Full Text of the Annual Report 2023 of TCL Technology Group Corporation
TCL 科技集团股份有限公司
TCL Technology Group Corporation
ANNUAL REPORT 2023
April 28, 2024
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Amid rapids we beat the waves and sail steadily to reach far
ANNUAL REPORT 2023 Chairman's Statement
Amidst a tightening financial environment, intensifying geopolitical conflicts, and rapid
restructuring of global supply chain, the world economy slowed down in 2023. In the wake of
opportunities amid challenges, the economic restructuring brought new impetus to the transformation
and upgrading of the technology industry, and the evolving global energy landscape further
highlighted the importantly strategic position of the new energy industry.
With the strategic goal of becoming a global leading technology conglomerate, the Company
pivoted on the development of high-tech, long-cycle, and capital-intensive businesses, strengthened
the leading edge of its core businesses in display and new energy photovoltaics. Under the backdrop
of a complex operating environment, the Company cemented its foundation, enhanced risk
management capabilities, pursued extreme cost efficiency, and drove development through
technology innovation. In 2023, the Company achieved a revenue of RMB174.367 billion, up 4.69%
year on year; net profits of RMB4.781 billion, up 167.37% year on year; net profit attributable to
shareholders of the listed company of RMB2.215 billion, up 747.60% year on year; and net operating
cash flow of RMB25.315 billion.
During the Reporting Period, the sales of display at user-end market remained sluggish. On the
supply side, the industry structure continued to optimize, competition tended to be benign, and the
prices of major products rebounded amid stabilization. The Company's display business kept
optimizing business strategies, and continued to implement the high-end strategy, with a stable
growth in the market share of major products. TCL CSOT remained top 2nd globally by its market
share of TV products, while its market share of e-sports monitors and LTPS tablet products ranked
first globally. The t9 production line, positioned at mid-sized IT and vehicle-mounted display
products, started serial production and shipments, and the proportion of OLED high-end product
shipments rose quickly. During the Reporting Period, the display business achieved a revenue of
RMB83.655 billion, with a year-on-year increase of 27.26%, and a net profit of negative RMB7
million, with a year-on-year improvement of RMB7.618 billion, among which a net profit of
RMB3.441 billion was recorded in the second half of 2023, indicating steadily improving profitability.
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
In 2023, the global new energy photovoltaic industry and corporate development embarked on
a new pattern. Affected by the capacity centrally released alongside the industrial chain, the supply
and demand was unbalanced, with significant decline of product prices, and some low-efficient
capacity faced the pressure of elimination. Overall, the industry structure was expected to be
optimized. During the Reporting Period, TZE recorded a revenue of RMB59.146 billion, down by
11.74% year on year. Under the influence of the decreasing product price, loss from investees,
provision for impairment loss and other factors, TZE reported a year-on-year decrease of 44.88% in
net profit to RMB3.899 billion throughout the year. In the face of challenges, TZE maintained its
strategic resolve and strengthened its competitiveness. On the one hand, it leveraged its differentiated
advantages in G12, N-type silicon wafers, shingle components and intelligent manufacturing, and
accelerated industry integration through technological innovation so as to pass through industrial
cycles. On the other hand, TZE actively evaluated and explored the feasibility on localized
manufacturing (e.g. the United States, Europe, and the Middle East) in key countries or regions
around the world, and promoted the operational improvement of Maxeon to effectively use its
patented technology and unique advantages in overseas markets with entry barriers. TZE continued
to facilitate its efforts to develop photovoltaic business and localized manufacturing on the
international arena, seized the global opportunities for the development of the new energy industry,
and achieved a sustainable growth.
During the Reporting Period, the Company sustained robust operations and made steady
progress in other business segments.
The Company has always emphasized research and development (R&D) investments in cutting-
edge technologies and commercial application, with a focus on innovation to drive business
transformation and upgrading. During the Reporting Period, the Company invested RMB10.309
billion in R&D, accounted for 5.91% of the Company's revenue. In 2023, the Company filed 590 new
PCT applications, in total of 15,331 applications applied. Notably, the Company ranked second
globally in terms of patent applications in the field of quantum dot displays. Furthermore, through
continuous technological innovation, process advancements, and a strategic shift towards Industry
4.0 manufacturing, TZE has built its unique competitive edges in large-size, thin-film, and N-type
silicon wafers. To implement the technology ecosystem strategy, the Company has proactively
marshaled resources, made a breakthrough in key technologies and industrial production. This robust
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technology ecosystem serves as a cornerstone for the Company's continued technological
development.
Looking ahead, with intensive integration of several promising techonologies, we will anticipate
a surge of novel display applications and immersive scenarios, which will propel the growing
demands in display industry. The inter-country transfer of LCD industry has gradually drawn to an
end, and the competitive landscape tends to stabilize. Companies are transitioning from a scale-driven
growth model to a high-quality development stage fueled by technological innovation, product
upgrading, and an eco-system layout. The Company's display business aims at becoming a "world-
leading provider of display solutions". To achieve this, we are implementing a comprehensive
strategy that optimizes our business and product structure, strengthens our operational foundation,
enhances operational excellence, differentiates our values, and drives continuous improvement in
operational efficiency.
As climate change and energy issues escalate into pressing global challenges, there's a growing
consensus on the urgent need to accelerate the green and low-carbon transformation of the energy
sector. The photovoltaic industry will remain at the bottom of the market cycle in the near to medium
term, featuring severely unbalanced supply and demand, acceleration of product and technology
transformation, and elimination of outdated production capacity driven by the Matthew effect. Taking
"ranking No.1 in global silicon wafer market share and achieving comprehensive global leadership"
as the strategic vision, the Company's new energy photovoltaic business sticks to technological
innovation, expands the leading edge in advanced production capabilities, strategically strengthens a
layout across the photovoltaic industry chain, and capacity building worldwide, so as to go through
the cycle by relative competitiveness and achieve a sustainable growth.
As a crucial pillar of the national economy, the manufacturing sector plays a key role in driving
economic transformation and development. Technological manufacturing is especially vital for
fostering economic transformation and upgrading, and nurturing new engines of growth. The
Company remains focused on its core businesses in displays and new energy photovoltaics,
unwavering in its pursuit of global leadership. With the courage of "venturing midstream and striving
to win", embracing a culture of "relentless perseverance and decisive action", the Company guides
its business units to solidify their competitive edges, ensuring steady progress and positioning the
Company for long-term sustainable growth.
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Committed to creating value for shareholders, the Company has a long-standing tradition of
maintaining a prudent dividend policy. Following this commitment, the Board of Directors proposes
a dividend of RMB0.80 per 10 shares for 2023, sharing the Company's growth success with all
shareholders.
I would like to express my sincere gratitude for the trust of all our shareholders, for the support
from all our partners and users, as well as for the efforts of all employees!
April 28, 2024
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the "Board"), the Supervisory Committee as well as the directors,
supervisors and senior management of TCL Technology Group Corporation (hereinafter referred to
as the "Company") hereby guarantee the factuality, accuracy and completeness of the contents of this
Report and its summary, and shall be jointly and severally liable for any misrepresentations,
misleading statements or material omissions therein.
Mr. Li Dongsheng, the Chairman of the Board, Ms. Li Jian, the person-in-charge of financial
affairs (Chief Financial Officer), and Ms. Jing Chunmei, the person-in-charge of the financial
department, hereby guarantee that the financial statements carried in this Report are factual, accurate
and complete.
All the Company's directors attended the Board meeting for the review of this Report and its
summary.
The future plans, development strategies or other forward-looking statements mentioned in this
Report and its summary shall NOT be considered as promises of the Company to investors. Therefore,
investors are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the meeting of the Board of Directors is as follows: For
every 10 shares held, shareholders will receive a cash dividend of RMB0.8 (including tax) based on
the total number of outstanding shares of 18,779,080,767(Any repurchased shares held by the
Company upon profit distribution are exclusive of the distribution), without bonus shares or shares
converted from capital reserve.
This Report and its summary has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
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Content
Part I Important Notes, Table of Contents and Definitions .................................... 6
Part II Corporate Information and Key Financial Information .......................... 10
Part III Management Discussion and Analysis ...................................................... 15
Part IV Corporate Governance ............................................................................... 53
Part V Environmental and Social Responsibility ................................................... 76
Part VI Significant Events ........................................................................................ 85
Part VII Changes in Shares and Information about Shareholders .................... 103
Part VIII Preferred Shares ..................................................................................... 112
Part IX Bonds .......................................................................................................... 113
Part X Financial Report…………………………………………………………..120
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Documents Available for Reference
(I) The financial statements signed and stamped by the person-in-charge of the Company, the
Chief Financial Officer and person-in-charge of the financial department.
(II) The original of the auditor's report with the seal of the accounting firm, and signed and
stamped by CPAs.
(III) The originals of all company documents and announcements that were disclosed to the
public during the Reporting Period.
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Definitions
Term Refers to Definition
Company, the Company, the Group Refers to TCL Technology Group Corporation
The "Reporting Period", "current period" Refers to The period from January 1, 2023 to December 31, 2023.
TCL CSOT Refers to TCL China Star Optoelectronics Technology Co., Ltd.
TCL Industrial Refers to TCL Industrial Holdings Co., Ltd.
TCL Zhonghuan Renewable Energy Technology Co., Ltd., a majority-
TZE Refers to owned subsidiary of the Company listed on the Shenzhen Stock Exchange
(stock code: 002129.SZ)
Shenzhen China Star Optoelectronics Bandaoti Display Technology Co.,
Shenzhen CSOT Refers to
Ltd.
Wuhan CSOT Refers to Wuhan China Star Optoelectronics Technology Co., Ltd.
Wuhan China Star Optoelectronics Wuhan China Star Optoelectronics Bandaoti Display Technology Co., Ltd.
Refers to
Bandaoti
Guangzhou China Star Optoelectronics Bandaoti Display Technology Co.,
Guangzhou CSOT Refers to
Ltd.
Suzhou CSOT Refers to Suzhou China Star Optoelectronics Technology Co., Ltd.
Moka Technology Refers to Moka International Limited
t1 Refers to The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT
t2 Refers to The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT
The generation 6 (or G6) LTPS-LCD panel production line at Wuhan
t3 Refers to
CSOT
The generation 6 (or G6) flexible LTPS-AMOLED panel production line
t4 Refers to
at Wuhan CSOT
Wuhan t3 production expansion project Refers to The generation 6 (or G6) of new display production line of Wuhan CSOT
The generation 11 (or G11) new TFT-LCD display production line at
t6 Refers to
Shenzhen CSOT
The generation 11 (or G11) new ultra high definition display production
t7 Refers to
line at Shenzhen CSOT
The generation 8.6 (or G8.6) new oxide display production line at
t9 Refers to
Guangzhou CSOT
t10 Refers to The generation 8.5 (or G8.5) TFT-LCD production line at Suzhou CSOT
GW Refers to Gigawatt, power unit for solar cells, 1GW = 1,000 megawatts
12-inch ultra-large DW-cut solar monocrystalline silicon square wafer,
G12 Refers to size: 44,096mm, diagonal line: 295mm, side length: 210mm, with its size
80.5% larger than the conventional M2
RMB Refers to Renminbi
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Part II Corporate Information and Key Financial Information
I. Corporate Information
Stock name TCL TECH. Stock code 000100
Stock abbreviation before change (if any) -
Place of listing Shenzhen Stock Exchange
Company name in Chinese TCL 科技集团股份有限公司
Abbr. TCL 科技
Company name in English (if any) TCL Technology Group Corporation
Abbr. in English (if any) TCL TECH.
Legal representative Li Dongsheng
TCL TECH. Building, 17 Huifeng Third Road, Zhongkai Hi-Tech
Place of registration
Development District, Huizhou City, Guangdong Province
Zip code 516001
History of changes in the Company's place of
-
registration
TCL TECH. Building, 17 Huifeng Third Road, Zhongkai Hi-Tech
Office address
Development District, Huizhou City, Guangdong Province
Zip code 516001
Company website https://www.tcltech.com/
Email address ir@tcl.com
II. Contact Information
Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001
Office address
Nanshan District, Shenzhen, Guangdong Province, China
Tel. 0755-33311666
Email address ir@tcl.com
III. Media for Information Disclosure and Place Where This Report is Lodged
Stock exchange website for publication of this Report Shenzhen Stock Exchange http://www.szse.cn
Securities Times, China Securities Journal, Shanghai Securities News,
Media name and website for publication of this Report Securities Daily, as well as www.cninfo.com.cn
(http://www.cninfo.com.cn)
Place where this Report is lodged Capital Market Department of TCL Technology Group Corporation
IV. Changes to Company Registered Information
Unified Social Credit Code 91441300195971850Y
1. In 2019, the Company focused on display devices by sold smart
terminal businesses such as consumer electronics and household
Changes in main business activities of the Company
appliances and related supporting businesses.
since going public
2. In 2020, the Company acquired 100% equity of Tianjin Zhonghuan
Electronic through public delisting, shaping a business structure that
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focused on display, and new energy photovoltaic.
Changes of controlling shareholder since incorporation Not applicable
V. Other information
The independent audit firm hired by the Company:
Name Da Hua Certified Public Accountants (Special General Partnership)
Room 1101, Building 7, No. 16 Xi Si Huan Zhong Road, Haidian
Office address
District, Beijing
Name of signing accountants Jiang Xianmin and Xiong Xin
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period
Applicable □ Not applicable
Name Office address Representative Period of supervision
The period from December
Shenwan Hongyuan 19 Taipingqiao Avenue, Xicheng
Ren Cheng and Mo Kai 22, 2022 to December 31,
Financing Services Co., Ltd. District, Beijing
2023.
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable Not Applicable
VI. Key Accounting Data and Financial Indicators
Indicate whether there is any retrospectively adjusted or restated datum in the table below
Yes □ No
2023-
2022 Over-2022 2021
2023 Change
Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Revenue (RMB) 174,366,657,015 166,552,785,829 166,552,785,829 4.69% 163,540,559,623 163,657,700,477
Net profit
attributable to
the company's 2,214,935,302 261,319,451 261,319,451 747.60% 10,057,443,528 10,064,253,118
shareholders
(RMB)
Net profits
attributable to
the company's
shareholders
1,021,080,065 -2,698,210,800 -2,698,210,800 137.84% 9,437,240,976 9,444,050,566
after non-
recurring gains
and losses
(RMB)
Net cash
generated from
25,314,756,105 18,426,376,609 18,426,376,609 37.38% 32,878,450,437 32,878,450,437
operating
activities (RMB)
Basic earnings
per share 0.1195 0.0191 0.0174 586.78% 0.7463 0.6789
(RMB/share)
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Diluted earnings
per share 0.1179 0.0185 0.0168 601.79% 0.7354 0.6690
(RMB/share)
Increase by
Weighted 3.76
average return 4.27 0.52 0.52 percentage 26.46 26.48
on equity (%) points
YoY
The end of 2022 Change The end of 2021
The end of 2023 Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Total assets
382,859,086,727 359,996,232,668 359,996,232,668 6.35% 308,733,133,305 308,749,696,062
(RMB)
Owners' equity
attributable to
the company's 52,921,867,086 50,678,520,477 50,678,520,477 4.43% 43,034,234,611 43,041,044,200
shareholders
(RMB)
Reason for retrospective adjustment or restatement:
1. Shares were converted from capital reserve during the Reporting Period. The Company recalculated the basic earnings per share and
diluted earnings per share in accordance with accounting standards and other regulations.
2. In accordance with the requirements of the Interpretations of Accounting Standards for Business Enterprises No. 15, Interpretations
of Accounting Standards for Business Enterprises No. 16, and Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss (Revised in 2023), the Company has implemented the
relevant provisions. These adjustments have no material impact on the Company's financial position and operating results.
The net profit before or after the deduction of non-recurring gains and losses in the latest three accounting years, whichever is lower,
is negative and the audit report of the latest year shows the company's ability to continue as a going concern
□Yes No
The net profit before or after the deduction of non-recurring gains and losses, whichever is lower, is negative
□Yes No
VII. Accounting Data Differences under China's Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Differences in Net Profit and Equity under CAS and IFRS
□ Applicable Not Applicable
There is no difference in net profit and net assets between the financial statements prepared in accordance with International Accounting
Standards (IAS) and Chinese Accounting Standards (CAS) for the Reporting Period of the Company.
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
2. Differences in Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable Not Applicable
There is no difference in net profit and net assets between the financial statements prepared in accordance with foreign accounting
standards and Chinese Accounting Standards (CAS) for the Reporting Period of the Company.
3. Reasons for Accounting Data Differences Above
□ Applicable Not Applicable
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 39,443,242,439 45,705,483,167 47,960,309,079 41,257,622,330
Net profit attributable to the
-548,999,154 889,492,743 1,270,918,405 603,523,308
company's shareholders
Net profits attributable to the
company's shareholders after non- -729,931,586 129,864,746 1,107,560,913 513,585,992
recurring gains and losses
Net cash generated from operating
4,495,356,538 5,920,811,609 5,727,844,866 9,170,743,092
activities
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what has been
disclosed in the Company's quarterly or interim reports.
□Yes No
IX. Non-Recurring Gains and Losses
Applicable □ Not applicable
Unit: RMB
Item 2023 2022 2021
Gains and losses on disposal of non-current assets (inclusive of impairment
275,255,225 1,757,838,745 -184,525,551
allowance write-offs)
Public subsidies charged to current profits and loss (except for public subsidies
which are closely related to the Company's daily operations, comply with
2,764,042,905 1,322,782,937 699,270,673
national policies, are granted based on determined standards, and have a
continuous impact on the Company's profits or losses)
Gains and losses on change in fair value of financial assets and financial
liabilities held by the non-financial companies, other than those valid hedging
-114,258,710 -127,233,837 238,629,291
activities related to the normal operating business, as well as gains and losses
from the disposal of financial assets and financial liabilities
Reversal of provision for impairment of receivables that have been individually
22,894,255 37,745,528 -
tested for impairment
Gain equal to the amount by which investment costs for the Company to obtain
subsidiaries, associates and joint ventures are lower than the Company's
- - 40,299,579
enjoyable fair value of identifiable net assets of investees when making
investments
Non-operating income and expenses other than the above 228,994,235 758,599,650 275,789,900
Less: Corporate income tax 603,197,886 244,386,076 93,176,105
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Non-controlling interests (net of tax) 1,379,874,787 545,816,696 356,085,235
Total 1,193,855,237 2,959,530,251 620,202,552
Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable Not Applicable
The Company has no other profit and loss items that meet the definition of non-recurring profits and losses.
Notes on non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on Information Disclosure
for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define Recurring Gain/Loss items
□ Applicable Not Applicable
The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit and
loss items.
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Part III Management Discussion and Analysis
I. Company-related Industry Outlook During the Reporting Period
In 2023, the international political and economic situation was complex and volatile, with
ongoing geopolitical conflicts. The global industrial supply chain faced a restructuring, further
exacerbating economic fragmentation. Meanwhile, some economies implemented tight monetary
policy, which further slowed down global economy. In response to the complicated and ever-
changing challenges, the Company continued to focus on the development of display business and
new energy photovoltaic business, enhance the resilience of its business, and optimize its competitive
edge in pursuit of high-quality sustainable development. In 2023, TCL TECH. achieved a revenue of
RMB174.367 billion, up 4.69% year-on-year; net profit of RMB4.781 billion, up 167.37% year-on-
year; net profit attributable to shareholders of the listed company of RMB2.215 billion, up 747.60%
year-on-year; and a net operating cash flow of RMB25.315 billion.
Major factors that influenced the Company's performance included: the positive turnaround of
the supply-demand relationship in the display industry, the steady price appreciation of mainstream
products, the Company's proactive optimization of business strategies, improving business structure,
and significantly improved profitability. During the Reporting Period, the display business achieved
a revenue of RMB83.655 billion, with a year-on-year increase of 27.26%, and a net profit of negative
RMB7 million, with a year-on-year reducing loss of RMB7.618 billion. The display business turned
losses into profits in Q3 2023 and continued to achieve strong profitability in Q4 2023, which resulted
in a total profit of RMB3.441 billion for H2 2023. Fueled by China's "Dual Carbon" strategy, demand
in the new energy photovoltaic industry maintained growth. However, industry-wide supply-demand
imbalances led to a decline in product pricing. Furthermore, the TZE's performance was impacted by
the investee Maxeon, such as investment losses associated with the Maxeon, as well as long-term
equity investments and financial assets recognized as asset impairment loss and negative fair value
change, respectively. As a result, TZE reported a revenue of RMB59.146 billion for the Reporting
Period, down 11.74% year-on-year; a net profit of RMB3.899 billion, reflecting a year-on-year
decline of 44.88%.
Leveraging technological innovation as a primary driver, the Company is poised for
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building a robust portfolio of proprietary and cutting-edge technologies to ensure sustained
industry leadership and drive continuous industrial upgrading. During the Reporting Period, the
Company invested RMB10.309 billion in R&D, and filed 590 new PCT applications, for a total of
15,331 applications applied. The Company's display business strategically amplified R&D
investments in ultra-large-sized, ultra-high-resolution, high refresh rate, and flexible display
technologies. Establishing new-type display technology and application innovation as its core
competitivenesses, the Company strove toward the high-end of the value chain. The Company's new
energy photovoltaic business focused on groundbreaking innovation in solar cell technology with
independently developed intellectual property rights, and led the industry transition towards
significantly improved energy conversion efficiency through its long-term technological
accumulation, ultimately securing high-quality development.
The Company ensured a steady and sustainable market position by fortifying core
competencies and establishing a robust operational foundation, as well as optimizing
production capacity and product structure. In conjunction with stable competition structure in the
display industry, leading manufacturers posses an advantage in terms of economies of scale. During
the Reporting Period, the Company strategically realigned its production capacity and product
structure on the basis of incremental markets and continuously increased its market share, with its
TV panel shipments ranking No. 2 globally, MNT panel shipments jumping to No. 3 globally, and
flexible OLED shipments experiencing growth in leaps and bounds. At the end of the Reporting
Period, the Company's photovoltaic materials business significantly expanded its crystal wafer
production capacity to 183GW, capturing a 23.4% market share of the global market. The company
accounted for 60% of the large-sized (210 series) wafer external sales market, 65% of the overseas
wafer external sale market, and 36.4% of the N-type wafer segment, maintained No.1 in photovoltaic
wafer external sales market share, and further consolidated the Company's leadership within the
industry.
The Company implemented a strategic approach focused on fortifying its core
competencies and rectifying shortcomings, to bolster the competitive advantage of its core
business segments, and increase both efficiency and effectiveness. The Company's display
business capitalized on the technological capabilities of its high-gen production lines to actively drive
the development of larger-sized, higher-specification display products, and to grasp the iterative
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demand for IT products fueled by the IT revolution, to fill the gap in its mid-sized production capacity
(e.g., the t9 production line) and product layout. To enhance its operational efficiency, the small-sized
OLED business has implemented a high-end, differentiated product strategy. Relying on its
advantages in leading G12 and N-type wafer technology, Industry 4.0 and flexible manufacturing
processes, the Company's new energy photovoltaic business played a synergistic role across the entire
photovoltaic value chain, and ultimately shored up the relative advantages in cost efficiency.
Promoting globalization strategy, the Company transitioned from product export to
industry capacity export, building a global industrial ecosystem. The Company's display business
improved its layout in its panel module plant in India and overseas business platform, to strengthen
its capacity to serve global customers and partners and satisfy the incremental needs of emerging
markets worldwide. Due to the increasing complexity of the global economic and political landscape,
the Company's new energy photovoltaic business prudently and steadfastly implemented its
globalization strategy, where it actively evaluated and explored potential industrial projects in key
global markets, such as the United States, Europe, and the Middle East. Various projects were rolled
out, such as comprehensive project planning, strategic partner negotiation, and thorough feasibility
studies. Concurrently, the business collaborated with strategic partners to expand its photovoltaic cell
and module business in Malaysia, the Philippines, and other regions, further cementing its global
competitiveness within the new energy photovoltaic sector.
II. Main Businesses of the Company During the Reporting Period
The Company focused on the development of the core business of displays and new energy
photovoltaics and other silicon materials, and was committed to achieving the strategic goal of global
leadership.
TCL TECH.
New energy photovoltaics Industrial finance and
Display Others
and other silicon materials investment
Moka Zhonghuan Zhonghuan TCL Highly
TCL CSOT Technology Photovoltaic Advanced Finance TCL Capital TPC
Juhua China Ray
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(I) Display business
In 2023, the user-end demand for displays products remained sluggish globally, and it showed
seasonal fluctuation. However, the trend towards larger TV panels drove display area demand, while
a just-in-time (“JIT”) production strategy bacame a consensus among major enterprises, fostering
healthy industry development amid an increasingly favorable competitive landscape. Large-sized
panel prices exhibited a seasonal pattern with significant peak-season recovery and a slight decline
in the off-season, while mid-sized panel prices stabilized at low levels and small-sized panels
experienced structural price increases in the second half of the year.
By leveraging its strengths in terms of scale and efficiency, TCL CSOT has consistently
optimized its business and product mix, insisted on JIT production, and accelerated their business
cycle. This, coupled with favorable price increases for key products, has significantly boosted
operating performance. During the Reporting Period, the display business achieved a revenue of
RMB83.655 billion, with a year-on-year increase of 27.26%, and a net profit of negative RMB7
million, with a year-on-year reducing loss of RMB7.618 billion while recorded a profit of
RMB3.441 billion in H2 2023. The display business achieved a net cash flow from operating
activities of RMB20.12 billion.
In its large-sized products business, TCL CSOT leveraged its advantages in terms of high-
gen production lines and synergy with the industry chain, and led the upgrading and high-end
development of large-sized TV panels while actively developing commercial displays, such as
interactive whiteboards, digital signage, and splicing screens. Capitalizing on the manufacturing
efficiency and process advantages of its G8.5 and G11 high-gen production lines, TCL CSOT
collaborated with strategic customers to enhance the penetration of large-sized TVs in the market and
elevate the value of key segments alongside the industry chain. The Company consolidated its No. 2
position in terms of global market share of TV panels. 79% of the shipment area for products above
55 inches, 51% of the shipment area for products above 65 inches; while 55-inch and 75-inch products
ranked No. 1 in the world, the market share of 65-inch products ranked No. 2 globally. In commercial
markets such as interactive whiteboards, digital signage, and splicing screens, the Company ranked
among the top three in terms of global market share.
In its medium-sized product business, TCL CSOT accelerated its capacity construction in
IT and vehicle-mounted screen products, while optimizing and enhancing product competitiveness
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and optimizing customer structure to create a new engine for business growth. Dedicated to mid-sized
displays for IT, vehicle-mounted devices and other business, the t9 production line (phase I) is now
running at full capacity, propelling the Company to being ranked third globally in terms of display
shipments. In this segment, the Company occupies the largest share in the global e-sports monitors
market, while its laptop and vehicle-mounted devices are on track for branded customer introductions
and gradual production increases. With the steady increase in 6th-gen LTPS capacity, the Company
ranks No. 2 in LTPS laptop panels globally and No. 1 in LTPS tablets globally; and vehicle-mounted
LTPS displays rank fifth worldwide. TCL CSOT's mid-sized business increased to 21% of its revenue,
making it a key driver of future growth.
In the small-sized display segment, TCL CSOT is targeting the mid-to-high-end market
with a portfolio of LTPS and flexible OLED production lines, driving continuous improvements
in product competitiveness and market share. TCL CSOT ranked No. 3 in the world in terms of
LTPS mobile panel shipments from the t3 production line. The independently developed 1512 PPI
Mini-led LCD-VR screens achieved start of production (SoP) and shipment. The Company's t4
flexible OLED production line has experienced a significant ramp-up in both utilization rate and
shipments. This operational excellence secured the Company's position as the fourth-largest supplier
of flexible OLED smartphone panels globally in Q4 2023. Product and customer mix have undergone
structural optimization, evidenced by the introduction of several brand customers during the
Reporting Period. The Company's leadership in flexible OLED technologies extends to foldable,
LTPO, and Pol-Less displays, driving a continuous increase in the share of high-end products within
its portfolio. During the Reporting Period, the flexible OLED business segment achieved a two-fold
growth in revenue, reflecting a sustained improvement in operational performance.
Looking ahead into the future, as major information carriers and interactive interfaces in the
digital economy era, display industry will endure industrial value in the long run and are expected to
unleash more value.
In the large-sized and mid-sized segments, display technology has entered a period of slow
iteration, while LCD technology will remain the mainstream technology in the long term. In recent
years, global TV sales have remained stable. Fueled by the size increase of large-sized screens,
display area has maintained stable growth and industry cycle fluctuations have reduced. The supply-
side industry has become further concentrated, and increasingly optimized competition will drive the
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balanced development of industrial supply and demand. Corporate profitability will recover with
reasonable business returns under favorable circumstances. Driven by product specification upgrades
such as high refresh rates and lower energy consumption, IT panels are poised for significant
structural growth. Capitalizing on this trend, the company’s 8th-gen production lines specialized for
IT products will leverage their cutting-edge capabilities to gradually become the main force in key
markets.
Flexible OLED has firmly established its dominance in the smartphone market and gradually
penetrated into new application scenarios. Foldable OLED displays are poised for a new growth
frontier, fueled by rapidly unleashed demand. In the meantime, there exist certain factors that pose
challenges to current capacity, manufacturing, and other aspects, such as capacity loss resulting from
new technologies and the yield ramp-up of new products, which will further improve industry supply
and demand relationships.
TCL CSOT, as a global leader in large-sized display panels, will continuously enhance its
relative competitiveness and profitability; it will improve its medium-sized products portfolio,
leverage the advantages of its high-generation production lines, seize the opportunities in incremental
markets for high-specification products, and increase market share and revenue scale; TCL CSOT
will optimize its small-sized products and customer structure, drive the high-end development of
products through technological innovation, achieve business improvement in flexible OLED, and
accelerate the transformation and upgrading from a large-sized display leader to leader across the full
size of displays.
(II) New energy photovoltaics and other silicon materials business
In response to such challenges as climate change, energy security, and environmental pollution,
the global energy industry is experiencing a rapid shift towards a more sustainable model, which
drives the fast-growing new energy photovoltaic industry. In 2023, the global installed capacity
surged by 72% year-on-year to 395GW, of which China accounted for approximately 216.9GW,
while overseas markets contributed the remaining 178GW. The photovoltaic industry's compelling
sustained growth prospects have spurred a wave of investment from both established players and new
entrants. The influx of capital has accelerated capacity expansion across the photovoltaic industrial
chain, leading to a product price downturn in major links while squeezing the profit margin of the
industry as a whole.
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In line with prudent accounting practices, the Company recognized long-term equity investments
and financial assets in connection with the investee, Maxeon, as asset impairment losses and negative
fair value change, respectively. These factors, along with investment recognized under the equity
method on a consolidated basis, contributed to a negative impact on TZE's fourth-quarter
performance. During the Reporting Period, TZE achieved a revenue of RMB59.146 billion, with a
year-on-year decrease of 11.74%, and a net profit of RMB3.899 billion, with a year-on-year decrease
of 44.88%. In the photovoltaic materials business, year-on-year shipment volume surged by 68% to
114GW, capturing a leading market share of 23.4% for silicon wafers and generating RMB43.791
billion in revenue. The comprehensive gross profit margin for this business also witnessed a
significant improvement of 2.8 percentage points year-on-year to 21.8%; year-on-year shipment
volume for photovoltaic cells and modules grew by 29.8% year-on-year to 8.6GW, generating
RMB9.309 billion in revenue.
With an imbalance between demand and supply throughout the industrial chain, competition is
evident within the industry from the lowest levelized cost of energy (LCOE) for photovoltaic modules
to product (efficiency/power output) on the basis of integrated internal rate of return (IRR) and land-
based balance-of-system (BOS) costs. Those products with higher energy conversion efficiency will
become the mainstream in the industry. TZE prioritizes technological innovation, securing a
leading position in G12 and N-type photovoltaic materials technology. Through continuous cost
reduction and efficiency optimization, the Company is actively strengthening its comparative
competitiveness. At the end of the Reporting Period, with comparative competitiveness created by
technical innovation and lean manufacturing, the Company led the upgrade of large-sized, wafer,
thinfilm process technologies for crystals and wafers. Metrics such as the consumption rate of silicone
materials per crystalline unit, monthly crystal output per furnace, and wafer output quantities per kg
are at the forefront of the industry and factor into the Company's ability to navigate industry chain
fluctuations through sustainable technology and cost leadership. Leveraging its technological
expertise in N-type material products, and its flexible manufacturing capabilities, aligned with the
demands for the "multi-product, multi-customer, multi-process" in the N-type era, the Company is
accelerating its transition to N-type materials and shingled modules. With the world's No. 1 external
sales market share in N-type silicon wafer and a cost lower than the second-best cost in the industry
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at around RMB0.03/W, the Company is establishing a differentiated competitive edge in the industry
chain for next-gen technologies.
With the pursuit of autonomous and controllable energy by countries worldwide, coupled with
the increasing localization of photovoltaic manufacturing and the reduction of international trade,
there is a resulting degree of uncertainty in business operations. However, also present are novel
strategic opportunities for enterprises with the capacity to expand into overseas markets. TZE
strengthened its Industry 4.0 intelligent manufacturing capabilities, continued to impel its
global presence, developing industrial projects in key countries or regions around the world.
Reliant upon its long-term investment and accumulation in intelligent manufacturing, the Company
has secured industry-leading levels of automation and labor productivity, resulting in a competitive
advantage in localized manufacturing on a global scale. During the Reporting Period, the Company
actively evaluated and pursued industrial expansion projects in key global markets, including the
United States, Europe, and the Middle East. This included ongoing project planning, communication
and negotiation with potential partners, and research into project implementation. The Company also
prudently recognized an impairment loss on its investment in Maxeon, a company significantly
impacted by a confluence of factors in its core markets, including a rapid decline in photovoltaic
product prices, adjustments to photovoltaic subsidy policies, and a high interest rate. The Company
is actively driving operational excellence initiatives at Maxeon, with an aim to fully capitalize on
Maxeon's unique competitive advantages in its core markets and its proven technological innovation
capabilities. By fostering a collaborative ecosystem between global production and distribution
channels, the Company seeks to strengthen its competitive edge in the global marketplace.
Looking ahead into 2024, we anticipate further optimization of the industry structure, along with
sustained growth in user-end market demand for display area, which suggests a favorable industry
outlook, leading to enhanced operating performance within the Company's display business. While
the photovoltaic industry remains at the bottom of the cycle, the Company's new energy photovoltaic
business is taking a proactive stance. By strengthening its operational resilience, the Company aims
to navigate through the industry cycles with a competitive edge. By upholding the spirit of "Venturing
Midstream and Striving to Win", the Company will firmly grasp the opportunities brought by
transformations in the technology manufacturing industry and the global energy structure, and
continue to implement the business strategies of "improving operational quality and efficiency,
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enhancing strengths to shore up weaknesses, innovation-driven development as well as accelerating
global expansion" in order to achieve sustainable, high-quality development and take on a leading
role in the global market.
III. Analysis of Core Competitiveness
Since its inception in 1981, TCL has embarked on a remarkable journey spanning 42 years,
marked by a series of extraordinary achievements. Navigating industry cycles with resilience, TCL
has become a leading technology manufacturing conglomerate in China. Among the numerous
enterprises that have emerged since China implemented its reform and opening-up policy, TCL is one
of a select few large corporations that have retained its vibrancy and vigor for nearly half a century.
In 2018, TCL introduced the most significant transformation in its corporate history,
strategically restructuring from a diversified to a specialized business model, which entailed a clear
focus on the development of high-tech, capital-intensive, and long-cycle technology industries. In
line with China's strategy of transformation from a manufacturer of quantity to one of quality, the
Company is committed to becoming a leading global technology conglomerate. To achieve this, it
has divested its terminal business and non-core businesses, and shifted its focus to industrial
upgrading and strategic expansion in upstream high-tech industries. In 2020, the Company officially
changed its name to "TCL TECH.", delisting Zhonghuan Electronic in July 2020, which facilitated
the Company's entry into the new energy photovoltaic and silicon materials sectors. In August 2020,
the acquisition of Suzhou Samsung solidified TCL TECH.'s position and competitive edge within the
display industry.
As it stands, leveraging its strengths in independent innovation and self-driven development, the
Company has established a business structure centered on two core industries: displays and new
energy photovoltaics. With a well-defined development roadmap, efficient operations, and a
distinctive corporate culture, the Company has established itself as a global leader in its core
industries, and is well-poised for building its core competitiveness and sustainable development
capabilities.
Scale leadership: Transforming from a leader in large-sized displays to a full-size layout
As a leader in the global display industry and a trailblazer in domestic display line construction,
the Company leverages its strategic "Twin Star" production line layout to maximize synergies with a
focus on both endogenous growth and epitaxial mergers and acquisitions, enabling the Company to
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continuously expand its production capacity. With a global footprint spanning nine high-gen
production lines and five module plants, the Company serves a diverse customer base across major
markets. In 2023, TCL CSOT ranked No. 2 globally in TV panel shipments, securing the No. 1
ranking in terms of both 55-inch and 75-inch TV panels. The Company is also accelerating its full-
size strategy by investing in the t9 production line, which is geared towards high-value-added IT and
commercial display products in medium-sized products segment. In 2023, TCL CSOT ranked No. 2
in the LTPS notebook market and No. 1 in the tablet market by market share; it ranked No. 3 in the
global MNT display market, where it ranked No. 1 in the e-sports MNT segment. TCL CSOT reported
a significant surge in flexible OLED shipments during Q4 2023. During 2023, TCL CSOT also
actively enhanced its value chain structure, increased module capacity, and further elevated its
position along the value chain and in terms of profitability. TCL CSOT has passed through several
industry cycles, transforming from a follower to a peer and then to a front-runner, which is not merely
a testament to its continuously high-quality growth in scale but also to its unwavering strategy to
technological innovation and ecosystem development in the display sector.
Leading management: TCL CSOT aims to be a global leader in efficiency and traverse
various cycles by comparative competitiveness
While establishing its leadership in market scale, technology, and ecosystem development, TCL
CSOT has consistently maintained industry-leading efficiency and profitability metrics. Since its
inception in 2011, TCL CSOT has successfully navigated two significant cycles in the display
industry thanks to two critical contributors - extreme cost efficiency and lean management.
TCL CSOT leverages the synergy of its twin factories to optimize production line planning,
maximize capacity expansion, implement end-to-end cost and expense control through lean
management and extreme efficiency cost measures, establishing its competitiveness in the industry.
TCL CSOT's proven risk mitigation capabilities, honed through multiple industry cycle fluctuations,
will continue to propel the company's leadership position and steer its growth trajectory in the future.
Strategic new frontier: Cultivating a thriving second growth curve with new energy
On the basis of enterprise development and national planning for strategic emerging industries,
the Company actively seeks new development pathways that are technology-intensive and capital-
intensive with a long development cycle, so as to strengthen and fully utilize TCL's core
competitiveness. In July 2020, the Company successfully acquired the Zhonghuan hybrid-ownership
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reform project. TZE aligns perfectly with TCL's quest for new growth drivers, specializing in the
research and development of new energy photovoltaics and other silicon materials.
Since 2021, TZE has unlocked growth potential and accelerated business development through
institutional reform, optimizing capital structure and enhancing organizational vitality.
Leading in technology and ecology: Actively laying the groundwork for pan-display
technologies, building a first-mover advantage through ecological leadership
Relying on TCL CSOT and TZE, the Company has accelerated its vertical layout of the
industrial chain and continuously improved its upstream capacity for technological innovation. The
Company has strategically focused on building an ecosystem in areas such as basic materials, next-
gen display materials, photovoltaic materials and critical equipment for new manufacturing processes.
This is aimed at creating an ecosystem within the display market to establish a leading advantage
based on next-gen display technology.
TCL TECH. boasts a global network of 32 R&D centers, serving as the only "National Printing
and Flexible Display Innovation Center" appointed by the Ministry of Industry and Information
Technology and the sole "National New Display Technology Innovation Center" designated by the
Ministry of Science and Technology, with 9 national-level enterprise open innovation platforms and
33 provincial-level innovation platforms having obtained related qualifications.
Organizational and cultural assurance: Building the "Philosophy of Global Leadership"
and strengthening corporate culture
Four decades of unwavering commitment to "Daring, Innovation, Tenacity, Transformation, and
Vision" represents TCL's most valuable intangible asset over the last 42 years, serves as the
motivation to push boundaries, and acts as the continuous driving force behind its ongoing
advancement toward global leadership. At the beginning of 2020, the Company resolutely set forth
the strategic goal of "accelerated growth, surpassing competitors, and achieving global leadership"
and released the "Philosophy of Global Leadership" to exemplify its corporate culture in its new phase.
With this goal as the driving force, the Company is committed to reshaping its organizational culture
to one that is characterized by ownership, accountability, and a performance-driven mindset. TCL
remains dedicated to continuously upgrading, exploring, and strengthening the core values embodied
by TCL's spirit of "Daring, Innovation, Tenacity, Transformation, and Vision". The Company will
further strengthen the development of organizational structure and corporate culture to foster a more
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dynamic and agile work environment. By making its "Philosophy of Global Leadership" the
cornerstone of every TCL employee's approach, the Company strides towards sustainable growth.
IV. Analysis of Core Businesses
1. Overview
See "Part III Management Discussion and Analysis".
2. Revenue and costs
(1) Breakdown of operating revenue
Unit: RMB
2023 2022
As % of total As % of total Change (%)
Amount Amount
revenue (%) revenue (%)
Total revenue 174,366,657,015 100% 166,552,785,829 100% 4.69%
By operating division
Display business 83,654,743,374 47.98% 65,717,154,752 39.46% 27.30%
New energy
photovoltaics and
59,146,463,193 33.92% 67,010,157,025 40.23% -11.74%
other silicon
materials business
Distribution
30,109,528,571 17.27% 31,847,803,417 19.12% -5.46%
business
Other and offsets 1,455,921,877 0.83% 1,977,670,635 1.19% -26.38%
By product category
Display devices 83,654,743,374 47.98% 65,717,154,752 39.46% 27.30%
New energy
photovoltaics and
59,146,463,193 33.92% 67,010,157,025 40.23% -11.74%
other silicon
materials
Distribution of
30,109,528,571 17.27% 31,847,803,417 19.12% -5.46%
electronics
Other and offsets 1,455,921,877 0.83% 1,977,670,635 1.19% -26.38%
By operating segment
Mainland China 119,940,276,585 68.79% 119,139,823,459 71.53% 0.67%
Overseas
(including Hong 54,426,380,430 31.21% 47,412,962,370 28.47% 14.79%
Kong)
Distribution mode
Direct sales 149,146,033,585 85.54% 140,148,331,286 84.15% 6.42%
Distribution 24,805,129,036 14.23% 25,652,437,925 15.40% -3.30%
Dealer 415,494,393 0.24% 752,016,618 0.45% -44.75%
(2) Operating division, product category, region or sales mode contributing over 10% of the revenue or operating profit:
Applicable □ Not applicable
Unit: RMB
Change in Change in
Gross profit Change in
Revenue Operating cost operating cost gross profit
margin revenue year-
year-on-year margin year-
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on-year (%) (%) on-year (%)
By operating division
Display business 83,654,743,374 72,095,222,728 13.82% 27.30% 10.66% 12.95%
New energy
photovoltaics
and other silicon 59,146,463,193 47,170,528,471 20.25% -11.74% -13.96% 2.06%
materials
business
Distribution
30,109,528,571 28,949,391,997 3.85% -5.46% -5.32% -0.15%
business
By product category
Display devices 83,654,743,374 72,095,222,728 13.82% 27.30% 10.66% 12.95%
New energy
photovoltaics
59,146,463,193 47,170,528,471 20.25% -11.74% -13.96% 2.06%
and other silicon
materials
Distribution of
30,109,528,571 28,949,391,997 3.85% -5.46% -5.32% -0.15%
electronics
By operating segment
Mainland China 119,940,276,585 103,308,185,800 13.87% 0.67% -4.49% 4.66%
Overseas
(including Hong 54,426,380,430 45,459,410,741 16.48% 14.79% 3.89% 8.77%
Kong)
Distribution mode
Direct sales 149,146,033,585 124,301,367,797 16.66% 6.42% -1.62% 6.81%
Distribution 24,805,129,036 24,159,455,454 2.60% -3.30% -3.24% -0.07%
Dealer 415,494,393 306,773,290 26.17% -44.75% -49.39% 6.77%
Core business data in the recent term restated according to the changed methods of measurement that occurred in the Reporting Period
□ Applicable Not Applicable
(3) Was revenue from product sales higher than service revenue?
Yes □ No
Operating division Item Unit 2023 2022 Change (%)
10,000 square
Sales 5,304 4,275 24.06%
meters
10,000 square
Display Production volume 5,420 4,230 28.14%
meters
10,000 square
Inventory 240 124 93.49%
meters
Sales 10,000 sets 1,753 1,299 34.99%
Modules and finished
Production volume 10,000 sets 1,747 1,317 32.67%
machines
Inventory 10,000 sets 60 66 -9.76%
Sales 10,000 sets 1,630,718 1,064,653 53.17%
Photovoltaic silicon
Production volume 10,000 sets 1,671,530 1,084,730 54.10%
wafers
Inventory 10,000 sets 72,914 32,102 127.13%
Million square
Other silicon materials Sales 737 744 -0.96%
inches
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Million square
Production volume 765 743 2.97%
inches
Million square
Inventory 53 24 117.48%
inches
Sales 10,000 kWh 102,019 123,105 -17.13%
Energy Production volume 10,000 kWh 102,019 123,105 -17.13%
Inventory 10,000 kWh
Sales MW 7,144 6,607 8.13%
Photovoltaic modules Production volume MW 7,911 6,619 19.53%
Inventory MW 1,407 639 119.95%
Explanation of why any financial indicator in the table above registered a year-on-year change of over 30%
Applicable □ Not applicable
1. The increase in inventory of display was mainly affected by the release of t9 capacity;
2. The increases in modules and finished machines and output was mainly a result of growth in business scale;
3. Photovoltaic silicon wafer sales increased by 53.17% and production increased by 54.10% compared to the previous year. Inventory
increased by 127.13% compared to the previous year. This is mainly due to the Company's construction projects launching for
production and the continuous improvement of advanced production capacity through technological innovation and Industry 4.0
flexible manufacturing. At the end of the year, crystal wafer production capacity reached 183GW, an increase of 31% over the
beginning of the year, leading to an increase in the turnover of silicon wafer production, sales and inventory (solar silicon wafers are
presented as converted to M6 products, including photovoltaic silicon rods converted from exported photovoltaic silicon rods);
4. Inventory of other silicon materials increased by 117.48% compared to the previous year mainly due to the increase in product
inventory with the market downturn. In addition, as the production and sales of polished wafers and epitaxial wafers have increased,
the inventory turnover rate has also increased;
5. Inventory of photovoltaic modules increased by 119.95% compared to the previous year mainly due to the severe overcapacity in
the entire photovoltaic industry chain, the dire market conditions, and the slowdown in inventory turnover. In addition, as the scale of
production and sales has increased, the inventory turnover rate has increased.
(4) Execution progress of major sales contracts and materials purchasing contracts signed into during the Reporting Period
□ Applicable Not Applicable
(5) Breakdown of operating cost
Operating division
Unit: RMB
2023 2022
Operating YoY
Item As % of As % of
division Amount Amount Change
total total
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revenue revenue
Materials, salary,
Display business 72,095,222,728 48.46% 65,148,141,621 42.88% 10.66%
depreciation, etc.
New energy
photovoltaics and
Materials, salary,
other silicon 47,170,528,471 31.71% 54,822,913,894 36.09% -13.96%
depreciation, etc.
materials
business
Distribution
Finished goods, etc. 28,949,391,997 19.46% 30,574,483,912 20.12% -5.32%
business
Materials, salary, 552,453,346 0.37%
Others 1,379,949,553 0.91% -59.97%
depreciation, etc.
Product category
Unit: RMB
2023 2022
As % of As % of YoY
Product category Item
Amount total Amount total Change
revenue revenue
Materials, salary,
Display devices 72,095,222,728 48.46% 65,148,141,621 42.88% 10.66%
depreciation, etc.
New energy
photovoltaics and Materials, salary,
47,170,528,471 31.71% 54,822,913,894 36.09% -13.96%
other silicon depreciation, etc.
materials
Distribution of
Finished goods, etc. 28,949,391,997 19.46% 30,574,483,912 20.12% -5.32%
electronics
Materials, salary,
Others 552,453,346 0.37% 1,379,949,553 0.91% -59.97%
depreciation, etc.
(6) Were there changes in the scope of consolidated financial statements for the Reporting Period?
Yes □ No
Compared with 2022, 39 subsidiaries (24 newly incorporated and 15 acquired) are newly included in the consolidation scope of 2023;
and 18 subsidiaries (12 transferred and 6 de-registered) are excluded from the consolidation scope of 2023.
(7) Major changes to the business scope or product or service range in the Reporting Period
□ Applicable Not Applicable
(8) Major customers and suppliers
Major customers
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Total sales of top five customers (RMB) 51,360,607,561
Total sales of top five customers as % of total sales of the
29.46%
Reporting Period (%)
Total sales of related parties among top five customers as % of
10.09%
total sales of the Reporting Period (%)
Top five customers
As % of total sales revenue
No. Customer name Sales revenue (RMB)
(%)
1 Customer A 17,595,352,384 10.09%
2 Customer B 11,982,836,772 6.87%
3 Customer C 10,005,174,109 5.74%
4 Customer D 8,108,202,897 4.65%
5 Customer E 3,669,041,400 2.10%
Total -- 51,360,607,561 29.46%
Other information about major customers: For sales transactions between the Company and its related parties, see provisional
announcements disclosed by the Company on the designated platform for information disclosure.
Major suppliers
Total purchases from top five suppliers (RMB) 28,899,693,549
Total purchases from top five suppliers as % of total purchases
20.75%
of the Reporting Period (%)
Total purchases from related parties among top five suppliers
-
as % of total purchases of the Reporting Period (%)
Top five suppliers
Purchases in the Reporting
No. Supplier name As % of total purchases (%)
Period (RMB)
1 Supplier A 7,679,043,598 5.51%
2 Supplier B 6,838,857,510 4.91%
3 Supplier C 6,351,627,011 4.56%
4 Supplier D 4,425,255,517 3.18%
5 Supplier E 3,604,909,912 2.59%
Total -- 28,899,693,549 20.75%
Other information about major suppliers
□ Applicable Not Applicable
3. Expenses
Unit: RMB
2023 2022 Change (%) Main reason for change
Sales
2,523,687,453 1,950,527,877 29.38%
expenses
Administrati Mainly caused by the growth in business scale,
4,783,246,926 3,540,610,990 35.10%
ve expenses and increases in labor costs
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Financial
3,972,727,915 3,422,894,839 16.06%
expenses
R&D
9,522,837,963 8,633,638,171 10.30%
expenses
4. R&D investments
Applicable □ Not applicable
Anticipated impact on
Main R&D project
Purpose Progress Preset goals the future development
name
of the Company
Leverage technological
Develop high-PPI
Develop ultra-high- leadership to attract
High-quality VR Enhance VR image LTPO VR technology,
resolution VR display high-end customers,
technology quality to achieve high enhancing VR display
technology with 2K*2K enhancing brand value
development PPI quality and reducing
resolution per eye and product
power consumption
competitiveness
The world's first 14-
Development of a 14-inch 2.8K in-cell Enhanced product
Realized industrial inch 2.8K in-cell active
14-inch 2.8K active pen eye-care competitiveness and
transformation pen eye-care large-
flagship tablet large-screen tablet industry influence
screen tablet
Deep engagement in
Empowering R&D
Leveraged multi-modal business activities,
Star Intelligence efficiency and quality
Realized industrial large models in R&D accelerated the R&D
Large Model Expert improvement through
transformation design to empower process, and improved
System deep understanding and
panel development R&D efficiency and
learning
product quality
Utilized AI algorithms
Capitalized upon AI to enhance yield Completed system Used AI and big data
and big data for analysis efficiency, implementation and algorithms to enhance
Realized industrial
failure analysis and swiftly pinpointed deployment, and yield analysis and
transformation
application defect root causes, and gradual roll-out to all improve manufacturing
simulation accelerated plants processes
improvement measures
Achieved lower power Enhanced brand
Achieved a lower consumption while
WQHD LTPO Realized industrial awareness and product
refresh rate and reduced effectively addressing
display technology power consumption transformation visual fatigue. competitiveness in the
LTPO segment
Reduced costs while Identified novel, high-
enhancing efficiency for AI-assisted R&D performance, and stable Facilitated the
AI-assisted R&D of
R&D of OLED platform for OLED OLED materials with industrialization of
OLED materials
materials with AI materials AI-based generation OLED materials
technologies and screening
Achieved enhanced
Developed technological Breakthrough in POL
proprietary high- competitiveness through specifications /
speed CSPI national breakthroughs in POL development of material
Realized industrial Reduced cost and
standard protocols material specifications, platforms;
transformation enhanced efficiency
and key display the development of Proprietary R&D of
materials, e.g., color material platforms, and POL membrane
filters and polarizers proprietary research of materials.
membrane materials.
R&D of key Met the market Promoted production Improved the quality of Enhanced the core
technologies for N- requirements for process improvement monocrystalline silicon, competitiveness of the
type silicon single technical indicators of and product quality met customer needs, company's main
crystals designed N-type monocrystalline consistency with further improved business
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
for solar cells and silicon technology and ongoing mass efficiency, reduced
their applications strengthened the production by costs and achieved an
Company's core enhancing Total increase in market share
competitiveness Solution capabilities, of N-type
participating in monocrystalline silicon
customer product and
process design-in, and
establishing IPD
collaboration with N-
type customers
Having addressed the
challenges associated
with granular silicon
feedstock through
Removed technical
process innovation, the Achieved 100%
barriers in the use of
Company has mastered application by
Researched and granular silicon
its application method, enhancing the quality of Reduced silicon costs
applied granular feedstock in single
enabling the production granular silicon and improved product
silicon in the single crystal pulling
of higher-quality single feedstock and competitiveness for the
crystal silicon processes to reduce
crystal silicon rods. developed granular Company
preparation process silicon costs and
This method can be silicon application
enhance product
applied to 100% of the solutions
competitiveness
Company's products,
placing the Company at
the forefront of the
industry
Researched and
Equipment upgrading
developed ultra-thin Achieved the 130μm
and cutting process
solar silicon wafer thick SoP target for
R&D of G12 silicon design have been Enhanced the core
cutting technology to silicon wafers; and
wafer slicing completed; SoP has competitiveness of the
meet the demand for completed the 110μm
technology been realized for 130um main business
thin film in the thick technical reserve
and 120um G12 silicon
downstream market and for silicon wafers
wafers
to improve unit output
By successfully
The development of the
developing the 4.0
4.0 technology platform
product and equipment
designed for
platform, achieving SoP
components was
and obtaining product Increased our market
Developed the 4.0 completed on schedule, Enhanced the core
certification, the share by successfully
technology platform resulting in components competitiveness of
Company has further transitioning to N-type
for components with superior power battery packs
expanded its product component products
output, efficiency, and
portfolio to meet
cost-effectiveness,
diverse market demands
paving the way for their
under various
market introduction
application scenarios
The introduction of the
new battery graphic
Reduced silver design has resulted in a
consumption by 0.03%, 0.07% increase in cell- Met customers'
increasing efficiency, level efficiency during demands, while
Enhanced the core
Optimized battery and enhancing both large-scale trial reducing cost and
competitiveness of
graphic design battery efficiency and production, while improving efficiency, as
battery packs
component power with meeting component well as raising market
the optimized positive process yield share
and negative circuit requirements and
achieving a 0.2%
improvement in
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
component CTM
R&D personnel
2023 2022 Change (%)
Number of R&D employees 11,313 11,979 -5.56%
As % of R&D employees (%) 15.04% 17.16% -2.12%
Education
PhD 188 231 -18.61%
Master 2,131 2,442 -12.74%
Bachelor's degree and others 8,994 9,306 -3.35%
Age
Under 30 years old 5,965 7,286 -18.13%
30~40 years old 4,696 4,280 9.72%
Over 40 years 652 413 57.87%
R&D investments
2023 2022 Change (%)
R&D investment amount (RMB) 10,308,543,529 10,778,414,851 -4.36%
R&D investments as % of total revenue (%) 5.91% 6.47% -0.56%
Capitalization amount of R&D investments
3,560,255,965 4,287,426,803 -16.96%
(RMB)
Capitalization amount of R&D investments
34.54% 39.78% -5.24%
as % of total revenue (%)
Reasons and impacts of major changes in the composition of R&D personnel of the Company
□ Applicable Not Applicable
Reasons for significant changes in R&D investment as % of total revenue compared with the previous year
□ Applicable Not Applicable
Reasons for significant changes in R&D investments capitalization and explanation of rationale
□ Applicable Not Applicable
5. Cash flow
Unit: RMB
Item 2023 2022 Change (%)
Sub-total of cash generated from
155,010,648,305 155,632,096,991 -0.40%
operating activities
Sub-total of cash used in operating
129,695,892,200 137,205,720,382 -5.47%
activities
Net cash generated from operating
25,314,756,105 18,426,376,609 37.38%
activities
Sub-total of cash generated from
61,202,286,515 51,431,426,776 19.00%
investment activities
Subtotal of cash used in investing 101,999,341,466 98,267,398,620 3.80%
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
activities
Net cash used in investing activities -40,797,054,951 -46,835,971,844 12.89%
Sub-total of cash generated from
70,023,939,233 113,655,272,732 -38.39%
financing activities
Subtotal of cash used in financing
68,232,173,839 82,254,617,585 -17.05%
activities
Net cash generated from financing
1,791,765,394 31,400,655,147 -94.29%
activities
Net increase in cash and cash
-13,678,809,131 3,593,919,427 -480.61%
equivalents
Explanation of why related data has significant changes year-on-year
Applicable □ Not applicable
Net cash generated from operating activities: Primarily due to the increase in scale of sales during the Reporting Period.
Net cash generated from financing activities: Primarily due to the decrease in scale of financing during the Reporting Period.
Explanation of the significant difference between the net cash flow generated by the Company's operating activities and the net profit
of the current year during the reporting period
Applicable □ Not applicable
The large difference between the net cash flow generated by the Company's operations and the net profits of the current year is primarily
caused by factors such as depreciation, amortization and impairment of the Company's assets during the Reporting Period.
V. Analysis of Non-Core Businesses
Applicable □ Not applicable
Unit: RMB
As % of gross
Amount Source Sustainability
profit
Depreciation of inventory write-off in line
Asset impairment -4,813,965,478 -95.29% No
with the market
Non-operating income 71,284,932 1.41% No
Non-operating expenses 203,779,883 4.03% No
VI. Analysis of Assets and Liabilities
1. Significant changes in asset composition
Unit: RMB
The end of 2023 January 1, 2023 Change in
Main reason for
Total assets Total assets percentage
Amount Amount change
Percentage Percentage (%)
Primarily due to the
Monetary purchase of low-risk
21,924,270,872 5.73% 35,378,501,261 9.83% -4.10%
assets wealth management
products
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Accounts Primarily due to the
22,003,651,259 5.75% 14,051,661,462 3.90% 1.85%
receivable increase in sales scale
Contract assets 343,907,118 0.09% 315,167,085 0.09% 0.00% No significant change
Inventories 18,481,754,865 4.83% 18,001,121,855 5.00% -0.17% No significant change
Investment
911,679,154 0.24% 946,449,125 0.26% -0.02% No significant change
property
Long-term
equity 25,431,271,193 6.64% 29,256,215,804 8.13% -1.49% No significant change
investments
Primarily due to
construction in
progress being
Fixed assets 176,422,620,794 46.08% 132,477,671,844 36.80% 9.28% converted into fixed
assets, resulting in
increase in fixed
assets
Primarily due to
construction in
progress being
Construction in converted into fixed
17,000,052,457 4.44% 52,053,833,629 14.46% -10.02%
progress assets, resulting in
decrease in
construction in
progress
Right-of-use
6,386,446,373 1.67% 5,110,123,904 1.42% 0.25% No significant change
assets
Short-term
8,473,582,304 2.21% 10,215,910,963 2.84% -0.62% No significant change
borrowings
Contract
1,899,468,140 0.50% 2,336,008,164 0.65% -0.15% No significant change
liabilities
Long-term
30.73% 118,603,164,839 32.95% -2.21% No significant change
borrowings 117,662,208,623
Lease liabilities 5,737,287,693 1.50% 4,461,382,902 1.24% 0.26% No significant change
Higher proportion of overseas assets
□ Applicable Not Applicable
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2. Assets and liabilities at fair value
Applicable □ Not applicable
Unit: RMB
Gain/loss of fair- Impairment
Cumulative fair- Amount Amount sold in
Beginning value changes in allowances
Item value changes purchased in the the Reporting Other changes Ending amount
amount the Reporting established in the
recorded in equity Reporting Period Period
Period Reporting Period
Financial assets
1. Held-for-
trading financial
assets (excluding 15,632,334,714 -82,730,184 36,690,131,991 26,084,053,319 26,155,683,203
derivative
financial assets)
2. Derivative
361,034,230 188,835,246 26,600,642 -468,462,515 108,007,603
financial assets
3. Receivables
1,103,127,764 -148,718,206 954,409,558
financing
4. Other debt
investments
5. Investments in
other equity 439,996,263 -55,954,756 1,720,000 886,911 386,648,418
instruments
Subtotal of
17,536,492,971 106,105,062 -29,354,114 36,691,851,991 26,084,053,319 -616,293,810 27,604,748,782
financial assets
Total of the above 17,536,492,971 106,105,062 -29,354,114 36,691,851,991 26,084,053,319 -616,293,810 27,604,748,782
Financial
932,646,673 78,767,446 143,869,843 1,097,300,600 1,942,542,301 310,042,260
liabilities
Other changed content
None
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□Yes No
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
3. Restricted asset rights as at the period-end
Carrying amount
Restricted assets Reason for restriction
(RMB'0,000)
Monetary assets 34,109 Deposited in the central bank as the required reserve
Monetary assets 158,637 Other monetary assets and restricted bank deposits
Notes receivable 50,364 Pledge
Fixed assets 9,347,914 As collateral for loan
Intangible assets 396,567 As collateral for loan
Held-for-trading financial assets 36,964 Pledge
Construction in progress 89,559 As collateral for loan
Accounts receivable 86,008 Pledge
Contract assets 34,321 Pledge
Investment property 974 As collateral for loan
Other non-current assets due within one year 43,049 Pledge
Total 10,278,465
VII. Investments Made
1. Total investment amount
Applicable □ Not applicable
Total investment amount in the Total investment amount in the same
Change (%)
Reporting Period (RMB) period last year (RMB)
38,650,552,795 52,419,386,966 -26.27%
2. Major equity investments made in the Reporting Period
Applicable □ Not applicable
Unit: RMB100 million
Progres
Investment
Term s as of Involve Index to
Invest Shareholding Fundin Type of income/los Date of
Principal Investment of the Anticipate ment in disclosed
Name of investee ment percentage g Partner product s in the disclos
activity method investm balance d income lawsuit informatio
amount (%) source s Reporting ure
ent sheet (s) n
Period
date
Huizhou
Ningbo Jia'an
Dongshen Jia'an
Venture
Equity Industrial Equity Self- Not Not Not March
Capital Establis Not Not www.cninf
Investment investment investment 15.6 99.94% raised applica applica applica 31,
Partnership hed applicable applicable o.com.cn
Partnership s s funds ble ble ble 2023
(Limited
(Limited
Partnership)
Partnership)
Not Not
Total -- -- 15.6 -- -- -- -- -- -- -- -- --
applicable applicable
3. Major non-equity investments ongoing in the Reporting Period
□ Applicable Not Applicable
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4. Financial investments
(1) Securities investments
Applicable □ Not applicable
Unit: RMB'0,000
Gain/loss of
Cumulative Amount
fair-value Amount Gain/loss
Initial Accounting Beginning fair-value purchased Ending
Security Stock changes in sold in the in the Accounting Funding
Stock Code investment measurement carrying changes in the carrying
type abbreviation the Reporting Reporting title source
cost method amount recorded in Reporting amount
Reporting Period Period
equity Period
Period
Other non-
DK Electronic current Self-
Stocks 300842.SZ 2,430 Fair value 25,258 8,466 0 0 0 8,466 33,724
Materials, Inc. financial funded
assets
Other non-
current Self-
Stocks 688469.SH UNT 26,745 Fair value - -3,337 0 26,745 0 -3,337 23,408
financial funded
assets
Nanyang Measurement
Financial Debt Self-
ZQTZ2303070002 Commercial 7,083 at amortized - 0 0 7,083 0 426 7,251
bonds investments funded
Bank cost
Held-for-
trading Self-
Bonds XS2560662541 LINK CB LTD 4,455 Fair value 4,791 -359 0 1,552 0 -95 6,064
financial funded
assets
Measurement
Financial 22 ICBC Macau Debt Self-
223001.IB 5,000 at amortized 5,044 0 0 0 0 129 5,044
bonds Bond 01 investments funded
cost
Held-for-
ELECTRICITE trading Self-
Bonds USF2941JAA81 2,919 Fair value - 171 0 5,312 730 379 4,754
DE FRANCE SA financial funded
assets
Held-for-
ECOPETROL Self-
Bonds US279158AL39 2,421 Fair value 4,349 167 0 0 0 417 4,590 trading
SA funded
financial
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assets
Held-for-
MELCO
trading Self-
Bonds USG5975LAA47 RESORTS 1,328 Fair value 1 45 0 5,145 1,360 90 3,832
financial funded
FINANCE
assets
China Taiping
Insurance Measurement
Financial Debt Self-
ZQTZ2303090003 Holdings 3,541 at amortized - 0 0 3,541 0 184 3,613
bonds investments funded
Company cost
Limited
Held-for-
U.S. TREASURY trading Self-
US912797HH31 3,453 Fair value - 27 0 3,453 0 27 3,480
Treasury bill BILL financial funded
assets
Other securities investments held at the period-end 705,553 -- 258,430 393 -5,595 442,236 531,456 8,966 169,880 -- --
Total 764,929 -- 297,874 5,574 -5,595 495,068 533,545 15,653 265,641 -- --
Disclosure date of the board announcement approving
March 31, 2023
the securities investments
Disclosure date of the general meeting announcement
April 22, 2023
approving the securities investments (if any)
39
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
(2) Investments in derivative financial instruments
Applicable □ Not applicable
1) Derivative investments for hedging purposes made during the Reporting Period
Applicable □ Not applicable
Unit: RMB'0,000
Ending contractual amount as % of the
Beginning amount Ending amount Gain/loss status in
Company's ending net assets
Type of contract the Reporting
Contractual Transaction Contractual
Contractual amount Transaction limit Period Transaction limit
amount limit amount
1. Forward forex contracts 2,062,172 73,441 3,039,040 114,095 20.92 0.79
-12,814
2. Interest rate swaps 384,446 11,533 407,686 12,231 2.81 0.08
Total 2,446,618 84,974 3,446,726 126,326 -12,814 23.73 0.87
Accounting policies and specific
accounting principles for hedging
business during the Reporting
Period and a description of No significant change.
whether there have been
significant changes from those of
the previous reporting period
Description of actual profits and During the Reporting Period, profit from changes in the fair value of hedged items amounted to RMB137.85 million; losses from the delivery of due forward
losses during the Reporting exchange contracts amounted to negative RMB450.92 million; and profit from the valuation of outstanding forward exchange contracts amounted to RMB184.93
Period million.
During the Reporting Period, the Company's main foreign exchange risk exposures included foreign currency asset and liability exposures arising from business
Description of the hedging effect activities such as outbound sales, raw materials procurement, and financing. The uncertain risks arising from the exchange rate fluctuations were effectively hedged
by derivative contracts with the same purchase amounts and terms in the opposite direction.
Funding source for derivative
Self-funded.
investment
Analysis of risks and control In order to effectively manage the exchange and interest rate risks of foreign currency assets, liabilities, and cash flows, the Company, after fully analyzing the
market trends and predicting operations (including orders and capital plans), adopted forward foreign exchange contracts, options, and interest rate swaps to avoid
measures associated with
future exchange rate and interest rate risks. As its business scale changes, the Company will adjust its exchange rate risk management strategy according to the
derivative investments held in the actual market conditions and business plans.
