due to continuous batch supply product sales revenue is confirmed after delivery inspection and
receipt of payment receipts. Export sales revenue is recognized after customs declaration and export and obtaining
the bill of lading.
(2) Recognition of income from the sale of scrap metal after weighing and taking delivery and obtaining
receipts.
Differences in revenue recognition accounting policies caused by different business models of similar businesses
24．Government grants
1. Government grants shall be recognized if and only if the following conditions are all met: (1) the Company
will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary government grants
are measured at the amount received or receivable. Non-monetary government grants are measured at fair value and
can be measured at nominal amount in the circumstance that fair value can’t be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company construct or otherwise
acquire long-term assets under requirements of government. In the circumstances that there is no specific
government requirement the Company shall determine based on the primary condition to acquire the grants and
government grants related to assets are government grants whose primary condition is to construct or otherwise
acquire long-term assets. They offset carrying amount of relevant assets or recognized as deferred income. If
recognized as deferred income they are included in profit or loss on a systematic basis over the useful lives of the
relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold
transferred disposed or damaged within the useful lives balance of unamortized deferred income is transferred
into profit or loss of the year in which the disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For
government grants that contain both parts related to assets and parts related to income in which those two parts
are blurred and thus collectively classified as government grants related to income. For government grants related
to income used for compensating the related future cost expenses or losses of the Company are recognized as
deferred income and are included in profit or loss or offset relevant cost during the period in which the relevant
cost expenses or losses are recognized; for government grants related to income used for compensating the
related cost expenses or losses incurred to the Company they are directly included in profit or loss or directly
offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or offset
relevant cost based on business nature while those not related to the ordinary course of business shall be included
into non-operating revenue or expenditures.
25．Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between
the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of
items not recognized as assets and liabilities but with their tax base being able to be determined according to tax
laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income which it is most likely to
obtain and which can be deducted from the deductible temporary difference. At the balance sheet date if there is any
exact evidence that it is probable that future taxable income will be available against which deductible temporary
differences can be utilized the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available
to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that
it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss excluding those arising from the following circumstances: (a) business combination; and (b) the transactions
or items directly recognized in equity.
26．Leases
1. Accounting of operating lease
When the Company is the lessee during each period of the lease term the rent is included in the relevant asset
cost or recognized as the current profit and loss according to the straight-line method and the initial direct expenses
incurred are directly included in the current profit and loss. Contingent rents are included in the current profits and
losses when they actually occur.When the Company is the lessor during each period of the lease term the rent is recognized as the current
profit and loss according to the straight-line method and the initial direct expenses incurred are directly included in
the current profit and loss except for the larger amount which is capitalized and included in the profit and loss in
installments. Contingent rents are included in the current profits and losses when they actually occur.
2. Accounting of finance lease
When the Company is the lessee on the start date of the lease term the Company uses the lower of the fair
value of the leased asset on the lease start date and the present value of the minimum lease payment as the entry
value of the leased asset and the minimum lease payment as the long-term payable For the recorded value of the
loan the difference is the unrecognized financing cost and the initial direct cost incurred is included in the value of
the leased asset. In each period of the lease period the actual interest rate method is used to calculate and confirm
the current financing costs.When the Company is the lessor at the beginning of the lease period the Company uses the sum of the
minimum lease payment on the lease start date and the initial direct cost as the entry value of the financial lease
receivable and records the unsecured residual value at the same time; collects the minimum lease payment The
difference between the sum of initial direct costs and the sum of unguaranteed residual value and the sum of its
present value is recognized as unrealized financing income. In each period of the lease period the actual interest rate
method is used to calculate and confirm the current financing income.
27．Other significant accounting policies and estimates
Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization management requirements and internal reporting system. An operating
segment is a component of the Company that:
1. Engages in business activities from which it may earn revenues and incur expenses;
2. Whose financial performance are regularly reviewed by Management to make decisions about resource to
be allocated to the segment and assess its performance; and
3. For which financial information regarding financial position financial performance and cash flows is
available.
28. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
The Company has adopted “CASBE 14 - Revenue” revised by Ministry of Finance of PRC (hereinafter
referred to as the “New Revenue Standards”) since January 1 2020. According to the convergence of the old and
new standards the information of the comparable period will not be adjusted. The cumulative impact of the
implementation of the new standards on the first implementation date will be retroactively adjusted to the retained
earnings and other relevant items in the financial statements as at January 1 2020.On January 1 2020 the new revenue standards have no adjustment impact on the company's retained earnings
other affected financial statement items and amounts are shown below table:
Items
Balance sheet
December 31 2019
adjustment impact of new revenue
standards
January 1 2020
Advance receipts 23453218.32 -23453218.32
contract liabilities +23453218.32 23453218.32
（2）Changes in significant accounting estimates
□ Applicable √ Not applicable
（3）Since 2020 Adjustments to the relevant items of financial statements at the beginning of the year at
the first implementation of new revenue and lease standards .
Applicable
Whether it is necessary to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Items December 31 2019 January 1 2020 Amount adjusted
Current asset：
Cash and Bank Balances 2663719770.15 2663719770.15
Settlement funds
Loans to other banks
Held-for-trading financial assets 993634433.31 993634433.31
Derivative financial assets 8314400.73 8314400.73
Notes receivable 2097159908.40 2097159908.40
Accounts receivable 1871323522.82 1871323522.82
Receivable financing
Advances paid 62871924.30 62871924.30
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 97394782.97 97394782.97
Including: Interest receivable
Dividends receivable
Repurchasing of financial assets
Inventories 2180838596.07 2180838596.07
Contract assets
Assets held for sales
Non-current assets due within one year
Other current assets 75933253.28 75933253.28
Total current assets 10051190592.03 10051190592.03
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 2145963.27 2145963.27
Long-term equity investments 14522259.80 14522259.80
Other equity instrument investments
Other non-current financial assets
Investment property 27025974.05 27025974.05
Fixed assets 3379608199.26 3379608199.26
Construction in progress 480959262.46 480959262.46
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 525867518.75 525867518.75
Development expenditures
Goodwill 31959091.60 31959091.60
Long-term prepayments 8720120.64 8720120.64
Deferred tax assets 88952931.69 88952931.69
Other non-current assets 179238257.09 179238257.09
Total non-current assets 4738999578.61 4738999578.61
Total assets 14790190170.64 14790190170.64
Current liabilities:
Short-term borrowings 1295610572.07 1295610572.07
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities 126364.40 126364.40
Notes payable 1130668415.32 1130668415.32
Accounts payable 1587763752.62 1587763752.62
Advances received 23453218.32 -23453218.32
Contract liabilities 23453218.32 23453218.32
Selling of repurchased financial assets
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 228997483.82 228997483.82
Taxes and rates payable 58192607.75 58192607.75
Other payables 161237214.88 161237214.88
Including: Interest Payable
Dividends Payable 1772750.00 1772750.00
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 222228097.22 222228097.22
Other current liabilities
Total current liabilities 4708277726.40 4708277726.40
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 392882280.09 392882280.09
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 94235857.77 94235857.77
Long-term employee benefits payable
Provisions
Deferred income 82537550.43 82537550.43
Deferred tax liabilities 65049361.71 65049361.71
Other non-current liabilities 81788928.52 81788928.52
Total non-current liabilities 716493978.52 716493978.52
Total liabilities 5424771704.92 5424771704.92
Equity:
Share capital 2765657898.00 2765657898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1090800022.06 1090800022.06
Less: Treasury shares 363781151.34 363781151.34
Other comprehensive income -39332748.50 -39332748.50
Special reserve
Surplus reserve 559896619.39 559896619.39
General risk reserve
Undistributed profit 5278392288.84 5278392288.84
Total equity attributable to the parent Company 9291632928.45 9291632928.45
Non-controlling interest 73785537.27 73785537.27
Total equity 9365418465.72 9365418465.72
Total liabilities & equity 14790190170.64 14790190170.64
Adjustment statement
On January 1 2020 the new revenue standards have no adjustment impact on the company's retained earnings
other affected financial statement items and amounts are shown below table:
Items
Balance sheet
December 31 2019
adjustment impact of new revenue
standards
January 1 2020
Advance receipts 23453218.32 -23453218.32
contract liabilities +23453218.32 23453218.32
Balance Sheet of the Parent Company
Unit: RMB
Items December 31 2019 January 1 2020 Amount adjusted
Current assets:
Cash and bank balances 1039915005.31 1039915005.31
Held-for-trading financial assets 195000000.00 195000000.00
Derivative financial assets 2069850.00 2069850.00
Notes receivable 161946880.21 161946880.21
Accounts receivable 1135299895.98 1135299895.98
Receivables financing
Advances paid 6076163.25 6076163.25
Other receivables 603257516.95 603257516.95
Including: Interest Receivable
Dividends Receivable
Inventories 519241847.99 519241847.99
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 21333811.35 21333811.35
Total current assets 3684140971.04 3684140971.04
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4256633941.06 4256633941.06
Other equity instrument investments
Other non-current financial assets
Investment property
Fixed assets 1460855506.39 1460855506.39
Construction in progress 44135844.65 44135844.65
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 189181593.94 189181593.94
Development expenditures
Goodwill
Long-term prepayments 625318.03 625318.03
Deferred tax assets 17068063.08 17068063.08
Other non-current assets 109659279.90 109659279.90
Total non-current assets 6078159547.05 6078159547.05
Total assets 9762300518.09 9762300518.09
Current liabilities:
Short-term borrowings 730799542.65 730799542.65
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1431862681.89 1431862681.89
Advances received 92676.29 -92676.29
Contract liabilities 92676.29 92676.29
Employee benefits payable 65680254.82 65680254.82
Taxes and rates payable 1576623.72 1576623.72
Other payables 1252808472.44 1252808472.44
Including: interest payable
Dividends Payable 1772750.00 1772750.00
Liabilities classified as held for sale
Non-current liabilities due within one year 220225194.44 220225194.44
Other current liabilities
Total current liabilities 3703045446.25 3703045446.25
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 30895817.00 30895817.00
Deferred tax liabilities 31296603.88 31296603.88
Other non-current liabilities
Total non-current liabilities 62192420.88 62192420.88
Total liabilities 3765237867.13 3765237867.13
Equity:
Share capital 2765657898.00 2765657898.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2005303119.53 2005303119.53
Less: treasury shares 363781151.34 363781151.34
Other comprehensive income
Special reserve
Surplus reserve 431209447.07 431209447.07
Undistributed profit 1158673337.70 1158673337.70
Total equity 5997062650.96 5997062650.96
Total liabilities & equity 9762300518.09 9762300518.09
Adjustment statement
On January 1 2020 the new revenue standards have no adjustment impact on the company's retained earnings
Other affected financial statement items and amounts are shown below table:
Items Balance sheet
December 31 2019 adjustment impact of new revenue standards January 1 2020
Advance receipts 92676.29 -92676.29
contract liabilities +92676.29 92676.29
（4）Since 2020 the statements of first implementation of new revenue and lease standards to trace and
adjust previous comparative data.
□ Applicable √ Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
VAT
The output tax calculated based on the revenue from sales of goods or rendering of
services in accordance with the tax law net of the input tax that is allowed to be deducted
in the current period
13%
Urban maintenance and
construction tax
The sum of turnover tax payable and value-added tax exemption 5%，7%
Enterprise income tax Taxable income 15%，25%
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Zhejiang Sanhua Intelligent Controls Co. Ltd 15%
Zhejiang Sanhua Climate and Appliance Controls Group Co. Ltd 15%
Wuhu Sanhua Auto-control Components Co. Ltd 15%
Zhejiang Sanhua Automotive Components Co. Ltd. 15%
Sanhua (hangzhou) Micro Channel Heat Exchanger Co. Ltd 15%
Hangzhou Leaderway Electronics Co. Ltd 15%
Zhuhai Hengtu Electronics Co. Ltd. 15%
Wuhu Sanhua Refrigeration Fittings Co. Ltd 15%
Sanhua (Jiangxi) Self - control Components Co. Ltd. 15%
Wuhan Sanhua Refrigeration Parts Co. Ltd 15%
Sanhua AWECO Appliance Systems (Wuhu) Co. Ltd. 15%
Domestic taxpayers other than the above-mentioned 25%
2. Tax preferential policies
1．Enterprise income tax
Being categorized as high-tech enterprises the income tax of the Company and several subsidiaries for 2020
are temporarily calculated at a preferential tax rate of 15% and the final income tax settlement shall prevail.
2．Value-added tax
Several subsidiaries are welfare enterprises and can enjoy the preferential policy of "VAT refund". The
exceeding portion over the 3% VAT payable of the certified software products enjoy the immediate refund policy.
Export goods enjoy the VAT exemption and refund policy.
3. Others
The overseas subsidiary shall be subject to the tax regulations of its host country.Ⅶ. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 232265.51 417814.58
Cash in bank 3411034773.03 2553365200.43
Other cash and bank balances 78420529.60 109936755.14
Total 3489687568.14 2663719770.15
Including: Deposited overseas 370754548.72 488694193.85
The total amount of the cash and
bank balances that are limited by
mortgage pledge or freeze
89543529.60 109936755.14
Other remarks:
As of December 31 2020 bank deposits containing large deposit certificates with fixed interest rates
amounted to 1629 million yuan.
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through
profit or loss
752224861.78 993634433.31
Including:
Bank financial products 752224861.78 993634433.31
Including:
Total 752224861.78 993634433.31
Other remarks:
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 49339961.11 3371510.40
Futures tools 8990525.42 4942890.33
Total 58330486.53 8314400.73
Other remarks:
4. Notes receivable
（1）Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 2190368328.70 1981778291.59
Trade acceptance 133566452.83 115381616.81
Total 2323934781.53 2097159908.40
Unit: RMB
Categories
Closing balance Opening balance
Book balance
Provision for bad
debt
Carrying
amount
Book balance
Provision for bad
debt
Carrying
amount
Amount
Propor
tion
Amount
Provisi
on
propor
tion
Amount Propor
tion
Amount Provisi
on
propor
tion
Including:
Notes
receivable
with
provision
for bad debt
made on a
collective
basis
23309
64594.
83
100.00
%
702981
3.30
0.30%
23239347
81.53
21032326
25.08
100.00
%
607271
6.68
0.29%
20971599
08.40
Including:
Bank
acceptance
21903
68328.
70
93.97
%
21903683
28.70
19817782
91.59
94.23
%
19817782
91.59
Trade
acceptance
140596
266.13
6.03%
702981
3.30
5.00%
13356645
2.83
12145433
3.49
5.77%
607271
6.68
5.00%
11538161
6.81
Total
23309
64594.
83
100.00
%
702981
3.30
0.30%
23239347
81.53
21032326
25.08
100.00
%
607271
6.68
0.29%
20971599
08.40
Provision for bad debt made on a collective basis:
Unit: RMB
Items
Closing balance
Book balance Provision for bad debt Provision proportion (%)
Bank acceptance portfolio 2190368328.70
Trade acceptance portfolio 140596266.13 7029813.30 5.00%
Total 2330964594.83 7029813.30 --
Remarks on the determination basis of portfolio:
If the provision for bad debt of notes receivable is in accordance with the general expected credit loss model
please refer to the disclosure of the bad debt provision for other receivables:
√ Applicable □ Not Applicable
Provision for bad debt Phase I Phase II Phase III Subtotal
12? month expected credit
losses
Lifetime expected credit losses
(credit not impaired)
Lifetime expected credit losses (credit
impaired)
Balance on January 1
2020
6072716.68 6072716.68
The balance as of
January 1 2020 is in
the current period
—— —— —— ——
--Transferred to phase
II
--Transferred to phase
III
--Reversed to phase II
--Reversed to phase I
Provision made in the
current period
957096.62 957096.62
Provision recovered in
current period
Provision reversed in
current period
Provision written off
in current period
Other changes
Balance on December
31 2020
7029813.30 7029813.30
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Categories
Opening
balance
Changed amount of this period
Closing
balance Accrual
Recovered or
reversed
Write off Others
Trade acceptance 6072716.68 957096.62 7029813.30
Total 6072716.68 957096.62 7029813.30
Including significant provision for bad debt recovered or reversed amount:
□ Applicable √ Not Applicable
（3）Pledged notes at the balance sheet date
Unit: RMB
Items Closing balance of pledged notes
Bank acceptance 1608722846.32
Total 1608722846.32
（4）Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 36221098.39
Trade acceptance 101893140.59 17493416.00
Total 138114238.98 17493416.00
5. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Categor
ies
Closing balance Opening balance
Book balance
Provision for bad
debt
Carrying
amount
Book balance
Provision for bad
debt
Carrying
amount
Amount Propor
tion
Amount Accru
ed
propor
tion
Amount Propor
tion
Amount Accru
ed
propor
tion
Receiva
bles
with
provisi
on
made
on an
individ
ual
basis
57335.28 0.00% 57335.28
100.00
%
0.00 447139.67 0.02%
447139.