Reporting Period (including but Risk analysis:
not limited to market risk, 1. Market risk: The financial derivatives business carried out by the Group is related to hedging and trading activities associated with the main business operations.
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
liquidity risk, credit risk, There is a market risk associated with potential losses due to fluctuations in market prices, such as underlying interest rates and exchange rates, which affects the
operational risk, legal risk, etc.) prices of financial derivatives.
2. Liquidity risk: The derivatives business carried out by the Group is an over-the-counter transaction operated by a financial institution, and there is a risk of
incurring losses due to paying fees to the bank for liquidating or selling the derivatives below the buying prices;
3. Performance risk: The Group conducts its derivative business based on rolling budgets for risk management, and there is a risk of performance failure due to
deviation arising between the actual operating results and budgets;
4. Other risks: In the case of specific business operations, the failure of operational personnel to report and obtain approvals in accordance with established
procedures or to accurately, promptly, and comprehensively record information related to financial derivative transactions may result in potential losses or missed
trading opportunities in the derivatives business. Moreover, if the trading operator fails to fully understand the terms of transaction contracts or product information,
the Group may face legal risks and transaction losses.
Risk control measures:
1. Basic management principles: The Group strictly adheres to hedging principles with the primary goals of fixing costs and avoiding risks. It is necessary for the
financial derivatives business to align with the variety, size, direction, and duration of spot goods, and this should not involve any speculative trading. When
selecting hedging instruments, only simple financial derivatives that are closely related to the main business operations and comply with the requirements of hedge
accounting should be selected while avoiding engaging in complex business activities that go beyond the established scope of operations and involve risks and
pricing that are difficult to understand;
2. The Group has formulated a special risk management system tailored to the risk characteristics of the financial derivatives business, covering all key aspects such
as preemptive prevention, in-process monitoring, and post-processing. It reasonably allocates professionals for investment decision-making, business operations,
and risk control as required. Personnel involved in investment are required to fully understand the risks of financial derivatives investment and strictly implement
the business operations and risk management system for derivatives. Before the holding company engages in derivative business activities, the holding company
must submit detailed business reports to the competent department of the Group, including information about its internal approval, main product terms, operational
necessity, preparations, risk analysis, risk management strategy, fair value analysis, and accounting methods. Additionally, a special summary report of previously
conducted operations should be submitted. Only after obtaining the opinion of the relevant professional departments within the Group may the holding company
proceed with the operations.
3. Relevant departments should track the changes in the open market price or fair value of financial derivatives, promptly assess the risk exposure changes of
invested financial derivatives, and compile reports to the board of directors on business development;
4. The financial company should actively manage and disclose in a timely manner any confirmed gains and losses as well as unrealized losses from futures and
derivative transactions of listed companies. When such losses account for 10% of the audited net profit attributable to the shareholders of the listed company in the
last year and exceed RMB10 million, the financial company should make timely disclosure thereof.
Changes in market prices or fair
value of derivative investments in With the rapid expansion of overseas sales, the Company continued to follow the above rules in the operation of forward foreign exchange contracts and interest
rate swap contracts, to avoid and hedge against foreign exchange risks arising from operations and financing. During the Reporting Period, there were profits and
the Reporting Period (fair value
losses of RMB137.85 million from changes in the fair value of hedged items and losses of RMB265.99 million from derivatives. The fair value of derivatives is
analysis should include the determined by the real-time quoted price of the foreign exchange market, and is based on the difference between the contractual price and the forward exchange
measurement method and related rate quoted immediately on the foreign exchange market on the balance sheet date.
assumptions and parameters)
Legal matters involved (if
Not applicable
applicable)
Disclosure date of the board
announcement approving the March 31, 2023
derivative investments (if any)
Disclosure date of the general
April 22, 2023
meeting announcement approving
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
the derivative investments (if
any)
Opinion of independent directors From January to December 2023, the financial derivatives transactions entered into by the Company were closely connected to the daily operational needs of the
on derivative investments and Company, and the risks therefrom were controllable. Such transactions conformed to the development needs of the Company, and the requirements of related laws
risk control and regulations.
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2) Derivative investments for speculative purposes made during the Reporting Period
□ Applicable Not Applicable
There were no derivative investments for speculative purposes made by the Company during the Reporting Period.
5. Use of the capital raised
Applicable □ Not applicable
(1) General information about the use of raised funds
Applicable □ Not applicable
Unit: RMB'0,000
Total
amount
Total
Total of
amount of Purpose
amount change Total Amount
Used in changed- and
Year Method of d- proceeds left idle
Total amount Net amount the Total purpose location
of of change purpose that have for over
raised raised current amount used funds of the
raising raising d- funds not been two
period during the unused
purpose as a % used years
Reporting amount
funds of total
Period
amount
raised
Non-
public Not Not Not
Not
2022 offering 959,695.94 947,469.47 244.99 947,714.46 applica applica 0 applica 0
applicable
of ble ble ble
shares
Not Not
Not
Total -- 959,695.94 947,469.47 244.99 947,714.46 applica applica 0 -- 0
applicable
ble ble
Use of the capital raised
According to the Approval for the Non-Public Issue of Shares by TCL Technology Group Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1658) issued by the China
Securities Regulatory Commission, the Company issued 2,806,128,484 shares in a non-public manner, raising a total of RMB9,596,959,415.28 in 2022. After
deducting issuance-related expenses, the actual available proceeds were RMB9,474,694,686.16. On December 6, 2022, the Company received the proceeds
from the aforementioned share issue, which was confirmed by Da Hua CPAs (Special General Partnership) in its capital verification report of "Da Hua Yan
Zi [2022] No. 000709".
As of December 31, 2023, the Company utilized the proceeds of RMB9,477,144,603.75 (including net interest income of RMB2,449,917.59), in which
RMB9,000,000,000.00 was used to repay the funds raised for the investment in previous projects, while the remaining amount was used to supplement the
working capital. As of the date of this report issuance, the Company has successfully completed the closure procedures for the special account designated for
the funds raised through this private placement.
(2) Promised use of raised funds
Applicable □ Not applicable
Unit: RMB'0,000
Promised Whether Investm Investmen Date Benefit Whethe Whether
Total Cumulative
project funded the Adjusted ent in t progress when the s r it met there were
promised investment
with raised project total the as at the project is derived the significant
investment amount at
funds and changed investment Reporti period- ready for in the anticipa changes
amount with the period-
investment or not amount (1) ng end its Reporti ted to the
raised funds end (2)
with excess (including Period (3)=(2)/(1 intended ng benefits project
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
funds raised partial ) use Period or not feasibility
changes) or not
Promised projects
24 months
1. Generation
from the
8.6 oxide Not Not
commenc
display device No 900,000.00 900,000.00 0 900,000.00 100.00% applica applica No
ement
production line ble ble
date of the
project
project
2. Additional Not Not
Not
working No 47,469.47 47,469.47 244.99 47,714.46 100.52% applica applica No
applicable
capital ble ble
Subtotal of Not
promised -- 947,469.47 947,469.47 244.99 947,714.46 -- -- applica -- --
projects ble
Excess funds raised
No excess funds raised
Description of
delayed
progress and
reasons for
failure to
achieve the
planned
progress and
anticipated
Not applicable, no income estimate is made for the item
income
(including the
reasons for
selecting "Not
applicable" for
"Whether
anticipated
benefits were
met or not")
Description of
major changes
Not applicable
in project
feasibility
Amount,
purpose, and
use progress of Not applicable
excess funds
raised
Change in
location of the
Not applicable
project with
raised funds
Change in the
project
Not applicable
implementatio
n method
On December 12, 2022, the Proposal on Using Raised Funds to Swap Self-raised Funds Previously Invested in Projects that should be
Advance
Funded with Raised Funds was approved at the 26th Meeting of the Company's 7th Board of Directors. As such, the raised funds were
investments in
44
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
promised agreed to be swapped with the advance investments of self-raised funds in projects that should be funded with raised funds. The total swap
projects amount was RMB9 billion.
funded with
raised funds
and
subsequent
swaps
Temporary
addition of
idle raised
funds to Not applicable
supplement
working
capital
Amount and
reason for
surplus raised
funds during Not applicable
project
implementatio
n
Unused raised
fund purpose Not applicable
and allocation
Issues or other
situations
regarding the
Not applicable
use and
disclosure of
raised funds
(3) Change of the raised fund projects
□ Applicable Not Applicable
No such cases in the Reporting Period.
VIII. Sale of Major Assets and Equity Investments
1. Sale of major assets
Applicable □ Not applicable
Net Percenta Has the
profit ge of the project
contribu net Relation been
Whether Whether
ted by profit ship impleme
Whether all titles all debts
the asset Impact from the with the nted as
Pricing this was of the of the Index to
Transact Transactio to the of sale sale of affiliate planned
Annou principle an asset asset Date of disclose
ion Assets n price (in listed on the the asset d party and on
ncemen s for the affiliate have have disclosu d
counterp sold RMB0'000 compan Compan contribu (if it is a schedule
t date sale of d-party been been re informat
art ) y from y (Note ted to affiliate ? If not,
the asset transacti fully fully ion
the 3) the d-party provide
on transferr transferr
beginnin listed transacti the
ed ed
g of the compan on) reasons
period y to the and the
to the total net measure
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
date of profit s taken
the sale by the
(in Compan
RMB0'0 y
00)
Reduced
Idle operatio
propert nal costs
ies in while
No.2 enhanci
courtya ng
Beijing rd, operatio Based
E-Town Bolin nal on the
Decem Not Not Not Not Not Decemb www.cn
Urban Road, efficienc negotiat
ber 28, 25,269 applicab applicab No applicab applicab applicab Yes er 28, info.co
Renewal Beijing y, which ed
2023 le le le le le 2023 m.cn
Co., Econo aligns evaluati
Ltd. mic- with the on price
Techno develop
logical ment
Develo interests
pment of the
Area Compan
y
2. Sale of major equity investments
□ Applicable Not Applicable
IX. Principal Subsidiaries and Joint Stock Companies
Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company's net profit:
Unit: RMB0'000
Company Principal Registered Operating
Company name Total assets Net assets Revenue Net profit
type activity capital profit
TCL China Star
Optoelectronics RMB33.08
Subsidiary Display 20,893,668 7,409,114 7,207,779 -90,039 -48,056
Technology Co., billion
Ltd.
New energy
TCL Zhonghuan photovoltaic
Renewable Energy s and other RMB4.04
Subsidiary 12,506,304 6,023,711 5,914,646 456,547 389,889
Technology Co., silicon billion
Ltd. materials
business
Highly Information Distribution RMB0.42
Subsidiary 726,655 143,404 3,010,953 5,243 4,320
Industry Co., Ltd. business billion
Acquisition and disposal of subsidiaries in the Reporting Period
Applicable □ Not applicable
How subsidiaries were Effects on overall
Company name obtained or disposed of operations and
in the Reporting Period operating performance
Lumetech North America Corporation Newly incorporated No significant effect
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Suzhou Zhonghuan Photovoltaic Materials Co., Ltd. Newly incorporated No significant effect
Ningxia Huanou New Energy Technology Co., Ltd. Newly incorporated No significant effect
Ningxia Zhonghuan Industrial Park Management Co., Ltd. Newly incorporated No significant effect
Guangzhou TCL Industrial Research Institute Co., Ltd. Newly incorporated No significant effect
Huizhou Dongshen Jia'an Equity Investment Partnership (Limited
Newly incorporated No significant effect
Partnership)
Ningbo Dongshen Zhixuan Equity Investment Partnership (Limited
Newly incorporated No significant effect
Partnership)
Huansheng Photovoltaic (Guangdong) Co., Ltd. Newly incorporated No significant effect
Xuzhou Huanneng New Energy Co., Ltd. Newly incorporated No significant effect
Lingwu Xuzhao New Energy Co., Ltd. Newly incorporated No significant effect
Ningxia Zhonghuan Yuelanshan Hotel Management Co., Ltd. Newly incorporated No significant effect
Zhangjiakou Shengming New Energy Co., Ltd. Newly incorporated No significant effect
Xi'an Maituo Technology Co., Ltd. Newly incorporated No significant effect
Xi'an Shengtai Technology Co., Ltd. Newly incorporated No significant effect
Xi'an Shengke Sunpie Technology Co., Ltd. Newly incorporated No significant effect
Urumqi Sunpie Fengshagn Trading Co., Ltd. Newly incorporated No significant effect
Urumqi Sunpie Zhixing Trading Co., Ltd. Newly incorporated No significant effect
Foshan Sunpiestore Technology Co., Ltd. Newly incorporated No significant effect
Zhuhai Sunpiestore Technology Co., Ltd. Newly incorporated No significant effect
Ningxia Hongyuan New Energy Co., Ltd. Newly incorporated No significant effect
Ningxia Shengyao New Energy Co., Ltd. Newly incorporated No significant effect
Lingwu Shangyuan New Energy Co., Ltd. Newly incorporated No significant effect
Xiamen Dili Hongxin Equity Investment Partnership (Limited
Newly incorporated No significant effect
Partnership)
Xi'an Shengbo Sunpie Technology Co., Ltd. Newly incorporated No significant effect
Xinxin Bandaoti Technology Co., Ltd. Acquisition No significant effect
Jiangsu Mingjing Bandaoti Technology Co., Ltd. Acquisition No significant effect
Jiangsu Lixin Bandaoti Technology Co., Ltd. Acquisition No significant effect
Xuzhou Xinjing Bandaoti Technology Co., Ltd. Acquisition No significant effect
Jiangsu Huasheng Bandaoti Materials Co., Ltd. Acquisition No significant effect
Hong Kong NExcel Electronic Technology Co., Ltd. Acquisition No significant effect
Singapore NExcel Electronic Technology Pte. Acquisition No significant effect
Xuzhou Jingrui Bandaoti Equipment Technology Co., Ltd. Acquisition No significant effect
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Meixin (Xuzhou) Silicon Material Technology Co., Ltd. Acquisition No significant effect
Suzhou Huaxin Environmental Technology Co., Ltd. Acquisition No significant effect
Inner Mongolia TCL Photoelectric Technology Co., Ltd. Acquisition No significant effect
TCL Financial Technology (Shenzhen) Co., Ltd. Acquisition No significant effect
Techigh Circuit Technology (Huizhou) Co., Ltd. Acquisition No significant effect
Techigh Circuit Technology (Zhuhai) Co., Ltd. Acquisition No significant effect
Tairui (Hong Kong) Limited Acquisition No significant effect
Yixing Huanxing New Energy Co., Ltd. Transferred No significant effect
Tianjin Binhai Huanneng New Energy Co., Ltd. Transferred No significant effect
Dushan Anju Photovoltaic Technology Co., Ltd. Transferred No significant effect
Shangyi Shengxin New Energy Development Co., Ltd. Transferred No significant effect
Gengma Huanxing New Energy Co., Ltd. Transferred No significant effect
Guyuan Shengju New Energy Co., Ltd. Transferred No significant effect
Zhangjiakou Shengyuan New Energy Co., Ltd. Transferred No significant effect
Qinhuangdao Tianhui Solar Energy Co., Ltd. Transferred No significant effect
Tianjin Zhonghuan Hengda Technology Co., Ltd. Transferred No significant effect
Tianjin Yingtuo Computer Control Technology Co., Ltd. Transferred No significant effect
Shangyi Shengyao New Energy Development Co., Ltd. Transferred No significant effect
Guangdong TCL New Technology Co., Ltd. Transferred No significant effect
Tianjin Huanhai Real Estate Development Co., Ltd. De-registered No significant effect
TCL Lighting (Wuhan) Co., Ltd. De-registered No significant effect
Inner Mongolia Huanneng Resources Development Co., Ltd. De-registered No significant effect
Inner Mongolia Zhonghuan Electronic Materials Co., Ltd. De-registered No significant effect
Meixin (Xuzhou) Silicon Material Technology Co., Ltd. De-registered No significant effect
Inner Mongolia Zhonghuan Energy Development Center (Limited
De-registered No significant effect
Partnership)
Explanation of Principal Subsidiaries and Joint Stock Companies
None
X. Structured Bodies Controlled by the Company
□ Applicable Not Applicable
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XI. Prospects
As a high-tech manufacturer with a presence in multiple sectors, TCL accelerates its
development by grasping strategic opportunities made available via China's high-quality economic
development. With ample strategic resources, enhanced organizational efficiency, and presence in
high-growth, high-potential industries, TCL embraces its 42nd year of development at a new
historical starting point with a promising future.
With a strategic focus on displays and new energy photovoltaics, TCL is building core
assets in the global technology industry
Following the spin-off of its consumer-end business in 2019 and repositioning as a global
technology industry group, the Company has built its long-term competitive advantage through a
focus on the core elements and critical growth drivers within the display and technology industries,
in a combination of endogenous growth and epitaxial mergers and acquisitions.
As one of the leading players in the global display sector, the Company has seized industry
growth opportunities by continuously refining its technology, and expanding its product portfolio
across a full spectrum of sizes. With these efforts, the Company has established a global competitive
edge. Concurrently, the Company is actively expanding into the new energy photovoltaic industry
through the acquisition of TZE, aiming to establish a new growth pathway for the technology industry
in the next decade. Since 2021, TZE has unlocked growth potential and accelerated business
development through institutional reform, optimizing capital structure and enhancing organizational
vitality.
With both TCL CSOT and TZE flourishing, the Company has entered a new phase driven by
two business engines, establishing a foundation for long-term profitability that transcends industry
cycles, enabling it to unlock long-term growth opportunities even amidst macroeconomic fluctuations.
Effectively implementing major strategic initiatives to achieve the goals of 2024's strategic
planning
Building on the successes of the 2023 strategic plan, the Company's overall efforts this year will
maintain the momentum of continuous improvement and ambitious growth through a key focus on
solidifying our foundation and overcoming challenges to achieve breakthroughs. The Company will
implement a business strategy guided by global leadership, prioritizing the enhancement of its
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
competitiveness, and driving high-quality development. By meticulously executing key tasks, the
Company will ensure the successful realization of its strategic goals.
Standing on the solid foundation forged over 42 years, TCL aims to become a global leader. It
will pool its efforts, being guided by science and technology and driven by innovation, to continue to
ramp up, catch up, and achieve high-quality development and future-proof its success.
XII. Communications with the Investment Community such as Research, Inquiries, and
Interviews
Applicable □ Not applicable
Primary
focus of
Time Time Type of
Time Communication discussion Index to main information
of Manner of communication
Location party and communicated
reception communication party
materials
provided
Log Sheet No. 2023-001 on
Performance
E Funds, China Investor Relations
Futian and
Southern Fund, Activities dated March 31,
March 31, Shangri-La Onsite + Video operations
Institution Harvest Fund, 2023 disclosed by the
2023 Hotel, conferencing of TCL
Dacheng Fund, Company at
Shenzhen TECH. for
and others www.cninfo.com.cn on
2022
April 4, 2023.
E Funds,
Aegon-
Log Sheet No. 2023-002 on
Industrial Fund, Performance
Conference Investor Relations
Perseverance and
Room of Activities dated May 8,
May 8, Video Asset operations
TCL Institution 2023 disclosed by the
2023 conferencing Management, of TCL
TECH. in Company at
China Life, TECH. for
Shenzhen www.cninfo.com.cn on
Taikang Asset Q1 2023
May 10, 2023.
Management,
and others
Perseverance
Asset
2023 Log Sheet No. 2023-003 on
Management, E
Conference interim Investor Relations
Funds, China
Room of performance Activities dated August 30,
August Video Southern Fund,
TCL Institution and 2023 disclosed by the
30, 2023 conferencing CIB Fund,
TECH. in operations Company at
Dacheng Fund,
Shenzhen of TCL www.cninfo.com.cn on
Loyal Valley
TECH. September 1, 2023.
Capital, and
others
Perseverance
Asset Log Sheet No. 2023-004 on
Performance
Conference Management, Investor Relations
and
Room of Foresight Fund, Activities dated October
October Video operations
TCL Institution E Funds, 30, 2023 disclosed by the
30, 2023 conferencing of TCL
TECH. in Huaxia Fund, Company at
TECH. for
Shenzhen Loyal Valley www.cninfo.com.cn on
Q3 2023
Capital, and October 31, 2023.
others
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Contents
and public
January - The Individuals, information,
Investor hotline Individuals,
December Company's institutions, etc., -
(telephone) institutions, etc.
2023 office etc. disclosed by
the
Company
Contents
and public
January - The Individuals, information,
Individuals,
December Company's irm.cninfo.com.cn institutions, etc., irm.cninfo.com.cn
institutions, etc.
2023 office etc. disclosed by
the
Company
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
XIII. Implementation of the "Joint Improvement of Quality and Investment Return" Action
Plan
Whether the Company has disclosed the "Joint Improvement of Quality and Investment Returns" Action Plan.
Yes □ No
In line with the national emphasis on enhancing the quality and investment value of listed companies, the
Company has developed the "Joint Improvement of Quality and Investment Returns" Action Plan, which is based
upon in-depth research on industry trends and careful consideration of our future business trajectory. For a
comprehensive overview, please refer to the Announcement on "Implementing the 'Joint Improvement of Quality
and Investment Returns' Action Plan" disclosed on February 28, 2024.
Recognizing the unwavering support of our investors, the Company remains committed to its "investor-centric"
approach, ensuring compliant and prudent operations while safeguarding investor interests.
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Part IV Corporate Governance
I. General information of Corporate Governance
Since listed, in accordance with the Company Law, the Securities Law, the Code of Corporate Governance for
Listed Companies, Rules Governing the Listing of Shares on Shenzhen Stock Exchange and the Self-regulatory
Guidelines of Shenzhen Stock Exchange for Listed Companies No. 1 - Standardized Operation of Listed Companies
on the Main Board and other relevant laws and regulations, the Company has continued to improved its governance
structure and further standardized its operations to comply with the requirements of related laws and regulations.
During the Reporting Period, the Company pushed ahead with its corporate governance work in many aspects.
At present, the Company has established an organizational structure in line with the Company's business scale and
operation and management, reasonably set up departments and posts, scientifically plan responsibilities and duties
and build an internal control system that enables employees to performs their duties, assumes their responsibilities,
work and supervise each other.
In strict accordance with the provisions and requirements of the Company Law, the Securities Law, the Articles
of Associations, the Rules of Procedure for General Meeting of Shareholders, and other laws, regulations and rules,
the Company standardizes the procedures for the convening, participation and voting of the general meeting,
combines in-person and online voting, provides convenience for all shareholders to exercise their rights, and ensure
all shareholders, especially small and mid-size shareholders to fully exercise their rights; the board of director sets
up four dedicated committees: audit committee, nomination committee and remuneration and appraisal committee
to provide suggestions to the board of directors and ensure the board meetings and decision-making in a professional
and efficient manner. The board of supervisors perform their duties diligently and conscientiously by attending
general meetings, observing board meetings, regularly inspecting the Company's legal operations and financial
status, and issuing supervisory board opinions, to effectively supervises the company's major matters, related
transactions, financial status, and the performance of directors and executives, safeguarding the legitimate rights
and interests of the company and its shareholders. The supervisors investigate issues at various sites, take the
initiative to put forward management suggestions, which effectively improve the internal governance of the
Company. The Company has continuously improved its information disclosure management and investor relations
management through innovative management system. By providing regular specialized training based on the latest
regulatory rules, the Company promptly informs directors, supervisors and senior management of supervisory
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
focuses, to strengthen self-discipline among the management team, and fulfill their duties with diligence. The
Company effectively safeguards the interests of all shareholders, particularly minority shareholders, and strengthens
the management's self-discipline capacity, make them diligently perform their duties, and effectively safeguards the
interests of all shareholders, especially small and medium-sized shareholders. The Company has successively
launched employee stock incentive plans with the participation of middle and senior managers and excellent
employees, further improving corporate performance and continuous improvement of its value. The Company is
devoted to public charitable undertakings and actively participates in social public charitable donations. Thanks to
these measures, the Company takes a lead in corporate governance in the industry.
Currently, there is no difference between the actual status of the Company's corporate governance structure
and the standard documents on the corporate governance for listed companies published by China Securities
Regulatory Commission. The names of the policies are published on www.cninfo.com.cn. Details on the
amendments to the policies in three years before the Reporting Period are as follows:
Year of amendment Title of rules
The Articles of Association of TCL Technology Group Corporation
The Rules of Procedure for the Board of Directors of TCL Technology Group Corporation
The Rules of Procedure for the Supervisory Committee of TCL Technology Group Corporation
The Rules of Procedure for the General Meeting of TCL Technology Group Corporation
The Rules Governing the Guarantees Provided for External Parties of TCL Technology Group
2020
Corporation
The Internal Control Rules for Investment in Derivative Financial Instruments of TCL Technology
Group Corporation
The Rules Governing Securities Investment of TCL Technology Group Corporation
The Rules Governing the Use of Raised Funds of TCL Technology Group Corporation
The Articles of Association of TCL Technology Group Corporation
2021
The Rules of Procedure for the Board of Directors of TCL Technology Group Corporation
The Articles of Association of TCL Technology Group Corporation
2022 The Rules Governing Information Disclosure of TCL Technology Group Corporation
The Rules Governing the Registration of Information Insiders of TCL Technology Group Corporation
The following rules are revised during the Reporting Period and relevant rules are disclosed on
www.cninfo.com.cn:
Title of rules
The Internal Audit Charter of TCL Technology Group Corporation (March 2023)
Revised The Rules Governing Securities Investment of TCL Technology Group Corporation (March 2023)
The Internal Control Rules for Investment in Derivative Financial Instruments of TCL Technology
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Group Corporation (March 2023)
The Articles of Association of TCL Technology Group Corporation (May 2023)
Risk Management Plan for Financial Transactions Between TCL Technology Group Financial Co., Ltd.
and its Related Parties (August 2023)
Is there any material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies
□Yes No
There is no material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies.
II. The Company's Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
□ Applicable Not Applicable
III. Horizontal Competition
□ Applicable Not Applicable
IV. Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor
Meeting Type participati Date of the meeting Date of disclosure Resolutions of the meeting
on ratio
The First All proposals were adopted. Please refer
Extraord
Extraordinary to the Notice on the First Extraordinary
inary
General 15.03% January 9, 2023 January 10, 2023 General Meeting of 2023 disclosed on
general
Meeting of www.cninfo.com.cn on January 10,
meeting
2023 2023 (Notice No.: 2023-001)
All proposals were adopted. Please refer
The 2022
Annual to the Notice on Resolutions of the 2022
Annual
general 16.42% April 21, 2023 April 22, 2023 Annual General Meeting disclosed on
General
meeting www.cninfo.com.cn on April 22, 2023
Meeting
(Notice No.: 2023-029)
The Second All proposals were adopted. Please refer
Extraord
Extraordinary to the Notice on the Second
inary
General 15.57% June 16, 2023 June 17, 2023 Extraordinary General Meeting of 2023
general
Meeting of disclosed on www.cninfo.com.cn on
meeting
2023 June 17, 2023 (Notice No.: 2023-046)
The Third All proposals were adopted. Please refer
Extraord
Extraordinary to the Notice on the 3rd Extraordinary
inary
General 16.28% September 15, 2023 September 16, 2023 General Meeting of 2023 disclosed on
general
Meeting of www.cninfo.com.cn on September 16,
meeting
2023 2023 (Notice No.: 2023-057)
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights
□ Applicable Not Applicable
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
V. Performance of Duty by Independent Directors in the Reporting Period
1. General information
Increase of Decrease of
Number of Number of
shares shares Other
Position Start of End of shares held at shares held at Reason for
Name Position Gender Age during the during the increase/decrease
Status tenure tenure the beginning of the end of the change
reporting reporting (share)
the year year
period period
April 19,
Chairman
Li 2002 May 23, See the
Incumbent Male 66 814,061,096 - - 83,097,357 897,158,453
Dongsheng June 20, 2024 note below
CEO
2005
Vice
Liang Charmian November May 23,
Incumbent Male 42 - - - - - None
Weihua of the 13, 2020 2024
Board
January 9,
Director
Wang 2023 May 23, See the
Incumbent Male 49 157,661 - - 175,522 333,183
Cheng August 9, 2024 note below
COO
2021
November
Director
Shen 13, 2020 May 23,
Incumbent Male 61 - - - - - None
Haoping Senior Vice November 2024
President 14, 2020
September
Director
1, 2017
Board April 23, May 23, See the
Liao Qian Incumbent Male 43 481,306 - - 807,769 1,289,075
Secretary 2014 2024 note below
Senior Vice August 27,
President 2020
January 9,
Director
2023 May 23, See the
Zhao Jun Incumbent Male 51 200,482 - - 742,372 942,854
Senior Vice December 2024 note below
President 23, 2022
April 29, May 23,
Lin Feng Director Incumbent Male 38 - - - - - None
2022 2024
Independent November May 23,
Gan Yong Incumbent Male 76 - - - - - None
director 13, 2020 2024
Independent November May 23,
Chen Shiyi Incumbent Male 67 - - - - - None
director 13, 2020 2024
Wan Independent November May 23,
Incumbent Male 44 - - - - - None
Liangyong director 13, 2020 2024
Independent September May 23,
Liu Xunci Incumbent Male 65 - - - - - None
director 1, 2017 2024
Chairman
of the September May 23,
Zheng Tao Incumbent Male 53 - - - - - None
Supervisory 15, 2023 2024
Committee
September May 23,
Qiu Haiyan Supervisor Incumbent Female 49 - - - - - None
1, 2014 2024
Mao Employee September May 23, See the
Incumbent Male 43 229,583 - - 336,992 566,575
Tianxiang Supervisor 1, 2017 2024 note below
August 9, May 23, See the
Li Jian CFO Incumbent Female 51 294,513 - - 674,108 968,621
2021 2024 note below
Senior Vice September
Yan President 1, 2014 May 23, See the
Incumbent Male 57 1,303,302 - - 1,038,963 2,342,265
Xiaolin December 2024 note below
CTO
6, 2012
Former
Chairman
He September September
of the Former Male 58 - - - - - None
Zhuohui 2, 2015 14, 2023
Supervisory
Committee
Total -- -- -- -- -- -- 816,727,943 - - 86,873,083 903,601,026 --
Note: 1. The Company will hold a general meeting on May 24, 2024, to deliberate on matters related to the change of directorship.
2. The increase in the number of shares held by Mr. Li Dongsheng, Mr. Wang Cheng, Mr. Liao Qian, Mr. Zhao Jun, Mr. Mao
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Tianxiang, Ms. Li Jian, and Mr. Yan Xiaolin during the Reporting Period was due to the Company's shares converted from capital
reserve, as well as the non-transactional transfer of shares (which are attributable to the participants of the Phase III Global Partnership
Plan and the Employee Shareholding Plan) to their securities accounts.
During the reporting period, any resignation of directors and supervisors and dismissal of senior managers during their term
of office?
Yes □ No
On August 29, 2023, the 22nd meeting of the 7th Supervisory Board of the Company reviewed and passed the
"Proposal on Filling the Vacancy of Non-Employee Representative Supervisor of the 7th Supervisory Committee",
as Mr. He Zhuohui, Chairman of the Supervisory Committee, submitted a written resignation report to the
Supervisory Board due to work changes, requesting to resign from his positions as supervisor and chairman of the
Supervisory Committee. He will no longer hold any positions in the Company after his resignation, and his
resignation will take effect after the election of new supervisors by the Company's general meeting.
On September 15, 2023, the Company held its third extraordinary general meeting for the year 2023, reviewed
and passed the "Proposal on Filling the Vacancy of Non-Employee Representative Supervisor of the 7th Supervisory
Committee". Mr. He Zhuohui resigned as the supervisor of the Company and Chairman of the Supervisory
Committee from September 15, 2023.
Change of Directors, Supervisors and Senior Management
Applicable □ Not applicable
2. Positions
Name Office title Type of change Date of change Reason for change
Wang Cheng Director Elected January 9, 2023 Election at a general meeting
Zhao Jun Director Elected January 9, 2023 Election at a general meeting
Election at a general meeting
Supervisor and Chairman of the
Zheng Tao Elected September 15, 2023 and appointment by the
Supervisory Committee
Supervisory Committee
Former Supervisor and Chairman Change as a result of personal
He Zhuohui Former September 14, 2023
of the Supervisory Committee job arrangement
Professional background, major work experience and current post held in the Company of incumbent
director, supervisor and senior manager
Mr. Li Dongsheng, the founder of TCL who currently serves as TCL TECH’s Chairman, CEO and non-
independent director; Mr. Li has held a number of prestigious positions: Vice Chairman of the China Chamber of
International Commerce, First President of the China Manufacturing Innovation Alliance, Honorary President of
South China University of Technology Education Development Foundation, Vice President of Alumni Association
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
South China University of Technology and Visiting Professor in Wuhan University.
Mr. Liang Weihua, Vice Chairman of TCL TECH. He was born in March 1981. He holds a master's degree
and graduated from the Economics and Management School of Wuhan University with the MBA degree in
December 2012. From July 2003 to December 2010, he worked as Assistant Manager of Enterprise Management
Department and Administration Department of Huizhou Investment Management Company. From December 2010
to December 2011, he took the post of Executive Deputy General Manager of Huidong County Hongyuan Water
Supply Co., Ltd. From December 2011 to June 2016, he served as the General Manager of Huidong County
Hongyuan Water Supply Co., Ltd. From June 2016 to June 2021, he took office as Deputy General Manager of
Huizhou Investment Holding Co., Ltd. (and also served as a director of the company since August 2016). From
March 2017 to March 2022, he has been a director of Huizhou Financing Guarantee Co., Ltd.; from March 2017 to
January 2023, he concurrently served as a director of Utrust Inclusive Finance (Huizhou) Financing Guarantee Co.,
Ltd. From April 2017, he was a director at Truly (Huizhou) Smart Display Limited. Since October 2019, he has
been Chairman and General Manager of Huizhou New Materials Industry Park Investment and Construction Co.,
Ltd. Since November 2020, he has held office as Vice Chairman of TCL Technology Group Corporation and its
consolidated subsidiaries, except where the context otherwise requires. He became Chairman and General Manager
of Huizhou Innovative Investment Co., Ltd. in November 2020.
Mr. Wang Cheng, COO of TCL TECH. Born in 1974, MBA, EMBA from the University of Texas at
Arlington. Since joined TCL in 1997 and successively served in multiple management positions at TCL multimedia
overseas business, human resources director and senior vice president of TCL Group. He once worked as the CEO
of TCL Electronics from October 2017 to August 2021, and CEO of TCL Industrial Holdings from January 2019
to August 2021. From August 2021, he was appointed as COO of TCL TECH.
Mr. Shen Haoping, Non-independent Director and Senior Vice President of TCL TECH. Born in 1962, he
holds a bachelor's degree. At present, he serves as Vic Chairman and General Manager of TCL Zhonghuan
Renewable Energy Technology Co., Ltd (“TZE”) and General Manager of Tianjin Zhonghuan Electronics and
Information Group Co., Ltd. He was ranked as one of the best CEOs by Forbes China in 2022. Mr. Shen has many
years of experience in the design and manufacturing of photovoltaic mono silicon materials. He has presided over
several key large-scale R&D projects, and led TZE to win the top industry honors such as China patent excellence
award, China innovation-oriented enterprise and Forbes China potential enterprise. Under Mr. Shen’s leadership,
TZE has built a world-leading photovoltaic silicon ingot and wafer R&D, manufacturing and sales organization.
Mr. Liao Qian, Non-independent Director, Senior Vice President, and Secretary of the Board of Directors of
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
TCL TECH. He obtained a Master’s Degree and holds the Occupational Qualification Certificate of the People’s
Republic of China for Law. From August 2006 to February 2014, he worked at Guotai Junan International Holdings
Co., Ltd. and was engaged in the investment banking business in Hong Kong and Mainland China. Joining TCL
Corporation in March 2014, he is in charge of strategic planning, strategic investment and matters in relation to
domestic and overseas capital markets. He is also Chairman of Highly Information Industry Co.,Ltd, Tonly
Technology Co., Ltd. and CDOT (0334.HK); Vice Chairman of the Board of Tianjin Qiyier Communication &
Broadcasting Co., Ltd. and Director of TCL Zhonghuan Renewable Energy Technology Co., Ltd (002129.SZ).
Mr. Zhao Jun, Non-independent Director and Senior Vice President of TCL TECH. He was born in Xianyang
City, Shaanxi Province in November 1972. He graduated from Northwestern Polytechnical University with a
master's degree of engineering in polymer materials. After graduation, he served as vice president at Tianma Micro-
Electronics Group, and currently serves as Senior Vice President of TCL Tech and CEO of TCL CSOT. From April
1997 to January 2018, he worked with Tianma Micro-Electronics Group, successively serving as a pre-process
engineer, deputy manager of the quality department, director of manufacturing and quality, deputy general manager,
assistant president, and general manager and vice president of the procurement center and quality center. From May
2018 to October 2019, he joined Wuhan China Star Optoelectronics Technology Co., Ltd. as general manager and
director. From October 2019 to February 2021, he served as Vice President of TCL Tech, Senior Vice President of
TCL CSOT, General Manager of TCL CSOT Large Size Business Group and General Manager of TV Business
Department. From February 2021 to December 2022, he served as Chief Operating Officer of TCL CSOT and
presided over the overall work of the CSOT. Since December 2022, he has served as Senior Vice President of TCL
Tech and CEO of TCL CSOT.
Mr. Lin Feng, Non-independent Director of TCL TECH. He graduated from Central South University of
Economics and Law in 2011 with a master’s degree in management science and engineering. From February 2013
to May 2016, he served as project director and deputy director of the Industrial Investment Department of Hubei
Science & Technology Investment Group Co., Ltd.; from May 2016 to May 2018, he served as deputy general
manager of Wuhan Optics Valley Industrial Investment Co., Ltd.; since May 2018, he has been appointed as general
manager of Wuhan Optics Valley Industrial Investment Co., Ltd.
Mr. Gan Yong, Independent director of TCL TECH. He is a Professor Senior Engineer, metallurgist and
materials scientist and doctoral supervisor. He serves as President of the Chinese Society for Metals (CSM).
Mr. Chen Shiyi, Independent director of TCL TECH. He was born of Han ethnicity in Tiantai, Zhejiang in
October 1956. He started to work in July 1987. His titles include doctor of science, doctoral supervisor, academician
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Full Text of the Annual Report 2023 of TCL Technology Group Corporation
of the Chinese Academy of Sciences (CAS) and the World Academy of Sciences (TWAS). Currently, he is president
of the Eastern Institute for Advanced Study, a member of the 10th National Committee of the China Association
for Science and Technology, vice chairman of the 2nd Council of the China Engineering Education Accreditation
Association, vice chairman of the 11th Council of the Chinese Society of Theoretical and Applied Mechanics.
Mr. Wan Liangyong, Independent director of TCL TECH. Currently, he is a professor and a doctoral
supervisor at the School of Business Administration of South China University of Technology, and director of the
Accounting Development Research Center. He is also a council member of the Accounting Society of China (ASC),
and independent director of multiple companies.
Mr. Liu Xunci, Independent director of TCL TECH. He was born in Longhui County, Hunan Province, and
was awarded a master's degree. With the Professorial Title, he is recognized as a High-level Management Talent in
Huizhou City. In September 1976, he became an educated urban young man working in the countryside after
graduation from high school. In 1983, he started to work upon graduation. He was an associate professor, professor,
and teaching supervisor. He is now a member in the teaching supervisory panel.
Mr. Zheng Tao, Chairman of the Supervisory Committee of TCL TECH. Currently serving as the Chairman
of the Board and the Supervisor of Huizhou Investment Development Co., Ltd. From September 2011 to September
2017, served as the General Manager of Huizhou Golden Leaf Comprehensive Trade Development Co., Ltd.; from
September 2017 to June 2023, held the positions of Chairman and General Manager of Huizhou Golden Leaf
Comprehensive Trade Development Limited Liability Company; since July 2022, concurrently serving as a Director
of Huizhou Industrial Investment Development Fund Co., Ltd.; and since June 2023, has been the Chairman (Legal
Representative) and Director of Huizhou Investment Development Co., Ltd.
Ms. Qiu Haiyan, Supervisor of TCL TECH. Born in December 1975, She obtained her Bachelor's Degree
from the Central Radio & TV University in 2011. From July 1995 to March 1998, she served as a finance officer in
Huizhou Zongli Real Estate Company; from March 1998 to July 2002, she served as a finance officer at Huizhou
Trust Investment Company; from July 2002 till now, she serves as accountant, deputy manager and manager of the
Finance Department in Huizhou Investment Holding Co., Ltd.; from August 2008 to October 2023, she served as
director of Huizhou Investment Holding and Asset Management Co., Ltd.; from June 2009 to February 2013, she
concurrently served as supervisor at Huizhou Fairway Investment and Construction Co., Ltd.; from March 2014 to
March 2022, she concurrently served as an employee director of Huizhou Investment Development Co., Ltd.; since
April 2014, she has concurrently served as a Supervisor of the Fifth, Sixth, and Seventh Supervisory Committees
of the Company; and from July 2022 to October 2023, she has concurrently served as a director of Huizhou
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Industrial Investment Development Master Fund Co., Ltd.; since July 2023, she has been the CFO at Huizhou
Investment and Development Co., Ltd.
Mr. Mao Tianxiang, Employee Supervisor of TCL TECH. Mr. Mao is also Assistant President and Head of
the Audit and Supervision Department of TCL Tech. He was born in January 1980 and graduated with a bachelor
degree in July 2003. From July 2003 to June 2005, he served as Secretary at China Telecom Guangxi Guilin
Company; from July 2005 to November 2007, he served as Supervisor of PR and Communications in the Strategic
OEM Business Division and Officer in the President’s Office in the Company; since September 2014, he has worked
in TCL Tech Group and was Acting General Manager of the Electronic Devices Business Department of Techne
Group, General Manager of TCL Resource Investment, Chief Auditor of TCL CSOT, etc. Since 2019, he has
successively been a Supervisor of Tianjin Qiyier Communication & Broadcasting Co., Ltd. the Chairman of the
Supervisory Committee of Highly Information Industry Co., Ltd., and the Chief Supervisor of TCL Financial Co.,
Ltd. Since October 2020, he has been Chairman of the Supervisory Committee of TCL Zhonghuan Renewable
Energy Technology Co., Ltd (002129.SZ); since November 2020, he has been Chairman of the Supervisory
Committee of Tianjin Printronics Circuit Corporation (002134.SZ); since December 2020, he has been Assistant
President, Head of the Audit and Supervision Department of TCL Tech Group.
Ms. Li Jian, CFO of TCL TECH. Born in 1972, she has an MBA from MIT. Joined TCL in 2004, successively
serving as the capital director of TCL Multimedia Technology Holding Co., Ltd., the deputy general manager and
general manager of TCL Group Finance Co., Ltd., and now serves as the chairman of TCL Technology Group
Finance Co., Ltd. From August 2021, she is appointed as CFO of TCL TECH.
Mr. Yan Xiaolin, CTO and Senior Vice President of TCL TECH. Also serves as Dean of the Wuhan TCL
Industrial Technology Research Institute, Ltd.; Director of TCL CSOT, and Chief Scientist of TCL CSOT;
Chairman of Guangdong Juhua Printed Display Technology Co., Ltd., Chairman of TCL Microchip Technology
(Guangdong) Co., Ltd., Chairman of Xiamen Extremely PQ Display Technology Co., Ltd., Chairman of the IEC
Technical Committee on Electronic Display Devices, Vice Chairman and President of Asia of the Organic Printing
Electronics Society, and Fellow of the Society for Information Display (SID).
Positions held at the shareholding entity
Applicable □ Not applicable
Any pay received
Office title at the
End of from the
Name Name of shareholding entity shareholding Start of tenure
tenure shareholding
entity
entity?
Li Dongsheng Ningbo Jiutian Liancheng Representative August 2014 Incumbent No
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Equity Investment Partnership appointed by the
(Limited Partnership) executive partner
Wuhan Optics Valley Chairman and
Lin Feng May 2018 Incumbent Yes
Industrial Investment Co., Ltd. general manager
Huizhou Investment Holding
Chairman July 2023 Incumbent No
Co., Ltd.
Zheng Tao
Huizhou Investment
Chairman June 2023 Incumbent Yes
Development Co., Ltd.
Huizhou Investment Holding
Qiu Haiyan Workers' Director February 2014 Incumbent Yes
Co., Ltd.
Notes to positions
held at the Not applicable
shareholding entity
Positions held at other entities
Applicable □ Not applicable
Office title at other End of Pay received from
Name Name of other entities Start of tenure
entities tenure other entities
TCL Industrial Holdings Co., Ltd. Chairman September 2018 Incumbent Yes
Li Independent and
Dongsheng Tencent Holdings Limited non-executive April 2004 Incumbent Yes
director
Huizhou New Material Industrial
Chairman and
Park Investment and Construction October 2019 Incumbent No
general manager
Co., Ltd
Liang
Huizhou Innovation Investment Chairman and
Weihua November 2020 Incumbent No
Co., Ltd general manager
Huizhou Guoyou Capital Deputy General
June 2021 Incumbent Yes
Investment Group Co., Ltd Manager
Wang TCL Microchip Technology
Director May 2021 Incumbent No
Cheng (Guangdong) Co., Ltd.
Tianjin Qiyier Communication & Vice Charmian of
Liao Qian June 2019 Incumbent No
Broadcasting Co., Ltd. the Board
Hubei Xiaomi Changjiang
Industrial Investment Fund Supervisor October 2017 Incumbent No
Management Co., Ltd.
Wuhan Optical Valley Fiberhome
Lin Feng
Investment Fund Management Co., Director August 2018 Incumbent No
Ltd.
Wuhan Weineng Battery Assets
Director August 2021 Incumbent No
Co., Ltd.
Gan Yong The Chinese Society for Metals President May 2017 Incumbent Yes
Eastern Institute for Advanced
Chen Shiyi President August 2022 Incumbent Yes
Study
Independent
URTRUST Insurance Co., Ltd. February 2020 Incumbent Yes
Wan director
Liangyong Independent
Guangdong Goworld Co., Ltd October 2021 Incumbent Yes
director
Huizhou Guoyou Asset
Zheng Tao Chairman June 2023 Incumbent No
Management Co., Ltd.
Mao Tianjin Qiyier Communication &
Supervisor June 2019 Incumbent No
Tianxiang Broadcasting Co., Ltd.
Li Jian Bank of Shanghai Co., Ltd. Director January 2022 Incumbent No
TCL Microchip Technology
Yan Xiaolin Chairman May 2021 Incumbent No
(Guangdong) Co., Ltd.
Notes to
positions
Other major jobs or concurrently held jobs and resume
held at other
entities
Punishments imposed in recent three years by the securities regulator on the incumbent directors, supervisors and senior
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management as well as those who left in the Reporting Period:
Applicable □ Not applicable
For details, please refer to the relevant announcements disclosed by the Company on the designated information disclosure media
on October 29, 2022 and January 20, 2023.
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
(I) Decision-making procedure
The allowances for directors and supervisors of the Company were reviewed and approved by the Company at the second
extraordinary general meeting in 2008 and the fourth extraordinary general meeting in 2011. The remuneration for senior executives
is subject to the Company's remuneration rules.
(II) Determination basis and actual payment
1. Remuneration or allowance criteria for directors
The remuneration of executive directors: As the Company pays remuneration to executive directors, it shall not pay additional
allowances to them. The remuneration is determined as per the Company's remuneration management rules.
The allowances of non-executive directors: RMB160,000/year (tax inclusive):
The allowances of independent non-executive directors: The allowance for each independent non-executive director is
RMB160,000/year (tax inclusive), and the allowance for the convener of the Audit Committee is RMB200,000/year (tax inclusive).
The Company shall bear the travel expenses arising from the independent directors attending the Company's board and general
meetings, as well as other expenses arising from non-executive directors and independent directors' exercising their functions and
powers as per the Company's Articles of Association.
2. Remuneration or allowance criteria for supervisors
The allowance for the Chairman of the Supervisory Committee is RMB160,000/year (tax inclusive);
The allowance for the shareholder supervisor is RMB100,000/year (tax inclusive);
And as the Company pays remuneration to the employee supervisor, it shall not pay additional allowances to him/her.
The Company shall bear the travel expense arising from the shareholder supervisors attending the Company's Supervisory
Committee meetings, general meetings and board meetings (as a non-voting delegate), as well as other expenses arising from his/her
exercising his/her functions and powers as per the Company's Articles of Association.
3. Remuneration criteria for senior management
The remuneration of senior management is determined as per the Company's Articles of Association and remuneration
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management rules.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-
Remuneration
tax
Position from any
Name Position Gender Age remuneration
Status related party or
from the
not
Company
Li Dongsheng Chairman, CEO Male 66 Incumbent 1,241.97 Yes
Liang Weihua Vice Charmian of the Board Male 42 Incumbent 0 Yes
Wang Cheng Director, COO Male 49 Incumbent 970.24 No
Zhao Jun Director, Senior Vice President Male 51 Incumbent 915.53 No
Shen Haoping Director, Senior Vice President Male 61 Incumbent Note No
Director, Board Secretary and
Liao Qian Male 43 Incumbent 908.33 No
Senior Vice President
Lin Feng Director Male 38 Incumbent 0 Yes
Gan Yong Independent director Male 76 Incumbent 0 No
Chen Shiyi Independent director Male 67 Incumbent 30.13 No
Wan
Independent director Male 44 Incumbent 20.00 No
Liangyong
Liu Xunci Independent director Male 65 Incumbent 16.00 No
Chairman of the Supervisory
Zheng Tao Male 53 Incumbent 4.00 Yes
Committee
Qiu Haiyan Supervisor Female 49 Incumbent 10.00 Yes
Mao Tianxiang Employee Supervisor Male 43 Incumbent 227.32 No
Li Jian CFO Female 51 Incumbent 854.69 No
Yan Xiaolin Senior Vice President, CTO Male 57 Incumbent 895.17 No
Former Chairman of the
He Zhuohui Male 58 Former 12.00 Yes
Supervisory Committee
Total -- -- -- -- 6,105.38
Note: 1. The above amounts include fixed salaries, allowances, and performance bonuses received from the Company by the directors,
supervisors, and senior executives of the Company during their terms of office.
2. As at the end of the Reporting Period, non-executive director Mr. Liang Weihua and independent director Mr. Gan Yong had not
received their respective allowances of RMB501.3 thousand (before tax); the compensation for Mr. Chen Shiyi, an independent director
listed above, includes a portion that was not received in previous years and was distributed in this Reporting Period; non-executive
director Mr. Lin Feng gave up the allowance; Director Shen Haoping received a compensation from TZE. The specific data are subject
to the announcements of TZE.
3. In 2023, the Company took out liability insurances for all its directors, supervisors, and senior executives, with a total premium of
RMB421.8 thousand per year. The participation of the directors, supervisors, and senior executives in the Company's employee stock
ownership plan is detailed in the relevant announcements issued by the Company.
Other Information
□ Applicable Not Applicable
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VI. Performance of Duty by Directors in the Reporting Period
1. Board of Directors During the Reporting Period
Date of the Date of
Meeting Resolutions of the meeting
meeting disclosure
The 28th
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
January January 20,
the 7th 28th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
19, 2023 2023
Board of January 20, 2023 (Notice No.: 2023-004)
Directors
The 29th
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
March 30, March 31,
the 7th 29th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
2023 2023
Board of March 31, 2023 (Notice No.: 2023-011)
Directors
The 30th
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
April 27, April 28,
the 7th 30th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on April
2023 2023
Board of 28, 2023 (Notice No.: 2023-032)
Directors
The 31st
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
May 15, May 17,
the 7th 31st Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on May
2023 2023
Board of 17, 2023 (Notice No.: 2023-035)
Directors
The 32nd
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
May 31,
the 7th June 1, 2023 32nd Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on June
2023
Board of 1, 2023 (Notice No.: 2023-039)
Directors
The 33rd
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
August 29, August 30,
the 7th 33rd Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
2023 2023
Board of August 30, 2023 (Notice No.: 2023-051)
Directors
The 34th
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
September September
the 7th 34th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
28, 2023 29, 2023
Board of September 29, 2023 (Notice No.: 2023-059)
Directors
The 35th
meeting of
October
the 7th - Passed the Proposal on the Text of the Company's Third Quarter 2023 Report.
27, 2023
Board of
Directors
The 36th
meeting of All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
November November
the 7th 36th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
28, 2023 29, 2023
Board of November 29, 2023 (Notice No.: 2023-066)
Directors
The 37th
All proposals were adopted. Please refer to the Notice on Resolutions adopted at the
meeting of December December
37th Meeting of the 7th Board of Directors disclosed on www.cninfo.com.cn on
the 7th 27, 2023 28, 2023
December 28, 2023 (Notice No.: 2023-070)
Board of
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Directors
2. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
The director
Board
Board Board failed to
Total number of Board meetings
meetings meetings the attend two General
board meetings meetings attended by
Director attended director consecutive meetings
the director attended way of
through a failed to board attended
eligible to attend on site telecommun
proxy attend meetings or
ication
not
Li Dongsheng 10 1 9 - - No 1
Liang Weihua 10 2 8 - - No 3
Wang Cheng 10 2 8 - - No -
Shen Haoping 10 1 9 - - No -
Liao Qian 10 2 8 - - No 1
Zhao Jun 10 1 9 - - No -
Lin Feng 10 2 8 - - No 3
Gan Yong 10 1 9 - - No -
Chen Shiyi 10 - 10 - - No -
Wan Liangyong 10 1 9 - - No 2
Liu Xunci 10 2 8 - - No 4
Explanation for absence from the Board meetings in person for two consecutive times: None
3. Objections Raised by Directors on Matters of the Company
Whether directors raised objections on matters of the Company
□Yes No
No such cases in the Reporting Period.
4. Other information about the Performance of Duty by Directors
Whether directors adopted the proposals of the Company
Yes □ No
Explanation for the proposal adopted by directors or not
During the reporting period, the directors of the Company diligently performed their duties and obligations in accordance with
the provisions of the Company Law, the Securities Law, the Listing Rules of Shenzhen Stock Exchange, the Articles of Association, the
Rules of Procedure of the Board of Directors and other laws, regulations and rules, and put forward valuable professional opinions on
the internal control and daily operation decision-making of the Company, which effectively improved the standard operation and
scientific decision-making of the Company. The independent directors of the Company performed their duties independently and
impartially in strict accordance with the Measures for the Administration of Independent Directors of Listed Companies and relevant
laws and regulations, and issued independent and impartial opinions on major matters such as the Company's repurchase proposal,
annual profit distribution, capital reserve transferred into share capital and annual daily affiliated transaction forecast, effectively
safeguarded the legitimate rights and interests of investors, especially small and medium-sized investors.
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VII. Performance of Duties by Dedicated Committees During the Reporting Period
Date of
Meetings Important opinions Other duties Objection
Name Members the Meeting agenda
convened and proposals raised performed matters
meeting
1. 2022 Audit Plan for
Financial Statements of
TCL Technology Group
February
Corporation; The audit - None
16, 2023
2. 2022 Internal Control committee carried
Plan of TCL Technology out its work in strict
Group Corporation. accordance with the
1. Proposal on the 2022 Company Law, the
Annual Financial Report regulatory rules of
of the Company; the CSRC, the
2. Proposal on the Articles of
Wan
Summary Report of the Association and the
Liangyon
Audit Audit Committee under Rules of Procedure
g, Chen
Com 4 the Board Regarding the of the Board of
Shiyi, March 30,
mittee 2022 Annual Audit Directors. Upon - None
Wang 2023
Carried out by Da Hua thorough
Cheng
Certified Public communication and
Accountants (Special discussion, all
General Partnership); proposals were
3. Proposal on Renewing unanimously
the Engagement of the adopted
Accounting Firm.
1. Text of the Company's
August
2023 Interim Report and - None
29, 2023
Its Summary
October 1. Text of the Company's
- None
27, 2023 Third Quarter 2023
1. Proposal on the
Remuneration of the All proposals were
March 30,
Directors, Supervisors, adopted upon - None
2023
and Senior Executives in deliberation.
Gan 2022
Remu
Yong, 1. Proposal on the TCL
nerati
Wan TECH. 2021-2023
on and
Liangyon Employee Stock
Appra 2
g, Liu Ownership Plan (Phase
isal
Xunci, III) (Draft); All proposals were
Com May 31,
Wang 2. Proposal on the TCL adopted upon - None
mittee 2023
Cheng TECH. 2021-2023 deliberation.
Employee Stock
Ownership Plan (Phase
III) and the Management
Measures.
Li
Dongshen
g, Liang
Strate
Weihua, 1. Proposal on the 2022 All proposals were
gy March 30,
Wang 1 Environmental, Social adopted upon - None
Com 2023
Cheng, and Governance Report deliberation.
mittee
Liao Qian,
Shen
Haoping,
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Zhao Jun,
Chen
Shiyi
VIII. Performance of Duty by the Supervisory Committee
Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□Yes No
The Supervisory Committee raised no objections in the Reporting Period.
IX. Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-services of the Company as the parent 379
Number of in-services of the Company of major subsidiaries 74,838
Total number of in-services of the Company at the end of
75,217
period
Total number of paid employees in the Reporting Period 75,217
Number of retirees to whom the Company as the parent or its
762
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 51,686
Sales 1,974
Technical 11,313
Financial 706
Administrative 469
Management 2,141
Others 6,928
Total 75,217
Educational backgrounds
Educational background Employees
PhD 243
Master 3,788
Bachelor's degree 14,393
Junior college and others 4,097
Total 22,521
Note : The "educational backgrounds" section excludes overseas employees and front-line operators.
2. Employee Remuneration Policy
The Company implements the remuneration management on a basis of the principle of "job-determined responsibilities and salary,
and pay for performance" Fixed income is determined based on position assessment, variable income is determined based on
performance appraisal and a remuneration distribution mechanism oriented by position and performance is established inside the
Company.
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3. Employee Training Plans
On September 10, 2000, the Training Department of TCL Headquarters changed to TCL Training Institute. The Institute was
officially established. On August 16, 2005, TCL Training Institute changed its name to TCL Leadership Development Institute, which
focused on training of management talent and development of leadership. In 2015, the institute was upgraded to TCL University. In
2021, TCL University was incorporated into the Group Organization Department and renamed the Learning and Development Group,
focusing on business application and building talent pipeline for the organization. In 2023, to strengthen the accumulation of
management experience and support strategic development, TCL University was re-established with a professional operation
mechanism, positioned at carrying forward corporate culture, accumulating the experience and empowering talents, so as to contribute
to the Company's continued business success.
In 2023, the Company continuously optimized and upgraded the "Elite" development program, to build a talent pool of general
managers and directors with strategic thinking and comprehensive operating capabilities. In order to facilitate the transformation and
upgrade of the supply chain, the Company established the "Supply Chain Elite" initiative, to train supply chain experts with both
business acumen and the ability to solve problems across diverse functional areas. In support of strategic implementation, the Company
also conducted three specialized training and frontline exercises.
In resource development, the Company places great emphasis on building a training resource system in support of talent
development in all enterprises under the Group. Industry executives, outstanding management representatives, and business backbone
personnel actively participated in course development, contributing a wealth of internal TCL experience and case studies.
TCL University will continue to build a more comprehensive training system, develop a program with the characteristics of TCL,
and build a management and professional talent pool that meets the strategic requirements of the Company. TCL University is
committed to increasing the talent pool (i.e. 1:2 managers: talents), both quantitatively and qualitatively, and gradually transforming
the talent structure from a pyramid shape to a spindle.
4. Labor Outsourcing
□ Applicable Not Applicable
X. Profit Distributions to Shareholders (in the Form of Cash and/or Stock)and Share Capital
Converted from Capital Reserve
Formation, implementation or adjustment of profit distribution policy, especially cash dividend policy, in the Reporting Period
Applicable □ Not applicable
For details, see the Shareholder Dividend Reward Plan for the Next Three Years (2023-2025) disclosed by the Company on March 31,
2023.
Special explanation of cash dividend policy
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In compliance with the Company's Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due roles
Companies that do not distribute cash dividends shall disclose
the specific reasons and the measures they intend to take to Not applicable
enhance investor returns in the next step:
Non-controlling interests were able to fully express their
opinions and desires and their legal rights and interests were Yes
fully protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved were in compliance with Not applicable
applicable regulations and were transparent
During the Reporting Period, the Company made profits and the parent company's profits that were eligible for profit
distribution for shareholders were positive, but no cash dividend distribution plan was put forward.
□ Applicable Not Applicable
Final Dividend Plan and Share Capital Converted from Capital Reserve for the Reporting Period
Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 0.8
Bonus issue from capital reserves (share/10 shares) 0
Share base (share) 18,779,080,767
Cash dividends (RMB) (tax inclusive) 1,502,326,461.36
Cash dividends in other forms (e.g. share repurchase) (RMB) 247,096,745.21
Total cash dividends (including those in other forms) (RMB) 1,749,423,206.57
Distributable profits (RMB) 17,871,649,164
Total cash dividends (including those in other forms) as a
100%
percentage of total profits to be distributed (%)
Cash dividend plan
Based on the Company's capital share as at April 28, 2024, i.e. 18,779,080,767 shares eligible to the profit distribution(in case
the Company repurchases treasury shares upon equity distribution, that proportion will not be entitled to distribution), shareholders
will receive a cash dividend of RMB0.8 for every 10 shares held (tax included).
Details of profit distribution or capital reserve fund transfer plan
In connection with the actual operations, the Company proposed a profit distribution plan that for every 10 shares held on April
28, 2024, shareholders will receive a cash dividend of RMB0.8 (tax included) based on the capital shares 18,779,080,767 to be
eligible for profit distribution, (in case the Company repurchases treasury shares upon equity distribution, that proportion will not
be entitled to distribution) with a total distributed profit of RMB1,502,326,461.36 and the remaining undistributed profit carried
forward for distribution in future years.
Where any changes occur, before the implementation of the dividend plan, to the total share capital of the Company due to any
convertible bonds-to-stock programs, share repurchases, exercises of equity incentives, new share issues in refinancing, etc., the
dividend will be adjusted according to the principle of "adjusting the total distribution amount under the same distribution ratio",
subject to the actual distribution amount.
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XI. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
Applicable □ Not applicable
1. Equity Incentives
Equity Incentives Granted to Directors and Senior Management
□ Applicable Not Applicable
Appraisal of and Incentive for Senior Management
During the Reporting Period, the Company conducted performance appraisal and competency and quality assessment on the
managers, The Contract To Success (CTS) system was used for performance appraisal. In respect to the team led by each manager, the
key factors of performance appraisal included phased strategic goals and operating goals of the current period (such as profits, cash
flow, products and service quality) and key projects; the comprehensive results of each accomplished goal were considered as the main
basis for motivating managers. In that way, corporate strategies were converted into internal management activities through the process
of goal setting, implementation and accomplishment to direct all systems of the Company and serve the purpose of enhancing the
overall efficiency of the Company. The management assessment consisted of four dimensions, included manager performance,
competence, experience and quality (potential, personality and aspiration/values). An annual examination report for managers was
generated through annual performance assessment, manager review and inspection, talent appraisal development center, 360-degree
behavior interviews or online assessment, supported by key experience, personality or management style assessment, which served as
the main basis for appraising, appointing and dismissing leaders.
2. Implementation of Employee Stock Ownership Plan
Applicable □ Not applicable
All the valid employee stock ownership plans during the Reporting Period
Total Proportion to
Funding source
Scope of Number of number of total share
Name Changes for implementing
employees employees shares held capital of listed
the plan
（share） companies
The Company's
2021-2023
middle and senior Special incentive
Employee Stock Not
management and Less than 3,600 48,332,573 0.26% funds provisioned
Ownership Plan applicable
outstanding key by the Company
(Phase I)
staff
The Company's
2021-2023
middle and senior Special incentive
Employee Stock Not
management and Less than 3,600 117,132,801 0.62% funds provisioned
Ownership Plan applicable
outstanding key by the Company
(Phase II)
staff
2021-2023 The Company's Not Employees'
Less than 3,600 64,992,964 0.35%
Employee Stock middle and senior applicable legitimate income,
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Ownership Plan management and performance-
(Phase III) outstanding key based bonus or
staff other distribution
permitted by laws
and regulations
Shareholdings of Directors, Supervisors and Senior Management under the Employee Stock Ownership Plan during the Reporting
Period
Proportion to total
Beginning amount in the Ending amount in the
Name Position share capital of
Reporting Period Reporting Period
listed companies
Li Dongsheng Chairman, CEO
Wang Cheng Director, COO
Director, Senior Vice
Zhao Jun
President
Director, Board Secretary
Liao Qian About 27.07 million shares About 18.74 million shares 0.10%
and Senior Vice President
Senior Vice President,
Yan Xiaolin
CTO
Li Jian CFO
Mao Tianxiang Employee Supervisor
Changes of asset management institutions during the Reporting Period
□ Applicable Not Applicable
Changes of equity caused by the holder's disposal share during the Reporting Period
□ Applicable Not Applicable
For details on change in shareholdings from non-trading transfer by directors, supervisors and senior managers under the ESOP, please
see the "Change of Shareholdings of Directors, Supervisors and Senior Managers" in the report.
Exercise of shareholder rights during the Reporting Period
□ Applicable Not Applicable
Other relevant information and explanations of the Employee Stock Ownership Plan during the Reporting Period.
□ Applicable Not Applicable
Changes of the members of Employee Stock Ownership Plan Management Committee
□ Applicable Not Applicable
Financial impact of Employee Stock Ownership Plan on the Company during the Reporting Period and related accounting
treatment
Applicable □ Not applicable
The financial, accounting treatment and taxation involved in the Company's shareholding plan shall be implemented according
to laws and regulations and normative documents on financial systems, accounting standards, taxation systems, etc. The holder of the
shareholding plan shall pay the personal income tax generated due to the shareholding plan according to law, and can choose to sell
the corresponding amount of shares to the shareholding plan to cover personal income tax. The remaining shares will be attributed to
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individuals.
Termination of Employee Stock Ownership Plan during the Reporting Period
Applicable □ Not applicable
Based on the agreements under the Phase III Global Partner Program (Draft), the shares attributable to employees have been fully
vested, sold and transferred to employees at the end of the reporting period. In March 2024, shares attributed to the Company in the
scheme of the current period were sold.
3. Other Employee Incentives
□ Applicable Not Applicable
XII. Construction and Implementation of Internal Control System During the Reporting
Period
1. Construction and Implementation of Internal Control System
In accordance with the provisions of internal control standard system, the Company establishes, improves and effectively
implements internal controls, reasonably ensures the legal compliance of business management, asset security, authenticity and
integrity of financial statements and relevant information, improves business efficiency and effectiveness, and promotes the realization
of development strategy.
2. Material Internal Control Weaknesses Identified in the Reporting Period
□Yes No
XIII. Management and Control of Subsidiaries by the Company During the Reporting Period
□ Applicable Not Applicable
XIV. Internal Control Evaluation Report or Independent Auditor's Report on Internal
Controls
1. Internal Control Evaluation Report
Disclosure date of the internal control
April 30, 2024
self-evaluation report
Index to the disclosed internal control
http://www.cninfo.com.cn
self-evaluation report
Evaluated entities combined assets as a
98%
percentage of consolidated total assets
Evaluated entities combined revenue as a
98%
percentage of consolidated revenue
Identification standards for internal control weaknesses
Weaknesses in internal controls over Weaknesses in internal controls not
Category
financial reporting related to financial reporting
Material weaknesses: (1) an invalid Material weaknesses: (1) material
Nature standard
control environment; (2) fraud of violations of the country's laws or
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directors, supervisors and senior regulations in the Company's operating
management; (3) any material activities; (2) any material decision-
misstatement of financial reporting of the making error that is caused by an
current period which is identified by the irrational decision-making procedure and
registered accountants but which the causes material property loss to the
Company failed to report; and (4) invalid Company; (3) a massive loss of the key
internal control supervision by the Audit managerial or technical personnel; and (4)
Committee and the internal audit organ. frequent negative news coverage that
Serious weaknesses: A single weakness causes great concern for the regulatory
or a group of weaknesses which are less administration and a material long-lasting
serious than a material weakness but impact on the Company's brand and
could still cause deviation from the reputation.
control objectives Serious weaknesses: A single weakness
Common weaknesses: Other internal or a group of weaknesses which are less
control weaknesses that are neither serious than a material weakness but
material nor serious could still cause deviation from the
control objectives
Common weaknesses: Other internal
control weaknesses that are neither
material nor serious
Material weaknesses: misstatements ≥5%
of profit before tax;
Serious weaknesses: 3% of profit before
Quantitative standard tax ≤misstatements <5% of profit before Not applicable
tax;
Common weaknesses: misstatements
<3% of profit before tax
Number of material weaknesses in
None
internal controls over financial reporting
Number of material weaknesses in
internal controls not related to financial None
reporting
Number of serious weaknesses in
None
internal controls over financial reporting
Number of serious weaknesses in
internal controls not related to financial None
reporting
2. Independent Auditor's Report on Internal Controls
Applicable □ Not applicable
Opinion paragraph in the independent auditor's report on internal controls
In our opinion, TCL Technology Group Corporation maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2023, based on the Basic Rules on Enterprise Internal Controls and other applicable rules.