67
100.00
%
0.00
Includi
ng:
Receiva
bles
with
provisi
on
made
on a
collecti
ve basis
2481072
027.67
100.00
%
1254587
28.10
5.06%
2355613
299.57
1970386
982.39
99.98
%
990634
59.57
5.03%
1871323
522.82
Includi
ng:
Total
2481129
362.95
100.00
%
1255160
63.38
5.06%
2355613
299.57
1970834
122.06
100.00
%
995105
99.24
5.05%
1871323
522.82
Provision made on an individual basis:
Unit: RMB
Debtors
Closing balance
Book balance Provision for bad debts Accrued proportion Reasons
MAHLE BEHR
MEXICO S. DE R.L.
DE .C.V.
57335.28 57335.28 100.00%
Total 57335.28 57335.28 -- --
Provision made on a collective basis:
Unit: RMB
Items
Closing balance
Book balance Provision for bad debt Accrued proportion
Within 1 year 2460804171.04 123040285.50 5.00%
1 to 2 years 18791491.28 1879149.13 10.00%
2 to 3 years 994446.02 298333.81 30.00%
Over 3 years 481919.33 240959.66 50.00%
Total 2481072027.67 125458728.10 --
Remarks on the determination basis of portfolio:
If the provision for bad debt of accounts receivable is in accordance with the general expected credit loss
model please refer to the disclosure of bad debt provision for other receivables:
√Applicable □ Not Applicable
Provision for bad debt Phase I Phase II Phase III Subtotal
12? month expected
credit losses
Lifetime expected credit losses
(credit not impaired)
Lifetime expected credit losses (credit
impaired)
Balance on January 1 2020 99063459.57 447139.67 99510599.24
The balance as of January 1 2020
is in the current period
—— —— —— ——
--Transferred to phase II
--Transferred to phase III
--Reversed to phase II
--Reversed to phase I
Provision made in the current
period
27590321.86 27590321.86
Provision recovered in current
period
3965.64 3965.64
Provision reversed in current period 1195053.33 385838.75 1580892.08
Provision written off in current
period
Other changes
Balance on December 31 2020 125458728.10 57335.28 125516063.38
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year 2460804171.04
1 to 2 years 18791491.28
2 to 3 years 994446.02
Over 3 years 539254.61
Total 2481129362.95
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Categories
Opening
balance
Changed amount of the current period
Closing
balance Accrued
Recovered or
reversed
Write off Others
Receivables with provision
made on an individual basis
447139.67 3965.64 385838.75 57335.28
Receivables with provision
made on a collective basis
99063459.57 27590321.86 1195053.33 125458728.10
Total 99510599.24 27590321.86 3965.64 1580892.08 125516063.38
（3）Details of the top 5 debtors with largest balances
Closing balance of top 5 debtors totaled 932049433.02 yuan(Customer controlled by the same actual
controller shall be combined to calculate accounts receivable) accounting for 37.57% of the total closing balance
of accounts receivable and provision for bad debts made thereon totaled 46602471.64 yuan.Other remarks:
In current period the Company write-off a total of small sporadic accounts 1580892.08 yuan.
6. Advances paid
（1）Advances paid by aging
Unit: RMB
Aging
Closing balance Opening balance
Amount Percentage Amount Percentage
Within 1 year (including 1 year) 61348884.20 88.39% 59688137.51 94.94%
1 to 2 years 6712609.39 9.67% 1274082.94 2.03%
2 to 3 years 64117.70 0.09% 1799865.58 2.86%
Over 3 years 1278715.16 1.84% 109838.27 0.17%
Total 69404326.45 -- 62871924.30 --
Remarks on reasons for unsettled significant advances paid with aging over one year:
（2）Top 5 debtors with the largest advances paid balances
Closing balance of top 5 debtors totaled 17243886.66 yuan accounting for 24.85% of the total closing
balance of advances paid.Other remarks:
614646.44 yuan of Advances paid written off in current period.
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 76935495.05 97394782.97
Total 76935495.05 97394782.97
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Tax refund receivable 36628075.87 46670909.67
Guarantee deposits 30801053.14 30166732.62
Others 11700014.42 23292984.90
Total 79129143.43 100130627.19
2）Provision of bad debt
Unit: RMB
Provision for bad debt
Phase I Phase II Phase III
Subtotal
12? month
expected credit
losses
Lifetime expected credit
losses (credit not impaired)
Lifetime expected credit
losses (credit impaired)
Balance on January 1
2020
1439293.10 1296551.12 2735844.22
The balance as of
January 1 2020 is in
the current period
—— —— —— ——
Provision made in the
current period
40686.78 40686.78
Provision recovered in
current period
582882.62 582882.62
Balance on December
31 2020
856410.48 1337237.90 2193648.38
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) 856410.48
1 to 2 years 257412.63
2 to 3 years 458330.02
Over 3 years 621495.25
Total 2193648.38
3）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Categories
Opening
balance
Changed amount of the current period
Closing
balance Accrued
Recovered or
reversed
Write
off
Others
Receivables with provision made on a
collective basis
2735844.22 40686.78 582882.62 2193648.38
Total 2735844.22 40686.78 582882.62 2193648.38
4）Details of the top 5 debtors with largest balances
Unit: RMB
Items
Nature of
receivables
Closing balance Ages
Proportion to the
total balance of
other receivables
Provision for bad
debt at the end of
the period
Tax refund
receivables
Tax refund 36628075.87 1 to 2 years 46.29%
Finance Bureau of
Xinchang County
Performance bond 6971285.00 1 to 3 years 8.81%
Shaoxing Binhai
New City
Management
Committee
Performance bond
for land and
project
construction
5410000.00 2 to 4 years 6.84%
Xinchang County Deposit of 3774000.00 4 to 8 years 4.77%
Land Reserve
Development
Center
construction
projects
Wuhu Yijiang
District Finance
Bureau
Deposit of
construction
projects
3751000.00 2 to 4 years 4.74%
Total -- 56534360.87 -- 71.45%
5）Other receivables related to Government grants
Unit: RMB
Items Government grant Closing balance Ages
Estimated receipt time
amount and basis
Local finance and
taxation departments
VAT refund of civil
welfare enterprises
1929944.96
Within 1
year(including 1 year)
From January to April
2021 Tax refund
return
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
（1）Categories of inventories
Unit: RMB
Items
Closing balance Opening balance
Book balance
Provision for
decline in
value of
inventories or
provision for
impairment of
contract
performance
costs
Carrying amount Book balance
Provision for
decline in
value of
inventories or
provision for
impairment of
contract
performance
costs
Carrying amount
Raw materials 530578235.34 38591465.21 491986770.13 402017918.68 29042388.91 372975529.77
Work-in-progress 377607984.60 661948.94 376946035.66 312143395.71 4759164.75 307384230.96
Finished goods 1488998382.81 55323878.13 1433674504.68 1558291038.03 58630244.52 1499660793.51
Others 5154395.99 5154395.99 818041.83 818041.83
Total 2402338998.74 94577292.28 2307761706.46 2273270394.25 92431798.18 2180838596.07
（2）Provision for decline in value of inventories and Provision for impairment of contract performance
costs
Unit: RMB
Items Opening balance
Increase in current period Decrease in current period
Closing balance
Accrued Others Reversal or write off Others
Raw materials 29042388.91 18516287.33 381887.15 9349098.18 38591465.21
Work-in-progress 4759164.75 425935.69 31395.32 4554546.82 661948.94
Finished goods 58630244.52 39730315.82 33833.49 43070515.70 55323878.13
Others 92431798.18 58672538.84 447115.96 56974160.70 94577292.28
The determination of the net realizable value of the excess & obsolete inventories of metal materials at the
end of the period is the scrap metal recovery price. The determination of the net realizable value of the excess &
obsolete inventories of electronic components is RMB 0.
9. Other current assets
Unit: RMB
Items Closing balance Opening balance
Deductible input tax 100377659.11 41622415.21
Prepaid Enterprise income tax 49911203.33 33856030.95
Others 171625.57 454807.12
Total 150460488.01 75933253.28
Other remarks:
10. Long-term receivable
（1）Long-term receivable
Unit: RMB
Items
Closing balance Opening balance
Range of
discount rate
Book
balance
Provision for
bad debt
Carrying
amount
Book
balance
Provision for
bad debt
Carrying
amount
Employee home
loan
2074750.00 2074750.00 2145963.27 2145963.27
Total 2074750.00 2074750.00 2145963.27 2145963.27 --
Impairment of provision for bad debt
Unit: RMB
Provision for bad debt
Phase I Phase II Phase III
Total
12? month Lifetime expected credit
losses (credit not impaired) Lifetime expected credit
expected credit
losses
losses (credit impaired)
The balance as of
January 1 2020 is in
the current period
—— —— —— ——
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
11. Long-term equity investments
Unit: RMB
Investe
es
Openin
g
balance
(Carryi
ng
amount
)
Increase/decrease in current period
Closing
balance
(Carryi
ng
amount
)
Closing
balance
of
provisi
on for
impair
ment
Investm
ent
increas
ed
Investm
ent
decreas
ed
Investm
ent
income
recogni
zed
under
equity
method
Adjust
ment in
other
compre
hensive
income
Change
s in
other
equity
Cash
dividen
ds or
profit
declare
d to
distribu
tion
Provisi
on for
impair
ment
Others
Ⅰ. Joint ventures
Ⅱ.Associates
Guochu
ang
Energy
Internet
Innovat
ion
Center
(Guang
dong)
Co.
Ltd.
14937
18.98
31533.
78
15252
52.76
Chongq
ing
Tainuo
Machin
ery Co.Ltd.
88477
28.00
20491
76.73
15000
00.00
93969
04.73
Nancha
ng
Sanhua
23352
42.16
43189
6.79
12500
00.00
15171
38.95
Jinlifen
g
Machin
ery Co.Ltd.Zhongs
han
Sanhua
Tainuo
Machin
ery Co.Ltd.
27971.
57
-27971
.57
Ningbo
Jinlifen
g
Machin
ery Co.Ltd.
12500
00.00
-18779
0.82
10622
09.18
Qingda
o
Sanhua
Jinlifen
g
Machin
ery Co.Ltd.
0.00 0.00
Zhongs
han
Xuanyi
Pipe
Manufa
cturing
Co.
Ltd.
18175
99.09
-99488
.03
17181
11.06
Xincha
ng
zhejian
g
energy
sanhua
compre
hensive
energy
0.00
co.
LTD
Subtota
l
14522
259.80
12500
00.00
21973
56.88
27500
00.00
15219
616.68
Total
14522
259.80
12500
00.00
21973
56.88
27500
00.00
15219
616.68
Other remarks:
Zhongshan Sanhua Tainuo Machinery Co. Ltd. has been liquidated and cancelled in May 2020; Qingdao
Sanhua Jinlifeng Machinery Co. Ltd. has been insolvent the equity investment has been reduced to zero yuan; As
of December 31 2020 the Company has not paid capital contribution to Xinchang zhejiang energy sanhua
comprehensive energy co. LTD.
12. Investment property
（1）Investment property measured by cost method
√ Applicable □ Not Applicable
Unit: RMB
Items
Buildings and
structures
Land use right and
Overseas land
ownership
Construction in
progress
Total
Ⅰ. Original Carrying
amount
1.Opening balance 36137499.11 10455622.00 46593121.11
2.Increase in current
period
496203.06 92389.50 588592.56
（1）Acquisition
（2）Transferred in
from inventory\fixed
assets\ construction in
progress
（3）Acquisition
（4）Converted
difference in Foreign
Currency Statements
496203.06 92389.50 588592.56
3.Decrease in current
period
23990274.63 7008986.50 30999261.13
（1）Disposal
（2）Other transfer out 23990274.63 7008986.50 30999261.13
4.Closing balance 12643427.54 3539025.00 16182452.54
Ⅱ. Accumulated
depreciation and
amortization
1.Opening balance 17507685.84 2059461.22 19567147.06
2. Increase in current
period
2022581.60 152000.96 2174582.56
（1）Accrual or
amortization
1868715.21 152000.96 2020716.17
（2）Converted
difference in Foreign
Currency Statements
153866.39 153866.39
3.Decrease in current
period
13415403.86 2211462.18 15626866.04
（1）Disposal
（2）Other transfer out 13415403.86 2211462.18 15626866.04
4.Closing balance 6114863.58 0.00 6114863.58
Ⅲ. Provision for
impairment
1.Opening balance
2. Increase in current
period
（1）Accrual
3.Decrease in current
period
（1）Disposal
（2）Other transfer out
4.Closing balance
Ⅳ. Carrying amount
1.Closing balance 6528563.96 3539025.00 10067588.96
2.Opening balance 18629813.27 8396160.78 27025974.05
（2）Investment property measured by fair value measurement model
□Applicable √ Not Applicable
13. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 3839408059.45 3379608199.26
Total 3839408059.45 3379608199.26
（1）Fixed assets
Unit: RMB
Items
Buildings and
structures
Machinery and
equipment
Measurement
analysis
equipment
Transportation
vehicles
Office and
other
equipment
Total
Ⅰ. Original
book
value:
1.Opening
balance
2157358358.56 3050563131.59 77768081.99 40349952.76 224254779.28 5550294304.18
2. Increase in
current period
179894850.42 630215430.99 45114238.58 4138500.40 23166682.85 882529703.24
（1）
Acquisition
288029626.86 47886534.10 3941780.75 24414404.42 364272346.13
（2）
Transferred in
from
construction in
progress
156700627.31 355635406.70 512336034.01
（3）Business
combination
（4）
Transferred in
from
investment
property
23990274.63 23990274.63
（5）Converted
difference in
Foreign
-796051.52 -13449602.57 -2772295.52 196719.65 -1247721.57 -18068951.53
Currency
Statements
3. Decrease
in current
period
1502733.97 41528655.81 7430735.15 4134274.16 10482475.03 65078874.12
（1）Disposal
or scrap
1502733.97 41528655.81 7430735.15 4134274.16 10482475.03 65078874.12
4.Closing
balance
2335750475.01 3639249906.77 115451585.42 40354179.00 236938987.10 6367745133.30
Ⅱ.
Accumulated
depreciation
1.Opening
balance
509863544.24 1443454422.50 32773108.28 30515107.61 150112811.87 2166718994.50
2. Increase in
current period
101917323.57 268939442.23 10667330.59 3737219.17 20793012.83 406054328.39
（1）Accrual 88427646.32 273088826.33 10986039.75 3683051.46 20383788.57 396569352.43
(2)Transferred
in from
investment
property
13415403.86 13415403.86
(3) Converted
difference in
Foreign
Currency
Statements
74273.39 -4149384.10 -318709.16 54167.71 409224.26 -3930427.90
3. Decrease
in current
period
33917352.83 3341088.05 3848249.47 7023889.37 48130579.72
（1）Disposal
or scrap
33917352.83 3341088.05 3848249.47 7023889.37 48130579.72
4.Closing
balance
611780867.81 1678476511.90 40099350.82 30404077.31 163881935.33 2524642743.17
Ⅲ. Provision
for
impairment
1.Opening 3967110.42 3967110.42
balance
2. Increase in
current period
（1）Accrual
3. Decrease
in current
period
272779.74 272779.74
（1）Disposal
or scrap
272779.74 272779.74
4.Closing
balance
3694330.68 3694330.68
Ⅳ. Carrying
amount
1.Closing
balance
1723969607.20 1957079064.19 75352234.60 9950101.69 73057051.77 3839408059.45
2.Opening
balance
1647494814.32 1603141598.67 44994973.71 9834845.15 74141967.41 3379608199.26
（2）Fixed assets leased through financial leasing
Unit: RMB
Items
Original book
value
Accumulated depreciation
Provision for
impairment
Carrying amount
Buildings and structures 146648653.71 27861243.95 118787409.76
（3）Fixed assets with certificate of titles being unsettled
Unit: RMB
Items Carrying amount Reasons for unsettlement
Finished goods warehouse in Meizhu
North district
21125640.86
New assets the certificate of title to be
processed uniformly after the overall
completion
13# factory in Meizhu North district 75558844.91
New assets the certificate of title to be
processed uniformly after the overall
completion
Staff dormitory in Meizhu (Phase II) 22741997.90
New assets the certificate of title to be
processed uniformly after the overall
completion
14# factory in Meizhu North district 24243958.39
New assets the certificate of title to be
processed uniformly after the overall
completion
15# factory in Meizhu North district 59110510.38
New assets the certificate of title to be
processed uniformly after the overall
completion
Shaoxing new energy plant (PhaseⅠ) 156481398.95
New assets the certificate of title to be
processed uniformly after the overall
completion
Subtotal 359262351.39
Other remarks
14. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 628730529.07 480959262.46
Total 628730529.07 480959262.46
（1）Details of construction in progress
Unit: RMB
Items
Closing balance Opening balance
Book balance
Provision
for
impairment
Carrying
amount
Book balance Provision
for
impairment
Carrying
amount
Annual production of 7.3
million sets of new energy
vehicle thermal management
system components project
145885533.67 145885533.67 78050708.13 78050708.13
Annual production of 12.7
million sets of automotive air
conditioning control
components project
50740941.36 50740941.36
Annual production of 11.5
million sets of new energy
auto parts project
78290263.60 78290263.60 100809231.62 100809231.62
Annual production of 65
million sets of commercial
25812948.25 25812948.25 13815107.62 13815107.62
refrigeration and air
conditioning intelligent
control components
construction project
Annual production of 1.5
million sets of new energy
thermal management
components project
88939186.18 88939186.18
Annual production of 1
million sets of new energy
vehicle air-conditioning
thermal sensors project
3772038.19 3772038.19 2877561.33 2877561.33
Annual output of 50.5 million
sets of high efficiency and
energy saving refrigeration
and air conditioning control
components technology
transformation projects
11841050.00 11841050.00
Vietnam industrial plant
project
80569043.24 80569043.24 32155560.02 32155560.02
Others 193620465.94 193620465.94 202510152.38 202510152.38
Total 628730529.07 628730529.07 480959262.46 480959262.46
（2）Changes of significant construction in progress in current period
Unit: RMB
Items Budget
Opening
balance
Increased in
current
period
Transferred
to fixed
assets in
the current
period
Other
amounts
decrease
d in
current
period
Closing
balance
Accumulat
ed
investment
to budget
(%)
Completio
n
percentag
e
(%)
Accumulat
ed amount
of
capitalized
interest
Including
:
capitalize
d interest
in current
period
Capitalizati
on rate for
interest in
current
period
Fund
sourc
e
Annual
production of
7.3 million
sets of new
energy
vehicle
thermal
management
system
components
project
468600000.00
78050708.1
3
193044503.
01
125209677.
47
145885533.
67
72.65%
Raise
d
funds
Annual
production of
12.7 million
sets of
automotive
air
conditioning
control
components
project
215000000.00
50740941.3
6
40996513.0
0
91737454.3
6
84.92%
Raise
d
funds
Annual
production of
11.5 million
sets of new
energy auto
parts project
528800000.00
100809231.
62
204228155.
29
226747123.
31
78290263.6
0
77.62%
Raise
d
funds
Annual
production of
65 million
sets of
commercial
refrigeration
and air
conditioning
intelligent
control
components
construction
project
1780550000.
00
13815107.6
2
35354907.1
2
23357066.4
9
25812948.2
5
2.76% Other
Annual
production of
1.5 million
sets of new
energy
thermal
management
components
project
500000000.00
89223942.5
1
284756.33
88939186.1
8
17.84% Other
Annual 44786000.00 2877561.33 3134251.83 2239774.97 3772038.19 45.81% Other
production of
1 million sets
of new energy
vehicle
air-conditioni
ng thermal
sensors
project
Annual output
of 50.5
million sets of
high
efficiency and
energy saving
refrigeration
and air
conditioning
control
components
technology
transformatio
n projects
785570000.00
11984150.0
0
143100.00
11841050.0
0
1.53% Other
Vietnam
industrial
plant project
28 million
dollars
32155560.0
2
50790156.7
0
2376673.48
80569043.2
4
43.04% Other
Total
278449110.
08
628756579.
46
472095626.
41
435110063.
13
-- -- --
.
15. Intangible Assets
（1）Details of intangible assets
Unit: RMB
Items
Land use
right
Pate
nt
righ
t
Non-pa
tent
technol
ogy
Overseas
land
ownershi
p
AWECO
intellectua
l property
and
business
resources
RANCO
intellect
ual
property
and
business
resource
s
Intellectu
al
property
right of
air
condition
er
controller
Patent
technolo
gy of
Dotech
electroni
c
expansio
n
controlle
r
Software Total
Ⅰ.Original
Carrying
amount
1.Openin
g
balance
5530758
49.31
2941380
1.81
1034867
89.02
175847
9.45
4215017
5.56
663436
4.80
2789266
1.59
7644121
21.54
2.Increas
ed in
current
period
3549435.
90
-468175.
30
5340843
.60
8422104.
20
（1）
Acquisiti
on
5092556
.73
5092556.
73
（2）
Internal
research
and
develop
ment
（3）
.
Business
combinat
ion
（4）
Transferr
ed in
from
investme
nt
property
7008986.
50
7008986.
50
（5）
Effect of
Foreign
Currency
Translati
on
-3459550
.60
-468175.
30
248286.8
7
-3679439
.03
3.Decrea
sed in
current
period
4205497.
60
1034867
89.02
175847
9.45
1094507
66.07
（1）
Disposal
4205497.
60
1034867
89.02
175847
9.45
1094507
66.07
4.Closin
g
balance
5524197
87.61
2894562
6.51
4215017
5.56
663436
4.80
3323350
5.19
6633834
59.67
Ⅱ.
Accumul
ated
amortiza
tion
1.Openin
g
balance
8603055
9.93
205745.3
7
1034858
54.20
363239.
45
2125729
5.24
552863.
70
2251943
8.24
2344149
96.13
2.Increas
ed in
1342224
4.12
108835.5
9
934.82
139524
0.00
3895017
.60
663436.
44
3340113
.70
2282582
2.27
.current
period
（1）
Accrual
1121078
1.94
129122.4
5
934.82
139524
0.00
3895017
.60
663436.
44
3111730
.16
2040626
3.41
（2）
Transferr
ed in
from
investme
nt
property
2211462.
18
2211462.
18
（3）
Converte
d
differenc
e in
Foreign
Currency
Statemen
ts
-20286.8
6
228383.5
4
208096.6
8
3.
Decrease
d in
current
period
168219.9
0
1034867
89.02
175847
9.45
1054134
88.37
（1）
Disposal
168219.9
0
1034867
89.02
175847
9.45
1054134
88.37
4.Closin
g
balance
9928458
4.15
314580.9
6
2515231
2.84
121630
0.14
2585955
1.94
1518273
30.03
Ⅲ.Provisio
n
for
impairm
ent
4129606 4129606.
.
1.Openin
g
balance
.66 66
2.
Increase
d in
current
period
-267149.
95
-267149.9
5
（1）
Accrual
（2)
Converte
d
differenc
e in
Foreign
Currency
Statemen
ts
-267149.
95
-267149.9
5
3.
Decrease
d in
current
period
（1）
Disposal
4.Closin
g
balance
3862456
.71
3862456.
71
Ⅳ.
Carrying
amount
1.Closin
g
balance
4531352
03.46
2476858
8.84
1699786
2.72
541806
4.66
7373953
.25
5076936
72.93
4670452 2507844 934.82 139524 2089288 608150 5373223 5258675
.
2.Openin
g
balance
89.38 9.78 0.00 0.32 1.10 .35 18.75
At the balance sheet date intangible assets formed from internal R&D account for 0.00% of total closing balance
of intangible assets.
16. Goodwill
（1）Original Carrying amount of goodwill
Unit: RMB
Investee or events resulting in
goodwill
Opening
balance
Increased in current period
Decreased in current
period Closing
balance Due to business
combination
Disposal
R-Squared Puckett Inc. 31959091.60 31959091.60
Total 31959091.60 31959091.60
（2）Provision for goodwill impairment
Unit: RMB
Investee or
events resulting
in goodwill
Opening
balance
Increased in current period Decreased in current period
Closing
balance Provision made … Disposal …
Total
Related information of asset group or asset group portfolios which include goodwill
Impairment test process the key parameters(Such as expected future cash flow when the present value of the
forecast period growth rate stable period growth rate profit margin discount rate forecast period) and conclusion
of goodwill impairment loss:
Based on December 31 2020 the Company performed an impairment test on the value of the microchannel
asset group portfolio. The recoverable amount of the asset group portfolio is estimated by the income method.Pre-tax free cash flow for the next five years is based on projections，It's been stable over the years，the pre-taxdiscount rate is determined to be13.80%. After testing the recoverable amount of the microchannel asset group
portfolio is greater than the carrying amount，the management of the company believes that there is no sign ofimpairment of goodwill and there is no need to make provision for impairment losses.Impact of goodwill impairment tests
Other remarks
17. Long-term prepayments
Unit: RMB
.Items Opening balance
Increased in
current period
Amortization Other decreases Closing balance
Plant renovation
expenditure
7223760.94 20684610.31 4201969.64 23706401.61
Compensated use
fee for emission
rights
968938.03 968938.03
Tools 527421.67 527421.67
Total 8720120.64 20684610.31 5698329.34 23706401.61
Other remarks
18. Deferred tax assets / deferred tax liabilities
（1）Deferred tax assets before offset
Unit: RMB
Items
Closing balance Opening balance
Deductible
temporary difference
Deferred tax
assets
Deductible
temporary difference
Deferred tax
assets
Unrealized profit from internal transactions 180209650.54 17242885.11 223604977.62 25040965.45
Deductible losses 153097367.85 32871988.62 72228904.20 13514908.45
Provision for bad debt 78915609.30 15835440.18 71519997.24 14114166.19
Provision for inventory write-down 67642565.60 11282463.93 69518382.06 11230078.81
Deferred income: government grants 140105328.43 22782106.08 82537550.43 12800632.56
Provision for fixed assets impairments 3694330.68 554149.61 3898415.90 584762.39
Floating loss on derivatives 300000.00 45360.00 126364.40 18954.66
The share-paid remuneration without pre-tax
deduction calculated according to the
accounting standard
70222810.23 11050883.17 12577025.65 1993619.83
The expected additional deductible share-based
remuneration in the future period calculated
according to the tax standard
139395300.30 22008772.76 34658546.38 5493823.94
Provisional cost estimate 27565532.12 4134829.82 27740129.55 4161019.41
Total 861148495.05 137808879.28 598410293.43 88952931.69
（2）Deferred tax liabilities before offset
Unit: RMB
.Items
Closing balance Opening balance
Taxable temporary
difference
Deferred tax liabilities
Taxable temporary
difference
Deferred tax liabilities
Depreciation and
amortization expense
770755369.92 128446514.86 396585435.74 62347023.15
Floating gain on
derivatives
13804602.36 2070690.35 2906246.02 435936.90
Floating gain on
financial products
1739861.78 260979.27 12526390.31 2266401.66
Total 786299834.06 130778184.48 412018072.07 65049361.71
（3）Deferred tax assets or liabilities after offset shown on a net offsetting basis
Unit: RMB
Items
Deferred tax assets and
liabilities offset
amount at the end of
the balance amount
Closing balance of
deferred tax assets or
liabilities after offset
Deferred tax assets and
liabilities offset
amount at the
beginning of the
balance amount
Opening balance of
deferred tax assets or
liabilities after offset
Deferred tax assets 137808879.28 88952931.69
Deferred tax liabilities 130778184.48 65049361.71
（4）Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 55823915.76 36799162.90
Provision for inventory write-down 26934726.68 22913416.12
Deductible losses of subsidiaries 24790389.63 97583268.62
Provision for fixed assets impairments 68694.52
Provision for intangible assets impairments 3862456.71 4129606.66
Floating loss on derivatives 7639957.91
The share-paid remuneration without pre-tax deduction calculated
according to the accounting standard
11139485.50 1840976.14
Investment losses recognized by the equity method 4319616.68 3322259.80
Total 134510548.87 166657384.76
.
（5）Deductible losses of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Maturity years Closing balance Opening balance Remarks
Year 2020 770856.07
Year 2021 14131496.37
Year 2022 23008626.48
Year 2023 24053673.84
Year 2024 17510655.24
Year 2025 445585.90
Year 2028 10478078.42 10478078.42
Year 2029 7488066.67 7629882.20
Year 2030 6378658.64
Total 24790389.63 97583268.62 --
Other remarks:
19. Other non-current assets
Unit: RMB
Items
Closing balance Opening balance
Book balance
Provision for
impairment
Carrying
amount
Book balance
Provision for
impairment
Carrying
amount
Advanced payment
for assets
purchasing
251509127.08 251509127.08 179238257.09 179238257.09
Total 251509127.08 251509127.08 179238257.09 179238257.09
Other remarks:
20. Short-term borrowings
（1）Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 730000000.00
Credit borrowings 20000000.00
Overseas loan under domestic guarantee 362698500.00 562083652.90
Accrued interest 389796.60 3526919.17
.Total 383088296.60 1295610572.07
Remarks on categories of short-term borrowings:
21. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 7939957.91 126364.40
Total 7939957.91 126364.40
Other remarks:
22. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 1238574463.73 1130668415.32
Total 1238574463.73 1130668415.32
At the balance sheet date balances due but unpaid totaled RMB 0.