Independent auditor's report on internal The Internal Control Audit Report of TCL Technology Group Corporation disclosed at
controls disclosed or not www.cninfo.com.cn dated April 30, 2024
Disclosure date April 30, 2024
Index to such report disclosed http://www.cninfo.com.cn
Type of the auditor's opinion Unmodified opinions
Material weaknesses in internal controls
No
not related to financial reporting
Indicate whether any modified opinion is expressed in the independent auditor's report on the Company's internal controls.
□Yes No
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Indicate whether the independent auditor's report on the Company's internal controls is consistent with the internal control self-
evaluation report issued by the Company's Board.
Yes □ No
XV. Ad-hoc self-inspection and rectification for corporate governance of listed companies
Not applicable
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Part V Environmental and Social Responsibility
I. Major Environmental Issues
Whether the listed company and its subsidiaries are major polluters announced by the environmental protection department
Yes □ No
Industrial Discharge Standards, and Details on Pollutant Discharge from Production and Operation
Key
Number Exces
Name of the pollutants Distribution Governing Approved
Major Way of of Discharge sive
Company or and types of of discharge discharge Total discharge total
pollutants discharge discharg intensity discha
subsidiary specific outlets standards discharge
e outlets rge
pollutants
Continuously 86.92mg/L 500mg/L 106.37t 129.6t None
COD 2
discharged to Within 10.67mg/L 100mg/L 22.73t 449.82t None
Suzhou China
CSOT Suzhou
Star
Waste water Environmenta CSOT
Optoelectronics
pollutants Ammonia l Technology Sewage
Technology Co., 1 1.15mg/L 6mg/L 3.34t 22.68t None
nitrogen Wastewater Treatment
Ltd.
Treatment Plant
Plant
Continuously 15.539mg/
COD 1 500mg/L 2.7694t 96.335t None
discharged to L
Suzhou China Suzhou
South gate
Star Waste water Industrial
of the plant
Optoelectronics pollutants Ammonia Park First
1 area 0.316mg/L 45mg/L 0.0349t 5.65t None
Display Co., Ltd. nitrogen Sewage
Treatment
Plant
Discharged to
North of the
COD Guangming 1 153mg/L 260mg/L 105.694t 2071.12t None
plant area
Waste water Sewage Plant
pollutants Discharge to
TCL China Star Artificial
COD Maozhou 1 15mg/L 30mg/L 52.108t 174.89t None
Optoelectronics wetland
River
Technology Co.,
Discharged to
Ltd.
the
Waste gas Nitrogen
atmosphere in 50 Plant roof 1.5mg/Nm3 120mg/Nm3 5.57t None None
pollutants oxides
an organized
manner
Discharged to Southeast
Waste water
Shenzhen China COD Guangming 2 corner of 42mg/L 110mg/L 252.725t 1077.8t None
pollutants
Star Sewage Plant the plant
Optoelectronics Discharged to
Display the
Waste gas Nitrogen
Technology Co., atmosphere in 10 Plant roof 4.4mg/Nm3 120mg/Nm3 21.31t 38.86t None
pollutants oxides
Ltd. an organized
manner
COD 1 t3 8.52mg/L 400mg/L 88.62t 315.78t None
Wuhan China
Waste water Continuous Northwest
Star Ammonia
pollutants discharge 1 corner of 0.165mg/L 30mg/L 0.83t 31.579t None
Optoelectronics nitrogen
the plant
Technology Co.,
Waste gas Nitrogen Continuous t3
Ltd. (t3) 2 89.5 mg/m3 150 mg/m3 2.43t 10.17t None
pollutants oxides discharge Northwest
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Key
Number Exces
Name of the pollutants Distribution Governing Approved
Major Way of of Discharge sive
Company or and types of of discharge discharge Total discharge total
pollutants discharge discharg intensity discha
subsidiary specific outlets standards discharge
e outlets rge
pollutants
corner of
the plant
Wuhan China 8.3233mg/
COD 1 t5 400mg/L 12.31t 524.56t None
Star L
Waste water Continuous Northeaster
Optoelectronics
pollutants Ammonia discharge n corner of 0.2767mg/
Technology Co., 1 30mg/L 0.41t 52.456t None
nitrogen the plant L
Ltd. (t5)
COD 1 t4 8.52mg/L 400mg/L 353.566125t 570.8t None
Wuhan China Waste water Continuous Northwest
Ammonia
Star pollutants discharge 1 corner of 0.165mg/L 30mg/L 1.31t 57.1t None
nitrogen
Optoelectronics the plant
Display t4
Technology Co., Waste gas Nitrogen Continuous Northwest Not
2 150 mg/m3 / 2.021t None
Ltd. (t4) pollutants oxides discharge corner of inspected
the plant
DB12/356-
Chemical 2018
General
oxygen Comprehen
Organized 1 discharge 160.84t 411.02t None
requiremen sive Sewage
TianJin outlet
t Discharge
Zhonghuan As per
Waste water Standard
Advanced emission
pollutants DB12/356-
Material&Techn standard
2018
ology Co., Ltd. General
Ammonia Comprehen
Organized 1 discharge 6.53t 22.17t None
nitrogen sive Sewage
outlet
Discharge
Standard
Chemical
General
oxygen
Organized 1 discharge DB12/356- 3.47t 42.19t None
requiremen
outlet 2018
t
Tianjin Huan'Ou As per Comprehen
Waste water General
Material&Techn Ammonia emission sive
pollutants Organized 1 discharge 0.03t 2.14t None
ology Co., Ltd. nitrogen standard Sewage
outlet
Discharge
General
Total Standard
Organized 1 discharge 1.779t 2.7t None
nitrogen
outlet
Chemical
General
oxygen
Organized 1 discharge DB12/599- 9.05t 20.08t None
requiremen
outlet 2015
t
Discharge
General
Tianjin Huanzhi Total Standard of
Organized 1 discharge As per 0.02t 0.45t None
New Energy Waste water phosphorus Pollutants
outlet emission
Technology Co., pollutants for
General standard
Ltd. Ammonia Municipal
Organized 1 discharge 0.09t 1.43t None
nitrogen Wastewater
outlet
Treatment
General
Total Plant
Organized 1 discharge 0.70t 8.78t None
nitrogen
outlet
Tianjin Huanou Waste water Chemical General As per GB 39731-
Organized 1 12.68t 147.21t None
New Energy pollutants oxygen discharge emission 2020
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Key
Number Exces
Name of the pollutants Distribution Governing Approved
Major Way of of Discharge sive
Company or and types of of discharge discharge Total discharge total
pollutants discharge discharg intensity discha
subsidiary specific outlets standards discharge
e outlets rge
pollutants
Technology Co., requiremen outlet standard Discharge
Ltd t Standard of
General Water
Total
Organized 1 discharge Pollutants 0.04t 2.19t None
phosphorus
outlet for
General Electronic
Ammonia
Organized 1 discharge Industry 0.08t 15.11t None
nitrogen
outlet DB12/356-
2018
Comprehen
General
Total sive
Organized 1 discharge 4.75t 15.92t None
nitrogen Sewage
outlet
Discharge
Standard
Integrated
Particulate
Emission
matter, Rooftops of
As per Standard of
Waste gas nitrogen Not plants and
Multiple emission Air Not exceeding Standard None
pollutants oxides, organizing production
standard Pollutants
VOCs, workshops
GB16297-
fluoride
1996
COD,
Inner Mongolia ammonia
Zhonghuan Solar nitrogen,
Material Co., other GB8978-
Ltd. specific 1996
pollutants General As per Comprehen
Waste water
(total Organized 1 discharge emission sive Not exceeding Standard None
pollutants
phosphorus outlet standard Sewage
, pH, Discharge
suspended Standard
solids,
BOD5,
fluoride)
Discharged to
collective
GB/T
Total industrial DW001DW
2 31962 0.14t 1.39t None
phosphorus sewage 003
Water
treatment
Quality
plant
Standard
Discharged to
Zhonghuan for Sewage
collective
Advanced As per Discharged
Waste water Total industrial DW001DW
Bandaoti 2 emission into Urban 9.86t 151.48t None
pollutants nitrogen sewage 003
Technology Co., standard Sewers
treatment
Ltd. GB8978-
plant
1996
Discharged to
Comprehen
collective
sive Sewage
industrial DW001DW
COD 2 Discharge 62.56t 1815.79t None
sewage 003
Standard
treatment
plant
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Key
Number Exces
Name of the pollutants Distribution Governing Approved
Major Way of of Discharge sive
Company or and types of of discharge discharge Total discharge total
pollutants discharge discharg intensity discha
subsidiary specific outlets standards discharge
e outlets rge
pollutants
Discharged to
collective
Ammonia industrial DW001DW
2 0.11t 134.69t None
nitrogen sewage 003
treatment
plant
Chemical
General
oxygen
Organized 1 discharge 11.43t 44.41t None
requiremen
outlet
t
General
GB 30484-
Flouride Organized 1 discharge 1.24t 1.64t None
2013
outlet Discharged
Huansheng Solar Discharge
Waste water General according
(Jiangsu) Co., Ammonia Standard
pollutants Organized 1 discharge to the 0.002t 0.06t None
Ltd. nitrogen for Battery
outlet standard
Industry
General
Total Pollutants
Organized 1 discharge 0.15t 0.2t None
nitrogen
outlet
General
Total
Organized 1 discharge 0.004t 0.006t None
phosphorus
outlet
Chemical Discharged to
General
oxygen urban sewage
1 discharge 52.73t 72.72t None
requiremen treatment
outlet
t plant
GB39731-
Discharged to
General 2020
Ammonia urban sewage
1 discharge Discharge 0.19t 1.1t None
Wuxi Zhonghuan nitrogen treatment Discharged
outlet Standard of
Applied Waste water plant according
Water
Materials Co., pollutants Discharged to to the
General Pollutants
Ltd. Total urban sewage standard
1 discharge for 4.32t 6.91t None
nitrogen treatment
outlet Electronic
plant
Industry
Discharged to
General
Total urban sewage
1 discharge 0.36t 0.55t None
phosphorus treatment
outlet
plant
Disposing of pollutants
During the Reporting Period, the pollutants generated by the Company and its subsidiaries were discharged in accordance with the
requirements of the pollutant discharge permit after treated by corresponding pollutant treatment facilities. All kinds of pollutant
treatment facilities were in normal operation, and there were no incidents of notification or punishment received from government
environmental supervision agencies. The discharge and disposal of waste water, waste gas, solid waste, and plant boundary noise
generated in the operating process complied with the laws and regulations of the country and the place where the operation was located.
The Company's waste water includes domestic waste water and industrial waste water, of which domestic waste water is
discharged into the local municipal sewage treatment pipe network after being pre-treated with oil separation and septic treatment;
industrial waste water enters different treatment systems according to its characteristics, and is discharged after physical, chemical and
biochemical treatment.
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The air pollutants produced by the Company are mainly process waste gas in the production process. For different types of waste
gases, the Company has constructed corresponding waste gas treatment systems, such as a waste gas stripping system, acidic waste gas
treatment system, alkaline waste gas treatment system, organic waste gas treatment system, waste gas treatment system for waste water
treatment station, etc. For the collection of waste gases through pipelines to the corresponding waste gas treatment system, where waste
gases are discharged at a high altitude after meeting relative standards. The concentration and total amount of waste water and exhaust
gas discharged meet the relevant national and local standards.
The solid wastes generated by the Company include general waste, hazardous waste and domestic garbage, of which, hazardous
wastes are treated by an entrusted qualified hazardous waste disposal agency according to the regulations; general wastes are recycled
and disposed of by a resource recycling manufacturer after being classified in the plant area; domestic garbage is handed over by
qualified units to a domestic garbage landfill for sanitary landfill. All of the above disposals have been carried out according to laws
and regulations.
The factory noises generated by the Company come from the mechanical noises of production and power equipment, including
refrigerators, cooling towers, air compressors, fans, various pumps, etc. The Company reduces the impact of noise on the surrounding
environment by the use of low-noise equipment, vibration reduction, noise reduction, etc., and noise reduction measures such as sound
insulation and sound absorption in the factories and equipment rooms. The monitoring results show that the Company's factory noise
emissions can stably reach the standards.
Environmental Self-Monitoring Program
The Company implements on-line monitoring of various pollutants based on the environmental impact assessment approval and
pollution discharge permit, clarifies monitoring indicators, execution standards and their limits, conducts quarterly testing of various
pollution factors such as waste water/waste gas/underground water/plant boundary noise, and develops a self-monitoring plan based
on the Company's own situation, as well as regularly employing qualified third party to test various pollution factors with the reports
kept on file. In addition to self-monitoring, the local environmental protection department also infrequently supervises the
environmental testing to ensure that emissions meet standards.
Emergency Response Plan for Environmental Incidents
The Company regularly carries out environmental risk assessment and emergency material survey, prepares an Emergency
Response Plan for Environmental Incidents and submits it to the local environmental protection department for recordation after being
reviewed by experts. The Company regularly delivers employee training on emergency plans and carries out emergency drills for
environmental emergencies to ensure timely and accurate response to environmental pollution emergencies.
The Plan shall be subject to changes in line with the actual situation and changes of various companies under the Group in a timely
manner, and shall be prepared again in case of major changes or after every 3 years.
Relevant information on investments in environmental governance and protection and payments of environmental protection taxes
The Company pays the environmental protection taxes every quarter by the Financial Department, and the investments in
environmental protection are calculated on an annual basis.
Measures taken to reduce its carbon emissions and their effects during the Reporting Period
Applicable □ Not applicable
To address the challenge of global climate change and actively respond to the national strategic requirements of "emission peak"
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and "carbon neutrality", the Company officially issued a Carbon Neutrality White Paper on the GPC 2023 on July 6, 2023, and unveiled
the TCL Green, an action plan for carbon neutrality, making a "3050" pledge to achieve emission peak by 2030 and carbon neutrality
by 2050. To deliver this commitment, TCL TECH. established an ad-hoc climate change response team, developed well-defined carbon
reduction pathway and greenhouse gas management strategies, and continuously increased the use of renewable energy and the overall
energy efficiency. TCL Technology Group managed its overall greenhouse gas emissions from five aspects: supervision of carbon
accounting, carbon reduction management, carbon asset pooling, carbon trading services and carbon finance support. In addition, the
Company also carried out the ISO 14064 Greenhouse Gas Accounting and Verification through third-party agencies, completed 2023
carbon verification and developed relevant improvement measures, as well as conducted annual self-evaluation to ensure the targets
achieved.
In terms of energy management, a sound energy management system has been established for the main subsidiaries of TCL TECH.,
with multiple measures to proactively tap into the technology alternatives to reduce energy consumption. The Company also passed
the ISO50001 certification. The units of TCL CSOT have implemented measures to reduce energy consumptions by process-based
energy savings, energy conservation management and parameters optimization. In 2023, the Company carried out 638 energy
conservation projects, saving 499 million kWh, and reducing carbon emission of 28.46 tons. Besides, TZE took an active stance to
develop energy conservation technologies to enhance its capabilities in saving energy and water in a full scale. In 2023, the Company
carried out 57 water conservation projects, saving 65 million kWh and saving 11.0759 million m of water.
Companies under TCL TECH. continue to develop and utilize renewable energy. TCL CSOT maximized its rollout of the rooftop
PV. At the end of the Reporting Period, TCL CSOT has self-built capacity of 123.79MW generating a total of 100,486.33Mwh, and
purchased 42.45 million kWh green power certificate in 2023. TZE has set "100% renewable electricity" as its commitment to
sustainable development and a long-term goal for production and operation electricity consumption. In 2023, it achieved 100%
coverage of distributed photovoltaic power generation systems on rooftops of its plants. It plans to build photovoltaic power stations
with a total capacity of over 4GW by 2027 to directly supply its plants in Inner Mongolia and Ningxia, and to build a green
manufacturing system featuring high efficiency, cleanness, low carbon, and circulation, and to set a benchmark of zero-carbon plants
worldwide.
TCL Technology prioritizes the R&D of clean technologies and the manufacturing of environmentally friendly, low-carbon
products. These initiatives are considered a critical pillar for achieving sustainable development and a key strategic focus for the
Company's overall operations. The Company continuously updates green product design and production technologies, and promotes
energy transformation. Ten display panels manufactured by TCL CSOT have been awarded the title of "Green Design Product" selected
on the Ministry of Industry and Information Technology's "Green Manufacturing List", and TCL CSOT Shenzhen has been recognized
as a "National Demonstration Enterprise for Green Design of Industrial Products". TZE's G12 and shingle solar panels have both been
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certified for their carbon footprint by authoritative institutions, offering customers products that are both high-performing and low-
carbon. Based on life cycle assessments, TZE's annual photovoltaic product shipments contribute significantly to a clean energy future.
These products are estimated to generate over 4 trillion kWh of clean electricity throughout their life cycle, which translates to a
reduction of approximately 2 billion tons of carbon dioxide equivalent emissions, which aligns with the Company's commitment to
"zero-carbon energy" and drives carbon neutrality across the value chain ecosystem.
In December 2023, TCL attended the Blue Zone Finance Event of the 28th Conference of the Parties (COP28) to the United
Nations Framework Convention on Climate Change (UNFCCC) and delivered a keynote speech. TCL shared its corporate strategies
in response to climate change and its practical experiences in achieving sustainable development. The Company joined hands with
global enterprises to engage in climate action, exploring green financial solutions to address climate change and biodiversity crises in
a collaborative manner.
Other environment information that should be publicly disclosed
None
II. Social Responsibility
TCL TECH. actively responds to national calls and focuses on four major areas (i.e. science and technology, education, culture,
and targeted relief), continuously strengthens investment in public charitable undertakings, integrates public charitable resources, and
contributes to promoting social equity, consolidating and expanding achievements of poverty alleviation and, and achieving rural
revitalization and common prosperity. Leveraging its industrial strengths and resources, the Company has launched a series of
initiatives, including "TCL Photovoltaic Low-Carbon Campus," "TCL Smart Classroom," "A.I. Homecoming," and "Little Music+."
Upholding the development concept of "dual-carbon", the TCL Charity Foundation has partnered with TZE to spearhead the
"TCL Photovoltaic Low-Carbon Campus" program since 2022. In 2023, the foundation implemented a multifaceted photovoltaic
initiative to promote sustainable development and education in Inner Mongolia, including donating photovoltaic rooftop power
generation systems and their associated 25-year electricity generation income to nine schools in Hohhot and Linger County. A pilot
project was also established at Hohhot No. 1 Middle School through a social value investment approach. Building on this foundation
of rural and urban deployments, the project expands its reach to encompass diverse scenarios. It further aims to foster photovoltaic
environmental education and establish a systematic new model for photovoltaic-assisted education, and advance the deep integration
of science and technology with public welfare undertakings.
To facilitate the integration between technologies and public wellness and empower education equality with technologies, TCL
Charity Foundation establishes TCL Smart Classrooms in urban and rural schools, including smart instructional equipment and
software, to build multimedia smart classrooms, tailored and simultaneous classrooms between "urban and rural areas". In 2023, TCL
Smart Classrooms successfully implemented at several schools, including Shenzhen Nanshan No. 2 Foreign Language School (Group)
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Hyde School, Chiwan School, and Guangxi Guilin Longsheng Experiment Middle School, benefiting over 5,800 students.
In 2019, TCL Charity Foundation cooperated with the TCL Industrial Research Institute to launch the "A.I. Home" project,
developed and designed the "Eagle Storytelling Machine", and delivered the "Eagle Story Club" campaign in rural schools, bringing
together children from rural schools, to improve their wellbeing and help them with growing up. In 2023, the Foundation distributed
over 300 customized "Eagle Storytelling Machines" to left-behind children and migrant children; the sixth batches of pilot schools
were selected for the "Eagle Story Club" project. A total of 34 schools from 16 provinces including Xinjiang, Tibet, Guizhou, were
selected as the "Eagle Story Club" pilot schools, and a total of 173 story boxes, accumulating the number to 293, were distributed,
benefiting more than 26,000 students.
To address the shortage of high-quality music education resources for children, TCL Charity Foundation and the Education
Foundation of the Beijing Central Conservatory of Music launched the "Little Music++" project, developed and designed the "Little
Snow Music Machine", and carried out "Little Snow Music Class" in the rural schools to introduce both Chinese and international
famous music works and appreciation to children who lack music resources and motivate kids to develop positive and optimistic
characters. In 2023, the sixth batches of pilot schools were selected for the "Little Snow Music Class" project. A total of 35 schools
from 15 provinces including Ningxia, Guangxi, Henan, were selected as the "Little Snow Music Class" pilot schools, and a total of 179
music boxes were distributed, benefiting more than 9,000 students.
Demonstrating a steadfast commitment to the educational development, the TCL Charity Foundation implemented a novel,
pyramid-structured university donation program at the South China University of Technology in 2022, which ensures long-term,
sustainable support for institutions of higher learning. Expanding its reach in 2023, the foundation established partnerships with six
prestigious Chinese universities. Through these collaborations, the TCL Charity Foundation provided funding for nine TCL Science
and Technology Innovation Fund projects, awarded five TCL Young Scholar fellowships, and supported 198 students through the
Huameng Scholarship program.
III. Consolidating and Extending the Achievements of Poverty Alleviation and Pushing
Forward Rural Revitalisation
To promote the development of rural education, TCL Charity Foundation continues to implement the "TCL Hope Project
Candlelight Award Plan" to recruit and encourage rural teachers to stay in their jobs and contribute to rural education. The project
solicited excellent teachers across the country. Each of the winners received a personal award worth RMB9,500, including a cash
reward and 7-day offline "Candlelight Class" training. The 9th "TCL Hope Project Candlelight Prize Program", held in 2023,
recognized 400 excellent rural teachers who were selected from counties that serve as the key counties in the National Rural
Revitalization, the targeted support counties of the Communist Youth League Central Committee, and the pairing support areas of
Shenzhen. Since its implementation in 2013, this project has been successfully implemented for nine sessions, with project applicants
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from 523 counties in 23 provinces across the country. More than 3400 outstanding rural teachers from 3000 schools have won the
awards. A total investment of over RMB46 million has been made in this project.
In addition, TCL Charity Foundation continued to launch projects such as targeted assistance and community charity. It supported,
consolidated and expanded the poverty alleviation achievements, built harmonious urban and rural communities, and contributed to
social equity and harmonious development. With a focus on rural communities, the Company supported rural development through
financial donations. It has carried out donation activities in targeted poverty alleviation villages in Guizhou, Ningxia, and Huizhou.
The Company promoted rural revitalization through cultural co-creation, and developed the "TCL Chen Xiangbo Aesthetic Education
Space" in No. 325 village, Xunwu County, Jiangxi Province, to carry out various cultural and artistic activities in the immersive space
so as to improve the cultural and artistic literacy of local residents. Also, rural public charitable projects were implemented, such as
"Rural Elderly Photography Activities" and "TCL Volunteer Public Education Trip to Tibetan Areas of Qinghai Keba", to push the
progress of cultural and ethical development in rural areas from multiple dimensions.
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Part VI Significant Events
I. Fulfillment of Commitments
1. Commitments of the Company's Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Entities Fulfilled
in the Reporting Period or Overdue at the Period-End
Applicable □ Not applicable
Date of
Type of
Commitment Promisor Details of commitment commitment Term of commitment Fulfillment
commitment
making
1) I shall avoid horizontal competition
between the companies, enterprises or
other business organizations that I
About own, control, control with others, have
horizontal significant influence on and the
During the tenure of
competition, Company with its subsidiaries; and 2)
August 30, the Company's In continuous
Li Dongsheng related-party I shall reduce and control transactions
2013 director, supervisor or performance
transaction and of related parties between the
senior management
capital companies, enterprises or other
occupation business organizations that I own,
Commitments made in control, control with others, or have
refinancing significant influence on and the
Company with its subsidiaries.
Citic Securities Company Limited,
Nuode Asset Management Co., Ltd.,
6 months from the
Guotai Junan Securities Co., Ltd.,
date of listing of the
Everbright Securities Company Limited, About The shares of TCL TECH subscribed
December 5, new shares (the issue
UBS AG, Caitong Fund Management restriction on shall not be transferred within 6 Fulfilled
2022 date of restricted
Co., Ltd., GF Securities Co., Ltd., sales of shares months from the date of listing.
shares is June 26,
Haitong Securities Co., Ltd.,
2023)
Perseverance Asset Management
Partnership (Limited Partnership) -
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Gaoyi Xiaofeng No. 2 Zhixin Fund,
China Life Asset Management Co., Ltd.
- China Life Asset Management - Bank
of China - China Life Asset - PIPE2020
Insurance Asset Management Product,
China Southern Asset Management Co.,
Ltd., Shen Ruijin, Dacheng Fund
Management Co., Ltd., Golden Eagle
Asset Management Co., Ltd., Huaxia
Life Insurance Co., Ltd., Taikang Asset
Management Co., Ltd. - Taikang Life
Insurance Co., Ltd. - Unit Link -
Industry Configuration, Guang Dong
Zheng Yuan Private Fund Investment
Management Co., Ltd. - Zhengyuan
Saturday Private Equity Investment
Fund, Bank of Communications
Schroder Fund Management Co., Ltd.,
Foresight Fund Co., Ltd.
1. Before and after this transaction,
there was no horizontal competition
between me/this partnership and the
enterprises controlled by me/this
partnership and TCL Group and the
main businesses of its affiliated
enterprises.
2. After this transaction, I/this
partnership will take active measures
to avoid any business or activity that
The largest shareholder of the listed competes or may constitute During the period of
About avoiding
Commitments made in company and person acting in concert competition with the main business of December 7, being the largest In continuous
horizontal
selling major assets (Mr. Li Dongsheng and Jiutian TCL Group and its affiliated 2018 shareholder of the performance
competition enterprises, and will urge the
Liancheng) Company
enterprises controlled by me/this
partnership to avoid any business or
activity that competes or may
constitute competition with the main
business of TCL Group and its
affiliated enterprises.
3. If I/this partnership and the
enterprises controlled by me/this
partnership obtain the opportunity to
engage in new business, which
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constitutes or may constitute
horizontal competition with the main
business of TCL Group and its
affiliated enterprises. I/this partnership
will, when it is possible, try my/our
best to make this business opportunity
available to TCL Group or its
affiliated enterprises in the first place
based on reasonable and fair terms and
conditions.
4. If the business of mine/this
partnership and the enterprises
controlled by me/this partnership
coincides or may constitute horizontal
competition with TCL Group's
business due to my/this partnership's
investment demand or TCL Group's
business development, I/this
partnership and the enterprises
controlled by me/this partnership
agree to solve the resulting horizontal
competition within a specific time
limit since as it is determined.
5. During the period of being the
largest shareholder of TCL Group, the
aforementioned commitment is
unconditional and irrevocable. If I/this
partnership violate the aforementioned
commitments, I/this partnership will
make comprehensive, timely and full
joint and several compensation for the
losses to TCL Group caused thereby.
1. I/this partnership will minimize the
related party transactions between
me/this partnership and the enterprises
Commitments controlled by me/this partnership and
The largest shareholder of the listed TCL Group and its affiliated During the period of
on reducing and
company and person acting in concert enterprises. December 7, being the largest In continuous
regulating
(Mr. Li Dongsheng and Jiutian 2. For inevitable or reasonable related 2018 shareholder of the performance
related party party transactions, I/this partnership
Liancheng) Company
transactions and the enterprises controlled by
me/this partnership and TCL Group
and its affiliated enterprises will
conduct them according to fair market
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principles and normal commercial
conditions, so as to ensure the fairness
of the related party transaction price,
and will perform the decision-making
procedures for related party
transactions according to the law, to
ensure that the related party
transactions will not be used to
illegally transfer TCL Group's funds
or to damage the legitimate rights and
interests of TCL Group and its
shareholders.
3. I/this partnership and the enterprises
controlled by me/this partnership will
not ask TCL Group and its affiliated
enterprises to give more favorable
conditions than those that can be
offered to an independent third party
in any fair market transaction.
4. During the period of being the
largest shareholder of TCL Group, the
aforementioned commitment is
unconditional and irrevocable. If I/this
partnership violate the aforementioned
commitments, I/this partnership will
make comprehensive, timely and full
joint and several compensation for the
losses to TCL Group caused thereby.
After this transaction, I/this
partnership will continue to exercise
shareholder's rights according to laws,
regulations and the Articles of
Association of TCL Group, and
Commitments maintain the independence of TCL
The largest shareholder of the listed on maintaining Group in terms of assets, personnel, During the period of
company and person acting in concert the finance, business and institutions. December 7, being the largest In continuous
(Mr. Li Dongsheng and Jiutian independence of I/this partnership will ensure: 2018 shareholder of the performance
Liancheng) listed (I) The independence of TCL Group Company
personnel.
companies
I/this partnership promise(s) to
maintain personnel independence with
TCL Group. TCL Group's senior
management, including the general
manager, deputy general manager,
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chief financial officer, and secretary of
the board of directors, shall not hold
positions other than directors and
supervisors in my/this partnership's
subordinate wholly-owned, controlled
or other enterprises with actual control
(hereinafter referred to as "subordinate
enterprises"), and shall not be paid in
my/this partnership's subordinate
enterprises. The financial personnel of
TCL Group shall not work part-time in
my/this partnership's subordinate
enterprises.
(II) The independence and integrity of
TCL Group's assets.
1. The independence and integrity of
TCL Group's assets.
2. TCL Group does not have any funds
or assets occupied by me/this
partnership and my/this partnership's
subordinate enterprises.
(III) The financial independence of
TCL Group.
1. TCL Group establishes an
independent financial department and
an independent financial accounting
system.
2. TCL Group has a standardized and
independent financial accounting
system.
3. TCL Group opens an independent
bank account and does not share a
bank account with me/this partnership.
4. The financial personnel of TCL
Group shall not work part-time in
my/this partnership's subordinate
enterprises.
5. TCL Group can make independent
financial decisions, and I/this
partnership shall not interfere with the
use of TCL Group's funds.
(IV) The institutional independence of
TCL Corporation.
1. TCL Group has an independent and
complete organization which can
operate independently.
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2. TCL Group's office and premises
for production and operations are
separated from my subordinate
enterprises/this partnership.
3. The Board of Directors, Board of
Supervisors and various functional
departments of TCL Group operate
independently, and have no
subordinate relationship with this
partnership's functional departments.
(V) The business independence of
TCL Group.
1. I/this partnership promise(s) to
maintain the business independence of
TCL Group after this transaction.
2. TCL Group has the assets,
personnel, qualifications and ability to
independently carry out business
activities, and has the ability to operate
independently in the market.
If TCL Group suffers losses due to the
violation of commitments under the
letter of commitment by me/this
partnership or my/this partnership's
subordinate enterprises, I/this
partnership will bear the
corresponding compensation liability
according to the law.
Fulfilled on time Yes
Specific reasons for
failing to fulfill
Not applicable
commitments on time and
plans for next steps
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2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
Applicable □ Not applicable
Name of
Current Date of
asset or Forecast Current actual Reasons for
Forecast forecast original Index to original
project with start performance not reaching
end time performance forecast forecast disclosure
an earnings time (RMB'0,000) the forecast
(RMB'0,000) disclosure
forecast
Announcement on the
Acquisition of the
Moka 100% Equity Interests
January December Not December
Internationa 28,765 56,756 of Moka International
1, 2021 31, 2023 applicable 12, 2020
l Limited Limited & the Related-
Party Transactions
(2020-166)
Commitments Made by the Company's Shareholders and Counterparties on the Annual Operating Performance of the Report
Applicable □ Not applicable
According to the Assets Valuation Report for TCL Technology Group Corp. To Acquire the 100% Equity Interests of Moka
International Limited, the net profit (hereinafter referred to as "net profit") of Moka International Limited (hereinafter referred to as
"the target company") in the audited consolidated statements in 2021, 2022 and 2023 (hereinafter referred to as "performance
commitment period") is expected to be not less than RMB224.43 million, RMB246.07 million, and RMB287.65 million
respectively.Therefore, TCL Industries Holdings (HK) Limited (hereinafter referred to as the "Transferor") commits that the cumulative
net profit of the target company during the performance commitment period is not less than RMB760 million (hereinafter referred to
as the "committed net profit").
TCL Technology Investments Limited (hereinafter referred to as the "Transferee", a wholly-owned subsidiary of the Company)
shall, within 4 months after the end of the performance commitment period, hire an accounting firm approved by the Transferor to
conduct a special audit on the achievement of the target company's committed net profit throughout the performance commitment
period, and issue a special audit report. After auditing, if the net profit actually achieved by the target company during the performance
commitment period fails to reach the committed net profit, the Transferee shall notify the Transferor in writing within 10 working days
after the issue of the special audit report agreed herein. The Transferor shall compensate the Transferee in cash within 3 months after
receiving the written notice from the Transferee. The amount of compensation payable by the Transferor for the current period =
(committed net profit - achieved net profit) ÷ committed net profit × the price of this equity transfer. Both parties further confirm that
the accumulative amount compensated by the Transferor during the performance commitment period shall not exceed the total amount
of consideration obtained by the Transferor in this equity transfer. After auditing, if the net profit actually achieved by the target
company exceeds the committed net profit during the performance commitment period, both parties agree to take 50% of the excess
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amount as the transferor's excess performance reward (the maximum amount of excess performance reward shall not exceed 20% of
the equity transfer price), and the Transferee shall pay this excess performance reward to the Transferor in cash within 3 months after
the issuance of the special audit report.
On April 28, 2024, the Company held its 39th meeting of the 7th Board of Directors and approved the "Proposal on the 2021-
2023 Performance of Moka International Limited". For more details, please refer to the relevant announcements disclosed on the same
day as this annual report.
Achievement of Performance Commitment and Its Influence on Goodwill Impairment Tests
According to the special audit report issued by Da Hua Certified Public Accountants (Special General Partnership), the target
company Moka International Limited realized a net profit of RMB402.42 million, RMB510.99 million and RMB567.56 million in
2021, 2022 and 2023 (performance commitment periods), respectively, which exceeded the estimated amount in the Asset Evaluation
Report of the TCL Technology Group Corporation to buy 100% Equity Interests of Moka International Limited. There was no sign of
goodwill impairment, so it is not necessary to make provision for goodwill impairment.
II. Occupation of the Company, Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable Not Applicable
No such cases in the Reporting Period.
III. Irregularities in the Provision of Guarantees
□ Applicable Not Applicable
No such cases in the Reporting Period.
IV. Explanations Given by the Board of Directors Regarding the Latest Independent Auditor's
"Modified Opinion" on the Financial Statements
□ Applicable Not Applicable
V. Explanations Given by the Board of Directors, the Supervisory Committee, and Independent
Directors (If Any) Regarding the Independent Auditor's "Modified Opinion" on the Financial
Statements of the Reporting Period
□ Applicable Not Applicable
VI. YoY Changes to the Accounting Policies and Estimates or Correction of Material
Accounting Errors
Applicable □ Not applicable
According to the relevant provisions of the Explanatory Announcement on Information Disclosure by
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Companies Offering Securities to the Public No. 1 - Non-Recurring Profits and Losses (2023 Revision), any public
subsidies that are closely related to the Company's day-to-day operations, comply with national policies, are granted
based on established standards, and create a lasting impact on the Company's profit or loss, should be classified as
recurring profit or loss. The change did not have any material impact on the Company's financial position and
operation results.
In accordance with the Interpretation No. 15 of the Accounting Standards for Business Enterprises issued by
the Ministry of Finance, the Company implemented related requirements and retroactively adjusted relevant items
of the financial statements during the comparable periods. Such change in accounting policies has no material
impact on the Company's financial position and operating results.
VII. YoY Changes to the Scope of the Consolidated Financial Statements
Applicable □ Not applicable
Compared with 2022, 39 subsidiaries (24 newly incorporated and 15 acquired) are newly included in the
consolidation scope of 2023; and 18 subsidiaries (12 transferred and 6 de-registered) are excluded from the
consolidation scope of 2023.
VIII. Engagement and Disengagement of Independent Auditor
Current independent auditor:
Da Hua Certified Public Accountants (Special
Name of the domestic independent auditor
General Partnership)
The Company's payment to the domestic independent auditor (RMB'0,000) 427.1
How many consecutive years the domestic independent auditor has provided
16 years
audit services for the Company
Names of the certified public accountants from the domestic independent
Jiang Xianmin and Xiong Xin
auditor writing signatures on the auditor's report
How many consecutive years the certified public accountants have provided
5 years, 2 year
audit services for the Company
Name of the foreign independent auditor (if any) Not applicable
The Company's payment to the foreign independent auditor (RMB'0,000) (if
Not applicable
any)
How many consecutive years the foreign independent auditor has provided
Not applicable
audit services for the Company (if any)
Names of the certified public accountants from the foreign independent auditor
Not applicable
writing signatures on the auditor's report (if any)
How many consecutive years the certified public accountants have provided
Not applicable
audit services for the Company (if any)
Indicate whether the independent auditor was changed for the Reporting Period.
□Yes No
Indicate whether the independent auditor was changed during the Audit Period.
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□Yes No
Independent auditor, financial advisor or sponsor hired for the audit of internal control:
Applicable □ Not applicable
During the Reporting Period, the Company hired Da Hua Certified Public Accountants (Special General Partnership)
to conduct an internal control audit, with an audit cost of RMB500,000.
IX. Delisting Faced After the Disclosure of the Annual Report
□ Applicable Not Applicable
X. Insolvency and Reorganization
□ Applicable Not Applicable
No such cases in the Reporting Period.
XI. Significant Lawsuits and Arbitrations:
□ Applicable Not Applicable
No such cases in the Reporting Period.
XII. Punishments and Rectifications
□ Applicable Not Applicable
No significant punishments or rectifications in the Reporting Period.
XIII. Credit Quality of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable Not Applicable
XIV. Major Related-Party Transactions
1 Continuing Related-Party Transactions
□ Applicable Not Applicable
During the Reporting Period, the Company's daily related-party transactions is found in the related announcements disclosed on
www.cninfo.com.cn.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable Not Applicable
During the Reporting Period, there is no related-party transactions regarding purchase or disposal of assets or equity investments.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable Not Applicable
No related-party transactions regarding significant joint investments in third parties which occurred during the Company's Reporting
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Period.
4. Amounts Due to and from Related Parties
Applicable □ Not applicable
Indicate whether there were any amounts due to and from related parties for non-operating purposes.
Yes □ No
Amounts receivable due to related parties
Amount
Amount
Capital of
of new Interest in
occupatio Beginning recovered Ending
Relationship grants in current
Related n for non- balance grants in Coupon balance
with the Source current period
parties operating (RMB'0,0 current rate (RMB'0,
Company period (RMB'0,0
purposes 00) period 000)
(RMB'0,0 00)
or not (RMB'0,0
00)
00)
TCL Sale of
Industrial Related equity
No 47,040 0 47,040 - - 0
Holdings corporation investm
Co., Ltd. ents
The Company sold equity of Chongqing Zhongxin Rongxin to TCL Industries Holdings Inc. in order
to further optimize its business structure and focus resources on the development of its primary high-
The Influence of Amounts tech business in line with the public policy guidance and in accordance with the needs of the
Due to Related Parties on Company's announced financing projects. According to the agreement signed by both parties, TCL
the Company's Operating
Industries Holdings Inc. shall pay 51% of the equity transfer price to the Company before June 30,
Results and Financial
Status 2022. The remaining equity transfer price will be paid before June 30, 2023. Refer to the
Announcement on the Disposal of Equity Interests in Partnership Enterprise and the Related-Party
Transactions disclosed by the Company on www.cninfo.com.cn dated June 27, 2022.
5. Transactions with Related Finance Companies
□ Applicable Not Applicable
6. Transactions Between the Financial Company Controlled by the Company and Related Companies
Applicable □ Not applicable
Deposits:
Amount incurred in the
current period
Daily deposit Total
Relationship Beginning Total deposit Ending
Related Range of withdrawal
with the ceiling balance amount in balance
parties interest amount in
Company (RMB0'000) (RMB'0,000) current (RMB'0,000)
current
period
period
(RMB0'000)
(RMB0'000)
Subsidiary of
Related
TCL 250,000.00 0.8%-1.15% 34,186.2 1,193,727.7 1,227,883.6 30.3
corporation
Industries
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Holdings
Co., Ltd.
Loans:
Amount incurred in the
current period
Total
Relationship Beginning Total loan Ending
Related Loan limit Range of repayment
with the balance amount in balance
parties (RMB'0,000) interest amount in
Company (RMB'0,000) current (RMB'0,000)
current
period
period
(RMB0'000)
(RMB0'000)
Subsidiary of
TCL
Related
Industries 250,000.00 - - - - -
corporation
Holdings
Co., Ltd.
Credit or other financial business:
Relationship with the Ending balance
Related parties Business type Total
Company (RMB'0,000)
Subsidiary of TCL The balance of
Credit granting
Industries Holdings Related corporation comprehensive credit 86,998.51
(bill discount)
Co., Ltd. on any day shall not
exceed RMB2.5 billion
Subsidiary of TCL
Credit granting (including loans, notes
Industries Holdings Related corporation 35,675.18
(bill acceptance) discounting, and notes
Co., Ltd.
acceptance)
7. Other Major Related-Party Transactions
Applicable □ Not applicable
Date of interim
Title of announcement Website for disclosure
disclosure
Announcement on External Investments and Related-party
May 17, 2023
Transactions of the Subsidiary - TZE
Announcement on the Related-party Transactions with Shenzhen Jucai
March 31, 2023
Supply Chain Technology Co., Ltd. in 2023
Announcement on the Expected Daily Related-Party Transactions for
March 31, 2023
2023
Announcement on Reducing the Limit of Financial Services Provided www.cninfo.com.cn
by TCL Technology Group Finance Co., Ltd. to Related Parties and
March 31, 2023
Renewing the Financial Services Agreement for Related-party
Transactions
Announcement on the Launch of Accounts Receivable Factoring and
March 31, 2023
the Related-party Transaction
Report on the Execution of Daily Related-Party Transactions in 2022 March 31, 2023
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XV. Major Contracts and Execution Thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable Not Applicable
(2) Contracting
□ Applicable Not Applicable
(3) Leases
□ Applicable Not Applicable
2. Major Guarantees
Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure date of Guarantee for
Actual occurrence Actual guarantee Counterguarantee (if Term of
Obligor the guarantee line Line of guarantee Type of guarantee Collateral (if any) Expired or not related parties or
date amount any) guarantee
announcement not
TCL Industries Holdings Joint liability
April 28, 2022 514,629 - - / - Yes Yes
(HK) Limited guarantee
TCL Air-Conditioner Joint liability
April 28, 2022 80,991 March 31, 2021 1,969 / 78-134 days No Yes
(Zhongshan) Co., Ltd. guarantee
TCL King Electrical
Joint liability
Appliances (Huizhou) Co., April 28, 2022 327,138 August 29, 2019 7,332 / 241 days No Yes
guarantee
Ltd.
Joint liability
Tonly Technology Co., Ltd. April 28, 2022 39,496 November 4, 2021 315 / 311 days No Yes
guarantee
TCL King Electrical
Joint liability
Appliances (Chengdu) Co., April 28, 2022 51,653 - - / - Yes -
guarantee Counter guarantee
Ltd.
provided by TCL
Huizhou TCL Mobile Joint liability
April 28, 2022 212,507 - - / Industrial Holding Co., - Yes -
Communication Co., Ltd. guarantee
Ltd.
TCL Mobile
Joint liability
Communication (HK) April 28, 2022 29,225 - - / - Yes -
guarantee
Company Limited
TCL Home Appliances Joint liability
April 28, 2022 68,280 - - / - Yes -
(Hefei) Co., Ltd. guarantee
TCL Home Appliances Joint liability
April 28, 2022 4,929 - - / - Yes -
(Zhongshan) Co., Ltd. guarantee
TCL Air Conditioner Joint liability
April 28, 2022 13,480 - - / - Yes -
(Wuhan) Co., Ltd. guarantee
Zhongshan TCL Joint liability
April 28, 2022 31,749 - - / - Yes -
Refrigeration Equipment guarantee
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Co., Ltd.
Guangdong TCL Smart
Joint liability
Heating & Ventilation April 28, 2022 2,522 - - / - Yes -
guarantee
Equipment Co., Ltd.
TCL Home Appliances Joint liability
April 28, 2022 10,000 - - / - Yes -
(Huizhou) Co., Ltd. guarantee
TCL Air-Conditioner Joint liability
April 28, 2022 5,488 - - / - Yes -
(Jiujiang) Co., Ltd. guarantee
TCL Very Lighting
Joint liability
Technology (Huizhou) Co., April 28, 2022 1,034 - - / - Yes -
guarantee
Ltd.
SHIFENDAOJIA Online Joint liability
April 28, 2022 77 - - / - Yes -
Service Co., Ltd. guarantee
Guangzhou TCL Science
Joint liability
and Technology April 28, 2022 84,700 - - / - Yes -
guarantee
Development Co., Ltd.
Techigh Circuit
Joint liability
Technology (Huizhou) Co., April 28, 2022 499 - - / - Yes -
guarantee
Ltd.
Huizhou Zhongkai TCL
Joint liability
Zhirong Technology May 22, 2021 45,500 - - / With counter- guarantee - Yes -
guarantee
Microcredit Co., Ltd.
Aijiexu New Electronic Guarantee in proportion
Joint liability
Display Glass (Shenzhen) April 22, 2023 35,000 April 28, 2020 23,055.92 to shareholding 8 years No No
guarantee
Co., Ltd. percentage
Huizhou Yunxin Joint liability
April 22, 2023 15,000 - - With counter- guarantee - Yes -
Technology Co., Ltd. guarantee
Qihang Import&Export Joint liability
April 22, 2023 6,000 - - With counter- guarantee - Yes -
Limited guarantee
Shenzhen Qianhai Qihang
Joint liability
Supply Chain Management April 22, 2023 40,000 - - With counter- guarantee - Yes -
guarantee
Co., Ltd.
Shenzhen Qianhai Sailing
Joint liability
International Supply Chain April 22, 2023 110,000 March 1, 2023 48,048 With counter- guarantee 58-268 days No No
guarantee
Management Co., Ltd.
Qihang International Joint liability
April 22, 2023 50,000 - - / With counter- guarantee - Yes -
Import and Export Co., Ltd. guarantee
Inner Mongolia Xinhua Guarantee in proportion
Joint liability
Bandaoti Technology Co., April 22, 2023 40,000 May 22, 2023 23,320 / to shareholding 6.4 years No No
guarantee
Ltd. percentage
Inner Mongolia Xinhuan Guarantee in proportion
Joint liability
Silicon Energy Technology April 22, 2023 180,000 June 15, 2023 132,000 / to shareholding 5.5 years No No
guarantee
Co., Ltd. percentage
Total approved line for such guarantees in Total actual amount of such guarantees in
476,000 242,817
Reporting Period (A1) Reporting Period (A2)
Total approved line for such guarantees at the end Total actual balance of such guarantees at
1,999,897.00 236,040
of the Reporting Period (A3) end of Reporting Period (A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure date of Guarantee for
Actual occurrence Actual guarantee Counterguarantee (if Term of
Obligor the guarantee line Line of guarantee Type of guarantee Collateral (if any) Expired or not related parties or
date amount any) guarantee
announcement not
TCL MOKA
Joint liability 152 days-2.4
INTERNATIONAL April 22, 2023 176,000 June 12, 2023 17,793 / / No No
guarantee years
LIMITED
TCL Technology Joint liability
April 22, 2023 400,000 July 14, 2020 212,481 / / 1.5 years No No
Investments Limited guarantee
TCL China Star
December 22, Joint liability 112 days-9.0
Optoelectronics April 22, 2023 1,580,000 1,613,759 / / No No
2022 guarantee years
Technology Co., Ltd.
TCL Technology Park Joint liability
April 22, 2023 97,000 - - / / - Yes -
(Huizhou) Co., Ltd. guarantee
TCL Technology Group April 22, 2023 90,000 August 31, 2022 70,000 Joint liability / / 3.7 years No No
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(Tianjin) Co., Ltd.* guarantee
TCL Technology Group Joint liability
April 22, 2023 200,000 - - / / - Yes No
Finance Co., Ltd. guarantee
Beijing Hecheng Nuoxin Joint liability
April 22, 2023 10,000 September 2, 2022 10,000 / / 246 days No No
Technology Co., Ltd. guarantee
Beijing Lingyun Data Joint liability
April 22, 2023 128,000 April 21, 2023 52,497 / / 112-238 days No No
Technology Co., Ltd. guarantee
Beijing Sunpiestore Joint liability
April 22, 2023 145,000 September 2, 2022 120,000 / / 246 days No No
Technology Co., Ltd. guarantee
Guangdong Juhua Printed
Joint liability
Display Technology Co., April 22, 2023 5,000 - - / / - Yes -
guarantee
Ltd.
Guangzhou China Star
Optoelectronics Bandaoti Joint liability
April 22, 2023 1,750,000 March 7, 2022 994,615 / / 1 day-6.2 years No No
Display Technology Co., guarantee
Ltd.
Highly (Tianjin) E- Joint liability
April 22, 2023 5,000 April 21, 2023 3,971 / / 112 days No No
Commerce Co., Ltd. guarantee
Highly (Tianjin) Joint liability
April 22, 2023 115,000 April 21, 2023 96,245 / / 112 days No No
Technology Co., Ltd. guarantee
Highly Information Joint liability
April 22, 2023 554,000 May 18, 2022 328,280 / / 19 days-1.5 years No No
Industry Co., Ltd. guarantee
Huizhou China Star
Joint liability
Optoelectronics April 22, 2023 1,150,000 March 23, 2021 511,809 / / 68 days-5.2 years No No
guarantee
Technology Co., Ltd.
Huizhou Moka Technology Joint liability
April 22, 2023 55,000 - - / / - Yes -
Development Co., Ltd. guarantee
Moka Technology Joint liability 112 days-5.2
April 22, 2023 700,000 April 21, 2023 129,463 / / No No
(Guangdong) Co., Ltd. guarantee years
Qingdao Blue Business Joint liability
April 22, 2023 5,000 June 19, 2023 389 / / 49-237 days No No
Consulting Co., Ltd. guarantee
Shaanxi Titi Electronic Joint liability
April 22, 2023 10,000 September 2, 2022 10,000 / / 246 days No No
Technology Co., Ltd. guarantee
Shenzhen China Star
Optoelectronics Bandaoti Joint liability 112 days-5.5
April 22, 2023 1,300,000 April 28, 2018 1,065,799 / / No No
Display Technology Co., guarantee years
Ltd.
Suzhou China Star
Joint liability
Optoelectronics April 22, 2023 100,000 - - / / - Yes -
guarantee
Technology Co., Ltd.
Suzhou China Star
Joint liability
Optoelectronics Display April 22, 2023 265,000 August 30, 2022 50,959 / / 8.4 years No No
guarantee
Co., Ltd.
Tianjin Printronics Circuit Joint liability
April 22, 2023 100,000 September 9, 2022 6,254 / / 6.7 years No No
Corporation guarantee
Tianjin TiTi Yunchuang Joint liability
April 22, 2023 5,000 September 2, 2022 5,000 / / 246 days No No
Technology Co., Ltd. guarantee
Tianjin WanfangNuoxin Joint liability
April 22, 2023 5,000 September 2, 2022 5,000 / / 246 days No No
Technology Co., Ltd. guarantee
Tianjin Xincheng Pilot Joint liability
April 22, 2023 5,000 September 2, 2022 5,000 / / 246 days No No
Technology Co., Ltd. guarantee
China Display
Optoelectronics Joint liability
April 22, 2023 150,000 April 21, 2023 13,160 / / 6-112 days No No
Technology (Huizhou) Co., guarantee
Ltd.
Wuhan China Star
Optoelectronics Bandaoti December 22, Joint liability
April 22, 2023 1,600,000 908,268 / / 12 days-4.2 years No No
Display Technology Co., 2017 guarantee
Ltd.
Wuhan China Star
Joint liability
Optoelectronics April 22, 2023 1,600,000 June 29, 2021 1,048,026 / / 2 days-6.7 years No No
guarantee
Technology Co., Ltd.
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Chongqing Blue Business Joint liability
April 22, 2023 1,000 - - / / - Yes -
Consulting Co., Ltd. guarantee
China Star Optoelectronics Joint liability
April 22, 2023 100,000 - - / / - Yes -
International (HK) Limited guarantee
Total approved line for such guarantees in Total actual amount of such guarantees in
12,406,000 3,873,168
Reporting Period (B1) Reporting Period (B2)
Total approved line for such guarantees at the end Total actual balance of such guarantees at
12,406,000 7,278,769
of the Reporting Period (B3) end of Reporting Period (B4)
Guarantees provided between subsidiaries
Disclosure date of Guarantee for
Actual occurrence Actual guarantee Counterguarantee (if Term of
Obligor the guarantee line Line of guarantee Type of guarantee Collateral (if any) Expired or not related parties or
date amount any) guarantee
announcement not
Otog Banner Huanju New Joint liability
June 24, 2017 15,276 August 30, 2017 15,276 / / 3.7 years No No
Energy Co., Ltd. guarantee
Huhehaote Huanju New
December 11, Joint liability
Energy Development Co., November 26, 2014 9,529 9,529 / / 287 days No No
2015 guarantee
Ltd.*
Huansheng Solar (Jiangsu) Joint liability
March 22, 2021 36,000 April 1, 2021 36,000 / / 2 years No No
Co., Ltd. guarantee
Huansheng New Energy September 30, Joint liability
May 26, 2022 155,000 109,834 / / 3.8-7.5 years No No
(Jiangsu) Co., Ltd. 2022 guarantee
Inner Mongolia Zhonghuan March 22, 2021 Joint liability
542,492 April 30, 2021 423,382 / / 4.3-5.5 years No No
Crystal Materials Co., Ltd. May 26, 2022 guarantee
Ningxia Zhonghuan Solar Joint liability
January 23, 2022 748,000 May 30, 2022 600,000 / / 5.4 years No No
Material Co., Ltd. guarantee
Tianjin Huanou New
September 28, Joint liability
Energy Technology Co., September 27, 2022 115,000 44,728 / / 5.7 years No No
2022 guarantee
Ltd
Tianjin Huanzhi New
January 21, 2021 Joint liability
Energy Technology Co., 59,703 August 2, 2021 38,603 / / 3.8-4.0 years No No
May 26, 2022 guarantee
Ltd.
Wuxi Zhonghuan Applied Joint liability
May 26, 2022 190,000 June 30, 2022 99,089 / / 5.5 years No No
Materials Co., Ltd. guarantee
Zhonghuan Energy (Inner Joint liability
June 24, 2017 10,120 July 21, 2017 10,120 / / 8.6 years No No
Mongolia) Co., Ltd. guarantee
Zhonghuan Hong Kong Joint liability
May 26, 2022 50,000 July 15, 2022 50,000 / / 228 days No No
Holding Limited guarantee
Shenzhen China Star
Optoelectronics Bandaoti Joint liability
April 22, 2023 2,612,500 November 5, 2021 2,351,300 / / 4.4 years No No
Display Technology Co., guarantee
Ltd.
PANEL OPTODISPLAY
Joint liability
TECHNOLOGY April 22, 2023 35,000 April 28, 2022 10,000 / / 3.5 years No No
guarantee
PRIVATE LIMITED
TCL MOKA
Joint liability
INTERNATIONAL April 22, 2023 214,500 April 27, 2023 17,746 / / 2.5 years No No
guarantee
LIMITED
Total approved line for such guarantees in Total actual amount of such guarantees in
2,862,000 219,030
Reporting Period (C1) Reporting Period (C2)
Total approved line for such guarantees at the end Total actual balance of such guarantees at
4,793,121 3,815,607
of the Reporting Period (C3) end of Reporting Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in the Reporting Total actual guarantee amount in the
15,744,000 4,335,016
Period (A1+B1+C1) Reporting Period (A2+B2+C2)
Total approved guarantee line at the end of the Total actual guarantee balance at the end
19,199,018 11,330,416
Reporting Period (A3+B3+C3) of the Reporting Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the Company's net assets 214.10%
Of which:
Balance of guarantees provided for shareholders, the actual controller and their related parties (D) 9,616
Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset
1,638,911
ratio (E)
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Amount by which the total guarantee amount exceeds 50% of the Company's net assets (F) 11,330,151
Total of the three above amounts (D+E+F) 11,330,151
Joint liability possibly borne or already borne in the Reporting Period for outstanding guarantees -
Guarantees provided in breach of prescribed procedures -
Note: (1) The guarantee period in the above table is the occurrence period of the principal debt. The actual guarantee is valid for two or three years from the expiration
date of the principal debt, which is subject to the single contract.
(2) During the Reporting Period, the Company adjusts the guarantee limit to its controlling subsidiaries based on their demands. The details are outlined as follows:
The guarantee limit amounting to RMB 900 million offered to TCL China Star Optoelectronics Technology Co., Ltd. was transferred to TCL Technology Group (Tianjin) Co., Limited,
another controlling subsidiary. The Company has performed internal review procedures for the above-mentioned guarantee transfers. It's found that they did not violate the legal provisions on
listed companies, and complied with the relevant requirements of the Proposal on Providing Guarantees for Subsidiaries in 2023 reviewed and approved at the 2022 Annual General Meeting held
on April 21, 2023.
(3) In the table above, Shenzhen China Star Optoelectronics Bandaoti Display Technology Co., Ltd., a subsidiary controlled by the Company, was jointly guaranteed by the Company and its
subsidiary TCL China Star Optoelectronics Technology Co., Ltd. in an external syndicated loan, in which the Company provided certain percentage of guarantee, while TCL China Star
Optoelectronics Technology Co., Ltd. provided full guarantee.
(4) As at the end of the Reporting Period, the debt portion under joint guarantee amounted to RMB21.25217 billion. The joint guarantee has been filled in the "Company's Guarantee for
Subsidiaries" and "Guarantee Among Subsidiaries", respectively.
In the "guarantee among subsidiaries", the guaranteed entity and Huhehaote Huanju New Energy Development Co., Ltd. were provided with the guarantee under joint and several liability by
TCL Technology Group (Tianjin) Co., Ltd. and TCL Zhonghuan Renewable Energy Technology Co., Ltd. both of which were subsidiaries. As at the end of the Reporting Period, the debt portion
under joint guarantee amounted to RMB95.29 million.
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3. Entrusted Cash Asset Management
(1) Cash Entrusted for Wealth Management
Applicable □ Not applicable
Overview of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
Impairment
allowance for
unrecovered
Unrecovered
Type Funding source Amount Undue amount overdue amount of
overdue amount
wealth
management
products
Bank's wealth
management Self-funded 1,119,219.00 941,269.00 0 0
product
Securities firm's
wealth
Self-funded 392,957.43 313,146.25 0 0
management
product
Trust plan Self-funded 326,836.67 246,836.67 0 0
Other Self-funded 74,040.05 70,640.05 0 0
Total 1,913,053.15 1,571,891.97 0 0
High-risk wealth management transactions with a significant single amount liquidity:
□ Applicable Not Applicable
Situation in which the Company fails to recover its principal for entrusted wealth management products, or other situations that may
result in impairment
□ Applicable Not Applicable
(2) Loan Entrusted for Wealth Management
□ Applicable Not Applicable
During the Reporting Period, the Company did not have any entrusted loans.
4. Other Major Contracts
□ Applicable Not Applicable
XVI. Other Significant Events
□ Applicable Not Applicable
XVII. Significant Events of Subsidiaries
□ Applicable Not Applicable
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Part VII Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
Before change Increase/decrease in the Reporting Period (+/-) After change
Shares
New Bonus converted
Shares Percentage Others Subtotal Shares Percentage
issues shares from capital
reserve
I. Restricted
3,420,220,967 20.03% 0 0 342,022,097 -3,081,703,851 -2,739,681,754 680,539,213 3.62%
Shares
1. Shares held
by state-owned 877,192,981 5.14% 0 0 87,719,297 -964,912,278 -877,192,981 0 0.00%
legal entities
2. Shares held
by other
908,951,956 5.33% 0 0 90,895,196 -320,533,070 -229,637,874 679,314,082 3.62%
domestic
investors
Among which:
Shares held by
187,134,502 1.10% 0 0 18,713,450 -205,847,952 -187,134,502 0 0.00%
domestic legal
entities
Shares held by
domestic 721,817,454 4.23% 0 0 72,181,746 -114,685,118 -42,503,372 679,314,082 3.62%
individuals
3. Shares held
by foreign 197,538,186 1.15% 0 0 19,753,819 -216,066,874 -196,313,055 1,225,131 0.007%
investors
Among which:
Shares held by
196,783,625 1.15% 0 0 19,678,363 -216,461,988 -196,783,625 0 0.00%
foreign legal
entities
Shares held by
foreign 754,561 0.004% 0 0 75,456 395,114 470,570 1,225,131 0.007%
individual
4. Fund,
wealth
1,436,537,844 8.41% 0 0 143,653,785 -1,580,191,629 -1,436,537,844 0 0.00%
management
product, etc.
II. Non-
13,651,670,64
restricted 79.97% 0 0 1,365,167,063 3,081,703,851 4,446,870,914 18,098,541,554 96.38%
0
shares
1. RMB-
denominated 13,651,670,64
79.97% 0 0 1,365,167,063 3,081,703,851 4,446,870,914 18,098,541,554 96.38%
ordinary 0
shares
III. Total 17,071,891,60
100.00% 0 0 1,707,189,160 0 1,707,189,160 18,779,080,767 100.00%
shares 7
Reasons for changes in shares
Applicable □ Not applicable
1. On April 26, 2023, the Company disclosed the Implementation Announcement on the 2022 Annual Equity Distribution, and after
the completion of the capital reserve conversion, the total share capital of the Company increased from 17,071,891,607 shares to
18,779,080,767 shares.
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2. On June 19, 2023, the Company disclosed the "Suggestive Announcement on Releasing from the Restriction on Non-publicly
Offered Shares and Listing for Circulation". The non-publicly offered restricted shares were released from restriction and listed for
circulation on June 26, 2023.
3. During the Reporting Period, locked-up shares held by senior management increased by 66,446,730 shares, as non-restricted shares
decreased by the same amount.
Approval of changes in shares
□ Applicable Not Applicable
Transfer of share ownership
□ Applicable Not Applicable
Effects of changes in shares on the basic earnings per share, diluted earnings per share, Net asset per share attributable to the
Company's ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively
Applicable □ Not applicable
Item January - December 2023
Basic earnings per share (RMB/share) 0.1195
Diluted earnings per share (RMB/share) 0.1179
Item December 31, 2023
Net asset per share attributable to ordinary shareholders of the Company (RMB) 2.8
Other information that the Company considers necessary or is required by the securities regulatory authorities to be disclosed
□ Applicable Not Applicable
2. Changes in Restricted Shares
Applicable □ Not applicable
Unit: Share
Number of Number of
Number of
Number of increased released Date of
Name of restricted Reason for
restricted shares restricted restricted restriction
shareholder shares at restriction
at period-begin shares of the shares of the release
period-end
period period
CITIC Securities The shares were
280,701,754 28,070,175 308,771,929 0
Co., Ltd. within the lockup
Guotai Junan period of non-
Securities Co., 228,070,175 22,807,017 250,877,192 0 public offering
Ltd. (shares of the
Everbright Company
Securities 204,678,362 20,467,836 225,146,198 0 subscribed by June 26, 2023
Company Limited investors in non-
UBS AG 196,783,625 19,678,363 216,461,988 0 public offering
GF Securities Co., shall not be
187,134,502 18,713,450 205,847,952 0
Ltd. transferred within
Haitong Securities 6 months from the
163,742,690 16,374,269 180,116,959 0
Co., Ltd. date of listing)
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Perseverance
Asset
Management
Partnership
131,578,947 13,157,895 144,736,842 0
(Limited
Partnership) -
Gaoyi Xiaofeng
No. 2 Zhixin Fund
China Life Asset
Management -
Bank of China -
China Life Asset -
116,959,064 11,695,906 128,654,970 0
PIPE2020
Insurance Asset
Management
Product
Shen Ruijin 108,479,532 10,847,953 119,327,485 0
Huaxia Life
Insurance Co.,
87,719,298 8,771,930 96,491,228 0
Ltd. - Self-owned
funds
Other
shareholders
participating in
1,100,280,535 110,028,054 1,210,308,589 0
the non-public
offering of the
Company
Locked-up shares
Others 614,092,483 66,446,730 0 680,539,213 of senior Not applicable
management
Total 3,420,220,967 347,059,578 3,086,741,332 680,539,213 -- --
II. Issuance and Listing of Securities
1. Issuance of Securities (Preferred Shares Exclusive) in the Reporting Period
□ Applicable Not Applicable
2. Changes in the Total Number of Shares, Shareholder Structure, and the Structure of Assets and
Liabilities
Applicable □ Not applicable
For Changes in the total number of shares and shareholder structure, see "I. Changes in Shares" in this part.
3. Existing Staff-Held Shares
□ Applicable Not Applicable
III. Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total number of 600,087 Number of 578,652 Total number 0 Number of preferred 0
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ordinary ordinary of preferred shareholders with resumed
shareholders by shareholders shareholders voting rights at the month-
the end of the at the month- with resumed end prior to the disclosure
reporting period end prior to voting rights of this Report
the disclosure by the end of
of this Report the reporting
period
Shareholders with 5% or above, and shareholdings of top 10 shareholders of ordinary shares (excluding the lending of shares under refinancing
Increase/decr Number of non- Shares in pledge,
Shareholding Number of Number of
Name of Nature of ease during restricted marked or frozen
percentage shares held at restricted
shareholder shareholder the Reporting ordinary shares
(%) the period-end shares held Status Number
Period held
Li Dongsheng
Ningbo Jiutian Domestic
Liancheng individual/
Equity Domestic 6.73% 1,264,053,189 104,968,170 672,868,839 591,184,350
Investment general Pledge 293,668,015
Partnership legal entity
(Limited
Partnership)
Hong Kong
Securities Foreign
5.53% 1,037,612,543 649,114,066 1,037,612,543
Clearing legal entity
Company Ltd.
Huizhou
Investment Municipal
4.35% 817,453,824 95,313,984 817,453,824
Holding Co., legal entity
Ltd.
Wuhan Optics
Valley
Provincial
Industrial 2.83% 532,003,016 403,690,620 532,003,016 Pledge 249,000,000
legal entity
Investment Co.,
Ltd.
China Securities
Domestic
Finance
general 2.19% 410,554,710 37,323,157 410,554,710
Corporation
legal entity
Limited
Perseverance
Asset
Management Fund,
Partnership wealth
(Limited managemen 1.21% 226,736,512 95,157,565 226,736,512
Partnership) - t product,
Gaoyi Xiaofeng etc.
No. 2 Zhixin
Fund
CITIC
Financial
Securities Co., 1.20% 225,726,798 -61,957,556 225,726,798
Institution
Ltd.
Bank of China
Fund,
Limited -
wealth
Huatai-
managemen 1.09% 204,079,760 204,079,760 204,079,760
Pinebridge CSI
t product,
Photovoltaic
etc.
Industry ETF
China Foreign Fund,
Economy and wealth 0.90% 168,599,830 168,599,830 168,599,830
Trade Trust Co., managemen
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Ltd. - Foreign t product,
trade trust - etc.