23. Accounts payable
（1）Details of accounts payable
Unit: RMB
Items Closing balance Opening balance
Within 1 year(including 1 year) 2184050911.51 1538694359.81
1 to 2 years 88579882.54 36247361.15
2 to 3 years 1289268.11 7254952.39
Over 3 years 5741693.81 5567079.27
Total 2279661755.97 1587763752.62
24. Advances received
（1）Details of advances received
Unit: RMB
Items Closing balance Opening balance
Advance collection of asset package
disposal funds
10000000.00
.Total 10000000.00
25. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Advance payment for goods 42581607.67 23453218.32
Total 42581607.67 23453218.32
Reasons for significant changes in the carrying amount of contract liabilities during the reporting period
26. Employee benefits payable
（1）Details of employee benefits payable
Unit: RMB
Items
Opening
balance
Increased in current
period
Decreased in current
period
Closing balance
Ⅰ. Short-term employee benefits 221838334.79 1697764479.73 1636901323.09 282701491.43
Ⅱ. Post-employment benefits - defined
contribution plan
3701568.23 36896982.26 37710409.14 2888141.35
Ⅲ. Termination benefits 3457580.80 2815279.48 2556579.07 3716281.21
Total 228997483.82 1737476741.47 1677168311.30 289305913.99
（2）Details of Short-term employee benefits
Unit: RMB
Items Opening balance
Increased in current
period
Decreased in current
period
Closing balance
1. Wage bonus
allowances and
subsidy
203198192.24 1383935013.63 1322258453.89 264874751.98
2. Employee welfare
fund
2134102.51 75651111.90 77785214.41
3. Social insurance
premium
11162051.71 96951334.31 97705345.21 10408040.81
Including:
Medicare premium
2023459.75 27798779.14 27533189.44 2289049.45
Occupational injuries
211099.29 1552995.84 1507314.10 256781.03
.premium
Maternity premium
233674.66 585303.76 702538.82 116439.60
Overseas social
security contributions
8693818.01 67014255.57 67962302.85 7745770.73
4. Housing provident
fund
265855.34 28489899.73 28755755.07
5. Trade union fund
and employee
education fund
104574.42 18344132.93 17224543.29 1224164.06
8、Dispatching
remuneration
3511341.29 90298597.57 90349659.22 3460279.64
9、Cash stock
appreciation option
1462217.28 4094389.66 2822352.00 2734254.94
Total 221838334.79 1697764479.73 1636901323.09 282701491.43
（3）Details of defined contribution plan
Unit: RMB
Items
Opening
balance
Increased in current
period
Decreased in current
period
Closing
balance
1. Basic endowment insurance
premium
3584148.09 35696556.05 36509160.79 2771543.35
2. Unemployment insurance
premium
117420.14 1200426.21 1201248.35 116598.00
Total 3701568.23 36896982.26 37710409.14 2888141.35
Other remarks:
27. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
VAT 14647359.92 12303529.64
Enterprise income tax 33105141.57 27169457.87
Individual income tax 5797449.67 6570153.06
Urban maintenance and construction tax 2283772.47 2004384.14
Education surcharge 1207595.10 1098720.52
Local education surcharge 717275.16 623676.41
.Housing property tax 14503893.38 5263984.54
Land use tax 2162780.06 2277425.60
Local foundation for water works 60119.04 6051.60
Others 522755.69 875224.37
Total 75008142.06 58192607.75
Other remarks:
28. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividend payable 1772750.00
Other payables 270888400.58 159464464.88
Total 270888400.58 161237214.88
（1）Dividend payable
Unit: RMB
Items Closing balance Opening balance
Dividend of restricted shares 1772750.00
Total 1772750.00
Other remarks include significant dividend payable with age over one year，should disclose the reasons for thenon-payment
（2）Other payables
1）Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 145063690.00 57578920.00
Freight and miscellaneous charges 72117058.15 39930705.16
Product warranty fee 2757036.90 3114096.06
Guarantee deposit 6564169.23 18044694.61
Rent and property fee 7877975.71 2609059.40
Compensation for product quality loss 3889429.08 1125611.68
Collection of talent awards 1320000.00 1969150.29
Others 31299041.51 35092227.68
.Total 270888400.58 159464464.88
Other remarks
Refer to the "Inventory Shares" in the notes to this financial report for the repurchase obligations of restricted
shares.
29. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Overseas loan under domestic guarantee 130498000.00
Guaranteed borrowings 222000000.00
Accrued interest 55923.87 228097.22
Total 130553923.87 222228097.22
Other remarks:
30. Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 1380000000.00
Overseas loan under domestic guarantee 326142884.74 392371834.47
Accrued interest 1776110.13 510445.62
Total 1707918994.87 392882280.09
Remarks on categories of long-term borrowings:
Other remarks including interest rate ranges
31. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 90336083.27 94235857.77
Total 90336083.27 94235857.77
（1）Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
.Payables for financial leasing 89432221.08 92607634.64
Stock appreciation rights deposit 903862.19 1628223.13
Other remarks:
Payables for financial leasing
Remaining lease term Current period cumulative Preceding period comparative
Within 1 year(including 1 year) 6417433.10 9515311.20
1 to 2 years 10274197.36 3752011.15
2 to 3 years 10274197.36 10005979.99
Over 3 years 70534422.75 78699036.81
Subtotal 97500250.57 101972339.15
Less: Unrecognized financing charges 8068029.49 9364704.51
Subtotal 89432221.08 92607634.64
32. Provisions
Unit: RMB
Items Closing balance Opening balance Reasons for balance
Pending lawsuit 2638000.00
Total 2638000.00 --
Other remarks，Including the relevant significant assumptions and estimates of the significant provisions:
33. Deferred income
Unit: RMB
Items
Opening
balance
Increased in current
period
Decreased in current
period
Closing balance
Reasons for
balance
Government grants 82537550.43 76420792.64 18853006.64 140105336.43
Total 82537550.43 76420792.64 18853006.64 140105336.43 --
Other remarks:
34. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction fund 28782218.09 32512629.00
Long-term employee rights protection
payment
51616679.63 49276299.52
Total 80398897.72 81788928.52
Other remarks:
.
According to local investment promotion policies the "seven connections and one leveling" project of the
construction land of the Wuhu city is completed by Wuhu high-tech Industrial Development Zone Administration
Committee. As the state-owned assets management unit of Wuhu high-tech Industrial Development Zone Wuhu
Xinma Investment Co. Ltd. and Wuhu High-tech Construction Development Co. Ltd. entrusted Wuhu Sanhua
Auto-control Components Co. Ltd and Wuhu Sanhua Technology Co. Ltd. to build the "seven connections and
one leveling" project and allocated RMB 72.03 million as engineering fund. As of December 312020 the
accumulated amount of hedging and written-off of engineering agent construction fund and project expense was
RMB 43.2478 million，and the amount to be written-off at the end of the period was RMB 28.7822 million.
Long-term employee rights protection payment: retirement pensions of Mr. Harald Schrott who is the former
actual controller of the Germany Aweco residential appliances business and his father Hugo Schrott. Based on
Austrian labor law one-time welfare compensation for termination of labor contract; one-time welfare
compensation for retirement disability and death. The amount of such liabilities is estimated and determined by
an independent actuary.
35. Share capital
Unit: RMB
Opening balance
Changed amount of current period（+/-）
Closing balance Issue of
new shares
Bonus
shares
Reserve transferred
to shares
Others Subtotal
Total
shares
2765657898.00 826675080.00 -731510.00 825943570.00 3591601468.00
Other remarks:
① Approved by the Company’s shareholders meeting the Company transferred 826675080 shares to all
shareholders (excluding repo shareholders) with capital reserve at the ratio of increasing 3 shares for every
10 shares.
② Approved by the Company’s shareholders meeting repo and write-down of 731510 shares of equity
incentive restricted shares that have not met unlock condition.
36. Capital reserve
Unit: RMB
Items Opening balance
Increased in current
period
Decreased in current
period
Closing balance
Capital premium（Share premium）
970924083.94 11129040.00 882412402.43 99640721.51
Other capital reserve 119875938.12 107029814.59 11129040.00 215776712.71
Total 1090800022.06 118158854.59 893541442.43 315417434.22
Other remarks including changes and reasons in the current period:
Reasons for the change of increase or decrease in current period:① Due to transfer capital reserve to share
capital，share premium decreased RMB 826675080.00；②The company grants restricted stock to employees inthe form of inventory stock repurchased from the secondary market， share premium decreased RMB.
49264050.00；③ Equity Incentive Restricted Shares unlock 4988880 shares this period，the corresponding
accumulative compensation paid by shares is RMB 11129040.00，a premium on the share capital transferred in
such amount from other capital reserves；④ Repo and cancellation of equity incentive restricted shares that have
not met the unlock condition，share premium decreased RMB 3452414.20；⑤ Other capital reserve increased
RMB 72810130.99 due to the confirmation of share-based payment remuneration.；⑥The available income tax
benefit due to the expected tax cost of equity incentive restricted shares that are no unlockable exceeds
accounting cost the closing balance was RMB 34219683.60 higher than the opening balance other capital
reserve and deferred tax assets increased such amount；⑦Due to transaction for equity，share premium decreased
RMB 3020858.23 refer to the notes to the financial report.
37. Treasury shares
Unit: RMB
Items Opening balance
Increased in current
period
Decreased in current
period
Closing balance
Restricted shares 59453800.00 118643250.00 33033360.00 145063690.00
Repo shares 304327351.34 167907300.00 136420051.34
Total 363781151.34 118643250.00 200940660.00 281483741.34
Other remarks including changed amount of the current period and movement reason:
(1) Restricted shares
①In current period，the Company granted 12.045 million restricted shares to incentive objects with the reposhares from the secondary market the grant price was RMB 9.85 per share and a total of RMB 118643250.00
was raised. Treasury shares decreased RMB 167907300.00，and share premium decreased RMB 49264050.00.The restricted shares have not met the unlock condition the Company accounted them as treasury shares and
recognized related liabilities for repo obligation.
②Equity incentive restricted shares 2952000 shares this period，the grant price was RMB 8.37 per share，the
unlocked amount is RMB 24708240.00. Treasury shares and related liabilities for repo obligation decreased such
amount.③June 2020 and September 2020，The company implemented the 2019 annual equity distribution and the 2020
semi-annual equity distribution，the dividend of the not unlocked portion of the equity incentive restricted sharesis RMB 4141196.00，suspended by the company. At the same time，treasury shares and related liabilities for repo
obligation decreased such amount.④Repo and cancellation of equity incentive restricted shares that have not met the unlock condition，treasuryshares decreased RMB4183924.00.
(2) Repo shares
In current period the Company granted 12045000 shares of restricted stock to incentive recipients based on
inventory stock. Repo shares decreased RMB 167907300.00.
38. Other comprehensive income (OCI)
Unit: RMB
Items Opening Changed amount of the current period Closing
.balance
Current
period
cumulative
before
income tax
Less:
OCI
carried
forward
transferre
d to
profit or
loss
Less: OCI
carried
forward
transferred
to
undistribut
ed profit
Less:
incom
e tax
expens
e
Attributable
to
the parent
Company
after
tax
Attributable
to
Non-controlli
ng
interest
after tax
balance
Items to be
reclassified
subsequently
to profit or
loss
-39332748.
50
-50292214.
11
-50292214.
11
-89624962.
61
Translation
reserves
-39332748.
50
-50292214.
11
-50292214.
11
-89624962.
61
Other
comprehensi
ve income in
total
-39332748.
50
-50292214.
11
-50292214.
11
-89624962.
61
Other remarks including the effective part of the cash flow hedge profit and losses converted into the initial
recognized amount adjustment of the hedged item:
39. Surplus reserve
Unit: RMB
Items Opening balance Increased in current period Decreased in current period Closing balance
Statutory surplus reserve 533401562.81 78070994.08 611472556.89
Discretionary surplus reserve 8681137.20 8681137.20
Reserve fund 17813919.38 17813919.38
Total 559896619.39 78070994.08 637967613.47
Remarks on surplus reserve including movement in current period and the reason for changes:
This period increased by RMB 78070994.08，According to the parent company's current net profit 10% of
the statutory surplus reserve.
40. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance before adjustment at the end of the previous period 5278392288.84 4488881759.86
.
Add: Increase due to adjustment (or less: decrease) 8359634.19
Opening balance after adjustment 5278392288.84 4497241394.05
Add: Net profit attributable to shareholders of the parent Company for current year 1462158821.57 1421204236.13
Less: Appropriation of statutory surplus reserve 78070994.08 110933454.84
Payable dividends on ordinary shares 771563408.50 529119886.50
Closing balance 5890916707.83 5278392288.84
41. Operating revenue and Operating cost
Unit: RMB
Items
Current period cumulative Preceding period comparative
Revenue Cost Revenue Cost
Main operations 11665371918.47 8081530851.82 10876865236.86 7570528297.31
Other operations 444461449.97 418860470.45 410624205.37 376316148.52
Total 12109833368.44 8500391322.27 11287489442.23 7946844445.83
After deducting non-recurring profit or loss by audit whether the net profit is negative or not
□ Applicable √ Not Applicable
Other remarks
42. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction tax 26020701.95 26638165.64
Education surcharge 13060313.39 13886087.61
Housing property tax 19644211.36 21934182.81
Land use tax 3415856.97 9007858.24
Stamp duty 2650817.59 3334108.73
Local education surcharge 8919791.12 9220983.88
Local foundation for water works 596652.81 642593.41
Others 3665075.62 7647358.71
Total 77973420.81 92311339.03
Other remarks
43. Selling expenses
Unit: RMB
.Items Current period cumulative Preceding period comparative
Labor cost 185383982.72 187342391.33
Warehousing freight and miscellaneous
charges
298383939.51 240711888.21
Entertainment expense 38123695.62 40239474.17
Travel expense 16841187.92 43210204.21
Market maintenance fee 41332674.93 40227423.35
Advertising expense 12803945.68 13634700.98
Others 10085332.79 23181371.91
Total 602954759.17 588547454.16
Other remarks:
44. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 400277866.64 325762128.67
Share-based payment remuneration 72810130.99 19072589.52
Depreciation and amortization expense 96201760.17 84611377.76
Office expense 94094129.08 87201138.67
Intermediary organ expense 48741873.10 39435559.80
Entertainment expense 14907529.66 15337269.91
Vehicle expense 10658851.78 8374929.19
Sporadic renovation expense in the park 17734954.44 5850964.35
Security fund for the disabled 2441941.61
Others 6215391.41 10135162.35
Total 764084428.88 595781120.22
Other remarks:
45. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 291552480.55 268606916.42
Material and power expense 136062761.46 169349876.66
Depreciation and amortization expense 31108149.42 27393695.99
.Mold manufacturing expense 30480247.99 23688085.36
Travel expense 3051460.51 7661182.16
Royalties 4865282.70 3458424.26
Outsourcing R&D expense 841185.47 3958534.23
Others 20439795.53 27895620.91
Total 518401363.63 532012335.99
Other remarks:
46. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 64733993.15 54050078.51
Interest income -52233256.57 -29496046.87
Bank financing fee 1950351.25 2102904.85
Cash discount -2528801.21 -3143982.74
Exchange gains or losses 112675905.53 -35510776.78
Others 4261901.49 4225003.96
Total 128860093.64 -7772819.07
Other remarks:
47. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government grants 150308983.80 101880138.31
Including: VAT refund of civil welfare
enterprises
10848552.90 11634556.01
VAT refund on software
products in excess of tax burden
5359348.90 3934430.81
Handling fees for withholding individual
income tax
1246912.65 92329.55
Total 151555896.45 101972467.86
48. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
.Investment income from long-term equity
investments under equity method
2199442.47 1418182.87
disposal of long-term equity investments -4100413.03
Investment income of bank financing
products
46589043.29 41123586.63
Gains and losses on settlement of foreign
exchange contract
19642289.10 837129.75
Gains and losses on settlement of futures
contracts
29117946.22 -15653119.67
Bill discount interest -4369430.89 -2407426.89
Other 17194.75
Total 89078877.16 25335547.44
Other remarks:
49. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of bank financing
products
-10786528.53 12526390.31
Floating income of futures contracts 7260487.69 8677764.72
Floating income of foreign exchange
contract
35373956.60 6702192.15
Total 31847915.76 27906347.18
Other remarks:
50. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -28677382.30 -3374126.64
Total -28677382.30 -3374126.64
Other remarks:
51. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
.Ⅱ. Inventory write-down loss and
contract performance cost impairment
loss
-58672538.84 -27895239.50
Total -58672538.84 -27895239.50
Other remarks:
52. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of fixed assets -486378.33 278783.69
53. Non-operating revenue
Unit: RMB
Items
Current period
cumulative
Preceding period
comparative
Amount recorded into the current
non-recurring profit and loss
Exempted payment 3090050.86 5479565.67 3090050.86
Compensation and penalty
income
1056661.41 905086.14 1056661.41
Gains from retirement of
fixed assets
84161.06 43110.17 84161.06
Others 824606.49 364521.14 824606.49
Total 5055479.82 6792283.12 5055479.82
Other remarks:
54. Non-operating expenditures
Unit: RMB
Items Current period cumulative Preceding period comparative
Amount included in
non-recurring profit or loss
Losses on retirement of fixed
assets
10492379.67 6409161.91 10492379.67
Litigation for damages 2638000.00 2638000.00
Donation expenditures 51555.76 75428.60 51555.76
Others 1661697.75 1228530.89 1661697.75
Total 14843633.18 7713121.40 14843633.18
Other remarks:
.
55. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax expenses 185380549.14 208303742.83
Deferred income tax expenses 33322315.46 20949726.23
Total 218702864.60 229253469.06
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Profit before tax 1692026216.58
Income tax expense based on statutory/applicable tax rate 281618425.53
Effect of utilization of deductible losses not previously
recognized as deferred tax assets
-46359.55
Effect of deducible temporary differences or deductible losses
not recognized
7966260.28
Effect of prior income tax reconciliation -4799245.99
Tax impact of research and development expenses plus
deduction
-50508344.90
Impact of restricted stock unlocked tax deduction -14466289.89
Adjustment of permanent differences -1569237.24
write-off of deferred tax assets previously recognized in
current period
507656.36
Income tax expenses 218702864.60
Other remarks:
56. Other comprehensive income
Please refer to the notes of balance sheet items and other comprehensive income for details.
57. Notes to items of the consolidated cash flow statement
（1）Other cash receipts related to operating activities
Unit: RMB
.Items Current period cumulative Preceding period comparative
Government grants 189256546.89 96292082.24
Net change in restricted funds 22294525.74
Interest income 52233256.57 29496046.87
Rental income 10255696.35 10583717.33
Guarantee deposit 1056661.41 3820200.00
Other 733249.60 12207297.84
Total 253535410.82 174693870.02
The remarks of other cash receipts related to operating activities:
（2）Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 11123000.00 5176329.03
Guarantee deposit 12114845.90 9307226.86
Expense payments for the period 669374176.12 607837864.04
Total 692612022.02 622321419.93
The remarks of other cash payments related to operating activities:
（3）Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Redemption of bank financing products 520254995.00 1045500000.00
Net change in restricted funds 7204442.99 3384912.56
Profit on Foreign exchange contract settlement 19642289.10
Profit on Futures contract settlement 29117946.22
Deposit of land transfer 5055525.00
Withdraw call loans 2000000.00
Total 576219673.31 1055940437.56
The remarks of other cash receipts related to investing activities:
（4）Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
.Payments for purchasing bank financing
products
289200000.00 4608043.00
Net change in restricted funds 3929071.15
Loss on foreign exchange contract
settlement
18623937.92
Loss on futures contract settlement 689383.44
Call loans 2000000.00
Total 289200000.00 29850435.51
The remarks of other cash payments related to investing activities:
（5）Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Disposal of part of the subsidiary's
equity
222517.59 5109000.00
Net change in restricted funds 24311782.55 57855624.87
Total 24534300.14 62964624.87
The remarks of other cash payments related to financing activities:
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Repo shares expenses 2309044.00 276250709.93
Repayment of finance lease 4472088.58 9049906.21
Bank financing charges 1950351.25 2102904.85
Finance lease interest expenses 1296675.02 1403481.08
Expenses for acquiring non-controlling
interest in subsidiaries
9238318.85
Payment of stock appreciation right
deposit
724360.94 1438316.05
Total 10752519.79 299483636.97
The remarks of other cash payments related to financing activities:
.
58. Supplement information to the cash flow statement
（1）Supplement information to the cash flow statement
Unit: RMB
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to cash flow
from operating activities:
-- --
Net profit 1473323351.98 1433815038.76
Add: Provision for assets impairment
loss
87349921.14 31269366.14
Depreciation of fixed assets oil
and gas assets productive biological assets
398438067.60 342878543.15
Amortization of right-of-use assets
Amortization of intangible assets 20558264.41 21512188.24
Amortization of Long-term prepayments 5698329.34 7179778.92
Loss on disposal of fixed
assets intangible assets and other
long-term assets (Less: gains)
486378.33 -278783.69
Loss on retirement of fixed
assets (Less: gains)
10408218.61 6366051.74
Losses on changes in fair value
(Less: gains)
-31847915.76 -27906347.18
Financial expenses (Less: gains) 85662587.59 56152983.36
Investment losses (Less: gains) -93448308.05 -25335547.44
Decrease of deferred tax assets
(Less: increase)
-14636264.19 -16761875.13
Increase of deferred tax liabilities
(Less: decrease)
65728822.77 32217777.42
Decrease of inventories (Less:
increase)
-188213271.68 -181755639.30
Decrease of operating receivables
(Less: increase)
-817805253.81 82864778.13
Increase of operating payables
(Less: decrease)
1012830723.84 113378878.02
Others 72810130.99 24566413.46
Net cash flows from operating activities 2087343783.11 1900163604.60
2. Significant investing and financing -- --
.activities not related to cash receipts and
payments:
Conversion of debt into capital
Convertible bonds due within one
year
Fixed assets leased in under finance
leases
3. Net changes in cash and cash
equivalents:
-- --
Cash at the end of the period 3400144038.54 2553783015.01
Less: Cash at the beginning of the
period
2553783015.01 1164542861.48
Add: Cash equivalents at the end of
the period
Less: Cash equivalents at the
beginning of the period
Net increase of cash and cash
equivalents
846361023.53 1389240153.53
（2）Net cash receipts from disposal of subsidiaries in current period
Unit: RMB金额
Cash and cash equivalents received in current period for
subsidiary disposal in current period
6562658.15
Including: --
Qingdao Debaiyi Refrigeration Equipment Co. Ltd. 6562658.15
Less: Cash and cash equivalents held by subsidiaries on which the
Company lost control
6272468.97
Including: --
Qingdao Debaiyi Refrigeration Equipment Co. Ltd. 6272468.97
Including: --
Net cash receipts from disposal of subsidiaries in current period 290189.18
Other remarks:
（3）Composition of cash and cash equivalents
Unit: RMB
.Items Closing balance Opening balance
Ⅰ . Cash 3400144038.54 2553783015.01
Including: Cash on hand 232265.51 417814.58
Cash in bank that can be
readily drawn on demand
3399911773.03 2553365200.43
Ⅲ. Cash and cash equivalents at end of
year
3400144038.54 2553783015.01
Other remarks:
On December 31 2020，restricted use of cash and bank balances includes margin deposits 46093170.51
yuan 、 Litigation freeze deposit 11123000.00yuan and Deposit in securities and futures institutions
32327359.09yuan，totals 89543529.60 yuan. Such cash and bank balances are not readily available for payment
and do not belong to cash and cash equivalents.
（4）Amount of endorsed acceptance not involving cash receipts and payments
Items Current period cumulative
Amount of endorsed acceptance 112518677.57
Including: Payment for operating activities 109630824.74
Payment for investment activities 2887852.83
59. Assets with restriction on ownership or use rights
Unit: RMB
Items
Carrying amount at the end of the
period
Cause of restriction
Cash and Bank Balances 89543529.60
Guarantee deposit 、Margin deposit witha futures institution and litigation freeze
deposit
Notes receivable 1608722846.32 Pledge financing
Total 1698266375.92 --
Other remarks:
Items Carrying amount at the end of the period Cause of restriction
Cash and Bank Balances 46093170.51 Guarantee deposit
32327359.09 Margin deposit with a futures institution
11123000.00 litigation freeze deposit
Subtotal 89543529.60
.
60. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Items
Closing balance in
foreign currencies
Exchange rate RMB equivalent
Cash and Bank Balances -- --
Including: USD 111089210.06 6.5249 724845986.72
EUR 43167466.15 8.0250 346418915.85
Other currencies 59010905.15
Subtotal 1130275807.72
Accounts receivable -- --
Including: USD 154439692.02 6.5249 1007703546.46
EUR 34569590.53 8.0250 277420964.00
Other currencies 74178308.22
Subtotal 1359302818.68
Long-term borrowings -- --
Including: USD 32166620.38 6.5249 209883981.32
EUR 14530450.00 8.0250 116606861.25
Subtotal 326490842.57
Held-for-trading financial assets
Including: USD 6396683.63 6.5249 41737721.02
Subtotal 41737721.02
Notes receivable
Including: JPY 203642687.00 0.0632 12877548.96
Subtotal 12877548.96
Other receivables
Including: USD 686535.44 6.5249 4479575.09
EUR 150354.70 8.0250 1206596.47
Mexican peso 33932763.37 0.3280 11130591.11
Other currencies 2237538.98
Subtotal 19054301.65
Long-term receivable
Including: EUR 190000.00 8.0250 1524750.00
.Subtotal 1524750.00
Short-term borrowings
Including: USD 15000000.00 6.5249 97873500.00
EUR 33047116.66 8.0250 265203111.20
Subtotal 363076611.20
Derivative financial liabilities
Including: USD 1170892.72 6.5249 7639957.91
Subtotal 7639957.91
Accounts payable
Including: USD 11575948.70 6.5249 75531907.67
EUR 13420576.38 8.0250 107700125.45
Other currencies 18382422.89
Subtotal 201614456.01
Other payables
Including: USD 2771121.00 6.5249 18081287.41
EUR 1606544.91 8.0250 12892522.90
Other currencies 9528416.32
Subtotal 40502226.63
Non-current liabilities due within
one year
Including: USD 20008570.84 6.5249 130553923.87
Subtotal 130553923.87
Long-term payables
Including: USD 47180.00 6.5249 307844.78
EUR 11209906.00 8.0250 89959495.65
Other currencies 68742.84
Subtotal 90336083.27
Other remarks:
（2）Notes on overseas operating entities including for the significant overseas operating entities its main
operating locations reporting currency and the basis for selection should be disclosed and the reason for
changes in reporting currency should also be disclosed.
√ Applicable □ Not Applicable
The Company has several overseas subsidiaries locate in the United States Europe Japan Poland Mexico
and other countries where US dollars Euro Japanese yen Polish zloty Mexican pesos etc. are used as the
standard reporting currency..
61. Government grants
（1）Details
1) Government grants related to assets
Unit: RMB
Items Opening
balance
Increased in
current period
The amount recorded
as other income in
current period
Closing balance Related to
assets/related
to
income
Grant for project of an annual output of
15 million commercial refrigeration and
air-conditioning automatic control
components
4898000.16 2448999.96 2449000.20 Related
to assets
Special fund grant for multistory factory
buildings of small and medium-sized
enterprises
5215120.26 219986.16 4995134.10 Related
to assets
Grant for innovation ability construction
project of National Enterprise Technology
Center
3750000.12 624999.96 3125000.16 Related
to assets
Grant for energy-saving project with an
annual output of 35 million sets of L-type
four-way reversing valve for air
conditioners
3051396.55 910570.80 2140825.75 Related to
assets
Grant for technical transformation project
of newly increased 800000 sets of heat
exchanger per year
3032000.00 758000.00 2274000.00 Related to
assets
Grant for the technical transformation
project with an annual output of 2 million
sets of air-conditioning parts
2760000.08 552000.00 2208000.08 Related to
assets
Grant for the industrialization project of
20 million refrigeration and air
conditioning automatic control
components
1443272.70 1164435.00 278837.70 Related to
assets
Grant for commercial machine
micro-channel heat exchanger technical
transformation project
2030050.00 738200.00 1291850.00 Related to
assets
Grant for 1 million sets of
air-conditioning thermal sensor
technology transformation of new energy
vehicle
6407450.08 915349.92 5492100.16 Related to
assets
Grant for an annual output of 2 million
sets of high-efficiency energy-saving
2295417.72 515947.64 1779470.08 Related to
.inverter controllers assets
Technical transformation project of
annual output of 100000 large heat
exchangers
5008290.00 1273400.00 1224830.00 5056860.00 Related to
assets
Grant for air-conditioning component
micro-channel heat exchanger project
1000000.00 1000000.00 Related to
assets
Grant for construction project of public
test and detection service platform for
refrigeration components
1399999.72 700000.08 699999.64 Related to
assets
Grant for the construction project of
automatic control components for
residential air conditioners with an annual
output of 10 million
960000.00 480000.00 480000.00 Related to
assets
Grant for pollution source treatment
project
1347391.67 178900.00 1168491.67 Related to
assets
Grant for construction project of public
inspection and testing service platform for
automobile air conditioning parts
641666.83 384999.96 256666.87 Related to
assets
Technical transformation project for the
production line of energy-saving
residential air-conditioning control
components with an annual output of 50
million sets
624038.60 126923.04 497115.56 Related to
assets
Grant for construction project of 25
million sets of new energy-saving and
environmental protection variable
frequency air conditioning expansion
valve
476000.24 135999.96 340000.28 Related to
assets
Industrial transfer projects and single
equipment investment grant
450690.70 144326.64 306364.06 Related to
assets
Comprehensive investment award for
technological transformation of industrial
enterprises in Wuhu City
3343136.00 357888.00 2985248.00 Related to
assets
Industrial transformation and upgrading
technological transformation and
industrial investment
1615259.34 202424.90 1412834.44 Related to
assets
Intelligent factory technological
transformation project based on The
Internet of Things technology
4124999.93 500000.04 3624999.89 Related to
assets
Grant for the annual production of 11.5
million sets of new energy auto parts
project
4200000.00 14594072.64 1131004.37 17663068.27 Related to
assets
.
Four-way reversing valve optimization
project
733333.40 159999.96 573333.44 Related to
assets
Policy grant for Wuhu City's strong
industrial base and manufacturing strong
province
795000.00 90000.00 705000.00 Related to
assets
Annual production of 3 million
self-circulating superconducting plates
technology project
816750.00 99000.00 717750.00 Related to
assets
Comprehensive award and compensation
for investment in technological
transformation of industrial enterprises
2218666.33 275964.24 1942702.09 Related to
assets
Grant for intelligent manufacturing
technology transformation project of 6
million sets of commercial refrigeration
components per year
2991220.00 360000.00 2631220.00 Related to
assets
Grant for technical transformation project
of intelligent manufacturing of
refrigeration components
6628400.00 828550.00 5799850.00 Related to
assets
Grant for technical transformation project
of 30 million sets of high efficiency
energy saving refrigeration and air
conditioning control components
7200000.00 800000.00 6400000.00 Related to
assets
Grant for an annual output of 7.3 million
sets of new energy vehicle thermal
management system components
technical transformation
1080000.00 39300000.00 40380000.00 Related to
assets
Grant for technical transformation project
for the high efficiency and energy saving
refrigeration and air conditioning control
components with an annual output of 30
million sets
12116100.00 100967.50 12015132.50 Related to
assets
Grant for technical transformation project
for the commercial refrigeration control
components with an annual output of 12
million sets
1125100.00 9375.83 1115724.17 Related to
assets
Grant for equipment of New
technological transformation for
industrialization
1317620.00 43912.68 1273707.32 Related to
assets
Technical transformation project of large
heat exchanger with annual output of
700000 sets
6694500.00 669450.00 6025050.00 Related to
assets
Subtotal 82537550.43 76420792.64 18853006.64 140105336.43
.