Gaoyi Xiaofeng
Hongyuan
Collective Fund
Trust Scheme
Strategic investor or general
legal entity becoming top-10
ordinary shareholders due to Not applicable
private placement of new
shares
Among the top 10 shareholders, Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership
(Limited Partnership) became persons acting in concert by signing the Agreement on Concerted Action. Mr. Li
Note on the above shareholders'
associations or concerted Dongsheng holds 897,158,453 shares and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
actions Partnership) holds 366,894,736 shares, representing 1,264,053,189 shares in total and becoming the largest
shareholder of the Company.
Explain if any of the
shareholders above was
involved in entrusting/being Not applicable
entrusted with voting rights or
waiving voting rights
Explanation on repurchase
accounts among top 10 Not applicable
shareholders
Shareholdings of top 10 non-restricted ordinary shareholders
Number of non-restricted ordinary shares held at the end of the reporting Type of shares
Name of shareholder
period Type Quantity
Hong Kong Securities Clearing RMB-
Company Ltd. 1,037,612,543 denominated 1,037,612,543
ordinary shares
Huizhou Investment Holding RMB-
Co., Ltd. 817,453,824 denominated 817,453,824
ordinary shares
Li Dongsheng
RMB-
Ningbo Jiutian Liancheng 591,184,350 denominated 591,184,350
Equity Investment Partnership ordinary shares
(Limited Partnership)
Wuhan Optics Valley Industrial RMB-
Investment Co., Ltd. 532,003,016 denominated 532,003,016
ordinary shares
China Securities Finance RMB-
Corporation Limited 410,554,710 denominated 410,554,710
ordinary shares
Perseverance Asset
RMB-
Management Partnership
226,736,512 denominated 226,736,512
(Limited Partnership) - Gaoyi
ordinary shares
Xiaofeng No. 2 Zhixin Fund
RMB-
CITIC Securities Co., Ltd. 225,726,798 denominated 225,726,798
ordinary shares
Bank of China Limited - RMB-
Huatai-Pinebridge CSI 204,079,760 denominated 204,079,760
Photovoltaic Industry ETF ordinary shares
China Foreign Economy and 168,599,830 RMB- 168,599,830
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Trade Trust Co., Ltd. - Foreign denominated
trade trust - Gaoyi Xiaofeng ordinary shares
Hongyuan Collective Fund
Trust Scheme
Related or acting-in-concert
Among the top 10 shareholders with non-restricted shares, Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity
parties among top 10 non-
Investment Partnership (Limited Partnership) became persons acting in concert by signing the Agreement on
restricted outstanding
shareholders, as well as Concerted Action. Mr. Li Dongsheng holds 224,289,614 non-restricted shares and Ningbo Jiutian Liancheng Equity
between top 10 non-restricted Investment Partnership (Limited Partnership) holds 366,894,736 non-restricted shares, representing 591,184,350
outstanding shareholders and non-restricted shares in total and becoming the largest shareholder of the Company.
top 10 shareholders
Explanation for the top 10
ordinary shareholders Not applicable
participating in securities
margin trading
Top 10 shareholders participating in the lending of shares under the refinancing business
Applicable □ Not applicable
Unit: Share
Top 10 shareholders participating in the lending of shares under the refinancing business
Shares lent under
Shares in the ordinary Shares in the ordinary Shares lent under
refinancing at the
account and credit account and credit refinancing at the end of
beginning of the period
account at the beginning account at the end of the the period that have not
Name of that have not been
of the period period been returned
shareholder returned
(full name) Proportion Proportion Proportion Proportion
Total to total Total to total Total to total Total to total
number share number share number share number share
capital capital capital capital
Huizhou
Investment
722,139,840 4.23% 21,000,000 0.12% 817,453,824 4.35% 0 0%
Holding Co.,
Ltd.
Wuhan Optics
Valley
Industrial 128,312,396 0.75% 430,240,000 2.52% 532,003,016 2.83% 0 0%
Investment
Co., Ltd.
Bank of China
Limited -
Huatai-
Unknown Unknown
Pinebridge 0 0% 204,079,760 1.09% 1,602,800 0.01%
(note) (note)
CSI
Photovoltaic
Industry ETF
Note: The regular shareholder data provided by the China Securities Depository and Clearing Corporation Limited does not contain
this information.
Changes in the top 10 shareholders compared with the previous period
Applicable □ Not applicable
Unit: Share
Changes in the top 10 shareholders compared with the end of previous period
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Number of shares held in the ordinary
Number of shares lent under refinancing
account, credit account and lending
Addition/exit at the end of the period that have not
Name of shareholder through refinancing that have not been
during the been returned
(full name) returned at the end of the period
Reporting Period
Proportion to total Proportion to total
Total number Total number
share capital share capital
Wuhan Optics Valley
Industrial Investment Addition 0 0% 532,003,016 2.83%
Co., Ltd.
Perseverance Asset
Management
Partnership (Limited
Addition 0 0% 226,736,512 1.21%
Partnership) - Gaoyi
Xiaofeng No. 2
Zhixin Fund
Bank of China
Limited - Huatai-
Pinebridge CSI Addition 1,602,800 0.01% 205,682,560 1.09%
Photovoltaic Industry
ETF
China Foreign
Economy and Trade
Trust Co., Ltd. -
Foreign trade trust - Addition 0 0% 168,599,830 0.90%
Gaoyi Xiaofeng Hong
Yuan Collective Fund
Trust Scheme
Guotai Junan
Exit 0 0% 8,794,061 0.05%
Securities Co., Ltd.
Everbright Securities
Exit 0 0% 10,414,915 0.06%
Company Limited
UBS AG Exit 0 0% 62,073,717 0.33%
GF Securities Co.,
Exit 0 0% 53,191,566 0.28%
Ltd.
Haitong Securities
Exit Unknown (note) Unknown (note) Unknown (note) Unknown (note)
Co., Ltd.
Note: The regular shareholder data provided by the China Securities Depository and Clearing Corporation Limited does not contain
this information.
Indicate whether any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company
conducted any promissory repo during the Reporting Period.
□Yes No
2. The Company's Controlling Shareholders
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became persons acting in
concert by signing the Agreement on Concerted Action, holding 1,264,053,189 shares in total and becoming the largest shareholder of
the Company.
As per related provisions of the Company Law, a controlling shareholder refers to a shareholder who owns over 50% of a limited
liability company's total capital or over 50% of a joint stock company's total share capital; or, despite the ownership of less than 50%
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of a limited liability company's total capital or less than 50% of a joint stock company's total number of shares, who can still prevail in
the resolution of a meeting of shareholders or a general meeting of shareholders according to the voting rights corresponding to their
interest in the limited liability company's total capital or the joint stock company's total number of shares. According to the provisions
above, the Company has no controlling shareholder or actual controller.
Change of the controlling shareholder in the Reporting Period
□ Applicable Not Applicable
3. Actual Controller and Its Acting-in-Concert Parties
Explanation of The Company's Absence of Actual Controller
The "actual controller" refers to an entity which is not a shareholder of a company but actually controls the company behaviors
through investment relationship, agreement or other arrangements. According to the definition above, the Company has no actual
controller.
Whether there is any shareholder holding more than 10% of the shares at the ultimate control level of the Company
□Yes No
Change of the actual controller in the Reporting Period
□ Applicable Not Applicable
The actual controller controls the Company through trust or other asset management methods
□ Applicable Not Applicable
4. The cumulative number of shares pledged by the Company's controlling shareholder or the largest
shareholder and its acting-in-concert parties account for 80% of their shareholdings in the Company
□ Applicable Not Applicable
5. Other corporate shareholders with a holding percentage over 10%
□ Applicable Not Applicable
6. Limits on shareholding reduction of the Company's controlling shareholder, actual controller, reorganizer
and other commitment entities
□ Applicable Not Applicable
IV. Specific Implementation of Share Repurchase During the Reporting Period
Progress on any share repurchase
Applicable □ Not applicable
Disclosure Proportion to Proposed Proposed Purpose of Number of Proportion
Number of shares
time of total share repurchase repurchase share repurchased of
to be repurchased
the plan capital amount period repurchase shares repurchased
110
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
(shares) shares to the
underlying
shares
involved in
the equity
incentive
plan
With a total
repurchase amount
of RMB220 million Based on the
to 250 million at a approximately
Within 12
repurchase price of 43.2526 The total
months after
no more than million of amount of
the 32nd
RMB5.78 per share shares that can repurchase
Meeting of
(inclusive), it is be shall be no
the For employee
estimated that the repurchased, less than
Company's stock
number of shares the proportion RMB220
June 1, 7th Board of ownership
that can be of the million 64,992,964 -
2023 Directors plans or
repurchased will be repurchased (inclusive)
deliberates equity
approximately shares to the and no more
and incentives
43.2526 million Company's than
approves
shares based on the total share RMB250
this share
upper limit of the capital million
repurchase
total repurchase approximately (inclusive)
plan
amount and the equals to
upper limit of the 0.23%
share repurchase
price
With a total
repurchase amount
of RMB400 million Based on the
to 600 million at a approximately
Within 12
repurchase price of 99.3377 The total
months after
no more than million of amount of
the 36th
RMB6.04 per share shares that can repurchase
Meeting of
(inclusive), it is be shall be no
the For employee
estimated that the repurchased, less than
Company's stock
number of shares the proportion RMB400
November 7th Board of ownership
that can be of the million 0 -
29, 2023 Directors plans or
repurchased will be repurchased (inclusive)
deliberates equity
approximately shares to the and no more
and incentives
99.3377 million Company's than
approves
shares based on the total share RMB600
this share
upper limit of the capital million
repurchase
total repurchase approximately (inclusive)
plan
amount and the equals to
upper limit of the 0.53%
share repurchase
price
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable Not Applicable
111
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Part VIII Preferred Shares
□ Applicable Not Applicable
During the reporting period, the Company did not have preferred shares.
112
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Part IX Bonds
I. Enterprise Bonds
□ Applicable Not Applicable
No enterprise bonds in the Reporting Period.
II. Corporate Bonds
Applicable □ Not applicable
1. General Information on Corporate Bonds
Unit: RMB'0,000
Way of
principal
Date of Value Outstanding Coupon repayment Place of
Bond name Abbr. Bond code Maturity
issuance date balance rate and trading
interest
payment
Interest
TCL
payable
Corporation
annually
Corporate Bonds
October October and Shenzhen
Publicly Offered October
19TCL03 112983.SZ 17, 21, 44,000 2.95% principal Stock
in 2019 to 21, 2024
2019 2019 repayable Exchange
Qualified
in full
Investors (Phase
upon
3)
maturity
Interest
TCL
payable
Corporation
annually
Corporate Bonds
and Shenzhen
Publicly Offered July 19, July 23, July 23,
19TCL02 112938.SZ 100,000 3.05% principal Stock
in 2019 to 2019 2019 2024
repayable Exchange
Qualified
in full
Investors (Phase
upon
2)
maturity
Interest
TCL
payable
Corporation
annually
Corporate Bonds
May and Shenzhen
Publicly Offered May 17, May 20,
19TCL01 112905.SZ 20, 100,000 3.15% principal Stock
in 2019 to 2019 2024
2019 repayable Exchange
Qualified
in full
Investors (Phase
upon
1)
maturity
Investor eligibility (if any) For qualified investors / for professional investors; not applicable for foreign bonds
Match to trade, click to trade, inquire to trade, bid to trade, negotiate to trade; not
Applicable trading mechanism
applicable for foreign bonds
Risk of termination of listing and trading
No
(if any) and countermeasures
113
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Overdue bonds
□ Applicable Not Applicable
2. Triggering and implementation of issuer or investor option clauses and investor protection clauses
□ Applicable Not Applicable
3. Intermediary Organizations
Name of Contact of
Name of bond Name of signing
intermediary Office address intermediary Tel.
project accountants
organization organization
Citic Office Tower, Yang Fang, Deng
19TCL01,
CITIC Securities 48 Liangmaqiao Xiaoqiang,
19TCL02, - 010 -60833575
Co., Ltd. Road, Chaoyang Chen Donghui,
19TCL03
District, Beijing Zhou Junren
Sun Miaoyue, Wu
19TCL01, 33F, One Museum
Guotai Junan Lei, Li Hongyu,
19TCL02, Place, 669 Xinzha - 021-38031979
Securities Co., Ltd. Wen Xiao, Liu
19TCL03 Road, Shanghai
Xuanhua
F1-8, CDB
19TCL01, China Development Building, 29
19TCL02, Bank Securities Co., Fuchengmen Outer - Zhao Zhipeng 010 -88300907
19TCL03 Ltd. Avenue, Xicheng
District, Beijing
21F, No. 2,
Tianfeng Building,
19TCL01,
TF Securities Co., No.217 Zhongbei
19TCL02, - Liu Yipei 027-87618889
Ltd. Road, Wuchang
19TCL03
District, Wuhan
City
45F, Century
19TCL01, Commercial Plaza, Yang Shangjun,
Shenwan Hongyuan
19TCL02, No. 989 Changle - Ouyang Wenjian, 0755-23996949
Securities Co., Ltd.
19TCL03 Road, Xuhui Cao Peixian
District, Shanghai
F408, Yuanyang
19TCL01,
Beijing Jia Yuan Building , 158 Wen Liangjuan,
19TCL02, - 010 -66413377
Law Offices Fuxingmen Inner Wang Ying
19TCL03
Avenue, Beijing
Room 1101,
Da Hua Certified Li Bingxin,
19TCL01, Building 7, No. 16
Public Accountants Zhang Yuan
19TCL02, Xi Si Huan Zhong Jiang Xianmin 0755 -82900734
(Special General yuan, Yang
19TCL03 Road, Haidian
Partnership) Chunxiang
District, Beijing
Building 5, Galaxy
SOHO, No. 2
19TCL01, China Chengxin
Nanzhugan Hutong, Jia Xiaoqi, Guo
19TCL02, International Credit - 010 -66428877
Chaoyangmen Inner Ziyue
19TCL03 Rating Co., Ltd.
Avenue, Dongcheng
District, Beijing
Whether the above organizations were changed during the Reporting Period
□Yes No
114
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
4. Use of the Capital Raised
Unit: RMB'0,000
Whether
consistent with
Total
Rectification of the purpose,
Amount
Name of bond Used Unused Operation of special fund- illegal use of usage plan and
of
project Amount Amount raising account (if any) raised funds other
Raised
(if any) agreements
Funds
promised in the
prospectus
Set up a fund-raising account
to ensure that the funds raised
19TCL03 200,000 200,000 0 None Consistent
are earmarked for special
purposes
Set up a fund-raising account
to ensure that the funds raised
19TCL02 100,000 100,000 0 None Consistent
are earmarked for special
purposes
Set up a fund-raising account
to ensure that the funds raised
19TCL01 100,000 100,000 0 None Consistent
are earmarked for special
purposes
The raised funds were used for construction projects
□ Applicable Not Applicable
The Company changed the usage of above funds raised from bonds during the Reporting Period
□ Applicable Not Applicable
5. Adjustments of credit rating results during the Reporting Period
□ Applicable Not Applicable
6. The implementation and changes of guarantees, debt repayment plans and other safeguard measures
regarding debt repayment during the Reporting Period, and their impact on bond investor equity
□ Applicable Not Applicable
III. Debt Financing Instruments of Non-Financial Enterprises
Applicable □ Not applicable
1. General information of debt financing instruments of non-financial enterprises
Unit: RMB'0,000
Way of
principa
Place
Date of Outstandi Coup l
Bond Value Maturit of
Bond name Abbr. issuanc ng on repayme
code date y tradin
e balance rate nt and
g
interest
payment
2023 Mid-Term 23TCL Group 1023801 Februa Februa Februa 150,000 4.10% Interest Inter-
115
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Notes of TCL MTN001 (Sci- 51 ry 3, ry 7, ry 7, payable bank
Technology Group Tech Innovation N 2023 2023 2026 annually mark
Corporation (Phase otes) and et
1) (Sci- principa
Tech Innovation N l
otes) repayabl
e in full
upon
maturity
Interest
payable
2022 Mid-Term
annually
Notes of TCL
22TCL Group and Inter-
Technology Group
MTN003 (Sci- 1022814 July 4, July 6, July 6, principa bank
Corporation (Phase 200,000 3.45%
Tech Innovation N 74 2022 2022 2025 l mark
3) (Sci-
otes) repayabl et
Tech Innovation N
e in full
otes)
upon
maturity
Interest
payable
annually
2022 Mid-Term
and Inter-
Green Notes of April April April
22TCL Group 1322800 principa bank
TCL Technology 25, 27, 27, 150,000 3.30%
GN002 40 l mark
Group Corporation 2022 2022 2025
repayabl et
(Phase 2)
e in full
upon
maturity
Interest
payable
annually
2022 Mid-Term
and Inter-
Notes of TCL Januar Januar Januar
22TCL Group 1022800 principa bank
Technology Group y 12, y 14, y 14, 200,000 3.45%
MTN001 89 l mark
Corporation (Phase 2022 2022 2025
repayabl et
1)
e in full
upon
maturity
Interest
payable
2021 Mid-Term annually
Notes of TCL and Inter-
21TCL Group May May May
Technology Group 1021009 principa bank
MTN001 (High- 10, 12, 12, 200,000 4.15%
Corporation (Phase 66 l mark
Growth Bonds) 2021 2021 2024
1) (High-Growth repayabl et
Bonds) e in full
upon
maturity
Mid-term notes are issued to institutional investors in the national
Investor eligibility (if any) interbank bond market (excluding those prohibited from purchasing by
national laws and regulations)
Applicable trading mechanism Transaction inquiry, request for quotation and click-to-buy
Risk of termination of listing and trading (if any) and
No
countermeasures
Overdue bonds
116
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
□ Applicable Not Applicable
2. Triggering and implementation of issuer or investor option clauses and investor protection clauses
□ Applicable Not Applicable
3. Intermediary Organizations
Name of Name of Contact of
Name of bond project intermediary Office address signing intermediary Tel.
organization accountants organization
No.55
21TCL Group MTN001 (High-Growth Bonds), Fuxingmennei
Industrial and
22TCL Group GN002, Avenue, 010-
Commercial - Wu Siyi
22TCL Group MTN003 (Sci- Xicheng 81012556
Bank of China
Tech Innovation Notes) District, Beijing
City
No.69
Jianguomenei
22TCL Group MTN001,
Agricultural Avenue Liu 010-
23TCL Group MTN001 (Sci- -
Bank of China Dongcheng Zhaoying 85109688
Tech Innovation Notes)
District, Beijing
City
21TCL Group MTN001 (High-Growth Bonds), No.25 Jinrong
China
22TCL Group MTN003 (Sci- Avenue
Construction 010 -
Tech Innovation Notes), Xicheng - Zhou Peng
Bank 67596478
23TCL Group MTN001 (Sci- District, Beijing
Corporation
Tech Innovation Notes) City
No.1
Bank of China Fuxingmennei 010-
22TCL Group MTN001 - Zhang Shun
Limited Avenue 66595482
Beijing City
Shanghai No.12
Pudong Zhongshan East 021-
22TCL Group GN002 - Li Yansun
Development 1st Road, 31884090
Bank Co., Ltd. Shanghai
Building 5,
Galaxy SOHO,
21TCL Group MTN001 (High-Growth Bonds),
China No. 2
22TCL Group MTN001, 22TCL Group
Chengxin Nanzhugan
GN002, 22TCL Group MTN003 (Sci- Jia Xiaoqi, 010 -
International Hutong, -
Tech Innovation Notes), Guo Ziyue 66428877
Credit Rating Chaoyangmen
23TCL Group MTN001 (Sci-
Co., Ltd. Inner Avenue,
Tech Innovation Notes)
Dongcheng
District, Beijing
Da Hua
21TCL Group MTN001 (High-Growth Bonds), Room 1101,
Certified Qiu
22TCL Group MTN001, 22TCL Group Building 7, No.
Public Junzhou,
GN002, 22TCL Group MTN003 (Sci- 16 Xi Si Huan Jiang 0755 -
Accountants Jiang
Tech Innovation Notes), Zhong Road, Xianmin 82900734
(Special Xianmin,
23TCL Group MTN001 (Sci- Haidian
General Xiong Xin
Tech Innovation Notes) District, Beijing
Partnership)
21TCL Group MTN001 (High-Growth Bonds), F408,
22TCL Group MTN001, 22TCL Group Beijing Jia Yuanyang Wen
010 -
GN002, 22TCL Group MTN003 (Sci- Yuan Law Building , 158 - Liangjuan,
66413377
Tech Innovation Notes), Offices Fuxingmen Wang Ying
23TCL Group MTN001 (Sci- Inner Avenue,
117
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
Tech Innovation Notes) Beijing
Whether the above organizations were changed during the Reporting Period
□Yes No
4. Use of the Capital Raised
Unit: RMB'0,000
Total Whether consistent
Rectification of
amount Operation of special with the purpose,
Amount Unused illegal use of
Name of bond project of fund-raising account (if usage plan and other
spent amount raised funds (if
raised any) agreements promised
any)
funds in the prospectus
Set up a fund-raising
23TCL Group
account to ensure that
MTN001
150,000 150,000 0 the funds raised are None Consistent
(Sci-
earmarked for special
Tech Innovation Notes)
purposes
Set up a fund-raising
22TCL Group
account to ensure that
MTN003
200,000 200,000 0 the funds raised are None Consistent
(Sci-
earmarked for special
Tech Innovation Notes)
purposes
Set up a fund-raising
account to ensure that
22TCL Group GN002 150,000 150,000 0 the funds raised are None Consistent
earmarked for special
purposes
Set up a fund-raising
account to ensure that
22TCL Group
200,000 200,000 0 the funds raised are None Consistent
MTN001
earmarked for special
purposes
Set up a fund-raising
21TCL Group account to ensure that
MTN001 200,000 200,000 0 the funds raised are None Consistent
(High-Growth Bonds) earmarked for special
purposes
The raised funds were used for construction projects
□ Applicable Not Applicable
The Company changed the usage of above funds raised from bonds during the Reporting Period
□ Applicable Not Applicable
5. Adjustments of credit rating results during the Reporting Period
□ Applicable Not Applicable
6. The implementation and changes of guarantees, debt repayment plans and other safeguard measures
regarding debt repayment during the Reporting Period, and their impact on bond investor equity
□ Applicable Not Applicable
118
Full Text of the Annual Report 2023 of TCL Technology Group Corporation
IV. Convertible Corporate Bonds
□ Applicable Not Applicable
During the reporting period, the Company did not have convertible corporate bonds.
V. Consolidated loss of the Reporting Period Exceeding 10% of Net Assets of the last year-end
□ Applicable Not Applicable
VI. Overdue Interest-bearing Debts Other Than Bonds at Period End
□ Applicable Not Applicable
VII. Any Violation of Rules and Regulations During the Reporting Period
□Yes No
VIII. Key Accounting Data and Financial Indicators of the Company for the past two years as
at the end of the Reporting Period
Item End of the Reporting Period December 31, 2022 Change
Current ratio 1.03 1.09 -5.50%
Debt/asset ratio 62.1% 63.3% -1.23%
Quick ratio 0.75 0.78 -3.85%
2023 2022 Change
Net profit after deducting
non-recurring gains and 220,705 -171,729 228.52%
losses (RMB0'000)
Debt to EBITDA ratio 15.0% 12.1% 2.9%
Interest coverage ratio 1.80 0.92 95.65%
Cash coverage ratio 5.55 4.32 28.67%
EBITDA coverage ratio 6.36 5.17 23.02%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
119
TCL Technology Group Corporation
Auditor’s Report
DHSZ [2024] No. 0011018521
Da Hua Certified Public Accountants (Special General
Partnership)
Da Hua Certified Public Accountants (Special General Partnership)
TCL Technology Group Corporation
Auditor’s Report and Financial Statements
(January 1, 2023 to December 31, 2023)
Content Page
I. Auditor’s Report 1-8
II. Audited Financial Statements
Consolidated Balance Sheet 1-2
Consolidated Income Statement 3
Consolidated Cash Flow Statement 4-5
Consolidated Statement of Changes in 6-7
Shareholders’ Equity
Balance Sheet of the Parent Company 8-9
Income Statement of the Parent Company 10
Cash Flow Statement of the Parent Company 11-12
Statement of Changes in Shareholder Equity 13-14
of the Parent Company
Notes to Financial Statements 15-178
Da Hua Certified Public Accountants (Special General Partnership)
Floor 12, Building 7, No. 16 Xi Si Huan Zhong Road, Haidian District, Beijing [100039]
Phone: 86 (10) 5835 0011 Fax: 86 (10) 5835 0006
www.dahua-cpa.com
Auditor’s Report
DHSZ [2024] No. 0011018521
To all Shareholders of TCL Technology Group Corporation:
I. Opinion
We have audited the financial statements of TCL Technology Group
Corporation (the “Company”), which include the consolidated and parent’s
balance sheets as at December 31, 2023, the consolidated and parent’s statements
on income, statements on cash flows and statements on changes in shareholders’
equity for the year then ended, as well as the notes to these financial statements.
In our opinion, the accompanying financial statements present fairly, in all
material respects, the consolidated and parent’s financial position of the
Company as at December 31, 2023, and the consolidated and parent’s operations
results and cash flows the year then ended in accordance with the Accounting
Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audits in accordance with the Audit Standards for
Chinese Registered Accountants. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for Audit of 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 our ethical responsibilities in accordance with the said Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions.
Page 1
Auditor’s Report DHSZ [2024] No. 0011018521
III. 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 for 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 provide
a separate opinion on these matters.
And key audit matters identified in our audit are summarized as follows:
Revenue recognition
Please refer to the accounting policies as stated in 38. “Revenue recognition” under Note III to the
financial statements and 57. “Revenue” under Note V to the financial statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect
to revenue recognition include:
The Company’s revenue for the current
period was approximately RMB174.4 understand and assess whether the management's
billion, an increase of about RMB7.8 design and operation of key internal controls in
billion from the revenue of RMB166.6 respect to revenue recognition are effective;
billion for the previous period.
As operating revenue is one of the understand and assess whether the management's
Company’s key operating indicators selection and implementation of the policies related
with the inherent risk of the to revenue recognition complied with the
management manipulating the revenue Accounting Standards for Business Enterprises;
recognition time point for the purpose
of achieving a specific objective or select samples of recorded transactions with revenue
expectation, and the revenue for the year and examined relevant supporting
recognition for the current period has a documents involved during the transaction process,
material influence on the financial including outbound delivery orders, customer receipt
statements, we have identified revenue records, sale invoices, customs declarations, bills of
recognition as a key audit matter. lading and fund receipt proofs;
select samples of the recorded transactions with
revenue around the balance sheet date and examined
outbound delivery orders and other supporting
documents to assess whether the revenue has been
recorded for the appropriate accounting period;
obtain the Company's sale list for the year and
carried out analytic review procedures on the
operating revenue to determine how reasonable
changes in the revenue and gross profit margin for
the current period were;
conduct confirmation procedures with key accounts
and inquired about the sales amount and the account
receivable balance incurred for the current period;
examine whether the information in connection with
revenue was duly presented and disclosed in the
financial statements.
Based on the audit work executed, we believe that the Company's recognition of revenue complies
with relevant requirements of the Accounting Standards for Business Enterprises.
Page 2
Auditor’s Report DHSZ [2024] No. 0011018521
III. Key Audit Matters (continued)
Measurement of fixed assets and construction in progress
Please refer to the accounting policies as stated in 26. "Fixed assets" and 27. "Construction in
progress" under Note III to the financial statements and 20. "Fixed assets" and 21. "Construction
in progress" under Note V to the financial statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect
to the measurement of fixed assets and construction in
progress include:
As at December 31, 2023, the total
amount of fixed assets and construction understand and evaluate the effectiveness of the
in progress presented in the Company’s design of internal controls related to fixed assets and
consolidated financial statements was construction in progress, and test the effectiveness of
RMB193.4 billion, accounting for the implementation of key controls;
50.52% of the total assets. The fixed
assets and construction in progress obtain a list of new assets in the current period, and
mainly included machinery and carry out a spot check of procurement contracts,
equipment and buildings required for payment documents, invoices and acceptance slips
display products, new energy for large-value assets;
photovoltaic products and materials.
Matters such as the eligibility of assets obtain the new settlement statements for
for capitalization, the point of time at construction in the current period, examine them
which construction in progress is against the amounts recorded in the books, and
transferred to fixed assets and review the accuracy and completeness of the entries;
depreciation is provisioned, and the
useful life and residual value of the discuss with the management and judge the accuracy
respective fixed assets involve of the point of time when the construction in progress
management's judgment, so we is transferred to fixed assets and the reasonableness
identified the measurement of fixed of the expected useful life of fixed assets;
assets and construction in progress as
key audit matters. inspect the construction-in-progress site when
approaching the balance sheet date, understanding
and evaluate the progress of the work and checking
it against the entries in the book;
obtain the ownership certificate of fixed assets and
the company inventory sheet, and conduct on-site
checks of important assets;
obtain the statement of depreciation provision for
fixed assets and recalculating whether the
depreciation has been provisioned accurately;
examine that the information in connection with
fixed assets and construction in progress has been
duly presented and disclosed in the financial
statements.
Based on the audit work executed, we believe that the Company measured the fixed assets and
construction in progress in accordance with relevant requirements of the Accounting Standards for
Business Enterprises.
Page 3
Auditor’s Report DHSZ [2024] No. 0011018521
III. Key Audit Matters (continued)
Related parties
Please refer to “XI. Related parties and related transactions”under the notes to the financial
statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect
to related transactions include:
In 2023, the Company’s routine related
transactions amounted to about Examine and evaluate the internal controls adopted
RMB36.1 billion, representing an by management for identifying and disclosing the
increase of about 19.94% from the relationships between related parties and related
previous period. transactions, and review the effectiveness of the
The integrity of the disclosure of related design and implementation of the internal controls;
parties and related transactions, the
authenticity of related transactions and Acquire the statements of management on the
the fairness of transaction prices will integrity of the relationships between related parties
pose an important impact on the fair and related transactions, etc., as well as the list of
presence of the financial statements. relationships between related parties provided by the
Therefore, we identify the related management, and examined this with the
balance and transactions as key matters information acquired from other public channels;
in this audit.
Examine the customers, suppliers and other
stakeholders that deal with the Company to identify
whether there were any omissions for the related
parties. acquire the resolutions of the board of
directors and the general meeting in connection with
related transactions, examine the decision-making
authority and procedures of the related transactions,
judged the legality and compliance of the related
transactions, and determine whether they had been
properly authorized and approved;
compare the prices for selling goods to the related
parties with those of similar products sold to
unrelated parties to determine the fairness of the
prices of related transactions;
acquire the incurred amount and balance details of
related transactions, and examine the financial
vouchers corresponding to the transactions and the
attached contracts or orders, dispatch notes,
statements, invoices and bank documents for the
selected specific samples; and conduct confirmation
procedures for the incurred amounts and balances of
the related transactions with important related
parties.
Based on audit procedures conducted, we are of the opinion that management has made reasonable
disclosure on the completeness of related party relationship, authenticity of related transactions
and faireness of consideration.
Page 4
Auditor’s Report DHSZ [2024] No. 0011018521
IV. Other Information
The Company’s management is responsible for the other information. Other
information comprises all of the information included in the Company’s 2023
Annual Report, but does cover the financial statements and our auditor's report
thereon.
Our opinion on the financial statements does not cover other information
and we do not express any form of assurance or conclusions thereon.
In connection with our audit on 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 audits or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a
material misstatement for other information, we are required to report that fact.
We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with
Governance for Financial Statements
The Company's management is responsible for the preparation of the
financial statements that provide a fair view in accordance with the Accounting
Standards for Business Enterprises, and for designing, implementing and
maintaining such internal controls as the management determines is necessary to
enable 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 concerns and using the going concerns as a
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.
VI. Auditor's Responsibilities for Audit of 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 states our opinions.
Page 5
Auditor’s Report DHSZ [2024] No. 0011018521
Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the China Independent Auditing Standards
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or aggregate,
they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with the China Independent Auditing
Standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
1．Identifying and assessing the risks of material misstatements in financial
statements, and whether due to fraud or error, designing and performing audit
procedures responsive to those risks, and obtaining audit evidence that is
sufficient and appropriate to provide a basis for our opinions. 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 overriding of internal controls.
2．Obtaining an understanding of internal controls relevant to the audit in
order to design audit procedures that are appropriate to the circumstances.
3．Evaluating the appropriateness of accounting policies used and
determine how reasonable accounting estimates and related disclosures made by
the management are.
4．Concluding on the appropriateness of the management's use of the going
concern assumption of accounting and, based on the audit evidence obtained,
drawing a conclusion on 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 by the China Independent Auditing Standards to draw users'
attention in our auditor's report on the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinions. 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.
5．Evaluating 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 maintains fair presentation.
Page 6
Auditor’s Report DHSZ [2024] No. 0011018521
6．Obtaining 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 directing,
supervising and performing the Company audits and undertaking full
responsibility for audit opinions.
We communicated with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant audit
findings, including any noteworthy deficiencies in internal controls that we
identify during our audit.
We also provided those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence, and
communicated with them on all relationships and other matters that may
reasonably be thought to bear an impact on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, we
determined those matters that were of most significance in the audit of the
financial statements of the current period and these therefore constitute the key
audit matters. We describe these matters in our auditor's report unless law or
regulation precluded public disclosure about the matters or when, in extremely
rare circumstances, we determined 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 interests of such communication.
(There is no text below this page)
Page 7
(There is no text on this page, which is used for the signature and seal of
Auditor’s Report DHSZ [2024] No. 0011018521)
Da Hua Certified Public
Accountants (Special General Chinese CPA:
Partnership)
(Engagement
Jiang Xianmin
Partner)
Beijing China Chinese CPA:
Xiong Xin
April 28, 2024
Page 1
TCL Technology Group Corporation
Consolidated Balance Sheet
___________(RMB’000)_____________
Note V December 31, 2023 January 1, 2023
Current assets
Monetary assets 1 21,924,271 35,378,501
Held-for-trading financial assets 2 23,184,117 12,703,507
Derivative financial assets 3 108,008 361,034
Notes receivable 4 615,392 512,849
Accounts receivable 5 22,003,651 14,051,661
Receivables financing 6 954,410 1,103,128
Prepayments 7 2,946,288 3,593,857
Other receivables 8 5,706,855 4,033,248
Inventories 9 18,481,755 18,001,122
Contract assets 10 343,907 315,167
Held-for-sale assets 11 162,416 -
Non-current assets due within one year 12 580,695 -
Other current assets 13 5,286,534 5,438,936
Total current assets 102,298,299 95,493,010
Non-current assets
Debt investments 14 122,349 741,703
Long-term receivables 15 720,281 631,373
Long-term equity investments 16 25,431,271 29,256,216
Investments in other equity instruments 17 386,648 439,996
Other non-current financial assets 18 2,971,566 2,928,827
Investment property 19 911,679 946,449
Fixed assets 20 176,422,621 132,477,672
Construction in progress 21 17,000,052 52,053,834
Right-of-use assets 22 6,386,446 5,110,124
Intangible assets 23 18,419,544 16,783,931
Development costs 24 2,541,493 3,179,207
Goodwill 25 10,516,742 9,161,852
Long-term deferred expenses 26 3,402,689 2,744,208
Deferred income tax assets 27 2,246,222 1,753,887
Other non-current assets 28 13,081,184 6,293,943
Total non-current assets 280,560,787 264,503,222
Total assets 382,859,086 359,996,232
Person-in-
Person-in- charge of
charge of the
Legal Financial Financial Jing
representative: Li Dongsheng affairs: Li Jian Department: Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
1
TCL Technology Group Corporation
Consolidated Balance Sheet (Continued)
___________(RMB’000)_____________
Liabilities and shareholders' equity: Note V December 31, 2023 January 1, 2023
Current liabilities
Short-term borrowings 29 8,473,582 10,215,911
Borrowings from the Central Bank 30 995,010 777,676
Customer deposits and deposits from other
31 270,929 603,423
banks and financial institutions
Held-for-trading financial liabilities 32 251,451 861,912
Derivative financial liabilities 33 58,591 70,735
Notes payable 34 5,610,802 6,365,660
Accounts payable 35 29,402,493 26,381,912
Advances from customers 36 678 1,402
Contract liabilities 37 1,899,468 2,336,008
Employee compensation payable 38 3,034,497 2,376,933
Taxes and levies payable 39 861,342 1,215,591
Other payables 40 22,171,402 24,190,352
Non-current liabilities due within one year 41 24,631,659 10,957,321
Other current liabilities 42 1,563,245 1,185,848
Total current liabilities 99,225,149 87,540,684
Non-current liabilities
Long-term borrowings 43 117,662,209 118,603,165
Bonds payable 44 9,113,848 12,006,851
Lease liabilities 45 5,737,288 4,461,383
Long-term payables 46 2,739,444 887,763
Long-term employee compensation payable 38 29,645 472,538
Deferred income 47 1,540,648 2,468,145
Deferred income tax liabilities 27 1,427,487 1,319,428
Estimated liabilities 48 117,395 97,522
Total non-current liabilities 138,367,964 140,316,795
Total liabilities 237,593,113 227,857,479
Share capital 49 18,779,081 17,071,892
Capital reserves 50 10,752,055 12,522,793
Less: Treasury share 51 1,094,943 1,314,581
Other comprehensive income 52 (945,798) (811,822)
Surplus reserves 53 3,874,006 3,712,273
Specific reserves 54 11,343 2,301
General risk reserve 55 8,934 8,934
Retained earnings 56 21,537,188 19,486,730
Total equity attributable to shareholders of the
52,921,866 50,678,520
parent company
Non-controlling interests 92,344,107 81,460,233
Total shareholders’ equity 145,265,973 132,138,753
Total liabilities and shareholders' equity 382,859,086 359,996,232
Person-in-
Person-in- charge of
charge of the
Legal Financial Financial Jing
representative: Li Dongsheng affairs: Li Jian Department: Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
2
TCL Technology Group Corporation
Consolidated Income Statement
___________(RMB’000)_____________
Note V 2023 2022
I. Total revenue 174,446,172 166,632,146
Including: Operating revenue 57 174,366,657 166,552,786
Interest income 58 79,515 79,360
Less: Operating cost 57 148,767,597 151,925,489
Interest expenditures 58 19,362 23,530
Taxes and levies 59 801,938 640,302
Sales expenses 60 2,523,687 1,950,528
Administrative expenses 61 4,783,247 3,540,611
R&D expenses 62 9,522,838 8,633,638
Financial expenses 63 3,972,728 3,422,895
Including: Interest expenses 4,922,120 4,468,008
Interest income 939,719 723,665
Plus: Other income 64 3,538,259 2,917,794
Return on investment 65 2,591,877 4,731,394
Including: Return on investment in
1,363,661 2,898,739
joint ventures and associates
Exchange gain 58 516 17,914
Gain on changes in fair value 66 27,338 (139,244)
Credit impairment loss 67 (173,065) (37,653)
Asset impairment loss 68 (4,813,965) (3,486,523)
Asset disposal income 69 (41,416) (79,825)
II. Operating profit 5,184,319 419,010
Plus: Non-operating income 70 71,285 790,112
Less: Non-operating expenses 71 203,780 152,071
III. Gross profit 5,051,824 1,057,051
Less: Income tax expenses 72 271,040 (731,008)
IV. Net profit 4,780,784 1,788,059
(I) Classification by business continuity
1. Net profit from continuing operations 4,780,784 1,788,059
2. Net profit from discontinued operations - -
(II) Classification by ownership
1. Net profit attributable to the owners of
2,214,934 261,319
the parent company
2. Net profit attributable to non-controlling
2,565,850 1,526,740
interests
V. Other comprehensive income, net of tax 52 (189,220) (327,034)
(I) Other comprehensive income that
cannot be subsequently reclassified into profit (48,773) (18,149)
or loss
(II) Other comprehensive income that may
be subsequently reclassified into profit or loss (140,447) (308,885)
upon satisfaction of prescribed conditions
VI. Total comprehensive income 4,591,564 1,461,025
Total comprehensive income attributable to
2,080,958 (141,056)
the shareholders of the parent company
Total comprehensive income attributable to
2,510,606 1,602,081
non-controlling interests
VII. Earnings per share 73
(I) Basic earnings per share (RMB yuan) 0.1195 0.0174
(II) Diluted earnings per share (RMB yuan) 0.1179 0.0168
Person-in- Person-in-
charge of charge of the
Legal Financial Financial Jing
representative: Li Dongsheng affairs: Li Jian Department: Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
3
TCL Technology Group Corporation
Consolidated Cash Flow Statement
___________(RMB’000)_____________
Note V 2023 2022
I. Cash flow from operating activities:
Proceeds from sale of commodities and rendering of services 139,948,369 137,297,835
Net increase/(decrease) in deposits from customers, banks and (332,494) (62,633)
other financial institutions
Net increase/(decrease) in borrowings from the Central Bank 217,333 (659,386)
Cash received from interest, handling charge and commission 79,515 79,360
Tax and levy rebates 8,198,667 11,020,947
Cash generated from other operating activities 74 6,899,258 7,955,973
Sub-total of cash generated from operating activities 155,010,648 155,632,096
Payments for commodities and services (104,274,934) (113,465,399)
Net (increase)/decrease in loans and advances to customers (210,100) 558,603
Net (increase)/decrease in deposits with the Central Bank, banks (19,240) 36,327
and other financial institutions
Cash paid to and for employees (12,223,510) (10,696,682)
Taxes and levies paid (4,194,531) (3,916,226)
Cash used in other operating activities 75 (8,773,577) (9,722,343)
(129,695,892) (137,205,720)
Sub-total of cash used in operating activities
Net cash generated from operating activities 80 25,314,756 18,426,376
II. Net cash generated from investment activities:
Proceeds from disinvestments 55,718,288 48,642,124
Proceeds from return on investments 2,188,135 1,100,618
Net proceeds from disposal of fixed assets, intangible assets and
140,305 85,502
other long-term assets
Net proceeds from disposal of subsidiaries and other business
80 1,566,356 1,432,795
units
Cash generated from other investing activities 76 1,589,202 170,387
Sub-total of cash generated from investment activities 61,202,286 51,431,426
Payments for the acquisition and construction of fixed assets,
(29,574,296) (40,762,787)
intangible assets and other long-term assets
Payments for investments (71,131,067) (56,242,405)
Net payments for acquiring subsidiaries and other business units 80 (370,928) (50,133)
Cash used in other investing activities 77 (923,051) (1,212,074)
Subtotal of cash used in investing activities (101,999,342) (98,267,399)
Net cash used in investing activities (40,797,056) (46,835,973)
Person-in-
charge of the
Person-in-charge of Financial
Legal representative: Li Dongsheng Financial affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
4
TCL Technology Group Corporation
Consolidated Cash Flow Statement (Continued)
___________(RMB’000)_____________
Note V 2023 2022
III. Cash flow generated from financing activities:
Capital contributions received 3,182,627 17,981,473
Including: Net capital contributions by non-
3,182,627 8,509,514
controlling interests to subsidiaries
Borrowings raised 61,391,001 87,581,519
Net cash received from bonds issue 1,500,000 7,820,000
Cash generated from other financing activities 78 3,950,311 272,281
Sub-total of cash generated from financing
70,023,939 113,655,273
activities
Cash paid for debt repayment (53,877,371) (66,503,750)
Cash paid for dividend and profit distribution or
(6,317,209) (9,640,363)
repayment of interests
Including: Dividends and profit paid by
(423,710) (1,691,435)
subsidiaries to minority shareholders
Cash used in other financing activities 79 (8,037,595) (6,110,504)
Subtotal of cash used in financing activities (68,232,175) (82,254,617)
Net cash generated from financing activities 1,791,764 31,400,656
IV. Effect of exchange rate changes on cash and cash
11,727 602,860
equivalents
V. Net increase in cash and cash equivalents (13,678,809) 3,593,919
Add: Opening balance of cash and cash equivalents 33,675,624 30,081,705
VI. Ending balance of cash and cash equivalents 80 19,996,815 33,675,624
Person-in-
Person-in- charge of
charge of the
Legal Financial Financial Jing
representative: Li Dongsheng affairs: Li Jian Department: Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
5
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity
___________(RMB’000)_____________
2023
Equity attributable to shareholders of the parent company
Other Other General Non-
Share Capital Treasury Special Surplus Undistributed Shareholder
equity comprehensive risk controlling
capital reserves share Reserves reserves profit equity Total
instruments income reserve interests
I. Balance at the end of the prior year 17,071,892 - 12,522,793 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,233 132,138,753
Add: Change in accounting policies - - - - - - - - - - -
II. Balance at the beginning of the
17,071,892 - 12,522,793 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,233 132,138,753
period
III. Movement of the period 1,707,189 - (1,770,738) 219,638 9,042 (133,976) 161,733 - 2,050,458 10,883,874 13,127,220
(I) Total comprehensive income - - - - - (136,719) - - 2,214,934 2,510,606 4,588,821
(II) Capital contributed and reduced
- - (131,061) 219,638 - - - - - 8,791,175 8,879,752
by shareholders
1. Capital contributed by
- - - - - - - - - 8,815,929 8,815,929
shareholders
2. Share-based payments included in
- - 242,757 466,809 - - - - - 336,118 1,045,684
owners' equity
3. Amount of bond issuance included
- - - - - - - - - - -
in owners' equity
4. Others - - (373,818) (247,171) - - - - - (360,872) (981,861)
(III) Profit distribution - - - - 9,042 - 161,733 - (161,733) (417,907) (408,865)
1. Appropriation of surplus reserves - - - - - - 161,733 - (161,733) - -
2. Appropriation of general risk
- - - - 32,220 - - - - 76,587 108,807
reserve
3. Appropriation to shareholders - - - - - - - - - (437,951) (437,951)
4. Others - - - - (23,178) - - - - (56,543) (79,721)
(IV) Internal transfer of owner's
1,707,189 - (1,707,189) - - 2,743 - - (2,743) - -
equity
1. Capitalization of capital reserves
1,707,189 - (1,707,189) - - - - - - - -
into capital (or share capital)
2. Other comprehensive income
- - - - - 2,743 - - (2,743) - -
transferred into retained earnings
(V) Others - - 67,512 - - - - - - - 67,512
IV. Balance as at the end of the
18,779,081 - 10,752,055 (1,094,943) 11,343 (945,798) 3,874,006 8,934 21,537,188 92,344,107 145,265,973
period
Person-in-charge of
Legal Person-in-charge of the Financial
representative: Li Dongsheng Financial affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
6
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
___________(RMB’000)_____________
2022
Equity attributable to shareholders of the parent company
Other Other General Non-
Share Capital Treasury Special Surplus Undistributed Shareholder
equity comprehensive risk controlling
capital reserves share Reserves reserves profit equity Total
instruments income reserve interests
I. Balance at the end of the prior year 14,030,642 200,334 6,079,267 (1,885,557) 1,549 (409,447) 2,550,173 8,934 22,458,340 76,611,057 119,645,292
Add: Change in accounting policies - - - - - - - - 6,809 9,753 16,562
II. Balance at the beginning of the
14,030,642 200,334 6,079,267 (1,885,557) 1,549 (409,447) 2,550,173 8,934 22,465,149 76,620,810 119,661,854
period
III. Movement of the period 3,041,250 (200,334) 6,443,526 570,976 752 (402,375) 1,162,100 - (2,978,420) 4,839,423 12,476,897
(I) Total comprehensive income - - - - - (415,837) - - 261,319 1,602,081 1,447,564
(II) Capital contributed and reduced
3,041,250 (200,334) 7,822,900 570,976 - - - - - 8,109,948 19,344,740
by shareholders
1. Capital contributed by shareholders 3,041,250 - 6,668,566 - - - - - - 8,109,948 17,819,764
2. Share-based payments included in
- - 26,559 76,664 - - - - - - 103,223
owners' equity
3. Amount of bond issuance included
(200,334) 1,127,775 997,083 - - - - - - 1,924,524
in owners' equity
4. Others - - - (502,771) - - - - - - (502,771)
(III) Profit distribution - - - - 752 - 1,162,100 - (3,212,103) (2,962,104) (5,011,355)
1. Appropriation of surplus reserves - - - - - - 1,162,100 - (1,162,100) (381,108) (381,108)
2. Appropriation of general risk
- - - - 752 - - - - - 752
reserve
3. Appropriation to shareholders - - - - - - - - (2,050,003) (2,580,996) (4,630,999)
4. Others - - - - - - - - - - -
(IV) Internal transfer of owner's
- - - - - 13,461 - - (13,461) - -
equity
1. Other comprehensive income
- - - - - 13,461 - - (13,461) - -
transferred into retained earnings
(V) Others - - (1,379,374) - - - - - (14,174) (1,910,502) (3,304,050)
IV. Balance as at the end of the
17,071,892 - 12,522,793 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,233 132,138,753
period
Person-in-charge of
Legal Person-in-charge of the Financial
representative: Li Dongsheng Financial affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
7
TCL Technology Group Corporation
Balance Sheet of the Company
___________(RMB’000)_____________
assets Note XVII December 31, 2023 January 1, 2023
Current assets
Monetary assets 2,646,890 17,821,922
Held-for-trading financial
14,178,884 5,936,208
assets
Derivative financial assets 66 15,578
Accounts receivable 1 350,788 353,812
Prepayments 9,241 3,693
Other receivables 2 19,614,272 4,961,948
Inventories - 5,380
Other current assets 1,629 34,838
Total current assets 36,801,770 29,133,379
Non-current assets
Long-term receivables - 1,935,365
Long-term equity investments 3 79,664,992 76,360,371
Investments in other equity
4 - 5,000
instruments
Other non-current financial
5 644,300 431,023
assets
Investment property 77,364 81,034
Fixed assets 34,806 32,223
Construction in progress - -
Right-of-use assets 435,915 428,575
Intangible assets 96,319 109,605
Long-term deferred expenses 33,005 24,069
Deferred income tax assets 7 7
Total non-current assets 80,986,708 79,407,272
Total assets 117,788,478 108,540,651
Person-in-
charge of
Person-in-charge the
Legal of Financial Financial
representative: Li Dongsheng affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
8
TCL Technology Group Corporation
Balance Sheet of the Parent Company (Continued)
___________(RMB’000)_____________
Liabilities and shareholders' equity: Note XVII December 31, January 1, 2023
Current liabilities
Short-term borrowings 2,124,045 1,900,169
Accounts payable 202,691 140,563
Contract liabilities 6,750 308
Employee compensation payable 184,320 178,097
Taxes and levies payable 12,415 63,908
Other payables 26,818,710 22,036,683
Non-current liabilities due within one year 6,167,442 5,605,919
Other current liabilities 3,656 2,430
Total current liabilities 35,520,029 29,928,077
Non-current liabilities
Long-term borrowings 19,963,555 15,280,955
Bonds payable 6,992,012 9,922,133
Lease liabilities 20,816 748
Long-term employee compensation payable 26,215 84,188
Deferred income 53,147 53,638
Total non-current liabilities 27,055,745 25,341,662
Total liabilities 62,575,774 55,269,739
Share capital 18,779,081 17,071,892
Capital reserves 16,127,030 17,715,533
Less: Treasury share 1,094,943 1,314,581
Other comprehensive income (142,055) (128,195)
Surplus reserves 3,671,942 3,510,209
Retained earnings 17,871,649 16,416,054
Total shareholders’ equity 55,212,704 53,270,912
Total liabilities and shareholders' equity 117,788,478 108,540,651
Person-in-
Person-in- charge of
charge of the
Legal Financial Financial
representative: Li Dongsheng affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
9
TCL Technology Group Corporation
Income Statement of the Company
___________(RMB’000)_____________
Note XVII 2023 2022
I. Operating revenue 6 1,719,960 1,593,213
Less: Operating cost 6 1,197,154 1,162,807
Taxes and levies 15,213 14,531
Sales expenses 32,997 54,059
Administrative expenses 496,759 323,594
R&D expenses 95,705 171,276
Financial expenses 1,126,842 1,282,688
Including: Interest expenses 1,581,566 2,252,721
Interest income 346,028 771,483
Plus: Other income 11,680 8,705
Return on investment 7 2,360,797 12,483,556
Of which: Share of profit or loss of joint 1,213,417 1,308,061
ventures and associates 7
Gain on changes in fair value 492,641 (24,134)
Credit impairment loss (1,192) (266)
Asset disposal income 1,065 1,540
II. Operating profit 1,620,281 11,053,659
Plus: Non-operating income 3,372 575,077
Less: Non-operating expenses 6,325 7,737
III. Gross profit 1,617,328 11,620,999
Less: Income tax expenses - -
IV. Net profit 1,617,328 11,620,999
V. Other comprehensive income (13,860) (16,001)
VI. Total comprehensive income 1,603,468 11,604,998
Person-in- Person-in-
charge of charge of the
Legal Financial Financial
representative: Li Dongsheng affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
10
TCL Technology Group Corporation
Cash Flow Statement of the Company
___________(RMB’000)_____________
Note
XVII 2023 2022
I. Cash flow from operating activities:
Proceeds from sale of commodities and
1,540,380 1,357,318
rendering of services
Tax and levy rebates 408 1,781
Cash generated from other operating
1,065,410 1,029,029
activities
Sub-total of cash generated from operating
2,606,198 2,388,128
activities
Payments for commodities and services (884,951) (1,054,192)
Cash paid to and for employees (179,035) (215,412)
Taxes and levies paid (175,341) (205,575)
Cash used in other operating activities (9,420,940) (12,757,279)
Sub-total of cash used in operating activities (10,660,267) (14,232,458)
Net cash generated from operating activities 8 (8,054,069) (11,844,330)
II. Cash flow from investing activities:
Proceeds from disinvestments 17,561,714 14,882,100
Proceeds from return on investments 1,359,286 10,461,727
Net proceeds from disposal of fixed assets,
- 24
intangible assets and other long-term assets
Sub-total of cash generated from investment
18,921,000 25,343,851
activities
Payments for the acquisition and construction
of fixed assets, intangible assets and other (13,483) (39,001)
long-term assets
Payments for investments (27,016,746) (17,545,211)
Cash used in other investing activities - -
Subtotal of cash used in investing activities (27,030,229) (17,584,212)
Net cash used in investing activities (8,109,229) 7,759,639
Person-in-
Person-in-charge charge of the
Legal of Financial Financial
representative: Li Dongsheng affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
11
TCL Technology Group Corporation
Cash Flow Statement of the Company (Continued)
___________(RMB’000)_____________
Note XVII 2023 2022
III. Cash flow generated from financing activities:
Capital contributions received - 9,471,959
Borrowings raised 18,920,000 23,388,555
Net cash received from bonds issue 1,500,000 7,820,000
Cash generated from other financing activities 205,647 991,657
Sub-total of cash generated from financing
20,625,647 41,672,171
activities
Cash paid for debt repayment (17,827,419) (26,733,600)
Cash paid for distribution of dividends and
(1,284,988) (3,195,747)
profits or repayment of interests
Cash used in other financing activities (276,715) (562,962)
Subtotal of cash used in financing activities (19,389,122) (30,492,309)
Net cash generated from financing activities 1,236,525 11,179,862
IV. Effect of exchange rate changes on cash and
(1,382) 73,720
cash equivalents
V. Net increase in cash and cash equivalents (14,928,155) 7,168,891
Add: Opening balance of cash and cash equivalents 17,570,270 10,401,379
VI. Ending balance of cash and cash equivalents 9 2,642,115 17,570,270
Person-in-
Person-in- charge of
charge of the
Legal Financial Financial
representative: Li Dongsheng affairs: Li Jian Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
12
TCL Technology Group Corporation
Statement of Changes in Shareholders’ Equity of the Company
___________(RMB’000)_____________
2023
Other Total
Other equity Capital Treasury comprehensive Surplus Retained shareholders’
Share capital instruments reserves share income reserves earnings equity
I. Balance at the end of the prior year 17,071,892 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
Add: Change in accounting policies - - - - - - - -
II. Balance at the beginning of the period 17,071,892 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
III. Movement of the period 1,707,189 - (1,588,503) 219,638 (13,860) 161,733 1,455,595 1,941,792
(I) Total comprehensive income - - - - (13,860) - 1,617,328 1,603,468
(II) Capital contributed and reduced by
- - 108,217 219,638 - - - 327,855
shareholders
1. Capital contributed by owners - - - - - - - -
2. Capital contributed by holders of other
- - - - - - - -
equity instruments
3. Share-based payments included in
- - 108,217 466,809 - - - 575,026
owners' equity
4. Amount of bond issue included in
- - - - - - - -
owners' equity
5. Others - - - (247,171) - - - (247,171)
(III) Profit distribution - - - - - 161,733 (161,733) -
1. Appropriation of surplus reserves - - - - - 161,733 (161,733) -
2. Appropriation to shareholders - - - - - - - -
3. Others - - - - - - - -
(IV) Internal transfer of owner's equity 1,707,189 - (1,707,189) - - - - -
1. Capitalization of capital reserves into
1,707,189 - (1,707,189) - - - - -
capital (or share capital)
(V) Others - - 10,469 - - - - 10,469
IV. Balance as at the end of the period 18,779,081 - 16,127,030 (1,094,943) (142,055) 3,671,942 17,871,649 55,212,704
Person-in-charge of Financial Person-in-charge of the
Legal representative: Li Dongsheng affairs: Li Jian Financial Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
13
TCL Technology Group Corporation
Statement of Changes in Shareholder Equity of the Company (Continued)
___________(RMB’000)_____________
2022
Other Total
Other equity Capital Treasury comprehensive Surplus shareholders’
Share capital instruments reserves share income reserves Retained earnings equity
I. Balance at the end of the prior year 14,030,642 200,334 9,900,679 (1,885,557) (112,194) 2,348,109 8,021,329 32,503,342
Add: Change in accounting policies - - - - - - - -
II. Balance at the beginning of the
14,030,642 200,334 9,900,679 (1,885,557) (112,194) 2,348,109 8,021,329 32,503,342
period
III. Movement of the
3,041,250 (200,334) 7,810,865 570,976 (16,001) 1,162,100 8,394,725 20,763,581
period
(I) Total comprehensive income - - - - (16,001) - 11,620,999 11,604,998
(II) Capital contributed and reduced
3,041,250 (200,334) 7,823,531 570,976 - - - 11,235,423
by shareholders
1. Capital contributed by owners 3,041,250 - 6,668,566 - - - - 9,709,816
2. Capital contributed by holders of
- - - - - - - -
other equity instruments
3. Share-based payments included in
- - 27,190 76,664 - - - 103,854
owners' equity
4. Amount of bond issue included in
- (200,334) 1,127,775 997,083 - - - 1,924,524
owners' equity
5. Others - - - (502,771) - - - (502,771)
(III) Profit distribution - - (12,666) - - 1,162,100 (3,212,103) (2,062,669)
1. Appropriation of surplus reserves - - - - - 1,162,100 (1,162,100) -
2. Appropriation to shareholders - - - - - - (2,050,003) (2,050,003)
3. Others - - (12,666) - - - - (12,666)
(IV) Others - - 3,989 - - - (14,171) (10,182)
IV. Balance as at the end of the
17,071,892 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
period
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng Financial affairs: Li Jian Financial Department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
14
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
I General information
TCL Technology Group Corporation (hereinafter referred to as “the Company”) is a
limited liability company established in Huizhou on July 17, 1997. It was changed to a
limited liability company as a whole in 2002 and was listed on the Shenzhen Stock
Exchange in January 2004. After years of new share placements, non-public reissuances,
conversion into share capital, exercise of options and repurchase and cancellation of
shares, etc., the registered capital and share capital of the Company were
RMB18,779,080,767 as at December 31, 2023.
The main business structure of the Company and its subsidiaries consists of display, new
energy photovoltaic and materials, industrial finance and other businesses. The relevant
information of the Company's subsidiaries is detailed in Note VIII.
The registered address of the Company is: TCL TECH Building, 17 Huifeng Third Road,
Zhongkai Hi-Tech Development District, Huizhou City, Guangdong Province.
Approval and issue: These financial statements were authorized for issue by the Company’s
Board of Directors on April 28, 2024.
II Scope of consolidated financial statements
As at the end of the Reporting Period, for subsidiaries included in the consolidated financial
statements, please refer to Note VIII, 1, (1) “Breakdown of important subsidiaries”. For the
changes to the scope of the consolidated financial statements of the Reporting Period, see
15
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates
1 Basis for the preparation of financial statements
The preparation of financial statements of the Company is based on the actual transactions
and events in accordance with the "Accounting Standards for Business Enterprises - Basic
Standards" published by the Ministry of Finance and specific corporate accounting
standards, application guidelines for corporate accounting standards, corporate accounting
standards interpretations and other relevant regulations (hereinafter collectively referred to
as "corporate accounting standards") for confirmation and measurement, combining the
provisions of “Regulations on Information Disclosure and Compilation of Companies
Offering Securities to the Public No. 15 - General Provisions on Financial Reports” (revised
in 2023) published by CSRC.
2 Going concern basis
The Company has evaluated the ability to continue as a going concern for 12 months from
the end of the Reporting Period and has not identified any issues or circumstances that result
in significant doubts about its ability to continue as a going concern. Therefore, the financial
statements have been prepared on a going concern basis.
3 Accounting Basis and Measurement Basis
The Company’s accounting treatment is based on the accrual basis. Except certain financial
instruments measured at fair value, the financial statements are measured at historical cost.
If an asset is impaired, provision for impairment will be made accordingly based onrelevant
rules.
4 Statement of compliance with corporate accounting standards
The financial statements are in compliance with the requirements of the Accounting
Standards for Business Enterprises, and truly and completely reflect the financial position,
operating results, cash flow and other relevant information of the Company during the
Reporting Period.
5 Accounting period
The Company adopts the calendar year as an accounting period, and its fiscal year is from
January 1 to December 31 of the Gregorian calendar.
6 Operations cycle
An operations cycle refers to a period from the purchase of assets by an enterprise for
processing to the realization of cash or cash equivalents. The Company takes a 12 months’
period as an operations cycle and take the operating cycle as the criteria for liquidity
classification of assets and liabilities.
7 Functional currency for bookkeeping
The Company uses RMB as its functional currency. Its overseas subsidiaries use the
currencies of the main economic environment in which they operate as their respective
functional currencies and their financial statements are converted into RMB and presented
in RMB thousands unless otherwise specified.
16
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
8 Method and selection basis for determining importance criteria
Item Importance criteria
The recovery, reversal and actual write-off
of bad debt provisions for important The amount of an individual item is greater than
receivables with bad debt provisions accrued RMB50 million.
on an individual basis
The ending carrying amount of an individual item
Important construction in progress
exceeds RMB10 billion.
The total asset of non-wholly-owned subsidiaries
exceeds 10% of that of the Group or the total
Important non-wholly-owned subsidiaries
revenue of non-wholly-owned subsidiaries
exceeds 10% of that of the Group.
The carrying amount of long-term equity
Important joint ventures or associates investments in a single investee exceeds 5% of the
total asset of the Group.
Important prepayments, contract liabilities,
The amount of an individual item exceeds 0.5% of
accounts payable and other payables are
the total asset of the Group.
aged for more than 1 year
The cumulative expenditure of an individual
Important capitalized research and
project exceeds 0.5% of the total asset of the
development projects
Group.
17
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
9 Accounting treatments for business combinations involving enterprises under and not under
common control
(1) When the terms, conditions and economic influence of transactions in the process of a step-by-step
combination conform to one or more of the following, accounting for multiple transactions is treated
as a package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
These transactions can only achieve a complete business outcome when they are accounted for
(b)
collectively;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
A transaction is uneconomical individually, but is economical when considered collectively with
(d)
other transactions.
(2) Business combinations involving enterprises under common control
A combination of enterprises that are ultimately controlled by the same party or parties before and
after the combination on a non-temporary basis constitutes a business combination under common
control.
Assets and liabilities acquired by the Company in business combination are measured at the carrying
amounts of assets and liabilities of the acquired party in the consolidated financial statements of the
ultimate controlling party as at the date of combination (including the goodwill resulting from the
acquisition of the acquired party by the ultimate controlling party). The difference between the
carrying amount of net assets acquired in the combination and that of the consideration paid for the
combination (or the total par value of shares issued) is used to adjust the share capital premium in
the capital reserve, and when the share capital premium in the capital reserve is insufficient for offset,
it is used to adjust the retained earnings. If there is a contingent consideration and it is necessary to
confirm estimated liabilities or assets, the difference between the amounts of the estimated liabilities
or assets and the settlement amount of subsequent contingent consideration is used to adjust the
capital reserve (capital premium or share capital premium), and when the capital reserve is
insufficient, it is used to adjust the retained earnings.
For a business combination that is ultimately realized through multiple transactions, if it is a package
transaction, each transaction is treated as a transaction that acquires control; if it is not a package
transaction, on the date of acquisition of control, the difference between the initial cost of long-term
equity investments and the carrying amount of long-term equity investments before the combination
plus the carrying amount of the newly paid considerations on the date of combination is used to
adjust the capital reserve; and when the capital reserve is insufficient for offset, it is used to adjust
the retained earnings. For equity investments held prior to the date of combination, no accounting
treatment is carried out for other comprehensive gains recognized by equity accounting or financial
instrument confirmation and measurement standards, and up to the disposal of the investment, the
accounting treatment shall be based on the same basis as the direct disposal of the assets or liabilities
of the invested entity; other changes in the owner’s equity other than net profit or loss, other
comprehensive income or profit distribution of net assets of the invested company recognized as
equity are not subject to accounting, and will be transferred to the current profit and loss until
disposal of the investment.
(3) Business combination not under common control
A combination of enterprises that are not ultimately controlled by the same party or parties before
and after the combination constitutes a business combination not under common control.
18
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under
9
common control (continued)
(3) Business combination not under common control (continued)
Assets paid and liabilities incurred or assumed by the Company as a consideration for the
business combination are measured at fair value on the date of purchase, and the difference
between the fair value and their carrying amount is recognized in profit or loss.
The difference between the higher combination cost and lower share in the fair value of net
identifiable assets of the acquired party gained in the combination is recognized as
goodwill. If the combination cost is lower than the share in the fair value of net identifiable
assets of the acquired party gained in the combination, the fair values of the identifiable
assets, liabilities and contingent liabilities of the acquired party gained and the measurement
of the combination cost are first reviewed; and if it is reviewed that the combination cost is
lower than the share in the fair value of net identifiable assets of the acquired party gained
in the combination, the difference between the lower combination cost and higher share in
the fair value of net identifiable assets of the acquired party gained in the combination is
included in current profits and losses.
In the case where a business combination not under common control is realized through
multiple exchanges and transactions, if it is a package transaction, each transaction will be
accounted for as a transaction for acquiring control; in the case it is not a package
transaction, if the equity investment held before the date of combination is accounted for
using equity method, the sum of the carrying amount of equity investments of the acquired
party held before the date of acquisition, plus the new investment cost on the date of
acquisition will be recognized as the initial cost of the investment; the remaining
comprehensive income recognized in equity investments using equity method before the
date of acquisition will be recorded, when the investment is disposed of on the same basis
as those the investee adopted directly to dispose of the relevant assets or liabilities. If the
equity investment held before the date of combination is accounted for by financial
instrument recognition and measurement criteria, the sum of the fair value of equity
investment on the date of combination plus the new investment cost is taken as the initial
investment cost on the date of combination. The difference between the fair value and the
carrying amount of the original equity, and the accumulated fair value changes originally
included in other comprehensive income should be transferred to return on investment for
the current period of the combination date.
(4) Expenses incurred from combination
The agency fees paid for audits, legal services, assessments and consultations and other
directly related expenses incurred in the business combination are recognized in profit or
loss during the period in which they are incurred. The transaction costs for the issuance of
equity securities for the business combination that may be directly attributed to equity
transactions can be deducted from equity;
19
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements
(1) Criteria for judging control
Control means having the power of control over the investee, enjoying variable returns by
participating in the relevant activities of the investee, and having the ability to use the power
over the investee to influence the amount of returns.
The Company judges whether it controls the investee based on comprehensive
consideration of all relevant facts and circumstances. Once any change in relevant facts and
circumstances causes the relevant elements involved in the definition of control to be
changed, the Company will conduct a reassessment. The relevant facts and circumstances
mainly include:
① The purpose for which the investee is established;
② The relevant activities of the investee and how to make decisions on such activities;
③ Whether the rights enjoyed by the investor enable it to currently lead the relevant
activities of the investee;
④ Whether the investor is entitled to variable returns by participating in the relevant
activities of the investee;
⑤ Whether the investor has the ability to exercise its power over the investee to affect the
amount of return;
⑥ The relationship between the investor and other parties.