2) Government grants related to income and used to compensate relevant cost expenses or losses
Unit: RMB
Items Current period cumulative Financial Report
Items
Awards for major industrial investment projects 41560300.00 Other income
Subsidy of overseas COVID-19 13558741.13 Other income
Refund of unemployment insurance expenses 10341885.75 Other income
VAT refund of civil welfare enterprises 10848552.90 Other income
VAT refund on software products in excess of tax burden 5359348.90 Other income
Award of enterprise R&D investment 6713693.72 Other income
Award of industry support fund 5840830.00 Other income
Enterprise operation development reward 4050000.00 Other income
Energy saving and consumption reduction and environmental protection
subsidies
4601440.00 Other income
Talent introduction and job stabilization subsidies 3381598.79 Other income
Subsidy and award of technological innovation and entrepreneurship 6708500.00 Other income
Reward for the development of industrial informatization 3411500.00 Other income
Special funds for foreign trade and economic development 2078801.00 Other income
Award of urban land use tax policy 1659233.76 Other income
Patent subsidy for enterprises 1154880.00 Other income
Innovation and Development Award 200000.00 Other income
Award of logistics Development Support 314100.00 Other income
Other 9672571.21 Other income
Subtotal 131455977.16
(2)The amount of government grant included in the profit or loss statement in the current period is RMB
150308983.80.
62. Others
Ⅷ. Changes in the consolidation scope
1. Disposal of subsidiaries
Whether there is one-time disposal involving loss of control over a subsidiary
√Applicable □ Not Applicable
Unit: RMB
Subsid Equity Equity Equity Loss Deter Differe Propor Carryi Fair Gains/ Deter Chang
.iaries dispos
al
consid
eration
dispos
al
propor
tion
(%)
dispos
al
metho
d
of
control
date
minati
on
basis
for
loss of
control
date
nce
betwee
n
dispos
al
consid
eration
and
net
assets
attribu
table
to the
Comp
any at
the
consol
idated
financi
al
statem
ents
level
tion of
remain
ing
equity
at the
loss of
control
date
ng
amoun
t of
remain
ing
equity
at the
loss of
control
date
value
of
remain
ing
equity
at the
loss of
control
date
Losses
on fair
value
remeas
ureme
nt of
remain
ing
equity
minati
on
metho
d and
major
assum
ption
on fair
value
of
remain
ing
equity
at the
loss of
control
date
es in
other
compr
ehensi
ve
incom
e/equit
y
related
to
former
subsidi
ary’s
equity
invest
ment
transfe
rred to
invest
ment
incom
e
Qingd
ao
Debaiy
i
Refrig
eration
Equip
ment
Co.
Ltd.
6562
658.15
70.00
%
Agree
ment
to
dispos
al
Decem
ber 2
2020
Compl
ete the
registr
ation
proced
ures
for
industr
ial and
comm
ercial
change
s
-4098
327.44
0.00%
Other remarks:
Whether there is disposal of subsidiaries in stages involving loss of control in current period
□Applicable√ Not Applicable
2. Changes in consolidation scope due to other reasons
Changes in consolidation scope due to other reasons and related information (such as newly established
subsidiary liquidation subsidiary etc..
243
1．Entities brought into the consolidation scope
Entity name Equity acquisition
method
Equity
acquisition date
Actual capital contribution at
the end of the period
Capital contribution
proportion (%)
Zhejiang Xianji Intelligent Technology
Co. Ltd
New investment 2020-09-10 34.6 million yuan 100%
Sanhua Mexico Investment Co. Ltd New investment 2020-09-15 200000 pesos 100%
Zhejiang Sanhua Commercial
Refrigeration Co. Ltd
New investment 2020-10-09 68.29 million yuan 100%
Shaoxing Sanhua Automobile Thermal
Management Technology Co. Ltd
New investment 2020-12-03 0.00yuan 100%
2．Entities excluded from the consolidation scope
Unit: RMB
Entities
Equity disposal
method
Equity disposal
date
Disposal-date net
assets
Net profit from the period
beginning to the disposal date
Hangzhou Sanhua Home Appliance
Thermal Management System Co. Ltd
Liquidation
cancellation
2020-05-18 147448.25 -78092.41
Aweco Appliance (Shanghai) Co. Ltd
Liquidation
cancellation
2020-06-02 6669.73 22351.38
Ma 'anshan Sanhua Intelligent Technology
Co. Ltd
Liquidation
cancellation
2020-08-03 3907472.50 -478491.11
3. Others
Ⅸ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Subsidy name
Main operating
place
Place of
registration
Business nature
Holding proportion Acquisition
method Direct Indirect
Zhejiang
Sanhua Trading
Co. Ltd
Zhejiang Zhejiang Commerce 100.00% Establishment
Zhejiang
Sanhua Climate
and Appliance
Controls Group
Co. Ltd.
Zhejiang Zhejiang Manufacture 74.00% 26.00%
Business
combination
under common
control
Zhejiang Zhejiang Zhejiang Manufacture 100.00% Business
.Sanhua
Automotive
Components
Co. Ltd.
combination
under common
control
Sanhua
(hangzhou)
Micro Channel
Heat Exchanger
Co. Ltd
Zhejiang Zhejiang Manufacture 100.00%
Business
combination
under common
control
Sanhua
International
Singapore Pte.Ltd
Singapore Singapore Commerce 100.00%
Business
combination
under common
control
Remarks on inconsistency between holding proportion and voting rights proportion in subsidiaries:
Basis for the control of an investee while holding its half or less than half voting rights and the non-control
of an investee while holding its more than half voting rights
Basis for control of significant structured entities brought into the consolidation scope
Basis for determining an entity being acting as an agent or a principal
Other remarks:
The above subsidiaries are significant subsidiaries of the Company.
（2）Significant not wholly-owned subsidiaries
Remarks on inconsistency between holding proportion and voting rights proportion of non-controlling
shareholders in subsidiaries:
Other remarks:
On December 31 2020，The Company has no Significant not wholly-owned subsidiaries.
2. Transactions resulting in changes in subsidiaries’ equity but without losing control
（1）Changes in subsidiaries’ equity
Subsidiaries
Date of
change
Holding proportion before
change
Holding proportion after
change
Xinchang county sitong mechanical and electrical co.
LTD
2020-07-31 100% 70%
As a result of the Company's transfer to minority shareholders of the 30% equity held in Xinchang County
Sitong Electromechanical Co. Ltd. (Hereinafter referred to as Sitong electromechanical) the company's interest
was reduced from 100% to 70%..
（2）Effect of transactions on non-controlling interest and equity attributable to parent company
Unit: RMB
Items Sitong electromechanical（100% to 70%）
Acquisition costs/Disposal considerations 8563752.16
-- Cash 8563752.16
Total acquisition costs/disposal considerations 8563752.16
Less: Share in subsidiaries’ net assets based on acquired/disposed net assets proportion 11584610.39
Balance -3020858.23
Including: Capital reserve adjusted -3020858.23
Other remarks:
3. Others
X. Risks Relating to Financial Instruments
The Company has exposure to the following risks from its use of financial instruments which mainly include:
credit risk liquidity risk and market risk. The Company's overall risk management strategy is aimed at the
unpredictability of the financial market and strives to reduce the potential adverse effects on the Company's
financial performance.(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each reporting date the Company assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When assessing whether the credit risk has increased significantly since
initial recognition the Company takes into account reasonable and supportable information which is available
without undue cost or effort including qualitative and quantitative analysis based on historical data external
credit risk rating and forward-looking information. The Company determines the changes in default risk of
financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet date
and the initial recognition date on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when one or
more of the following qualitative and quantitative standards are met. Quantitative standard mainly relates to the
scenario in which on the balance sheet date the probability of default in the remaining lifetime has risen by more
than a certain percentage compared with the initial recognition. Qualitative standard mainly relates to significant
adverse changes in the debtor’s operation or financial position present or expected changes in technology market
economy or legal environment that will have significant adverse impact on the debtor’s repayment ability.
(2) Definition of default and credit-impaired asset
A financial asset is credit-impaired when one or more following events have occurred. The standard is
consistent with the definition of credit impairment. The debtor has significant financial difficulty. The debtor
breached the binding clause of the contract on the debtor. The debtor is likely to go bankrupt or other financial
.reorganization. The creditor of the debtor for economic or contractual reasons relating to the debtor’s financial
difficulty having granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default loss rate of
default and exposure to default risk. The Company develops a model of the probability of default loss rate of
default and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating
guarantee measures and collateral type payment method etc.) and forward-looking information.
3. Please refer to “Notes receivable” “Accounts receivable” “Other receivable” for details on the
reconciliation table of opening balance and closing balance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances bank financial investments
notes receivable and accounts receivable.The Company deposits its bank balances and other cash and bank balances in financial institutions with
relatively high credit levels. Some bank acceptance bills held by the Company are accepted and paid by small and
medium financial institutions. In addition in order to improve the efficiency of capital use the Company entrusts
idle funds to banks for financial investment. The management of the Company believes that based on the current
operating status of domestic banks bank balances and other cash notes receivable and bank financial investments
are not currently facing serious credit risks. If there is a serious unfavorable differentiation in the bank's credit
system in the future the Company will make adjustments in due course.The Company performs credit assessment on customers who uses credit settlement on a continuous basis.
Based on the customer's financial status past credit history and other factors assess the customer's credit rating
and monitor the balance of accounts receivable to control credit risk exposure. For customers with bad credit
records the Company will use written reminders shorten or cancel credit periods and reduce credit transaction
amounts to ensure that there is no major risk of bad debts.The Company conducts transactions with recognized and creditworthy customers and the credit risk is
centralized and managed on the basis of customers. As of December 31 2020 the Company has a certain
concentration of credit risk and 37.57% of accounts receivable was due from the five largest customers of the
Company. The Company held no collateral or other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset on the balance sheet.(II) Liquidity risk
The Company continues to monitor short-term and long-term funding needs to ensure that sufficient cash
reserves are maintained. At the same time the Company continuously monitors compliance with the loan
agreement to ensure that the credit line obtained from commercial banks can meet short-term or long-term funding
needs. When necessary the Company can implement equity financing.
As of December 31 2020 the undiscounted contractual cash flows of the Company’s financial liabilities
listed by maturity date are shown in the following table:
Financial liabilities classified based on remaining time period till maturity
Items
Closing balance
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings（Include interest） 384529024.72 384529024.72
Notes payable 1238574463.73 1238574463.73
Accounts payable 2279661755.97 2279661755.97
.Other payable 270888400.58 270888400.58
Non-current liabilities due within one year（Include interest） 132518381.28 132518381.28
Long-term borrowings（Include interest） 1781690487.83 1781690487.83
Long-term payables（Include interest） 6417433.10 20548394.68 70534422.75 97500250.53
Subtotal 4312589459.38 1802238882.51 70534422.75 6185362764.64
(Continued)
Items
Opening balance
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings（Include interest） 1311299960.81 1311299960.81
Notes payable 1130668415.32 1130668415.32
Accounts payable 1587763752.62 1587763752.62
Other payable 159464464.88 159464464.88
Non-current liabilities due within one year（Include interest） 223342263.89 223342263.89
Long-term borrowings（Include interest） 411319664.33 411319664.33
Long-term payables（Include interest） 194556.75 15342264.21 78699036.81 94235857.77
Subtotal 4412733414.27 426661928.54 78699036.81 4918094379.62
(III) Market risk
1. Interest Rate Risk
The Company’s interest risk relates mainly to bank borrowings. The Company’s fair value interest risks
arise from fixed-rate financial instruments while the cash flow interest risks arise from floating interest financial
instruments. The Company determines the proportion of fixed-rate financial instruments and floating interest rate
financial instruments based on the market environment. As of December 31 2020 the Company's
interest-bearing debt accounted for a small proportion and the interest rate risk it faced was within a controllable
range.The Company continues to monitor the level of interest rates. Rising interest rates will have an adverse
impact on the Company's financial performance and the management will make necessary response measures in a
timely manner based on the latest market conditions.
2. Foreign currency risk
The Company's production bases and sales markets are distributed in developed and developing countries
including the United States the European Union Japan India Mexico etc. The business volume settled in
Euros and U.S. dollars has a certain proportion and the exchange rate risk is relatively high. Based on internal
risk control policies the Company's management has taken several measures to deal with exchange rate risks: a.pre-judgment based on the trend of exchange rate changes timely settlement of foreign exchange receipts or
delayed settlement of foreign exchange; b. Carry out overseas financing through domestic guarantees and
overseas loans to hedge foreign currency monetary assets and control net risk exposure; and c. Carry out
forward exchange settlement and foreign currency swap business to lock in exchange rates.
As of December 31 2020 please refer to “monetary items in foreign currencies” of notes to financial
statements for details in foreign currency financial assets and liabilities..XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Item Name
Fair value as of the balance sheet date
Level 1 Level 2 Level 3 Total
Recurring fair value measurement -- -- -- --
1.Held-for-trading financial assets 8990525.42 408564822.89 393000000.00 810555348.31
Financial assets measured at fair value through profit or loss 8990525.42 408564822.89 393000000.00 810555348.31
Debt instrument investments 359224861.78 393000000.00 752224861.78
Derivative financial assets 8990525.42 49339961.11 58330486.53
Total amount of assets constantly measured at their fair
values
8990525.42 408564822.89 393000000.00 810555348.31
2. Held-for-trading liabilities 7939957.91 7939957.91
Derivative financial liabilities 7939957.91 7939957.91
Total amount of liabilities constantly measured at their fair
values
7939957.91 7939957.91
Non-constant measurement at fair values -- -- -- --
2. Basis for determining the market price of items under first level constant and non-constant measurement
at fair value.The fair value of futures contracts is measured at the exchange's open market quotes.
3. Items under second level constant and non-constant measurement at fair value valuation technique
adopted and qualitative and quantitative information of important parameters
The fair value of forward foreign exchange contracts and bank financing products is measured based on the
valuation amount of the host bank or the forward foreign exchange rate announced by the Bank of China. Bank
financing products are measured based on the valuation amount of the issuer or manager.
4. Items under third level constant and non-constant measurement at fair value valuation technique
adopted and qualitative and quantitative information of important parameters.If the fair value information is insufficient the bank financing products are measured at cost on behalf of the
fair value..XII. Related party relationships and transactions
1. Parent Company
Parent Company
Place of
registration
Business nature Registered capital
Holding
proportion over
the Company
Voting right
proportion over
the Company
Sanhua Holding
Group Co. Ltd
Zhejiang Province
Industrial
Investment
660 million yuan 50.46% 50.46%
Remarks on the parent Company:
As of December 31 2020 Sanhua Holding Group Co. Ltd. directly holds 29.78% of the Company's shares
and indirectly holds 20.68% of the shares through its subsidiaries for a total of 50.46% of the shares.The final controllers of the Company are Mr Zhang Daocai Mr Zhang Yabo and Zhang Shaobo.Other remarks:
2. Information about the Company's subsidiaries
Please refer to interest in other entities of notes to financial statements.
3. Joint ventures and associates of the Company
Please refer to notes to financial statements for details on the Company’s significant joint ventures and associates.