(2) Consolidation scope
The scope of consolidation of the Company’s consolidated financial statements is
determined on the basis of control, and all subsidiaries (including separate entities
controlled by the Company) are included into the consolidated financial statements.
20
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements (continued)
(3) Consolidation procedure
The Company prepares the consolidated financial statements based on the financial
statements of itself and its subsidiaries and other relevant information. The Company
prepares the consolidated financial statements in a manner that the whole group will be
treated as an accounting entity to reflect the financial position, operating results, and cash
flow of the group as a whole under unified accounting policies, in accordance with the
recognition, measurement and presentation requirements of relevant accounting standards
for business enterprises.
The accounting policies and accounting periods adopted by all subsidiaries included in the
consolidated financial statements are consistent with those of the Company. If the
accounting policies or accounting periods adopted by the subsidiaries are inconsistent with
those of the Company, necessary adjustments will be made in accordance with the
Company's accounting policies and accounting periods when preparing consolidated
financial statements.
The impact of intracompany transactions between the Company and its subsidiaries, and
intracompany transactions between subsidiaries, on the consolidated balance sheet,
consolidated income statement, consolidated cash flow statement and consolidated
statement of changes in shareholders' equity is offset in the preparation of consolidated
financial statements. Where a transaction is recognized by the Company or its subsidiaries
as the transaction subject, which is different from that under the consolidated financial
statement of the group, the transaction should be adjusted at the group level.
If the current losses shared by the minority shareholders of a subsidiary exceed the share
enjoyed by the minority shareholder in the initial owners' equity of the subsidiary, the
balance will still reduce the minority interests.
During the Reporting Period, if a subsidiary or business is added due to the business
combination involving enterprises under common control, the opening balances of the
consolidated balance sheet are adjusted; the income, expenses and profits of the subsidiary
or business as from the beginning of the period of combination to the end of the Reporting
Period are included in the consolidated income statement; the cash flows of the subsidiary
or business as from the beginning of the period of combination to the end of the Reporting
Period are included in the consolidated cash flow statement, and the relevant items of the
comparative statements are adjusted as if the reporting entity after the combination had
existed since the time point when the ultimate controller began to control.
If the Company is able to exercise control over the investee under common control due to
additional investment or for other reasons, it shall be deemed that the parties participating
in the combination had made adjustments based on their current state when the ultimate
controller began to control. For the equity investment held before obtaining the control over
the acquired party, relevant gains and losses, other comprehensive income and other
changes in net assets recognized between the date of obtaining the original equity or the
date when the acquiring party and the acquired party are under common control, whichever
later, and the date of combination shall be used to offset the beginning retained earnings or
the profits and losses of the comparative statement period.
21
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements (continued)
(3) Consolidation procedure (continued)
During the Reporting Period, if a subsidiary or business is added due to a business
combination involving enterprises under non-common control, the opening balance of the
consolidated balance sheet is not adjusted; the income, expenses and profits of the
subsidiary or business from the date of acquisition to the end of the Reporting Period are
included in the consolidated income statement; the cash flow of the subsidiary or business
from the date of acquisition to the end of the Reporting Period is included in the
consolidated cash flow statement.
If the Company is able to exercise control over the investee not under common control due
to additional investment or for other reasons, the Company shall remeasure the equity, of
the purchased party held before the purchase date, at its fair value as at the purchase date,
and the difference between the fair value and its carrying amount shall be recognized in the
return on investment of the current period. If the equity of the purchased party held before
the purchase date involves other comprehensive income accounted for under the equity
method and other changes in owner’s equity other than net profit and loss, other
comprehensive income, and profit distribution, the relevant other comprehensive income
and other changes in owner’s equity shall be converted into the return on investment of the
current period of on the purchase date, except for other comprehensive income arising from
the investee’s remeasurement of the changes in net liabilities or net assets of defined benefit
plans.
During the reporting period, if the Company disposes of a subsidiary or business, the
income, expenses and profits of the subsidiary or business for the period from the beginning
of the period to the disposal date are included in the consolidated income statement; and
the cash flow of the subsidiary or business for the period from the beginning of the reporting
period to the disposal date is included in the consolidated cash flow statement.
22
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements (continued)
(3) Consolidation procedure (continued)
When the Company loses control over the invested party due to disposal of part of the equity
investment or other reasons, the remaining equity investment after disposal will be re-measured
based on its fair value by the Company on the date of loss of control. The difference of the sum of
the consideration obtained from the disposal of the equity and the fair value of the remaining equity,
less the sum of the share of net assets and goodwill of the original subsidiary that should be enjoyed
in accordance with the original share-holding ratio since the date of acquisition or combination, is
accounted for the return on investment in the current period of loss of control. Other comprehensive
income or net profit and loss related to the original subsidiary's equity investment, other
comprehensive income and other changes in owners' equity other than profit distribution, will be
converted into current return on investment when control is lost, except for other comprehensive
gains arising from the re-measurement of net liabilities of the Benefit Plan made by the invested
party or changes in net assets.
When the equity investment in a subsidiary is disposed of step by step through multiple transactions
until the loss of control, when the terms, conditions and economic influence of the transactions of
the equity investment in the subsidiary conform to one or more of the following, it usually indicates
that the multiple transaction items shall be accounted for as a transaction package:
① These transactions are made simultaneously or with consideration of influence on each other;
② These transactions can only achieve a complete business outcome when they are accounted for collectively;
③ The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
④ A transaction is uneconomical individually, but is economical when considered collectively with other transactions.
If transactions through which the equity investment in a subsidiary is disposed of until the loss of
control constitute a transaction package, the Company will account for such transactions as one
transaction through which the subsidiary is disposed of with the loss of control over it; provided that
the difference between the price for each disposal and the share in the net asset of the subsidiary
corresponding to the investment disposed of, before the loss of control, is recognized as other
comprehensive income in the consolidated financial statements and is transferred to the profits and
losses of period in which the loss of control occurs.
When transactions through which the equity investment in a subsidiary is disposed of until the loss
of control do not constitute a transaction package, such transactions shall be accounted for i) before
the loss of control, in accordance with the relevant policies for partial disposal of an equity
investments in a subsidiary without losing control; and ii) upon the loss of control, in accordance
with the general accounting method for disposing of a subsidiary.
The difference, between the long-term equity investment obtained by the Company through the
purchase of minority interests and the share in the net asset of the subsidiary calculated continuously
from the purchase date (or combination date) based on the new shareholding percentage, shall be
used to adjust i) the share capital premium under the capital reserve in the consolidated balance sheet
or ii) the retained earnings, if the share capital premium under the capital reserve is insufficient to
offset,.
The difference, between the disposal price obtained from the partial disposal of a long-term equity
investment in a subsidiary without losing control and the share, corresponding to the long-term
equity investment disposed of, in the net asset of the subsidiary calculated continuously from the
purchase date or combination date, shall be used to adjust i) the share capital premium under the
capital reserve in the consolidated balance sheet or ii), the retained earnings, if the share capital
premium under the capital reserve is insufficient to offset.
23
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
11 Classification of joint arrangements and accounting treatment method for joint operations
(1) Classification of joint arrangements
The Company classifies a joint arrangement as a joint operation or a joint venture according to
factors such as the structure and legal form of the joint arrangement, the terms agreed in the
joint arrangement, other relevant facts and circumstances.
Joint arrangements not reached through independent entities are classified as joint operations;
joint arrangements reached through independent entities are usually classified as joint ventures;
however, a joint arrangement that is indicated by conclusive evidence of meeting any of the
following conditions and meeting the provisions of relevant laws and regulations is classified
as a joint operation:
① The legal form of the joint arrangement shows that the parties have rights to the assets, and
obligations for the liabilities, relating to the arrangement.
② The contractual terms of the joint arrangement stipulates that the parties have rights to the
assets, and obligations for the liabilities, relating to the arrangement.
③ Other relevant facts and circumstances show that the parties have rights to the assets, and
obligations for the liabilities, relating to the arrangement. For example, the parties enjoy
substantially all the output related to the joint arrangement, and the repayment of the liabilities
relating to the arrangement continues relying on the support of the parties.
(2) Accounting treatment for joint operation
The Company shall recognize the following items in relation to interest in the joint operation,
and carry out accounting treatment in accordance with the provisions of relevant accounting
standards for business enterprises:
① its assets, including its share of any assets held jointly;
② its liabilities, including its share of any liabilities incurred jointly;
③ its revenue from the sale of its share of the output arising from the joint operations;
④ its share of the revenue from the sale of the output by the joint operations; and
⑤ its expenses, including its share of any expenses incurred jointly.
If investing or selling assets (except those that constitute a business), etc., into or to the joint
operation, the Company shall only recognize the part of the profit and loss arising from the
transaction attributable to other participants in the joint operation, before the assets, etc., are
sold to a third party by the joint operation. The Company will recognize in full the asset
impairment loss arising if the assets invested or sold are impaired in compliance with the
Accounting Standards for Business Enterprises No. 8 - Asset Impairment, etc.
If purchasing assets (except those that constitute a business), etc., from the joint operation, the
Company shall only recognize the part of the profit and loss arising from the transaction
attributable to other participants in the joint operation, before the assets, etc., are sold to a third
party by the Company. The Company will recognize its share of the asset impairment loss
arising if the assets purchased are impaired in compliance with the Accounting Standards for
Business Enterprises No. 8 - Asset Impairment, etc.
The Company does not enjoy joint control over the joint operations. If the Company has rights
to the assets, and obligations for the liabilities, relating to the joint operation, it shall still be
accounted for by the above principles; otherwise, it shall be accounted for by the relevant
accounting standards for business enterprises.
24
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 Criteria for determining cash and cash equivalents
In the preparation of the cash flow statement, the Company recognizes cash holdings and deposits
that can be used for payment at any time as cash.
The Company recognizes cash that is easily converted into known amount with short holding period
(generally due within three months from the date of purchase) and strong liquidity, and investments
with low risk of changes in value (including investments in bonds within three months, while
excluding equity investments), as cash equivalents.
13 Foreign currency business and translation of foreign currency statements
(1) Foreign currency transactions
Foreign currency transactions between the Company and its subsidiaries are translated into base
currency at the spot exchange rate on the transaction date.
Foreign currency monetary items are translated at the spot exchange rate on the balance sheet date,
and the exchange differences resulted therefrom, except that the exchange differences arising from
special foreign currency loans related to the acquisition and construction of assets eligible for
capitalization should be treated in accordance with the principle of capitalization of borrowing costs,
are all included in the current profit and loss. Foreign currency non-monetary items measured at
historical cost are still translated at the spot exchange rate on the transaction date, and the amount of
base currency for bookkeeping is not changed.
Foreign currency non-monetary items measured at fair value are translated at the spot exchange rates
on the date when the fair value is determined, and the exchange differences resulted therefrom are
included in profit or loss in the current period as a change in fair value. In the case of foreign currency
non-monetary items that are at fair value through other comprehensive income, the exchange
differences incurred are included in other comprehensive income.
(2) Translation of foreign currency financial statement
When the Company translates the financial statements of overseas operations, the assets and
liabilities in the balance sheet are translated at the spot exchange rate on the balance sheet date. The
owner’s equity items, except for the “Retained earnings” item, are translated at the spot exchange
rate at the time of occurrence of the items. All the incurred items in the income statement are
translated at the current average exchange rate of the period in which transactions occur. The
translation differences of foreign currency financial statement arising from the above translation are
included in other comprehensive income.
When disposing of an overseas operation, the translation differences in the foreign currency financial
statements related to the overseas operation listed in other comprehensive income in the balance
sheet are transferred from the other comprehensive income to the profit and loss. When the disposal
of a portion of the equity investment or otherwise causes a decrease in the proportion of equity held
in the overseas operation without losing of control over the overseas operation, the translation
differences in the foreign currency statements related to the part of the overseas operation disposed
of will be attributed to minority interests, rather than to the profit and loss. When the overseas
operation disposed of is a portion of the equity of an associate or joint venture, the translation
difference of the foreign statements related to the overseas operation should be transferred to the
profit or loss for the period in proportion to the disposal of the overseas operation.
25
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments
When the Company becomes a party to a financial instrument, it recognizes a financial asset or
liability.
The effective interest method refers to the method of calculating the amortized cost of financial
assets or liabilities and allocating interest income or interest expenses into each accounting period.
The effective interest rate refers to the interest rate used to discount the estimated future cash flow
of a financial asset or financial liability during its expected duration to the book balance of the
financial asset or the amortized cost of the financial liability. When determining the effective interest
rate, the expected cash flow is estimated on the basis of considering all contract terms of financial
assets or liabilities (such as prepayment, extension, call options or other similar options), but the
expected credit loss is not considered.
The amortized cost of a financial asset or financial liability is the accumulated amortization amount
formed by deducting the repaid principal from the initial recognition amount of the financial asset
or financial liability, adding or subtracting the difference between the initial recognition amount and
the maturity amount by using the effective interest method, and then deducting the accumulated
accrued loss reserve (only applicable to financial assets).
(1) Classification and measurement of financial assets
According to the business model of the financial assets under management and the contractual cash
flow characteristics of the financial assets, the Company divides the financial assets into the
following three categories:
(a) Financial assets at amortized cost.
(b) Financial assets at fair value through other comprehensive income.
(c) Financial assets at fair value through profit or loss.
Financial assets are measured at fair value when initially recognized, but if the accounts or notes
receivable arising from the sale of goods or the provision of services do not contain significant
financing components or do not consider financing components for no more than one year, the initial
measurement shall be made at the transaction price.
For financial assets at fair value through profit or loss, transaction expenses are directly recognized
in the current profit and loss. For other financial assets, transaction expenses are included in the
initial recognition amount.
Subsequent measurement of financial assets depends on their classification. All related financial
assets affected will be reclassified when and only when the Company changes its business model of
managing financial assets.
(a) Financial assets classified as those measured at amortized cost
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only
the payment of the principal and the interest on the amount of outstanding principal, and the business
model for managing the financial asset is to collect the contractual cash flow, then the Company
classifies the financial asset as measured at amortized cost. Financial assets of the Company that are
classified as those measured at amortized cost include monetary assets, notes receivable, accounts
receivable, other receivables, long-term receivables, debt investments, etc.
26
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(a) Financial assets classified as those measured at amortized cost (continued)
The Company recognizes interest income from such financial assets with the effective
interest method, and carries out subsequent measurement at amortized cost. Gains or losses
arising from impairment or derecognition or modification are included in current profit and
loss. The Company calculates and determines the interest income based on the book balance
of financial assets multiplied by the effective interest rate except for the following
circumstances:
① For purchased or originated credit-impaired financial assets, the Company calculates
and determines their interest income at the amortized cost of the financial assets and the
credit-adjusted effective interest rate since the initial recognition.
② For financial assets not credit-impaired at the time of being purchased or originated but
in the subsequent period, the Company calculates and determines their interest income at
the amortized cost and the effective interest rate of the financial assets in the subsequent
period. If the financial instrument is no longer credit-impaired due to the improvement of
its credit risk in the subsequent period, the Company calculates and determines the interest
income by multiplying the effective interest rate by the book balance of the financial asset.
Financial assets classified as those measured at fair value through other comprehensive
(b)
income
The contract terms of a financial asset stipulate that the cash flow generated on a specific
date is only the payment of the principal and the interest on the amount of outstanding
principal, and the business model for managing the financial assets is both to collect
contractual cash flow and for its sale, then the Company classifies the financial assets as
measured at fair value through other comprehensive income.
The Company recognizes interest income from such financial assets with the effective
interest method. Except that the interest income, impairment loss and exchange difference
are recognized as the current profit and loss, other changes in fair value are included in
other comprehensive income. When the financial asset is derecognized, the accumulated
gains or losses previously included in other comprehensive income are transferred out and
included in the current profit and loss.
Notes and accounts receivable at fair value through other comprehensive income are
reported as receivables financing, and such other financial assets are reported as other debt
investments. Among them, other debt investments maturing within one year from the
balance sheet date are reported as the current portion of non-current assets, and other debt
investments maturing within one year are reported as other current assets.
27
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(c) Financial assets designated as measured at fair value through other comprehensive income
At the time of initial recognition, the Company may irrevocably designate non-trading
equity instrument investments as financial assets at fair value through other comprehensive
income on the basis of individual financial assets.
Changes in the fair value of such financial assets are included in other comprehensive
income without allowance for impairment. When the financial asset is derecognized, the
accumulated gains or losses previously included in other comprehensive income are
transferred out and included in the retained earnings. During the investment period when
the Company holds the equity instrument, the dividend income is recognized and included
in the current profit and loss when the Company's right to receive dividends has been
established, the economic benefits related to dividends are likely to flow into the Company,
and the amount of dividends can be measured reliably. The Company reports such financial
assets under the item of investments in other equity instruments.
An investment in equity instruments is a financial asset at fair value through profit or loss
when it is obtained mainly for recent sale, or is part of the identifiable portfolio of financial
assets centrally managed when initially recognized and objective evidence exists for a
short-term profit model in the near future, or is a derivative (except for derivatives defined
as financial guarantee contracts and designated as effective hedging instruments).
(d) Financial assets classified as those measured at fair value through profit or loss
If failing to be classified as those measured at amortized cost or at fair value through other
comprehensive income, or not designated as measured at fair value through other
comprehensive income, financial assets are all classified as those measured at fair value
through profit or loss.
The Company carries out subsequent measurement of such financial assets at fair value,
and includes gains or losses arising from changes in fair value as well as dividends and
interest income associated with such financial assets into current profits and losses.
The Company reports such financial assets as held-for-trading financial assets and other
non-current financial assets according to their liquidity.
28
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(e) Financial assets designated as measured at fair value through profit or loss
At the time of initial recognition, the Company may irrevocably designate financial assets
as measured at fair value through profit or loss on the basis of individual financial assets in
order to eliminate or significantly reduce accounting mismatches.
If the mixed contract contains one or more embedded derivative instruments and its main
contract is not any financial asset as above, the Company may designate the whole of the
mixed contract as a financial instrument at fair value through profit or loss. Except under
the following circumstances:
① Embedded derivatives do not significantly change the cash flow of mixed contracts.
② When determining initially whether similar mixed contracts need to be split, it is
substantially clear that embedded derivatives contained in them should not be split without
analysis. If the prepayment right embedded in a loan allows the holder to prepay the loan
at an amount close to the amortized cost, the prepayment right does not need to be split.
The Company carries out subsequent measurement of such financial assets at fair value,
and includes gains or losses arising from changes in fair value as well as dividends and
interest income associated with such financial assets into current profits and losses.
The Company reports such financial assets as held-for-trading financial assets and other
non-current financial assets according to their liquidity.
29
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(2) Classification and measurement of financial liabilities
The Company classifies a financial instrument or its components into financial liabilities or
equity instruments upon initial recognition according to the contract terms of and the
economic substance reflected by the financial instrument issued, rather than only in legal
form, in combination with the definitions of financial liabilities and equity instruments.
Financial liabilities are classified at initial recognition as measured at fair value through
profit or loss, or other financial liabilities, or derivatives designated as effective hedging
instruments.
Financial liabilities are measured at fair value upon initial recognition. For financial
liabilities at fair value through profit or loss, relevant transaction expenses are directly
included in current profits and losses; for other categories of financial liabilities, relevant
transaction expenses are included in the initial recognition amount.
Subsequent measurement of financial liabilities depends on their classification:
(a) Financial liabilities at fair value through profit or loss
Such financial liabilities include held-for-trading financial liabilities (including derivatives
falling under financial liabilities) and financial liabilities designated as measured at fair
value upon initial recognition and through profit or loss.
A financial liability is a held-for-trading financial liability if it is mainly undertaken for
recent sale or repurchase, or is part of the identifiable portfolio of financial instruments
centrally managed, and there is objective evidence that the enterprise has recently employed
a short-term profit model, or is a derivative instrument, except derivatives designated as
effective hedging instruments and derivatives conforming to financial guarantee contracts.
Held-for-trading financial liabilities (including derivatives falling under financial
liabilities) are subsequently measured at fair value. All changes in fair values except for
hedging accounting are included in current profits and losses.
The Company irrevocably designates financial liabilities as measured at fair value through
profit or loss at the time of initial recognition in order to provide more relevant accounting
information, provided:
① Such financial liabilities can eliminate or significantly reduce accounting mismatches.
② The financial liability portfolio or the portfolio of financial assets and liabilities is
managed and evaluated for performance on the basis of fair value according to the
enterprise risk management or investment strategy stated in the official written documents,
and is reported to key management personnel within the enterprise on this basis.
The Company subsequently measures such financial liabilities at fair value. Apart from
changes in fair value that are brought about by changes in the Company’s own credit risk
and included in other comprehensive income, other changes in fair value are included in
current profits and losses. Unless including such changes in other comprehensive income
will cause or expand accounting mismatch in profit or loss, the Company will include all
changes in fair value (including the amount affected by changes in its own credit risk) in
current profits and losses.
30
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(2) Classification and measurement of financial liabilities (continued)
(b) Other financial liabilities
The Company classifies financial liabilities except for the following items as measured at
amortized cost. Such financial liabilities are recognized by the effective interest method and
subsequently measured at amortized cost. Gains or losses arising from derecognition or
amortization are included in the current profits and losses:
① Financial liabilities at fair value through profit or loss.
② Financial liabilities resulting from the transfer of financial assets that do not meet the
conditions for derecognition or continue to be involved in the transferred financial assets.
③ Financial guarantee contracts that do not fall under the first two categories hereof, and loan
commitments that do not fall under category (1) hereof and lend at a below-market interest rate.
Financial guarantee contracts refer to contracts that require the issuer to pay a specific amount
to the contract holder who has suffered losses when a specific debtor fails to pay the debt in
accordance with the original or modified terms of the debt instrument. Financial guarantee
contracts that are not financial liabilities designated as measured at fair value through profit or
loss are measured after initial recognition according to the loss reserve amount and of the initial
recognition amount, less the accumulated amortization amount during the guarantee period,
whichever is higher.
(3) Derecognition of financial assets and liabilities
Financial asset are derecognized, i.e. written off from its account and balance sheet if any of the
(a)
following conditions is met:
① The contractual right to receive cash flow from the financial asset is terminated; or
② The financial asset has been transferred, which meets the requirements for derecognition of
financial assets.
(b) Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part thereof) has been discharged, such
financial liability (or part thereof) is derecognized.
The existing financial liability is derecognized with a new one recognized, and the difference
between the carrying amount and the consideration paid (including transferred non-cash assets
or assumed liabilities) is included in the current profits and losses, if an agreement is signed
between the Company and the lender to replace the existing financial liability by assuming a
new one, and the contract terms of these two financial liabilities are substantially different, or
the contract terms of the existing financial liability (or part thereof) are substantially modified.
If the Company repurchases part of a financial liability, the carrying amount of the financial
liability shall be distributed according to the proportion of the fair value of the continuing
recognition portion and the derecognition portion to the overall fair value on the repurchase
date. The difference between the carrying amount allocated to the derecognized portion and the
consideration paid (including transferred non-cash assets or liabilities assumed) shall be
included in the current profits and losses.
31
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer
When a financial asset is transferred, the Company evaluates the risks and rewards retained of
the financial asset ownership:
(a) If almost all the risks and rewards of the financial asset ownership are transferred, such financial
asset shall be derecognized, and the rights and obligations generated or retained in the transfer
shall be separately recognized as assets or liabilities.
If risks and rewards of the financial asset ownership are substantially retained, such financial
(b)
asset shall continue to be recognized.
(c) In circumstances where the Company neither transfers nor retains risks and rewards of the
financial asset ownership substantially (i.e. circumstances other than ① and ② of this article),
based on whether it retains control over such financial asset,
① the financial asset shall be derecognized, and the rights and obligations generated or retained
in the transfer shall be separately recognized as assets or liabilities if such control is not retained;
or
② the relevant financial asset shall continue to be recognized to the extent that it continues to
be involved in the transferred financial asset, and the relevant liabilities shall be recognized
accordingly if such control is retained. The extent that it continues to be involved in the
transferred financial asset refers to the extent the Company bears the risks or rewards on changes
in the value of the transferred financial asset.
When judging whether the transfer of financial assets meets the above conditions for
derecognition of financial assets, the principle of substance over form shall be adopted. The
Company divides the transfer of financial assets into overall transfer and partial transfer.
If the overall transfer of financial assets meets the conditions for derecognition, the difference
(a)
between the following two amounts shall be included in the current profits and losses:
① The carrying amount of the transferred financial asset on the date of derecognition.
② The sum of the consideration received for the transfer of financial assets and the amount of
the respective derecognized portion of the accumulated changes in fair value originally included
in other comprehensive income directly (the financial assets involved in the transfer are
financial assets at fair value through other comprehensive income).
(b) If the financial asset is partially transferred and the transferred part meets the conditions for
derecognition, the carrying amount of the financial asset before transfer shall be allocated
between the derecognition portion and the continuing recognition portion (in this case, the
retained service asset shall be regarded as the continuing recognition part of the financial asset)
according to the respective relative fair values on the transfer date, and the difference between
the following two amounts shall be included in the current profits and losses:
① The carrying amount of the derecognized portion on the derecognition date.
② The sum of the consideration received for the derecognized portion and the amount of the
corresponding derecognized portion of the accumulated changes in fair value originally
included in other comprehensive income (the financial assets involved in the transfer are
financial assets at fair value through other comprehensive income).
32
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer (continued)
If the transfer of a financial asset does not meet the conditions for derecognition, the
financial asset shall continue to be recognized and the consideration received shall be
recognized as a financial liability.
(5) Determination of fair value of financial assets and liabilities
The fair value of a financial asset or liability with an active market shall be determined by
the quoted price in the active market, unless the financial asset has a sell-off period for the
asset itself. For the financial assets restricted for the assets themselves, the compensation
amount demanded by market participants due to the risk of not being able to sell the
financial assets on the open market within the specified period shall be deducted from the
quoted price in the active market. Quoted prices in the active market includes those for
related assets or liabilities that can be easily and regularly obtained from exchanges, dealers,
brokers, industry groups, pricing or regulatory agencies, and can represent actual and
recurring market transactions on the basis of fair trade.
Financial assets initially acquired or derived or financial liabilities assumed shall be
determined on the basis of market transaction price.
The fair value of financial assets or liabilities without an active market shall be determined
by valuation techniques. At the time of valuation, the Company adopts valuation techniques
that are applicable under the current circumstances and are supported by sufficient available
data and other information, selects input values consistent with the characteristics of
relevant assets or liabilities considered by market participants in the transactions thereof,
and gives priority to the use of relevant observable input values whenever possible. If the
relevant observable input value cannot be obtained or be feasibly obtained, the
unobservable input value shall be used.
33
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments
Based on the expected credit loss, the Company conducts impairment accounting of financial assets
classified as those measured at amortized cost, financial assets classified as those measured at fair
value through other comprehensive income and financial guarantee contracts and recognizes loss
reserves.
Expected credit loss refers to the weighted average of the credit losses of financial instruments
weighted by the risk of default. Credit loss refers to the difference between all contractual cash flows
discounted at the original effective interest rate and receivable according to the contract and all cash
flows expected to be collected of the Company, i.e. the present value of all cash shortfalls. Among
them, credit-impaired purchased or originated financial assets of the Company shall be discounted
at the credit-adjusted effective interest rate of such financial assets.
For receivables arising from transactions regulated by the income criteria, the Company uses the
simplified measurement method to measure the loss reserve according to the amount equivalent to
the expected credit loss during the entire duration.
For credit-impaired purchased or originated financial assets, only the accumulated changes in the
expected credit losses during the entire duration since the initial recognition are recognized as loss
reserves on the balance sheet date. On each balance sheet date, the amount of change in the expected
credit loss during the entire duration is included in the current gains and losses as impairment losses
or gains. Even if the expected credit loss during the entire duration on the balance sheet date is less
than that reflected in the estimated cash flow upon initial recognition, the favorable change in the
expected credit loss is recognized as impairment gains.
In addition to other financial assets adopting the above simplified measurement method and other
than the credit-impaired purchased or originated ones, the Company evaluates whether the credit
risk of relevant financial instruments has increased significantly since the initial recognition,
measures its loss reserves and recognizes the expected credit loss and its changes respectively
according to the following circumstances on each balance sheet date:
(a) If the credit risk of the financial instrument has not increased significantly since its initial
recognition, it is in the first stage, and its loss reserve shall be measured according to an amount
equivalent to its expected credit loss over the next 12 months, and the interest income shall be
calculated according to the book balance and the effective interest rate.
(b) If the credit risk of the financial instrument has increased significantly since initial recognition but
no credit impairment has occurred, it is in the second stage, and its loss reserve shall be measured
according to an amount equivalent to its expected credit loss throughout its life, and the interest
income shall be calculated according to the book balance and the effective interest rate.
(c) If the financial instrument is credit-impaired since its initial recognition, it is in the third stage, and
the Company shall measure its loss reserve according to an amount equivalent to its expected credit
loss throughout its life, and calculate the interest income at the amortized cost and the effective
interest rate.
The increase or reversed amount of the credit loss reserve for financial instruments shall be included
in the current profits and losses as impairment losses or gains. Except for financial assets classified
as those measured at fair value through other comprehensive income, the credit loss reserve will
offset the carrying amount of the financial assets. For any of financial assets classified as those
measured at fair value through other comprehensive income, the Company recognizes its credit loss
reserve in other comprehensive income without reducing its carrying amount presented in the
balance sheet.
34
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
In the previous accounting period, the Company has measured the loss reserve, the amount
equivalent to the expected credit loss of the financial instruments throughout its life. However,
on the balance sheet date of the current period, the financial instrument no longer conforms to
the situation of significant increase in credit risk since initial confirmation; on the balance sheet
date of the current period, the Company has measured the loss reserve of the financial
instruments, the amount equivalent to the expected credit loss in the next 12 months, and the
reversed amount of the loss reserve thus formed is included in the current profit and loss as
impairment profit.
(a) Significant increase in credit risk
In order to determine whether the credit risk of financial instruments has increased significantly
since the initial recognition, the Company uses the available reasonable and based forward-
looking information and compares the risk of default of financial instruments on the balance
sheet date with the risk of default on the initial confirmation date. When the Company applies
provisions on depreciation of financial instruments to financial guarantee contracts, the initial
recognition date shall be regarded as the date when the Company becomes a party to make
irrevocable commitments.
For the assessment of whether the credit risk has increased significantly, the Company will
consider the following factors:
① According to whether the actual or expected debtor's operations results have changed
significantly;
② Whether the regulatory, economic or technological environment of the debtor has undergone
significant adverse changes;
③ Whether the following items have changed significantly: the value of collateral as debt
mortgage, or the guarantee provided by a third party, or the quality of credit enhancement; these
changes will reduce the debtor’s economic motivation to repay the loan within the time limit
stipulated in the contract and could impact the probability of default;
④ Whether the debtor's expected performance and repayment behavior have changed
significantly;
⑤ Whether the Company's credit management methods for financial instruments have changed,
etc.
If, on the balance sheet date, the credit risk of the financial instrument is judged to be low by
the Company, the Company assumes that the credit risk of the financial instrument has not
increased significantly since the initial recognition. The financial instrument will be deemed to
have lower credit risk under the following circumstances: the default risk of the financial
instrument is lower; the borrower has a strong capacity to fulfill its contractual cash flow
obligations in a short time; furthermore, even if there are adverse changes in the economic
situation and operating environment for a long period of time, it may not necessarily reduce the
borrower’s ability to fulfill its contractual cash flow obligations.
35
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
(b) Financial assets with depreciation of credit
If one or more events have adverse effects on the expected future cash flow of a financial asset, the
financial asset will become a financial asset that has suffered credit impairment. The following
observable information can be regarded as evidence of credit impairment of financial assets:
① The issuer or debtor is in serious financial difficulty;
② The debtor breaches the contract, such as default or overdue payment of interest or principal, etc.;
③ The creditor gives concessions to the debtor due to economic or contractual considerations related
to the debtor's financial difficulties; the concessions will not be made under any other circumstances;
④ There is a great possibility of bankruptcy or other financial restructuring of the debtor;
⑤ The issuer or debtor has financial difficulties, resulting in the disappearance of the active market
for the financial assets;
⑥ Purchasing or generation of a financial asset with a large discount, which reflects the fact of credit
loss.
Credit impairment of financial assets may not be caused by separately identifiable events, but may
be caused by the combined effect of multiple events.
(c) Determination of expected credit loss
The expected credit losses of financial instruments is assessed individually and collectively. During
the assessment of the expected credit losses, the Company will take into account reasonable and
reliable information about past events, the current situation and future economic situation forecast.
The Company divides financial instruments into different combinations on the basis of common
credit risk characteristics. Common credit risk characteristics adopted by the Company include:
financial instrument type, credit risk rating, aging combination, overdue aging combination, contract
settlement cycle, debtor's industry, etc. To understand the individual evaluation criteria and
combined credit risk characteristics of relevant financial instruments, please refer to the accounting
policies of relevant financial instruments for details.
The Company adopts the following methods to determine the expected credit losses of relevant
financial instruments:
① In terms of financial assets, credit loss is equivalent to the present value of the difference between
the contract cash flow that the Company shall receive and the expected cash flow.
② In terms of the financial guarantee contract, credit loss is equal to the expected amount of payment
made by the Company to the holder of the contract for credit loss incurred, less the present value of
the difference between the amount expected to be collected from the holder of the contract, the debtor
or any other party.
③ If, on the balance sheet date, a financial asset has suffered credit impairment, but one does not
purchase or generate a financial asset that has suffered credit impairment, the credit loss is equivalent
to the difference between the book balance of the financial asset and the present value of the
estimated future cash flow discounted at the original actual interest rate.
Factors reflected in the Company's method of predicting credit losses by quantitative finance tools
include: unbiased probability weighted average amount determined by evaluating a series of possible
results; time value of money; reasonable and reliable information about past events, current situation
and future economic situation forecast that can be obtained on the balance sheet date without
unnecessary extra costs or efforts.
36
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
(d) Write-off of financial assets
If the Company cannot reasonably expect the contract cash flow of the financial asset to be
fully or partially recovered, the book balance of the financial asset will be written off
directly. This write-off constitutes the derecognition of relevant financial assets.
(7) Offset of financial assets and financial liabilities
In the balance sheet, financial assets and financial liabilities are shown separately without
offsetting each other. However, if the following conditions are met at the same time, the
net amount after offset will be listed in the balance sheet:
The Company has the legal right, which is currently enforceable, to offset the confirmed
(a)
amount;
The Company plans to settle on a net basis, or realize the financial assets and settle the
(b)
financial liabilities at the same time.
15 Notes receivable
For the determination method and accounting treatment method of the Company's expected
credit loss on notes receivable, please refer to 14(6) of note III Impairment of financial
instruments.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the
level of a single instrument, the Company will refer to the experience of historical credit
loss, combine the current situation and judgment on future economic situation, divide notes
receivable into several combinations according to the characteristics of credit risk, and
calculate expected credit loss on the basis of combinations.
16 Accounts receivable
For the determination method and accounting treatment method of the Company's expected
credit loss on accounts receivable, please refer to 14(6) of note III Impairment of financial
instruments.
As for the accounts receivable, if there is objective evidence that the Company will not be
able to recover the money according to the original terms of the accounts receivable, the
Company will separately determine its credit loss.
If sufficient evidence of expected credit loss cannot be assessed at reasonable cost at the
level of single instrument, the Company will divide the accounts receivable into several
combinations according to the credit risk characteristics, and calculate the expected credit
loss on the basis of the combinations (with reference to the experience of historical credit
loss, and in combination with the current situation with the judgment of future economic
situation)
37
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
17 Receivables financing
Accounts receivable classified as those measured at fair value through other comprehensive
income, with a maturity of i) less than one year (including one year) from the initial
recognition date, are listed as receivables financing; or ii) more than one year from the
initial recognition date, are listed as other debt investments. For the relevant accounting
policies, please refer to 14(6) of note III Impairment of financial instruments.
18 Other receivables
For the determination method and accounting treatment method of the Company's expected
credit loss of other receivables, please refer to 14(6) of note III Impairment of financial
instruments.
For other receivables for which there is objective evidence that the Company will not be
able to recover the amount according to the original terms of the receivables, the Company
will separately determine its credit loss.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the
level of single instrument, the Company will refer to the experience of historical credit loss,
combine the current situation and judgment on future economic situation, divide other
receivables into several combinations according to the characteristics of credit risk, and
calculate expected credit loss on the basis of combinations.
19 Inventories
(1) Classification of inventories
Inventories refer to, among other things, finished products or goods held by the Company
for sale in its daily activities, work in progress in production, materials and supplies
consumed in the production or provision of labor services. Inventories mainly include but
are not limited to raw materials, work in progress, finished products, and turnover materials.
(2) Valuation method for inventories shipped in transit
When acquired, inventory is initially measured at cost, including purchase costs, processing
costs, and other costs. Inventories are shipped in transit by weighted average method.
38
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
19 Inventories (continued)
Basis for determining the net realizable value of inventories and accrual method for inventory
(3)
valuation allowance
After conducting a comprehensive counting at the end of the period, inventory valuation
allowance shall be accrued or adjusted based on whichever lower of the cost and net realizable
value of the inventory. For inventories of goods directly used for sale, such as finished goods,
merchandise inventories and materials for sale, in the normal production and operations process,
the net realizable value is determined by the amount of the estimated Sales expenses of the
inventory less the estimated sales cost and relevant taxes and fees; for material inventories that
need to be processed, in the normal production and operations process, the net realizable value
is determined by the amount of the estimated selling expenses of finished products produced
less the estimated cost occurred at the time of completion, the estimated selling expenses and
related taxes; for inventories held for the execution of sales contracts or labor contracts, the net
realizable value is calculated on the basis of the contract price, and if the quantity of inventories
held is more than the quantity specified in sales contracts, the net realizable value of excess
inventories is calculated based on the general sales price.
At the end of the period, inventory valuation allowance is accrued according to individual
inventory items; but for a large number of inventories with lower unit prices, inventory
valuation allowance is accrued according to inventory category; for inventories related to the
product series produced and sold in the same region with the same or similar end use or purpose,
which is difficult to measure separately from other items, thus inventory valuation allowance is
accrued and combined with other items.
If the influencing factors of the write-down of inventory value have disappeared, the amount
written-down is recovered and reversed to the amount of inventory valuation allowance already
accrued, and the amount reversed is included in the current profit and loss.
(4) Inventory system
The Company adopts a perpetual inventory system for inventory management.
(5) Amortization method of turnover materials
The Company's turnover materials are amortized by the one-time amortization method.
20 Contract assets
A contract asset shall be recognized if the Company has transferred the goods to the customer
and has the right to receive a consideration depending on other factors than the passage of time.
The right of the Company to unconditionally receive the considerations from customers (i.e.,
only depending on the passage of time) is listed independently as receivables.
For the determination method and accounting treatment method of the Company’s expected
credit loss on contract assets, please refer to 14(6) of note III Impairment of financial
instruments.
39
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
21 Held-for-sale non-current assets or disposal groups
(1) Criteria for classification as being held for sale
The Company recognizes non-current assets or disposal groups that meet both of the following
conditions as components held for sale:
① they can be sold immediately under the current status according to the
practice of selling such assets or disposal groups in similar transactions;
② The sale is likely to occur, that is, the Company has made a resolution on the sale plan, obtained
the approval from the regulatory authorities (if applicable), and obtained a confirmed purchase
commitment that the sale is expected to be completed in one year.
The confirmed purchase commitment refers to a legally binding purchase agreement concluded by
and between the Company and another party, which contains important terms such as transaction
price, time and sufficiently severe penalty for breach of contract, so that there will be little possibility
of major adjustments to or cancellation of the agreement.
(2) Accounting treatment for held-for-sale assets
The Company shall not depreciate or amortize non-current assets or disposal groups held for sale. If
the carrying amount is higher than the amount of fair value net of selling expenses, the former shall
be written down to the latter. The amount written down shall be recognized as asset impairment loss
and included in the current profit and loss, and the impairment allowance for assets held for sale
shall be accrued at the same time.
The non-current asset or disposal group classified as being held for sale on the date of acquisition
shall be initially measured at whichever initially measured amount is lower under the assumption
that it is not classified as being held for sale and the amount of fair value net of selling expenses.
The above principles are applicable to all non-current assets, except investment real estate
subsequently measured by the fair value model, biological assets measured by the amount of fair
value net of selling expenses, assets formed by employee compensation, deferred income tax assets,
financial assets regulated by the relevant accounting standards of financial instruments, and rights
arising from insurance contracts regulated by the relevant accounting standards of insurance
contracts.
22 Debt Investments
For the determination method and accounting treatment methods of the Company’s expected
credit loss of debt investments, please refer to 14(6) “Impairment of financial instruments”
under Note III.
23 Long-term receivables
For the determination method and accounting treatment method of the Company's expected credit
loss on long-term receivables, please refer to 14(6) of note III Impairment of financial instruments.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the level of
single instrument, the Company will refer to the experience of historical credit loss, combine the
current situation and judgment on future economic situations, divide long receivables into several
combinations according to the characteristics of credit risk, and calculate expected credit loss on the
basis of combinations.
40
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments
(1) Recognition of initial investment cost
(a) Long-term equity investment formed by business combination
For details on accounting policies, please refer to Note (III), 9 accounting treatments for
business combinations involving enterprises under and not under common control.
(b) Long-term equity investment acquired by other means
For long-term equity investment acquired by cash payment, the actual acquisition price is
recognized as initial investment cost. The initial investment cost includes expenses, taxes
and other necessary expenses directly related to the acquisition of the long-term equity
investment.
For long-term equity investment acquired by issuing equity securities, the fair value of
equity securities issued is recognized as initial investment cost; the transaction costs arising
from issuing or acquiring the own equity instruments of the acquiring party will be offset
from the equity in directly attributable transactions.
Provided that the non-monetary asset exchange contains commercial substance and the fair
value of the assets received or assets surrendered can be reliably measured, the initial
investment cost of the long-term equity investment received with non-monetary assets is
determined based on the fair value of the assets surrendered, except that there is conclusive
evidence that indicates that the fair value of assets received is more reliable. For non-
monetary assets that do not satisfy the above condition, the carrying amount of assets
surrendered and related taxes and fees payable are recognized as the initial investment cost
of the long-term equity investment.
The initial investment cost of a long-term equity investment acquired by debt restructuring
is determined on the basis of fair value.
41
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(2) Subsequent measurement and recognition of profit and loss
(a) Cost method
The long-term equity investment by which the Company exercises control over the investee
is accounted for by the cost method and measured at the initial investment cost. When the
long-term equity investment is added or recovered, its cost should be adjusted thereby.
In addition to the actual payment or the cash dividends or profits included in the
consideration that have been declared but not yet paid when acquiring the investment, the
Company recognizes the investment income for the period the investee's cash dividends or
profits attributable to the Company will be recorded in gains from investment for the period.
(b) Equity method
The long-term equity investments made by the Company in affiliates and joint ventures are
accounted for using the equity method. Among them, the portion ofequity investments in affiliates,
held indirectly through venture capital, mutual funds, trusts, or similar entities, including investment-
linked insurance funds, are measured at fair value through profit or loss.
The difference between the higher initial cost of the long-term equity investment and the fair value
share of identifiable net assets of the investee enjoyed in the investment is not used to adjust the
initial investment cost of the long-term investment; the difference between the lower initial
investment cost and the higher fair value share of identifiable net assets of the investee enjoyed at
the time of conducting the investment is included in the current profits and losses.
After the Company acquires a long-term equity investment, the investment income and other
comprehensive income should be recognized respectively based on the Company's share in the net
profit and loss and other comprehensive income realized by the investee, and the carrying amount
of the long-term equity investment should be adjusted accordingly; the Company's share in the
profits or cash dividends declared by the investee should be calculated, and the carrying amount of
the long-term equity investment should be reduced accordingly; the carrying amount of the long-
term equity investment should be adjusted based on changes in owners' equity of the investee other
than net profit and loss, other comprehensive income, and profit distribution, and included in owners'
equity.
Before the Company recognizes its share in the net profit and loss of the investee, the net profit of
the investee is adjusted based on the fair value of the identifiable assets of the investee as at the
acquisition of the investment. Any unrealized profit and loss from internal transactions between the
Company and its affiliates or joint ventures attributed to the Company based on the Company's, will
be offset, and the investment profit and loss is recognized thereon.
When the Company recognizes its share in the losses incurred by the investee, the Company should,
firstly, offset the carrying amount of the long-term equity investment. Then, if the carrying amount
of the long-term equity investment is insufficient for the offset, the investment loss is continued to
be recognized, and the carrying amount of long-term receivable items is offset, subject to other
carrying amount of the long-term equity constitutes the net investment in the investee. Finally, after
the above-mentioned treatment, if the Company still bears additional obligations in accordance with
the investment contract or agreement, the provision are recognized according to the estimated
obligations and included in the current investment losses.
If the investee realizes profit in the future period, the Company shall, after deducting the unconfirmed
loss share, conduct the process in the reverse order of the above to write down the book balance of
the recognized liabilities and recover other long-term equity that substantially constitutes net
investment of the investee and the carrying amount of the long-term equity, and then recover the
recognition of the profit as return on investment.
42
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(3) Conversion accounting treatment of long-term equity investments
(a) Accounting treatment for the transfer from fair value measurement to equity method
For an equity investment, originally held by the Company without control, joint control or significant
impact on the investee that is accounted for based on the financial instrument recognition and
measurement standards, if as a result of additional investment or otherwise, the equity investment enables
the Company to exercise significant impact on or joint control (rather than control) over the investee, the
sum of the fair value of the originally held equity investment determined under the Accounting Standards
for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the new
investment cost should be deemed as the initial cost of the investment accounted for using equity method.
The difference between the lower initial investment cost accounted for using equity method and the higher
share of the fair value of the identifiable net assets of the investee as at the date of the additional investment
calculated based on the new shareholding percentage after the additional investment is made, shall be
used to adjust the carrying amount of the long-term equity investment and included in the non-operating
income for the period.
(b) Transfer from fair value measurement or equity method to cost method
For an equity investment, originally held by the Company without control, joint control or significant
impact on the investee that is accounted for based on the financial instrument recognition and
measurement standards, or a long-term equity investment originally held by the Company in an affiliate
or joint venture, if as a result additional investment or for other reasons, the investment enables the
Company to exercise control over an investee that is not under the common control with Company, the
sum of the carrying amount of the originally held equity investment and the new investment cost should
be should be the initial cost of the investment accounted for using cost method in preparation of the
individual financial statements of the Company.
The remaining comprehensive income recognized in the equity investments using equity method before
the date of acquisition is accounted for, when the investment is disposed of, on the same basis as those
the investee adopted directly to dispose of the underlying assets or liabilities.
If the equity investment held before the acquisition date is subject to the accounting treatment under the
relevant provisions of the Accounting Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments, the cumulative changes in fair value originally included in other
comprehensive income should be transferred to the profit or loss for the period when the investment is
accounted for using cost method.
(c) Transfer from equity method to fair value measurement
If the Company loses joint control or significant impact on the investee due to the disposal of part of the
equity investment or otherwise, the equity remaining after the disposal should be accounted for under the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
Instruments, and the difference between the fair value and carrying amount as at the date of losing the
joint control or significant impact should be included in the profit or loss for the period.
Other comprehensive income recognized for the original equity investment accounted for using equity
method should be accounted for on the same basis as the direct disposal of the underlying assets or
liabilities by the investee when the equity method is terminated.
(d) Transfer from cost method to equity method
Where the Company loses control over the investee due to the disposal of part of the equity investment or
otherwise, if the equity remaining after the disposal by which the Company can exercise joint control or
significant impact on the investee in preparation of the individual financial statements of the Company,
the investment will be accounted for using equity method, and such remaining equity will be adjusted as
if it were accounted for using equity method from the time when it is acquired.
43
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(3) Conversion accounting treatment of long-term equity investments (continued)
(e) Transfer from cost method to fair value measurement
If the Company loses control over the investee due to the disposal of part of the equity
investment or otherwise, the equity remaining after the disposal by which the Company cannot
exercise joint control or significant impact on the investee should be accounted for based on the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments, in preparation of the individual financial statements of the Company, and
the difference between the fair value and carrying amount as at the date of losing the control
should be included in profit or loss.
(4) Disposal of long-term equity investments
When a long-term equity investment is disposed of, the difference between the carrying amount
of the long-term equity investment and the actual acquisition price shall be included in the profit
or loss for the period. For a long-term equity investment accounted for using equity method,
when the investment is disposed of, the part originally included in other comprehensive income
should be accounted for in the corresponding proportion and on the same basis as the direct
disposal of the underlying assets or liabilities by the investee.
When the terms, conditions and economic influence of transactions of the equity investment of
the subsidiary conform to one or more of the following, accounting for multiple transactions is
treated as a package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
(b) These transactions can only achieve a complete business outcome when they are accounted for
collectively;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other
transactions;
(d) A transaction is uneconomical individually, but is economical when considered collectively
with other transactions.
When an enterprise loses control over the original subsidiary due to disposal of part of the equity
investment or other reasons, if the transactions do not belong to a package transaction, the
accounting treatment of individual financial statements and consolidated financial statements
should be distinguished as follows:
(a) In the individual financial statements, the disposed equity should be accounted for in accordance
with the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment;
meanwhile, the remaining equity should be recognized as long-term equity or other related
financial assets based on its carrying amount. If the remaining equity after disposal can be used
to exercise common control or significant influence on the original subsidiary, it shall be
accounted for in accordance with the relevant provisions on the conversion of the cost method
into the equity method.
44
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(4) Disposal of long-term equity investments (continued)
(b) In the consolidated financial statements, the remaining equity should be re-measured in accordance
with its fair value on the date of loss of control. The difference between the sum of the consideration
acquired from the disposal of the equity and the fair value of the remaining equity, less the share of
net assets of the original subsidiary that should be enjoyed in accordance with the original
shareholding ratio from the date of acquisition, is included in the current profit and loss of the period
in which loss of control occurred. Other comprehensive income related to the original subsidiary's
equity investment should be converted into current investment income when control is lost. The
Company shall disclose in the notes the fair value of the remaining equity after disposal on the date
of loss of control and the amount of relevant gains or losses arising from the disposal remeasured
based on the fair value.
If the transactions of disposal of equity investment in a subsidiary until the loss of control
is a package transaction, the accounting treatment of individual financial statements and
consolidated financial statements should be distinguished as follows: :
(a) In the individual financial statements, the difference between each disposal price and the
carrying amount of the long-term equity investment corresponding to the disposed equity
before the loss of control is recognized as other comprehensive income, and transferred to
the current profit and loss of the period in which the loss of control occurred;
(b) In the consolidated financial statements, the difference between each disposal price and the
disposal of investment corresponding to the share of the net assets of the subsidiary before
the loss of control is recognized as other comprehensive income, and transferred to the
current profit and loss of the period in which the loss of control occurred.
(5) Criteria for judgment of joint control and significant impact
If the Company exerts joint control over an arrangement with other participants in accordance with
the relevant agreement, and decision on activities that has significant impact on the return of the
arrangement requires the unanimous consent of the participants sharing the control, the Company
and other participants will be deemed to have joint control over the arrangement - a joint venture
arrangement.
If a joint venture arrangement is entered into through an independent entity, and the Company has
right over the net assets of the independent entity based on the relevant agreements, the independent
entity shall be deemed as a joint venture and accounted for using equity method. If based on the
relevant agreement, the Company does not have rights to the net assets of the individual entity, the
individual entity shall be deemed as a joint operation, and the items related to the share of interests
in the joint operation should be recognized and accounted for in accordance with the provisions of
relevant Accounting Standards for Business Enterprises.
Significant impact means the investor’s power to participate in the decision-making of the financial
and operating policies of the investee, but by which the investor cannot control or commonly control
together with other parties the formulation of the policies. Significant impact on the investee will be
determined based on one or more of the cases with reference to all facts and conditions:
1) Assigning a representative to the board of directors or similar authority of the investee;
2) Participating in formulation of the financial and operational policies of the investee;
3) Entering into a significant transaction with the investee;
4) Assigning an officer to the investee; or
5) Providing key technical information to the investee.
45
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
25 Investment property
The Company's investment property means the property held for the purpose of earning
rent or capital appreciation, or both, including the land use rights that have been leased, the
land use rights that are held for transfer upon appreciation, and the leased buildings. In
addition, for the vacant buildings held by the Company for the purpose of leases, if the
Board of Directors makes a written resolution that expressly indicates that the buildings
will be used for leases and the intention of holding will not change in a short-term, the
building will also be reported as investment property.
An investment property of the Company will be recorded at its cost that comprises i) in case
of a purchased investment property, the purchase price, relevant taxes and other expenses
directly attributable to the asset; or ii) in case of a self-constructed investment property, the
necessary expenses incurred before the asset is constructed to reach its intended serviceable
state.
The Company adopts the cost model for subsequent measurement of investment property.
For the purpose of depreciation or amortization method, the same amortization policy
adopted for buildings as fixed assets and land use rights as intangible assets are used.
When the purpose of an investment property is changed to self-use, the Company shall
convert the investment property into a fixed asset or intangible asset from the date of
change. When the purpose of a self-used property is changed to earning rent or capital
appreciation, the Company will convert the fixed asset or intangible asset into an investment
property from the date of change. When such a conversion occurs, the carrying amount
before the conversion shall be used as the recorded value after the conversion.
When an investment property is disposed of, or when it permanently withdraws from use
and no economic benefit is expected to be obtained from the disposal of it, the investment
property shall be derecognized. The disposal income from the sale, transfer, scrapping or
damage of an investment property, net of its carrying amount and related taxes and fees, is
recognized in the profits and losses of the current period.
46
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
26 Fixed assets
(1) Recognition criteria for fixed assets
Fixed assets mean tangible assets held for the purpose of producing goods, rendering of
services, leases or operation management, whose service life is more than one fiscal year.
Fixed assets satisfying the following conditions are recognized:
(a) The economic benefits associated with the fixed assets are likely to flow into the enterprise;
(b) The cost of the fixed asset can be measured in a reliable way.
The Company's fixed assets are classified into buildings, machinery and equipment, office
and electronic equipment, transportation vehicles and fixed assets renovation in line with
capitalization conditions. Where each component of a fixed asset with a different service
life provides economic benefits to the Company in different ways and applies different
depreciation rates, it is recognized as a single fixed asset.
Fixed assets are initially measured at cost. The cost of purchasing fixed assets includes the purchase
price, related taxes, and other expenses attributable to the fixed asset before it is ready for the
intended use, such as the expenses on transportation, handling, installation and professional services,
etc. When determining the cost of fixed assets, discard expenses should be considered. Subsequent
expenditures related to fixed assets that satisfy the recognition criteria of fixed assets are included in
the cost of fixed assets; otherwise, they are recognized in profit and loss in the period in which they
arise.
Fixed assets are depreciated by the straight-line method. The depreciation rate of various fixed assets
is determined according to the estimated service life and estimated residual value (the estimated
residual value is 0-10% of the original value). The depreciation rate of classified fixed assets is as
follows:
Annual
Asset Category Estimated Service Life
Depreciation Rate
Houses and buildings 20-50 years 1.90%-5%
Machinery equipment 5-10 years 9.5%-20%
Office and electronic equipment 2-5 years 22.22%-50%
Transportation equipment 3-5 years 19.00%-33.33%
Power stations 20-25 years 3.80%-4.75%
Others 4-5 years 19.00%-31.67%
Fixed assets renovation is amortized evenly over the benefit period.
All fixed assets are subject to depreciation, except for fixed assets that have been fully depreciated
and continue to be used, and the land that is priced and recorded separately. Fixed assets are
depreciated on a monthly basis. Fixed assets added are not depreciated in the current month when
being added but from the following month; fixed assets reduced are still depreciated in the current
month when being reduced, and no depreciation is made from the following month. Fixed assets that
are not profitable for the Company or not used temporarily (other than seasonally deactivated) are
recognized as idle fixed assets. The estimated life expectancy and depreciation rate of idle fixed
assets should be re estimated, and depreciation is directly included in the current profit and loss.
The methods for impairment testing and accrual of impairment provisions of fixed assets
are detailed in 31 “Long-term Asset Impairment” under Note III.
47
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
27 Construction in progress
Construction in progress refers to the necessary expenses incurred by the Company for the purchase
and construction of fixed assets or investment property before being ready for the expected usable
status, including engineering materials costs, labor costs, related taxes and fees, borrowing costs
that should be capitalized and indirect costs that should be apportioned. Construction in progress is
accounted for separately according to individual projects.
After the construction in progress is ready for its intended use, it must be transferred to fixed assets
or investment property, whether the final accounting procedures are completed or not.
The methods for impairment testing and accrual of impairment provisions of construction in
progress are detailed in 31 “Long-term Asset Impairment” under Note III.
28 Borrowing costs
Borrowing costs refer to interest and other related costs incurred by the Company as a result of
borrowings, including interest on borrowings, amortization of discounts or premiums, ancillary expenses,
and exchange differences arising from foreign currency borrowings.
Borrowing costs that can be directly attributable to the acquisition, construction or production of assets
eligible for capitalization are capitalized and included in the relevant asset cost. Other borrowing costs
are recognized as expenses in the period in which they are incurred, and are included in the current profit
and loss. Assets eligible for capitalization refer to fixed assets, investment property and inventories and
other assets that require a substantial period of acquisition, construction or production activities to get
ready for the intended use or sale status.
Borrowing costs become capitalized when:
The asset expenditure has occurred, including expenditure incurred in the form of cash
(1) payments, transfer of non-cash assets, or assuming interest-bearing debts for the purpose of
acquisition, construction or production of assets that are eligible for capitalization;
(2) Borrowing costs have occurred;
The acquisition, construction or production activities necessary to enable the assets to be
(3)
ready for the intended usable or saleable state have commenced.
When an asset satisfied the capitalization conditions is abnormally interrupted during the process of
acquisition, construction or production and the interruption period lasts for more than three months, the
capitalization of the borrowing costs is suspended and recognized as the current expenses until the
acquisition, construction or production of the assets starts again. When an asset satisfied the capitalization
conditions is ready for its intended use or sale, the capitalization is stopped and the borrowing costs
incurred in the future are included in the current profit and loss.
The period of capitalization refers to the period from the time when the borrowing costs start to be
capitalized to the point when the capitalization is stopped, and the period in which the borrowing costs
are suspended for capitalization is not included. During the period of capitalization, if special borrowings
are made for the acquisition, construction or production of assets eligible for capitalization, the amount
of the interest expenses actually incurred during the current period of the special borrowings, less the
amount of interest income earned by depositing unused borrowing funds in a bank or investment income
earned by temporary investment, is recognized as the amount of capitalization. When a general loan is
occupied for the purpose of purchasing, constructing or producing assets satisfied the capitalization
conditions, the amount of capitalization is determined according to the weighted average of the
accumulated asset expenditure exceeding the special loan portion multiplied by the capitalization rate of
the general loan occupied; the capitalization rate is determined based on the weighted average interest rate
of general borrowings.
48
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
29 Right-of-use assets
The Company initially measures right-of-use assets at cost. Such cost includes:
(1) The initial measurement amount of lease liabilities;
(2) Lease payments made on or before the commencement date of the lease term (if a lease
incentive exists, net of the amount related to the lease incentive already taken);
(3) Initial direct costs incurred by the Company;
(4) Costs expected to be incurred by the Company to disassemble and remove the leased
asset(s), restore the premises where the leased asset(s) is/are located, or restore the leased
asset(s) to the condition agreed upon under the terms of the lease (excluding costs incurred
to produce inventory).
After the commencement date of the lease term, the Company uses the cost model for
subsequent measurement of right-of-use assets.
If it is reasonably certain that ownership of the leased asset(s) will be obtained at the end of
the lease term, the Company depreciates the leased asset(s) over its/their remaining service
life. If it is not reasonably certain that ownership of the leased asset(s) will be obtained at
the end of the lease term, the Company depreciates the leased asset(s) over the lease term
or the remaining service life of the leased asset(s), whichever is shorter. Right-of-use assets
for which impairment reserves have been accrued are depreciated in future periods at their
carrying amount net of impairment reserves, with reference to the above principles.
In accordance with the provisions of Accounting Standards for Business Enterprises No. 8
- Asset Impairment, the Company determines whether right-of-use assets have been
impaired and accounts for the recognized impairment losses, as detailed in 31 “Long-term
Asset Impairment” under Note III.
49
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
30 Intangible assets
Intangible assets refer to the identifiable non-monetary assets, owned or controlled by the Company,
without physical form, including land use rights, intellectual property rights, and non-patented
technologies, etc.
Intangible assets are recorded at the actual cost at the time of acquisition. The service life of
intangible assets is analyzed and judged at the time of acquisition. Intangible assets with a finite
service life are amortized on the shortest of the estimated service lives, the beneficial period of the
contract and the effective period specified by law from the time when the intangible assets are
available for use. The amortization period is as follows:
Category Amortization years
The shorter of the years of the land use rights and the operating
Land use rights
years of the Company
Patents and non-patent 10 years or the shorter of service life, beneficiary years and
technologies legally valid years
Others Beneficiary period
The Company reviews the service life and amortization method of intangible assets with limited
service life at least at the end of each year, and made adjustment if necessary.
The methods for impairment testing and accrual of impairment provisions of intangible assets are
detailed in 31 “Long-term Asset Impairment” under Note III.
If an intangible asset is foreseen as unable to bring economic benefits to the Company, it is regarded
as an intangible asset with an indefinite service life, which will be reviewed in each accounting
period. If evidence indicates that the service life of the intangible asset is limited, then it is converted
to an intangible asset with limited service life. Intangible assets with indefinite service lives are not
amortized.
The expenditures of the Company's internal research and development projects are classified into
expenditures in the research phase and expenditures in the development phase. Research means an
original, planned survey of acquiring and understanding new scientific or technical knowledge.
Development means the application of research results or other knowledge to a plan or design to
produce new or substantially improved materials, devices, products, etc. prior to commercial
production or use.
The expenditures in the research phase of the Company's internal research and development projects
are included in the current profit and loss when incurred; expenditures in the development phase are
recognized as intangible assets only when the following conditions are all satisfied:
(1) It is technically feasible to complete the intangible asset to enable it to be used or sold;
(2) There is intent to complete the intangible asset and use or sell it;
(3) The intangible assets can bring economic benefits;
(4) There are sufficient technical, financial and other resources to support the development of
the intangible assets as well as ability to use or sell the intangible assets;
Expenditures attributable to the development stage of the intangible asset can be measured
(5)
in a reliable way.
If the above conditions cannot be all satisfied, the expenditures are included in the current
profit and loss when incurred.
50
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
31 Impairment of long-lived assets
The Company determines whether there is any sign of possible impairment of the long-term assets
on the balance sheet date. If there is any sign of impairment in a long-term asset, the Company
estimates the recoverable amount thereof based on the individual asset. If it is difficult to estimate
the recoverable amount of the individual asset, the recoverable amount of the asset is determined
based on the asset group to which the asset belongs.
The recoverable amount of an asset is determined based on the net amount of fair value of the asset
less the disposal expenses, or the present value of estimated future cash flows of the asset, whichever
is higher.
If the measurement results of the recoverable amount indicate that the recoverable amount of the
long-term investment is lower than its carrying amount, the carrying amount of the long-term
investment is written off to the recoverable amount, and the amount written by is recognized as asset
impairment losses, which is included in the profit and loss, while provision for asset impairment is
made. Once the asset impairment loss is confirmed, it cannot be reversed in the future accounting
period.
After the asset impairment loss is recognized, the depreciation or amortization expense of the
impaired assets will be adjusted accordingly in the future periods, so that the adjusted carrying
amount of the asset (deducting the expected net residual value) will be systematically amortized over
the remaining service life of the asset.
For the goodwill formed by business combination and the intangible assets with indefinite service
life, impairment test is carried out every year regardless of whether there is any indication of
impairment.
In the impairment test of goodwill, the carrying amount of goodwill is apportioned to the asset group
or asset group portfolio expected to benefit from the synergy of the business combination. When
impairment tests are conducted on underlying asset groups or asset group portfolios that contain
goodwill, impairment tests will be first conducted on the asset groups or asset group portfolios that
do not contain goodwill, provided there is any sign of impairment in the asset groups or asset group
portfolios related to the goodwill, and the recoverable amount will be calculated, and compared with
the relevant carrying amount to recognize the corresponding impairment loss. Further impairment
tests will be conducted on asset groups or asset group portfolios that contain goodwill, by comparing
the carrying amount of such underlying asset groups or asset group portfolios (including the part of
the carrying amount of the allocated goodwill) with their recoverable amount. If the recoverable
amount of the underlying asset group or asset group portfolio is lower than its carrying amount, the
impairment loss shall be recognized for goodwill.
32 Long-term deferred expenses
Long-term deferred expenses refer to various expenses that the Company has paid, should be
amortized over the current and future periods, and whose period of amortization is more than one
year, such as the improvement expenses incurred in renting fixed assets by operating leases. Long-
term prepaid expenses are amortized on a straight-line basis within the beneficial period of the
expense items.
33 Contract liabilities
The Company recognizes as contract liabilities the part of the obligation to transfer the goods to the
customer due to received or receivable consideration from the customer.
51
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
34 Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits provided in various forms of
consideration in exchange for service rendered by employees or compensations for the
termination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances and
subsidies, staff welfare, premiums or contributions on medical insurance, work injury
insurance and maternity insurance, housing funds, union running costs and employee
education costs, and short-term paid absences. The employee benefit liabilities are
recognized in the accounting period in which the service is rendered by the employees, with
a corresponding charge to the profit or loss for the current period or the cost of relevant
assets. Non-monetary benefits are measured at their fair value.
(b) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans
or defined benefit plans. Defined contribution plans are post-employment benefit plans
under which the Company pays fixed contributions into a separate fund and will have no
obligation to pay further contributions; and defined benefit plans are post-employment
benefit plans other than defined contribution plans. During the Reporting Period, the
Company’s defined contribution plans mainly include basic pensions and unemployment
insurance.
(c) Termination benefits
If the Company terminates the labor relationship with an employee before the labor contract
expires, or offers compensation for encouraging the employee to accept the redundancies
voluntarily, the liabilities arising from compensation for the termination of labor relations
with the employee is determined, and also included in the current profit and loss, at the time
when the Company cannot unilaterally withdraw the termination of the labor relationship
plan or redundancies proposal, or the time when the cost associated with reorganization
involving payment of termination benefits is confirmed, whichever is earlier.
(d) Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except short-term
employment benefits, post-employment benefits and termination benefits.
For other long-term employee benefits that meet the conditions of a defined contribution
plan, the amount to be contributed shall be recognized as a liability during the accounting
period when the employee provides services to the Company, and shall be included in profit
or loss for the period or the underlying asset costs. For long-term employee benefits other
than those mentioned above, on the balance sheet date, the benefit obligations arising from
the defined benefit plan shall be attributed to the periods during which the employee
provides services, and shall be included in profit or loss for the period or the underlying
asset costs.
52
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
35 Estimated liabilities
(1) Recognition standards for estimated liabilities
An obligation related to product quality assurance, loss contracts, restructuring and other
contingencies shall be recognized as provision, if i) it is a current obligation of the
Company, ii) the fulfillment of this obligation is likely to result in an outflow of economic
benefits, and iii) the amount of this obligation can be reliably measured.
(2) Measurement methods for estimated liabilities
The estimated liabilities of the Company are initially measured on the basis of the best
estimate of the expenditure required to perform the relevant current obligations.
When determining the best estimate, the Company considers factors such as risks,
uncertainties and time value of money related to contingent events. Where the time value
of money has a significant impact, the best estimate is determined by discounting the
relevant future cash outflows.
The best estimates are handled as follows:
In case there is a continuous range (or interval) of required expenditures, within which the
possibility of occurrence of various results is the same, the best estimate is determined by
the average of the middle value of the range, that is, the average of the upper and lower
limits.
In case there is no continuous range (or interval) of required expenditures, or there is a
continuous range but the possibility of various results in the range is different, if the
contingency involves a single item, the best estimate is determined based on the most
probable amount; if a contingency involves multiple items, the best estimate is determined
based on various possible outcomes and associated probabilities.
If all or part of the expenses required by the Company to settle the estimated liabilities are
expected to be compensated by a third party, the compensation amount is separately
recognized as an asset when it is basically confirmed to be received, and the recognized
compensation amount should not exceed the carrying amount of the estimated liabilities.
53
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
36 Lease liabilities
The Company initially measures lease liabilities at the present value of the lease payments
outstanding on the commencement date of the lease term. When calculating the present value of
lease payments, the Company uses the interest rate implicit in lease as the rate of discount. If the
implicit interest rate of the lease cannot be determined, the incremental loan interest rate of the
Company shall be used as the discount rate. Lease payments include:
The amount of fixed payments, net of amounts related to lease incentives, and the amount
(a)
of substantive fixed payments;
(b) Variable lease payments that depend on indexation or ratio;
The exercise price of the purchase option, when applicable, if the Company is reasonably
(c)
certain that the option will be exercised;
(d) The amount required to be paid to exercise the option to terminate the lease if the lease term
reflects that the Company will exercise the option to terminate the lease;
The estimated amount payable based on the secured residual value provided by the
(e)
Company.
The Company calculates the interest expenses of lease liabilities for each period within the lease
term at a fixed rate of discount and includes them in profit or loss for the current period or cost of
the related assets.
Variable lease payments that are not included in the measurement of lease liabilities should be
included in profit or loss for the current period or cost of the related assets when they are actually
incurred.
37 Share-based payments
The share-based payments of the Company are mainly equity-settled share-based payments, and only
allow to be exercised by employees after the completion of their services in the waiting period. On
each balance sheet date in the waiting period, based on the best estimate of the number of vesting
equity instruments, the services obtained in the current period are included in the relevant costs or
expenses and capital reserve based on the fair value at the grant date of the equity instruments.
The fair value of equity instruments is determined by the external appraiser or management based
on the binomial distribution method. The best estimate of the vesting equity instrument is determined
by the management based on historical statistics on the vesting weights and turnover rates on the
balance sheet date.
Equity-settled share-based payments are measured based on the fair value of the equity instruments
granted to employees. In case that the vesting right is available immediately after the grant, it is
included in relevant cost or expense based on the fair value of the equity instrument on the grant
date, and the capital reserve is increased accordingly. In case that the vesting right is available after
the completion of services in the waiting period or satisfaction of stipulated performance conditions,
on each balance sheet day during the waiting period, the services acquired in the current period are
included into the relevant costs or expenses and capital reserve on the basis of the best estimate of
the number of feasible equity instruments and at the fair value of the date on which the equity
instruments are granted. No adjustments are made to the identified related costs or expenses or total
owners' equity after the vesting date.
54
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition
(1) General principles applied to revenue recognition
The Company shall recognize the revenue according to the transaction price assigned to the
performance obligation when any due performance obligation is fulfilled (namely when the
client obtains the control over relevant commodities or services). Performance Obligation
means that, under the contract, the Company promises to transfer commodities or services
that can be clearly distinguished to the client. “Obtain the control over relevant commodities
or services” refers to the ability to completely dominate the use of commodities and obtain
almost all economic benefits. From the contract’s effectiveness date, the Company shall
evaluate the contract, recognize each single performance obligation included and determine
whether each performance obligation is fulfilled within a certain period or at a time point.
When any of the following conditions is met, for performance obligation to be fulfilled
within a certain period, the Company shall recognize corresponding revenue within the
period as scheduled:
While fulfilling the due obligation in the Company, the client obtains and consumes the
(a)
resulting economic benefit;
The client is able to control the commodities under construction during the Company’s
(b)
fulfillment;
(c) Commodities generated from the Company’s fulfillment possess irreplaceable purpose and
the Company has the right to charge all fulfilled performance obligations within the whole
contract period; otherwise, the Company shall recognize corresponding revenue when the
client obtains the control over relevant commodities or services.
For any performance obligation with a certain period, the Company shall apply the output
method/input method to determine the appropriate fulfillment schedule based on the
specific nature of commodities and services. The output method is to determine the
fulfillment schedule according to the value of commodities transferred to the client (while
the input method is to determine the fulfillment schedule according to the Company’s input
to fulfill the performance obligation). If the fulfillment schedule cannot be reasonably
determined and the Company’s costs are predicted to be compensated, corresponding
revenue shall be recognized based on the specific cost amount until the fulfillment schedule
could be reasonably determined.
55
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition (continued)
(2) Specific revenue recognition method
(a) Product sales contract
According to the contract terms, for the selling of products subject to performance obligation fulfillment
conditions at a time point and other products, the Company shall recognize the realization of sales
revenues when the client obtains the control over relevant commodities or services according to the
delivery condition agreed in the sales contract upon signed by the client after commodities are received.
(b) Technical service contract
If revenues are recognized within a certain period based on the technical service contract, corresponding
revenues shall be recognized according to the performance schedule.
(c) Royalty income
Accounted for according to the time and method of charging as stipulated in the relevant contract or
agreement.
(d) Revenue from photovoltaic power stations
a. Centralized power stations: Power stations are combined to the grid. The revenue is recognized based
on the documents on power supply provided by the business departments of the Company, after the
duration of continuous and trouble-free operation specified by the electric power company is met. b.
Distributed power stations: Power stations are combined to the grid. The revenue is recognized based on
the documents on settlement provided by the business departments of the Company.
(3) Principles of handling revenues from specific transactions
(a) For the contract containing the sales return article: When the client obtains the control over relevant
commodities, corresponding revenue shall be recognized according to the consideration amount
(excluding the amount predicted to be returned due to sales return) predicted to be duly charged from
transferring commodities to the client, and corresponding liabilities shall be recognized based on the
amount predicted to be returned due to sales return. Meanwhile, when commodities are sold, the balance
through deducting the predicted cost for taking back commodities from the carrying amount of
commodities predicted to be returned (including the impairment of value of returned commodities) shall
be accounted for under “Returned Commodities Cost Receivable”.
(b) For the contract containing the quality assurance article: it’s required to evaluate whether the quality
assurance involves any separable service except for the promise (to the client) that commodities conform
to established standards. If the Company provides additional service, it shall be deemed as a single
performance obligation and subject to the accounting treatment according to relevant revenue criteria
provisions; otherwise, the quality assurance liability shall be subject to the accounting treatment according
to the accounting criteria provisions on Contingency.
(c) For the sales contract containing the client’s additional purchase option: the Company shall evaluate
whether the option provides the client with any significant right. If any, it shall be deemed as a single
performance obligation and the transaction price shall be apportioned to the performance obligation, and
corresponding revenues shall be recognized when the client executes the purchase option right and obtains
the control over relevant commodities in the future or when the option becomes invalid. If the separable
selling price applied to the client’s additional purchase option right cannot be directly observed, it’s
required to comprehensively consider the difference in discounts between the client’s execution of option
right and the client’s non-execution of option right and analyze the possibility for the client to execute the
option right and other relevant information. Then, corresponding reasonable estimate shall be made.
56
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition (continued)
(3) Principles of handling revenues from specific transactions (continued)
(d) The contract licensing the IP right to the client: It’s required to evaluate whether the IP right license
constitutes any single performance obligation; if any, it is necessary to determine whether the performance
obligation fulfillment is fulfilled within a certain period or at a time point. If any IP right license is granted
to the client and royalties are charged based on the client’s actual sales or usage, corresponding revenues
shall be recognized at a later time between the following dates: the day when the client’s subsequent
selling or usage occurs; the day when the Company fulfills relevant performance obligations.
(e) Major responsible person and agent: Based on whether the Company has control over the goods or service
before transferring it to the customer, it is determined whether the Company is the major responsible
person or an agent in the transactions. If the Company is able to control the goods or service before
transferring it to the customer, the Company shall be deemed as major responsible person and the revenue
shall be recognized at the total amount of the consideration received or receivable; otherwise the Company
shall be deemed as an agent and the revenue shall be recognized at the amount of the commission or
handling fee to which it expects to be entitled. The amount of the commission or handling fee is determined
by deducting the amount payable to other relevant parties from the total amount of consideration received
or receivable.
39 Contract costs
(1) Contract performance cost
For the cost resulting from performing the contract which is not included in other ASBE except
the revenue standards and meets the following conditions, the Company shall recognize it as an
asset：
(a) The cost is directly related to a current or predicted contract, including the direct labor, direct
material and manufacturing expenses (or similar expenses), the cost borne by the client and
other costs resulting from the contract;
The cost adds various resources that can be applied by the Company to fulfill due performance
(b)
obligations; and
(c) The cost is predicted to be recovered.
The asset shall be presented and reported in inventory or other non-current assets, which
depends on whether the amortization period exceeds a normal operating cycle during the initial
recognition.
(2) Contract acquisition cost
If the increment cost resulting from the Company’s acquisition of contract is predicted to be
recovered, it shall be recognized as an asset as the contract acquisition cost. Increment Cost
refers to the cost which only results from the contract acquisition, like the sales commission. If
the amortization period is less than one year, it shall be included in current profit and loss.
(3) Contract cost amortization
The asset related to the contract cost shall, by adopting the same basis for the recognition of
commodities or services revenues related to the asset, be amortized during the period of
fulfilling the performance obligation or according to the fulfillment schedule and be included
into current profit and loss.
57
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
39 Contract costs (continued)
(4) Impairment of contract costs
For the asset related to the contract cost as mentioned above, if the carrying amount is higher
than the difference between the residual consideration predicted to be obtained from the
Company’s transfer of commodities related to the asset and the cost to be incurred due to such
transfer, depreciation reserves shall be calculated and withdrawn for the surplus which shall
also be recognized as the asset impairment loss.
After the impairment allowances is established, if changes in depreciation factors during
previous periods have made the above difference higher than the asset’s carrying amount, it
shall be restituted to previously established asset impairment allowances and included in current
profit and loss. However, the carrying amount of restituted assets shall not exceed the carrying
amount of the asset on the date of restitution without establishing impairment allowances.
40 Public grants
(1) Type of change
Public grants are transfers of monetary or non-monetary assets from the public body to the Group at nil
consideration. According to the grants targets stipulated in the relevant policies documents, public grants
are classified into public grants related to assets and public grants related to income.
(2) Recognition of public grants
If a public grant is a monetary asset, it is measured at the amount received or receivable. If a public grant
is a non-monetary asset, it is measured at fair value. If the fair value cannot be obtained in a reliable way,
it is measured at the nominal amount (RMB1). Public grants measured at nominal amounts are recognized
directly in the current profits and losses.
(3) Accounting treatment
Public grants related to assets offset the carrying amount of the underlying assets.
If the public grants related to income are used to compensate related costs or losses in the subsequent
period, it is recognized as deferred income and included in the current profit and loss or offset costs in the
period in which the related costs or losses are recognized; public grants used to compensate costs or losses
incurred by the enterprise are directly included in the current profits or losses or offset related costs. For
public grants related to the day-to-day activities of the enterprise, the R&D and VAT-related subsidies
and the taxation, or operation-based incentive public subsidies are included in other income; other public
grants are written off against related costs based on the substance of economic activities. Public grants
not related to daily activities of the Company are included in the non-operating income and expenditure.
For preferential loans for policy discount, if the public finance department appropriates the discounted
funds to the lending bank, the borrowing cost is accounted for according to the principal of the loan and
the policy preferential interest rate, with the amount actually received as the entry value of the loan. If the
public finance department directly appropriates the interest grant funds to the Company, the grants offset
the related borrowing costs.
In case that a recognized public grant is required to be returned, the carrying amount of the asset is adjusted
if the carrying amount of relevant assets is offset at the initial recognition; if there is related deferred
income, the book balance of deferred income is offset, and the excess is included in the current profit and
loss; and in case of other circumstances, it is directly included in the current profit and loss.
58
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
41 Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities shall be recognized based on the
difference (temporary difference) between the tax basis and carrying amount of the underlying
assets or liabilities. On the balance sheet date, the deferred income tax assets and deferred
income tax liabilities are measured based on the tax rate applicable during the period when it
is expected to recover the assets or pay off the liabilities.
(1) Basis for recognition of deferred income tax assets
The Company recognizes deferred income tax assets arising from deductible temporary
differences to the extent that it is likely to acquire taxable income that can be used to offset the
deductible temporary differences, deductible losses that can be carried forward to future years
and tax credits. However, deferred income tax assets arising from the initial recognition of
assets or liabilities in a transaction with all the following characteristics shall not be recognized:
(1) the transaction is not a business combination; and (2) the occurrence of the transaction does
not affect accounting profits or taxable income or deductible losses.
For a deductible temporary difference related to investments in affiliates, the corresponding
deferred income tax asset will be recognized if the following criteria are met simultaneously:
the temporary difference is likely to be reversed in the foreseeable future and it is likely to
obtain taxable income that can be used to offset the deductible temporary difference in the
future.
(2) Basis for recognition of deferred income tax liabilities
The Company recognizes the taxable temporary differences that should be paid but not paid
for the current and previous periods as deferred income tax liabilities. But deferred tax
liabilities do not include:
(a) Temporary differences arising from the initial recognition of goodwill;
Temporary differences arising from transactions or events that are not formed by a business
(b) combination and do not affect accounting profits or taxable income (or deductible losses) upon
their occurrence;
For taxable temporary differences related to investments in subsidiaries and associates, the
(c) timing of the reversal of the temporary differences can be controlled and the temporary
differences are unlikely to be reversed in the foreseeable future.
Deferred income tax assets and liabilities are presented on a net basis after, provided the
(3)
following conditions are met:
An enterprise has the legal right to settle current income tax assets and liabilities on a net
(a)
basis;
Deferred income tax assets and liabilities relate to income taxes levied by the same taxing
authority on either the same taxable entity or different taxable entities which intend to either
(b) settle current tax assets and liabilities on a net basis, or to realize the assets and settle the
liabilities simultaneously, in each future period in which significant amounts of deferred tax
assets or liabilities are reversed.
59
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
42 Leases
From the effectiveness date of a contract, the Company assesses whether the contract is a lease or
includes any lease. If a party to the contract transfers the right allowing the control over the use of
one or more assets that have been identified within a certain period, in exchange for a consideration,
such contract is a lease or includes a lease.
(1) Lease contract split
If a contract contains multiple single leases at the same time, the Company will split the contract,
and conduct accounting treatment of each single lease respectively.
If a contract contains both lease and non-lease parts at the same time, the Company will split the
lease and non-lease parts, conduct accounting treatment of the lease part in accordance with the
accounting standards governing leases, and conduct accounting treatment of the non-lease part in
accordance with other applicable corporate accounting standards.
(2) Lease contract combination
With regard to two or multiple contracts containing leases concluded by the Company with the same
counterparty or its related parties at the same or a similar time, when any of the following conditions
is met, the contracts are combined into one contract for accounting treatment:
Two or multiple contracts are concluded based on an overall business purpose and
(a) constitute a package deal, and if they are not considered as a whole, the overall business
purpose cannot be understood.
The consideration amount of one contract among the two or multiple contracts depends on
(b)
the pricing or performance of other contracts.
(c) The rights to use assets transferred by the two or multiple contracts constitute one single
lease.
(3) Accounting treatment with the Company as lessee
On the commencement date of the lease term, the Company recognises the right-of-use assets and
lease liabilities for the lease, unless it is a simplified short-term lease or low-value asset lease.
(a) Short-term leases and low-value asset leases
A short-term lease refers to a lease that does not include a purchase option and whose lease term
does not exceed 12 months. A low-value asset lease refers to a lease where the value will be low
when a single leased asset is a new asset.
The Company does not recognize the right-of-use assets or lease liabilities for the following short-
term leases and low-value asset leases. In each period within the lease term, the relevant lease
payments are included in cost of the related assets or profit or loss for the current period on a
straightline basis or according to other systemic and reasonable methods.
Item Simplified leased asset type
Short-term lease A lease whose lease term does not exceed 12 months from the
commencement date of the lease term
Low-value asset An asset lease with a value of less than RMB40,000 or its foreign currency
lease equivalents
60
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
42 Leases (continued)
(3) Accounting treatment with the Company as lessee (continued)
The Company recognises the right-of-use assets and lease liabilities for short-term leases and low-value
asset leases other than those mentioned above.
The accounting policies for right-of-use assets and lease liabilities are detailed in Note III,
(b)
29 and Note III, 36.
(4) Accounting treatment with the Company as lessor
(a) Lease classification:
The Company classifies leases into finance leases and operating leases at the inception of leases. A finance
lease refers to a lease where almost all the risks and rewards, related to the ownership of the leased asset(s),
are substantially transferred, regardless of whether the ownership is transferred eventually. An operating
lease refers to all leases other than finance leases.
Usually, the Company classifies a lease that meets any one or more of the following conditions as a finance
lease:
1) Upon expiry of the lease term, the ownership of the leased asset(s) is transferred to the lessee.
2) The lessee has the option to purchase the leased assets. As the agreed purchase price is low enough
compared with the fair value of the leased asset(s) at the time the option is expected to be exercised, it can
be reasonably determined at the inception of the lease that the lessee will exercise the option.
3) Although the ownership of the asset(s) is not transferred, the lease term accounts for the majority of
the service life of the leased asset(s).
4) At the inception of the lease, the present value of the lease payments receivable is almost equal to the
fair value of the leased asset(s).
5) The leased asset(s) is/are special in nature and can be only used by the lessee, unless there is a large
alteration.
The Company may also classify a lease that falls under any one or more of the following circumstances
as a finance lease:
1) If the lessee cancels the lease, losses to the lessor caused by the cancellation will be borne by the lessee.
2) Gains or losses arising from fluctuations in the fair value of the residual value of the leased asset(s) are
borne by the lessee.
3) The lessee is able to renew the lease with a rental far lower than the market level to the next term.
(b) Accounting treatment of finance leases
On the commencement date of the lease term, the Company recognises the finance lease receivables for
the finance lease and derecognises the leased asset(s) of the finance lease.
In the initial measurement of finance lease receivables, the sum of the unsecured residual value and the
present value of the lease payments receivable not yet received on the commencement date of the lease
term discounted at the interest rate implicit in lease is the entry value of the finance lease receivables.
Lease payments receivable include:
1) The amount of fixed payments, net of amounts related to lease incentives, and the amount of substantive
fixed payments;
2) Variable lease payments that depend on indexation or ratios;
3) The exercise price of the purchase option, when applicable, if it is reasonably certain that the lessee
will exercise the purchase option;
4) The amount required to be paid by the lessee to exercise the option to terminate the lease if the lease
term reflects that the lessee will exercise the option to terminate the lease;
5) Secured residual value provided to the lessor by the lessee, a party related to the lessee, or an
independent third party that has the financial ability to perform the security provision obligation.
The received variable lease payments that are not included in the measurement of the net investment in
the lease are included in profit or loss for the current period when they are actually incurred.
61
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
42 Leases (continued)
(4) Accounting treatment with the Company as lessor (continued)
(c) Accounting treatment of operating leases
For each period of the lease term, the Company adopts the straight-line method or other
systematic and reasonable methods to recognize the lease receipts of the operating lease as rental
income; the Company capitalizes the initial direct expenses incurred in connection with the
operating lease, amortizes them over the lease term on the same basis as that for the recognition
of the rental income, and includes them in the current profit and loss by stage; the Company
includes the variable lease payments, obtained in connection with the operating lease that are
not included in the lease receipts, in the current profit and loss when actually incurred.
(5) Sale and leaseback
(a) The Company as seller and lessee
If the asset transfer in a sale and leaseback transaction is a sale, the Company will measure the
right-of-use assets formed by the sale and leaseback based on the portion of the original asset’s
carrying amount that is related to the use right acquired by the leaseback, and recognize related
gains or losses only for the right transferred to the lessor. If the fair value of the sales
consideration is different from the fair value of the asset, or if the lessor does not charge the rent
at the market price, the Company will conduct accounting treatment with the sales consideration
amount below the market price as the prepaid rent, or the amount above the market price as the
additional financing provided by the lessor to the lessee; at the same time, the relevant sales
gains or losses will be adjusted based on the fair value.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company will continue
to recognise the transferred asset and at the same time recognise a financial liability equivalent
to the transfer income.
(b) The Company as buyer and lessor
If the asset transfer in a sale and leaseback transaction is a sale, the Company will conduct
corresponding accounting treatment for asset purchase and apply the accounting standards
governing leases to the accounting treatment of the asset lease. If the fair value of the sales
consideration is different from the fair value of the asset, or if the Company does not charge the
rent at the market price, the Company will conduct accounting treatment with the sales
consideration amount below the market price as the pre-collected rent, or the amount above the
market price as the additional financing provided by the Company to the lessee; at the same
time, the rental receipt will be adjusted based on the market price.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company will recognise
a financial asset equivalent to the transfer income.
43 Related parties
If one party controls, commonly controls or exerts a significant influence on the other party,
and two or more parties are under the control, common control or significant influence of
the other party, they constitute related parties. Enterprises that are solely controlled by the
state and do not have any other related party relationship shall not be deemed as related
parties.
62
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
44 Discontinued operations
The Company will recognize a component that meets one of the following conditions, has been
disposed of or classified as being held for sale, and can be separately identified, as a component
of discontinued operation:
(1) This component represents an independent main business or a separate main operation
region.
(2) This component is part of a related plan to dispose of an independent main business or a
separate main operation region.
(3) This component is a subsidiary acquired for the sole purpose of resale.
Operating profit and loss, such as impairment losses for discontinued operations and the
amount reversed, and disposal profit and loss are presented in the income statement as profit
and loss of discontinued operations.
In the balance sheet, the Company presents, independently from other assets, the held-for-
sale non-current assets or assets in held-for-sale disposal groups, and presents,
independently from other liabilities, the liabilities in held-for-sale disposal groups. The
held-for-sale non-current assets or assets in held-for-sale disposal groups and the liabilities
in held-for-sale disposal groups shall not offset each other, but shall be presented as current
assets and current liabilities respectively. In the income statement, the Company presents
the profits and losses from going concern and the profits and losses from discontinued
operations. For the discontinued operations reported in the current period, the Company
represents in the financial statements for the current period, the information, previously
presented as the profits and losses from going concern, as the profits and losses from
discontinued operations for the comparable accounting period. If the discontinued
operations are no longer eligible for being classified as held-for-sale categories, the
Company will represent in the financial statements for the current period, the information,
previously presented as the profits and losses from discontinued operations, as the profits
and losses from going concern for the comparable accounting period.
45 Hedge Accounting
Hedge is classified as fair value hedge, cash flow hedge or net foreign investment hedge based
on the hedging relationship.
(1) A hedging relationship qualifies for hedge accounting only if all of the following criteria
are met:
(a) The hedging relationship consists only of eligible hedging instruments and eligible hedged
items.
(b) At the inception of the hedging relationship, there is formal designation of hedging instruments
and hedged items, and documentation of the hedging relationship and the Company’s risk
management strategies and objectives for undertaking the hedge have been prepared.
63
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(1) A hedging relationship qualifies for hedge accounting only if all of the following criteria
are met (continued)
(c) The hedging relationship meets the hedge effectiveness requirements.
The hedging relationship meets the hedge effectiveness requirements only if all of the following
criteria are met:
1) There is an economic relationship between the hedged item and the hedging instrument. This
economic relationship causes opposite changes in the value of the hedging instrument and the hedged
item in face of the identical hedged risk.
2) The effect of credit risk does not dominate the value changes that result from that economic
relationship.
3) The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the
hedged item that the Company actually hedges and the quantity of the hedging instrument that the
Company actually uses to hedge that quantity of hedged item. However, that designation shall not
reflect an imbalance between the weightings of the hedged item and the hedging instrument that
would create hedge ineffectiveness that could result in an accounting outcome that would be
inconsistent with the purpose of hedge accounting.
(2) Fair value hedge accounting
(a) Gain or loss on the hedging instrument shall be recognised in profit or loss. If the hedging instrument
hedges a non-trading equity instrument (or a component thereof) that the Company has elected to be
measured at fair value through other comprehensive income, the hedging gain or loss generated by
the hedging instrument shall be recognized in other comprehensive income.
(b) Gain or loss generated by the hedged item due to the hedged risk exposure shall be recognized in
profit or loss, and shall adjust the carrying amount of the recognized hedged item that is not measured
at fair value. If the hedged item is a financial asset (or a component thereof) measured at fair value
through other comprehensive income, the hedging gain or loss on the hedged item shall be
recognized in profit or loss, and wll not be required for adjustment since the carrying amount has
been measured at fair value. However, if the hedged item is a non-trading equity instrument (or a
component thereof) that the Company has elected to be measured at fair value through other
comprehensive income, the hedging gain or loss on the hedged item shall be recognized in other
comprehensive income, and will not be required for adjustment, since the carrying amount has been
measured at fair value.
When a hedged item represents a defined commitment that has not been unrecognized (or a
component thereof), the cumulative change in the fair value of the hedged item subsequent to its
designation caused by the hedge relationship is recognized as an asset or a liability with a
corresponding gain or loss recognized in profit or loss. When a defined commitment is made to
acquire an asset or assume a liability, the initial carrying amount of the asset or the liability is
adjusted to include the cumulative change in the fair value of the hedged item that has been
recognized.
(c) If the hedged item is a financial instrument (or a component thereof) measured at amortized cost, the
adjustment made to the carrying amount of the hedged item shall be amortized based on the effective
interest rate recalculated on the amortization commencement date, and recognized in the profit or
loss. This amortization can commence from the adjustment date, but not later than the time when the
hedging gain or loss adjustment is made for the termination of the hedged item. If the hedged item
is a financial asset (or a component thereof) measured at fair value through other comprehensive
income, the cumulative recognized hedging gain or loss shall be amortized in the same manner and
recognized in the profit or loss, but the carrying amount of the financial asset (or a component
thereof) shall not be adjusted.
64
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(3) Accounting treatment of cash flow hedges
(a) The portion of the gain or loss on the hedging instrument that is determined to be an effective
hedge (i.e., the portion that is offset by the change in the cash flow hedge reserve) shall be
recognized in other comprehensive income. The amount of cash flow hedging reserves shall be
determined based on the lower of the absolute amount of the following two items:
1) The cumulative gain or loss on the hedging instrument since the commencement of the hedge;
2) The cumulative change in the present value of expected future cash flows of the hedged item
since the commencement of the hedge. The amount of cash flow hedging reserves recognized
in other comprehensive income for each period is the change in cash flow hedging reserves for
the period.
(b) The portion of the gain or loss on the hedging instrument that is determined to be an ineffective
hedge (i.e., other gain or loss after deducting that recognized in other comprehensive income)
shall be recognized in profit or loss.
(c) The amount that has been accumulated in the cash flow hedge reserve shall be accounted for as
follows:
1) if any hedged item as an expected transaction, and the expected transaction subsequently
results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast
transaction for a non-financial asset or a non-financial liability becomes a defined commitment
for which fair value hedge accounting treatment is applied, the Company shall remove that
amount from the cash flow hedge reserve previously recognized in other comprehensive income
and include it in the initial cost of the asset or the liability.
2) for cash flow hedges other than those covered by 1), that amount from the cash flow hedge
reserve previously recognized in other comprehensive income shall be reclassified from the
cash flow hedge reserve to profit or loss in the same period or the period during which the
hedged expected future cash flows affect profit or loss.
3) however, if that amount from the cash flow hedge reserve previously recognized in other
comprehensive income is a loss and the Company expects that all or a portion of that loss will
not be recovered in one or more future periods, it shall immediately reclassify the amount that
is not expected to be recovered from other comprehensive income to profit or loss.
(4) Hedges of a net investment in a foreign operation
Hedges of a net investment in a foreign operation, including a hedge of a monetary item
that is accounted for as part of the net investment shall be accounted for similarly to cash
flow hedges:
(a) The portion of the gain or loss on the hedging instrument that is determined to be an effective
hedge shall be recognized in other comprehensive income.
When disposing of all or part of the foreign operation, the gain or loss on the hedging instrument
recognized in other comprehensive income shall be correspondingly transferred out and
recognized in the profit or loss.
(b) The portion of the gain or loss on the hedging instrument that is determined to be an ineffective
hedge shall be recognized in the profit or loss.
65
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(5) Termination of hedge accounting
Hedge accounting will be terminated if one of the following situations occurs:
(a) The hedging relationship no longer meets the risk management objectives due to changes
in risk management objectives.
(b) The hedging instrument has expired or been sold, or the contract has been terminated or has
been exercised.
(c) The economic relationship no longer exists between the hedged item and the hedging
instrument, or the effect of credit risk start to dominate the value changes that result from
that economic relationship.
(d) The hedging relationship no longer meets other conditions for applying hedging accounting
stipulated in this standard. In case that the rebalancing of the hedging relationship is applied,
the Company shall first consider the rebalancing of the hedging relationship, and then
evaluate whether the hedging relationship meets the conditions for applying hedging
accounting stipulated in this standard.
Termination of hedge accounting may affect the whole or a portion of the hedging
relationship, and when only a portion thereof is affected, hedge accounting remain
applicable to the remaining unaffected portion.
(6) Fair value selection of credit risk exposure
When credit derivative instruments measured at fair value through profit or loss are used to
manage the credit risk exposure of a financial instrument (or a component thereof), the
financial instrument (or a component thereof) can be designated as a financial instrument
measured at fair value through profit or loss during its initial recognition, subsequent
measurement, or when not yet recognized, with written records made simultaneously,
provided that the following criteria are met:
(a) The subject (such as the borrower or the loan commitment holder) of the credit risk
exposure of the financial instrument is consistent with the subject involved in the credit
derivative;
(b) The reimbursement level of the financial instrument is consistent with that of the instrument
required to be delivered under the terms of the credit derivative.
66
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
46 Changes to major accounting policies and estimates
(1) Change of accounting policies
Impact of the adoption of the Interpretation to Accounting Standards for Business
Enterprises No. 16 on the Company
On December 13, 2022, the Ministry of Finance (“MOF”) issued the Interpretation No. 16
of the Accounting Standards for Business Enterprises (CK [2022] No. 31, hereinafter
referred to as the “Interpretation No. 16”), clarifying “Accounting treatment that the deferred
income taxes associated with assets and liabilities arising from a single transaction is not
subject to the initial recognition exemption”. The Interpretation No. 16 is effective from
January 1, 2023, which allows voluntarily early adoption. The Company implemented
accounting treatment related to such matter this year, and the implementation of the
Interpretation No. 16 had no significant impact on the consolidation and the Company’s
financial statements.
(2) Changes to accounting estimates
No significant change occurred to the major accounting estimates in the Reporting Period.
47 Correction of previous accounting errors
No previous accounting errors were identified and corrected in the Reporting Period.
67
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IV Taxes
1 Value-added tax
In the Reporting Period, output tax was calculated at 3%, 5%, 6%, 9% or 13% of the taxable
income of general taxpayers and the value added-tax was paid based on the difference after
deducting the allowance deduction of input tax in the current period. The value added-tax
payment for the Company’s directly exported goods is executed in accordance with the
regulations of “Exemption, Offset and Refund”. The tax refund rate is 0%-13%.
2 Urban maintenance and construction tax
Subject to the relevant tax laws and regulations of the state and local regulations, urban
maintenance and construction tax is paid based on the proportion stipulated by the state
according to the individual circumstances of each member of the Company.
3 Education surcharges
Education surcharges are paid according to the individual circumstances of each member of
the Company based on the proportion stipulated by the state in accordance with the relevant
national tax regulations and local regulations.
4 Property tax
Property tax is paid on the houses with property rights according to the proportion stipulated
by the state in accordance with the relevant national tax regulations and local regulations.
68
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IV Taxes (continued)
5 Corporate income tax
The corporate income tax rate for the Company was 15% in the current period.
According to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, a reduced
corporate income tax rate of 15% is applied to important high-tech enterprises that the public supports.
According to the relevant provisions of the Announcement on the Preferential Income Tax Policies for
Small and Micro Enterprises and Self-employed Businesses (Announcement No. 6 [2023] of the Ministry
of Finance and the State Taxation Administration) and the Announcement of the Ministry of Finance and
the State Taxation Administration on Tax Policies for Further Supporting the Development of Small and
Micro Enterprises and Self-employed Businesses (Announcement No. 12 [2023] of the Ministry of Finance
and the State Taxation Administration), issued by the Ministry of Finance and the State Taxation
Administration in 2023, from January 1, 2023 to December 31, 2027, the annual taxable income of small
and low-profit enterprises not exceeding RMB1 million will be included in the taxable income at a reduced
rate of 25%, and the enterprise income tax will be paid at the rate of 20%.
Except for the following subsidiaries entitling to preferential tax treatment and the overseas subsidies that
adopt local applicable tax rate, other entities under the Company are subject to the applicable tax rate of
25%, or the preferential tax rate for small and micro enterprises.
Subsidiaries entitled to tax preferences:
Preferential
Company Name Reason
tax rate
TCL China Star Optoelectronics Technology
15.00% High-tech enterprise
Co., Ltd.
Wuhan China Star Optoelectronics Technology
15.00% High-tech enterprise
Co., Ltd.
Shenzhen China Star Optoelectronics Bandaoti
15.00% High-tech enterprise
Display Technology Co., Ltd.
Wuhan China Star Optoelectronics Bandaoti
15.00% High-tech enterprise
Display Technology Co., Ltd.
Suzhou China Star Optoelectronics Technology
15.00% High-tech enterprise
Co., Ltd.
Huizhou Kedate Smart Display Technology Co.,
15.00% High-tech enterprise
Ltd.
China Display Optoelectronics Technology
15.00% High-tech enterprise
(Huizhou) Co., Ltd.
Shenzhen Qianhai Maojia Software Technology
15.00% High-tech enterprise
Co., Ltd.
Qingdao Blue Business Consulting Co., Ltd. 15.00% High-tech enterprise
Tianjin Huanbo Science and Technology Co.,
15.00% High-tech enterprise
Ltd.
Tianjin Printronics Circuit Corporation 15.00% High-tech enterprise
Techigh Circuit Technology (Huizhou) Co., Ltd. 15.00% High-tech enterprise
Shenzhen TCL High-Tech Development Co.,
15.00% High-tech enterprise
Ltd.
TCL Financial Technology (Shenzhen) Co., Ltd. 15.00% High-tech enterprise
Corporate income tax is levied at a
Suzhou China Star Environmental Protection reduced rate of 15% on eligible
15.00%
Technology Co., Ltd. third-party enterprises, engaged in
pollution prevention and control
Tianjin Huan'Ou Bandaoti
15.00% High-tech enterprise
Material&Technology Co., Ltd.
Tianjin Zhonghuan Advanced
15.00% High-tech enterprise
Material&Technology Co., Ltd.
Inner Mongolia Zhonghuan Solar Material Co.,
15.00% High-tech enterprise
Ltd.
Inner Mongolia Zhonghuan Advanced Bandaoti High-tech enterprise, encouraged
15.00%
Material Co., Ltd. business in West China
69
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IV Taxes (continued)
5 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
Wuxi Zhonghuan Applied Materials Co.,
15.00% High-tech enterprise
Ltd.
High-tech enterprise,
Inner Mongolia Zhonghuan Crystal
15.00% encouraged business in West
Materials Co., Ltd.
China
Tianjin Huanzhi New Energy Technology
15.00% High-tech enterprise
Co., Ltd.
Huansheng New Energy (Jiangsu) Co., Ltd. 15.00% High-tech enterprise
Xuzhou Jingrui Bandaoti Equipment
15.00% High-tech enterprise
Technology Co., Ltd.
Tianjin Huanou New Energy Technology
15.00% High-tech enterprise
Co., Ltd
Huansheng New Energy (Tianjin) Co., Ltd. 15.00% High-tech enterprise
Encouraged business in West
Ningxia Zhonghuan Solar Material Co., Ltd. 15.00%
China
Encouraged business in West
Ningxia Zhonghuan New Energy Co., Ltd. 15.00%
China
Dushan Anju Photovoltaic Technology Co., Encouraged business in West
15.00%
Ltd. China
Encouraged business in West
Otog Banner Huanju New Energy Co., Ltd. 15.00%
China
Sonid Left Banner Huanxin New Energy Encouraged business in West
15.00%
Co., Ltd. China
Ningxia Huanou New Energy Technology Encouraged business in West
15.00%
Co., Ltd. China
Inner Mongolia TCL Photoelectric Encouraged business in West
15.00%
Technology Co., Ltd. China
Shaanxi Huanshuo Green New Energy Co., Encouraged business in West
15.00%
Ltd. China
A high-tech enterprise and an
Zhonghuan Advanced Bandaoti Technology
12.50% enterprise engaged in integrated
Co., Ltd.
circuit materials
Public-supported public
Yixing Huanxing New Energy Co., Ltd. 12.50%
infrastructure project
Tianjin Binhai Huanneng New Energy Co., Public-supported public
12.50%
Ltd. infrastructure project
Qinhuangdao Tianhui Solar Energy Co., Public-supported public
12.50%
Ltd. infrastructure project
Public-supported public
Guyuan Shengju New Energy Co., Ltd. 12.50%
infrastructure project
Zhangjiakou Shengyuan New Energy Co., Public-supported public
12.50%
Ltd. infrastructure project
70
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IV Taxes (continued)
5 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
Public-supported infrastructure
Phase III project of Hohhot Huanju New
7.50% project, encouraged business in West
Energy Development Co., Ltd.
China
Public-supported infrastructure
Ongniud Banner Guangrun New Energy
7.50% project, encouraged business in West
Co., Ltd.
China
Public-supported infrastructure
Tuquan Guanghuan New Energy Co., Ltd. 7.50% project, encouraged business in West
China
Public-supported infrastructure
Inner Mongolia New Huanyu Yangguang
7.50% project, encouraged business in West
New Energy Technology Co., Ltd.
China
Public-supported infrastructure
Gengma Huanxing New Energy Co., Ltd. 7.50% project, encouraged business in West
China
Public-supported infrastructure
Dangxiong Youhao New Energy
7.50% project, encouraged business in West
Development Co., Ltd.
China
Public-supported infrastructure
Ningxia Huanneng New Energy Co., Ltd. Tax-free project, encouraged business in West
China
Shangyi Shengyao New Energy Public-supported public
Tax-free
Development Co., Ltd. infrastructure project
Public-supported infrastructure
Shaanxi Runhuan Tianyu Technology
Tax-free project, encouraged business in West
Co., Ltd.
China
Public-supported public
Hohhot Shuguang New Energy Co., Ltd. Tax-free infrastructure project, encouraged
business in West China
Tianjin Binhai New Area Huanju New Public-supported public
Tax-free
Energy Co., Ltd. infrastructure project
71
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements
1 Monetary assets
December 31, 2023 January 1, 2023
Cash on hand 583 480
Bank deposits 19,807,150 33,161,505
Deposits with the central bank 397,191 381,137
Other monetary assets 1,719,347 1,835,379
21,924,271 35,378,501
Note Monetary assets with restricted use rights
December 31, 2023 January 1, 2023
TCL TECH Finance's statutory reserve deposits
341,091 321,852
with the central bank
Other restricted monetary assets 1,586,365 1,381,025
1,927,456 1,702,877
On December 31, 2023, the Company’s bank deposits of RMB341,091,000 (December 31, 2022:
RMB321,852,000) were statutory deposit reserves deposited with the Central Bank by TCL
Technology Group Finance Co., Ltd., a subsidiary of the Company.
On December 31, 2023, the Company’s monetary assets offshore amounted to RMB1,533,937,000
(December 31, 2022: RMB2,230,135,000), all of which were owned by the overseas subsidiaries
of the Company.
72
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
December 31, 2023 January 1, 2023
Financial assets classified as those measured at fair value
23,184,117 12,703,507
through profit or loss
Including: Debt instrument investments 23,131,691 12,483,274
Equity instrument investments 52,426 220,233
23,184,117 12,703,507
3 Derivative financial assets
December 31, 2023 January 1, 2023
Foreign exchange forwards and foreign exchange swaps 73,645 206,398
Interest rate swaps 34,363 154,636
108,008 361,034
4 Notes receivable
(1) Notes receivable by category
December 31, 2023 January 1, 2023
Bank acceptance notes 615,059 512,767
Trade acceptance notes 333 82
615,392 512,849
73
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
4 Notes receivable (continued)
(2) Presentation of provision for bad debts on notes receivable by category
December 31, 2023 January 1, 2023
Gross amount Allowance Carryin Gross amount Allowance Carryin
Am g g
Ratio Perce Amou Percent
Amount oun Amount Ratio (%)
(%) ntage amount nt age amount
t
Notes receivable
for which the
allowance for
doubtful accounts 615,392 100% - - 615,392 512,849 100% - - 512,849
were established
on the grouping
basis
Including: low-
risk
615,059 99.95% - - 615,059 512,767 99.98% - - 512,767
portfol
io
By aging analysis 333 0.05% - - 333 82 0.02% - - 82
615,392 100% - - 615,392 512,849 100% - - 512,849
(3) As at December 31, 2023, notes receivable in pledge were RMB499,930,000.
(4) As at December 31, 2023, endorsed or discounted notes receivable that were outstanding and
derecognized amounted to RMB391,566,000 and endorsed or discounted notes receivable that were
outstanding and not derecognized amounted to RMB9,923,000.
5 Accounts receivable
December 31, 2023 January 1, 2023
Accounts receivable 22,362,875 14,505,731
Less: allowance for doubtful accounts 359,224 454,070
22,003,651 14,051,661
74
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
Accounts receivable as at December 31, 2023 are classified as follows by how the doubtful
(1)
debts were provisioned:
December 31, 2023
Gross amount Allowance
Lifetime
ECL rate Gross amount
Accounts receivable for which the related
allowances for doubtful accounts were 234,417 86.58% 202,962
established on the individual basis
Of which:
Accounts receivable 234,417 86.58% 202,962
Accounts receivable for which the related
lowances for doubtful accounts were 22,128,458 0.71% 156,262
stablished on the grouping basis
Of which:
Group 1: by aging analysis 16,628,590 0.39% 65,631
Group 2: by tariff 870,234 0.01% 61
Group 3: by photovoltaics 3,742,046 2.06% 77,006
Group 4: other silicon materials 887,588 1.53% 13,564
22,362,875 359,224
(2) The aging of accounts receivable is analysed as follows:
December 31, 2023 January 1, 2023
Amount Ratio (%) Amount Ratio (%)
Within 1 year 21,061,059 94.18% 13,254,660 91.37%
1 to 2 years 489,084 2.19% 350,702 2.42%
2 to 3 years 193,256 0.86% 339,078 2.34%
Over 3 years 619,476 2.77% 561,291 3.87%
22,362,875 100% 14,505,731 100%
75
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
(3) Allowances for doubtful accounts receivable are analysed as follows:
December 31, 2023
Beginning amount 454,070
New subsidiary 2,182
Accrued in current period 36,362
Reversal of current period (91,224)
Write-off of current period (42,199)
Reduced subsidiary (372)
Exchange adjustment 405
Ending amount 359,224
(4) On December 31, 2023, the accounts receivable of the top five balances are as follows:
December 31, 2023 January 1, 2023
Total amount owed by the top five 10,129,405 5,422,959
Proportion of total accounts receivable 45.30% 37.38%
(5) Accounts receivable derecognized due to transfer
of financial assets
Amount
Methods of transfer of derecognized for Gain or loss on
Item financial assets the period derecognition
Accounts Discounting and
7,223,995 (47,893)
receivable factoring
6 Receivables financing
December 31, 2023 January 1, 2023
Notes receivable financing 954,410 1,103,128
954,410 1,103,128
Note As at December 31, 2023, endorsed or discounted notes receivable that were outstanding and
derecognized amounted to RMB16,096,035,000 and endorsed or discounted notes receivable that
were outstanding and not derecognized amounted to RMB23,880,000.
As of December 31, 2023, the Company believes that financing for the receivables it held did not
have significant credit risks and will not cause significant losses due to default.
76
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
December 31, 2023 January 1, 2023
Within 1 year 2,798,957 3,586,208
1-2 years 138,561 5,556
2-3 years 7,423 1,530
Over 3 years 1,347 563
2,946,288 3,593,857
(2) As of December 31, 2023, the prepayments of the top five balances are as follows:
December 31, 2023 January 1, 2023
Total amount owed by the top five 1,790,548 2,655,698
As % of total prepayments 60.77% 73.90%
8 Other receivables
December 31, 2023 January 1, 2023
Dividends receivable 1,381,490 1,226
Other receivables 4,325,365 4,032,022
5,706,855 4,033,248
(1) Dividends receivable
December 31, 2023 January 1, 2023
Others 1,398,536 1,226
Less: allowance for doubtful
17,046 -
accounts
1,381,490 1,226
77
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(1) Dividends receivable (continued)
(a) Presentation of provision for bad debts on dividends receivable by category
December 31, 2023 January 1, 2023
Carrying Carrying
Gross amount Allowance amount Gross amount Allowance amount
Category
Ratio Ratio
Amount Amount Percentage Amount Amount Percentage
(%) (%)
Allowances
for bad
debts
accrued on 1,398,536 100% 17,046 1.22% 1,381,490 1,226 100% - - 1,226
an
individual
basis
1,398,536 100% 17,046 1.22% 1,381,490 1,226 100% - - 1,226
(2) Other receivables
December 31, 2023 January 1, 2023
Other receivables 4,691,149 4,259,495
Less: allowance for
365,784 227,473
doubtful accounts
4,325,365 4,032,022
(a) Nature of other receivables is analyzed as follows:
December 31, 2023 January 1, 2023
Subsidy receivables 2,342,535 1,868,634
Equity transfer
618,752 1,073,246
receivables
Security and deposits 497,819 479,269
Others 866,259 610,873
4,325,365 4,032,022
78
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(2) Other receivables (continued)
(b) Presentation of provision for bad debts on other receivables by category
December 31, 2023 January 1, 2023
Gross amount Allowance Gross amount Allowance
Carrying Carrying
Category Ratio Percent Ratio Percenta
Amount Amount amount Amount Amount amount
(%) age (%) ge
Allowanc
es for bad
debts
accrued on 426,084 9.08% 293,600 68.91% 132,484 177,351 4.16% 160,740 90.63% 16,611
an
individual
basis
Provisions
for bad
debts 90.92
4,265,065 72,184 1.69% 4,192,881 4,082,144 95.84% 66,733 1.63% 4,015,411
accrued on %
a portfolio
basis
4,691,149 100% 365,784 7.80% 4,325,365 4,259,495 100% 227,473 5.34% 4,032,022
Among other receivables for which provisions for bad debts are accrued on an individual basis, important
other receivables are RMB234,837,000, and the balance of the provisions for bad debts correspondingly
accrued is RMB211,353,000.
(c) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL
12-month (credit not Lifetime ECL
ECL impaired) (credit impaired) Total
January 1, 2023 68,114 134,786 24,573 227,473
Transfer into the stage
(8,019) (105,368) 113,387 -
3
Return to the stage 1 127 (29) (98) -
Current accrual 13,657 - 204,386 218,043
Increase of new
794 - - 794
subsidiaries
Reversal of current
(12,279) - (135) (12,414)
period
Write-off of current
- (424) (67,616) (68,040)
period
Decrease due to
(61) - - (61)
disposal of subsidiaries
Exchange adjustment (11) - - (11)
December 31, 2023 62,322 28,965 274,497 365,784
Among the amount written off in the current period, single other receivables with significance were
written off by RMB52,122,000.
79
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(d) The aging of other receivables is analyzed as follows:
December 31, 2023 January 1, 2023
Carrying amount Ratio (%) Carrying amount Ratio (%)
Within 1 year 3,192,635 68.05% 3,209,877 75.35%
1 to 2 years 785,690 16.75% 417,448 9.80%
2 to 3 years 371,464 7.92% 258,284 6.07%
Over 3 years 341,360 7.28% 373,886 8.78%
4,691,149 100% 4,259,495 100%
(e) As of December 31, 2023, the other receivables of the top five balances are as follows:
December 31, 2023 January 1, 2023
Total amount owed by the
3,006,544 2,324,850
top five
As % of total other
64.09% 54.58%
receivables
(f) On December 31, 2023, there was no transfer of other receivables that did not conform to the conditions
for derecognition in the balance of this account; no transaction arrangement for asset securitization
with other receivables as the subject asset; and no financial instrument that was the subject of
securitization and did not conform to the conditions for derecognition.
80
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventories are classified as follows:
December 31, 2023 January 1, 2023
Provision for
depreciation
Provision for of
depreciation inventories /
of inventories provision
/ provision for for
impairment of impairment
contract of contract Carrying
Carrying performance Carrying Carrying performance amount
balance costs amount balance costs
Raw 6,605,273 636,587 5,968,686 5,604,506 979,845 4,624,661
materials
Work in 3,656,706 659,073 2,997,633 3,674,059 421,558 3,252,501
progress
Finished 10,640,524 1,536,291 9,104,233 11,512,597 1,705,750 9,806,847
Goods
Turnover 412,583 1,380 411,203 318,291 1,178 317,113
materials
21,315,086 2,833,331 18,481,755 21,109,453 3,108,331 18,001,122
As of December 31, 2023, the Company had no inventory for liabilities guarantee.
(2) Provision for depreciation of inventories / provision for impairment of contract performance
Amount of increase in Amount of decrease in the current
the current period period
January 1, Accrued Reversal Write-off December
2023 in current Others of current of current Others 31, 2023
period period period
Raw
979,845 886,495 80,523 (494,111) (813,741) (2,424) 636,587
materials
Work in
421,558 893,203 50,030 (117,074) (588,911) 267 659,073
progress
Finished 1,705,75
2,804,069 31,144 (324,392) (2,679,109) (1,171) 1,536,291
Goods 0
Turnove
r 1,178 222 - (20) - - 1,380
materials
3,108,331 4,583,989 161,697 (935,597) (4,081,761) (3,328) 2,833,331
81
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
December 31, 2023 January 1, 2023
Allowance Allowance
Carrying for Carrying Carrying for Carrying
balance doubtful amount balance doubtful amount
accounts accounts
Electricity charges
receivable 362,058 18,151 343,907 327,543 12,376 315,167
(2) Valuation allowances for contract assets are analyzed as follows:
Other
Current Current Reversal increases
January 1,
Accrual or write-off and December
2023
decreases 31, 2023
Electricity
12,376 11,493 (2,936) (2,782) 18,151
charges
11 Held-for-sale assets
Ending Estimated Estimated
Ending Impairment Fair
Item carrying disposal disposal
balance allowance value
amount cost period
Assets
Within 1
for 162,416 - 162,416 252,694 14,264
year
sale
assets 162,416 - 162,416 252,694 14,264
12 Non-current assets due within one year
December 31, 2023 January 1, 2023
Other non-current assets due within one year 461,179 -
Debt investments due within one year 119,516 -
580,695 -
82
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
13. Other current assets
December 31, 2023 January 1, 2023
Short-term debt investments 28,563 939,864
VAT to be deducted, to be certified, etc. 4,244,948 3,775,842
Loans and advances to customers 845,764 640,917
Others 167,259 82,313
5,286,534 5,438,936
14 Debt Investments
December 31, 2023 January 1, 2023
Treasury bonds and corporate bonds 122,349 741,703
83
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
15 Long-term receivables
December 31, 2023 January 1, 2023
Discount
Gross Allow Carrying Gross Allow Carrying rate
amount ance amount amount ance amount
Finance
720,281 - 720,281 631,373 - 631,373
lease
Including:
Unrealized (781,934
(518,000) - (518,000) (781,934) - 8.115%
financing )
income
720,281 - 720,281 631,373 - 631,373
16 Long-term equity investments
December 31, 2023 January 1, 2023
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Associates
26,404,102 1,452,985 24,951,117 29,065,027 329,479 28,735,548
(1)
Joint
ventures 529,657 49,503 480,154 570,171 49,503 520,668
(2)
26,933,759 1,502,488 25,431,271 29,635,198 378,982 29,256,216
As of December 31, 2023, the Company made impairment allowances for long-term equity investments in investees with poor
management and insolvent assets.
84
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(1) Associates
Increase or decrease in current period
Investment
Other
Increase/decrease in gains and Other Other Declared Accrued
January 1, increases
Name of investee investment in losses comprehensive equity Cash Impairment December 31,
2023 and
current period recognized by income adjustment changes dividends or allowance 2023
decreases
equity method profit
Bank of Shanghai Co., Ltd. 12,809,374 - 1,251,665 (7,708) - (327,157) - - 13,726,174
China Innovative Capital
944,392 - 25,698 - - - - 210 970,300
Management Limited
LG Electronics (Huizhou)
89,772 - 13,438 - - - (13,400) - - - 89,810
Co., Ltd.
Shenzhen Qianhai Qihang
Supply Chain Management 27,358 (40,000) (1,144) 1,635 - - - 12,151 -
Co., Ltd.
Shenzhen Jucai Supply
15,273 - 4,367 2 - - - - - - 19,642
Chain Technology Co., Ltd.
Shenzhen Tixiang Business
Management Technology 1,147 - 216 - - - - - - 12 1,375
Co., Ltd.
TCL Air Conditioner
40,610 - 372 - - - - - - - - - 40,982
(Wuhan) Co., Ltd.
TCL Finance (Hong Kong)
109,943 - 1,153 - - - - - - - - - 111,096
Co., Limited
Urumqi TCL Equity
Investment Management 1,090 - (3) - - - - - - - - - 1,087
Co., Ltd.
Hubei Changjiang Hezhi
Equity Investment Fund
1,413,073 (236,822) (16,932) - - - - - - - - 1,159,319
Partnership (Limited
Partnership)
Ningbo Dongpeng
Weichuang Equity
365,511 44,177 45,027 (1) - (29,243) - - 425,471
Investment Partnership
(Limited Partnership)
Deqing Puhua Equity
Investment Fund
126,213 (8,668) 31,573 - - - - - - - - - 149,118
Partnership (Limited
Partnership)
85
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Declared
Increase/decrease in gains and Other Cash dividends
January 1, Other equity Provision for Other increases
Name of investee investment in current losses comprehensive or profit December 31,
2023 changes impairment and decreases
period recognized by income adjustment distribution 2023
equity method declared
Ningbo Dongpeng Heli Equity
Investment Partnership (Limited 372,687 (19,173) (42,773) - - (35,798) - - 274,943
Partnership)
Wuxi TCL Aisikai Bandaoti
Industry Investment Fund 310,930 (5,061) (27,116) - - - - - - 278,753
Partnership (Limited Partnership)
Wuxi TCL Venture Capital
36,850 - (34) 26 - - - - - - 36,842
Partnership (Limited Partnership)
Ningbo Meishan Bonded Port Qiyu
Investment Management 23,342 - 8,841 - - - - - - - - 32,183
Partnership (Limited Partnership)
Shanghai Gen Auspicious Venture
Capital Partnership (Limited 15,057 - 330 1,448 - (1,069) - - 15,766
Partnership)
Nanjing Zijin A Dynamic
Investment Partnership (Limited 19,726 (321) 1,455 2 - - - - - 20,862
Partnership)
Huizhou Kaichuang Venture
Investment Partnership (Limited 8,695 - (12) 220 - - - - - 8,903
Partnership)
Beijing A Dynamic Venture
Capital Center (Limited 7,636 - (3,498) - - - - - - 4,138
Partnership)
Yixing Jiangnan Tianyuan Venture
Capital Company (Limited 4,820 - (611) 3 - - - - - 4,212
Partnership)
Shenzhen Chuangdong New
Industry Investment Fund 2,338 - (3) - - - - - - 2,335
Enterprise (Limited Partnership)
Hubei Changjiang Hezhi Equity
Investment Fund Management Co., 11,553 - 1,574 - - (3,000) - - - 10,127
Ltd.
Huizhou Kaimeng Angel
Investment Partnership (Limited 2,543 - (53) - - - - - - 2,490
Partnership)
Ningbo Jiutian Matrix Investment
2,597 6,800 455 - - - - - - - - 9,852
Management Co., Ltd.
Urumqi Qixinda Equity Investment
4,502 - 873 - - - - - - - - 5,375
Management Co., Ltd.
86
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Declared
gains and Cash Other
Increase/decrease Other Other Accrued
January 1, losses dividends or increases
Name of investee in investment in comprehensive equity Impairment December
2023 recognized profit and
current period income adjustment changes allowance 31, 2023
by equity distribution decreases
method declared
Urumqi TCL Create
Dynamic Equity Investment 759 - (1) - - - - - 758
Management Co., Ltd.
Beijing A Dynamic
Investment Consulting Co., 467 - (4) - - - - - 463
Ltd.
Shanghai Gen Auspicious
Investment Management 2,511 - (23) - - (1,753) - - 735
Co., Ltd.
Nanjing A Dynamic Equity
Investment Fund 279 - (2) - - - - - 277
Management Co., Ltd.
Wuxi TCL Medical Imaging
25,837 (644) (7,341) - - - - 153 18,005
Technology Co., Ltd.
Aijiexu New Electronic
Display Glass (Shenzhen) 880,249 - (19,476) - - (3,700) - - 857,073
Co., Ltd.
TCL Ventures Fund L.P. 29,018 (19,698) 1,562 - - 3,656 - (14,538) -
Getech Ltd. 83,660 - (1,560) (5) - - - - - 82,095
Guangdong Innovative
Lingyue Intelligent
Manufacturing and
Information Technology 502,444 328,430 59,337 - - - (19,937) - - 870,274
Industry Equity Investment
Fund Partnership (Limited
Partnership)
Guangdong Utrust
Emerging Industry Equity
Investment Fund 167,809 - 13,024 - - - - - - - 180,833
Partnership (Limited
Partnership)
87
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Declared
Investment
Cash Other
Increase/decrease in gains and Other Other Accrued
January 1, dividends or increases
Name of investee investment in losses comprehensive equity Impairment December 31,
2023 profit and
current period recognized by income adjustment changes allowance 2023
distribution decreases
equity method
declared
Shenzhen Xinhuoyicheng
Recreational and Sports 1,388 - (112) - - - - - - - - 1,276
Industry Co., Ltd.
JOLED Incorporation 159,302 - (17,043) - - - - (134,687) (7,572) -
Sichuan Shengtian New
Energy Development Co., 508,492 - 32,440 - - - (9,128) - - - 531,804
Ltd.
SunPower Systems
28,345 - 1,861 - - - - - - - 30,206
International Limited
Zhonghuan Aineng (Beijing)
4,118 - (1,625) - - - - - - - 2,493
Technology Co., Ltd.
Inner Mongolia Zhongjing
Science and Technology 136,682 - (357) - - - - - - - 136,325
Research Institute Co., Ltd.
Hunan Guoxin Bandaoti
9,825 - 64 - - - - - - - 9,889
Technology Co., Ltd.
Maxeon Solar Technologies,
1,620,417 290,027 (338,643) - - - - (1,013,423) 64,390 622,768
Ltd.
Xinjiang Goens Energy
3,919,465 (1,123,330) 557,009 - - - (3,353,144) - - -
Technology Co., Ltd. (Note)
Ruihuan (Inner Mongolia)
- (12,000) - - - - - 12,000 -
Solar Power Co., Ltd.
Tianjin Zhonghuan Haihe
Intelligent Manufacturing
657,615 38,510 36,561 - - - (4,986) - - 727,700
Fund Partnership (Limited
Partnership)
Zhonghuan Feilang (Tianjin)
5,125 (2,000) 1,142 - - - - - - 4,267
Technology Co., Ltd.
Ningbo Zhongxin Venture
Capital Partnership (Limited 144,968 (698) (1,959) - - - - - - 142,311
Partnership)
88
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Declared
gains and Other Cash
Increase/decrease in Other Accrued Other
January 1, losses comprehensive dividends or
Name of investee investment in equity Impairment increases and December
2023 recognized income profit
current period changes allowance decreases 31, 2023
by equity adjustment distribution
method declared
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 393,946 89,460 (52,272) - - - - - - - - 431,134
Inner Mongolia Shengou Electromechanical
1,012 - 475 - - - - - - - - 1,487
Engineering Co., Ltd.
Inner Mongolia Huanye Material Co., Ltd. 6,163 - 1,059 - - - - - - - - 7,222
Shenzhen Shutuo Technology Co., Ltd. 38,202 - 2,409 - - - - - - - (1,364) 39,247
Shenzhen Qianhai Sailing International
69,540 - (42,523) (44) 1,164 - - - 28,137
Supply Chain Management Co., Ltd.
Wuhan Guochuangke Optoelectronic
25,910 (7,202) 498 - - - - - - - 30,695 49,901
Equipment Co., Ltd.
Zhihui Xinyuan Commercial (Huizhou) Co.,
3,936 - 6,455 - - - - - - - - 10,391
Ltd.
Purplevine Holdings Limited 1,629 - (1,398) - - - - - - - 10,164 10,395
Xinxin Bandaoti Technology Co., Ltd. 1,798,784 - (34,120) - - - - - - - (1,764,664) -
Inner Mongolia Xinhua Bandaoti
117,886 440,000 (9,984) - - - - - - - 1,237 549,139
Technology Co., Ltd.
Inner Mongolia Xinhuan Silicon Energy
127,847 1,668,000 (50,230) - - - - - - - - 1,745,617
Technology Co., Ltd.
Shanghai Feilihua Shichuang Technology
41,054 - 2,035 - - - - - - - 6,703 49,792
Co., Ltd.
Jiangsu Jixin Bandaoti Silicon Material
- - 3,628 - - - - - 8,787 12,415
Research Institute Co., Ltd.
Xi’an Simovi New Material Co., Ltd. - 30,000 334 - - - - - 539 30,873
Guangdong TCL New Technology Co., Ltd. - 1,767 - - - - - - 1,767
Hubei Consumer Finance Co., Ltd. 166,077 - 13,332 - - - - - 179,409
Tianjin Qiyier Communication &
287,755 (58,722) 13,694 - - (2,548) - (56,696) 183,483
Broadcasting Co., Ltd.
28,735,548 1,402,832 1,463,104 (4,422) 1,164 (3,801,207) (1,148,110) (1,697,792) 24,951,117
Note: Xinjiang Xiexin New Energy Materials Technology Co., Ltd. was renamed as Xinjiang Goens Energy Technology
Co., Ltd. in May 2023.
Note: Xinxin Bandaoti Technology Co., Ltd. was acquired by Zhonghuan Advanced Bandaoti Technology Co., Ltd., a subsidiary of the Company, in February 2023 and became a subsidiary of the
Company.
89
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(2) Joint ventures
Increase or decrease in current period
Declared
Other
Increase/decrease Investment gains and Cash dividends Accrued Other
comprehensive Other equity
Name of investee January 1, 2023 in investment in losses recognized by or profit Impairment increases and
income changes December 31, 2023
current period equity method distribution allowance decreases
adjustment
declared
Zhangjiakou Qixin Equity Investment
86,975 - (22,184) - - (13,105) - - 51,686
Fund Partnership
Tianjin Huanyan Technology Co., Ltd. 140,793 - (810) - - - - - 139,983
TCL Huizhou City, Kai Enterprise
1,347 - 12 - - - - - 1,359
Management Limited
Huizhou TCL Human Resources Service
6,274 - 2,656 - - - - - 8,930
Co., Ltd.
TCL Microchip Technology (Guangdong)
285,279 60,000 (79,117) - 12,034 - - - 278,196
Co., Ltd.
520,668 60,000 (99,443) - 12,034 (13,105) - - 480,154
90
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
16 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
Decrease
January 1, Increase in Other December
in the Note
2023 the period changes 31, 2023
period
Pride Telecom
1,624 - - (210) 1,414 Note 1
Limited
Huaxia CPV
(Inner Mongolia) 49,503 - - - 49,503 Note 1
Power Co., Ltd.
JOLED
318,604 134,687 - (15,143) 438,148 Note 2
Incorporation
Maxeon Solar
Technologies, - 1,013,423 - - 1,013,423 Note 3
Ltd.
Ruihuan (Inner
Mongolia) Solar 9,251 - (9,251) - -
Power Co., Ltd.
378,982 1,148,110 (9,251) (15,353) 1,502,488
Note 1 Provisions for impairment were accrued for the long-term equity investments in these
investees at recoverable amounts because continuous operations loss occurred to these
investees with poor management.
Note 2 This company has made an application to the Tokyo District Court for initiating a bankruptcy
reorganization procedure named “civil regeneration”, and the Company has fully accrued
provisions for impairment of long-term equity investments at their carrying amount.
Note 3 This company’s products were mainly affected by such factors of the market location as the
economy, policies and prices, and its performance did not meet expectations. Since H2 2023,
its stock price has began to decline significantly. With reference to the market price of this
company’s stock (calculated at its closing price on NASDAQ as at December 29, 2023), the
Company recognized a recoverable amount of RMB622,768,000 net of disposal costs and
accrued A provision for impairment of RMB1,013,423,000 for long-term equity
investments.
91
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Investments in other equity instruments
December 31, 2023 January 1, 2023
Stocks 17,127 66,706
Equity of unlisted companies 369,521 373,290
386,648 439,996
Reasons
designated as
Amount of other
measured at fair
Confirmed comprehensive
value and
Dividend Accumulated Accumulated income
Item name whose changes
income Profits losses transferred to
are included in
recognized retained
other
earnings
comprehensive
income
Being held
long term for
3,243 (193,481)
strategic
Stocks - - purposes
Being held
Equity of long term for
10, 561 (25,959)
unlisted strategic
companies - - purposes
Total - 13, 804 (219,440) -
18 Other non-current financial assets
December 31, 2023 January 1, 2023
Equity investments 2,770,251 2,928,827
Debt investments 201,315 -
2,971,566 2,928,827
92
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
19 Investment property
Houses and Land use
Total
buildings rights
Gross amount:
January 1, 2023 1,067,479 205,633 1,273,112
Increase 109,863 15,961 125,824
Reclassified from fixed assets and
109,863 15,961 125,824
intangible assets
Decreases (55,862) (1,918) (57,780)
Reclassified to fixed assets and
(50,022) - (50,022)
intangible assets
Other decreases (5,840) (1,918) (7,758)
December 31, 2023 1,121,480 219,676 1,341,156
Accumulated depreciation and
amortization:
January 1, 2023 235,474 38,402 273,876
Increase 91,258 6,388 97,646
Accrued in current period 22,925 4,511 27,436
Reclassified from fixed assets and
68,333 1,877 70,210
intangible assets
Decreases (9,899) (37) (9,936)
Reclassified to fixed assets and
(9,372) - (9,372)
intangible assets
Other decreases (527) (37) (564)
December 31, 2023 316,833 44,753 361,586
Investment property, net:
December 31, 2023 804,647 174,923 979,570
January 1, 2023 832,005 167,231 999,236
Impairment allowance:
January 1, 2023 52,787 - 52,787
Increase 15,104 - 15,104
Increase in the period 15,104 - 15,104
Decreases - - -
Decrease in the period - - -
December 31, 2023 67,891 - 67,891
Investment property, net:
December 31, 2023 736,756 174,923 911,679
January 1, 2023 779,218 167,231 946,449
93
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
20 Fixed assets
Office and
Houses and Machinery electronic Transportation Power
buildings equipment equipment equipment stations Others Total
Gross
amount:
January 1,
44,979,606 174,755,648 2,737,234 261,094 2,361,429 27,226 225,122,237
2023
Increase 10,408,101 60,125,440 600,019 51,401 119,609 8,972 71,313,542
Acquisition
111,974 880,705 120,988 31,689 1,000 4,422 1,150,778
and other
New
1,771,267 3,259,428 12,973 2,618 - - 5,046,286
subsidiary
Reclassified
from
50,022 - - - - - 50,022
investment
property
Reclassified
from
8,474,838 55,985,307 466,058 17,094 118,609 4,550 65,066,456
construction
in progress
Decreases (443,133) (6,668,274) (81,971) (6,171) (135,438) (9,032) (7,344,019)
Written
down with
(3,846) (1,281,698) (790) - - - (1,286,334)
public
grants
Reclassified
to
(109,863) - - - - - (109,863)
investment
property
Other
(329,424) (5,386,576) (81,181) (6,171) (135,438) (9,032) (5,947,822)
decreases
Exchange
10,072 (2,214) 1,526 343 - 771 10,498
adjustment
December
54,954,646 228,210,600 3,256,808 306,667 2,345,600 27,937 289,102,258
31, 2023
Accumulated
depreciation:
January 1,
7,827,013 80,699,683 1,726,432 165,109 514,036 15,930 90,948,203
2023
Increase 1,987,325 19,623,572 297,118 42,074 84,502 4,762 22,039,353
Accrual 1,851,730 18,753,835 287,124 40,812 84,502 4,762 21,022,765
New
126,223 239,053 9,994 1,262 - - 376,532
subsidiary
Reclassified
from
9,372 - - - - - 9,372
investment
property
Other
- 630,684 - - - - 630,684
increases
Decreases (149,952) (1,680,893) (56,278) (4,043) (18,972) (5,799) (1,915,937)
Reclassified
to
(68,333) - - - - - (68,333)
investment
property
Other
(81,619) (1,680,893) (56,278) (4,043) (18,972) (5,799) (1,847,604)
decreases
Exchange
1,146 501 722 245 - 286 2,900
adjustment
December
9,665,532 98,642,863 1,967,994 203,385 579,566 15,179 111,074,519
31, 2023
Fixed assets,
net:
December
45,289,114 129,567,737 1,288,814 103,282 1,766,034 12,758 178,027,739
31, 2023
January 1,
37,152,593 94,055,965 1,010,802 95,985 1,847,393 11,296 134,174,034
2023
94
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
20 Fixed assets (continued)
Office
Houses
Machinery and Transportation Power
and Others Total
equipment electronic equipment stations
buildings
equipment
Impairment
allowance:
January 1,
766,317 832,173 35,290 111 62,059 412 1,696,362
2023
Accrued in
current - 3,407 - - - - 3,407
period
Write-off of
current (4,602) (74,865) (80) - - - (79,547)
period
Other
transfers (15,104) - - - - - (15,104)
out
December
746,611 760,715 35,210 111 62,059 412 1,605,118
31, 2023
Fixed
assets,
carrying
amount:
December
44,542,503 128,807,022 1,253,604 103,171 1,703,975 12,346 176,422,621
31, 2023
January 1,
93,223,792 975,512 95,874 132,477,672
2023 36,386,276 1,785,334 10,884
Please refer to Item 82 of Note V for information on fixed asset pledge. As at December 31, 2023, the gross
amount of the fixed assets that were fully depreciated and still in use was RMB50,139,955,000.