Details of other joint ventures or associates carrying out related party transactions with the Company in current
period or in preceding period but with balance in current period are as follows:
Joint ventures or associates Relationships with the Company
Chongqing Tainuo Machinery Co. Ltd Associates
Qingdao Sanhua jinlifeng Machinery Co. Ltd Associates
Zhongshan Xuanyi Pipe Making Co. Ltd Associates
Other remarks
Joint ventures or associates Abbreviation of associate
Qingdao Sanhua Jinlifeng Machinery Co. Ltd QSJM
Zhongshan Xuanyi Pipe Making Co. Ltd ZXPM
Chongqing Tainuo Machinery Co. Ltd CTMC
4. Other related parties of the Company
Other related parties Other relationships with the Company
Zhejiang Sanhua Green Energy Industrial Group Co. Ltd.Shareholders and under the same control of the parent
Company
Hangzhou Tongchan Machinery Co. Ltd. under the same control of the parent Company
.Hangzhou Sanhua Research Institute Co. Ltd. under the same control of the parent Company
Hangzhou Sanhua International Building Co. Ltd. under the same control of the parent Company
Xinchang County Sanhua Property Management Co. Ltd. under the same control of the parent Company
Shanghai Sanhua Electric Co. Ltd under the same control of the parent Company
Zhejiang Sanhua Zhicheng Real Estate Development Co. Ltd. under the same control of the parent Company
Zhejiang Haoyuan Technology Co. Ltd. under the same control of the parent Company
Ningbo Fuerda Smartech Co. Ltd. under the same control of the parent Company
Wuhu Alda Technology Co. Ltd. Subsidiary of a Company with shares held by the Company
Hangzhou Formost Material Technology Co. Ltd Subsidiary of a Company with shares held by the Company
Other remarks
Joint ventures or associates Abbreviation of associate
Sanhua Holding Group Co. Ltd. SHG
Zhejiang Sanhua Green Energy Industrial Group Co. Ltd. ZSGE
Hangzhou Sanhua Research Institute Co. Ltd. HSRI
Hangzhou Tongchan Machinery Co. Ltd. HTM
Zhejiang Haoyuan Technology Co. Ltd. ZHT
Hangzhou Sanhua International Building Co. Ltd. HSIB
Zhejiang Sanhua Zhicheng Real Estate Development Co. Ltd. ZSZR
Shanghai Sanhua Electric Co. Ltd SSE
Xinchang County Sanhua Property Management Co. Ltd. XCSP
Ningbo Fuerda Smartech Co. Ltd. NFS
Wuhu Alda Technology Co. Ltd. WAT
Hangzhou Formost Material Technology Co. Ltd HFMT
5. Related party transactions
（1）Purchase and sale of goods rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Related
parties
Content of
transaction
Current period
cumulative
Approved
Transaction Limit
Over the Transaction
Limit or No
Preceding period
comparative
HTM
Materials and
mechanical parts
519318.58 1500000.00 81077.58
HTM Services 50000.00 NO 130682.02
HSRI Water and electricity 115165.09 30500000.00 NO 1144787.13
HSRI Materials 14303.48 1500000.00
.
ZSGE Utility 2151282.58 30500000.00 NO 2333110.78
ZXPM Materials 9947414.32 10000000.00 NO 11884054.12
QSJM Merchandise 1702420.54 2000000.00 NO 1702846.12
WAT Merchandise 16601.77 50000.00 NO 17327.58
ZHT Merchandise 1063598.21 1500000.00
ZHT Utility 7308466.90 30500000.00 NO
Sale of goods and rendering of services
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
SHG Merchandise and Materials 1080229.07
SHG Water and electricity 1871967.25
CTMC Merchandise 233517.60
QSJM Materials 291399.64 12322.99
HFMT Water and electricity 890529.83 2354827.67
HSRI Water and electricity 919853.20 3010720.73
HSRI Merchandise and Materials 305509.41 1805362.91
HSRI Services 636792.45
WAT Utility 212462.82 320544.07
WAT Merchandise and Materials 1449.92 228021.51
WAT Services 59840.90
ZSGE Water and electricity 1357863.17 1520785.51
HSIB Merchandise 290149.69
ZSZR Merchandise 29990.27 17388.50
ZHT Water and electricity 95522.69
ZHT Merchandise 159.29
HTM Water and electricity 42297.07
Remarks of related transactions related to the purchase and sale of goods and the provision and acceptance of
services
Due to the large number of related parties involved in related party transactions between the parent
Company Sanhua Holding Group Co. Ltd and its subsidiaries the Company approved RMB 1.5 million as the
overall purchase quota for purchases and purchase rent equipment rental property management water electricity
and power service fee amount of 30.5 million yuan from the parent company Sanhua Holding Group Co. Ltd.and its subsidiaries collectively. The approval bases on the merger of the parent Company and its subsidiaries.
（2）Related party leases
The Company as the lessor：
.Unit: RMB
Lessees Types of asset leased Lease income for current period Lease income for the preceding period
SHG Office building 5309339.44 5309339.44
HFMT Plant 1022346.21 849851.40
WAT Plant 345223.41 312302.76
The Company as the lessee：
Unit: RMB
Lessors Types of asset leased Lease expenses for current period Lease expenses for the preceding period
HSRI Office building 1134833.52 921788.57
ZSGE dormitory 80800.00 80800.00
ZSGE Plant 405234.27 17828.56
Remarks of related party leases
（3）Related party guarantees
The Company as guarantors
Unit: RMB
Guaranteed parties Amount guaranteed Commencement date Maturity date
Whether the guarantee is
mature
The Company as guaranteed parties
Guaranteed parties Amount guaranteed Commencement date Maturity date Whether the guarantee is mature
SHG RMB 1380000000.00 February 7 2020 October 25 2022 No
SHG EUR14500000.00 July 05 2019 June 20 2022 No
SHG USD20000000.00 December 24 2019 December 23 2021 No
Remarks of related party guarantees
The information in the table does not include related guarantees within the scope of consolidation nor related
guarantees that have been performed.
（4）Assets transfer and debt restructuring of the related parties
Unit: RMB
Related parties Content of related party transactions Current period cumulative Preceding period comparative
HTM Equipment 21622706.86 19421679.72
HSRI Equipment 17393367.30
（5）Key management’s emoluments
Unit: RMB
.Items Current period cumulative Preceding period comparative
Key management’s emoluments 5950600.00 5664500.00
（6）Other related party transactions
Unit: RMB
Abbreviation of associate Content of transaction Current period cumulative Preceding period comparative
SHG Property income 1684018.88 1684018.88
ZSGE
Property expenses 847318.27 254553.09
Service income 3849.06 6943.40
HFMT Property income 461320.79 379584.92
HSRI Property expenses 44752.78 30483.19
HTM Service income 6867.92 13207.55
XCSP Property expenses 2984.07
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，related parties pay for thecompany RMB2828941.97，the company pays for the related party RMB3786.42.
6. Balance due to or from related parties
（1）Receivables
Unit: RMB
Items
Related
parties
Closing balance Opening Balance
Book balance Provision for bad
debts
Book balance Provision for bad
debts
Accounts receivable WAT 376293.54 18814.68 62502.41 3125.12
Accounts receivable SHG 180000.00 9000.00
Accounts receivable QSJM 26973.19 1348.66 9331.56 466.58
Accounts receivable HSRI 18514.60 925.73 358962.37 17948.12
Accounts receivable XCSP 3372.00 168.60
Advances paid ZXPM 186974.96
Other receivables SHG 20000.00 1000.00
Other non-current assets
（Equipment payment in advance）
HTM 9122291.82
（2）Payables
Unit: RMB
.Items Related parties Closing balance Opening Balance
Accounts payable HTM 3883247.79 4002107.32
Accounts payable ZXPM 1072110.11
Accounts payable HSRI 266150.00 266150.00
Accounts payable QSJM 1177838.77
Contract liabilities WAT 1518.94 2101.34
Advances received NFS 10000000.00
Other payables HFMT 100000.00 100000.00
7. Related party commitments
8. Others
XIII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Unit: RMB
Total equity instruments granted in current period 12045000.00
Total equity instruments exercised in current period 5120700.00
Total equity instruments retired in current period 458055.00
The range of exercise prices of share options outstanding at the end of
the period and the remaining contractual life
The adjusted grant price of stock appreciation rights
is 4.59 yuan which will be unlocked in batches
within 12 months after 36 months from the grant
date.The range of exercise prices of other equity instruments at the end of the
period and the remaining contractual life
2018 Restricted Stock Incentive Plan: The adjusted
restricted stock grant price is 4.59 yuan which will
be unlocked in batches within 12 months after 36
months after the grant date. 2020 Restricted Stock
Incentive Plan: The adjusted restricted stock grant
price is RMB 7.36 which will be unlocked in batches
within 12 months after 12 months 24 months and 36
months from the grant date.Other remarks
(1) Restricted stock and stock appreciation right incentive plan implemented in 2018
In September 2018 the Company implemented a restricted stock and stock appreciation right incentive plan
for core employees. Among them the number of restricted stocks granted was 10.33 million shares the number of
stock appreciation rights granted was 355000 shares and the grant price per share was RMB 8.37. The grant date
was September 18 2018 at 30%:30%:40%. The proportion is unlocked year by year in batches..In May 2019 the Company implemented the 2018 equity distribution. According to the methods stipulated in
the "2018 Restricted Stock Incentive Plan" and "2018 Stock Appreciation Rights Incentive Plan" the exercise price
and quantity of the underlying stocks involved were adjusted accordingly. After the adjustment the number of
restricted stocks granted was 13.429 million shares. The number of stock appreciation rights granted was 461500
shares and the grant price per share was RMB 6.25.In June 2020 the Company implemented the 2019 equity distribution. In September 2020 the company
implemented the 2020 semi-annual equity distribution. According to the methods stipulated in the "2018 Restricted
Stock Incentive Plan" and "2018 Stock Appreciation Rights Incentive Plan" the exercise price and quantity of the
underlying stocks involved were adjusted accordingly .After the adjustment the number of restricted stocks granted
was 17.4577 million shares. The number of stock appreciation rights granted was 599950 shares and the grant price
per share was RMB 4.59.
(2) Restricted stock incentive plan implemented in 2020
In February 2020，the Company implemented a restricted stock incentive plan for core employees. Amongthem，the number of restricted stocks granted was 12.045 million shares and the grant price per share was RMB
9.85，The grant date was February 24 2020 and it will be unlocked year by year in batches at a ratio of
30%:30%:40%.
In June 2020 the Company implemented the 2019 equity distribution. In September 2020 the company
implemented the 2020 semi-annual equity distribution. According to the method stipulated in the "2020 Restricted
Stock Incentive Plan" the exercise price and quantity of the underlying stocks involved were adjusted accordingly.
After the adjustment the number of restricted stocks granted was 15.6585 million shares and the grant price per
share was RMB 7.36.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for grant-date fair value of equity
instruments
Calculated based on the closing price of the stock on the grant date
minus the grant price of the restricted stock.
Determination method for the number of equity instruments
expected to vest
[Note]
Reasons for significant difference between the estimates in
current period and preceding period
Not applicable
Capital reserve accumulated due to equity-settled
share-based payment
97243888.18
Total expenses incurred due to equity-settled share-based
payment
72810130.99
Other remarks
Note：In 2018 the company initially granted 10.33 million restricted stocks to incentive object. Later it was
adjusted to 17.4577 million shares due to the annual distribution of equity in 2018 and the annual distribution of
equity in 2019. In 2020 the company initially granted 12.045 million restricted stocks to incentive object. Later it
was adjusted to 17.4577 million shares due to the annual distribution of equity in 2019. The number is the base，itwill be unlocked year by year in batches at a ratio of 30%:30%:40%. The Company estimates the number of
.exercisable equity instruments on the following basis: the Company's operating performance can meet the target，the future voluntary turnover rate of the incentive objects is 0%，and the performance appraisal level is above C (theunlocking coefficient is 1).
3. Cash-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for the fair value of liability
incurred by the Company and to be settled in cash or other
assets
It is calculated based on the closing price of the stock on the balance
sheet date after deduction of the adjusted stock appreciation right grant
price.Liabilities incurred due to cash-settled share-based
payment
6332840.44
Total expenses incurred due to cash-settled share-based
payment
4094389.66
Other remarks
4. Others
XIV. Commitments and contingencies
1. Contingencies
（1）Significant contingencies existing on the balance sheet date
On December 31 2020，no significant contingent matter needs to be disclosed by the Company.
（2）If no significant contingent matter to be disclosed by the Company it should also be noted accordingly
No important contingent matter needs to be disclosed by the Company.
2. Others
XV. Events after the balance sheet date
1. Profit distribution
Unit: RMB
Proposed profits or dividends 895454593.00
Profits or dividends declared to be paid after approval 895454593.00
.XVI. Other Significant Events
1. Segment information
（1）Basis for reportable segments and the accounting policy
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization management requirements and internal reporting system etc. and
identified the reportable segments based on products.
（2）Financial information of the reporting subsection
Unit: RMB
Items
Refrigeration and air-conditioning
electrical parts business
Auto parts
business
Inter-segment
elimination
Total
Total Operating revenue 964064.72 246918.62 1210983.34
Total Operating cost 676459.91 173579.22 850039.13
Total assets 1266070.50 437182.57 1703253.07
Total liabilities 546913.43 141064.36 687977.79
2. Other remarks
(1) Convertible corporate bonds
In January 2021 The Company has received the "Retification on Approval of Zhejiang Sanhua Intelligent
Controls Co. Ltd.'s Public Issuance of Convertible Corporate Bonds" (CSRC License [2021] No. 168) issued by
China Securities Regulatory Commission. Within 12 months as of the date of approval the Company may issue
convertible corporate bonds with a total face value of 3 billion yuan to the public.
(2)Financing lease
Please refer to “Fixed assets” of notes to financial statements for details in fixed assets leased in by financing.The unrecognized financing costs are 8068029.49yuan at the end of period and minimum lease payments to be
paid in subsequent years are as follows:
Remaining lease term Amount
Within 1 year(including 1 year) 6417433.10
1 to 2 years 10274197.36
2 to 3 years 10274197.36
Over 3 years 70534422.75
Subtotal 97500250.57
.XVII. Notes to items of parent Company financial statements
1. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Categor
y
Closing balance Opening balance
Book balance
Provision for bad
debt
Carrying
amount
Book balance
Provision for bad
debt
Carrying
amount
Amount
Proport
ion
Amount
Accrue
d
proport
ion
Amount
Proport
ion
Amount
Accrue
d
proport
ion
Receiva
bles
with
provisio
n made
on an
individu
al basis
5689261
07.65
77.05
%
5689261
07.65
98634901
4.75
86.28
%
98634901
4.75
Includin
g:
Receiva
bles
with
provisio
n made
on a
collecti
ve basis
1694532
30.80
22.95
%
847266
1.54
5.00%
1609805
69.26
15679040
1.29
13.72
%
783952
0.06
5.00%
14895088
1.23
Includin
g:
Total
7383793
38.45
100.00
%
847266
1.54
1.15%
7299066
76.91
11431394
16.04
100.00
%
783952
0.06
0.69%
11352998
95.98
Provision made on an individual basis:
Unit: RMB
Name
Closing balance
Book balance Provision for bad
debt
Accrued
proportion
Accrued
reason
.Zhejiang Sanhua Trading Co. Ltd 391515686.85
SANHUA INTERNATIONAL SINGAPORE
PTE.LTD.
91681883.29
SANHUA (VIETNAM) COMPANY LIMITED 57017505.61
Zhejiang Sanhua Automotive Components Co. Ltd. 13985140.95
Other subsidiaries 14725890.95
Total 568926107.65 -- --
Provision made on a collective basis:
Unit: RMB
Items
Closing balance
Book balance Book balance Book balance
Within 1 year 169453230.80 8472661.54 5.00%
Total 169453230.80 8472661.54 --
The remarks of determination of a collective basis:
If the provision for bad debt of accounts receivable is accrued in accordance with the general expected credit loss
model please refer to the disclosure of other receivables to disclose the relevant information about the provision
for bad debt:
√ Applicable □ Not applicable
Provision for bad debt
Phase I Phase II Phase III Subtotal
12? month expected
credit losses
Lifetime expected credit losses
(credit not impaired)
Lifetime expected credit losses
(credit impaired)
Balance on January 1 2020 7839520.06 7839520.06
The balance as of January 1 2020 is
in the current period
—— —— —— ——
--Transferred to phase II
--Transferred to phase III
--Reversed to phase II
--Reversed to phase I
Provision made in the current period 633141.48 633141.48
Provision recovered in current period
Provision reversed in current period
Provision written off in current
period
Other changes
Balance on December 31 2020 8472661.54 8472661.54
Disclosure by aging
Unit: RMB
Aging Closing balance
.Within 1 year (including 1 year) 738379338.45
Total 738379338.45
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Category
Opening
balance
Changed amount of the current period
Closing
balance Accrued
Recovered or
reversed
Write
off
Others
Receivables with provision made on a
collective basis
7839520.06 633141.48 8472661.54
Total 7839520.06 633141.48 8472661.54
Including significant provision for bad debt recovered or reversed amount:
（3）Assets and liabilities arising from transferred but still involved accounts receivable
Other remarks:
Closing balance of top 5 debtors totaled 629113983.75yuan accounting for 85.20% of the total closing
balance of accounts receivable and provision for bad debts made thereon totaled 4444945.40 yuan.