Fixed assets with pending ownership certificates at the end of the current period:
Expected
Carrying amount time of obtaining
ownership certificate
Houses and buildings Expected to be
18,258,415
(Note) completed in 2024
Note As at December 31, 2023, the fixed assets with pending ownership certificates of the Company were mainly
the buildings and constructions of CSOT’s t3, t5 and t9 manufacturing bases, as well as the buildings and
constructions of Inner Mongolia Zhonghuan Crystal Material Co., Ltd., Tianjin Zhonghuan Advanced
Material&Technology Co., Ltd. and Tianjin Huanhai Industrial Park Co., Ltd.
21 Construction in progress
(1) Schedule of construction in progress
December 31, 2023 January 1, 2023
Construction in progress 17,013,179 52,063,442
Less: Impairment allowance 13,127 9,608
17,000,052 52,053,834
95
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
21 Construction in progress (continued)
(2) Changes to construction in progress
Interest
Accumulated capitalizat
Transfer-in in investment in the Cumulative Including: ion rate for
Increase in the current period Other December project as % of Project capitalized capitalized interest current
Project name Budget January 1, 2023 period Fixed assets movements 31, 2023 budget progress interest in current period period Funding source
Proprietary funds,
t9 production line of Under
31,500,000 10,383,892 3,368,415 (13,098,442) (290,227) 363,638 74.77% 274,494 130,108 3.68% proceeds from share
LCD panel construction
offering and loans
Large-diameter
Under Self-funded and
bandaoti silicon wafers 5,410,520 1,630,505 2,069,243 (259,497) (452,287) 2,987,964 79.36% 5,326 4,688 3.35%
construction financed funds
for integrated circuit
50GW (G12) solar-
grade monocrystalline Under Self-funded and
10,979,740 3,667,153 3,153,523 (5,798,298) (96,391) 925,986 96.83% 152,096 59,997 2.26%
silicon material smart construction financed funds
factory project
Smart factory with an
annual output of 35GW
Under Self-funded and
high-purity solar ultra- 3,650,050 - 1,325,407 (332,793) - 992,614 36.31% 3,870 3,870 2.90%
construction financed funds
thin monocrystalline
silicon
Bandaoti silicon wafers Under Self-funded and
10,500,000 - 2,278,929 (744,148) (351,462) 1,183,319 62.01% 385,773 641 6.15%
for integrated circuit construction financed funds
Production line of 8-
12-inch bandaoti Under Self-funded and
5,707,172 1,130,031 620,597 (457,989) (33,164) 1,259,475 87.46% 20,628 19,095 3.35%
silicon wafers for construction financed funds
integrated circuit
Others Not applicable 35,242,253 19,586,151 (44,375,289) (1,166,060) 9,287,055
52,053,834 32,402,265 (65,066,456) (2,389,591) 17,000,052
96
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
22 Right-of-use assets
Houses and Transportation Machinery Land use
Total
buildings equipment equipment rights
Gross amount:
January 1, 2023 4,293,124 1,430 1,110,462 134,541 5,539,557
Increase 1,732,859 750 366,699 43,265 2,143,573
New subsidiary 35,402 - 212,139 - 247,541
Leased in 1,192,877 750 - 43,265 1,236,892
Other increases 504,580 - 154,560 - 659,140
Decreases (70,742) (302) (280,790) (55,039) (406,873)
Reduced subsidiary - - (241,052) (55,039) (296,091)
Reduction due to
(9,122) - - - (9,122)
contract revision
Other decreases (61,620) (302) (39,738) - (101,660)
Exchange adjustment 8,543 17 - - 8,560
December 31, 2023 5,963,784 1,895 1,196,371 122,767 7,284,817
Accumulated
depreciation:
January 1, 2023 227,403 912 189,886 11,232 429,433
Increase 395,404 630 158,911 16,240 571,185
New subsidiary 13,212 - 32,082 - 45,294
Accrual 382,192 630 126,829 16,240 525,891
Decreases (49,711) (302) (50,065) (3,304) (103,382)
Other decreases (49,711) (302) (50,065) (3,304) (103,382)
Exchange adjustment 1,131 4 - - 1,135
December 31, 2023 574,227 1,244 298,732 24,168 898,371
Right-of-use assets,
carrying amount:
December 31, 2023 5,389,557 651 897,639 98,599 6,386,446
January 1, 2023 4,065,721 518 920,576 123,309 5,110,124
Impairment allowance:
January 1, 2023 - - - - -
December 31, 2023 - - - - -
Right-of-use assets,
carrying amount
December 31, 2023 5,389,557 651 897,639 98,599 6,386,446
January 1, 2023 4,065,721 518 920,576 123,309 5,110,124
97
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
23 Intangible assets
Non-patent
Land use
technologies Others Total
rights
/patents
Gross amount:
January 1, 2023 9,216,257 11,350,477 1,995,650 22,562,384
Increase 308,048 2,561,245 952,236 3,821,529
New subsidiary 306,180 405,374 170,486 882,040
Purchase 1,868 284,256 162,447 448,571
Reclassified from investment
- - - -
property
Reclassified from development
- 1,871,615 - 1,871,615
costs
Others - - 619,303 619,303
Decreases (138,422) (100,663) (16,359) (255,444)
Sale and disposal (43,966) (14,625) (7,786) (66,377)
Reclassified to investment
(15,961) - - (15,961)
property
Reduced subsidiary (3,144) - (426) (3,570)
Other decreases (75,351) (86,038) (8,147) (169,536)
Exchange adjustment - 1,496 465 1,961
December 31, 2023 9,385,883 13,812,555 2,931,992 26,130,430
Accumulated amortization:
January 1, 2023 1,018,407 3,685,498 926,432 5,630,337
Increase 280,179 1,406,581 318,158 2,004,918
Accrual 264,541 1,382,848 259,956 1,907,345
New subsidiary 15,638 23,733 58,202 97,573
Decreases (18,739) (39,779) (12,343) (70,861)
Sale and disposal (3,842) (5,913) (6,900) (16,655)
Reclassified to investment
(1,877) - - (1,877)
property
Reduced subsidiary (157) - (426) (583)
Other decreases (12,863) (33,866) (5,017) (51,746)
Exchange adjustment - (2,484) 269 (2,215)
December 31, 2023 1,279,847 5,049,816 1,232,516 7,562,179
Intangible assets, net：
December 31, 2023 8,106,036 8,762,739 1,699,476 18,568,251
January 1, 2023 8,197,850 7,664,979 1,069,218 16,932,047
Impairment allowance:
January 1, 2023 23,562 113,406 11,148 148,116
Accrual - - - -
Exchange adjustment - 591 - 591
December 31, 2023 23,562 113,997 11,148 148,707
Intangible assets, carrying amount:
December 31, 2023 8,082,474 8,648,742 1,688,328 18,419,544
January 1, 2023 8,174,288 7,551,573 1,058,070 16,783,931
As at December 31, 2023, the total carrying amount of land use rights for which the title certificate has not been
registered properly was RMB12,745,000.
Please refer to Item 82 of Note V for information on collateralized intangible assets.
98
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
24 Development costs
Development expenditures are presented as follows:
December 31, 2023 January 1, 2023
Display 1,455,110 2,172,507
New energy photovoltaic & materials 1,086,383 1,006,700
2,541,493 3,179,207
25 Goodwill
(1) Gross amount of goodwill
Increase Decrease
Name of investee or item January 1, December
in the in the
incurring goodwill 2023 31, 2023
period period
TCL Medical Radiological
28,967 - - 28,967
Technology (Beijing) Co., Ltd. Note 1
Qingdao Blue Business
2,452 - - 2,452
Consulting Co., Ltd. Note 2
Tianjin Huan'Ou Bandaoti
214,683 - - 214,683
Material&Technology Co., Ltd. Note 3
TCL Technology Group (Tianjin)
6,726,130 - - 6,726,130
Co., Ltd. Note 4
Moka International Limited Note 5 1,728,973 - - 1,728,973
Suzhou China Star
Optoelectronics Technology Co., 486,603 - - 486,603
Ltd. Note 6
Huizhou Kedate Smart Display
3,011 - - 3,011
Technology Co., Ltd. Note 7
Suzhou China Star
Environmental Protection - 43,408 - 43,408
Technology Co., Ltd. Note 8
Xinxin Bandaoti Technology
- 1,180,005 - 1,180,005
Co., Ltd. Note 9
Techigh Circuit Technology Note
- 131,477 - 131,477
(Huizhou) Co., Ltd. 10
9,190,819 1,354,890 - 10,545,709
(2) Goodwill impairment allowance
Increase Decrease
January 1, in the in the December 31,
Name of investee 2023 period period 2023
TCL Medical Radiological
28,967 - - 28,967
Technology (Beijing) Co., Ltd.
99
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
25 Goodwill (continued)
(2) Goodwill impairment allowance (continued)
Note 1 In 2010, the Company acquired a 51.82% interest in TCL Medical Radiological Technology (Beijing)
Co., Ltd. (hereinafter referred to as “TCL Medical Radiological Technology”) with capital of RMB
52,319,000. Thus, the difference between the accumulated investment of the Company in TCL
Medical Radiological Technology (corresponding to 51.82% equity) and the fair value of the net
identifiable assets of TCL Medical Radiological Technology attributable to the Company on the
settlement date (equal to RMB28,967,000) was recorded in the Company's goodwill. An impairment
allowance of RMB 28,967,000 had been made on such goodwill in 2018.
Note 2 In October 2016, Highly Information Industry Co., Ltd., a subsidiary of the Company, acquired 60%
interest in Qingdao Blue Business Consulting Co., Ltd. (hereinafter referred to as “Blue Business
Consulting”) with consideration of RMB 10,000,000. Thus, the difference between the accumulated
investment of Highly Information Industry Co., Ltd. in Blue Business Consulting (corresponding to
a 60% interest) and the fair value of the net identifiable assets of Blue Business Consulting attributable
to Highly Information Industry Co., Ltd. on the settlement date (equivalent to RMB2,452,000) was
recorded in this item.
Note 3 Tianjin Huan’Ou Bandaoti Material&Technology Co., Ltd. is a subsidiary of TCL Technology Group
(Tianjin) Co., Ltd., which the Company has acquired in a business combination not involving entities
under common control.
Note 4 The Company completed its acquisition of 100% stake in TCL Technology Group (Tianjin) Co., Ltd.
(former name: Tianjin Zhonghuan Electronic Information Group Co., Ltd.) on October 1, 2020 with
a cash consideration of RMB12,500,000,000. At the date of acquisition, the Group obtained the
effective control of TCL Technology Group (Tianjin) Co., Ltd., and included such company into the
consolidated financial statements. On the date of transaction, the difference between the accumulated
investment of the Company in TCL Technology Group (Tianjin) Co., Ltd. (corresponding to the 100%
equity) and the fair value of the net identifiable assets of TCL Technology Group (Tianjin) Co., Ltd.
attributable to the Company on the settlement date (equal to RMB6,726,130,000) was recorded in this
item. The goodwill mainly consists of 2 asset groups: the new energy photovoltaic and other silicon
materials and the Tianjin Printronics Circuit Corp.
Note 5 In April 2021, the Company acquired 100% interest in Moka International Limited with a cash
consideration of RMB2,800,000,000. Thus, the difference between the accumulated investment of the
Company in Moka International Limited (corresponding to the 100% equity) and the fair value of the
net identifiable assets of Moka International Limited attributable to the Company on the settlement
date (equal to RMB1,728,973,000) was recorded in this item.
Note 6 In April 2021, the Company acquired 60% interest in Suzhou China Star Optoelectronics Technology
Co., Ltd. (formerly known as “Samsung Suzhou LCD Co. Ltd.”) with a cash consideration of
RMB4,757,727,000. The difference between the accumulated investment of the Company in Suzhou
China Star Optoelectronics Technology Co., Ltd. (corresponding to the total 70% equity) and the fair
value of the identifiable net assets of Suzhou China Star Optoelectronics Technology Co., Ltd.
attributable to the Company on the settlement date (equivalent to RMB486,603,000) was recorded in
this item.
Note 7 In August 2022, the Company acquired in 100% interest in Huizhou Kedate Smart Display
Technology Co., Ltd. with a cash consideration of RMB51,000,000. As such, the difference between
the investment of the Company in Huizhou Kedate Smart Display Technology Co., Ltd.
(corresponding to the 100% equity) and the fair value of the net identifiable assets of Huizhou Kedate
Smart Display Technology Co., Ltd. attributable to the Company on the settlement date (equal to
RMB3,011,000) was recorded in this item.
Note 8 Suzhou China Star Optoelectronics Technology Co., Ltd., a subsidiary of the Company, completed the acquisition
of 100% equity of Suzhou China Star Environmental Protection Technology Co., Ltd. in May 2023 at a cash
consideration of RMB344,942,000. As at the date of this transaction, the difference (RMB43,408,000) between
the investment amount i.e. the 100% equity of Suzhou China Star Environmental Protection Technology Co., Ltd.
held by Suzhou China Star Optoelectronics Technology Co., Ltd. and the fair value of the identifiable net assets
of the equity was recorded in this item.
100
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
25 Goodwill (continued)
(2) Goodwill impairment allowance (continued)
Note 9 Zhonghuan Advanced Bandaoti Technology Co., Ltd., formerly Zhonghuan Advanced Bandaoti
Material Co., Ltd., a subsidiary of the Company, completed the acquisition of 100% equity of Xinxin
Bandaoti Technology Co., Ltd. in February, 2023 at a consideration of RMB7,399,683,000 by issuing
equity securities. As at the date of this transaction, the difference (RMB1,180,005,000) between the
investment amount i.e. the 100% equity of Xinxin Bandaoti Technology Co., Ltd. held by Zhonghuan
Advanced Bandaoti Technology Co., Ltd. and the fair value of the identifiable net assets of the equity
was recorded in this item.
Note 10 Tianjin Printronics Circuit Corporation, a subsidiary of the Company, completed the acquisition of
the equity of and increased investment in Techigh Circuit Technology (Huizhou) Co., Ltd. in October
2023 at a consideration of RMB423,103,000 in cash. As at the date of this transaction, the difference
(RMB131,477,000) between the investment amount i.e. the 51% equity of Techigh Circuit
Technology (Huizhou) Co., Ltd. held by the Company and the fair value of the identifiable net assets
of the equity are recognized in this item.
(3) Goodwill impairment test
As at December 31, 2023, the recoverable amounts of the asset group of Blue Business Consulting
business, asset group of new energy photovoltaic and material, asset group of Moka International
Limited, asset group of Huizhou Kedate Smart Display Technology Co., Ltd., asset group of Suzhou
China Star Optoelectronics Technology Co., Ltd., asset group of Suzhou China Star Environmental
Protection Technology Co., Ltd., asset group of Xinxin Bandaoti Technology Co., Ltd., and asset
group of Techigh Circuit Technology (Huizhou) Co., Ltd., including goodwill, were calculated using
the expected discounted future cash flow method based on the budget approved by the management
(for a budget period of 5 to 10 years). The estimated perpetual annual growth rate was adopted to
calculate the future cash flow exceeding the budget period. The perpetual annual growth rate
(primarily 0% - 3%) adopted by the management was consistent with predicted data on the industry.
The management determines the revenue growth rate and determines the EBITDA (mainly 2.62%-
29.10%) based on historical experience and forecasts of market development, combined with the
Company’s future development strategic plan and adopt a discount rate (mainly 11.35%-14.19%) that
reflects specific risks of the relevant asset groups. The recoverable amount of the Tianjin Printronics
Circuit Corp asset group is determined based on the higher of the present value of the estimated future
cash flows of the asset or the fair value less costs of disposal. After the management analyzed the
recoverable amount of each asset group based on these assumptions, no provision for impairment was
required for the goodwill of any of the above asset groups as of December 31, 2023.
26 Long-term deferred expenses
Increase in Amortization
January 1, Others December
the period in the period
2023 31, 2023
Improvement expense on
1,441,265 425,924 (265,966) (67) 1,601,156
leased fixed assets
Others 1,302,943 2,381,820 (1,882,719) (511) 1,801,533
2,744,208 2,807,744 (2,148,685) (578) 3,402,689
V Notes to Consolidated Financial Statements (Continued)
101
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
27 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
December 31, 2023 January 1, 2023
Deductible Deferred Deductible Deferred
temporary income tax temporary income
difference assets difference tax assets
Deductible losses 24,627,580 4,048,128 19,383,933 3,055,974
Asset impairment
3,817,375 629,482 4,132,996 785,212
allowances
Provisions 831,604 130,466 559,584 91,408
Changes in fair value 143,302 22,170 15,398 2,792
Lease liabilities 4,309,382 486,276 195,722 29,358
Others 2,423,324 469,382 1,924,357 200,865
36,152,567 5,785,904 26,211,990 4,165,609
(2) Un-offset deferred income tax liabilities
December 31, 2023 January 1, 2023
Taxable Deferred Taxable Deferred
temporary tax temporary income tax
differences liabilities differences liabilities
Accelerated depreciation
15,603,188 2,606,518 13,198,261 2,046,374
of fixed assets
One-off tax deduction 7,829,922 1,172,285 6,818,647 1,021,284
for fixed assets
Increase in value of
assets as assessed in
business combination 2,841,620 529,769 1,627,106 378,993
not involving entities
under common control
Changes in fair value 301,793 70,908 331,292 71,725
Right-of-use assets 4,083,249 472,463 1,139 171
Others 522,095 115,226 951,687 212,603
31,181,867 4,967,169 22,928,132 3,731,150
102
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
27 Deferred income tax assets and deferred income tax liabilities (continued)
There were no deferred income tax assets or liabilities presented on a net basis after
(3)
offsetting
Amount subject to
mutual offset of
deferred income Closing balance of
Item
tax assets against deferred income tax
liabilities at the assets or liabilities after
end of the period offset
Deferred income tax assets (3,539,682) 2,246,222
(3,539,682) 1,427,487
Deferred income tax liabilities
Amount subject to
mutual offset of
deferred income
Item tax assets against Opening balance of
liabilities at the deferred income tax
beginning of the assets or liabilities after
period offset
Deferred income tax assets (2,411,722) 1,753,887
Deferred income tax liabilities (2,411,722) 1,319,428
(4) Unrecognized deferred income tax assets
December 31, 2023 January 1, 2023
Deductible temporary difference 1,712,962 306,669
Deductible losses 13,284,658 10,302,065
14,997,620 10,608,734
Deductible losses in respect of unrecognized deferred income tax assets will expire
(5)
in the following years:
December 31, 2023 January 1, 2023
2022 - 268,388
2023 581 472,917
2024 129,992 472,157
2025 286,860 440,443
2026 952,925 1,242,203
2027 onwards 11,914,300 7,405,957
13,284,658 10,302,065
103
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
28 Other non-current assets
December 31, 2023 January 1, 2023
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Other 13,081,184 - 13,081,184 6,293,943 - 6,293,943
13,081,184 - 13,081,184 6,293,943 - 6,293,943
Note Other non-current assets mainly include prepayments for engineering equipment, payments
for land use rights, etc.
29 Short-term borrowings
December 31, 2023 January 1, 2023
Unsecured borrowings 8,437,478 10,214,632
Borrowings secured by pledge 19,076 -
Interest payable 17,028 1,279
8,473,582 10,215,911
As at December 31, 2023, the Company’s short-term pledged loans were equivalent to
RMB19,076,000, pledged with held-for-trading financial assets equivalent to RMB21,143,000.
As of December 31, 2023, the Company does not have any short-term borrowings that have expired
and have not been repaid.
104
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
30 Borrowings from the Central Bank
As at December 31, 2023, the balance of the borrowings of TCL Technology Group Finance
Co., Ltd. (a subsidiary of the Company) from the Central Bank was RMB995,010,000
(December 31, 2022: RMB777,676,000).
31 Customer deposits and deposits from banks and other financial institutions
December 31, 2023 January 1, 2023
Customer deposits and deposits from other
270,929 603,423
banks and financial institutions
Customer deposits and deposits from banks and other financial institutions are the deposits
of related and nonrelated enterprises absorbed by TCL Technology Group Finance Co., Ltd.,
a subsidiary of the Company, within the business scope approved by the regulatory authority.
32 Held-for-trading financial liabilities
December January 1,
31, 2023 2023
Financial liabilities measured at fair value through profit or loss. 251,451 861,912
33 Derivative financial liabilities
December 31, 2023 January 1, 2023
Derivative financial liabilities 58,591 70,735
34 Notes payable
December 31, 2023 January 1, 2023
Bank acceptance notes 5,518,113 5,731,632
Trade acceptance notes 92,689 634,028
5,610,802 6,365,660
As of December 31, 2023, the Company had no notes payable that were due but not paid.
105
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
35 Accounts payable
December 31, 2023 January 1, 2023
Amounts due to suppliers 29,402,493 26,381,912
As of December 31, 2023, there were no significant accounts payable aged over one year.
36 Advances from customers
December 31, 2023 January 1, 2023
Advances from customers 678 1,402
As of December 31, 2023, the Company had no significant accounts receivable aged over one year.
37 Contract liabilities
December 31, 2023 January 1, 2023
Advances from customers 1,899,468 2,336,008
As at December 31, 2023, the Company had no significant contract liability aged over one year.
38 Employee benefits payable and long-term employee benefits payable
(1) Employee compensation payable
December 31, 2023 January 1, 2023
Short-term employee benefits
3,016,708 2,341,429
payable
Defined contribution plans payable 14,599 26,353
Dismissal benefits payable 3,190 9,151
3,034,497 2,376,933
106
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
38 Employee compensation payable and long-term employee compensation payable (continued)
(1) Employee benefits payable (continued)
(a) Short-term employee benefits presented
Increase in Decrease in the
January 1, 2023 the period period December 31, 2023
Wages, bonuses, allowances and
2,034,238 10,940,235 (10,065,459) 2,909,014
subsidies
Employee services and benefits - 459,819 (459,819) -
Social insurance benefits 38,105 377,454 (382,854) 32,705
Including: medical insurance
36,751 344,899 (349,642) 32,008
premium
Employment injury
695 19,295 (19,311) 679
insurance premiums
Maternity insurance 659 13,260 (13,901) 18
Housing fund 27,917 376,200 (385,390) 18,727
Trade union funds and staff
49,418 209,842 (204,139) 55,121
education funds
Others 191,751 35,609 (226,219) 1,141
2,341,429 12,399,159 (11,723,880) 3,016,708
(b) Defined contribution plans
Increase in Decrease in the
January 1, 2023 the period period December 31, 2023
Basic pension insurance 25,381 755,073 (766,244) 14,210
Unemployment insurance 972 22,945 (23,528) 389
26,353 778,018 (789,772) 14,599
(2) Long-term employee compensation payable
December 31, 2023 January 1, 2023
Supplementary pension insurance 23,276 25,101
Other long-term benefits 6,369 447,437
29,645 472,538
107
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
39 Taxes and levies payable
December 31, 2023 January 1, 2023
Corporate income tax 406,607 731,839
Value-added tax 112,854 211,873
Individual income tax 31,238 42,611
Urban maintenance and construction tax 72,993 60,858
Education surcharges 52,134 43,495
Others 185,516 124,915
861,342 1,215,591
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.
40 Other payables
December 31, 2023 January 1, 2023
Dividends payable 54,251 40,010
Other payables 22,117,151 24,150,342
22,171,402 24,190,352
(1) Dividends payable
December 31, 2023 January 1, 2023
Other non-controlling interests 54,251 40,010
54,251 40,010
(2) Other payables
December 31, 2023 January 1, 2023
Payables for engineering equipment 16,886,446 19,130,372
Unpaid expenses 2,653,858 2,195,904
Security and deposits 396,797 353,207
Others 2,180,050 2,470,859
22,117,151 24,150,342
108
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
41 Non-current liabilities due within one year
December 31, January 1, 2023
2023
Long-term borrowings due within one year
43 18,603,703 4,341,300
(Note 1)
Bonds payable due within one year (Note 2) 44 4,436,729 5,170,383
Lease liabilities due within one year 45 520,010 295,010
Long-term payables due within one year 377,513 179,127
Interest payable due within one year 391,958 552,181
Long-term employee compensation payable due
301,746 419,320
within one year
24,631,659 10,957,321
Note 1 The interest rates of the Company’s long-term borrowing due within one year ranged from 2.3% to
4.8% in the current period (2022: from 2.7% to 5.91%).
Note 2 The Company's bonds payable due within one year are mainly as follows:
① Corporate bond 19TCL 01: Issued in May 2019, with a term of 5 years, the closing balance as
at December, 31 of RMB999,932,000.
② Medium-term note 21TCL Group MTN001 (high-growth bond): Issued in May 2021, with a
term of 3 years, the closing balance as at December, 31 of RMB1,999,418,000.
③ Corporate bond 19TCL 02: Issued in July 2019, with a term of 5 years, the closing balance as
at December, 31 of RMB998,749,000.
④ Corporate bond 19TCL 03: Issued in October 2019, with a term of 5 years, the closing balance
as at December, 31 of RMB438,630,000.
42 Other current liabilities
December 31, 2023 January 1, 2023
After-sales service expense (note) 1,311,853 844,293
Output tax to be transferred 202,571 175,626
Others 48,821 165,929
1,563,245 1,185,848
Note After-sales service expense expected to occur within 1 year is presented in other current liabilities.
109
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
43 Long-term borrowings
December 31, 2023 January 1, 2023
Borrowings secured by collateral 39,851,294 42,317,366
Borrowings secured by pledge 5,595,835 6,675,371
Unsecured borrowings 90,818,783 73,951,728
136,265,912 122,944,465
Including: long-term loans due within one year (18,603,703) (4,341,300)
117,662,209 118,603,165
The maturities of the Company's long-term borrowings vary from 2023 to 2043.
As at December 31, 2023, the long-term borrowings secured by collateral were equivalent to
RMB39,851,294,000 (December 31, 2022: RMB42,317,366,000), which were secured by the
collaterals of the land use right, houses and buildings, machinery and equipment of about
RMB97,095,652,000 (December 31, 2022: RMB110,182,749,000); the long-term pledged
borrowings were equivalent to RMB5,595,835,000 (December 31, 2022: RMB6,675,371,000),
which were pledged by the collaterals of the 60% equity in Suzhou China Star Optoelectronics
Technology Co., Ltd., 100% equity in Suzhou China Star Optoelectronics Display Co., Ltd. and
accounts receivable and contract assets of about RMB505,109,000 (December 31, 2022:
RMB757,751,000).
The interest rates of the Company’s long-term borrowing ranged from 2.30% to 7.79% in the
current period (2022: from 2.40% to 7.75%).
44 Bonds payable
December 31, 2023 January 1, 2023
Corporate bonds 2,121,837 4,518,438
MTN 6,992,011 7,488,413
9,113,848 12,006,851
110
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
44 Bonds payable (continued)
(1) Movements in bonds payable
Accrued Repaid
Issued in Amortization
Issued January 1, interest as in Others
Bond name Par value Issue date Maturity current of premium December 31,
amount 2023 per par current (note)
period or discount 2023
value period
May 20,
19TCL01 1,000,000 5 1,000,000 1,000,264 - 31,500 (109) - (1,000,155) -
2019
July 23,
19TCL02 1,000,000 5 1,000,000 996,522 - 30,500 1,104 - (997,626) -
2019
October 21,
19TCL03 2,000,000 5 2,000,000 436,934 - 12,980 1,268 - (438,202) -
2019
July 14,
TCL TEC1 1,957,483 5 1,957,483 2,084,718 - 39,840 6,507 - 30,612 2,121,837
2020
21TCL Group MTN001 (High- May 10,
2,000,000 3 2,000,000 1,997,821 - 82,809 525 - (1,998,346) -
Growth Bonds) 2021
January 14,
22TCL Group MTN001 2,000,000 3 2,000,000 1,997,392 - 68,841 1,148 - - 1,998,540
2022
April 27,
22TCL Group GN002 1,500,000 3 1,500,000 1,497,217 - 49,386 1,198 - - 1,498,415
2022
22TCL Group MTN003 (Science
2,000,000 July 6, 2022 3 2,000,000 1,995,983 - 68,841 1,597 - - 1,997,580
and Technology Notes)
23TCL Group MTN001 (Science February 7,
1,500,000 3 1,500,000 - 1,500,000 55,124 (2,524) - - 1,497,476
and Technology Notes) 2023
Total 14,957,483 —— —— 14,957,483 12,006,851 1,500,000 439,821 10,714 - (4,403,717) 9,113,848
Note Others are bonds payable within one year which are reclassified to non-current liabilities due within one year and exchange adjustment.
111
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
45 Lease liabilities
December 31, 2023 January 1, 2023
Total lease liabilities 6,257,298 4,756,393
Less: Current portion of lease liabilities 520,010 295,010
Total 5,737,288 4,461,383
46 Long-term payables
December 31, 2023 January 1, 2023
Finance lease 2,739,444 887,763
47 Deferred income
Increase in Decrease in
January 1, 2023 the period the period
December 31, 2023
Public grants 2,468,145 7,380,522 (8,308,019) 1,540,648
2,468,145 7,380,522 (8,308,019) 1,540,648
Items involving public grants
Amount used
Amount
New to offset
recorded in Other
grants in costs and
January 1, other income changes December
current expenses in
2023 in current (note) 31, 2023
period current
period
period
Public grants
related to 953,042 1,012,020 (3,196) (174,754) (1,545,932) 241,180
assets
Public grants
related to 1,515,103 6,368,502 (2,904,735) (3,375,689) (303,713) 1,299,468
income
2,468,145 7,380,522 (2,907,931) (3,550,443) (1,849,645) 1,540,648
Note "Other changes" were deferred income offset by the carrying amounts of relevant assets.
112
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
48 Estimated liabilities
December 31, 2023 January 1, 2023
After-sales service fee of products 55,426 27,105
Pending litigation 61,969 70,379
Onerous contract - 38
117,395 97,522
113
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
49 Share capital
January 1, 2023 Increase or decrease in current period December 31, 2023
Shares
converted from
Amount Ratio (%) New issues capital reserve Others Subtotal Amount Ratio (%)
I. Restricted Shares 3,420,220 20.03% - 342,022 (3,081,704) (2,739,682) 680,538 3.62%
II. Non-restricted shares 13,651,672 79.97% - 1,365,167 3,081,704 4,446,871 18,098,543 96.38%
III. Total shares 17,071,892 100% - 1,707,189 - 1,707,189 18,779,081 100%
As at December 31, 2023, the Company's total share capital was 18,779,081,000 shares.
Note
Except for Chairman of the Board Mr. Li Dongsheng who holds restricted shares subscribed for in a private placement, none of the other incumbent directors, supervisors or
senior management hold any restricted shares from a split-share structure reform or a private placement. The shares held by these personnel will stay partially frozen as per the
Rules on the Management of Shares Held by the Directors, Supervisors and Senior Management Officers of the Company and the Changes thereof. The trading and information
disclosure in relation to these shares shall be in strict compliance with the applicable laws, regulations and rules.
114
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
50 Capital reserves
Increase in Decrease in
January 1, 2023 the period the period December 31, 2023
Share capital
12,437,990 423,212 (2,371,931) 10,489,271
premium
Other capital reserves 84,803 182,935 (4,954) 262,784
12,522,793 606,147 (2,376,885) 10,752,055
51 Treasury share
Increase in Decrease in
January 1, 2023 the period the period December 31, 2023
Treasury share 1,314,581 247,171 (466,809) 1,094,943
Increase in the period is mainly stock repurchases for the employee stock ownership plan or the
equity incentives of the Company. On May 31, 2023, the 32nd meeting of the Seven-term Board of
Directors was held to deliberate and approve the Proposal on the Repurchase of Certain Shares from
the Social Public in 2023. The Company will repurchase its own shares via centralized bidding, and
the Company’s shares repurchased will be used for the employee stock ownership plans or equity
incentives. As of December 31, 2023, the total number of shares repurchased was 64,993,000 shares
at the total consideration of RMB247,171,000.
Decrease in the year is mainly caused by the non-trading transfer and sale of the employee portion
of the employee stock ownership plan.
115
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
52 Other comprehensive income
(1) Other comprehensive income items, income tax effects and reclassifications to profit or loss
2023 2022
I. Items that cannot be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will be
8,024 (3,568)
reclassified to profit or loss under equity method
Share of the period 5,281 (3,568)
Previous other comprehensive income reclassified to retained
2,743 -
earnings for current period
2. Changes in fair value of other equity instruments (56,797) (14,581)
Current gain/(loss) (55,956) (19,688)
Previous other comprehensive income reclassified to retained
- 16,811
earnings for current period
Income tax effects recorded in other comprehensive income (841) (11,704)
II. Items that will be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will be
(12,446) (13,936)
reclassified to profit or loss under equity method
Share of the period (12,446) (13,936)
Income tax effects recorded in other comprehensive income - -
2. Changes in fair value of financial assets recorded in other
- -
comprehensive income
Current gain/(loss) - -
3. Cash flow hedges (109,900) 91,730
Current gain/(loss) (117,269) 163,220
Previous other comprehensive income reclassified to profit for
(7,580) (58,996)
current period
Income tax effects recorded in other comprehensive income 14,949 (12,494)
4. Differences arising from translation of foreign currency financial
(18,101) (386,679)
statements of overseas operations
5. Net income arising from disposal of overseas operations through
- -
profit or loss
(189,220) (327,034)
116
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
52 Other comprehensive income (continued)
(2) Changes in other comprehensive income items
Equity attributable to shareholders of the parent company
Share of other Differences
comprehensive arising from
income of Gain/loss translation Other
investees that will on changes Gain/(Loss) of foreign comprehensive
Change of be reclassified to in fair on changes currency- Fair value Fair value income
accounting profit or loss value of in cash denominated changes of changes of transferred to Non- Total other
policies under equity financial flow financial other equity other debt retained controlling comprehensive
method assets hedges statements instruments instruments earnings Subtotal interests income
January 1, 2022 334,950 46,888 (350,569) 62,546 (239,179) (141,290) - (122,793) (409,447) 899 (408,548)
Movement of 2022 - (17,501) - 15,615 (397,531) (16,420) - 13,462 (402,375) 75,341 (327,034)
January 1, 2023 334,950 29,387 (350,569) 78,161 (636,710) (157,710) - (109,331) (811,822) 76,240 (735,582)
Movement of 2023 - (4,422) - (49,418) (24,180) (58,699) - 2,743 (133,976) (55,244) (189,220)
December 31, 2023 334,950 24,965 (350,569) 28,743 (660,890) (216,409) - (106,588) (945,798) 20,996 (924,802)
117
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
53 Surplus reserves
Increase
in the Decrease in
January 1, 2023 period the period December 31, 2023
Statutory surplus reserves 3,529,403 161,733 - 3,691,136
Discretionary surplus
182,870 - - 182,870
reserves
3,712,273 161,733 - 3,874,006
As per China's Company Law, Articles of Association for Companies, accounting standards, the
Company and several of its subsidiaries shall appropriate 10% of net profits as statutory surplus
reserves until the reserve amount reaches 50% of the registered capital. According to the aforesaid
laws and regulations, part of the statutory surplus reserves can be converted into share capital of
the Company, and the remaining amount shall not be lower than 25% of the registered capital.
After the appropriation to the statutory surplus reserves, the Company may appropriate the
discretionary surplus reserves. Upon approval, the discretionary surplus reserves can be used to
make up the previous loss or increase the share capital.
54 Specific reserves
Decrease
Appropriation in the
January 1, 2023 in the period period December 31, 2023
Production safety reserve 2,301 32,220 (23,178) 11,343
55 General risk reserve
Decrease
Appropriation in the
January 1, 2023 in the period period December 31, 2023
General risk reserve 8,934 - - 8,934
As per the General Rules on Financial Affairs of Financial Enterprises and the Guide to the
Implementation of the General Rules on Financial Affairs of Financial Enterprises promulgated by
the Ministry of Finance, as well as the Articles of Association of TCL Technology Group Corporation,
the Company's subsidiary - TCL Technology Group Corporation - appropriated 1% of its net profit as
general risk reserve in the previous years.
118
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
56 Retained earnings
2023 2022
Beginning retained earnings 19,486,730 22,458,340
Change of accounting policies - 6,810
Net profit for current period 2,214,934 261,319
Decrease in the period (164,476) (3,239,739)
Including: Appropriation of surplus reserves (161,733) (1,162,100)
Distributed to ordinary shareholders as dividends - (2,050,003)
Others (2,743) (27,636)
Retained earnings at the end of the period 21,537,188 19,486,730
57 Operating income and operating costs
2023 2022
Operating Operating
Revenue Revenue
cost cost
Core business 168,869,605 144,899,893 162,197,543 148,928,769
Non-core business 5,497,052 3,867,704 4,355,243 2,996,720
174,366,657 148,767,597 166,552,786 151,925,489
(1) Business by operating segment
Revenue Operating cost Gross profit
2023 2022 2023 2022 2023 2022
Domestic
119,940,278 119,139,823 103,308,186 108,166,269 16,632,092 10,973,554
sales
Foreign
54,426,379 47,412,963 45,459,411 43,759,220 8,966,968 3,653,743
sales
174,366,657 166,552,786 148,767,597 151,925,489 25,599,060 14,627,297
(2) The total revenue from the sales to the top five customers was RMB51,360,608,000 and
RMB50,092,171,000 respectively for 2023 and 2022, accounting for 29.5% and 30.1% of the revenue.
119
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
57 Revenue and operating costs (continued)
(3) Revenue and costs generated from the Company's trial sales are as follows:
2023 2022
Revenue 1,447,163 739,823
Operating cost 1,139,976 721,126
58 Interest income/expense and exchange gain
2023 2022
Interest income 79,515 79,360
Interest expenditures 19,362 23,530
Exchange gain/(loss) 516 17,914
The interest income, interest expense and exchange gain/(loss) above occurred with the Company's
subsidiary TCL Technology Group Finance Co., Ltd., which are presented separately herein as
required for a financial enterprise.
59 Taxes and levies
2023 2022
Property tax 406,693 265,880
Stamp tax 224,364 218,367
Urban maintenance and construction tax 74,151 68,890
Education surcharges 36,420 35,730
Land use tax 34,477 30,732
Others 25,833 20,703
801,938 640,302
The applicable tax and levy standards are detailed
in Note IV.
120
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
60 Sales expenses
2023 2022
Employee salaries and benefits 668,705 601,948
After-sales service expense 841,951 400,771
Promotional and marketing expenses 272,074 298,422
Others 740,957 649,387
2,523,687 1,950,528
61 General and administrative expense
2023 2022
Employee salaries and benefits 2,014,617 1,337,491
Depreciation and amortization expenses 777,394 792,780
Expenses for hiring intermediaries 445,436 401,832
Digital development expenses 225,051 315,537
Others 1,320,749 692,971
4,783,247 3,540,611
62 R&D expenses
2023 2022
Depreciation and amortization expenses 4,132,169 2,983,043
Material expenses 1,979,550 2,940,584
Employee salaries and benefits 2,108,597 1,767,546
Others 1,302,522 942,465
9,522,838 8,633,638
63 Financial expenses
2023 2022
Interest expenditures 4,922,120 4,468,008
Interest income (939,719) (723,665)
Exchange loss / (gain) (137,852) (447,876)
Others 128,179 126,428
3,972,728 3,422,895
121
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
64 Other income
2023 2022
R&D subsidies 2,536,169 2,454,585
VAT rebates on software 50,605 44,280
Over-deduction in taxable amount for VAT 408,348 1,381
Others 543,137 417,548
3,538,259 2,917,794
65 Return on investment
2023 2022
Gain on disposal of debt instruments at fair
38,850 238,803
value through profit or loss
Gain on disposal of equity instruments at fair
51,291 (15,097)
value through profit or loss
Gain on holding of equity instruments at fair
116,577 18,758
value through profit or loss
Gain on holding of debt instruments at fair
366,008 69,748
value through profit or loss
Share of net income of associates 1,463,104 2,958,218
Share of net income of joint ventures (99,443) (59,479)
Net income from disposal of long-term equity
(51,685) 1,823,568
investments
Return on investment generated from the
699,071 -
disposal of equity in coal resource companies
Others 8,104 (303,125)
2,591,877 4,731,394
66 Gain on changes in fair value
2023 2022
Held-for-trading financial assets (82,730) (257,067)
Derivative financial assets 188,835 23,437
Held-for-trading financial liabilities (73,859) (1,678)
Derivative financial liabilities (4,908) 96,064
27,338 (139,244)
122
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
67 Credit impairment loss
2023 2022
Loss on uncollectible accounts receivable 54,862 (44,955)
Loss on uncollectible other receivables (222,675) (6,172)
Other financial assets (5,252) 13,474
(173,065) (37,653)
68 Asset impairment loss
2023 2022
Inventory valuation loss (3,648,392) (3,083,928)
Impairment loss on long-term equity investments (1,148,110) (319,981)
Others (17,463) (82,614)
(4,813,965) (3,486,523)
69 Asset disposal income
2023 2022
Income/(loss) from disposal of fixed assets (42,660) (71,718)
Others 1,244 (8,107)
(41,416) (79,825)
70 Non-operating income
Amount through
current non-
recurring gains
2023 2022 and losses
Gains on retired or damaged non-current assets 220 117 220
Public grants and others 71,065 789,995 71,065
71,285 790,112 71,285
123
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
71 Non-operating expense
Amount through
current non-recurring
2023 2022 gains and losses
Losses on retired or damaged
56,603 19,377 56,603
non-current assets
Donation 58,144 70,222 58,144
Others 89,033 62,472 89,033
203,780 152,071 203,780
72 Income tax expenses
(1) Table of income tax expenses
2023 2022
Current income tax expense 817,257 734,639
Deferred income tax expense (546,217) (1,465,647)
271,040 (731,008)
(2) Accounting profit and income tax adjustment process
2023 2022
Gross profit 5,051,824 1,057,051
Income tax expense calculated at
757,774 158,558
statutory/applicable tax rate
Impact of different tax rates applied to
302,867 383,590
subsidiaries
Impact of adjusting income tax in previous
(227,744) (12,613)
periods
Impact of non-taxable income (953,093) (704,581)
Impact of non-deductible costs, expenses and
68,559 107,325
losses
Impact of the use of deductible losses on deferred
income tax assets that were not recognized in the (213,931) (576,264)
previous periods
Impact of unrecognized deferred income tax
assets of deductible temporary differences or 677,201 730,522
deductible losses in the current period
Others (140,593) (817,545)
Income tax expense 271,040 (731,008)
124
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
73 Earnings per share
(1) Basic earnings per share
2023 2022
Net profit attributable to shareholders of the parent company 2,214,934 261,319
Weighted average outstanding ordinary shares (in thousand
18,533,341 15,054,601
shares)
Basic earnings per share (RMB yuan) 0.1195 0.0174
(2) Diluted earnings per share
2023 2022
Net profit attributable to shareholders of the parent company 2,214,934 261,319
Diluted weighted average outstanding ordinary shares (in
18,779,081 15,558,525
thousand shares)
Diluted earnings per share (RMB yuan) 0.1179 0.0168
74 Cash generated from other operating activities
Other cash received from operating activities in the consolidated cash flow statement was
RMB6,899,258,000 (year-on-year: RMB7,955,973,000), which primarily consisted of current
payments received, public grants and special appropriation, etc.
75 Cash used in other operating activities
Other cash paid for other operating activities in the consolidated cash flow statement was
RMB8,773,577,000 (year-on-year: RMB9,722,343,000), which primarily consisted of various
expenses and current payments, etc.
76 Cash generated from other investing activities
Other cash received from investing activities in the consolidated cash flow statement was
RMB1,589,202,000 (year-on-year: RMB170,387,000), which primarily consisted of net cash received
from subsidiaries and the receipt of project bid bonds, etc.
77 Cash used in other investing activities
Other cash paid for investing activities in the consolidated cash flow statement was RMB923,051,000
(year-on-year: RMB1,212,074,000), which primarily consisted of the refund of project bid bonds and
payments for foreign exchange forward delivery.
125
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
78 Cash generated from other financing activities
Other cash received from financing activities in the consolidated cash flow statement was
RMB3,950,311,000 (year-on-year: RMB272,281,000), which primarily consisted of finance lease
payments received, and deposits, etc.
79 Cash used in other financing activities
Other cash paid for financing activities in the consolidated cash flow statement was
RMB8,037,595,000 (year-on-year: RMB6,110,504,000), primarily consisted of the payments for the
repurchase of minority interests in subsidiaries, repurchase of the Company’s shares, and financial lease
payments, etc.
80 Supplementary information for the cash flow statement
(1) Reconciliation of net profit to net cash generated from/used in operating activities
2023 2022
Net profit 4,780,784 1,788,059
Add: Asset impairment allowance 4,987,030 3,524,176
Depreciation of fixed assets 21,034,479 19,290,088
Depreciation of right-of-use assets 525,891 322,032
Amortization of intangible assets 1,879,947 1,473,104
Amortization of long-term prepaid expense 2,148,685 1,613,307
Loss/(Gain) on disposal of fixed assets, intangible assets and
41,416 79,825
other long-term assets
Loss/(Gain) on retired or damaged fixed assets 56,383 19,260
Loss/(Gain) on changes in fair value (27,338) 139,244
Financial expenses 4,803,114 4,025,748
Return on investment (2,591,877) (4,731,394)
Decrease/(Increase) in deferred income tax assets (492,335) 399,459
Increase/(Decrease) in deferred income tax liabilities 108,059 (1,839,558)
Decrease/(Increase) in inventory (4,129,025) (4,643,791)
Decrease/(Increase) in operating receivables (7,629,570) 4,576,161
Increase/(Decrease) in operating payables (906,091) (7,139,434)
Others 725,204 (469,910)
Net cash generated from operating activities 25,314,756 18,426,376
126
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
80 Supplementary information for the cash flow statement (continued)
(2) Net cash payments for acquisition of subsidiaries in the current
period
2023 2022
Payments of cash and cash equivalents made in current period
571,830 51,000
due to business combinations incurred in current period
Less: cash and cash equivalents held by subsidiary on
85,844 867
acquisition date
Add: Payments of cash and cash equivalents made in current
period due to business combinations incurred in previous - -
periods
Net cash payments for acquisition of subsidiaries 485,986 50,133
(3) Net cash proceeds from disposal of subsidiaries in the current
period
2023 2022
Cash or cash equivalents received in current period due to
366,568 174,803
disposal of subsidiary in current period
Less: cash and cash equivalents held by subsidiary on the date
17,454 2,298
when the Company’s control over the subsidiary ceased
Add: Cash or cash equivalents received in current period due to
10,848 1,260,290
disposal of subsidiaries in prior periods
Net proceeds from the disposal of subsidiaries 359,962 1,432,795
(4) Breakdown of cash and cash equivalents
December 31, 2023 January 1, 2023
I. Cash 19,996,815 33,675,624
Including: Cash on hand 583 480
Bank deposits available for payment on demand 19,807,150 32,696,213
Other monetary assets available for payment on
132,982 919,646
demand
Deposits with the central bank available for payment 56,100 59,285
II. Cash equivalents - -
III. Ending balance of cash and cash equivalents 19,996,815 33,675,624
127
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
81 Net changes in cash and cash equivalents
2023 2022
Ending cash and cash equivalents 19,996,815 33,675,624
Less: Cash at the beginning of the year 33,675,624 30,081,705
Net increase in cash and cash equivalents (13,678,809) 3,593,919
Analysis of ending cash and cash equivalents:
Monetary assets at the end of the period 21,924,271 35,378,501
Less: Non-cash equivalents at the end of the period (note) 1,927,456 1,702,877
Ending cash and cash equivalents 19,996,815 33,675,624
Note: The closing non-cash equivalents primarily included interest receivable on bank deposits, the
statutory reserve deposits placed by TCL Technology Group Finance Co., Ltd. in the central bank
and other monetary assets, detailed in Annex V, 1.
128
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
82 Assets with restricted ownership or use rights
December 31, 2023 Reason for
restriction
Gross carrying Carrying
amount amount
Deposited in the
central bank as
Monetary assets 341,091 341,091
the required
reserve
Other monetary
funds and
Monetary assets 1,586,365 1,586,365
restricted bank
deposits
Notes receivable 503,636 503,636 Pledge
Fixed assets As collateral for
119,355,891 93,479,143
loan
Intangible assets As collateral for
4,595,320 3,965,665
loan
Held-for-trading financial assets 369,642 369,642 Pledge
Construction in progress As collateral for
895,589 895,589
loan
Accounts receivable 860,084 860,084 Pledge
Contract assets 361,312 343,205 Pledge
Investment property As collateral for
9,909 9,738
loan
Other non-current assets due
430,493 430,493
within one year Pledge
129,309,332 102,784,651
83 Foreign currency monetary items
December 31, 2023
Foreign currency balance Conversion rate RMB balance
Monetary assets
Including: USD 603,022 7.0827 4,271,024
HKD 126,889 0.9064 115,012
EUR 6,582 7.8469 51,648
JPY 2,596,554 0.0501 130,087
SGD 845 5.3750 4,542
INR 3,123,115 0.0850 265,465
Accounts receivable
Including: USD 948,093 7.0827 6,715,058
HKD 470 0.9064 426
INR 4,593,510 0.0850 390,448
EUR 319 7.8469 2,503
JPY 13,200 0.0501 661
129
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
83 Foreign currency monetary items (continued)
December 31, 2023
Foreign currency balance Conversion rate RMB balance
Accounts payable
Including: USD 525,082 7.0827 3,718,998
HKD 330,406 0.9064 299,480
EUR 7,813 7.8469 61,308
JPY 12,634,961 0.0501 633,012
INR 581,489 0.0850 49,427
Other receivables
Including: USD 14,016 7.0827 99,271
HKD 15,539 0.9064 14,085
EUR 1,590 7.8469 12,477
JPY 83,383 0.0501 4,177
PLN 865 1.8079 1,564
INR 70,348 0.0850 5,980
KRW 102,590 0.0055 564
MXN 20,849 0.4175 8,704
SGD 92 5.3750 495
Other payables
Including: USD 602,878 7.0827 4,270,004
HKD 417,938 0.9064 378,819
JPY 16,867,145 0.0501 845,044
INR 651,058 0.0850 55,340
PLN 28 1.8079 51
KRW 309,677 0.0055 1,701
MXN 24,202 0.4175 10,104
EUR 169 7.8469 1,326
TWD 266 0.2307 61
Short-term borrowings
Including: USD 2,693 7.0827 19,074
Long-term borrowings
Including: USD 91,448 7.0827 647,699
130
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
84 Leases
(1) The Company acting as a lessee
In 2023, short-term lease rents, low-value asset rents and income obtained from subleasing right-of-
use assets, for which the Group, acting as a lessee, chose simplified accounting, were not significant.
(2) The Company acting as a lessor
① Operating leases where the Company acts as a lessor
Including: Income related to
Item Rental income variable lease payments not
included in lease receipts
Houses and buildings 294,156 -
Machinery equipment 7,848 -
Total 302,004 -
② Finance leases where the Company acts as a lessor
Income related to variable
Sales gains and Financing
Item lease payments not included
losses income
in net lease investment
Finance lease - 62,878 -
Total - 62,878 -
Annual undiscounted lease receipts for the next five years
Annual undiscounted lease receipts
Item
Ending amount Beginning amount
Year 1 95,518 88,974
Year 2 88,031 88,543
Year 3 86,910 88,031
Year 4 86,910 86,910
Year 5 86,910 86,910
Total undiscounted lease receipts
904,691 991,602
after five years
131
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VI R&D expenses
1 Presentation by nature of expenses
Amount incurred in the current Amount incurred in the
Item
period previous period
Material costs 3,855,668 4,945,218
Labor costs 2,951,412 2,559,974
Depreciations and amortizations 2,323,024 2,030,079
Others 1,178,440 1,243,144
Total 10,308,544 10,778,415
Including: Expensed R&D expenses 6,748,288 6,490,988
Capitalized R&D expenses 3,560,256 4,287,427
2 Development expenses of R&D projects eligible for capitalization
Increase in the period Decrease in the period
Balance at the
Internal Recognized as Included in Ending
Item beginning of
development Others intangible profits and Others balance
the period
costs assets losses
Display 2,172,507 2,837,141 - (1,228,183) (404,696) (1,921,659) 1,455,110
New energy
photovoltaic & 1,006,700 723,115 - (643,432) - - 1,086,383
materials
Total 3,179,207 3,560,256 - (1,871,615) (404,696) (1,921,659) 2,541,493
3. The Company had no significant outsourced projects under research.
VII Changes to the Consolidation Scope
1 Newly consolidated entities for current period
Reason for Contribution
Name of investee change Registered capital (RMB) ratio
Newly
Lumetech North America Corporation USD10,000,000 100.00%
incorporated
Suzhou Zhonghuan Photovoltaic Materials Co., Newly
RMB50,000,000 100.00%
Ltd. incorporated
Ningxia Huanou New Energy Technology Co., Newly
RMB1,250,000,000 100.00%
Ltd. incorporated
Xinxin Bandaoti Technology Co., Ltd. Acquisition RMB6,513,000,000 100.00%
Jiangsu Mingjing Bandaoti Technology Co.,
Acquisition RMB120,000,000 100.00%
Ltd.
Jiangsu Lixin Bandaoti Technology Co., Ltd. Acquisition RMB4,210,000,000 100.00%
132
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
Reason for Registered capital Contribution
Name of investee
change (RMB) ratio
Xuzhou Xinjing Bandaoti Technology Co.,
Acquisition RMB4,210,000,000 100.00%
Ltd.
Jiangsu Huasheng Bandaoti Materials Co.,
Acquisition RMB200,000,000 100.00%
Ltd.
Hong Kong NExcel Electronic Technology
Acquisition USD5,000,000 100.00%
Co., Ltd.
Singapore NExcel Electronic Technology
Acquisition SGD100,000 100.00%
Co., Ltd.
Xuzhou Jingrui Bandaoti Equipment
Acquisition RMB150,000,000 100.00%
Technology Co., Ltd.
Meixin (Xuzhou) Silicon Material
Acquisition RMB22,000,000 100.00%
Technology Co., Ltd.
Ningxia Zhonghuan Industrial Park Newly
RMB10,000,000 100.00%
Management Co., Ltd. incorporated
Guangzhou TCL Industrial Research Newly
RMB20,000,000 100.00%
Institute Co., Ltd. incorporated
Suzhou China Star Environmental
Acquisition RMB100,000,000 100.00%
Protection Technology Co., Ltd.
Huizhou Dongshen Jia'an Equity
Newly
Investment Partnership (Limited RMB1,561,000,000 99.94%
incorporated
Partnership)
Inner Mongolia TCL Photoelectric
Acquisition RMB200,000,000 100.00%
Technology Co., Ltd.
Ningbo Dongshen Zhixuan Equity Newly
Investment Partnership (Limited RMB551,000,000 90.74%
incorporated
hi )
TCL Financial Technology (Shenzhen) Co.,
Acquisition RMB5,000,000 100.00%
Ltd.
Huansheng Photovoltaic (Guangdong) Co., Newly
RMB10,000,000 100.00%
Ltd. incorporated
Newly
Xuzhou Huanneng New Energy Co., Ltd. RMB1,000,000 100.00%
incorporated
Lingwu Xuzhao New Energy Co., Ltd. Newly RMB1,000,000 100.00%
incorporated
133
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
Registered capital Contribution
Name of investee Reason for change (RMB) ratio
Techigh Circuit Technology (Huizhou)
Acquisition RMB146,938,776 51.00%
Co., Ltd.
Techigh Circuit Technology (Zhuhai) Co., Acquisition RMB100,000,000 100.00%
Ltd.
Tairui (Hong Kong) Limited Acquisition HKD100,000 100.00%
Ningxia Zhonghuan Yuelanshan Hotel Newly
RMB1,000,000 100.00%
Management Co., Ltd. incorporated
Zhangjiakou Shengming New Energy Co., Newly
RMB1,000,000 100.00%
Ltd. incorporated
Xiamen Dili Hongxin Venture Capital
Newly
Partnership Enterprise (Limited RMB131,000,000 95.80%
incorporated
Partnership)
Xi'an Maituo Sunpie Technology Co., Newly RMB300,000 100.00%
Ltd. incorporated
Xi'an Shengtai Sunpie Technology Co., Newly
RMB300,000 100.00%
Ltd. incorporated
Xi’an Shengke Sunpie Technology Co., Newly RMB300,000 100.00%
Ltd. incorporated
Urumqi Sunpie Fengshang Trading Co., Newly
RMB500,000 100.00%
Ltd. incorporated
Newly
Urumqi Sunpie Zhixing Trading Co., Ltd. RMB500,000 100.00%
incorporated
Newly
Foshan Sunpiestore Technology Co., Ltd. RMB100,000 100.00%
incorporated
Zhuhai Sunpiestore Technology Co., Ltd. Newly RMB100,000 100.00%
incorporated
Newly
Ningxia Hongyuan New Energy Co., Ltd. RMB1,000,000 100.00%
incorporated
Newly
Ningxia Shengyao New Energy Co., Ltd. RMB1,000,000 100.00%
incorporated
Newly
Lingwu Shangyuan New Energy Co., Ltd. RMB1,000,000 100.00%
incorporated
Xi’an Shengbo Sunpie Technology Co., Newly
RMB300,000 100.00%
Ltd. incorporated
134
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
Note: Business combinations not under the common control occurred in the current period
(1) Acquisition of shares of Suzhou China Star Environmental Protection Technology Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On May 31, 2023 (the “Acquisition Date”), the Group acquired 100% equity of Suzhou China Star
Environmental Protection Technology Co., Ltd. at a cash consideration of RMB344,942,000, and
included such company into the scope of consolidation.
Cash consideration 344,942
Less: Share of fair value of identifiable net assets acquired 301,534
Goodwill amount 43,408
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value at acquisition Carrying amount as at the
date acquisition date
Total assets 358,206 175,775
Total liabilities 56,672 29,307
Net assets 301,534 146,468
Less: non-controlling
- -
interests
Net assets acquired 301,534 146,468
③ Jiangsu Tiandi Heng’an Real Estate Land Asset Appraisal Co., Ltd. has appraised the
information above using the income method, and issued an asset appraisal report (TDHA
[2022] ZPZ No. 1065), with an appraised value of RMB344,942,000.
(2) Acquisition of shares in TCL Internet Technology (Shenzhen) Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On June 30, 2023 (the “Acquisition Date”), the Group acquired 100% equity of TCL Internet
Technology (Shenzhen) Co., Ltd. with a cash consideration of RMB15,036,000, and included
such company into the scope of consolidation.
Cash consideration 15,036
Less: Share of fair value of identifiable net assets acquired 15,036
Difference of lower goodwill / merger cost and higher share of fair value of identifiable
-
net assets acquired
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value at acquisition Carrying amount as at the acquisition
Item
date date
Total assets 61,034 56,435
Total liabilities 45,998 45,998
Net assets 15,036 10,437
Less: non-controlling
- -
interests
Net assets acquired 15,036 10,437
135
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
(3) Acquisition of shares in Xinxin Bandaoti Technology Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On February 28, 2023 (the “Acquisition Date”), the Group acquired 100% equity of Xinxin Bandaoti
Technology Co., Ltd. by issuing equity securities, and included such company into the scope of
consolidation.
Fair value of equity securities issued 7,399,683
Less: Share of fair value of identifiable net assets acquired 6,219,678
Goodwill amount 1,180,005
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value at Carrying amount as at the
Item
acquisition date acquisition date
Total assets 8,320,672 7,752,700
Total liabilities 2,100,994 2,313,890
Net assets 6,219,678 5,438,810
Less: non-controlling interests - -
Net assets acquired 6,219,678 5,438,810
(4) Acquisition of shares in Inner Mongolia TCL Photoelectric Technology Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On May 1, 2023 (the “Acquisition Date”), the Group acquired 100% equity of Inner Mongolia TCL
Photoelectric Technology Co., Ltd. at a cash consideration of RMB119,039,000, and included such
company into the scope of consolidation.
Cash consideration 119,039
Less: Share of fair value of identifiable net assets acquired 119,039
Difference of lower goodwill / merger cost and higher share of fair value of
-
identifiable net assets acquired
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value at acquisition Carrying amount as at the
Item
date acquisition date
Total assets 213,871 194,735
Total liabilities 94,832 94,832
Net assets 119,039 99,903
Less: non-controlling interests - -
Net assets acquired 119,039 99,903
136
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
(5) Acquisition of the equity of Techigh Circuit Technology (Huizhou) Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On October 31, 2023 (the “Acquisition Date”), the Group acquired 51% equity of Techigh Circuit Technology
(Huizhou) Co., Ltd. with a cash consideration of RMB423,103,000, and included the acquisition of the equity
of such company into the scope of consolidation.
Cash consideration 423,103
Less: Share of fair value of identifiable net assets acquired 291,626
Difference of lower goodwill / merger cost and higher share of fair value of
131,477
identifiable net assets acquired
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value at acquisition Carrying amount as at the
Item
date acquisition date
Total assets 591,880 531,819
Total liabilities 270,888 270,907
Net assets 320,992 260,913
Less: non-controlling interests 157,286 127,847
Net assets acquired (note) 163,706 133,066
Note: The net asset obtained does not include amounts that have not been contributed.
③ SHENZHEN CHINA UNITED ASSETS APPRAISAL GROUP CO., LTD. has evaluated the
information above using the asset-based method, and issued an asset appraisal report (SCUPB Zi [2024]
No. 20), with an appraised value of RMB320,992,000.
2 Deconsolidated entities for current period
Time of
Name of investee deconsolidation Reason for change
Yixing Huanxing New Energy Co., Ltd. April 2023 Transferred
Tianjin Binhai Huanneng New Energy Co., Ltd. April 2023 Transferred
Dushan Anju Photovoltaic Technology Co., Ltd. April 2023 Transferred
Shangyi Shengxin New Energy Development Co., Ltd. April 2023 Transferred
Gengma Huanxing New Energy Co., Ltd. April 2023 Transferred
Guyuan Shengju New Energy Co., Ltd. April 2023 Transferred
Zhangjiakou Shengyuan New Energy Co., Ltd. April 2023 Transferred
137
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
2 Deconsolidated entities for current period
(continued)
Time of
Name of investee deconsolidation Reason for change
Qinhuangdao Tianhui Solar Energy Co., Ltd. April 2023 Transferred
Tianjin Huanhai Real Estate Development Co., Ltd. September 2023 De-registered
Tianjin Zhonghuan Hengda Technology Co., Ltd. October 2023 Transferred
TCL Lighting (Wuhan) Co., Ltd. October 2023 De-registered
Inner Mongolia Huanneng Resources Development
Co., Ltd. October 2023 De-registered
Inner Mongolia Zhonghuan Electronic Materials Co.,
Ltd. October 2023 De-registered
Tianjin Yingtuo Computer Control Technology Co.,
Ltd. November 2023 Transferred
Meixin (Xuzhou) Silicon Material Technology Co.,
Ltd. December 2023 De-registered
Shangyi Shengyao New Energy Development Co.,
Ltd. December 2023 Transferred
Inner Mongolia Zhonghuan Energy Development
Center (Limited Partnership) December 2023 De-registered
Guangdong TCL New Technology Co., Ltd. December 2023 Transferred
138
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
3 Subsidiaries disposed in current period
Tianjin Dushan
Name of Yixing Binhai Anju
subsidiary Huanxing Huanneng Photovoltaic Shangyi Shengxin New
New Energy New Energy Technology Energy Development
Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
Price for equity 37,710 29,708 52,460 79,060
interest disposal
% equity interest 100% 100% 99% 100%
disposed
Way of equity Sale Sale Sale Sale
interest disposal
Time of loss of April 2023 April 2023 April 2023 April 2023
control
Determination The The The
basis for time of operating operating operating The operating risk has
loss of control risk has been risk has been risk has been been transferred
transferred transferred transferred
Difference
between the
disposal price
and the
Company’s
share of the
subsidiary’s net 12,705 25,960 (21,827) 83,248
assets in the
consolidated
financial
statements
relevant to the
disposed equity
interest
Gengma Guyuan Zhangjiakou
Name of Huanxing Shengju Shengyuan Qinhuangdao Tianhui
subsidiary New Energy New Energy New Energy Solar Energy Co., Ltd.
Co., Ltd. Co., Ltd. Co., Ltd.
Price for equity 31,830 57,490 58,290 84,060
interest disposal
% equity interest 99% 99% 99% 99%
disposed
Way of equity Sale Sale Sale Sale
interest disposal
Time of loss of April 2023 April 2023 April 2023 April 2023
control
Determination The The The
basis for time of operating operating operating The operating risk has
loss of control risk has been risk has been risk has been been transferred
transferred transferred transferred
Difference
between the
disposal price
and the
Company’s
share of the
subsidiary’s net (13,808) (9,721) (9,376) (37,954)
assets in the
consolidated
financial
statements
relevant to the
disposed equity
interest
139
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Changes to Consolidation Scope (continued)
3 Subsidiaries disposed in current period (continued)
Tianjin Shangyi
Name of Zhonghuan Tianjin Yingtuo Guangdong Shengyao New
subsidiary Hengda Computer Control TCL New Energy
Technology Co., Technology Co., Technology Co., Development
Ltd. Ltd. Ltd. Co., Ltd.
Price for
equity interest 2,702 474 7,069 81,810
disposal
% equity
interest 100% 100% 80% 99%
disposed
Way of equity
interest Sale Sale Sale Sale
disposal
Time of loss November 2023 November 2023 December 2023 December 2023
of control
Determination The operating The operating risk The operating The operating
basis for time risk has been has been risk has been risk has been
of loss of
control transferred transferred transferred transferred
Difference
between the
disposal price
and the
Company’s
share of the
subsidiary’s
net assets in (512) 1,329 (2,475) 12,629
the
consolidated
financial
statements
relevant to the
disposed
equity interest
140
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VIII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Place of Nature of Principal place Shareholding ratio (%) How subsidiary
Name of investee
registration business of business Direct Indirect was obtained
TCL China Star Optoelectronics Technology Co.,
Manufacturing 79.17% -
Ltd. Shenzhen and sales Shenzhen Incorporated
Shenzhen China Star Optoelectronics Bandaoti
Manufacturing - 54.31%
Display Technology Co., Ltd. Shenzhen and sales Shenzhen Incorporated
Guangzhou China Ray Optoelectronic Materials
Research and - 100%
Co., Ltd. Guangzhou development Guangzhou Incorporated
Wuhan China Star Optoelectronics Technology
Manufacturing - 96.67%
Co., Ltd. Wuhan and sales Wuhan Incorporated
Wuhan China Star Optoelectronics Bandaoti
Manufacturing - 57.14%
Display Technology Co., Ltd. Wuhan and sales Wuhan Incorporated
China Star Optoelectronics International (HK)
- 100%
Limited Hong Kong Sales Hong Kong Incorporated
Business
combination not
China Display Optoelectronics Technology - 64.20%
Investment under common
Holdings Limited Bermuda holding Bermuda control
China Display Optoelectronics Technology
Manufacturing - 100%
(Huizhou) Co., Ltd. Huizhou and sales Huizhou Incorporated
Wuhan China Display Optoelectronics Technology
Manufacturing - 100%
Co., Ltd. Wuhan and sales Wuhan Incorporated
Business
combination not
Suzhou China Star Optoelectronics Technology - 100%
Manufacturing under common
Co., Ltd. Suzhou and sales Suzhou control
Business
combination not
Suzhou China Star Optoelectronics Display Co., - 100%
Manufacturing under common
Ltd. Suzhou and sales Suzhou control
Guangzhou China Star Optoelectronics Bandaoti
Manufacturing - 55.00%
Display Technology Co., Ltd. Guangzhou and sales Guangzhou Incorporated
TCL Culture Media (Shenzhen) Co., Ltd. Shenzhen Ad planning Shenzhen 100% - Incorporated
Product
Highly Information Industry Co., Ltd. 66.46% -
Beijing distribution Beijing Incorporated
Beijing Sunpiestore Technology Co., Ltd. Beijing Sales Beijing - 53.45% Incorporated
Beijing Lingyun Data Technology Co., Ltd. Beijing Sales Beijing - 60.00% Incorporated
TCL Technology Group Finance Co., Ltd. Huizhou Financial Huizhou 82.00% 18.00% Incorporated
141
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VII Interests in Other Entities (continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Principal Shareholding ratio
Place of Nature of place of (%) How subsidiary
Name of investee registration business business Direct Indirect was obtained
Shenzhen Dongxi Jiashang Entrepreneurship
Investment Co., Ltd. (Formerly Xinjiang TCL Investment 100% -
Equity Investment Co., Ltd.) Shenzhen business Shenzhen Incorporated
Investment
100% -
Ningbo TCL Equity Investment Ltd. Ningbo business Shenzhen Incorporated
Property
- 100%
TCL Technology Park (Huizhou) Co., Ltd. Huizhou management Huizhou Incorporated
Research and
- 100%
TCL Research America Inc. U.S. development U.S. Incorporated
TCL Industrial Technology Research Institute Research and
- 100%
(Hong Kong) Limited Hong Kong development Hong Kong Incorporated
Investment
100% -
TCL Technology Investments Limited Hong Kong business Hong Kong Incorporated
Business
combination not
2.55% 27.36%
TCL Zhonghuan Renewable Energy Manufacturing under common
Technology Co., Ltd. Tianjin and sales Tianjin control
Business
combination not
- 26.86%
Manufacturing under common
Tianjin Printronics Circuit Corporation Tianjin and sales Tianjin control
Business
combination not
- 100%
Tianjin Huan'Ou Bandaoti Manufacturing under common
Material&Technology Co., Ltd. Tianjin and sales Tianjin control
Business
combination not
- 98.08%
Manufacturing under common
Wuxi Zhonghuan Applied Materials Co., Ltd. Wuxi and sales Wuxi control
Business
combination not
- 62.00%
Tianjin Huanzhi New Energy Technology Manufacturing under common
Co., Ltd. Tianjin and sales Tianjin control
Business
combination not
- 100%
Inner Mongolia Zhonghuan Solar Material Inner Manufacturing Inner under common
Co., Ltd. Mongolia and sales Mongolia control
Business
combination not
- 100%
Tianjin Zhonghuan Advanced Manufacturing under common
Material&Technology Co., Ltd. Tianjin and sales Tianjin control
Business
combination not
- 83.73%
Manufacturing under common
Huansheng Solar (Jiangsu) Co., Ltd. Wuxi and sales Wuxi control
142
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VIII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Principal Shareholding
Place of Nature of How subsidiary
Name of investee place of ratio (%)
registration business was obtained
business Direct Indirect
Business
combination not
- 100%
Tianjin Huanou International Silicon Procurement & under common
Material Co., Ltd. Tianjin sales Tianjin control
Business
combination not
- 100%
under common
Zhonghuan Hong Kong Holding Limited Hong Kong Sales Hong Kong control
Business
combination not
- 100%
Tianjin Huanrui Electronic Technology Procurement & under common
Co., Ltd. Tianjin sales Tianjin control
Business
combination not
- 59.32%
Inner Mongolia Zhonghuan Crystal Inner Manufacturing Inner under common
Materials Co., Ltd. Mongolia and sales Mongolia control
Business
combination not
- 100%
Inner Mongolia Zhonghuan Advanced Inner Manufacturing Inner under common
Bandaoti Material Co., Ltd. Mongolia and sales Mongolia control
Business
combination not
7.35% 35.30%
Zhonghuan Advanced Bandaoti Manufacturing under common
Technology Co., Ltd. Wuxi and sales Wuxi control
Business
combination not
- 100%
Investment under common
Moka International Limited BVI holding BVI control
Business
combination not
- 100%
Manufacturing under common
Moka Technology (Guangdong) Co., Ltd. Huizhou and sales Huizhou control
(2) Subsidiaries with substantial non-controlling interests
Non- Profit or loss
Dividends distributed Closing equity of
controlling attributable to non-
Name of subsidiary to non-controlling non-controlling
shareholding controlling
shareholders in the interests
ratio (%) shareholders in the
current period
current period
TCL China Star Optoelectron
20.83% (443,697) - 43,769,170
Technology Co., Ltd.
TCL Zhonghuan Renewable Ener
70.09% 2,882,278 355,925 47,631,075
Technology Co., Ltd.
Highly Information Industry Co., Ltd. 33.54% 29,505 34,990 552,086
143
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VIII Interests in Other Entities (continued)
1 Interests in subsidiaries (Continued)
(2) Subsidiaries with substantial non-controlling interests (continued)
The key financial information of the above subsidiaries is as follows:
December 31, 2023 January 1, 2023
Non- Non- Current Non- Total Current Non- Total
Current Total Current Total
current current assets current assets liabilities current liabilities
assets assets liabilities liabilities
assets liabilities assets liabilities
TCL China Star
Optoelectronics
55,759,259 153,177,418 208,936,677 66,215,558 68,629,981 134,845,539 40,115,151 152,441,917 192,557,068 45,523,242 73,184,255 118,707,497
Technology Co.,
Ltd.
TCL Zhonghuan
Renewable Energy
34,627,478 90,435,565 125,063,043 22,324,095 42,501,836 64,825,931 31,829,523 76,483,400 108,312,923 23,020,082 38,232,999 61,253,081
Technology Co.,
Ltd.
Highly Information
7,086,563 179,985 7,266,548 5,807,990 24,523 5,832,513 8,563,285 149,390 8,712,675 7,191,610 39,961 7,231,571
Industry Co., Ltd.
2023 2022
Total Net cash generate Total Net cash generate
comprehensive from/used in comprehensive from/used in
Revenue Net profit income operating activities Revenue Net profit income operating activities
TCL China Star
Optoelectronics 72,077,792 (480,560) (524,501) 18,507,307 56,256,417 (8,352,833) (8,445,005) 11,012,565
Technology Co., Ltd.
TCL Zhonghuan
Renewable Energy 59,146,463 3,898,892 3,899,066 5,181,163 67,010,157 7,073,043 7,073,043 5,056,839
Technology Co., Ltd.
Highly Information 30,109,529 43,200 43,200 (205,171) 31,847,803 264,253 264,253 (574,296)
Industry Co., Ltd.
144
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
VIII Interests in Other Entities (continued)
2 Interests in joint ventures and associates
(1) Basic information about principal joint ventures and associates
Principal Shareholding
Strategic to the ratio (%)
place of Nature of
Name of investee Group’s activities
business/place business
or not Direct Indirect
of registration
Associate
Bank of Shanghai Co.,
Shanghai Financial Yes 5.76% -
Ltd.
(2) Key financial information of major associates
December 31, 2023 January 1, 2023
Bank of Shanghai Co., Bank of Shanghai Co.,
Ltd. Ltd.
Total assets 3,085,516,473 2,878,524,759
Total liabilities 2,846,467,311 2,656,876,235
Non-controlling interests 470,332 594,465
Equity attributable to
shareholders of the parent 238,578,830 221,054,059
company
Carrying amount of
13,726,174 12,809,374
investment in associate
2023 2022
Bank of Shanghai Co., Bank of Shanghai Co.,
Ltd. Ltd.
Revenue 50,564,474 53,112,478
Net profit attributable to the
22,544,789 22,280,215
parent company
Dividends from associate to
327,157 327,157
the Group in current period
(3) The Company had no significant joint ventures in the Reporting Period.
145
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IX Risks related to financial instruments
The purpose of the Company’s risk management is to achieve a right balance between the risk and the
benefit and maximally reduce the adverse impact of financial risks on the Company’s financial
performance. Based on such purpose, the Company has established various risk management policies
to recognize and analyze possible risks to be encountered by the Company, set an appropriate risk
acceptable level and designed corresponding internal control procedures so as to control the
Company’s risk level. In addition, the Company will regularly review these risk management policies
and relevant internal control system in order to adapt to the market or handle various changes in the
Company’s operating activities. Meanwhile, the Company’s internal audit department will also
regularly or randomly check whether the implementation of internal control system conforms to
relevant risk management policies. In fact, the Company has applied proper diversified investment and
business portfolio to disperse various financial instrument risks and worked out corresponding risk
management policies to reduce the risk of concentrating on one single industry, specific region or
specific counterpart.
The main risks arising from the Company's financial instruments are credit risk, liquidity risk, and
market risk (mainly foreign exchange risk and interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss caused by any party of financial instruments to another
party due to the failure in fulfilling performance obligations. The Group controls the credit risk based
on the specific group classification, and credit risk mainly results from bank deposit, due from central
bank, notes receivable, accounts receivable, loans and advances to customers and other receivables.
The Group’s bank deposits and due from central bank are mainly deposited in stated-owned banks and
other large and medium-sized listed banks. The Group considers no significant credit risk existed and
no significant loss will be caused by the counterpart’s breach of contract.
For notes receivable, accounts receivable, loans and advances to customers and other receivables, the
Group has established relevant policies to control the credit risk exposure, and will evaluate the client’s
credit qualification and determine corresponding credit period based on the client’s financial status,
the possibility of obtaining guarantees from the third party, relevant credit records and other factors
(like the current market situation). In the meantime, the Group will regularly monitor the client's credit
records. For any client with unfavorable credit records, the Group will issue written reminders, shorten
the credit period or cancel the credit period so as to keep the Group's overall credit risk controllable.
As at December 31, 2023, no significant guarantee or other credit enhancements held due to the debtor
mortgage was found in the Group.
(2) Liquidity risk
Liquidity risk refers to the risk of capital shortage the Company encounters when the Company is
fulfilling the obligation of settlement in the form of cash or other financial assets. Various subsidiaries
under the Group shall be responsible for predicting their own cash flow. The financial department of
the headquarter shall firstly summarize predictions on the cash flow of various subsidiaries and then
continuously monitor the short-term and long-term fund demand at the Group's level so as to maintain
sufficient cash reserves and negotiable securities that can be realized at any time; meanwhile, special
efforts shall also be made to continuously monitor whether provisions stated in the loan agreement are
observed and to make major financial institutions promise to provide sufficient reserve funds so as to
satisfy short-term and long-term capital demand.
As of December 31, 2023, the Group had no liquidity risk events.
146
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IX Risks Related to Financial Instruments (continued)
(3) Market risk
(a) Foreign exchange risk
The Group has carried out various economic activities around the world including manufacturing, selling,
investment and financing etc., and corresponding interest rate fluctuation risks exist in the Group’s foreign
currency assets and liabilities and future foreign currency transactions.
The Group always regards "Locking the Cost and Avoiding Possible Risks" as the foreign currency risk
management goal. Through the natural hedging of settlement currency, matching with the foreign currency
liabilities, signing simple derivative products closely related to the owner's operation and meeting corresponding
hedge accounting treatment requirements and applying other management methods, the foreign currency risk
exposure can be controlled within a reasonable scope and the impact of interest rate fluctuations on the Group's
overall profit and loss will be reduced.
On December 31, 2023, foreign-currency asset and liability items with significant exposure to exchange risk
were mainly denominated in US dollars. After management, the total risk exposure of the US dollar-
denominated items had a net asset exposure of USD186,459,000, equivalent to RMB1,320,635,000 based on the
spot exchange rate on the balance sheet date. The differences arising from the translation of foreign currency
financial statements were not included.
The Group applies the following exchange rate of USD against RMB:
Exchange rate at
Average exchange rate
period-end
2023 December 31, 2023
USD/RMB 7.0558 7.0827
Provided that other risk variables remained unchanged except for the exchange rate, a 5%
depreciation/appreciation in RMB as a result of the changes in the exchange rate of RMB against USD would
cause an increase/decrease of RMB66,032,000 in shareholders’ equity and net profit respectively of the Group
on December 31, 2023.
The above-mentioned sensitivity analysis is made based on the assumption that the exchange rate changes on the
balance sheet date, and financial instruments held by the Group on the balance sheet date exposed to the
exchange risk are re-calculated based on the changed exchange rate. The above analysis does not include
differences arising from the translation of foreign currency financial statements.
(b) Interest risk
The Group’s interest rate risk mainly results from interest-bearing bank borrowings adopting floating interest
rates, and the Group determined the proportion of fixed interest rates and floating interest rates based on the
market environment and its risk tolerance. Up until December 31, 2023, the Group’s liabilities with floating
interest rates accounted for 66.06% of its total interest-bearing liabilities. And, the Group will continuously
monitor the interest rates and make corresponding adjustments according to the specific market changes so as to
avoid interest rate risk.
(4) Offset of financial assets and financial liabilities
As at the end of the reporting period, the amount offset between the financial assets and financial liabilities
recognized under executable master netting arrangements or similar agreements was RMB11,966,787,000.
147
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
X Classification of Financial Instruments and Fair Value
Fair value of financial instruments and levels
1 Fair value is divided into the following levels in measurement and disclosure:
Level 1 refers to the (unadjusted) quotation of the same type of assets or liabilities on the active
market; and the Company mainly adopts the closing price as the value of a financial asset. Financial
instruments of level 1 mainly include exchange listed stocks and bonds.
Level 2 refers to the directly or indirectly observable input of a financial asset or liability that does
not belong to level 1.
Level 3 refers to the input of a financial asset or liability determined based on variables other than the
observable market data (non-observable input).
2 Basis for determining the market value of items measured at continuous level 1 fair value
The Company adopts the active market quotation as the fair value of a level 1 financial asset.
Items measured at continuous level 2 fair value adopt the following valuation techniques and
3
parameters:
The Company’s receivables financing was bank acceptance notes and trade acceptance notes, of
which the market prices were determined based on the transfer or discounted amounts.
Derivative financial assets and liabilities are multiple IRS and CCS signed between the Group and
financial institutions. The Company adopts the quotations provided by the financial institution in
valuation.
Items measured at continuous level 3 fair value adopt the following valuation techniques and
4
parameters (nature and quantity):
Other non-current financial assets measured at continuous level 3 fair value are mainly unlisted equity
investments held by the Company. In measuring the fair value, the Company mainly adopts the
valuation technique of comparison with listed companies, taking into account the price of similar
securities and liquidity discount.
Held-for-trading financial assets measured at continuous level 3 fair value are mainly wealth
management products held by the Company. In valuation of the fair value, the Company adopts the
method of discounting future cash flows based on the agreed expected yield rate.
148
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
X Classification of Financial Instruments and Fair Value (continued)
5 Financial instruments measured in three levels of fair value
Financial assets
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial assets
1,111,814 22,067,808 4,495 23,184,117
(see Note V. 2)
Derivative financial assets (see
- 108,008 - 108,008
Note V.3)
Receivables financing (see Note
- - 954,410 954,410
V.6)
Investments in other equity
17,127 - 369,521 386,648
instruments (see Note V. 17)
Other non-current financial assets
1,520,553 155,428 1,295,585 2,971,566
(see Note V. 18)
Total assets continuously measured
2,649,494 22,331,244 2,624,011 27,604,749
at fair value
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial
- 56,589 194,862 251,451
liabilities (see Note V, 32)
Derivative financial liabilities (see
- 58,591 - 58,591
Note V, 33)
Total liabilities continuously
- 115,180 194,862 310,042
measured at fair value
149
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related Parties and Related-Party Transactions
1 Actual controller and its acting-in-concert parties
Explanation of The Company’s Absence of Controlling Shareholders
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
Partnership) became persons acting in concert by signing the Agreement on Concerted Action,
holding 1,264,053,189 shares in total and becoming the largest shareholder of the Company.
As per Article 216 of the Company Law, a controlling shareholder refers to a shareholder who owns
over 50% of a limited liability company’s total capital or over 50% of a joint stock company’s total
share capital; or, despite the ownership of less than 50% of a limited liability company’s total capital
or less than 50% of a joint stock company’s total number of shares, who can still prevail in the
resolution of a meeting of shareholders or a general meeting of shareholders according to the voting
rights corresponding to their interest in the limited liability company’s total capital or the joint stock
company’s total number of shares. According to the definition above, the Company has no
controlling shareholder or actual controller.
2 Related parties that do not control or are not controlled by the Company
Information about such related parties：
Company Name Relationship with the Company
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Tianjin Huanyan Technology Co., Ltd. Joint venture
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund Joint venture
Partnership (Limited Partnership)
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. Joint venture’s subsidiary
Jiangsu Huanxin Bandaoti Co., Ltd. Joint venture’s subsidiary
Moxing Bandaoti (Guangdong) Co., Ltd. Joint venture’s subsidiary
Moxun Bandaoti Technology (Shanghai) Co., Ltd. Joint venture’s subsidiary
SunPower Systems International Limited Associate
MAXEON SOLAR TECHNOLOGIES, LTD. Associate
Inner Mongolia Zhongjing Science and Technology Research Associate
C
IInneri MongoliaL dShengou Electromechanical Engineering Co., Associate
d Associate
TCL Intelligent Technology (Ningbo) Co., Ltd.
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. Associate
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. Associate
Ningbo Dongpeng Weichuang Equity Investment Partnership Associate
(Limited Partnership)
Ningbo Dongpeng Heli Equity Investment Partnership (Limited Associate
TCL Finance (Hong Kong) Co., Limited Associate
Inner Mongolia Huanye Material Co., Ltd. Associate
Ruihuan (Inner Mongolia) Solar Power Co., Ltd. Associate
Zhonghuan Aineng (Beijing) Technology Co., Ltd. Associate
150
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI X Related parties and related-party transactions (continued)
The nature of related parties without control relationship
2
(continued)
Relationship with the
Company name
Company
LG Electronics (Huizhou) Co., Ltd. Associate
Wuxi TCL Medical Imaging Technology Co., Ltd. Associate
China Innovative Capital Management Limited Associate
Inner Mongolia Xinhua Bandaoti Technology Co., Ltd. Associate
Inner Mongolia Xinhuan Silicon Energy Technology Co., Ltd. Associate
JOLED Incorporation Associate
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co.,
Associate
Ltd.
Getech Ltd. and its subsidiaries Associate and its subsidiaries
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries Associate and its subsidiaries
Shenzhen Qianhai Sailing International Supply Chain Associate and its subsidiaries
Management Co., Ltd. and its subsidiaries
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its Associate and its subsidiaries
subsidiaries
Shenzhen Tixiang Business Management Technology Co., Ltd. Associate and its subsidiaries
and its subsidiaries
Tianjin Qiyier Communication & Broadcasting Co., Ltd. and its
Associate and its subsidiaries
subsidiaries
Purplevine Holdings Limited and its subsidiaries Associate and its subsidiaries
Huizhou TCL Human Resources Service Co., Ltd. and its Joint ventures and its
SunPower Corporation Associate’s subsidiary
SunPower Phils.Manufacture Ltd Associate’s subsidiary
SunPower Systems Sarl Associate’s subsidiary
SunPower Malaysia Manufacturing Sdn.Bhd. Associate’s subsidiary
Elite Excellent Investments Limited Associate’s subsidiary
Esteem Venture Investment Limited Associate’s subsidiary
Huixing Holdings Limited Associate’s subsidiary
Marvel Paradise Limited Associate’s subsidiary
Union Dynamic Investment Limited Associate’s subsidiary
Zijinshan Investment Co., Ltd. Associate’s subsidiary
Ningxia Zhongjing New Material Technology Co., Ltd. Associate’s subsidiary
TCL Industries Holdings Co., Ltd. and its subsidiaries Other relationships
Thunderbird Innovation Technology (Shenzhen) Co., Ltd. and its
Other relationships
subsidiaries
151
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions
(1) Selling raw materials and finished goods (Note 1)
2023 2022
TCL Industries Holdings Co., Ltd. and its
17,595,123 10,607,152
subsidiaries
SunPower Systems Sarl 1,209,116 1,912,424
Shenzhen Qianhai Sailing International Supply
1,208,487 1,631,738
Chain Management Co., Ltd. and its subsidiaries
SunPower Malaysia Manufacturing Sdn.Bhd. 886,746 482,562
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 89,680 50,095
SunPower Systems International Limited 79,537 195,077
Inner Mongolia Huanye Material Co., Ltd. 44,321 -
Zhonghuan Feilang (Tianjin) Technology Co.,
8,082 5,443
Ltd.
Shenzhen Jucai Supply Chain Technology Co.,
6,208 2,658
Ltd. and its subsidiaries
LG Electronics (Huizhou) Co., Ltd. 281 -
Getech Ltd. and its subsidiaries 229 4,704
Purplevine Holdings Limited and its subsidiaries 75 -
Tianjin Qiyier Communication & Broadcasting
48 39
Co., Ltd. and its subsidiaries
MAXEON SOLAR TECHNOLOGIES, LTD. - 1,691
Moxing Bandaoti (Guangdong) Co., Ltd. - 44
SunPower Corporation - 37
Sunpower Phils.Manufacture Ltd - 10
21,127,933 14,893,674
(2) Purchasing raw materials and finished products (Note 2)
2023 2022
Aijiexu New Electronic Display Glass
3,207,376 2,768,083
(Shenzhen) Co., Ltd.
Xinjiang Goens Energy Technology Co., Ltd. 2,234,753 5,741,285
TCL Industries Holdings Co., Ltd. and its
1,978,057 1,439,403
subsidiaries
Shenzhen Jucai Supply Chain Technology Co., 1,399,132 1,235,277
Ltd. and its subsidiaries
Shenzhen Qianhai Sailing International Supply
1,255,571 766,831
Chain Management Co., Ltd. and its subsidiaries
Inner Mongolia Huanye Material Co., Ltd. 693,157 -
JOLED Incorporation 363,394 -
Inner Mongolia Shengou Electromechanical
311,243 228,127
Engineering Co., Ltd.
152
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
Related Parties and Related-Party
XI
Transactions (Continued)
3 Major related-party transactions
(2) Purchasing raw materials and finished products (Note 2) (continued)
Inner Mongolia Zhongjing Science and
161,355 178,523
Technology Research Institute Co., Ltd.
Jiangsu Huanxin Bandaoti Co., Ltd. 150,506 -
Ningxia Zhongjing New Material Technology Co.,
28,697 -
Ltd.
TCL Intelligent Technology (Ningbo) Co., Ltd. 11,130 1,309
Zhonghuan Feilang (Tianjin) Technology Co.,
1,671 -
Ltd.
Inner Mongolia Xinhuan Silicon Energy
1,416 -
Technology Co., Ltd.
11,797,458 12,358,838
(3) Receiving funding (Note 3)
2023 2022
Shenzhen Jucai Supply Chain Technology Co.,
195,405 148,664
Ltd. and its subsidiaries
Shenzhen Qianhai Sailing International Supply
119,091 70,998
Chain Management Co., Ltd. and its subsidiaries
Huizhou TCL Human Resources Service Co.,
36,962 22,413
Ltd. and its subsidiaries
Elite Excellent Investments Limited 8,892 8,762
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 7,406 8
Esteem Venture Investment Limited 5,500 5,416
Ningbo Dongpeng Weichuang Equity Investment 820 34,228
Partnership (Limited Partnership)
Huixing Holdings Limited 670 673
Marvel Paradise Limited 611 612
Union Dynamic Investment Limited 389 401
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 205 300,000
TCL Air Conditioner (Wuhan) Co., Ltd. and its
98 41,862
subsidiaries
Jiangsu Huanxin Bandaoti Co., Ltd. 98 42,552
Ningbo Dongpeng Heli Equity Investment
33 33
Partnership (Limited Partnership)
Shenzhen Tixiang Business Management
- 15,730
Technology Co., Ltd. and its subsidiaries
376,180 692,352
153
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
Related Parties and Related-Party
XI
Transactions (Continued)
3 Major related-party transactions
(continued)
(4) Leases
2023 2022
Rental income
TCL Industries Holdings Co., Ltd. and its
63,067 76,368
subsidiaries
Aijiexu New Electronic Display Glass 62,878 66,902
Inner Mongolia Huanye Material Co., Ltd. 22,274 16,063
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 3,669 4,323
Zhonghuan Feilang (Tianjin) Technology Co.,
885 -
Ltd.
Shenzhen Jucai Supply Chain Technology Co.,
748 837
Ltd. and its subsidiaries
Getech Ltd. and its subsidiaries 669 1,065
Jiangsu Huanxin Bandaoti Co., Ltd. 466 -
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 400 368
Jiangsu Jixin Bandaoti Silicon Material Research 144 -
Institute Co., Ltd.
TCL Intelligent Technology (Ningbo) Co., Ltd. - 1
155,200 165,927
Rental expense
TCL Industries Holdings Co., Ltd. and its 60,396 62,456
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 10,036 5,147
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 1,427 1,927
Shenzhen Jucai Supply Chain Technology Co.,
283 -
Ltd. and its subsidiaries
TCL Intelligent Technology (Ningbo) Co., Ltd. 122 -
72,264 69,530
(5) Rendering or receipt of services
2023 2022
Providing labour service for related parties 327,066 293,468
Receipt of services 2,116,609 1,534,144
154
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related Parties and Related-Party
3 Major related-party transactions
(6) Receiving interest or paying interest (Note 3)
2023 2022
Interest received 15,619 22,837
Interest paid 43,049 18,040
(7) Remuneration of key management personnel (Note 4)
2023 2022
Remuneration of key management personnel 67,919 48,071
(8) Other related transactions
(a) In May 2023, the Group signed an equity transfer agreement with TCL Ace (Huizhou) Co., Ltd., a
subsidiary of TCL Industries Holdings Co., Ltd., to acquire 100% equity of Inner Mongolia TCL
Optoelectronic Technology Co., Ltd. held by TCL Ace (Huizhou) Co., Ltd. at a transaction price of
RMB119,039,000.
(b) In June 2023, the Group signed an equity transfer agreement with TCL Financial Holding Group
(Guangzhou) Co., Ltd., a subsidiary of TCL Industries Holdings Co., Ltd., to acquire 100% equity of
TCL Financial Technology (Shenzhen) Co., Ltd. held by TCL Financial Holding Group (Guangzhou) Co.,
Ltd. at a transaction price of RMB15,036,000.
(c) In June 2023, the Group signed an equity transfer agreement with Shenzhen Qianhai Sailing International
Supply Chain Management Co., Ltd. to transfer 40% equity of Shenzhen Qianhai Sailing Supply Chain
Management Co., Ltd. to Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. at
a transaction price of RMB21,940,000.
(d) In October 2023, the Group signed an equity transfer agreement with TCL Digital Technology (Shenzhen)
Co., Ltd., a subsidiary of TCL Industries Holdings Co., Ltd., to acquire 20% equity of Techigh Circuit
Technology (Huizhou) Co., Ltd. held by TCL Digital Technology (Shenzhen) Co., Ltd. at a transaction
price of RMB101,628,000.
(e) According to the terms of the Agreement by and between TCL TECHNOLOGY INVESTMENTS
LIMITED and T.C.L. INDUSTRIES HOLDINGS (H.K.) LIMITED on the Transfer of the 100% Equity
of Moka International Limited (“Equity Transfer Agreement”), when the net profit actually realized by
Moka International Limited during the agreed performance commitment period exceeds the committed
RMB760,000,000, the Company will reward the transferor with 50% of the excess profit as an
additional performance bonus (the total amount of the additional bonus will not exceed 20% of the
equity transfer price). During the commitment period, Moka International Limited realized a
consolidated net profit of RMB1,480,966,000. According to the said Equity Transfer Agreement, the
performance bonus recognized for the current period is RMB360,483,000.
155
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
Note 1 Selling raw materials and finished products to related parties
The Company sells raw materials, spare parts, auxiliary materials and finished goods to its joint
ventures and associates at market prices, which are settled in the same way as non-related-party
transactions. These related-party transactions have no material impact on the Company’s net
profit^ but play an important role as to the Company’s continued operations.
Note 2 Purchasing raw materials and finished products from related parties
The Company purchases raw materials and finished goods from its joint ventures and associates
at prices similar to those paid to third-party suppliers, which are settled in the same way as non-
related-party transactions. These related-party transactions have no material impact on the
Company’s net profit^ but play an important role as to the Company’s continued operations.
Note 3 Providing funding for or receiving funding from related parties and corresponding interest
received or paid
The Company set up a settlement center in 1997 and TCL Technology Group Finance Co., Ltd.
in 2006 (together, the “Financial Settlement Center”). The Financial Settlement Center is
responsible for the financial affairs of the Company, including capital operation and allocation.
The Center settles accounts with the Company’s subsidiaries, joint ventures and associates and
pays the interest. It also allocates the money deposited by the subsidiaries, joint ventures and
associates in it to these enterprises and charges interest. The interest income and expense between
the Company and the Center are calculated according to the interest rates declared by the People’s
Bank of China. The funding amount provided refers to the outstanding borrowings due from the
Center to related parties, while the funding amount received means the balances of related
parties’ deposits in the Center.
Note 4 The remunerations of key management personnel include fixed salaries, allowances and
performance bonuses received from the Company by the directors, supervisors and senior
executives of the Company during their terms of office, but do not include share-based payments.
Note 5 Transactions taken by TCL Financial Technology (Shenzhen) Co., Ltd. with the Group between
January and June 2023 are recorded into TCL Industries Holdings Co., Ltd. and its subsidiaries.
Note 6 The transactions between Xinjiang Goens Energy Technology Co., Ltd. and the Group in 2023
are related party transactions.
156
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(1) Accounts receivable
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
3,686,514 2,149,032
subsidiaries
Shenzhen Qianhai Sailing International Supply
144,349 292,275
Chain Management Co., Ltd. and its subsidiaries
SunPower Systems Sarl 46,943 258,443
SunPower Systems International Limited 13,163 76,749
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 12,527 12,651
Inner Mongolia Huanye Material Co., Ltd. 10,095 6,398
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 2,500 1,522
Inner Mongolia Shengou Electromechanical
785 -
Engineering Co., Ltd.
Thunderbird Innovation Technology (Shenzhen)
658 -
Co., Ltd. and its subsidiaries
LG Electronics (Huizhou) Co., Ltd. 478 -
Tianjin Qiyier Communication & Broadcasting
54 44
Co., Ltd. and its subsidiaries
Jiangsu Huanxin Bandaoti Co., Ltd. 32 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 22 183
SunPower Malaysia Manufacturing Sdn.Bhd. 6 2
Shenzhen Jucai Supply Chain Technology Co.,
- 1,163
Ltd. and its subsidiaries
Inner Mongolia Zhongjing Science and
- 969
Technology Research Institute Co., Ltd.
Tianjin Huanyan Technology Co., Ltd. - 289
Getech Ltd. and its subsidiaries - 281
MAXEON SOLAR TECHNOLOGIES, LTD. - 104
3,918,126 2,800,105
157
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
Related Parties and Related-Party
XI
Transactions (Continued)
Balances due from and to related parties
4
(continued)
(2) Accounts payable
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
1,246,215 1,311,176
subsidiaries
Aijiexu New Electronic Display Glass (Shenzhen)
1,113,639 699,954
Co., Ltd.
Shenzhen Jucai Supply Chain Technology Co.,
284,721 272,288
Ltd. and its subsidiaries
Shenzhen Qianhai Sailing International Supply
198,697 110,703
Chain Management Co., Ltd. and its subsidiaries
Inner Mongolia Shengou Electromechanical
46,226 57,847
Engineering Co., Ltd.
Getech Ltd. and its subsidiaries 34,963 112,831
Inner Mongolia Huanye Material Co., Ltd. 31,915 25,090
Ningxia Zhongjing New Material Technology
26,819 -
Co., Ltd.
Inner Mongolia Zhongjing Science and
22,521 63,818
Technology Research Institute Co., Ltd.
Jiangsu Huanxin Bandaoti Co., Ltd. 21,437 -
Huizhou TCL Human Resources Service Co., Ltd.
2,671 -
and its subsidiaries
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 936 968
TCL Intelligent Technology (Ningbo) Co., Ltd. 244 -
Zhonghuan Feilang (Tianjin) Technology Co.,
- 10
Ltd.
3,031,004 2,654,685
158
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related parties and related-party transactions (continued)
4 Balances due from and to related parties
(3) Other receivables
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its subsidiaries 133,502 576,402
Ningxia Zhongjing New Material Technology Co., Ltd. 12,251 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. and
9,114 5,550
its subsidiaries
Inner Mongolia Huanye Material Co., Ltd. 8,120 4,061
Aijiexu New Electronic Display Glass (Shenzhen) Co.,
7,791 7,987
Ltd.
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 7,363 2,058
Getech Ltd. and its subsidiaries 5,127 3,994
Moxun Bandaoti Technology (Shanghai) Co., Ltd. 4,265 -
Zhonghuan Aineng (Beijing) Technology Co., Ltd. 3,053 3,101
JOLED Incorporation 2,823 -
Shenzhen Qianhai Sailing International Supply Chain
1,898 777
Management Co., Ltd. and its subsidiaries
Inner Mongolia Xinhuan Silicon Energy Technology
1,629 -
Co., Ltd.
MAXEON SOLAR TECHNOLOGIES,LTD. 1,105 -
Inner Mongolia Zhongjing Science and Technology 775 15
Research Institute Co., Ltd.
Jiangsu Huanxin Bandaoti Co., Ltd. 707 -
LG Electronics (Huizhou) Co., Ltd. 336 212
Inner Mongolia Xinhua Bandaoti Technology Co., Ltd. 219 -
Jiangsu Jixin Bandaoti Silicon Material Research
215 -
Institute Co., Ltd.
Huizhou TCL Human Resources Service Co., Ltd. and 170 -
its subsidiaries
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 29 -
Ruihuan (Inner Mongolia) Solar Power Co., Ltd. - 20,181
TCL Air Conditioner (Wuhan) Co., Ltd. and its
- 9
subsidiaries
Wuxi TCL Medical Imaging Technology Co., Ltd. - 6
200,492 624,353
159
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related parties and related-party transactions
(continued)
4 Balances due from and to related parties
(4) Other payables
December 31,
January 1, 2023
2023
TCL Industries Holdings Co., Ltd. and its subsidiaries 607,576 81,858
Tianjin Zhonghuan Haihe Intelligent Manufacturing
428,100 428,100
Fund Partnership (Limited Partnership)
Getech Ltd. and its subsidiaries 112,086 166,525
Shenzhen Jucai Supply Chain Technology Co., Ltd.
82,487 120,677
and its subsidiaries
Shenzhen Qianhai Sailing International Supply Chain
77,143 35,350
Management Co., Ltd. and its subsidiaries
Huizhou TCL Human Resources Service Co., Ltd. and
46,151 22,462
its subsidiaries
Aijiexu New Electronic Display Glass (Shenzhen) Co., 9,317 9,317
d
Elite Excellent Investments Limited 8,892 8,762
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 5,591 5,564
Esteem Venture Investment Limited 5,500 5,416
Inner Mongolia Shengou Electromechanical 2,796 1,444
Engineering Co., Ltd.
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 2,575 1,924
Moxun Bandaoti Technology (Shanghai) Co., Ltd. 1,042 4,057
Huixing Holdings Limited 670 673
Marvel Paradise Limited 611 612
Thunderbird Innovation Technology (Shenzhen) Co.,
401 -
Ltd. and its subsidiaries
Union Dynamic Investment Limited 389 401
Ningbo Dongpeng Weichuang Equity Investment
273 18,762
Partnership (Limited Partnership)
Jiangsu Huanxin Bandaoti Co., Ltd. 134 -
China Innovative Capital Management Limited 86 29
Ningbo Dongpeng Heli Equity Investment Partnership
66 66
(Limited Partnership)
Inner Mongolia Zhongjing Science and Technology
60 55
Research Institute Co., Ltd.
Ningxia Zhongjing New Material Technology Co.,
58 -
Ltd.
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 45 45
TCL Intelligent Technology (Ningbo) Co., Ltd. 24 75
Jiangsu Jixin Bandaoti Silicon Material Research 20 -
Institute Co., Ltd.
CJ Speedex Logistics Co., Ltd. - 102
1,392,093 912,276
160
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related parties and related-party transactions
(continued)
Balances due from and to related parties
4
(continued)
(5) Non-current liabilities due within one year
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
14,042 19,555
subsidiaries
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 2,775 4,972
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. - 957
16,817 25,484
(6) Prepayments
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
46,682 75
subsidiaries
Getech Ltd. and its subsidiaries 15,695 16,890
Tianjin Huanyan Technology Co., Ltd. 6,466 30,438
Shenzhen Jucai Supply Chain Technology Co.,
399 2,862
Ltd. and its subsidiaries
Inner Mongolia Xinhuan Silicon Energy
156 -
Technology Co., Ltd.
Xinjiang Goens Energy Technology Co., Ltd. 152 8,386
Huizhou TCL Human Resources Service Co., Ltd.
133 -
and its subsidiaries
TCL Intelligent Technology (Ningbo) Co., Ltd. 44 -
Shenzhen Qianhai Sailing International Supply
- 2,633
Chain Management Co., Ltd. and its subsidiaries
69,727 61,284
161
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related parties and related-party transactions
(continued)
Balances due from and to related parties
4
(continued)
(7) Advances from customers
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
304 214
subsidiaries
Shenzhen Jucai Supply Chain Technology Co., Ltd.
110 -
and its subsidiaries
414 214
(8) Contract liabilities
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
71,842 56,969
subsidiaries
Shenzhen Qianhai Sailing International Supply
1,424 148,237
Chain Management Co., Ltd. and its subsidiaries
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 67 -
SunPower Corporation 46 -
Inner Mongolia Huanye Material Co., Ltd. 32 -
73,411 205,206
(9) Lease liabilities
December 31, 2023 January 1, 2023
TCL Industries Holdings Co., Ltd. and its
40,772 1,345
subsidiaries
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 8,690 1,260
49,462 2,605
162
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XI Related parties and related-party transactions
4 Balances due from and to related parties
(10) Deposits from related parties (note)
December 31, 2023 January 1, 2023
Shenzhen Jucai Supply Chain Technology Co.,
195,470 148,707
Ltd. and its subsidiaries
Shenzhen Qianhai Sailing International Supply
60,899 36,117
Chain Management Co., Ltd. and its subsidiaries
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 7,407 8
Huizhou TCL Human Resources Service Co., Ltd. 6,134 2,616
and its subsidiaries
Ningbo Dongpeng Weichuang Equity Investment
547 15,722
Partnership (Limited Partnership)
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 269 300,086
TCL Air Conditioner (Wuhan) Co., Ltd. and its
98 41,867
subsidiaries
Jiangsu Huanxin Bandaoti Co., Ltd. 98 42,553
TCL Intelligent Technology (Ningbo) Co., Ltd. 1 -
Ningbo Dongpeng Heli Equity Investment
- -
Partnership (Limited Partnership)
Shenzhen Tixiang Business Management
- 15,734
Technology Co., Ltd. and its subsidiaries
270,923 603,410
Note: These deposits are made by related parties in the Company’s subsidiary
TCL Technology Group Finance Co., Ltd.
(11) Other non-current assets
December 31, 2023 January 1, 2023
Purplevine Holdings Limited and its subsidiaries 174,422 216,468
Getech Ltd. and its subsidiaries 4,429 3,176
Shenzhen Jucai Supply Chain Technology Co.,
297 -
Ltd. and its subsidiaries
TCL Industries Holdings Co., Ltd. and its
68 -
subsidiaries
179,217 219,644
163
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XII Share-based payments
1 General conditions of share-based payment
Total amount of each equity instrument granted by the Company in the current
247,100
period
Total amount of each equity instrument exercised by the Company in the current
-
period
Total amount of the Company’s equity instruments that expired in the current
88
period
Range of exercise prices of the Company’s stock options outstanding and
-
remaining contract term at the end of the period
Range of exercise prices of the Company’s other equity instruments outstanding
-
and remaining contract term at the end of the period
(1) Employee Stock Ownership Plan (Phase II) 2021-2023
According to the Proposal on the Management Measures of the Company’s Employee Stock Ownership Plan (Phase II)
2021-2023 deliberated and adopted at the Second Extraordinary Meeting 2022, and the Proposal on the Company’s
Employee Stock Purchase Plan (Phase II) 2021-2023 (Draft) adopted by the resolution of the of the 19th Meeting of the
Seventh-term Board of Directors and the 14th Meeting of the Seventh-term Board of Supervisors, 32.6211 million shares
were granted to no more than 3,600 awardees at the price of RMB4.35/share on July 22, 2022. In 2023, a total of 20,000
shares granted by the Company became void due to the awardees’ resignation.
(2) Employee Stock Ownership Plan (Phase III) 2021-2023
According to the Proposal on the Management Measures of the Company’s Employee Stock Ownership Plan (Phase III)
2021-2023 deliberated and adopted at the Second Extraordinary Meeting 2023, and the Proposal on the Company’s
Employee Stock Purchase Plan (Phase III) 2021-2023 (Draft) adopted by the resolution of the 32nd Meeting of the
Seventh-term Board of Directors and the 21st Meeting of the Seventh-term Board of Supervisors, 64.99 million shares
were granted to no more than 3,600 awardees at the price of RMB3.94 on June 16, 2023.
The vesting arrangement of the restricted stock granted under the above incentive plan is shown in the following table:
Number of times Vesting period and ratio
After 12 months from the date of vesting of the holder's respective quota
of the underlying shares, the Shareholding Plan may decide whether to
sell 50% of the shares or to transfer 50% of the holder's respective shares
First non-trade transfer or sale
to the account of the holder of the Shareholding Plan, provided that such
transfer and sales are then supported by the systems of SZSE and the
Registration and Settlement Corporation;
After 24 months from the date of vesting of the holder’s corresponding
quota of the underlying shares, the Shareholding Plan may decide
whether to sell 50% of the shares or to transfer 50% of the holder’s
Second non-trade transfer or sale
corresponding shares to the account of the holder of the Shareholding
Plan provided that such transfer and sales are then supported by the
systems of SZSE and the Registration and Settlement Corporation.
2 Equity-settled share-based payments
The Group determined the fair value of equity
Method of determining the fair value of equity
instruments on the grant date based on the fair
instruments on the date of grant
value of the shares.
On each balance sheet date within the vesting
period, the Group determines the best estimate
Basis for determining the number of exercisable equity based on the latest number of employees eligible
instruments to exercise their options, and revise the
estimated number of exercisable equity
instruments.
Reasons for significant differences between current and
None
previous estimates
Accumulated amount of equity-settled share-based
RMB134,949,000
payment included in capital reserve
Total expense recognized for equity-settled share-based
RMB108,217,000
payments in the current period
3 The Company has no cash-settled share-based payments.
4 The Company has no share-based payment modification or termination.
164
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XII Share-based payments
5 Share-based payments by the controlling subsidiaries TZE and Zhonghuan Advanced
(1) Stock option incentive plan
(a) Changes in stock options during the year
Number of stock options outstanding as at the beginning of the year 2,752
Number of stock options granted by the Company in the current period -
Number of stock options of the Company exercised in the current period 840
Number of stock options of the Company voided in the current period -
Others 646
Number of stock options outstanding as at the end of the year 2,558
On July 6, 2021, TZE held its third extraordinary general meeting of 2021 where the Proposal for the 2021
Stock Option Incentive Plans (Draft) and Its Summary (hereinafter referred to as the “Stock Option Incentive
Plans for 2021”) was deliberated and adopted. On July 9, 2021, TZE held the 15th meeting of its 6th Board of
Directors and the 7th meeting of its 6th Board of Supervisors, where the Proposal for Granting Stock Options
to the Incentive Objects of the Stock Option Incentive Plans for 2021 was deliberated and adopted. As of
December 31, 2023, all Stock Option Incentive Plans for 2021 had entered the exercisable period.
(2) Employee stock ownership plan
(a) TZE’s employee stock ownership plan for 2021
On July 6, 2021, TZE held its third extraordinary general meeting of 2021 where the Proposal for the
Employee Stock Ownership Plan (Draft) and Its Summary for 2021 (hereinafter referred to as the “Employee
Stock Ownership Plan for 2021”) was deliberated and adopted. In 2021, TZE repurchased a total of 9,137,521
shares by centralized bidding through the securities account opened specially for repurchasing shares, at an
average repurchase price of RMB36.11 per share. Among the repurchased shares, 8,975,906 shares were used
for the Employee Stock Ownership Plan for 2021.
(b) Employee equity incentives of Zhonghuan Advanced
On February 10, 2022, TZE held its first extraordinary general meeting of 2022, where the Proposal for
Capital and Share Increase and Related Party Transactions of the Controlling Subsidiary Zhonghuan
Advanced Bandaoti Material Co., Ltd. was deliberated and adopted. Zhonghuan Advanced Bandaoti Material
Co., Ltd. (hereinafter referred to as “Zhonghuan Leading”), a subsidiary of the Company, intended to
implement employee stock ownership through capital and share increase (hereinafter referred to as “Stock
Ownership Plan of Zhonghuan Advanced”). In 2022 and 2023, Zhonghuan Advanced granted, in lump sum
respectively, 969,480,000 shares and 155,520,000 shares to the operation management team, backbone
employees and persons who had made significant contributions to its business development, at a grant price
of RMB1.04 per share.
(c) TZE’s employee stock ownership plan for 2022
On August 30, 2022, TZE held its second extraordinary general meeting of 2022 where the Proposal for the
Employee Stock Ownership Plan (Draft) and Its Summary for 2022 (hereinafter referred to as the “Employee Stock
Ownership Plan for 2022”) was deliberated and adopted. In 2022, TZE repurchased a total of 9,515,263 shares by
centralized bidding through the securities account opened specially for repurchasing shares, at an average repurchase
price of RMB41.09 per share. Among the repurchased shares, 9,492,797 shares were used for the Employee Stock
Ownership Plan for 2022. The remaining 161,615 shares repurchased in 2021 were also used for the Employee
Stock Ownership Plan for 2022. In summary, a total of 9,654,412 shares were used for the Employee Stock
Ownership Plan for 2022. The lock up period for the shares purchased for the Employee Stock Ownership Plan for
2022 is
165
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XII Share-based payments (continued)
5 Share-based payments by the controlling subsidiaries TZE and Zhonghuan Advanced
(continued)
(2) Employee stock ownership plan (continued)
(c) TZE’s employee stock ownership plan for 2022 (continued)
the period from September 8, 2022 to September 7, 2023. On June 30, 2023, the Management Committee for the
Employee Stock Ownership Plan for 2022 determined that the grant date of stock quota under the Employee Stock
Ownership Plan for 2022 should be July 1, 2023, and agreed to grant a total of approximately 9,654,412 shares to
employees who met the conditions of the Employee Stock Ownership Plan for 2022. As of December 31, 2023, all
the shares held under the Employee Stock Ownership Plan for 2022 had been granted to the holders.
(d) TZE’s employee stock ownership plan for 2023
On June 8, 2023, TZE held its second extraordinary general meeting of 2023 where the Proposal for the Employee
Stock Ownership Plan (Draft) and Its Summary for 2023 (hereinafter referred to as the “Employee Stock
Ownership Plan for 2023”) was deliberated and adopted. In the year, TZE repurchased a total of 14,381,400 shares
by centralized bidding through the securities account opened specially for repurchasing shares, at an average
repurchase price of RMB48.65 per share. Among the repurchased shares, 14,369,514 shares were used for the
Employee Stock Ownership Plan for 2023. The remaining 22,466 shares repurchased in 2022 were also used for
the Employee Stock Ownership Plan for 2023. In summary, a total of 14,391,980 shares were used for the
Employee Stock Ownership Plan for 2023. The lock up period for the shares acquired for the Employee Stock
Ownership Plan for 2023 is from June 9, 2023 to June 8, 2024. As no grant date is specified in the Agreement on
Granting the Employee Stock Ownership Plan for 2023 signed by and between TZE and its employees in the year,
no shares had been granted under the Employee Stock Ownership Plan for 2023 as at December 31, 2023.
(3) Equity-settled share-based payments
The Group determined the fair value of equity
Method of determining the fair value of equity
instruments on the grant date based on the fair
instruments on the date of grant
value of the shares.
On each balance sheet date within the vesting
period, the Group determines the best
Basis for determining the number of exercisable equity estimate based on the latest number of
instruments employees eligible to exercise their options, and
revise the estimated number of exercisable
equity instruments.
Reasons for significant differences between current and
None
previous estimates
Accumulated amount of equity-settled share-based
RMB500,835,000
payment included in capital reserve
Total expense recognized for equity-settled share-based
RMB456,400,000
payments in the current period
(4) TZE has no cash-settled share-based payments.
(5) Modification or termination of TZE’s share-based payment.
On August 23, 2023, the Employee Stock Ownership Plan for 2021 changed share-based payments settled in cash
to share-based payments settled in equity, with a decrease of expenses by RMB29,227,000 in 2023.
166
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XIII Commitments
1 Capital commitments
December 31, 2023
Contracted but not provisioned Note 1 33,203,372
Approved by Board but not contracted Note 2 1,524,475
34,727,847
Note The capital commitments under contractual obligations but not provided for in the current
1 period primarily consisted of such commitments for construction of investment projects
and external investments.
Note The capital commitments were approved by the Board but were not under contractual
2 obligations in the current period primarily consist of new energy photovoltaic and material
production projects and CSOT’s LCD panel projects.
As of December 31, 2023, apart from the disclosures above, there were no other major
commitments that are required to be disclosed.
XIV Contingencies
Guarantees Provided for External Parties
As at December 31, 2023, the guarantee provided by the Company for the related party’s bank loans,
commercial drafts, letters of credit, etc., was RMB2,360,399,000.
Actual Actual
Type of Term of Expired
Obligor guarantee occurrence
guarantee guarantee or not
amount date
August 29,
2019
Joint
Subsidiary of TCL Industries March 2,
96,160 liability No
Holdings Co., Ltd. 2021
guarantee
November 4,
2021
Joint
Aijiexu New Electronic Display April 28,
230,559 liability 8 years No
Glass (Shenzhen) Co., Ltd. 2020
guarantee
Shenzhen Qianhai Sailing Joint
March 1, 58 days to
International Supply Chain 480,480 liability No
2023 1 year
Management Co., Ltd. guarantee
Joint
Inner Mongolia Xinhua Bandaoti May 22,
233,200 liability 6.4 years No
Technology Co., Ltd. 2023
guarantee
Joint
Inner Mongolia Xinhuan Silicon
1,320,000 liability June 15,2023 5.5 years No
Energy Technology Co., Ltd.
guarantee
2,360,399
167
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XIV Contingencies (continued)
As at December 31, 2023, the amount of credit granted by the Group for the note discounting, note
acceptance, and non-financing guarantees of related parties was RMB1,248,737,000.
XV Events after the Balance Sheet Date
1 From January 29 to February 6, 2024, TCL TECH completed the issuance of the 2024 Technology
Innovation Corporate Bond (Digital Economy) (Phase I), with a value date of February 6, 2024, an
issuance scale of RMB1.5 billion, with a duration of 2 years and a coupon rate of 2.64%.
2 From April 8 to April 11, 2024, TCL TECH completed the issuance of the 2024 Technology
Innovation Corporate Bond (Digital Economy) (Phase II), with a value date of February 11, 2024,
an issuance scale of RMB1.5 billion, with a duration of 5 years and a coupon rate of 2.69%.
3 According to the proposal for profit distribution for 2023 deliberated and approved by the Board
of Directors, the Company intends to distribute a cash dividend of RMB0.8 (tax-inclusive) to all
its shareholders for every 10 shares in its total share capital consisting of 18,779,080,767 shares
that were eligible for profit distribution as at April 28, 2024 (if the Company repurchased treasury
shares during equity distribution, such shares would not be eligible for the profit distribution), with
no bonus shares given and no capital reserve converted into share capital, and with a total profit of
RMB1,502,326,000 distributed.
168
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVI Other Important Matters
(I) Segment reporting
1 Basis for determining reporting segment and accounting policies
According to the Company’s internal organizational structure, management requirements and
internal reporting system, the Company’s business is divided into four reporting segments: the
display business, the new energy photovoltaic and materials business, the distribution business
and the other businesses. The Company's management regularly evaluates the operating results of
these reporting segments to determine the allocation of resources and evaluate their performance.
The Company’s four reporting segments are:
Display business: mainly includes the research and development, manufacturing and sales of
(1)
display panels and display modules, as well as complete display processing.
New energy photovoltaic and display materials business: mainly includes the manufacture and sales
(2) of silicon materials, display devices, new energy materials, and new energy; development, and
operation of high-efficiency photovoltaic power station projects.
(3) Distribution business: mainly includes the sales of computers, software, tablet computers, mobile
phones and other electronic products.
(4) Other businesses: other businesses besides the above, including industrial finance and investment
business, technology development services and patent maintenance services provided by the
company, etc.
Segment assets include all current assets such as tangible assets, intangible assets, other long-term
assets and receivables attributable to each segment. Segment liabilities include payables, bank loans
and other long-term liabilities attributable to each segment.
Segment operating results refer to the income generated by each segment (including external
transactions income and inter-segment transaction income), net of expenses incurred by each
segment, depreciation, amortization and impairment losses of assets attributable to each segment,
gains or losses from changes in fair value, return on investment, non-operating income and income
tax expenses. Transfer pricing of inter-segment income is calculated on terms similar to other
foreign transactions.
169
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVI Other Important Matters (Continued)
(I) Segment reporting (continued)
2 Financial information of reporting segments
For the 12 months ending on December 31, 2023
New energy Other
photovoltaics businesses
display and other Distribution and
assets
business silicon business internally
materials offset
business accounts
Revenue 83,654,743 59,146,463 30,109,529 1,455,922 174,366,657
Net profit (7,407) 3,898,892 43,200 846,099 4,780,784
Total
235,586,824 125,063,043 7,266,548 14,942,671 382,859,086
assets
Total
159,403,780 64,825,931 5,832,513 7,530,889 237,593,113
liabilities
For the 12 months ending on December 31, 2022
New energy Other
photovoltaics businesses
Display and other Distribution and
assets
and silicon business internally
materials materials offset
business business accounts
Revenue 65,717,155 67,010,157 31,847,803 1,977,671 166,552,786
Net profit (7,625,065) 7,073,042 264,253 2,075,829 1,788,059
Total
175,429,564 108,312,923 8,712,675 67,541,070 359,996,232
assets
Total
99,999,637 61,253,081 7,231,569 59,373,192 227,857,479
liabilities
170
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to the key items presented in the financial statements of the Company
1 Accounts receivable
December 31, 2023 January 1, 2023
Accrual
Ratio Ratio
Amount Ratio Amount
(%) (%)
Allowance (%) Allowance Percentage
Within
351,594 100% 806 0.23% 353,877 100% 65 0.02%
1 year
2 Other receivables
December 31, 2023 January 1, 2023
Dividends receivable - -
Other receivables 19,614,272 4,961,948
19,614,272 4,961,948
(a) Nature of other receivables is analyzed as follows:
December 31, 2023 January 1, 2023
Equity transfer receivables 610 470,628
Security and deposits 2,841 1,795
Others 19,610,821 4,489,525
19,614,272 4,961,948
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL
12-month Lifetime ECL (credit
(credit not Total
ECL impaired)
impaired)
January 1, 2023 1,075 - 31,718 32,793
Accrued in
532 - - 532
current period
Reversal of
- - (82) (82)
current period
Write-off of
- - - -
current period
December 31,
1,607 - 31,636 33,243
2023
171
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to Financial Statements of the Parent Company (Continued)
2 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
December 31, 2023 January 1, 2023
Amount Ratio (%) Amount Ratio (%)
Within
17,998,302 91.61% 3,944,909 78.98%
1 year
1 to 2
673,321 3.43% 23,902 0.48%
years
2 to 3
12,776 0.06% 225,690 4.52%
years
Over 3
963,116 4.90% 800,240 16.02%
years
19,647,515 100.00% 4,994,741 100.00%
The outstanding other receivables were mostly current accounts with related parties.
The top five other receivables of the Company amounted to approximately RMB18,826,190,000
(December 31, 2022: RMB4,008,688,000), accounting for 95.82% of the total other receivables of
the Company (December 31, 2022: 80.26 %).
3 Long-term equity investments
December 31, 2023 January 1, 2023
Allowance
for
Gross doubtful Carrying Gross Impairment Carrying
amount accounts amount amount allowance amount
Associates and
16,717,864 - 16,717,864 17,171,275 - 17,171,275
joint ventures (1)
Subsidiaries (2) 62,947,128 - 62,947,128 59,189,096 - 59,189,096
79,664,992 - 79,664,992 76,360,371 - 76,360,371
As of December 31, 2023, there are no major restrictions on the realization of investment and the
remittance of return on long-term equity investments.
172
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(1) Associates and joint ventures
Increase or decrease in current period
Investment gains Other
Increase/decrease Other Provision Other December 31, 2023
and losses comprehensive Declared cash
January 1, 2023 in investment in equity for increases and
recognized by income dividends or profits
current period changes impairment decreases
equity method adjustment
Bank of Shanghai Co., Ltd. 12,809,374 - 1,251,665 (7,708) - (327,157) - - 13,726,174
China Innovative Capital Management Limited 944,392 - 25,698 - - - - 210 970,300
LG Electronics (Huizhou) Co., Ltd. 89,772 - 13,438 - - (13,400) - - 89,810
Shenzhen Qianhai Qihang Supply Chain
27,358 (40,000) (1,144) 1,638 - - - 12,148 -
Management Co., Ltd.
Shenzhen Tixiang Business Management
1,147 - 216 - - - - 12 1,375
Technology Co., Ltd.
Shenzhen Jucai Supply Chain Technology Co., Ltd. 15,273 - 4,367 2 - - - - 19,642
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
502,444 328,430 59,337 - - (19,937) - - 870,274
Industry Equity Investment Fund Partnership
(Limited Partnership)
Guangdong Utrust Emerging Industry Equity
167,809 - 13,024 - - - - - 180,833
Investment Fund Partnership (Limited Partnership)
Xinxin Bandaoti Technology Co., Ltd. 1,798,784 - (34,120) - - - - (1,764,664) -
Shenzhen Qianhai Sailing International Supply
69,540 - (42,523) (44) 1,164 - - - 28,137
Chain Management Co., Ltd.
Deqing Puhua Equity Investment Fund Partnership
- 163,760 (14,642) - - - - - 149,118
(Limited Partnership)
Ningbo Meishan Bonded Port Qiyu Investment
- 44,646 (12,464) - - - - - 32,182
Management Partnership (Limited Partnership)
Huizhou TCL Human Resources Service Co., Ltd. 6,274 - 2,656 - - - - - 8,930
TCL Microchip Technology (Guangdong) Co., Ltd. 285,279 60,000 (79,117) - 12,034 - - - 278,196
Others 453,829 (58,722) 27,026 - - (2,548) - (56,692) 362,893
17,171,275 498,114 1,213,417 (6,112) 13,198 (363,042) - (1,808,986) 16,717,864
173
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Direct Decrease in
January 1, Increase in the
shareholding period
the December
2023 period
ratio (%) 31, 2023
TCL China Star Optoelectronics
79.17% 33,780,853 268,400 - 34,049,253
Technology Co., Ltd.
TCL Technology Group Finance Co.,
82.00% 1,256,003 - - 1,256,003
Ltd.
TCL Technology Group (Tianjin)
100% 15,000,000 1,200,000 - 16,200,000
Co., Ltd.
TCL Zhonghuan Renewable Energy
2.55% 1,752,635 177,098 - 1,929,733
Technology Co., Ltd.
TCL Culture Media (Shenzhen) Co.,
100% 361,414 - - 361,414
Ltd.
Shenzhen Dongxi Jiashang
Entrepreneurship Investment Co., 100% 200,000 - - 200,000
Ltd.
Guangdong TCL Juxiang
Technology Co., Ltd. (Formerly
100% 110,000 - - 110,000
Huizhou Sailuote Communication
Co., Ltd.)
Highly Information Industry Co.,
66.46% 107,296 - - 107,296
Ltd.
TCL Communication Equipment
75.00% 79,500 - - 79,500
(Huizhou) Co., Ltd.
TCL Medical Radiological
100% 58,497 - - 58,497
Technology (Beijing) Co., Ltd.
Shenzhen TCL Strategic Equity
Investment Fund Partnership 100% 71,010 - - 71,010
(Limited Partnership)
TCL Industrial Technology Research
100% 20,000 - - 20,000
Institute, Ltd. (Europe)
Wuhan TCL Industrial Technology
100% 20,000 - - 20,000
Research Institute, Ltd.
Shenzhen TCL High-Tech
100% 20,000 - - 20,000
Development Co., Ltd.
Beijing HAWK Cloud Information
100% 20,000 - - 20,000
Technology Co., Ltd.
Huizhou Hongsheng Science and
100% 1,000 - - 1,000
Technology Development Co., Ltd.
Tianjin Silica Material Technology
100% 2,800,000 - - 2,800,000
Co., Ltd.
Xiamen TCL Technology Industrial
100% 211,000 253,397 - 464,397
Investment Co., Ltd.
TCL Internet Technology
100% 15,000 - - 15,000
(Shenzhen) Co., Ltd.
Ningbo TCL Equity Investment Ltd. 100% 300,000 - - 300,000
TCL Technology Investments
100% 2,988,293 - - 2,988,293
Limited
Huizhou Dongshen Jia’an Equity
Investment Partnership (Limited 99.94% - 10,000 - 10,000
Partnership)
TCL Financial Technology
100% - 15,036 - 15,036
(Shenzhen) Co., Ltd.
Zhonghuan Advanced Bandaoti
7.35% - 1,790,312 - 1,790,312
Technology Co., Ltd.
Equity incentives of subsidiaries 16,595 43,789 - 60,384
59,189,096 3,758,032 - 62,947,128
For the registered capital of subsidiaries and the Company’s equity interests in the subsidiaries, see Note VIII.
174
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to Financial Statements of the Parent Company (Continued)
4 Investments in other equity instruments
December 31, 2023 January 1, 2023
Equity of unlisted companies - 5,000
5 Other non-current financial assets
December 31, 2023 January 1, 2023
Equity investments 442,985 431,023
Debt investments 201,315 -
644,300 431,023
6 Operating income and operating costs
2023 2022
Revenue Operating Revenue Operating
cost cost
Core business 1,051,958 1,049,587 1,019,036 1,009,786
Non-core business 668,002 147,567 574,177 153,021
1,719,960 1,197,154 1,593,213 1,162,807
7 Return on investment
2023 2022
Gain on disposal of debt instruments at fair value through
profit or loss - 244,997
Gain on disposal of equity instruments at fair value through
profit or loss 298 -
Profit from holding debt instruments at fair value through
profit or loss 140,134 -
Debt instruments at amortized cost through profit or loss - -
Profit from holding equity instruments at fair value through
profit or loss - 3,953
Gain on disposal of derivative financial assets/liabilities 9,659 -
Dividends from subsidiaries 713,047 9,340,042
Share of profit of associates for current period 1,289,878 1,358,727
Share of profit of joint ventures for current period (76,461) (50,667)
Net income from disposal of long-term investments 284,242 1,586,504
2,360,797 12,483,556
As of December 31, 2023, there were no significant restrictions on the collection of return on
investment.
175
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XVII Notes to Financial Statements of the Parent Company (Continued)
8 Net cash generated from operating activities
Net cash used in operating activities of the Company was (RMB8,054,069,000).
9 Ending balance of cash and cash equivalents
The ending balance of cash and cash equivalents of the Company was RMB2,642,115,000.
10 Contingent liabilities
As of December 31, 2023, the contingent liabilities not provided for in the financial report
were as follows:
December 31, 2023
Guarantees for bank loans of subsidiaries 48,112,186
Guarantees such as trade notes, letters of credit and letters
of guarantee for subsidiaries 24,675,501
Guarantees for bank loans, trade notes, letters of credit, etc.
of related parties 2,360,399
XVIII Comparative Figures
Certain comparative data have been reclassified to comply with the presentation of the
current period.
176
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
IX Non-recurring profit and loss items and amount
2023 2022
Gain or loss on disposal of non-current assets
(inclusive of impairment allowance write- 275,255 1,757,839
offs)
Public grants through profit or loss (exclusive
of public grants closely related to the
Company’s normal business operations, in
compliance with national policies, enjoyed 2,764,043 1,322,783
according to determined criteria, and with a
continuous impact on the Company’s profits
and losses)
The profits or losses generated from changes
in fair value arising from financial assets and
financial liabilities held by non-financial
enterprises and the profits or losses from the
(114,259) (127,234)
disposal of such financial assets and financial
liabilities, except for the effective hedging
business related to the company’s normal
business operations
Reversal of provision for impairment of
receivables that have been individually tested 22,894 37,746
for impairment
Non-operating income and expenses other
228,994 758,600
than the above
Income tax (603,198) (244,386)
Non-controlling interests effects (1,379,875) (545,817)
Non-recurring gains and losses attributable to
1,193,854 2,959,531
ordinary shareholders of the parent company
According to the relevant provisions of the Interpretative Announcement No. 1 on
Information Disclosure by Companies Issuing Securities to the Public - Non-recurring
Profits and Losses (Revised in 2023), public grants closely related to the Company’s
normal business operations, in compliance with national policies, enjoyed according
to determined criteria, and with a continuous impact on the Company’s profits and
losses shall be presented as recurring profits and losses. The public grants presented as
recurring profits and losses by the Group in 2022 include asset-related public grants of
RMB150,765,000, which comply with the relevant provisions of Interpretative
Announcement No. 1 (Revised in 2023) and shall be presented as recurring profits and
losses. This change has no significant impact on the Company’s financial position and
operating results.
177
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2023
___________(RMB’000)_____________
XX Weighted Average Return on Equity (ROE) and Earnings per Share (EPS)
The Company calculates the ROE and EPS as follows in accordance with the Compilation Rules
No. 9 for Information Disclosure of Companies Offering Securities to the Public-Calculation
and Disclosure of Return on Equity and Earnings per Share (Revised in 2010) issued by the
China Securities Regulatory Commission and relevant provisions of accounting standards:
Item Reporting Earnings per share (RMB yuan)
period Net
profit
attributable Weighted
to the average Basic Diluted
parent return on earnings per earnings per
company equity (%) share share income
for the
reporting
period
Net profit attributable to
ordinary shareholders of the 2,214,934 4.27% 0.1195 0.1179
Company
Net profit attributable to
ordinary shareholders of the
1,021,080 1.97% 0.0551 0.0544
Company before non-
recurring gains and losses
Company Name: TCL Technology Group Corporation
Date: April 28, 2024
The financial statements and the notes thereto from page 1 to page 178 are signed by:
Person-in-
Person-in- charge of
charge of the
Legal Li Financial Financial Jing
representative: Dongsheng affairs: Li Jian Department: Chunmei
178