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 348897078.11 603257516.95
Total 348897078.11 603257516.95
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Other receivables categorized by nature Closing balance Opening balance
Principal and interest of capital assistance to subsidiaries 329063840.37 573806364.53
Tax refund receivable 8536537.99 15017287.01
Guarantee deposit 10381285.00 10381285.00
Others 1224031.39 4660439.18
Total 349205694.75 603865375.72
.
2）Provision for bad debt
Unit: RMB
Provision for bad debt
Phase I Phase II Phase III
Total
Next 12?month
expected credit
losses
Lifetime expected credit
losses (credit not
impaired)
Lifetime expected credit
losses (credit impaired)
Balance on January 1
2020
152826.34 455032.43 607858.77
Balance in current
period on January 1
2020
—— —— —— ——
Provision recovered in
current period
109437.04 189805.09 299242.13
Balance on December
31 2020
43389.30 265227.34 308616.64
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) 43389.30
1 to 2 years 8689.84
2 to 3 years 232704.00
Over 3 years 23833.50
Total 308616.64
3）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Category
Opening
balance
Changed amount of the current period
Closing
balance Accrued
Recovered or
reversed
Write
off
Others
Receivables with provision made on a
collective basis
607858.77 299242.13 308616.64
Total 607858.77 299242.13 308616.64
Including significant provision for bad debt recovered or reversed amount:
Unit: RMB
.
Debtors Recovered or reversed Way of collection
4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Debtors
Nature of
receivables
Closing
balance
Age
Proportion to the total
balance of other
receivables
Provision for bad debt
at the end of the period
Sanhua (Jiangxi) Self -
control Components Co.Ltd.
Financial aid 50000000.00
Within
1 year
14.32%
Wuhu Sanhua Auto-control
Components Co. Ltd
Financial aid 46000000.00
Within
1 year
13.17%
Shaoxing Shangyu Sanli
Copper Industry Co. Ltd
Financial aid 40000000.00
Within
1 year
11.45%
Zhongshan Sanhua
Refrigeration Accessories
Co. Ltd
Financial aid 40000000.00
Within
1 year
11.45%
Wuhu Sanhua Refrigeration
Accessories Co. Ltd
Financial aid 40000000.00
Within
1 year
11.45%
Total -- 216000000.00 -- 61.85%
3. Long-term equity investments
Unit: RMB
Investees
Closing balance Opening balance
Book balance Provision for
impairment
Carrying amount
Book balance Provision for
impairment
Carrying amount
Investments in
subsidiaries
4515044723.75 4515044723.75 4297929280.35 54000000.00 4243929280.35
Investments in
associates and
joint ventures
13501505.62 13501505.62 12704660.71 12704660.71
Total 4528546229.37 4528546229.37 4310633941.06 54000000.00 4256633941.06
（1）Investments in subsidiaries
Unit: RMB
Investees
Opening
balance(Carrying
Changed amount of the current period Closing balance
(Carrying
Closing
balance of Investments Investments Provision Others
.amount) increased decreased for
impairment
amount) provision
for
impairment
Zhejiang
Sanhua
Automotive
Components
Co. Ltd.
1977416802.97 16722173.85 1994138976.82
Sanhua
(Hangzhou)
Micro Channel
Heat Exchanger
Co. Ltd
635170819.48 9270319.62 644441139.10
Zhejiang
Sanhua Climate
& Appliance
Controls Group
Co. Ltd
310155131.25 10123137.76 320278269.01
Sanhua
International
Inc.
307379027.71 906300.60 308285328.31
Sanhua
International
Singapore Pte.Ltd
454171908.17 210472602.90 664644511.07
Wuhu Sanhua
Automatic
Control
Components
Co. Ltd
150379784.89 892147.77 151271932.66
Sanhua
(Jiangxi) Self -
control
Components
Co. Ltd
92824141.91 543247.02 93367388.93
Xinchang
Sitong
Electrical and
Mechanical
Co. Ltd
65444051.15 759611.86 19557906.39 46645756.62
Zhejiang
Sanhua
68290894.37 68290894.37
.
Commercial
Refrigeration
Co. Ltd
Zhejiang
Sanhua Trading
Co. Ltd
51053113.94 2691893.62 53745007.56
Changzhou
Lanke four-way
valve co. LTD
35196850.59 27302805.57 62499656.16
Hangzhou
Leaderway
Electronics Co.
Ltd
47798913.83 3218640.36 51017554.19
Shaoxing
Shangyu Sanli
Copper Industry
Co. Ltd
31930719.92 596867.18 32527587.10
Zhongshan
Sanhua Air
conditioning
Refrigeration
Components
Co. Ltd
4885524.32 196919.86 5082444.18
Wuhan Sanhua
Refrigeration
Components
Co. Ltd
3734983.46 505207.84 4240191.30
Zhongshan
Sanhua
Refrigeration
Components
Co. Ltd
5163639.29 735371.44 5899010.73
Suzhou Sanhua
Air-Conditioner
Parts Co.Ltd
8395763.86 273311.78 8669075.64
Hangzhou
Sanhua Home
Appliance
Thermal
Management
System Co. Ltd
16247160.09 16247160.09
.Zhejiang
Sanhua Self -
control
Components
Co. Ltd
32000000.00 32000000.00
Qingdao
Debaiyi
Refrigeration
Equipment Co.
Ltd
14580943.52 14580943.52
Total 4243929280.35 353501453.40 82386010.00 4515044723.75
（2）Investments in associates and joint ventures
Unit: RMB
Investees
Opening
balance
(Carryin
g
amount)
Changed amount of the current period
Closing
balance
(Carryin
g
amount)
Closin
g
balance
of
provisi
on for
impair
ment
Investm
ents
increase
d
Investm
ents
decreas
ed
Investm
ent
income
recogniz
ed under
equity
method
Adjustme
nt in
other
comprehe
nsive
income
Chan
ges
in
other
equit
y
Cash
dividend/
profit
declared
for
distributi
on
Provisi
on for
impair
ment
Oth
ers
Ⅰ. Joint ventures
Ⅱ. Associates
Guochua
ng
Energy
Internet
Innovatio
n Center
(Guangdo
ng) Co.Ltd.
149371
8.98
31533.7
8
152525
2.76
Chongqin
g Tainuo
Machiner
y Co.
Ltd.
884772
8.00
204917
6.73
1500000
.00
939690
4.73
Nanchan
g Sanhua
233524
2.16
431896.
79
1250000
.00
151713
8.95
.Jinlifeng
Machiner
y Co.
Ltd.Ningbo
Jinlifeng
Machiner
y Co.
Ltd
125000
0.00
-18779
0.82
106220
9.18
Qingdao
Sanhua
Jinlifeng
Machiner
y Co.
Ltd.
0.00 0.00
Zhongsha
n Sanhua
Tainuo
Machiner
y Co.
Ltd.
27971.5
7
-27971.
57
0.00
Xinchang
zhejiang
energy
sanhua
comprehe
nsive
energy
co. LTD
Subtotal
127046
60.71
125000
0.00
229684
4.91
2750000
.00
135015
05.62
Total
127046
60.71
125000
0.00
229684
4.91
2750000
.00
135015
05.62
（3）Other remarks
Due to the implementation of the enterprise group share payment transactions the company as a settlement
enterprise，according to the fair value of the granted entity instrument. Confirm equity investments in subsidiaries(service receivers). At the same time increase capital reserves 50111874.20yuan..
4. Operating revenue and Operating cost
Unit: RMB
Items
Current period cumulative Preceding period comparative
Revenue Cost Revenue Cost
Main operations 4261339025.61 3143704934.36 4241261150.67 3184390923.55
Other operations 255244021.84 239955604.07 222135377.17 218206712.02
Total 4516583047.45 3383660538.43 4463396527.84 3402597635.57
Other remarks：
5. Investment income
Unit: RMB
Items Current period
cumulative
Preceding period
comparative
Investment income from long-term equity investments under cost
method
174095823.76 549123531.19
Investment income from long-term equity investments under equity
method
2298930.50 2100652.42
Gains on disposal of long-term equity investments -27199644.40 956707.24
Investment income of bank financing products 13307539.55 4103178.32
Gains and losses on settlement of futures contracts 17957388.89 165534.20
Gains and losses on settlement of foreign exchange contract -8360741.05 163949.06
Income of fund using fee 17387962.74 27618295.32
other -43997.11
Total 189487259.99 584187850.64
6. R&D expenses
Unit: RMB
Items 2020 2019
Labor cost 101435220.21 80284612.99
Material and power expense 72943704.17 107351260.95
Depreciation and amortization expense 7931315.36 9801734.85
Mold manufacturing expense 2063576.52 1192844.56
Travel expense 833067.62 1863554.26
Royalties 825497.30 642382.70
.Outsourcing R&D expense 443167.38 1351326.21
Others 1882272.95 7162613.15
Total 188357821.51 209650329.67
XVIII. Supplementary information
1. Non-recurring profit or loss in current period
√ Applicable □ Not Applicable
Unit: RMB
Items Amount Remarks
Gains or loss on disposal of non-current assets -14770607.27
Government grants included in profit or loss
(excluding those closely related to operating activities
of the Company satisfying government policies and
regulations and continuously enjoyed with certain
quantity/quota based on certain standards)
134101082.00
Gains on changes in fair value of held-for-trading
financial assets derivative financial assets
held-for-trading financial liabilities and derivative
financial liabilities and investment income from
disposal of held-for-trading financial assets
derivative financial assets held-for-trading financial
liabilities derivative financial liabilities and other
investment excluding those arising from hedging
business related to operating activities
91394679.61
Mainly for 1.floating profit from futures hedging
operations refer to "Notes on Changes in Fair Value and
Investment Income" in this financial report for details.
According to the Measures for the Operation and
Management of Futures Hedge Business，the companywill continue to carry out futures hedging business of
copper zinc nickel and other raw materials in 2020，
mainly for customers point price and fixed price futures
hedging business. Due to the contract lock quantity is
consistent with the customer order，and the contract lockup price is not higher than the customer lock up price.Therefore the future period is now after the merger
(referring to the customer's actual implementation)，thecompany can keep the above customer business profit
rate stable to achieve the purpose of hedging. The above
mentioned clients who carry out futures hedging business
are all well-known manufacturers at home and abroad
and have good historical credit the company have not
defaulted since the company implemented the copper
lock mechanism.
2. Based on the internal risk control policy the
management of the Company has taken several measures
to deal with the exchange rate risk such as to carry out
forward settlement of foreign exchange and foreign
currency swap business lock the exchange rate..Other non-operating revenue or expenditures except
the above items
620065.25
Other profit or loss satisfying the definition of
non-recurring profit or loss
1246912.65
Less: Enterprise income tax affected 19272109.42
Non-controlling interest affected 1770947.78
Total 191549075.04 --
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
Profit of the reporting period
Weighted average
ROE
EPS (yuan/share)
Basic
EPS
Diluted
EPS
Net profit attributable to shareholders of ordinary shares 15.04% 0.41 0.41
Net profit attributable to shareholders of ordinary shares after deducting
non-recurring profit or loss
13.07% 0.36 0.36
3. Financial data variance between financial reporting prepared under domestic and abroad accounting
standards
（1）Differences of net profits and net assets in the financial reports disclosed according to the IFRS and
Chinese Accounting Standards
□ Applicable √ Not Applicable
（2）Differences of net profits and net assets in the financial reports disclosed according to the overseas
accounting standards and Chinese Accounting Standards
□ Applicable √ Not Applicable
（3）Reasons for accounting data variance between financial reporting prepared under domestic and
international accounting standards and for the difference adjustment on the data already audited by an
overseas audit institution the name of the audit institution should be noted
4. Others
1．Calculation process of weighted average ROE
.
(1) Weighted average net assets
Changed item in net assets Amount
Weighted by
month
Weighted average net
assets
Net assets attributable to shareholders of ordinary shares at the beginning of
period
9291632928.45 12/12 9291632928.45
Net profit attributable to shareholders of ordinary shares 1462158821.57 6/12 731079410.79
2019 cash dividend -410148045.30 7/12 -239253026.43
Semi-annual cash dividend in 2020 -355461639.20 3/12 -88865409.80
Stock incentive restricted shares unlock increased net assets 22895712.00 2/12 3815952.00
Compensation is paid in equity-settled shares 72810130.99 6/12 36405065.50
The accounting cost and tax cost of share-based compensation have different
calculation caliber which has an impact on current income tax benefits
34219683.40 6/12 17109841.70
Effect of Foreign Currency Translation -50292214.11 6/12 -25146107.06
Adjustment of capital reserves for equity transactions -3020858.23 7/12 -1762167.30
Net assets attributable to shareholders of ordinary shares at the end of period 10064794519.57 9725016487.85
(2) Weighted average ROE
Items Symbol Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 1462158821.57
Non-recurring profit or loss attributable to shareholders of ordinary shares B 191549075.04
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or
loss
C=A-B 1270609746.53
Weighted average net assets D 9725016487.85
Weighted average ROE E=A/D 15.04%
Weighted average ROE after deducting non-recurring profit or loss F=C/D 13.07%
2．Calculation process of Basic EPS and Diluted EPS
(1) Basic EPS
Items Symbol Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 1462158821.57
Equity incentive dividend on restricted stock B 4141196.00
Net profit attributable to shareholders of ordinary shares after deducting the equity incentive
dividend on restricted stock
C=A-B 1458017625.57
Non-recurring profit or loss attributable to shareholders of ordinary shares D 191549075.04
Net profit attributable to shareholders of ordinary shares after deducting dividends on restricted
stock and non-recurring profit or loss
E=C-D 1266468550.53
.Total shares at the beginning of period（Do not consider the unvested repurchase inventory shares） F 2743829802
Capital reserve converted into share capital G 826675080
The number of equity incentive restricted stock unreleased in 2018（After transition increase） H 6658600
Number of restricted stock write off（After transition increase） I 627510
Weighted average number of ordinary shares outstanding J[noted] 3563218772
Basic EPS K=C/J 0.41
Basic EPS after deducting non-recurring profit or loss L=E/J 0.36
Remark: J=F+G-H-I
(2) Diluted EPS
Items Symbol Current period
cumulative
Net profit attributable to shareholders of ordinary shares A 1462158821.57
Non-recurring profit or loss attributable to shareholders of ordinary shares B 191549075.04
Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss C=A-B 1270609746.53
Weighted average number of ordinary shares outstanding D 3563218772
The weighted average number of shareholders of ordinary shares increased by equity incentive
restricted shares
E 9840255
Weighted average number of ordinary shares outstanding after dilution F=D+E 3573059027
Diluted EPS G=A/F 0.41
Diluted EPS after deducting non-recurring profit or loss H=C/F 0.36
.Section XIII Documents Available for Inspection
1. The 2020 annual report signed by the chairman of the board.
2. The financial report signed and sealed by the Company's legal representative chief finance officer and
person in charge of accounting department.
3. Articles of Association.
4. Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
5. Other documents available for inspection.
Note: The Company shall disclose the catalogue of documents available for inspection including:
(1) The financial report signed and sealed by the Company's legal representative chief finance officer and
person in charge of accounting department.
(2) The original audit report with the seal of the accounting firm and the signature and seal of the certified
public accountant.
(3) Original copy of all the Company's documents and announcements published on the newspapers
designated by CSRC within the reporting period.
(4) Annual reports published in other securities markets.